You’re Not a Tech Startup Anymore – And That’s Okay, But!
In the early days of any new technology, almost everyone operating at the edge gets called a “tech company.” Then the tools mature, infrastructure improves, and what used to be a moat quietly becomes a commodity.
The problem is many founders (and investors) don’t update their mental model. They still talk, fundraise, and plan as if they’re in the frontier phase of a tech cycle that has already commoditized.
That mislabel isn’t cosmetic. It distorts:
How much capital you raise
From whom
At what valuation
And what growth, exit, and return profile is actually realistic
This is where the tech startup vs tech-enabled company distinction matters.
When “Having a Website” Made You a Tech Company
There was a time when selling online was hard tech:
Building a website from scratch
Integrating payments directly with banks
Handling logistics and basic CX without playbooks
If you sold online, you were on the frontier.
Today, having a website is the equivalent of having a logo. E-commerce is still valuable, but no longer differentiating. The same pattern played out in other areas:
Online payments
Then: painful bank integrations, PCI, custom builds
Now: Stripe/Adyen/checkout providers in a few API calls
SMS/OTP
Then: negotiating with telcos, unreliable delivery
Now: Twilio-style APIs as a commodity service
GPS and routing
Then: real-time tracking and routing were frontier
Now: standard libraries and mapping APIs
In each case, the evolution is the same:
Edge → Advantage → Table stakes → Commodity.
Founders get in trouble when they still treat commodities like frontier tech.
Uber as a Commoditization Case Study
Early Uber was a real tech startup:
Real-time GPS tracking on consumer phones
Dynamic rider–driver matching
Routing, pricing, and payments at scale
You couldn’t buy that stack off the shelf.
Today, if a new player says “We’re like Uber, but for X” and they mean:
Standard rider and driver apps
Google Maps routing
Commodity payment rails
…that is no longer frontier tech. It’s implementation.
That business is a transportation & logistics company running on commoditized tech. Still potentially attractive — but not the same risk/return profile as Uber in 2011, and it shouldn’t be funded like it.
Fintech: Real Tech vs Tech-Enabled Finance
The same pattern is obvious in fintech.
Deep tech fintech looks like:
New underwriting models using proprietary data
Real-time risk, fraud, and decision engines
Payment, FX, or treasury infrastructure that others build on
APIs that become rails for the ecosystem
If you rip out the tech, the business dies. The code is the company.
Tech-enabled financial services looks like:
A polished app and onboarding flow
Built on top of a BaaS provider or aggregator
Simple rules plus a manual or semi-manual back office
No real data, infra, or network-effect moat
If you rip out the tech, the business still works in slower, uglier form. It’s fundamentally a lender, processor, or distributor using tech as a tool, not as its core moat.
Both can be good businesses. They just deserve different expectations and funding models.
The Half-Life of a Tech Edge
The core mistake: treating “being a tech startup” as a permanent identity instead of a temporary edge.
Most tech follows a recognizable arc:
Invention – Very few can build it. Just shipping is a moat.
Advantage – A handful of teams can do it. Tech + execution = edge.
Table stakes – You must have it to compete, but it doesn’t differentiate.
Commodity – You rent it as infra from vendors.
Legacy – Clinging to the old stack becomes a liability.
We’ve watched this happen already with:
Websites and basic e-commerce
Online payments
SMS and OTP
GPS tracking and routing
Video streaming
OCR and basic document scanning
Simple recommendation engines
All were once “deep tech.” Now they’re plumbing.
Today’s Frontier, Tomorrow’s Plumbing: AI Edition
The same cycle is now playing out in AI.
Things that sound like an edge today will become default features:
LLM chat assistants – Soon, every product will include some sort of copilot or chat. The edge won’t be “we added GPT,” but your data, workflows, and outcomes.
AI customer support – Infra providers will ship robust AI support out of the box. The edge shifts to process design, escalation, and CX.
AI copilots inside SaaS – Users will assume every serious tool has one. You’ll win on depth, domain expertise, and real productivity gains.
AI content generation – Everyone will be able to generate passable content. Strategy, distribution, and voice become the real moat.
Vertical “AI for X” wrappers – Many wrappers converge on similar capabilities as horizontals and incumbents catch up. The winners are those who own data, workflows, and distribution.
These are all at risk of moving from “tech startup story” to “tech-enabled feature” faster than founders (and their pitch decks) admit.
Where Investors Misprice Risk
Investors get trapped when they:
Underwrite companies as if they’re in Invention/Advantage phase
While the market has already shifted to Table stakes/Commodity
Example:
In 2013, “We’re an on-demand delivery app” looked like a true tech play.
A decade later, the seventh delivery app in one city is mostly:
A thin-margin logistics/operations business running on commoditized tech.
Same with:
The 5th BNPL product built on the same rails
The 6th “AI for X” using the same base models
The 10th neobank on the same BaaS stack
Because the category winner was once a real tech pioneer, and the buzzword is still hot, late entrants get misclassified and mispriced.
LPs think they’re getting pure “tech exposure.” In reality, much of the exposure is to operational complexity, local competition, and commoditized tooling.
A Simple Diagnostic: Tech Startup or Tech-Enabled?
A rough but useful test:
If we replaced all our proprietary tech with off-the-shelf tools, how much would still work?
If 70–80% of the business runs: you’re likely tech-enabled.
If the business collapses: you’re closer to a true tech startup.
Can someone else buy our “secret sauce” as SaaS?
If yes, and it doesn’t fundamentally change your economics, you’re using infra, not owning a moat.
Do our margins and scalability look like software or operations?
Do you scale revenue without linearly adding people and assets?
Or do headcount, branches, drivers, or underwriters grow with every step up?
Does our edge compound with time (data, network effects) or erode as others adopt the same tools?
If we stripped the buzzwords, what are we honestly?
A bank? Logistics operator? Retailer? Agency? Clinic? School?
That answer is often more useful than “AI startup” or “fintech.”
Being Tech-Enabled Is Not a Downgrade
None of this is an attack on tech-enabled companies.
In fact, many great businesses are:
Operationally excellent
Customer-obsessed
Disciplined on unit economics
Aggressive in their use of technology as a tool
Those companies might be far better suited to:
Revenue-based financing
Private credit and structured debt
Growth equity / PE
Or simply: profitable, compounding cashflows
The real issue isn’t that we have too many tech-enabled companies. It’s that we call all of them “tech startups,” then punish them for behaving like what they truly are.
The Thin Line — And Why It Matters
The key distinction:
Tech startup: Technology is the business. It creates the moat, drives margins, and supports non-linear scale.
Tech-enabled company: The business could exist without proprietary tech, but uses it to run cheaper, better, faster, or smarter.
As technology evolves, companies cross that line:
Some start as true tech pioneers in a frontier space.
The category matures, infra is commoditized.
They end up as tech-enabled operators in a mature market.
That’s normal and healthy.
What’s dangerous is pretending that crossing never happened — and still funding, pricing, and storytelling as if we’re in the early days.
If you’re a founder, be honest about where you are on that curve.
If you’re an investor, be honest about what you’re actually underwriting.
Not every great business needs to be a deep tech startup.
But every serious founder and investor needs to know the difference.
