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Lately, it’s become trendy to say: “”
But this phrase is also anand confusing what a ‘moat’ means.
In fact, especially if the market is fickle and technology shifts quickly like in most AI agent markets.
Take the AI note taker market, for example. , vibe coding doesn’t help you win — it just . Margins get thinner. Churn gets worse.
In that sense, 🛢️ : it makes you go faster, but doesn’t tell you where to drive. It won’t fix a It won’t save you from a
And if your is just copying the current hot startup trend (like everyone chasing coding agents), Markets become a game of who can burn capital and saturate the market faster (e.g., Google CLI). But unlike Uber, AI features don’t have network effects…
In other words, . It can just as or expose the shallowness of your ‘distribution’.
So in this post, I want to break down why this narrative misses the point — and why:
In AI, because things move so quickly, “distribution” often just means attention — and that’s not a moat. At best, it’s optionality.
And vibe coding / faster product execution can’t save a bad strategy.
It had everything: OSS traction, a rabid developer community, and inbound from Fortune 500s. It was the first image model on the AWS Marketplace.
Rather than building a product company with domain focus (like Runway), or packaging commodity models into APIs (like Fal or OpenRouter),
It tried to be a scrappier, domain focused version of OpenAI — without the resources, discipline, or GTM leverage.
And it didn’t work.
Fal, by contrast, played it simple: wrap diffusion models in a clean developer-facing marketplace and scale usage. Today it’s at $50M ARR with a 39 person team.
But instead, it chased , botched multiple launches (including Stable Diffusion 3’s restrictive license), and eventually got leapfrogged by competitors with faster feedback loops and tighter product stories.
It’s not just Stability. Many VC-backed research-heavy labs failed to convert early buzz into durable surface area.
The lesson? Early distribution buys you time to build deep integrations with customers - which creates the moat. That’s it.
Stability proves early distribution is worthless once a unravels.
Vibe coding doesn’t reshape market structure. It just , which makes it - even if you have distribution.
Why?
In saturated categories with low switching costs, and standardized technology — vibe coding doesn’t help you differentiate — it helps everyone ship the same thing, faster.
And that’s exactly what happened in the
Otter, Fireflies, Granola, Fathom, and 30+ VC backed solutions — So what do they do instead?
Some tools even offer unlimited AI summaries at $8.33/month — a price point that only makes sense if you are banking on next round of funding (below: Otter.AI’s yearly pricing. Note, I personally prefer Fireflies because it has an API).
But this “messes up” the game for incumbents with distribution as well, such as Gong.
Gong, which built a defensible business with CRM integration and proprietary sales data, now faces price pressure from startups that trained their users to expect “sales call AI” for a fraction of the cost.
Gong has the data, the pipeline analytics, the sophistication — but none of that matters when the customer asks,
That’s the downstream effect of undifferentiated distribution: it commoditizes user expectations. It pulls down the economics for everyone.
So when does vibe coding strengthen an existing distribution?
— not when it tries to slap on overpriced AI upsells (looking at you, Salesforce).
In other words, the only real moat left is enterprise inertia. Not because the product is better, but because switching is painful. And if the incumbent can keep bolting on “good enough” AI, vibe coding becomes a cost shield — not a growth play.
Outside of that, moats are hard to come by. Non-enterprise users are too fickle. These markets inevitably spiral into pricing wars, hype fatigue, and category collapse.
Startups get stuck in a brutal loop: building in public, copying each other, and training users to expect feature parity. Differentiation gets compressed before anyone builds traction. Buyers stall. Nobody wants to rip out the incumbent if everything feels interchangeable.
Cursor broke through — but that was lightning in a bottle. And even then, it’s unclear whether they can sustain momentum. Their recent poaching of the Claude Code team suggests they know it too.
So yes, distribution matters. But in many cases, what we call “distribution” is really just resistance to change.
And that’s not a moat you build. That’s a moat you inherit — and cling to while the rest of the market burns itself out.
Vibe coding didn’t rewrite the laws of defensibility. It just changed the tempo.
Distribution is still necessary. But it’s not sufficient.
Moats come from what customers can’t walk away from — workflows, data loops, infra hooks. Not just being first to ship on Product Hunt.
And certainly not from shipping faster in a category no one wants to stay in.
In some sense, nothing changes.
