a16z essay tackles the 'labs will kill every AI startup' panic: app layer isn't dead
hugs · x · 2026-09-30
- a16z's Joe Schmidt published "Avoiding Death on the Yellow Brick Road," addressing the question founders keep asking: is there any application layer left to build, or will OpenAI and Anthropic kill everything?
- His take: founders are "half right." The labs really are absorbing a huge swath of application-layer software (Codex, Claude taking over workflows directly), but concluding the only safe places are inside a big lab or in robotics/hardtech is a form of "AI psychosis."
- The essay explores which application-layer directions remain durable and how startups can avoid being crushed by platform moves.
- Vibium founder hugs (Kevin Whinnery) shared his DM reply agreeing, saying his keyword on the business side is independent, and recommends rereading the a16z piece every time a lab ships a "startup-killing" feature.
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