Head of Growth at Lovable | The Collapse of Pre-Ai Distribution Moats, and How to Build New Ones The Evolution of Business Growth Growth has shifted from relying solely on a great product to combining a great product with effective distribution. The most successful companies leverage "growth loops," where continuous product interaction generates new users, rather than linear sales funnels. The Rise of Product-Led Growth (PLG) Product-Led Growth (PLG) gained prominence due to changes like B2B users increasingly becoming buyers, shorter lifecycles for marketing channels, greater availability of product data, and blurring roles between product, marketing, and engineering teams, shifting more growth responsibility to the product itself. AI's Disruption of Traditional Distribution Channels AI, particularly large language models like ChatGPT, is significantly impacting established distribution methods. Search traffic (e.g., Google SEO) is declining as users get direct answers from AI, and social networks are penalizing external links, reducing their effectiveness for driving traffic. AI currently serves as a destination, not a distribution channel. Customers Becoming Competitors With the rise of AI and low/no-code tools, non-technical users can now easily build their own software solutions for simple functionalities, often at a much lower cost. This means existing companies face competition not just from other businesses, but also from their own customers who can replicate parts of their product. The Imperative of Building a "Moat" To ensure long-term success amidst rapid technological and distribution shifts, companies must establish a "moat." This refers to a competitively defensible advantage that is difficult for others to replicate, extending beyond just the core product functionality. Key Moat Strategies for the AI Era Velocity of Development: Accelerating product shipping and innovation by leveraging "AI-native" employees who default to AI tools for various tasks. Brand: Cultivating a delightful and emotionally engaging product experience that exceeds expectations, fostering user loyalty and word-of-mouth growth. This is increasingly a product-led rather than purely marketing-led effort. Data: Strategically utilizing proprietary user data and potentially creating closed data ecosystems to gain a significant competitive advantage. Ecosystem Play: Investing in platform development, marketplaces, and robust integrations to create a sticky, interconnected user experience that provides more reasons for users to stay beyond just core product functionality. Urgency for Strategic Action Given the rapid changes driven by AI and collapsing distribution channels, companies must act immediately. Re-evaluating current strategies and roadmaps to prioritize building these competitive moats is crucial for survival and growth in the coming months and years. This video explains how the rise of AI is disrupting traditional business growth strategies, particularly for product-led growth (PLG) companies. Here's a summary: Growth Definition : The video defines growth as a combination of a great product and effective distribution, emphasizing growth loops over linear funnels for sustained expansion ( 1:37 ). Rise of Product-Led Growth (PLG) : It details the shift from sales/marketing-driven B2B growth to PLG, driven by factors like users becoming buyers, shorter marketing channel lifecycles, increased data availability, and blurring team roles ( 4:50 ). AI's Disruption : AI, especially tools like ChatGPT, is collapsing traditional distribution channels (like SEO and social media) by acting as a destination rather than a traffic source ( 10:07 ). Customer as Competitor : AI also enables customers to build simple functionalities themselves, posing a new competitive threat to companies, especially those with simple but highly utilized features ( 14:53 ). Building New Moats : To survive and thrive, companies must build new "moats" – competitively defensible advantages. Four key moats are: Velocity of Development : Achieved through "AI-native" employees who default to AI tools for productivity ( 21:45 ). Brand : Creating delightful, emotion-invoking product experiences that generate word-of-mouth ( 22:51 ). Data : Strategically leveraging user data and memory, potentially by creating closed ecosystems ( 24:34 ). Ecosystem Play : Continuing to invest in platforms, marketplaces, and integrations to make it harder for users to leave ( 26:13 ). Urgency : The video stresses the need for immediate action in building these moats, as the market is changing rapidly ( 28:02 ). YouTube generated summary This segment is crucial as it outlines the immediate need for companies to act despite market uncertainties, introducing the concept of a "moat." It defines a moat as a competitively defensible, hard-to-replicate differentiator, emphasizing that it's more than just a product or tool, but something that product integrates with to provide a unique advantage.This segment highlights a new and powerful moat: velocity of development, achieved through "AI-native employees." It explains how these employees instinctively leverage AI tools for all tasks, from coding to design, enabling unprecedented shipping speed and reducing cross-functional dependencies, thus creating a significant competitive edge in productivity.This segment redefines brand as a critical moat, moving beyond traditional marketing to encompass every delightful product interaction that evokes emotion and fosters word-of-mouth. It stresses that products must exceed expectations and create an experience customers want to discuss, making brand a fundamental product exercise for differentiation in a competitive landscape.This segment explains how user data and memory can serve as a powerful moat, providing an advantage in building better products and potentially forming a closed ecosystem. It illustrates with an example of a company locking down data access, demonstrating how strategic control over data can create significant competitive differentiation and advantage.This segment emphasizes the "ecosystem play" as a moat, detailing how building platforms, marketplaces, and integrations creates functionalities that are hard to replicate. It argues that providing multiple hooks and reasons for users to stay, beyond just core product functionality, is essential as product features become easily imitable in the current technological landscape.This concluding segment stresses the critical urgency of building a moat, emphasizing that first-mover advantage is real and immediate action is required. It warns that companies must prioritize creating defensible, sustainable growth models against collapsing distribution and rapid technological shifts, as tooling and software development become democratized.