Startups Must Pick One AI Platform

The emergence of ChatGPT as a new distribution platform represents a rare growth opportunity that follows predictable platform cycles.

The Four-Step Platform Cycle

Every new distribution platform follows the same pattern:

Step 0: Market Conditions
- Consensus emerges about a new category (social, mobile, AI)
- 5-7 major players battle with no clear winner yet
- Fierce competition as stakes are high (markets typically end in monopolies or duopolies)
Step 1: Identifying the Moat
- A player identifies their defensibility mechanism
- They press their advantage to gather that moat as quickly as possible
- They need an ecosystem to help build this moat, so they open a platform
Step 2: Platform Opening
- Company establishes a third-party platform with incentives
- The value exchange: developers build on the platform, adding use cases and engagement
- In return, developers get distribution for their applications
Step 3: Platform Closing
- Eventually, platforms lock down for monetization and control
- They either shut down third-party access, develop first-party alternatives, or suppress organic distribution to push paid mechanisms
- By this point, the platform has built enough defensibility that they can afford to close

Why ChatGPT Will Likely Be the Next Major Distribution Platform

ChatGPT has identified the key moat: context and memory
Their retention curves show significantly higher engagement than competitors
They're already hiring for roles related to a third-party "agent platform"
They're forming preferred partnerships with major companies (like HubSpot)
They have 10x more monthly active users than competitors like Claude

How to Play the Platform Game

For Late-Stage Companies:

You can afford to place multiple bets across platforms
Wait to see which platform emerges as the winner, then concentrate resources
Risk: waiting too long can leave you behind competitors

For Early-Stage Startups:

You must choose one platform and go all-in
You have scarce resources and attention - can't afford to spread too thin
Higher risk but higher potential reward

How to Choose Which Platform to Bet On

Prioritize retention and engagement depth over vanity metrics like MAUs
Evaluate user quality and monetization potential (like iOS vs Android)
Analyze the value exchange - what are they giving you to incentivize development?
Consider scale - but remember that better retention beats larger distribution

The Prisoner's Dilemma of Platform Adoption

Many companies hesitate to integrate with new platforms, fearing loss of control
But there is no opting out - if you don't participate, your competitors will
Customer expectations will shift to include these new experiences
The cycles are getting shorter, giving you less time to capitalize

Planning Your Exit Strategy

As soon as you enter the game, start planning your exit
Build ways to own important parts of the user experience
Accumulate specialized data and context the platforms don't have
Create micro-network effects that persist beyond the platform

The opportunity window is likely to open within the next six months, with ChatGPT expected to launch a third-party platform that will create a new distribution channel for those ready to capitalize on it.