You can't "buy" your competitive edge...

Over the last 12 months the tech landscape has changed at a terrifying pace for builders, employees, investors, and more.

• OpenAI and Anthropic seem to release new models once every other week.

• SaaS stocks are down over AI fears as well as over liquidity needs (lol) for last weeks allocation in SpaceX and the upcoming and highly anticipated OpenAI and Anthropic public offerings - all of which require new primary capital allocations.

• Many investors are scared to invest in startups over concerns over OAI and Anthropic simply cannibalizing their entire TAM as part of their product (Figma, and more)

Different symptoms, same underlying shift: the cost of building software just fell off a cliff, and the market is repricing every company whose value was being the software you used to buy.

New models every other week is the supply side of that. SaaS multiples compressing and investors fearing the incumbents get eaten is the market pricing it in. When tools are this cheap to build, owning one stops being a moat - and that’s the thread I want to pull on for the rest of this piece.

Barriers to entry are lower than they’ve ever been. Inspired employees are vibe coding CRMs, ripping out random workflow tools, and more. No commentary on whether these efforts will be successful and yield results, but the momentum to build over buy is there - and I am certainly ambitious enough to try to build my own things as well.

But people don’t seem to know what they should build and what they should buy - and people seem to cite time, cost, and effort tradeoffs as the predominant argument for their path forward.

While these arguments are interesting and cultivate conversations based in numbers, I believe the reality is inherently far more logical.

Before it was coined by Varun Anand and Mishti Sharma at Clay - “Alpha” was actually finance word - it’s the excess return you earn above the market.

For a startup, “the market” is every competitor with access to the same playbook, the same tech stack, and the same hiring pool - so alpha is whatever you do that they structurally can’t copy.

And this is an element that is difficult to replicate when done right; the lead magnets you see today, were “alpha” 6+ months ago, that now are being used to engagement-farm and send emails to prospects who are drastically behind and looking for a quick fix.

Unless you’re in a market that hasn’t used this strategy before, you’re not commenting “PLAYBOOK” for something that will make your company go from unheard of to an overnight success.

To zoom out, I think we can broadly analyze what all of this means.

Capitalism is simply about building the best long-term profitable business with the most sustainable margins and the deepest competitive moat.

And building a company is (at its foundation) about two things at its core

1. Building faster and more efficiently than anyone else

2. Selling more and more efficiently than everyone else

It’s every man (or woman) for themselves, and building / selling are at the very epicenter of that world.

If you take a step back and look at these two parts of running a business - it is your duty as a founder, employe, shareholder, and so on and so forth → to build and sell as fast and effectively as you can.

And for most companies, buying SaaS that is democratized for the masses; well put simply, that simply will not allow you to build the best company in your space. It will make you just like everyone else.

That’s why you see companies like Ramp, Modal, and others staffing internal teams focused on driving efficiencies internally rather than procuring products. How can we work with our sales team, with our engineering team, to turn the wheel faster - to ship the next feature, to sell one more deal this month.

From all of this, it seems to me like there are two types of software that exist today and we will continue to see the divide between the two get larger as time goes on:

1. Ops Software

2. Alpha Software

1. Ops Software

In my mind, ops software is software that is part of your operational stack - but does not allow any business to win their market.

Things like your CRM, your accounting tool, your productivity suite, payroll, etc.

It’s likely your team can augment these tools with vibe coded solutions, random annexes to existing solutions, and more.

I’m coming up with this as I go along, but I think historically, lots of tools that were at one time Alpha Software, land up becoming Ops Software.

When CRMs were first created, they were probably an enormous game changer for businesses, allowing them to document their deals, contacts, and companies. But as the market matured and this database became table-stakes, it becomes a stable, core part of every companies workflow.

What AI actually democratizes is the ability to manufacture your own alpha - the tooling, not the edge itself. The edge still has to be produced, by you, over and over.

If ops software is the floor every company stands on, alpha software is the ceiling only you can reach:

Alpha Software

Alpha software is my way of articulating the software that will truly make a competitive difference in your company.

Alpha software does not look like typical SaaS; by its very nature it needs to be custom built, hyper bespoke, catered to a teams exact needs and has the ability to evolve on a dime to match evolving market conditions and the will of its operators.

• Your team wants a faster dialing experience? Pushed to prod

• Your team needs custom integrations to 3 new purchased data vendors? Done

The way I think about it, team’s should outsource (buy) their ops software, and create (build) their alpha [software]. Buying the thing everyone has is rational - reinventing payroll is a waste. Buying the thing that’s supposed to win your market guarantees you’ll perform exactly like everyone else who bought it.

Time, cost, and effort are not the metrics to anchor to, its whether the tool is a source of your edge, or simply the cost of doing business.

To play devils advocate, if everyone can vibe-code a bespoke dialer on the same day, hasn’t the ability to build alpha itself been commoditized? If your competitor ships the same tool by dinner, where’s the edge?

I guess the logical resolution here comes back to the new perspective on the way competitive moats are built and loyalty prevails - thru taste. When owning the tool is free, the durable advantage becomes taste and speed - knowing which tool to build, building it before anyone else, and killing it the moment it stops working. The bottleneck is judgment, not engineering.

And on top of this, we’ve all seen it happen, vibe-coded tools are where tech-debt is created - these things decay, someone has to maintain them, and when the original champion of it departs, so does the lineage of the tribal knowledge of what made it special in the first place. Historically that maintenance cost is why buying usually won.

Where this has changed is that the same drop in build cost applies to upkeep - rewriting, patching, and extending a tool is now nearly as cheap as standing it up. The math that used to favor buying has quietly flipped.

Buying Gong or Clay will never get you fired, but it probably won’t make a category winner and put you on a yacht (sorry).

You can watch this ops/alpha lifecycle play out in real time in the two functions every company lives or dies by - selling and building

Selling

I say this because the reality is most GTM companies today are one historical example of an exceptional growth tactic that a handful of companies leveraged, that someone decided to commoditize for everyones benefit.

While this creates a initial golden age of innovation for those first few adopters, the second this tech is democratized and becomes available to everyone, the returns become diminishing - it no longer will give you an edge

We’ve seen this with nearly every flavor of outbound -

• emails (Apollo, Outreach, Salesloft, Unify),

• phone calls (Nooks, Orum, Trellis),

• gifting (Sendoso, Giftly),

• and much more (that one cake sending company that some dude vibecoded?).

Building

The same can be said for coding / development tools.

Cursor, Cognition, Copilot, Claude Code, Windsurf, Zed - they’re all incredible coding platforms that we’ve seen over the last 24 months.

Tools no longer have loyal users; users are loyal to whichever platform gives them the ability to generate differentiable outcomes the longest.

And whichever is the best tool du jour will win that battle.

This is a foundationally (not a word but alas) new reality.

Takeaways

I don’t think is a relatively novel thought, this is the nature of competition. And so long as capitalism is about building and selling, teams will put their money where their mouth is and buy whatever promises to give them a 2% edge over the competition.

With the cost of building dropping to zero, and the time it takes dropping in parallel, the future is bespoke. And that future is an exciting time to live in.

So, go out and ship, and build what will give you the competitive edge to beat your competitors and capture your market. There’s less than there ever has been standing in your way.

Garrett