The IRL Moat

There's a physics to where capital flows. Like water, it finds the path of least resistance toward the densest concentration of unrealized value—what we might call the *arbitrage of attention*. For decades, venture scaling operated on a simple principle: identify a secret the market hasn't priced in, then exploit it at a loss until you own the territory. The secret was usually technical. A better algorithm. A novel distribution mechanism. A way to digitize friction out of existence. **That game is functionally over.** ## The Collapse of Software Scarcity The advent of AI-generated code didn't just lower the cost of software—it vaporized it. What once required a team of engineers, six months of runway, and a prayer now materializes in an afternoon. Software has become content. And like all content in an age of infinite production, its marginal value approaches zero. So capital moved. First toward compute, the raw substrate that makes the magic possible. Then toward credits, the abstraction layer that meters access to intelligence itself. But even these are commoditizing. The scaling advantage no longer lives in what you can build. **It lives in what you can make people believe is real.** Here's the turn: in a world where synthetic content is indistinguishable from the authentic, *the authentic becomes the scarcest resource on the board*. People move towards spaces with the highest degree of authenticity and verifiability. ## From Digital Leverage to Physical Density We've spent two decades building tools to escape geography. To transcend the constraints of bodies in rooms. And we succeeded—so completely that we've created a society drowning in connection yet starving for contact. The statistics are brutal: record loneliness, collapsing friendship networks, a generation that has optimized for reach at the expense of depth. Social media flattened novelty itself. **Everything feels seen before because, in some algorithmic sense, it has been.** This is the setup for the next phase of venture scaling. The arbitrage has inverted. When everyone floods online, the contrarian bet is offline. When creation becomes effortless, curation becomes sacred. When connection is everywhere, **intimacy is the scarce commodity.** I'm watching this play out in real time. Companies like [Lectures on Tap](https://www.instagram.com/lecturesontap/) - where professors host lectures at bars for strangers hungry to learn and be seen. Run clubs function like fluid dating markets disguised as fitness rituals. Tech and AI companies host 'Cafes' and for Cursor, OpenAI and Anthropic pop-ups where builders congregate not for the WiFi but for the proximity to others who care about the same strange things they do. **These aren't businesses—they're experiments in manufactured serendipity.** ## The New Moat: Curated Density The pattern emerging isn't just "community" in a vague, cheap, Web3-buzzword sense. It's something more specific: *micro-niche extremes with white-hot centers*. Think of it like thermodynamics. A diffuse gas has no power. But compress it—create density, heat, pressure—and you get energy that can move things.
``` · · · ┌─────────┐ · · · · │ ● ● ● ● │ · · │ ● ● ● ● │ · · · · ───────► │ ● ● ● ● │ · · · │ ● ● ● ● │ · · · · └─────────┘ diffuse compressed (no power) (energy) ```
**The winning plays will be those that create these compressed pockets of passionate, identified people who rally around increasingly narrow obsessions.** This requires a new kind of founder. Not the technical architect. Not even the growth hacker. But the **high-agency convener**—someone who can pull humans into proximity, hold space for genuine exchange, and layer content, curation, and connection into a self-reinforcing loop. *Taste becomes a moat.* The ability to say "this, not that" in a world of infinite options is a form of leadership we haven't yet learned to value properly. ## What Remains When Everything Is Automated Here's the bet I'd make: the last un-automatable layer is the one that requires your physical presence in a room with other humans who have also chosen to be there. *Chosen*. That's the operative word. **Attendance is itself a signal of commitment that no algorithm can fake.** I suspect we'll see software evolve to require IRL unlocks—features that activate only when bodies gather, games that progress through real-world congregation, loyalty systems tied to showing up. The digital and physical won't compete; they'll interlock. Communities will scale not through viral loops but through network effects that compound in meatspace. If you want to be rich in an age of infinite connection, sell the thing connection cannot provide: **the felt experience of being witnessed**. Intimacy. Understanding. The irreplaceable weight of someone looking you in the eye and knowing you showed up. *The next frontier isn't a platform. It's a room.*