Author: Jaya Gupta , Partner, Foundation Capital
Compiled by: Yuliya, PANews
Editor's Note: In today's rapidly evolving AI technology landscape, product boundaries are blurring, and technological advantages can vanish within months. When everything becomes easily replicable, what truly constitutes a company's competitive moat? This article delves into this core issue. Below is the original text:
For everyone, the convergence of everything in the AI field is an undeniable fact. Companies I once thought were completely unrelated are now competitors. The application layer is collapsing into infrastructure, infrastructure companies are moving upstream in the business flow, and almost every startup is repackaging itself as some form of "transformative" enterprise. Buzzwords change every few months: from context graphs and action systems to organizational world models. As soon as a new concept emerges, all the websites immediately jump on the bandwagon, and within days the market is flooded with platforms claiming to "change the way we work in the future."
As AI models iterate faster, software interfaces become more and more similar, and product development becomes cheaper and cheaper, the superficial aspects of running a company can be easily copied. But what's truly difficult to copy is the company's underlying "system": how a company attracts outstanding talent, how it inspires their ambition, how it pools everyone's wisdom, how it allocates power, and how it transforms work into a "compound interest" system that others simply cannot replicate.
Top-tier companies have always understood one principle: employees are not tools of the company; employees are the company itself . But in the AI era, with everything else developing at breakneck speed, this truth becomes even more acute. If products can be copied, industry tracks can be renamed, and technological advantages can crumble within months, then a perennial question remains: what kind of organization should you build around the people capable of constructing all of this?
Simply put, the company's very structure is becoming its biggest competitive advantage.
Great companies even invent their organizational structure.
The most successful companies are actually innovative in their organizational structure. They create new company systems around a new way of working, thus providing a space for a new type of talent to flourish.
For example, OpenAI is neither like an academic institution in a university, nor like a traditional corporate lab or software company. Its core is "training cutting-edge AI models," and security, policy, products, and infrastructure all revolve around this core. This structure has given rise to a completely new type of researcher: one who understands cutting-edge science and products, and can simultaneously handle geopolitical and human civilization risks.
Take Palantir , for example. It invented a completely new operating structure for those messy systems. Sending people to the front lines with clients wasn't just about selling products; it was a reflection of the company's status, talent model, and worldview. In other companies, accompanying clients, dealing with organizational messes, and turning political appeals into products are all thankless, low-level jobs, but Palantir made them core. It created a new type of role—people who aren't simply programmers, consultants, or policy experts, but who can handle all three.
These companies do not conform to any established framework that existed before their emergence, nor do the people who built them. Great companies are not merely gathering places for outstanding talent; they are structures that ultimately allow specific talents to express themselves.
The structure of a company determines who stays.
The world's best companies never compete solely on industry tracks, market share, or high salaries; they compete on "identity." Ambitious people typically place extreme importance on these points: feeling special, being close to the center of power, becoming irreplaceable, having unlimited options, participating in a great mission, and being in the midst of history-changing events. However, they often don't initially know which aspect they value most.
This is why the most powerful organizations identify talent early on and begin recruiting when top universities admit freshmen. They bring talent into their fold before their self-perception is solidified, their values are clear, and they can distinguish between their strengths and their ideal self.
A great company will extend an olive branch to you for their ambitions. It will tell you: things you've been thinking about but don't know how to express can be achieved here. You can be the one who pushes the Mars mission timeline forward, witnesses breakthroughs in cutting-edge technology, navigates a fragmented system with ease, and achieves undisputed success.
This is the significance of great institutions; they are shells built around a specific group of people.
Many people value money above all else, which is the most uninteresting way for legendary companies to compete for talent (except perhaps Jane Street or Citadel). Money may attract talent, but it rarely truly converts them (just ask some new labs or Alex Wang). The best talent is most loyal when a company can offer something more tangible than money: a path that allows them to become the version they've always wanted to be, or at least don't yet know they want to be.
Every emotional commitment is also a structural commitment. If a company says being close to its customers is important, but customer-facing work is relegated to a low status, then that commitment is false; if a company claims to value ownership, but decision-making power is highly centralized, then that commitment is also false; if it says its mission is important, but this mission doesn't offend anyone, doesn't screen anyone, and doesn't require any sacrifice, then that's still false.
So, what kind of emotional experiences do people crave?
The desire to be different : rare, visible, irreplaceable. This rhetoric boils down to "only you can do it." Only if you are unique enough can you build it here. It precisely targets the deep-seated insecurities of most high performers: doubting their own excellence is fragile, doubting that others could also do the job, and doubting that they haven't been truly seen. This feeling only works in a sufficiently small organizational structure, because there, one person can truly change the company's trajectory.
The yearning for destiny : the feeling that one's life is heading in a certain inevitability. Anthropic is the clearest example of this. "We are one of two or three companies that decide how this technology is deployed securely, and the people sitting in this room are the ones doing it." This feeling only has credibility in a structured environment where one is destined to be one of those two or three institutions.
The desire to stay relevant : It feels like being in a room where compound interest is happening. Look at how many iconic CTOs Anthropic hired this quarter. Talent density is itself a morphological decision: it's the result of how a company recruits, pays, organizes work, and concentrates its best talent in the same physical space.
A desire to prove oneself : For example, those investment bankers whose lives have been polished to a glamorous level, possessing various certifications and constantly praised for their excellence, begin to doubt that all of this actually proves nothing. Or a desire for choice, which McKinsey has taken to the extreme. The company's structure: generalists, a two-year analyst cycle, and the option to explore different industries, because who knows what you'll want to do at 21.
Clearly, people also crave access to power and status.
Some are willing to sacrifice for something far greater than salary—what most companies used to call a "mission," but now it's more like a fervent belief centered around the team. In these new lab spaces, some new value propositions are sharper than the mission statements of the previous cycle because they all involve taking sides. Open source puts you in opposition to closed labs; sovereign AI puts you in opposition to the assumption that "a model of one nation will rule the world." The most powerful missions are those that will make some people refuse to work there, because that's the same thing as making the right people desperately want to be there.
Ultimately, people are just people. The best companies have accurately identified one or two emotions that specific candidates desperately crave and have tailored organizational structures specifically for these individuals.
Problems faced by founders
For founders, the real question isn't "How do we tell a better story?" but rather, "What kind of people can only be themselves here?"
Most companies market themselves by stating the literal version of what they do: “We’re building a model,” “We’re building a rocket,” “We’re building a CRM for X,” “We’re automating Y.” This may be accurate and honest, but today, mere accuracy is no longer enough to recruit top talent.
Today's best companies operate on a higher dimension, describing the changes their existence brings: which industries will recover, which institutions will be rebuilt, which civilizations will win the gamble, and which human endeavors will become possible for the first time.
Sometimes, people mistakenly believe that this "extra" height is merely a marketing tactic, or that it differs from the fundraising narrative. The tone of your story must match the scale of your company. Telling a grand story within a small-scale context sounds like boasting; conversely, telling a small-scale story within a grand-scale context will miss out on top talent. This alignment is precisely what candidates are evaluating, even if they cannot articulate it clearly.
If you believe that being close to customers is a moat, then customer-facing work must enjoy a high status.
If you believe that speed is the moat, then decision-making power must be delegated to the periphery.
If you believe that talent density is a moat, then you cannot allow mediocre people to define the pace of operations.
If you believe that deployment is the moat, then those closest to reality need power, not just responsibility.
Advice for job seekers: Being selected vs. being seen
For those considering their next job, there's another lesson to learn. You're betting years of your youth on someone's vision and a company's structure, but interviews rarely reveal the true picture. Interviews only show you impressive PowerPoint presentations, grand missions, capable colleagues, and a rosy future. They rarely show you the real power dynamics and almost never let you see how people behave under pressure.
These truths will only come to light later: when the company runs into trouble, when your job becomes difficult, when you have to request resources they don't want to give you, or when they say they "see your potential" but you need them to deliver on that promise with titles, power, money, scope of business, or resources.
For ambitious individuals, the emotional value provided by the company can easily create a "I am the boss" illusion for them, even before they actually receive shares. As a result, these high-performing employees do the work of founders, bear the pressure that executives should bear, and have the mindset of partners, but they still receive the money and power of ordinary employees.
The company is taking advantage of your founder-level drive, and all you've gained is a cheap sense of "belonging." If the company's actual compensation eventually matches that, it's a positive story; if not, it's one-sided exploitation.
Those who have been there will warn you: you're trading your "identity" for the "real benefits" the company should be giving you. For example, they'll give you a "special treatment" instead of a promotion, let you "get close to the boss" instead of real power, give you "verbal guarantees" instead of tangible benefits, and make you "trust me" instead of signing a written contract. This is why someone might feel deeply valued, but remain stagnant materially.
While companies have many ways to retain employees (such as stock options and salaries), the most dangerous promise is "later." "It will grow bigger later," "You'll earn more later," "Your compensation will catch up later." However, time passes silently. When you reach the next stage of your life, you'll find that those promises made for the future have never materialized (unless you're very lucky).
Ambitious people must understand that being "chosen" and being "seen" are two different things.
Being “chosen” is an emotional one: you are special, we believe in you, you are one of us.
Being "seen" is tangible: this is your business scope, this is your power, this is your profit sharing, this is your decision-making authority, and if you succeed, what real changes will you achieve?
If you truly have potential, go to a place where you can be genuinely "seen," a place that is willing to incorporate your value into its policies and compensation.
New moat
You can certainly interpret the above in a very dark light. You can think that every job posting is brainwashing, every mission is a facade, and every company is trying to make you feel special so they can cheaply rent your youth.
But deep down, we do need some kind of faith. We hope our work is meaningful, our sacrifices are worthwhile, and our talents are recognized by those who truly understand and are capable of great things. Having these thoughts doesn't mean we're foolish; it's just human nature. Great companies have always been new containers for these needs. They are not just machines for making money or products, but also architectures for housing ambition.
Silicon Valley loves to label people: techies, non-techies, researchers, operations, founders, investors, evangelists, mercenaries... But they forget that most truly brilliant people aren't confined to one box. They live across disciplines, borrowing knowledge from one field, breaking the rules of another, and combining seemingly unrelated things to create a new form that others take for granted.
The opportunity now is not to become the next OpenAI, Anthropic, Google, Palantir, or Tesla. Instead, it's to ask: What kind of company was previously impossible? What kind of people have been patiently waiting for such a company to emerge?
AI will make many things easier to copy: software interfaces, workflows, product prototypes, sales pitches, and even early-stage development speed. But no matter how many PowerPoint presentations tout AI as making it easier to start a company, AI will absolutely not allow you to easily establish a "new system." AI cannot help you easily create an organizational structure that brings the right people together, gives them the right authority, lets them solve the right problems, and allows their judgment to compound over time.
In the past, the talent market rewarded companies that made their employees feel "chosen." The talent market of the future will reward companies that break with convention and create entirely new organizational structures. And the people in these companies will transform into the kind of talent that could never have been cultivated in the old-fashioned companies of the past.
