Garry Tan: Founders Shouldn't Use 2026 Technology to Build 2010 Companies
YC CEO Garry Tan warned that founders must stop using 2026 technology to build outdated 2010 businesses.
He pointed out that one should not attempt to recreate Foursquare or Yelp, nor replicate Basecamp with a $10/month SaaS pricing. Do not sell at low prices; if the product is effective, its value is far greater than that.
Garry Tan emphasized not to be tempted by "tech-enabled PE" (making money through revenue tricks). AI has fundamentally changed the rules of the game, and new games must be played.
Source: Public Information
ABAB AI Insight
Garry Tan, as the head of YC, has long guided thousands of startups. His views continue to strongly advocate for a paradigm shift in entrepreneurship in the AI era, emphasizing that one cannot simply overlay AI on old business models but must use AI to reconstruct products, pricing, and growth strategies.
In terms of capital pathways, YC-supported projects are shifting resources from low-priced SaaS or local service replication to high-value AI-native applications, achieving rapid scaling through higher pricing and network effects. The motivation is to seize the opportunities presented by AI's marginal cost approaching zero and capability leaps, avoiding traditional low-margin competition.
Similar to the failures of many early mobile internet products that replicated PC-era products, and the current explosion of AI agents and automation tools, the entrepreneurial ecosystem is at a critical stage of transitioning from "tech-enabled old models" to "AI reconstructing entirely new business paradigms."
Essentially, this is about technological substitution and capital concentration: AI has completely changed the rules of entrepreneurship, as its exponential capability enhancement renders old low-price, low-differentiation models uncompetitive, forcing capital and talent to concentrate on founders who dare to set high prices, build new categories, and create network effects, forming a new winner-takes-all landscape in the AI era.
ABAB News · Law of Cognition
Playing old games with new tools is destined to become cannon fodder of the times.
What truly holds value is not replication, but using AI to create entirely new categories.
Low prices are not a moat; high value and rapid iteration are the keys to success in the AI era.