The chaotic enterprise startup period we're living through
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The chaotic enterprise startup period we're living through
Eli Portnoy<br>Aug 17, 2026
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I’ve started 4 companies, invested in over 30, and been on multiple startup boards over the past 20 years. My focus for my entire professional career has been on enterprise software startups (mostly in data and AI).<br>These experiences have given me a generally long arc by which to measure and compare what is happening in the startup ecosystem right now…and the period we are in now is by far the most complex time to be building an enterprise software startup that I can remember.<br>There are several factors creating this complexity...each building on the other to create a very chaotic market.<br>- AI is the most obvious one. Startups can build at a pace that was unprecedented even a few months ago. And it’s also much easier to get started. Anyone with a Claude Code account can build stuff, and experienced teams can build much, much faster.<br>- Going faster is great, but not when orgs are not set up to handle the velocity. When Eng ships 5x more features, that’s 5x more complexity that product marketing needs to effectively communicate, 5x more things that sales teams need to be enabled on, and 5x more reasons for customers to get frustrated by all the changes. So yes, more stuff is being delivered, but that is creating a lot of confusion and thrash.<br>- So maybe you decide to slow down or at least try to pace how often you deploy new stuff. Great in theory, but terrible when everyone else is going fast. The pressure to keep up is extreme. Try telling your sales team that you have already built that feature prospects want, but you’re going to hold it back because you don’t have the org infrastructure to get it to customers…especially when your competitor is not slowing down.<br>- So everyone decides to ship as fast as they can to keep up. How? By making sure the rest of the org also leverages AI, of course. So now every company is delivering stuff all day long and using AI to add it to their website, updating their sales decks, building one-pagers, pushing press releases, and hitting up their entire prospect and customer base with emails. Aside from this just being a huge amount of noise, it’s noise that all sounds the same. If everyone is using the same AI, you’re going to get noise that all sounds the same. This creates mass confusion in the market.<br>- And this noise is compounded because it’s not just existing teams generating it as they go faster, but also all the one- and two-person startups that are emerging that are also generating a lot of AI noise.<br>- With all the noise, it becomes damn near impossible to break through as a seller. But it’s equally hard on buyers who need to try and separate signal from noise…what is real and what isn’t.<br>- And I think focusing on the buyer is even more important because their world has changed dramatically. Many buyers were burned by massive AI promises that were made with demos that looked amazing, but did NOT work in production. They put resources, time, and reputation believing AI hype and were almost universally burned. So beyond having a hard time trying to wade through all of the chaos, they are way more skeptical of bold claims.<br>- All of this has turned buying from something fun and exciting - where they wanted to try new toys and stuff - to being downright demoralizing. It wasn’t that many years ago that people would take demos just for fun. Just to see the newest shiny thing. Now? The last thing buyers want to do is see a demo, especially when they all sound the same and feel like snake oil, only to then get stuck in a loop of infinite noise forever as the seller and marketing team add them to their firehose of noise.<br>- And even if you somehow get a buyer to take a demo, prove to them that your solution works, and that it will be game-changing, they still are going to be hesitant to buy. Because they are rightfully worried about being locked into a solution when the world is changing so quickly. They go through procurement, they stake their reputation, they deploy capital and resources, and they get you spun up. People love it for 2 months and then someone else announces something better, cheaper, and faster. And now they are locked in. Things are changing so quickly that even if you have exactly what they need, they still might be gun-shy to lock in and look like fools in 60 days.<br>- And the cherry on top of this entire mess is that VCs are looking at this landscape and saying…holy shit. Why the hell would I fund anything that has to deal with all of this? Instead, I am going to raise my bar 10x. I don’t want a company that has a chance to go from 0 - $10m in 3 years. I want to fund stuff that can go 0 - $100m in 12 months and rise above all of this noise extremely fast. And so they are concentrating on a tiny group of startups and giving them insane amounts of money.<br>So what does this all mean? It means...