The Graveyard of AI Startups: Startups That Forgot to Build Real Value

How the “Prompt-as-a-Startup” Era Crashed and Burned Introduction: Welcome to the Wrapper Wars (and Their Inevitable End) Once upon a tech cycle, in the land of Silicon Valley and side projects, someone discovered OpenAI’s GPT API and all hell broke loose. Suddenly, every other landing page had the phrase “powered by GPT-3”, paired with a glowing gradient, an emoji in the headline, and a promise to “revolutionize” some painfully specific task like “turning Zoom calls into poems.” It was beautiful chaos. It was hilarious. It was doomed. Between 2023 and early 2025, we witnessed the AI Wrapper Boom — an era where launching a startup meant putting a prompt behind a frontend and calling it a company. Founders rushed in like it was a hackathon with VC money on the table. You probably saw them: “Summarize my PDFs.” “Write better emails.” “Talk to your cat with AI.” “Be your therapist, but cheaper.” All of them looked polished.Most of them raised money.Almost none of them built anything real. Here’s the truth no one wanted to admit: If OpenAI shut down your API key and your startup also dies, you didn’t build a product. You built a fancy prompt. This isn’t just a roast (okay, maybe a little). It’s a postmortem. A cautionary tale for the next wave of builders who still think GPT is a product, not a platform. We’re going to unpack: Why these startups exploded… and then imploded How the economics made no sense The 20+ most iconic (and hilarious) failures And what you actually need to build if you want to survive in AI-land now This is not a hit piece. It’s not a hater parade. It’s a breakdown — written by someone who watched this mess unfold while yelling “bro, that’s just the OpenAI playground with dark mode” into the void. Let’s begin our tour of the Graveyard of AI Startups. Bring flowers. Or popcorn. 2. The Wrapper Wars: How We Got Here In 2023, startups stopped building and started wrapping. The launch of GPT-3.5 and GPT-4 didn’t just change how we write, code, or brainstorm. It changed how we pretend to innovate. Before GPT, startups were hard. You needed infrastructure. A team. A real product vision. Sometimes even (gasp) a backend. But then OpenAI dropped its playground, handed the internet a shiny API, and just like that — we entered the Age of the Wrapper. Suddenly, anyone with a Figma mockup and a Stripe account could launch a “startup.” A few lines of code, a reused Tailwind template, and a call to openai.createChatCompletion() boom, you’re a CEO. The Rise of the Promptpreneur Product Hunt exploded with launches like: “TalkToYourPDF.ai” “EmailWizardGPT” “MyTherapist.isNotReal” “LegalBotAI (Not a Lawyer)” And it worked at least on the surface. They looked clean. Had slick UX. They called themselves AI-first. They had Discord servers and “waitlists.” The codebase was usually: const openaiResponse = await openai.createChatCompletion({ model: "gpt-4", messages: [{ role: "user", content: userInput }],}); And that’s it. That was the whole product. You’d be shocked how many “founders” shipped this exact logic and raised a pre-seed. Prompt Engineering = Product? Nah. The most popular dev trend of the time? “Prompt engineering.” People started tweeting like: “After fine-tuning prompts for 6 hours, I unlocked 80% better output. This is the new full stack.” Except no one owned models. No one trained datasets. No one built tools. Just “clever” prompts like: “You are a senior tax lawyer who gives answers in TikTok voice and uses emojis.” Prompt engineering wasn’t the problem. It was treating it like a product, when it was just a layer. VC Hype + API Abuse = Recipe for Disaster Investors saw the hype and FOMO’d hard. They threw checks at anything with .ai in the domain name. You had: Founders with zero ML experience raising millions “Startups” with one dev, one landing page, and no roadmap Products that were 100% OpenAI frontend wrappers, no backend logic And they weren’t hiding it either. One founder literally tweeted: “We don’t need infra we have OpenAI.” It was like watching people build skyscrapers on cardboard foundations — and wondering why it all collapsed the second usage spiked. Everyone Built the Same App At one point, you could launch a startup by copying ChatGPT’s interface and changing the text from “Hello! How can I help you?” to “Hey, I’m your AI cofounder, ask me anything.” Every niche had 20 clones: GPT for doctors GPT for lawyers GPT for resumes GPT for sales emails GPT for Tinder openers (no, seriously) It became clear: we didn’t have 10,000 AI startups — we had 1 startup with 10,000 skins. 3. The Template of Failure They built wrappers, not products. And surprise they broke. At first glance, these AI startups looked solid. Slick landing pages. Clean UI. Snappy copy like “Revolutionize Your Workflow with AI.” But dig a little deeper and you’d realize most of them were just prompt UIs duct-taped to OpenAI, calling themselves companies. Let’s break down the exact r

Apr 24, 2025 - 00:05

The Graveyard of AI Startups: Startups That Forgot to Build Real Value

How the “Prompt-as-a-Startup” Era Crashed and Burned

Introduction: Welcome to the Wrapper Wars (and Their Inevitable End)

Once upon a tech cycle, in the land of Silicon Valley and side projects, someone discovered OpenAI’s GPT API and all hell broke loose.

Suddenly, every other landing page had the phrase “powered by GPT-3”, paired with a glowing gradient, an emoji in the headline, and a promise to “revolutionize” some painfully specific task like “turning Zoom calls into poems.”

It was beautiful chaos.
It was hilarious.
It was doomed.

Between 2023 and early 2025, we witnessed the AI Wrapper Boom — an era where launching a startup meant putting a prompt behind a frontend and calling it a company. Founders rushed in like it was a hackathon with VC money on the table.

You probably saw them:

“Summarize my PDFs.”
“Write better emails.”
“Talk to your cat with AI.”
“Be your therapist, but cheaper.”

All of them looked polished.
Most of them raised money.
Almost none of them built anything real.

Here’s the truth no one wanted to admit: If OpenAI shut down your API key and your startup also dies, you didn’t build a product. You built a fancy prompt.

This isn’t just a roast (okay, maybe a little). It’s a postmortem. A cautionary tale for the next wave of builders who still think GPT is a product, not a platform. We’re going to unpack:

Why these startups exploded… and then imploded
How the economics made no sense
The 20+ most iconic (and hilarious) failures
And what you actually need to build if you want to survive in AI-land now

This is not a hit piece. It’s not a hater parade. It’s a breakdown — written by someone who watched this mess unfold while yelling “bro, that’s just the OpenAI playground with dark mode” into the void.

Let’s begin our tour of the Graveyard of AI Startups. Bring flowers. Or popcorn.

2. The Wrapper Wars: How We Got Here

In 2023, startups stopped building and started wrapping.

The launch of GPT-3.5 and GPT-4 didn’t just change how we write, code, or brainstorm. It changed how we pretend to innovate.

Before GPT, startups were hard. You needed infrastructure. A team. A real product vision. Sometimes even (gasp) a backend. But then OpenAI dropped its playground, handed the internet a shiny API, and just like that — we entered the Age of the Wrapper.

Suddenly, anyone with a Figma mockup and a Stripe account could launch a “startup.” A few lines of code, a reused Tailwind template, and a call to openai.createChatCompletion() boom, you’re a CEO.

The Rise of the Promptpreneur

Product Hunt exploded with launches like:

“TalkToYourPDF.ai”
“EmailWizardGPT”
“MyTherapist.isNotReal”
“LegalBotAI (Not a Lawyer)”

And it worked at least on the surface.
They looked clean. Had slick UX. They called themselves AI-first. They had Discord servers and “waitlists.” The codebase was usually:

const openaiResponse = await openai.createChatCompletion({
  model: "gpt-4",
  messages: [{ role: "user", content: userInput }],
});

And that’s it. That was the whole product.

You’d be shocked how many “founders” shipped this exact logic and raised a pre-seed.

Prompt Engineering = Product? Nah.

The most popular dev trend of the time? “Prompt engineering.”
People started tweeting like:

“After fine-tuning prompts for 6 hours, I unlocked 80% better output. This is the new full stack.”

Except no one owned models. No one trained datasets. No one built tools.
Just “clever” prompts like:

“You are a senior tax lawyer who gives answers in TikTok voice and uses emojis.”

Prompt engineering wasn’t the problem. It was treating it like a product, when it was just a layer.

VC Hype + API Abuse = Recipe for Disaster

Investors saw the hype and FOMO’d hard. They threw checks at anything with .ai in the domain name.

You had:

Founders with zero ML experience raising millions
“Startups” with one dev, one landing page, and no roadmap
Products that were 100% OpenAI frontend wrappers, no backend logic

And they weren’t hiding it either. One founder literally tweeted:

“We don’t need infra we have OpenAI.”

It was like watching people build skyscrapers on cardboard foundations — and wondering why it all collapsed the second usage spiked.

Everyone Built the Same App

At one point, you could launch a startup by copying ChatGPT’s interface and changing the text from “Hello! How can I help you?” to “Hey, I’m your AI cofounder, ask me anything.”

Every niche had 20 clones:

GPT for doctors
GPT for lawyers
GPT for resumes
GPT for sales emails
GPT for Tinder openers (no, seriously)

It became clear: we didn’t have 10,000 AI startups — we had 1 startup with 10,000 skins.

3. The Template of Failure

They built wrappers, not products. And surprise they broke.

At first glance, these AI startups looked solid.
Slick landing pages. Clean UI. Snappy copy like “Revolutionize Your Workflow with AI.”
But dig a little deeper and you’d realize most of them were just prompt UIs duct-taped to OpenAI, calling themselves companies.

Let’s break down the exact recipe that sent them straight into the startup graveyard:

No Real Intelligence Just Prompt Glorification

Here’s what most of them actually built:

Text input box
API call to GPT
Display the result in a fancy div
Hope the user pays $9.99/month for that

There was no logic layer. No feedback loop. No model training.
If you opened DevTools and peeked into the network tab, you’d see the product’s entire brain in a single JSON payload.

You can’t build a company on a glorified playground.