AI didn't create this split. It just burned away everything that let you ignore it.

Every few weeks, a new AI tool launches that replicates what some existing business does. Faster. Cheaper. Sometimes better. Watch the reactions carefully. Some founders panic. Others barely shrug.

The difference has nothing to do with how good their product is.

You've built something people pay for. A SaaS tool, a service, a content product. It works. Customers like it. Then someone ships an AI-powered version of your thing over a weekend. Or a well-funded team clones your core features in a single sprint.

The usual advice is to "add AI," "move faster," or "find your moat." All of which sounds reasonable and misses the point entirely.

The Oldest Split in Commerce

Every venture, since the first merchant set up a stall, has been one of two things: a commodity or a brand.

A commodity competes on price, speed, and features. A brand competes on trust, taste, and identity. No third category. The successful ones always knew which game they were playing.

For decades, though, the line was blurry. Building software, for example, was hard enough that the act of building itself created a temporary moat. If you could ship something that worked, that alone was differentiation. The effort required to replicate your product was your shield.

AI dissolved that shield.

Building is drastically cheaper now, and for anything straightforward, approaching free. Competitors can replicate your core features using AI-driven development in days. And suddenly, ventures that thought they were brands are discovering they were commodities all along. They just couldn't tell, because the difficulty of building masked the absence of anything deeper.

What Happened to Stock Photography

Photography has been part of my life for decades, so this parallel became obvious early.

Stock photography was a massive industry. Getty Images and Shutterstock built empires on it. Photographers made a living shooting generic business scenes, landscapes, food plates, team-at-desk compositions.

Then AI image generation arrived. Midjourney, DALL-E, and their successors could produce a "diverse team collaborating in a modern office" in seconds, for pennies. The market didn't just shrink. It collapsed in the middle. Shutterstock contributors went from earning hundreds a month to single digits.¹ Getty and Shutterstock were forced into a $3.7 billion merger in early 2025, scrambling to strip $150-200 million in overhead while trying to rebrand as "AI content marketplaces."²

Here's what most people miss: fine art photographers with distinctive styles? They're doing fine. Some are doing better than ever. Nobody hires a portrait photographer or visits a gallery for generic output. They go for a specific vision, a specific eye, a way of seeing the world that belongs to one person.

Stock photographers were commodities selling a product anyone could produce given enough tools. Art photographers were brands offering something only they could create. AI didn't invent that split. It just made pretending impossible.

And this pattern keeps repeating. Software, services, content, consulting.

The Dead Zone

Most ventures live in a dead zone between commodity and brand.

They have some brand elements: a founder's personality on social media, a community Slack channel, a distinctive color palette. All layered on top of a fundamentally commodity product.

This middle ground used to be viable. You could survive there for years, even thrive. AI is making it lethal.

The brand elements aren't strong enough to survive feature parity from AI-native competitors. The commodity elements aren't efficient enough to survive price competition from tools that cost a fraction of yours. Squeezed from both sides.

And the instinct to "just add more brand stuff" doesn't work. You can't bolt brand onto a commodity product like adding a feature. Brand comes from genuine conviction about how a problem should be solved, built over time, proven through consistency. It's structural. Either it's in the DNA or it isn't.

If you want the AI-specific version of why brand alone is not a moat, read The AI Moat You Can't Buy.

The Test

Remove your product's features, speed advantages, and pricing. What's left?

If the answer is "nothing," you're a commodity. That's fine. Walmart is a commodity business. So is most of cloud computing. Commodities can be enormously profitable. The strategy is clear: optimize relentlessly, scale hard, win on cost.

If something remains, a point of view, a specific audience that identifies with what you represent, a way of solving the problem that some people love and others genuinely don't get, you might have a brand. Different strategy: deepen the conviction, attract the right people, let the wrong ones leave.

Intellectual property can blur the line. Patents, trade secrets, proprietary processes. Coca-Cola has guarded its formula for over a century. And yet Pepsi routinely beats it in blind taste tests.³ The two colas are practically indistinguishable in the lab. Coca-Cola dominates the market anyway. That gap between the tongue and the wallet? Pure brand. The secret formula protects the commodity layer. The brand is what makes people reach for the red can.

IP slows down replication. Brand makes replication irrelevant.

Three questions to sharpen which side you're on:

  1. If a competitor replicated every feature of your product tomorrow, what would your customers miss?
  2. Can you describe your approach in a way that would make some people disagree?
  3. Would your best customers recommend you even if a cheaper alternative existed?

Three "nothings" means commodity. Build for that. Something specific, something opinionated, something that would start an argument? You have the seed of a brand. Build for that instead.

If you want to pressure-test that honestly, use Where Do You Fall on the Premium–Commodity Spectrum? Free Tool.

Choose, or Get Chosen For

The dangerous move isn't being a commodity (though AI keeps thinning those ranks). The dangerous move is being a commodity that thinks it's a brand. You end up with the cost structure of a brand and the defensibility of a commodity. That's the dead zone. AI doesn't just expose it. It collapses it.

Every founder now faces this question, and it's worth answering honestly: are you building something people choose, or something people use until something cheaper shows up?

The answer shapes everything. Your pricing, your marketing, your hiring, your product roadmap.

Pick one. Go all the way.

Rabbit Hole:

  1. Kaptur, "The Silent Collapse: Generative AI's Erosion of Photo Licensing Revenue." Shutterstock contributors reported dramatic revenue drops as AI-generated imagery flooded the market, with some seeing monthly earnings fall from hundreds of dollars to single digits.
  2. Getty Images and Shutterstock announced a $3.7 billion merger in January 2025, aiming to cut $150-200 million in duplicate overhead over three years while repositioning as an AI content platform.
  3. The "Pepsi Paradox": in blind taste tests, participants consistently prefer Pepsi or can't distinguish the two. When brands are visible, Coca-Cola wins overwhelmingly. fMRI studies show the Coca-Cola brand activates memory and emotion centers in ways Pepsi doesn't.