The era of easy AI startups is over, argues venture capitalist Yariv Adan in a provocative new piece. While AI has democratized building powerful applications, the very tools that enable rapid development have also erased traditional competitive moats. Commoditized Magic - the term Adan coined two years ago - describes how frontier models have made previously impossible capabilities accessible yet nearly worthless as differentiators.

This shift creates a fundamental problem for venture-backed startups. When any skilled engineer can build sophisticated software over a weekend hackathon, the market floods with competitors. Traditional moats like proprietary data or unique expertise are increasingly vulnerable to disruption by AI agents. The economics have changed: building software now costs less in time, money, and expertise than ever before, but this very accessibility creates crowding where differentiation becomes nearly impossible.

Adan suggests entrepreneurs abandon the unicorn chase and instead build herds of donkeys - automated, passive-income-generating businesses at scale. By leveraging AI agents for ideation, market research, prototyping, and customer outreach, solo founders can create multiple small ventures simultaneously. This approach sidesteps traditional venture capital while capitalizing on AI's speed and efficiency. The message is clear: in a world where software is increasingly commoditized, the new rules of entrepreneurship demand either unprecedented differentiation or a complete rethinking of what constitutes success.