Startups: The Passion and The Paradox (2026 Edition)
I wrote this piece in 2014. Twelve years on, I'm still grumpy. Some things never change.
What has changed is the landscape around us. The VC party is well and truly over, it’s not dead, but the hangover is severe. Rising interest rates, a brutal correction in tech valuations, and the cold realisation that “growth at all costs” was a Ponzi scheme held together by cheap money. The unicorn factory slowed to a trickle. Many of those billion-dollar exits turned out to be paper wealth that dissolved before anyone cashed out.
But here’s the twist nobody in 2014 saw coming clearly enough: AI arrived and blew the doors off.
The New Bimbo, Hair Colour TBC
In 2014 I said Silicon Valley was a “personified blonde bimbo actress with a serious complex”. I’d extend that now to AI itself and the mythology being constructed around it.
The playbook is identical. Before, the message was: get funded, move fast, break things, disrupt. Now it’s: wrap AI around it, ship in a weekend, become a one-person billion-dollar company. The dream has been re-skinned. The underlying psychology hasn’t moved an inch.
The record label became the VC became the accelerator. Now add the AI platform provider to that chain. OpenAI, Anthropic, Google they sit in the middle of you and your dream, just as surely as any VC ever did. You’re building on their infrastructure, paying their API bills, subject to their pricing changes, their deprecations, their terms of service.
The puppet strings are thinner now. Still there though.
What AI Actually Changed
To be fair and I’m always fair, even when I’m being unpleasant about it some things did shift.
The cost to build collapsed. What needed a team of eight engineers in 2014 needs one person with good prompting skills and a subscription today. That part is real. The barriers to making something exist are lower than they have ever been.
The problem is that the barriers dropped for everyone simultaneously. So the market is now flooded not with more professional wedding photographers, as I put it before, it’s flooded with fully-functioning products that took a weekend to clone. Your moat evaporated before you even dug it. Defensibility in software is a harder argument to make than it was twelve years ago.
What AI didn’t change: distribution, trust, customer acquisition, and the relentless difficulty of getting people to pay for things. Those problems remain stubbornly human.
The VC Reckoning
The funding winter shook out a lot of what needed shaking. Firms that were throwing term sheets at anyone with a Notion doc and a deck full of TAM slides got burned. LPs got impatient. Management fees on underperforming funds became a talking point. The 90% failure rate I mentioned in 2014 didn’t improve, by some measures in the AI gold rush cohort, it got worse because the speed of build meant the speed of ship something nobody wants also accelerated dramatically. I’ve been caught out with that myself, now I’m far more measured.
The “captives” pool didn’t go away. It just rebranded. Now it’s often framed as “AI-native portfolio companies”, same dynamic, much gloss shiny language.
Accelerators and hubs are still running the numbers game. Many of them now mandate “AI integration” as a condition of entry, which is about as meaningful as mandating you have a LinkedIn page. It’s a checkbox, not a strategy.
The Quiet Counter-Movement
Here’s what I didn’t see coming in 2014, and what genuinely gives me some optimism. I know, me Jase, optimistic.
The tools of the trade being democratised by AI have created a genuine micro-startup class. Small, profitable, un-funded, often solo or two-person operations building specific things for specific people and actually making money. No pitch deck. No investor relations. No 409A valuations. Revenue from customers, radical concept.
This isn’t the Silicon Valley model. It’s closer to the old-school small business model, except the margins can be software margins. That’s interesting. That’s actually new.
The irony is that AI, the thing being used to sell the latest version of the startup dream, is also quietly enabling the antithesis of that dream: small, independent, sustainable, and beholden to nobody. Now that I like because I’ve preached that for years.
Every Startup Is Still A Marilyn
The core of what I wrote in 2014 holds. You’ll still go to all the networking events, now they’re called demo days and AI summits. You’ll talk to all the right people, apply for all the programmes, and at some point someone will suggest you just “pivot the model slightly” and then the money might flow.
And in that moment, the first puppet string connects.
What I’d add now: the AI hype cycle is a particularly seductive version of this trap, because it comes dressed as empowerment. You don’t need anyone, you can build anything, the tools are there all true, to a point. If your entire strategy rests on a foundation owned by someone else’s model, someone else’s API, someone else’s infrastructure, you are still auditioning. You’ve just moved the casting couch.
K.I.S.S. - Keep It Separate, Stupid.
My advice from 2014 stands. You need honest people around you, not cheerleaders. You need to understand your numbers, not your narrative. And you need to know who’s actually in the middle of you and your customer because there’s always someone in the middle now, and in 2026 it might be a model provider you’re paying per token.
I’m still grumpy, still 100% equity where possible, still suspicious of anyone who tells you it’s easy.
The dream is still the same dream. The costume changed. The complex didn’t.