The vast majority of startups fail to find a moat and eventually fail completely. It didn't stop VCs from investing. It didn't stop people from starting startups.
Perhaps those failed startups would have been viable if they could have built and maintained the product with 10 engineers instead of 100.
So instead of a single large software product that might not fill specific niches well, we might have a medium size product and many smaller products that fill more niches in the category.
For example, Clerk.com auth supports React mostly. But what about Vue or Svelt? Someone can come along and say, I can build that for Vue and Svelt and be economically viable because I build it much faster with fewer engineers leveraging AI.
A quick Linkedin search says Clerk.com has 112 employees. What if I can build an alternative for Vue and Svelt with just 10 employees?
Not being able to maintain a moat just means that software engineers will be switching to different jobs more frequently. It doesn't mean that the overall software market will decrease.
