Donkeys, Not Unicorns | Towards Data Science

Towards Data Science

by Yariv Adan

February 20, 2026

AI-Generated Deep Dive Summary

The article "Donkeys, Not Unicorns" explores the evolving landscape of AI-driven entrepreneurship, highlighting the challenges startups face in standing out amidst rising commoditization. While building innovative apps has become more accessible due to advancements in AI and tools like Claude Code, sustaining success requires robust defensible moats—such as proprietary data or unique expertise—that can withstand competition from highly skilled AI agents. The concept of "Commoditized Magic" underscores how AI democratizes product creation, leading to an explosion of competitors. Even the most complex applications can now be replicated quickly and cheaply, making it difficult for startups to differentiate themselves. This over-saturation has pushed many investors away from ventures without clear competitive advantages, emphasizing the need for unique value propositions. For readers interested in AI, understanding these dynamics is crucial. The era of Commoditized Magic presents both opportunities and risks. While AI offers unprecedented capabilities, entrepreneurs must focus on building sustainable businesses with strong differentiation to avoid getting lost in a crowded market. Instead of chasing unicorns, startups should aim for herds of donkeys—sustainable, scalable models that provide genuine value and withstand disruption.

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Originally published on Towards Data Science on 2/20/2026