This article introduces the concept of Model-Market Fit (MMF) as a critical layer beneath product-market fit for AI startups. It explains how crossing the capability threshold of AI models can unlock market potential, highlighting examples from legal and coding sectors. Without MMF, even strong market demand won't lead to product adoption.

This article explores the emerging trend of Agent Labs, which focus on developing AI agents rather than just models. It contrasts their business strategies and priorities with those of traditional Model Labs, highlighting how Agent Labs offer better pricing, customer-centric approaches, and a more sustainable cash flow. The piece also discusses recent shifts in major AI companies toward building platforms for developers.