A Contrarian Take on ETA in the AI Era

May 10, 2026

by a searcher from Southern Methodist University - Edwin L. Cox School of Business in Denver, CO, USA

Over the last 5 years, I’ve watched the ETA movement absolutely explode. And honestly… I get it. Buying an existing business gives you: Existing revenue Existing customers Existing cash flow Existing operations In theory, you’re skipping the hardest part: starting from zero. But now I think the AI era changes the equation entirely. Because when you acquire a business, you’re not just buying revenue. You’re also buying: legacy systems outdated processes cultural baggage technical debt operational inefficiency people/process complexity someone else’s “dirty closet” And you’re often financing all of that with significant debt at a moment where technology is moving faster than at any point in modern business history. My contrarian take: In 2026, it may actually be LESS risky to build an AI-native business from scratch than to buy and modernize a legacy one. We’re entering a world where the gap between: AI creators/builders and AI consumers/users is going to widen dramatically. Widen is an understatement. Some are calling it the "forking of humanity." (side note: this is super interesting stuff - check out Peter Diamandis - https://metatrends.substack.com/p/humanity-is-about-to-fork) Small, highly-leveraged AI-native companies can now move with a speed and efficiency that traditional businesses simply can’t match structurally. A tiny team with the right workflows, automation, agents, and distribution can create enormous value without inheriting years of operational entropy. For context: I bought a business 3 years ago and sold it a year ago. I thought, "what could go wrong?" Everything went wrong. It is MUCH harder and heavier than the ETA talking heads represent. I took on a ton of risk and carried insurmountable stress. All my choices. I learned an incredible amount doing it, and I don’t regret it at all. BUT... if I were starting fresh today... I’d build an AI-native company from the ground up. Curious how others here are thinking about this shift. Does AI strengthen the ETA thesis… or weaken it?

Reply by a professional
from INSEAD in Denver, CO, USA

“I’ll build from zero with agents” is what every YC bro is also saying. Not at all less risky. An acquired business with sticky customers, supplier relationships, and 15 years of pricing power has something an AI-native startup spends 3 years building. The actual asymmetric play right now isn’t “skip ETA.” It’s buy a boring business with durable demand and AI-ify the operating model from the inside. You get the distribution AI can’t create, and you apply the leverage to the operations AI transforms. Every one of those is a margin lever, and you’re pulling them on top of an asset that’s already producing cash…which can significantly strengthen your financial position and derisk you.

Reply by a searcher
from Harvard University in New York, NY, USA

Hi Sean, great post here. I think the conversation goes beyond tech / AI replacing software. Lots of services companies value comes from backend systems, managing compliance, various things that AI should automate easier and bring down entry barriers. Grappling with this now evaluating healthcare practices rollups where it should be easier now for a solo practitioner to manage his/her business.

+1 more reply.

Join the discussion