By Gabby Cazeau, Partner

In business school, they teach you that your competitors are incumbents, emerging players, and inertia. Founders and VCs have learned how to deal with each:

• Incumbents: Outperform them
• Emerging players: Outcompete them 
• Inertia: Create enough momentum to replace the status quo

But the playbook is changing. Today, your customer can be your first competitor.

The classic “Build vs. Buy” question has evolved. We are living in a moment where your customer can build something quickly that’s perhaps just as good as the tool you’re selling. The gap between those two choices is shrinking by the week and now, it’s “I’ll buy AI tools to build it myself.”

Now, while customers might not be building the underlying models, they are getting better at building for themselves at the application layer. They can build “good enough” for their specific needs over a weekend. As an early-stage startup, you now have to overcome the feedback: “I had a demo with you last week, but I just built it myself over the weekend.”

So, what do customers actually buy now?

Customers are still solving for the opportunity cost in building something that isn’t their core business. In a world where code is a commodity and execution is nearly free, the barrier to building is low. But the barrier to building something world-class remains as high as ever.

They’re also still solving for the intangibles of trust, expertise, and peace of mind that comes with someone else building the tool. Your moat is the peace of mind you provide and the risk you take off their plate.

Founders: If your customer built your product tomorrow, what would you have left to sell them?

About Harlem Capital

Harlem Capital is a venture capital firm that backs the next generation of winners. The firm partners with exceptional founders with the irrational motivation to build generational companies. All Winners Welcome.

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