Our AI expert and columnist Fabian Westerheide is sure that CTOs will soon no longer be the most expensive people in startups – better salespeople are needed
Fabian Westerheide is a founding partner of the AI-focused venture capital investor AI.FUND and has been investing privately since 2014 Asgard Capital in AI companies. Westerheide provides strategic advice to public and private institutions in the area of AI and hosts annual AI conferences Rise of AI to Berlin.
The nurse who builds an app without writing a line of code: This is the current favorite anecdote of tech optimists. Look at the democratization of software! Anyone can be a creator now!
However, I read this story differently. Not as a feel-good story, but as a warning shot. Because what is happening here is massive inflation. AI makes the implementation of software radically cheap. And what is cheap is no longer a signal of excellence.
This turns the calculations of the startup world on its head – and changes how we spend money.
The end of CTO hegemony
Let’s look back over the last ten years: Who was the most expensive person in the room? The CTO. What was the biggest block in burn rate? The development team. The main reason for a seed round was usually simple: we need money to pay techies to build the product in the first place. “Inventor types” were funded to deliver prototypes. This era is just ending.
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Today, if a junior PM builds a prototype with Claude or GPT-4 in a weekend, the development costs implode. The “builder” is no longer the bottleneck. But the money we save on coding doesn’t disappear. It just shifts. And massively so.
Code becomes cheap, customers become expensive
Where is capital going today? Either in GPUs (for the few who actually build and scale infrastructure). Or – and this affects 99 percent of founders – into sales.
We are currently experiencing a brutal return to reality. The dream of “product-led growth,” in which AI software spreads virally and sells itself, is shattered for many B2B startups. The reality is: SaaS is becoming what it was before the hype – hard B2B business. Almost project business. Nothing with “AI sells everything”. There’s noise out there. Because everyone can build, the market will be flooded with solutions. To get through this, no landing page is enough. You need sales teams, you need account managers, you need manual labor.
We are losing the margin that we gained through AI in development, especially in sales.
The interface problem: Are you a company or a facade?
This is leading to a wave of startups that I would describe as “AI front companies.” They look like tech companies, but are often just thin interfaces over American API interfaces. They solve problems, yes. But they have no strategic depth. The risk here is that if your product is just an API query at its core, your barriers to entry are zero. You’re no longer just competing with other startups, but with anyone who tries out a new AI model on the weekend. Anyone can start a business. This has never been easier. But almost no one can scale. This has never been harder.
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Investors have to relearn: demo vs. business
The problem also affects my side of the table. Many investors are still blinded by shiny demos. We are conditioned to finance “technological progress”. But today the demo is commodity. Investors need to stop funding the best hobbyists and start looking for the best sellers. We need to fund teams that not only understand how to connect an LLM, but how to lead an enterprise customer through a 12-month sales cycle.
Conclusion: Back to the merchant
The party for pure coders is over. That sounds hard, but it’s an opportunity. AI makes crafts cheap. But it makes market access expensive. Anyone starting a business today needs more than just a technical “feat”. He must understand that we are entering a phase in which technical excellence is the hygiene factor – and sales excellence is the only remaining moat. The startup of the future may only consist of two people: one operates the AI. The other guy can sell damn well. And I bet the second one will soon be the more expensive one.
