The four components of a successful startup are the same today as they were before the artificial intelligence boom, says billion-dollar founder and tech investor Leigh Jasper, defying notions that pivoting to AI is mandatory for new and emerging businesses.
Speaking at the Growth Summit on Wednesday, Jasper said today’s soaring AI company valuations coincide with a “steep and fast” bear market for traditional SaaS ventures.
Worldwide, investors are cautiously gauging the potential of AI agents, LLMs, and vibe-coding tools to replace subscription-based software.
But Jasper, who co-founded $1.6 billion construction management platform Aconex before chairing his own venture capital funds, said the qualities investors search for today “are the same as we’ve always done”.
4 key factors for aspiring startups
Building a strong network effect — where each new user adds value to existing users — is the first indicator of startup success, said Jasper at the Melbourne event.
Platforms like Carsales and job listing site Seek, where Jasper serves on the board, demonstrate the snowballing power of the network effect, he said.
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The second key factor is proprietary data, he continued, pointing to his own work building the B2B sales intelligence platform Firmable.
“What we’re trying to do there is build a unique, proprietary data set that’s impossible for an LLM to build from scratch,” he said.
That doesn’t mean simply building systems of record, which Jasper says are “not defensible data”.
Instead, startups should augment customer information in unique and hard-to-replicate ways, making it difficult for users to swap to another platform.
The third factor is what Jasper called “deep workflow understanding”.
Startups that “deeply understand the industry they’re serving, or the function, the task that they’re serving” stand out from generalist businesses, he said.
“I think it’s very hard for an agent today to go and replicate complicated workflows,” he said.
Contemporary AI technology may be able to handle simple workflows, “but a complex and specific workflow in a business, that’s something that has defensibility,” said Jasper.
“Then the last thing — this doesn’t always play out — but regulatory or risk-based systems,” he continued.
“If you’re working in healthcare, that’s pretty hard for somebody to come in and push you out, if you’ve got regulatory barriers to others entering into that market.”
Combined, those factors — all of which existed before the widespread adoption of AI tools — stand to benefit modern technology businesses.
“It’s very hard for AI to replicate network effects or replace them, really hard for LLMs to replace and replicate proprietary data,” said Jasper.
It is “really hard for LLMs to match workflows, and really hard for AI to be able to [manage regulatory concerns].”
“So while AI is disrupting a bunch of stuff, there’s certain models that we think will be enduring.”
Maintaining focus through tech cycles
Building with those ideals in mind can help newer startups survive funding downcycles, Jasper said, reflecting on Aconex’s own ability to raise capital in moments of market uncertainty.
“Dance to your own tune through the tech cycles,” he said. “So don’t worry too much about what others are doing. Build your business.”
“But be ready. When that apple drops from the tree, and there’s opportunity to raise money when you’re in the sweet spot, take that opportunity.”
And despite the chaos wrought by AI, he said the technology, if utilised correctly, is “giving every new startup, every new business, every growing business, every scaling business, a bigger opportunity than ever before”.
“It’s just bloody good fun,” he added.
“Building when things are changing gives you an opportunity to do stuff that couldn’t be done… Just think through your business model, and how you build a sustainable business model that is defensible, even with disruption from AI.”
