Building, Backing & Scaling in an AI-Native World with Kenneth Auchenberg, Partner @ AlleyCorp

Riding UnicornsSep 10, 202546 min

Kenneth Auchenberg from AlleyCorp makes a compelling case that we're entering an 'agent-first' era of software development, where AI agents will function as autonomous economic actors requiring entirely new infrastructure layers. His perspective as both a deep-tech incubator and hands-on builder offers unique insights into how traditional software defensibility breaks down when coding becomes democratized, and why the companies building agent infrastructure today will capture the most value.

Key takeaways

  • AI agents will drive explosive infrastructure growth similar to how mobile apps transformed the tech stack, creating massive opportunities for picks-and-shovels companies.
  • Traditional software defensibility crumbles when AI democratizes coding, forcing companies to find new competitive moats beyond technical complexity.
  • Autonomous commerce will require entirely new payment systems designed for AI agents to make purchases and transactions on behalf of humans.
  • VCs are increasingly incubating deep-tech AI companies from scratch, building conviction through hands-on experimentation rather than waiting for external deal flow.
  • Human-to-human interactions may become obsolete as AI agents handle everything from job interviews to customer service, fundamentally reshaping workplace dynamics.

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32:54· 48stactical advice

How VCs build conviction and incubate AI companies from scratch

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to build a foundational model for material science. And now they're working with defense contractors, etcetera, to kind of predict new kind of metals and new types of glass with the foundation model they have trained. So we really like when we see these opportunities and we have conviction, we cut out the time to do our research and then build that conviction, and then we put capital in as we see needed. So this is, this is one example of of a company we incubated in in the past year. And right now, I'm I'm I'm basically incubating another one. It's very cool. It's very cool. And is it always a new team? Do you have a central team where you have, like,

a growth person and a product person who can jump on a new incubation idea until you hire someone full time, or is it always fresh team for each new incubation project? So we don't have

everyone are, like, using some sort of AI in in either end.

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