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For three years, boards and leadership teams have been stress-testing their AI strategies against known competitors. But the rules of competition have fundamentally changed. Today, your most dangerous rival isn’t a company you’re tracking — it’s one that doesn’t exist yet.

Hear why “Your Next Competitor Doesn’t Exist Yet—And That’s the Problem” Deep Dive

Companies have spent three years preparing for AI disruption. Most are preparing for the wrong enemy. They are watching predictable threats, e.g., a direct competitor with a larger AI budget, an adjacent player entering their category, or a legacy brand with better technology. This narrow focus creates a major blind spot. Almost no one is thinking about the company that doesn’t exist yet—the one being built right now by a team of just two to five people, with an AI stack, no legacy costs and zero reason to play by your industry’s rules.

The Erosion of the Enterprise Moat

Consider Medvi, the telehealth startup recently profiled by The New York Times. Medvi built itself into a direct competitor to Hims & Hers Health—a company with 2,400 employees and $2.4 billion in revenue. In contrast, Medvi was launched by just two people, with $20,000 in startup costs and a laptop. In 2025, the company generated $401 million in revenue and is on track for $1.8 billion in sales in 2026.

To be clear, Medvi’s story comes with serious caveats. Following the Times profile, the company drew scrutiny for deceptive marketing by using deepfaked “before and after” images of fake patients, resulting in an FDA warning letter and ongoing legal challenges. Medvi’s model is certainly not one to emulate. But what it proves is that with AI, your next competitor is defined by the collapse of entry costs and the speed of execution. That demands every leader’s attention—regardless of your sector or how long you’ve owned the market.

This quote from the New York Times article could easily be overlooked, but it zeroes in on the tectonic shift that is occurring: “It’s not an A.I. company, but I did it with A.I.” It’s about what people can now do with these tools. This is a prime example of the “vibe coding” threat that I referenced in a previous post regarding the $428 billion SaaS industry. Founders are simply describing what they want to build, spinning up platforms in weeks and bypassing the recurring cost of seat licenses entirely.

Competitive advantages that took years to nurture are being dismantled in a fraction of the time by unknown upstarts who use AI to disrupt the very logic of a sector.

Why “Locked-in” Customers Are No Longer Safe

Companies and their boards are being lulled into a false sense of security by the belief that their sheer size acts as a protective shield. For years, enterprise giants have relied on what you might call “institutional inertia”—i.e., the assumption that brand authority, proprietary methodology and deeply embedded client relationships would keep customers tethered to them indefinitely.

Gartner is a real-time example of how quickly that assumption can unravel.

For decades, Gartner’s Magic Quadrant and research subscriptions have defined how boards and IT leaders make decisions. Their competitive moat wasn’t technology; rather, it was trust, access and the complexity of replacing what they provided. No single competitor could replicate it. That felt like protection. Then AI changed what “research” meant.

IT departments began telling their executives to cut Gartner spending and use AI tools instead. Not because Gartner’s analysts got worse, but because the capability Gartner was monetizing—synthesizing vast amounts of information into actionable guidance—was something their own clients could now access directly. The threat didn’t come from a competing research firm; instead, it came from a capability their customers started using instead of renewing their contracts with Gartner.

Gartner’s shares fell 47.9% in 2025. A company whose entire business model is helping other organizations anticipate disruption didn’t see its own coming. AI is proving that in the age of agentic AI, market share and brand relevance are no longer viable defensive strategies. They are valuation traps.

The Strategic Response

In 1849, when gold was discovered at Sutter’s Mill, thousands rushed to California with dreams of striking it rich. Yet what the Gold Rush taught us is how several merchants strategically recognized financial opportunities that would outperform the miners’ long-term aspirations. These Gold Rush entrepreneurs were Levi Strauss, whose blue jeans provided the durable clothing that miners needed; John Studebaker, who designed and built wheelbarrows for the gold miners; and Samuel Brannan, who made a fortune selling pickaxes, shovels and pans to miners. Instead of focusing on the gold, these men shifted their focus to the people chasing it—each with a clear problem to solve and a defensible position to own.

Using Sutter’s Mill as a framework, companies should look at AI from two strategic viewpoints: The first is an offensive AI strategy—i.e., approaching your market as if you are a competitor who doesn’t exist yet. How can you create and build long-term value by addressing a specific need with AI, the same way Strauss realized miners needed durable work pants, Studebaker provided wheelbarrows for moving rock and Brannan supplied the tools to find the gold?

Take Abridge’s ambient documentation system, which Kaiser Permanente uses to allow providers to focus more on their patients by transforming patient-clinician conversations into contextually aware, clinically useful and billable AI-generated notes. Even where Microsoft’s Nuance had deployed solutions to 77% of U.S. hospitals, Abridge captured nearly 70% of the new market.

The second is a defensive AI strategy—i.e., one that isn’t focused on your overall business, but on the specific components with the biggest risk: the service that’s become a commodity, the workflow that’s purely manual and the pain point your organization has normalized but never solved.

The takeaway is to look for the opportunity that is the unexpected outlier. Strauss, Studebaker and Brannan may have seen the initial opportunity in the Gold Rush, but what they really recognized was a series of unmet needs. Without durable clothes, miners couldn’t work safely. Without a wheelbarrow, heavy stones couldn’t be moved. Without pickaxes, shovels and pans, the gold couldn’t be discovered. Look at what’s happened with AI and the explosion of data center demand—and all of the infrastructure required to support it.

Ask yourself this: what part of your business would your invisible competitor attack right now? That’s the same instinct you need to apply to your organization before they do.

The Threat Isn’t AI; It’s Who It’s Coming From

Is your company, product, job, or competitive advantage at risk from AI disruption? If so, who is the threat—and how will you defend against it?

No company can protect itself from everything, but a proactive AI mindset that blends an offensive strategy—constantly scanning the market as if you were a competitor who doesn’t exist yet—with a defensive approach that isolates your biggest vulnerabilities and builds to protect them, is where you start. As I discussed in a previous post, too many companies are caught in innovation theater: the risks get acknowledged, a plan gets proposed, and then it stalls. No follow-through. No strategic commitment.

A simple way to break that pattern is to just listen, watch and learn. Assign a member of your team to deliver a monthly AI reconnaissance report covering how your competitors are using AI, which AI-driven startups are entering your space and what their value proposition is. And, in my opinion, the most important part: look outside your industry entirely. Who is playing the role of Strauss, Studebaker or Brannan and filling an obvious void that everyone inside your industry is too close to see? Then share that intelligence across the organization. Use it to generate new ideas. Because the best possible outcome is that your company becomes the competitive threat that nobody saw coming.

If you’d like to learn more about building your own AI reconnaissance practice, or if you have questions about how AI can help your company find its strategic footing, I’d love to have that conversation with you. Email me here.

As always, thank you for reading and/or listening.

Photo by Ignat Kushnarev on Unsplash