The risk of AI apps competing with their model suppliers

A1a16z@a16z9:07 AM · Oct 19, 2026

571TECH

Jean-Denis Greze, founder of @TownAI, on the question every AI app founder gets asked: what stops the big labs from crushing you? "It is risky always to be competing with your suppliers, right? We're competing against our suppliers. So you gotta ask yourself, is that naturally… Show more

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a16z@a16z

Jean-Denis Greze was CTO of Plaid. His next startup, an AI tax product for small businesses, brought in nearly $1M in revenue its first year, and he projected $2.5 to $3M the next. He shut it down anyway. The reason: in the age of AI, it was never going to be venture scale.… Show more

YouTubeWhy a $1M Startup Wasn’t Worth Building in the Age of AIJean-Denis Greze was CTO of Plaid. His next startup, an AI tax product for small businesses, made nearly $1M in its first year and was on track for $2.5M to $3M. He shut it down anyway. The reason: in the age of AI, it was never going to be venture scale. Incumbents could use the same technology to automate tax prep for their existing customers faster than a startup could win market share. Tax is also sold once a year, so he had about a one-month window to pivot before the door closed. The pivot became Town, an AI assistant that works from your email and calendar. It found product-market fit fast enough that Ben Horowitz messaged a16z partner Alex Rampell to say it “changed my life,” without knowing whose company it was. In this episode, Alex and Jean-Denis cover: - Why a profitable business can still be the wrong business to build - How to know when to kill something that’s working - Why Town competes with OpenAI and Anthropic, the companies it buys its tokens from - Why the “forward deployed engineer” model gets worse as AI gets better - How a $1/month AI routine can save a restaurant thousands - What agents mean for Amazon, advertising and the future of shopping Timestamps: 00:00 Intro 00:56 Leaving Plaid for the SMB tax bet 06:57 Walking away from a working business 10:28 How Town was born 16:16 The iPhone moment for AI at work 23:22 Town as a token-allocation machine 29:10 Horizontal vs vertical 34:03 Why Town over OpenAI and Anthropic 44:32 Why AI is underhyped outside the Valley 52:33 Neutral agents and the broken ad covenant Resources: Follow Alex Rampell on X: https://x.com/arampell Follow Jean-Denis Greze: https://x.com/jgreze Learn more about Town: https://town.com Stay Updated: If you enjoyed this episode, be sure to like, subscribe, and share with your friends! Find a16z on X: https://twitter.com/a16z Find a16z on LinkedIn: https://www.linkedin.com/company/a16z Listen to the a16z Show on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYX Listen to the a16z Show on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711 Follow our host: https://x.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see http://a16z.com/disclosures.