Opinions expressed by Entrepreneur contributors are their own.
Key Takeaways
- Infrastructure creates lasting advantages as product companies build moats through operations and physical assets that are harder to replicate than software alone
- Capital discipline drives stronger growth and shows that efficient execution can outperform, raising large amounts of venture capital
- The future is hybrid, with the next generation of successful companies combining AI with real-world infrastructure
For much of the past decade, Silicon Valley embraced a single formula for startup success. Build software, acquire users at breakneck speed, raise increasingly larger venture rounds and worry about profitability later. Scale became synonymous with software because code could be deployed instantly and replicated at virtually no cost.
That playbook is beginning to change due to tighter venture funding and increased investor scrutiny. This has shifted attention from growth at all costs to businesses with durable economics, operational excellence and sustainable profitability. While software remains a powerful business model, founders building physical products and infrastructure are demonstrating that enduring companies often require a different approach, one rooted in execution rather than pure acceleration.
Next generation of Moats
New York-based mobility company JOCO illustrates why. Backed by approximately $7.5 million in venture funding, the company has created one of the country’s largest urban e-bike infrastructure networks. They are serving enterprise customers, including Amazon, Uber Eats, Grubhub, Instacart, and Gopuff.
Its model arrives as electric mobility is becoming a significant economic force. According to Grand View Research, the global e-bike market was valued at more than $61 billion in 2024 and is expected to reach $144 billion by 2033.
This is being driven by urbanization, sustainability initiatives and growing commercial adoption. At the same time, Fortune Business Insights projects the last-mile delivery market will surpass $212.46 billion by 2034, fueled by e-commerce and demand for faster urban logistics.
Those statistics underscore a broader economic transformation. Cities around the world are investing in cleaner transportation solutions while retailers continue searching for faster, lower-cost ways to move goods. Companies operating at the intersection of both trends are positioned to benefit from powerful long-term tailwinds.
Infrastructure advantages
Rather than simply renting electric bikes, JOCO has built an integrated platform that combines hardware, software, charging infrastructure, maintenance and logistics. It also includes rider support into a business that becomes more valuable as its physical footprint expands.
“Software can be distributed almost instantly…but every JOCO location adds density, convenience, and operational knowledge to a network that’s harder to reproduce,” said Jonathan A. Cohen, JOCO Co-Founder.
That insight reflects a larger shift occurring across entrepreneurship. Increasingly, competitive advantage comes not from building another application, but from creating integrated systems that competitors cannot quickly copy.
More than coding
Artificial intelligence has fundamentally lowered the barriers to software development. Tasks that once required large engineering teams can now be completed by significantly smaller groups using AI-assisted coding tools. Product iterations happen faster than ever before, making software features increasingly difficult to defend as lasting competitive advantages.
Physical infrastructure operates under a completely different set of rules. Warehouses cannot be spun up overnight. Charging networks require regulatory approvals and capital investment.
Maintenance operations demand specialized expertise. Supplier relationships develop over years rather than months. Operational knowledge compounds through experience, making infrastructure businesses stronger with time.
These assets create durable competitive moats because they require patience, operational excellence, and consistent execution. Consumer demand also suggests physical products remain highly relevant despite the rapid growth of digital technologies.
“Nearly 50% of all internal site searches showed electric intent, and Google search data corroborates this entirely. E-bike and related terms continued to dominate cycling-related search volume in 2025,” said Workstand’s David Wert.
This further highlights that physical products remain in high demand in our vibe-coding-centered world. The implication for entrepreneurs is significant. Software may open doors, but infrastructure often keeps competitors out.
Capital efficiency vs. innovation
For years, startup success was frequently measured by fundraising announcements. Today’s market increasingly rewards founders who demonstrate they don’t need enormous amounts of capital to build enduring businesses.
PitchBook reports that venture funding has become significantly more selective over the past two years, with investors placing greater emphasis on profitability, capital efficiency, and sustainable unit economics over rapid expansion.
“The $274.2 billion in venture-growth capital deployed through May is already more than double the full-year 2025 total, though 86.4% of that figure traces back to four rounds from three foundation model companies,” according to PitchBook.
For everyone else, capital efficiency has become more important than capital availability. Instead of raising hundreds of millions of dollars to pursue market share at any cost, founders increasingly need to prove disciplined execution, sustainable customer acquisition, and profitable growth.
For example, JOCO’s FDNY-approved charging cabinets emerged from safety needs, while its courier rest hubs were designed to improve rider well-being and operational consistency. Neither innovation was built primarily for marketing value. Both strengthened the company’s long-term operating model.
“We invest when an innovation improves safety, rider earnings, operational reliability, or the economics of our network,” Co-Founder Johnny Cohen explains.
Entrepreneurship’s hybrid future
The next generation of breakout companies may not resemble the software startups that dominated the last decade. Instead, they could combine software, artificial intelligence, physical infrastructure and disciplined operations into businesses that create advantages difficult to replicate.
With the rise of robotics, advanced manufacturing, clean energy, logistics technology, healthcare devices and urban mobility all point toward the same conclusion. Technology increasingly creates value when paired with real-world assets and operational expertise.
Software alone is becoming easier to build. Operational excellence remains extraordinarily difficult. For founders deciding what kind of company to build, that distinction may become the defining competitive advantage of the next decade.
Key Takeaways
- Infrastructure creates lasting advantages as product companies build moats through operations and physical assets that are harder to replicate than software alone
- Capital discipline drives stronger growth and shows that efficient execution can outperform, raising large amounts of venture capital
- The future is hybrid, with the next generation of successful companies combining AI with real-world infrastructure
For much of the past decade, Silicon Valley embraced a single formula for startup success. Build software, acquire users at breakneck speed, raise increasingly larger venture rounds and worry about profitability later. Scale became synonymous with software because code could be deployed instantly and replicated at virtually no cost.
That playbook is beginning to change due to tighter venture funding and increased investor scrutiny. This has shifted attention from growth at all costs to businesses with durable economics, operational excellence and sustainable profitability. While software remains a powerful business model, founders building physical products and infrastructure are demonstrating that enduring companies often require a different approach, one rooted in execution rather than pure acceleration.