What founders need to know about building in the age of AI: an Investment Director’s perspective
There is no shortage of excitement in technology markets right now. AI is everywhere – in pitches, in product roadmaps and in headlines. Every week brings news of another breakthrough, another funding round and another company claiming to be at the centre of the next wave.
But beneath all of that noise, a quieter and arguably more important conversation is happening. One about what genuinely sets companies apart. About which businesses will still be standing in ten years. And about what founders should actually be focused on building.
Charlie Lyon Carroll, Investment Director at IW Capital, explains his perspective on where the real opportunities in AI lie, what competitive advantage looks like today and how investors are starting to think about longer-term technologies like quantum computing.
The AI opportunity and where most pitches miss it
Charlie’s view on the current AI landscape is measured. “The hype has largely been driven by the model layer businesses, the infrastructure, and some of the scaled vertical software deployments,” he says. “Or at least the ones that haven’t been undercut by the LLM makers.”
This might surprise founders who have spent months building AI-led products. But Charlie’s view is that the most interesting value in the AI ecosystem is not necessarily being created by AI companies themselves. “The real opportunity is in what businesses are doing with these tools inside their products and operations,” he explains.
The logic becomes clearer when you consider what established companies already bring to the table. “Think about Salesforce,” Charlie says. “They have millions of customers already embedded in their systems, locked into contracts, using their platforms every day. They can push new AI-enabled products straight into that base. Their distribution is a structural advantage.”
For founders, this highlights something easy to overlook. Building with AI is not the same as building an advantage. The ability to reach customers and keep them is just as important, often more so, than what the technology can actually do.
The rise of the AI-native business
While established companies hold real distribution advantages, Charlie sees a genuine opening for a new kind of startup. “Compared to businesses that began a decade ago, being an ‘AI native’ start-up is a massive advantage,” he explains, meaning businesses built from the ground up with automation embedded into how they operate, rather than layered on top of existing systems.
“Legacy organisations have a natural build-up of process inefficiencies and bureaucracy, ” he says. “But if you design a company with AI integrated across every process from day one- finance, marketing, operations, product, you can run a very lean business at a scale that simply was not possible before.”
This efficiency does more than reduce costs. It changes the economics of entire sectors. “There are businesses that probably never made sense before,” Charlie notes. “The margins were too thin, the operational load too heavy. With AI reducing that overhead, some of those sectors start to look genuinely exciting.”
Competitive moats. What they really mean and why they matter more than ever
Competitive moats are a constant topic in venture capital conversations. Charlie’s explanation of them is refreshingly direct. “A moat is simply what stops somebody easily copying what makes you unique,” he says. “If they can replicate what you are doing, the value you have created will eventually be competed away.”
Two types of moats stand out in his view. The first is proprietary data, but with an important caveat. “Data exclusivity can be a strong advantage, but only if it is high quality and you can actually execute on it,” Charlie explains. “Sitting on a large dataset is not a moat; using it consistently to produce better outcomes than your competitors is.”
The second comes from sectors where regulation creates natural friction. In industries such as healthcare, bringing a product to market requires navigating complex approval processes that can take years. “If a regulatory pathway is genuinely difficult,” Charlie says. “but you’ve solved that either through attrition or innovation, that friction protects you. It becomes very hard for competitors to follow quickly.”
The takeaway for founders is that a durable competitive advantage rarely lives in the core technology alone. It tends to compound through data assets, regulatory position, customer relationships and the kind of domain depth that cannot be acquired overnight.
Distribution. The advantage that founders consistently underestimate
If there is one theme Charlie returns to repeatedly, it is distribution. Product quality or technology can ease the process, but they are worthless without the ability to reach customers and keep them.
“You can build something genuinely better than everything else in the market,” he says simply. “But you still have to get it in front of people. You still have to sell it.”
Many founders treat the go-to-market strategy as something to address once the product is ready. Charlie suggests the opposite. In competitive technology markets, the companies that build their commercial infrastructure alongside their product tend to be the ones with staying power. Distribution is not a phase that comes after building. It is part of the building.
Quantum computing. A longer view, and where the smart money is watching
For all the energy around AI, Charlie is also paying close attention to what comes next. On quantum computing, his view is clear. “We are not at a commercial inflection point yet,” he says. “We are seeing early examples where quantum can outperform classical computing on specific calculations, but stable, scalable, commercially viable quantum is still some distance away.”
That said, investment in the field – particularly at a government level- is accelerating rapidly. “Governments are waking up to the strategic implications,” Charlie explains. “Whoever develops meaningful quantum capability first will hold real advantages, including in cybersecurity. Some nations are already collecting encrypted data today that they plan to decrypt once the technology matures.”
For investors, the challenge is balancing that long-term potential against genuine uncertainty. “If you have deep technical conviction on a specific hardware approach, you might invest directly,” Charlie says. “But for most investors, the better risk-adjusted opportunities are in the surrounding ecosystem, the software, the tooling, the infrastructure that will matter regardless of which hardware architecture ultimately wins.”
What early-stage investors are really looking for
Given all of this, the noise around AI, the importance of defensibility, the long game in quantum, what is Charlie actually watching for when he evaluates a company at the earliest stages?
“Honestly, the eventual moat is not always visible at the start,” he admits. “What you are really looking for is early traction from a team approaching a real problem from a genuinely different angle. Someone doing something that nobody else is doing.”
That signal, of a team that has found something others have missed, and that is gaining momentum around it, is often what separates the companies worth backing from the many others competing for attention.
The market is noisier than it has ever been. For founders looking to cut through, Charlie’s message is consistent. Do not compete on buzzwords. Compete on clarity, depth of insight and the kind of advantage that compounds over time.
