Original title: Your Startup Is technically Dead On Arrival

Original author: Steve Blank, expert in entrepreneurship methodology
Original language: Deep tide TechFlow

Deep tide guides:Steve Blank, the author of this paper, is well known in the Silicon Valley Enterprise Circle as the "Four Steps to the Epiphany" and has written the Four Step Entrepreneurship Act, which is the author of the Customer Development methodology。

Eric Ries' Lean Enterprise was developed on the basis of his theory. He taught entrepreneurship at Stanford, Berkeley, Columbia University, and the I-Corps project of the National Science Foundation of the United States was built on his methodological basis。

Steve Blank, who recently had coffee with an investment founder, found out that he had spent six years in prison without realizing that the outside world had changed。

He wrote the article, and the core view is direct:

If your company has been in existence for over two years, your business plans are probably out of dateI DON'T KNOW. AI IS RESHAPING THE SPEED OF DEVELOPMENT, TEAM SIZE, PRICING MODELS AND COMPETITIVE BARRIERS, AND THE FOUNDERS OF THE 2024 SCRIPT ARE LIKELY TO MISS THE NEXT ROUND OF FINANCING。

First-hand observations from across the ocean are worth reading for readers who are starting a business or who are concerned with technology and creating a circle。

The full text is reproduced below。

If your company has been in existence for more than two years, it is likely that many of the original assumptions are no longer in existence。

You need to stop what you're doing, whether you write codes, make products, hire people or finance, and see what's going on around here. Or the company dies。

An anxiety caused by a coffee

I just had a coffee with Chris。Chris, the founder of my vote six years ago, he's been working hard ever since

1) a complex problem of autonomous systems

In an existing market

3) Using a unique business model。

Chris is now ready to launch the first round of massive financing. I looked at his investors, and I found a problem:In the years he's been working, the outside world has turned upside down。

His five-year-old software barriers to autonomous systems are becoming less and less unique. Ukraine ' s autonomous drones and ground vehicles have raised dozens or even hundreds of companies with larger teams and more funds to do the same。

Chris has been campaigning for his small market (which should have been subverted, but the old player still holds) while the autonomous technological demand for a neighbouring market has erupted, namely, national defence。

OVER THE PAST FIVE YEARS, VC INVESTMENTS IN DEFENCE START-UPS HAVE SKYROCKETED FROM ZERO TO $20 BILLION A YEAR. HIS PRODUCTS ARE WELL SUITED TO LOGISTICAL AND MEDICAL EVACUATIONS IN THE DISPUTED ENVIRONMENT. BUT HE KNOWS NOTHING ABOUT THESE OPPORTUNITIES IN THE DEFENCE MARKET。

Chris's team did a great system integration (deeply integrated with an existing flight platform, which makes him different from most competitions), and business is still in place, but it is no longer what was originally envisaged。

After talking to Chris, I realized that most of the start-up companies that had been in existence for more than two years, business plans were out of date, and technology stores and team configurations were out of date。

If you haven't looked up lately, you're missing something。

What's changed

VC MONEY IS POURING INTO AI. IN 2025, THE AI PROJECT TOOK TWO THIRDS OF THE TOTAL VC INVESTMENT. THAT MEANS IF YOU DON'T DO AN AI-RELATED THING, YOU'RE FIGHTING FOR A SMALLER POOL. NOT AI, THE START-UP FIRM HAS TO ANSWER THE QUESTION: WHY CAN A BETTER FUNDED AI, THE ORIGINAL COMPETITION, NOT JUST EAT YOUR MARKET

For the software founders, AI completely rewritten the old formula of cost, speed and manpower. Vibe Coding with tools like Claude Code or OpenAI Codex, a MVP can be done in a few days or hours, no more months. It means that the MVP itself can no longer prove your team's ability。

These tools are changing the composition of the development team:Engineers have become fewer and the type of engineer has changed, and there has been a split between business process engineers and deep technical engineers。

In the past, a development team was needed, and now a few people can do it, sometimes alone. The data used to be differential advantages and moats, but now the underlying models (ChatGPT, Gemini, Claude) are commodifying open data sources。

Figure: Model T vs Ferrari

The concept of agile development itself also needs to be revisited。

The bottleneck of the past was: can we afford to build and publish this product? Now the bottleneck is: do we know what to test? Can we learn from users fast enough? Agility is no longer a serial process. AI Agent can run multiple things at the same or even lower cost。

You can now test multiple versions of the same business at the same time, or even different business directions at the same time. You can run five pricing models, 10 marketing messages, 20 UX processes. And the user interface may no longer be on screen, and the target of the test may be to find the prompt that enabled AI Agent to deliver the expected results。

Figure: Transition from UI to AI Agent

The bottlenecks are no longer engineering capabilities, but move upwards to judgement, insight into the expected results of clients and the ability to distribute them。

AI Agent will rewrite all software items Category

AI Agent will change every software class, including the one you do。

Today ' s software application operates as follows: it displays information to users and then waits for users to operate through interfaces such as dashboards, alarms, workflow tools and reporting. But the client bought the software to do a job, not to watch more screens. Let the job really be done, and this is what AI Agent will do on its own。

What does that mean

If your product is telling the user what to do next, AI Agent will eventually do that for the user. If the competitor's product does the job automatically, and your product is waiting for the user to click the mouse, you're no longer competitive。

Next-generation applications do not simply display information on the screen, and they act like an employee: resolve worksheets, book meetings, screen sales trails, and automatically replenish. When the product moves from "software or interface" to "software or result", the price will also shift from seat-to-seat fees to result-based fees: every single worksheet, every scheduled meeting, every clue that is closed。

(The search for Project/Market Fit will become the search for AI Agent/Customer Outlook Fit. The minimum viable product (MVP) will become the minimum deliverables (MPO). I'm going to do this in the next article. I'm not sure

Hardware won't escape

For hardware founders, the changes are equally dramatic。Hardware remains bound by the laws of physics, capital, supply chain and manufacturing cycle, and you cannot bypass cutting metals, making prototypes or chips。

BUT AI CAN GET YOU OUT OF BAD IDEAS FASTER. NOW YOU CAN SIMULATE MORE DESIGN VARIANTS, CREATE DIGITAL TWINS, TEST ASSUMPTIONS EARLIER, CHEAPER, BEFORE YOU MAKE A PHYSICAL PROTOTYPE. THE RESULT IS FASTER LEARNING AND DISCOVERY (SOMETIMES FASTER TO FAILURE), AND IN START-UP COMPANIES, FASTER FAILURE IS AN ADVANTAGE, NOT A DISADVANTAGE。

ONCE AI IS EMBEDDED AS PART OF THE SYSTEM, THE PRODUCT ITSELF CHANGES。BY ADDING AN AI BACKEND TO THE CAMERA, THE CAMERA BECOMES A SURVEILLANCE SYSTEM, A VIBRATION SENSOR, A MACHINE FAILURE PREDICTION SYSTEM. THE ROBOT BECAME A FACTORY WORKER. THE MOAT IS NO LONGER JUST THE HARDWARE ITSELF, BUT THE HARDWARE CAN SENSE WHAT WITH AI CAN BE USED TO MAKE DECISIONS AND ACTIONS。

Sinking cost trap

Companies created before 2025 typically optimized the world for an expensive and customized software development. Agility development and DevSecOps make us lean, but they work in a symmetry, and the size of the team is matched by this structure。

IT TOOK SEVERAL YEARS TO BUILD THE "SPECIALIZED CODE AND FUNCTIONAL MOAT" COMPANY, AND IT'S BEEN DISCOVERED THAT AI IS COMMODIFYING MOST OF THEIR TECHNOLOGY。This has embarrassed start-ups in financing: business models may be partly or entirely obsolete。

These changes are not necessarily visible when you bury your head in a product looking for Produc/Market Fit。

TECHNOLOGY STACKS, PRODUCT FUNCTIONS, USER INTERFACES, NUMBER OF EMPLOYEES, THESE SINKING COSTS BECOME A REASON FOR YOUR RELUCTANCE TO TRANSFORM: HOW CAN WE THROW AWAY YEARS OF WORK? OUR VC IS GOING IN THIS DIRECTION. CLIENTS STILL WANT UI. TEAM BELIEVES IN THE ROAD MAP. OUR CLIENTS ARE NOT READY。

Chris is a classic. He did a really impressive thing, probably competitive, but the business model around it needs to change. I'm not sure

Some of the sunk costs are assets: deep field knowledge, customer relations, proprietary data, hard-earned regulatory approval, physical integration. These are worth retaining. The achievements of Chris ' flight platform collections fall into this category。

The real sunk costs of the liability are the large engineering team set up for the slow software cycle, the seat-based pricing model, and the product road map built around functionality rather than results. These are the so-called Dead Moose on the table, which is clear, but nobody wants to pick out。

The founders who survived were those who could look at themselves and ask:What would I do today if I were to start a new business using today's tools and today's market

This problem is uncomfortable when you already have a particular direction of financing. But it's nothing more than the investors telling you they don't want to throw the next round and then you close down with an outdated plan。

Summary

• You can't run the 2026 track with a 2024 script (or earlier). Financing, technology and business models have changed. Quick development is becoming parallel development。

• The search for Produc/Market Fit will become the search for AI Agent/Customer Outlook Fit. MVP will become MPO (minimum deliverables)。

• Sedimentation cost mentality will bring you down。

• Defensive moats may still exist in: proprietary data, deep understanding of customer outcomes, regulatory lock-in, or formal procurement (Program of Reform)。

- If you can still sleep, you don't know what's going on。

:: The surviving founders will come out of the office to see the situation, transform and correct the situation。

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