If anyone can build software with AI, what's the real competitive advantage?
Short answer
Audience. AI collapsed the cost of building software, so a great tool no longer protects you, and competition for attention is about to climb as software and companies multiply. An audience that trusts you can't be cloned. Build it first and you get options for how to make money from it.
There are so many people building amazing AI tools in their basements. A great tool doesn't protect you anymore. An audience does.
"Build the audience first. And then you basically are building optionality for how you want to leverage it... especially because of AI, the real moat is audience."
Why does audience matter more now?
Because it's so easy to build, more people are building, and it's crowded trying to get in front of buyers. I think competition for eyeballs goes up at least 100 times in the next couple of years, because there will be 100 times more software and 100 times more companies. Layoffs add to it: people who lose jobs start side businesses.
The way to stand out is a media brand that gives people content they choose to take in. Big companies know what that's worth. A newsletter that started as a side hustle was bought by HubSpot, a multi-billion-dollar company.
Should I build the product or the audience first?
The audience, when they compete for the same week, unless the product work is unblocking customers who already pay you. A plan that builds an audience before there's a revenue model is fine with me. The return is optionality. And I discount any strategy whose only advantage is that the tool is better.
How do I test whether my business is defensible?
Ask whether AI can just do what you're doing within one to two years. Run that test on every repeatable content or service task. If the answer is plausibly yes, the value has to live in the brand and the relationship instead. That's why my team invests in design, branding, social media and the podcast, not only the newsletter.
What does audience-first look like in practice?
I'd been doing newsletters for two years, knew the problems, built tools to solve them, and already had an audience of newsletter operators to sell to. The audience came first. The software came second.
The reverse is the common trap. You could build the coolest thing ever, perfect and ready to go. How are you going to sell it?
Related: will the AI labs just build my product and why AI makes trust more valuable.
Answered by TJ Larkin. From Local Media HQ podcast conversations in 2025 and 2026 and an April 2026 group call. Last updated .