AI has created the fastest-scaling companies we’ve ever seen. Lovable, for instance, hit $100 million ARR just eight months after launch. As Brian Balfour observes in The Big Squeeze, “Escape velocity elevated Lovable from obscurity to household name. And now the company has a real chance to build a large and successful business. But there’s no guarantee they’ve found long-term defensibility or can turn this wave of interest into a sustainable business.”

That tension—between speed and defensibility—is the defining challenge of today’s market. Startups can achieve breakout growth only to find incumbents copying their innovation and distribution channels drying up. For B2B startups, the squeeze is even harsher. Distribution windows are shorter, incumbents are stickier, and the path to defensibility is narrower. Winning requires not just speed, but turning that speed into structural moats.

The Mechanics of the Big Squeeze

Balfour describes three converging forces:

  • Massive AI interest: fueling rapid adoption and record-breaking growth.

  • Incumbent mirroring: big players rushing to replicate startup innovations.

  • Distribution scarcity: organic channels like search and social in steep decline.

The result, he writes, is

The Big Squeeze. Startups must get massive distribution quickly, but it’s harder to get and easier for their innovations to be ripped off once they do.

This dynamic was captured years earlier by Alex Rampell of Andreessen Horowitz:

The battle between every startup and incumbent comes down to whether the startup gets distribution before the incumbent gets innovation.

In B2B, where distribution has always been more constrained, the battle is even tougher.

Why Distribution Alone Isn’t a Moat

Balfour is clear: “Distribution isn’t success in itself, but an opportunity to capture it. It’s the very first step in building a moat.”

The distinction is crucial for B2B. Consumer startups can sometimes ride virality to scale, even without defensibility. In B2B, however, adoption is gated by procurement, compliance, and entrenched workflows. Even when a startup achieves rapid distribution, incumbents can quickly reclaim share by integrating similar features into platforms enterprises already trust.

Zoom illustrates the point. It scaled rapidly in response to the demand for remote work. But Microsoft Teams, bundled with Office 365, leveraged existing distribution and enterprise credibility to capture the market. Similarly, Clubhouse had explosive growth but faltered because it lacked defensibility once larger players entered the space.

Distribution sparks momentum. But as Balfour reminds us, “The question is if you can sequence the distribution to a real moat.”

Sequencing Escape Velocity into Defensibility

For B2B startups, the challenge is not just hitting escape velocity but converting it into durable advantages. That requires deliberate sequencing:

  1. Workflow Integration – Products must embed deeply into existing jobs-to-be-done. As Balfour notes about Figma, “It has a vertical use-case that will allow it to more deeply integrate with its customers’ workflows.” This kind of embedding makes displacement harder.

  2. Ecosystem Development – Integrations, APIs, and partner programs create stickiness. Lovable, for instance, launched partnerships with GitHub, Supabase, Stripe, and Figma to make its tool indispensable across workflows.

  3. Compliance and Trust – Certifications like SOC 2, HiTrust, and HIPAA take time to achieve and build credibility incumbents cannot instantly replicate.

  4. Data Gravity – Products that become the system of record, like Salesforce or Snowflake, make switching costly.

  5. Brand and Network Effects – Capturing mindshare early matters, but in B2B, reinforcing reliability and enterprise trust is equally critical.

As Andreessen Horowitz stresses, AI itself is not a moat. Defensibility lies in workflow context, proprietary data, and ecosystems—not in model access alone.

Strategic Perspectives from Research

McKinsey’s global B2B surveys reinforce Balfour’s thesis. Their research shows that B2B leaders who invest in omnichannel sales, seamless experiences, and AI outperform their peers. Another study finds that companies that combine multiple GTM strategies—digital tools, hybrid channels, marketplaces, and e-commerce—grow market share by more than 10% annually.

CB Insights reports that the top two reasons startups fail are lack of market need and being outcompeted—both symptoms of failing to translate distribution into defensibility.

And as Balfour himself warns, “Organic channels always decay over time… What was once free becomes paid. What was once permitted becomes forbidden.” That’s why the companies that dominate in the next decade will be those that plan their moat-building in parallel with their growth.

The Product Manager’s B2B Playbook

For product managers, the message is clear:

  • Chase distribution credibility, not just volume. Enterprise customers buy from trusted, compliant sources.

  • Sequence defensibility early. Build integrations, compliance, and enterprise features while scaling.

  • Exploit temporary windows. Use SMB or prosumer traction as a wedge to enter the enterprise before incumbents close the gap.

  • Run dual tracks. Ship for growth and for a moat simultaneously.

Or as Balfour concludes:

You do still need a great product and you still need product-market fit. But this market is a harsh reminder that a great product is necessary, but not sufficient.

Orbit, Not Just Escape

The Big Squeeze is real, and it will define the next decade of B2B growth. Distribution alone won’t save startups. The winners will be those who use escape velocity not as an end state but as a launchpad into durable orbit—anchoring themselves in enterprise workflows, ecosystems, and trust before incumbents slam the door shut.