Big companies are not your worry in most cases. They have so much bureaucracy and internal politics that it's often cheaper for them to buy out the up-and-coming startups than it is to build in-house.

Instead, if you achieve success without much of a moat, you will be cloned by one of the "App Store mills". These are companies who employ multiple small teams (think 3-4 people), and each team is charged with cloning one of the most popular apps - they have really abbreviated development cycles, on the order of 6 weeks, and they just keep churning till they've drowned every app on the leaderboard in clones. And because they are astroturfing the whole space, they don't actually need most of these clones to be individually profitable.

> Big companies can copy your product in no time

Your advantage in this case, now or 10 years ago, is that this is simply not true.

If your business is "a flashlight app", yeah, eventually they'll copy it (as it happened). However they'll take an unusual long time to do that simple thing (as it also happened).

Why? Because everything at big companies is a political game, full of internal conflicts, multiple priorities, non-collaborative teams, self-interest, promotion games, and a bunch of other things not really related to build the thing in question. It very rarely has anything to do with how fast the code can be written.

If your business is good enough and becomes something more than "a piece of software", and solves a problem, becomes a brand, has great user feedback... that's not something you can "copy in no time".

It’s still hard to create something successful.

Remember that Mark Zuckerberg has had “AGI” for over a decade in the form of tens of thousands of human software engineers and Facebook still has barely been able to create a new successful product on their own without acquiring it from a smaller company.

Is “software startup” the right term? I understand that you might want to “use software” in the startup but surely, in the most successful startups, the thing that makes them successful is that they solve a real problem, that real people/businesses have, and are prepared to “pay” [1] you to solve for them.

If the startup is just “software for the sake of software” then I think that’s a different thing entirely. And to be fair, sometimes software for the sake of it is more like art or fun. And it’s true, sometimes something wonderful comes out of that. Sometimes. :)

[1]: Obviously “pay” can mean _very_ different things in different contexts.

The opposite is increasingly true…

I spent the past 6 months rebuilding a medium-size company’s CRM.

They were on Salesforce for a decade, and now they’ll own their data based on the work of a single engineer.

For Salesforce, the moat is increasingly the inertia that comes from big-company contracts and the perceived safety of buying Salesforce.

Society is experiencing the first wave of the true Cambrian explosion of software and there’s never been a better time to be an indie maker. Never. This is like the iOS App Store moment, but multiplied by 100 and expected to last 10x longer.

Yes!! The software market is still growing quickly.

What moat are you referring to? AFAICT, moats are bigger now than ever before, but the moats I see are centered around things like consumer habits and B2B contracts and hub/platform experiences. People tend to like the software they know & have, or the contractors they know already, even when they complain about it. The need to overcome static friction is a moat, one that makes it harder for startups to get in, but easier to stay once you’re in.

Big companies are slow. It seems like it would be easy for them to copy products, but they rarely do, and even when they try they take forever. Worry about yourself first, whether you can deliver, whether your product is superior, whether you can get customers, whether your business is sustainable, etc.. Worry about other startups second. They can copy faster than big companies. Do you have an edge over other startups? Don’t worry about the big companies. If they aren’t already solving the problem you want to solve, they won’t start until after you’re successful.

Note acquisitions are a thing! Big companies that want to copy your product are aware that the fastest way to do that is to acquire a working solution and a pile of new customers. You should be thinking about big companies more as opportunity than competition.

Yes, big companies can copy your product. But at what cost, especially when including opportunity cost and the levels of bureaucracy in larger companies? I have heard your question many times during the last 20 years, and still there are more software startups.

In many cases it would cost them less to buy your company than to create it from scratch. Which is why so many small companies are acquired instead of copied. The question should be more what do you want to do and are you able to follow up on creating a startup? Writing the code is a small part of creating a successful startup

Yes! All startups are created to solve a problem, regardless of the tools used. Apps are simply tools to solve human problems. Because humans will always have challenges to address, software will remain a vital tool. While AI makes writing software much easier. It's likely to lead to an explosion of new apps. Only those that fill a genuine need will survive. Your job is to identify these new problems and determine which apps to build.

Simple apps are a thing of the past. If an LLM can generate an app in a few sittings, it isn't a saleable product. However, people will still pay for a fully engineered application that solves a complex problem that AI cannot easily replicate.

Regarding copies, there is always room for more than one solution to the same need. Your challenge is to figure out how to stand out. A fundamental business hurdle, that has existed since the beginning.

Here's an idea that always bear's fruit. We humans love to do things as easy as possible. Write something that saves energy, time and is simple then people will pay for it.

Yes, if you have customers who need your software and are willing to pay for it.

Yes, otherwise there wouldn't be billions of dollars flowing into seed rounds every year to make novel products.

Not sure why you think a large company can copy a product in no time, they have to steer a cargo ship, you have a speed boat.

You gotta find a niche these days and do it well. No longer can there be generalist software. Find underserved industries that aren’t “cool” per se, but still have problems.

Have heard from multiple investors that they think boring software is the next wave, rather than a new UI/UX/Productivity way of doing things.

There was never a statistical “advantage”, you just never heard about the 9/10 outright failures or even the parts of the 1/10 where people are toiling in obscurity and would have been better off financially “grinding leetcode and working for a FAANG” ((c) r/cscareerquestions) or even being an enterprise dev in a tier 2 city.

In my experience (enterprise software), customers buy our products not because we have a moat or some hard-to-achieve technical advantage but because they can speak to us in their words, they know we care, and we try solve their problems quickly.

Just yesterday I was speaking with the COO of a $200M/yr revenue company in the supply chain space. He'd learned Claude Code and built a couple apps to solve internal problems but reached out to talk to us. I asked him "you've been able to build some really impressive tools, clearly you can solve your own problems, why are you talking to me?" And he said "I have a business to run. I shouldn't be coding. I need somebody who understands my business & can solve my problems without taking a lot of my time."

Is there a cheaper way for him to solve his problems? Absolutely. But he wants to put the key in the ignition and know the car will turn on every time without thinking about it. There is an endless list of problems to solve; I don't think software businesses are going anywhere anytime soon.

Maybe. great businesses don't need moats. They just need sonething people buy from them. Maybe venture capital needs moats - but you can get rich without that. (If rich is even the goal - a nice life is a better goal)

beware of any business where there is no competition - there is generally good reason nobody else is making money there.

Software moats were never really a moat in and of themselves. You always had to be a first mover. It's true that there are fewer and fewer first mover opportunities, but that has less to do with recent LLMs advancements and more that we have already solved a lot of software problems on first principles. It's partially why LLMs work so well, they are pulling the "widgets" from distribution and synthesizing into your requirements. Before, we probably thought we were writing novelty when it was literally solved 1000x over.

If you aren't a first mover, your success was always dependent on other skills and great execution across multiple disciplines, and also a lot of stubbornness. The software layer has always been important, but a support role of successful enterprises. Start-ups have always been hard to pull together successfully for a lot of other reasons unrelated to code.

If you find a disruptive algorithm (like pagerank) there is little evidence that LLMs will infer your solution by looking at your app. Anything else, they are just design choices and have never been moats either, but say you have a qualitative edge, you'll make the choices that can create a recognizable brand where someone vibing a copycat may not care as much. Nothing has changed on this. Your chance of succeeding rests on your ability to reach your users and iterate in a crowded space, this is what you always had to do anyway.

There are things, however, that aren't worth working on anymore with the advent of LLMs. Some of these have been fully dismissed, for example sentiment analysis. A single API call for the cheapest (even local) LLM vendor will give you SOTA classification. There are many more examples but they are so obvious. Essentially, the "build me 1 billion dollar app" prompt will never work, so if you have a burning desire to build something, do it. Just remember, there never was and never will be a promise of unlimited fortunes whatever you do.

> Considering there is very little moat left in software and big companies can copy your product in no time?

Your task in a software startup (or any startup) is to produce the moat. If you can create something with little effort in a few weeks or months then so can anyone else.

If your product does something hard or useful that you know how to do because you understand the audience or business, or includes data or knowledge that others may not know about or have, or just you can put the effort in to great service to build a large customer base it becomes harder to be copied.

The risk is the same as it was a decade ago, and the decade before that.

The startup will take over your life. You will pour every bit of time and money you have into it. You will lose your sanity. And it’s pretty much a guarantee that you will fail.

Unless you already have a comfortable financial cushion and/or industry connections that will guarantee funding and partnerships, you have to be truly crazy to try that life. But, ultimately it’s the crazy ones that end up winning.

Big companies are very bad at developing new software.

That's why it's so common for successful software startups to eventually get acquired. Big companies know that it's a lot more efficient for them to spend money simply buying someone who did the thing, than spending money and taking on a bunch of risk trying to do the thing themselves.

Yes if people have to learn how to use it. Make something that will last centuries not just a couple of decades. 700 years ago they invented double-entry method of accounting which is still used today. Relational databases were invented recently as well and will survive well past most front-end frameworks. Eventually skynet will be invented but no one believes me just like no one would have believed that aluminum tubes would be flying through the sky or enriching uranium. If before you couldn't open a winapi window, now you can do that in one sentence instruction, and you'll have a good starting point. Things are changing. Look at accounting, accountants don't even do accounting anymore, they're just QB users.

It’s the best time to start a company. Few people can build anything now. Big companies are at a huge disadvantage now because they can’t be personal. Software development is going decentralized. You can go to a bunch of businesses and be personal, and develop personalized solutions for them in person. You only need few such clients to be profitable and have lifestyle business.

> Considering there is very little moat left in software and big companies can copy your product in no time?

Having worked in the corporate world all my working life I can safely say with confidence that big companies absolutely DO NOT move fast. Do not underestimate the power of middle-management to destroy momentum!

Solve a problem for someone and if it was a painful one, they'll pay you for it.

Try and go for $100 MRR (pay for servers and some pizza). Big companies won't go for that.

Try another idea (while still running the above). Go for $1000 MMR. Still too small.

This is harder than you think and will teach you incredible skills. Next: keep going. :)

DISCLAIMER: obviously don't quit your job/starve/become homeless etc to try this.

Software startups still work, but only if software is not the point.

Code is now cheap, so the advantage moved into things that cannot be copied by looking, accumulated data, hidden workflows, trust, and judgment earned by staying inside a problem too long.

Big companies copy shapes, not gravity. If your edge is visible, it is temporary. If it only appears over time, you are still early.

Yes, but not in relationship to products being copied. Copying the technical aspects of an idea has been possible for a long time anyway.

Knowing how to acquire, support and cultivate a growing user base is the challenge.

The availability of a technical "moat" has always been a select property of only a few products. All real moats are network effects.

The moat for small company is the lower coordination overhead than bigger companies, not about the effort of writing code.

Big companies try to balance a lot of stakeholders, the collection of all their requirements makes them risk adverse and creates wasted effort. I’ve been on a lot of projects (pre AI coding) with rewrites and changes that have more to do with politics and org changes, lack of vision, and needless veto points.

That’s the small software company advantage still IMO

It is. Big companies (or really anyone) usually don't have the time to copy an idea unless it becomes too big already. And if your idea becomes too big, it was worth pursuing it.

A software startup has always, always been a longshot. This is still true. Also, vanishingly few companies of any kind, including software, ever get a "moat". Small companies survive, when they do, by being fast moving enough to keep making new things.

You certainly should not start a software startup to get rich, as that was never the most likely outcome. You should start one if you have an idea for software that isn't out there, which you think people would find useful, and you want to see what it's like to do a startup (enough to give it several years of your life).

I have, btw, never founded a software startup, though I have worked at some. I got paid in salary, not equity. It is now, always was, and probably always will be a longshot.

Google won't copy anything unless is super strategic or generates $$$ (100M ARR?).

Depends on your market. Enterprise is hard to crack. B2B you can sneak in via grassroots but it requires building a guerilla marketing presence, B2C is a hit business model with on average deep pocket requirements.

Little moat, but also little thresholds. The only way to not win 100% is not to play.

If true then VC money would dry up. We definitely are not at the stage where new company formation has ended.

Depends what you expect, people still have problems that need solved by software, if you expect to be the next Google the odds are not in your favor but if you aim to have a sustainable income from software that should be viable.

> Considering there is very little moat left in software and big companies can copy your product in no time?

Whenever you have doubts about your ability to do something enough to ask for advice from random people you don’t know, and if that thing is unnecessary and will be significantly difficult, like a startup that is just some option for you to work on, the answer is probably no.

You have to feel the true desire to make something happen because you must. Anything other than that is probably a bad idea.

Yes! Coding is just one of the tasks you've got to do when building a software business. You also have to find a good value preposition, identify a good channel to your customers, manage your resources etc.

Channels are becoming even more important as software has become easy to copy. But copycats always existed. When it wasn't created by AI, it was created in low wage countries.

That's always been the case, in software and elsewhere.

Yet, Ford didn't copy Tesla, why not?

Checkout https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma but overall the idea is that large corporations have totally different goals and incentive than startups. Also check https://steveblank.com and his startup owner manual trying to clarify that a startup is NOT a small company, rather it's searching for a product/market fit.

So is it worth pursuing a (software) startup?

Honestly if you want to make money, no. It's much easier to work for a large corporation (big economical benefits) or a public institution (work safety). You might not get ridiculously rich either way but you will be safer than most.

If you want to make a ridiculous amount of money though, well you might have to make sacrifices you are underestimating. I don't want to promote the grind culture but checkout Silicon Valley, the TV show, in particular when they discuss VC and promises done. Basically if you ask for a very high valuation you have to deliver on those claims and obviously they investors are going to keep you accountable on that. You might have to work more than you wanted (which might make the whole process a nightmare more than a joy) but more dangerously you might lose the very raison d'etre of the company you founded. If it's "just" about making money, you won't care, if you have a genuine mission, those compromises are going to eat you alive.

So... is it "worth it" very much depend on who you are, who you want to be and how saturated the market is.

I wouldn't worry about the big corporations, I would worry about what you can actually deliver and how not being able to do so will change you along the way.

if you have to ask the answer is no.

if you are young there’s still hope that you can change your mindset and approach though.

if software can save time and make money than human capital then there will be demand.

It depends on what you are pursuing. Software was never a true moat for the really hot stuff. See books Zero to One, 7 Powers. It can be moat when you have something extremely complex, like for Unreal Engine, software actually is the moat. However, when it comes to regular software, everything was always prone to being copied. Will it be copied, it depends entirely on what's for the grabs for someone else to copy it. If you have a mature SaaS, that already has some competitors, what does anyone gain by copying it if the projection for building a sustainable business is very small? Personally I am building something that is relatively complex (much more complex / non-standard than a CRUD and likely not in Claude training data, and something that would be a very bad idea to write it in AI slop due to security issues) and relatively niche, something that a well funded startup would never dream about building, yet something that a smaller team would have a difficult time to compete with me, LLMs or not.

Big companies aren't the problem.

Finding customers is the difficult part.

Do it if you want to - if you feel some burning desire to create that thing and you just can't get it out of your head.

So long as it's not about AI. The world hasn't run out of problems that could be solved or improved by software.

Since the majority of our industry is still in a combination denial/disbelief and bureaucratic incompatibility with AI workflows, startups are increasingly well positioned to reap the rewards.

The way I think about it is, everyone is struggling to make AI tools work well, so if you can be in the top 50% of people trying, you're actually in the top 10% in terms of positioning for future growth.

Sometimes, software that 2 devs make in a year, takes same 2 years for 5 teams of 10.

If you have to ask, then the answer is no.

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You're asking what's a defensible value-add, but without really framing current business conditions or issues.

Time - opportunity - matters a lot, perhaps more than anything. And to face that, one needs to ask better questions (even if you're just polling).

Thought this would be a thread about the crazy offers being handed out to join AI teams at Amazon, Meta, Google, OpenAI, Anthropic, Apple, or any of the massively capitalized 'neolabs'.

The problem is the software has already been made in the past. It has built up over time. Just like songs. There are so many already there.

When smartphones just came out I was already not making websites anymore. But every single app I made got at least 10k downloads in one week and around 1/5 got in the top 10 of a category like "social" even though I've only ever spent maybe a month max on developing any single app.

But now there are soooo many already there. Good luck getting into the top 10 social now with one weekend of coding.

You're asking an orthodox and conservative audience who have time to be on HN

The real question to ask is;

Is it still worth pursuing a software startup ... using the same strategies/approach/mindset/tools/means/methods of yesteryears?

Answer is Yes for the first part and No for the second part.

Problems which need software solutions and/or have a software component (at this point, practically everything) still exist in plenty. AI/ML has only changed the playing field drastically. It cannot understand the intent behind the problem which is a uniquely Human Dilemma. This is where the opportunities lie; understanding different Problem/Business Domains by studying and closely interacting with possible clients and coming up with tailored solutions whether domain-specific or client-specific.

The emphasis now is on better problem understanding/specification/verification (DSLs/notations/diagrams etc.) and faster iteration to a MVP. AI/ML is a great help here but the cycle is initiated by a Human who is always in the loop and steers it on the right trajectory in the state space of possible solutions.

The biggest problem is the government has made it more and more difficult to start a business, both through fees, especially through taxes, and very especially through all the regulations.

Not with that attitude

in the valley at least its difficult to pursue that unless you’re in a “hot” field. A few years ago, it was cloud, then big data, then crypto and now AI. When startups in those fields can raise hundreds of millions, they can lure away a lot of talent (both tech and non tech).

Sure, the world still needs software. Perhaps even more so now with the advent of AI.

There's still a ridiculously minuscule chance that you'll end up profitable, let alone successful.

I read that software, from a business perspective, is almost always looked at as a liability rather than an asset. There just isn't very much profitable software in this world, and the software that can become profitable likely subsidizes its business with advertising. The only saving grace is that software that becomes profitable can typically scale. See Facebook, TikTok, Google.

Games sell but are risky and creatively demanding.

Software is a tough business.

The fact that people look to start a business based on searching foe a moat shows they don't believe in free markets. As well as shows what's wrong with Silicon Valley.

You could probably become rich wholesaling gravel in your city. There are plenty of opportunities all around. Execution is key.

YES, now is the best time in history to build a software startup.

Copying isn't your biggest worry.

Build something novel, what has changed?

I would strongly recommend staying away from software startups unless:

- The CEO of some major corporation or a big VC is a close friend or friend of your family.

- You are rich and have a lot of friends who will buy your product.

- You already finished the MVP; which you started building 12 years ago... Might as well try to complete.

- You're a criminal.

The market is insanely saturated and people already have more stuff than they need. Capitalism has been over since 2008. Now it's just feudalism. Product is irrelevant; it's all a social game of selection. You have to be selected. You just need to know someone and have a product with a semi-reasonable narrative that your CEO buddy can use as a justification to give you company money. That's it.

The serious answer:

The value cannot be just the software. E.g. some workflow tool (Salesforce). These tools will continue to exist for awhile but any customer capable of moving off of it to a startup version, can probably make their own startup version, tailored to them.

Now, if you offer something besides the software — logistics, networks, financial instruments, regulatory compliance, physical goods, compute, etc — that has value besides the software.

But the five billionth workflow automation tool has fast diminishing value in 2026.

no

This is the problem with big concentration of wealth and power. The big tech mega corps can copy your idea easily because they don’t have any budget, they can undercut you or sell at a loss, and they can distribute it to all their current customers with anti competitive bundling.

It has happened over and over many times and American antitrust law is useless. The largest corporations must be broken up, taxed heavily, and regulated in new ways. Otherwise there is no fair competition or level playing field for startups.

Isn't it the opposite? E.g. there is very little moat left and small companies or individuals can copy any product big or small in no time?

Depends on your goal - do you have an idea you care about and want to solve? Probably a good idea. If you "want to be your own boss" or looking for something just to be acquired, hard to say, depends on who you know, etc.

You're gonna get a lot of positive responses here, but frankly only do it if you think you can make meaningful money within a month or two.

Everything is going off the rails this year. You only have to use Claude Code for 10 minutes to realize every job involving a computer is going to get flipped upside down within a year.

You mean the big companies who still haven't moved away from abominations like SAP and Oracle? The ones where you require twenty approvals to get a small pilot done? Instead of moving to saner and cheaper alternatives, they would just say, "hey, why don't we just start making our own software?" Every effort like this—if it had any takers—will fail spectacularly.

I get it people are skeptical about the future. But I can't imagine any scenario where people would like taking responsibility of building and mantaining their own software for everything vs. paying marginal amount of money (relatively speaking) to let someone else take the headache.

Got to get more creative and less funding dependent. People still seem caught up in the old process of ideation, static creation, pitch decks. Ack! Garbage now! I only ever took funding to scale to 3-5 heads, well I have 20 heads for nearly nothing now... Ive created more "startup" ideas in the last 3 years then the last 20 of my career. I just keep cranking out anything remotely interesting, launch, and if it don't "work", move on. I just launched another one this week, feels most promising, but we'll see... I didn't go quitting my day job just yet.

Also, GTFO! My ideas are not just slop from sitting around day dreaming. Every one is from observations made from talking or watching people struggle... cant replace that with AI yet.

There's still plenty of moats frankly, same moats as before. What isn't the moat is the software development time.

In our case, we're building a tool that has a moat from: integrations, multiple parties connecting, and others

It's very sticky once we get in, and has nothing to do with the software so much as legal, company policy and inter party communication

You can get the same output as $500k/year of software engineers for $2.4k/year now. Never been better if you ask me!

Could it be that it's just a wrapper for APIs like OpenAI/Anthropic? I've been thinking about this for a long time, and I'm surprised to find someone else with the same view.

The only software worth writing is tools for agents that contain something hard for them to vibe code in a couple of sessions.

Making someone’s agents 20% better, cheaper or faster will be a measurable and easy sales goal.