How Cursor Can Win: Strategy, Defensibility, and Developer Moats

Sameer Bajaj — Wed, 23 Sep 2026 00:29:34 +0000

Originally published at sameerbajaj.com.

There have been many new entrants in the AI wave over the last few years, but for me, Cursor takes the pick for the most useful product. I've been a daily active user over the last year, and during this period, I've used it for a variety of use cases that don't just involve working on code. I've also used it for knowledge management. You see, I primarily store my notes in markdown format, which makes it very easy for tools like Cursor to help me understand trends and connections I wouldn't have come across myself.

For example, you can add context to the Cursor AI chat by '@' multiple markdown documents (or folders) and 'talk' to your own notes. Now, there are alternatives such as NotebookLLM to do the same, but the friction involved in uploading your context is just too high. Cursor is just quick and very responsive.

Another major reason I onboarded quickly with Cursor was its pricing structure. Back when I first onboarded, Cursor offered 500 premium fast requests and unlimited slow requests from the top AI models for just $20 a month. To be able to use one subscription for my regular AI questions, knowledge base-specific questions, and coding side projects was peak AI 'zero percent interest' days. That pricing structure didn't last very long. Recently, Cursor announced a new pricing model that would be worth $20 of API usage from the top AI model providers for their $20/month subscription plans. This pricing makes sense for Cursor, but users are not happy. And with how Cursor is currently positioned, user churn could start to be a problem.

To strategically evaluate Cursor's positioning, I go back to Porter's Five Forces framework. This framework evaluates an industry from the perspective of its players—the buyers, suppliers, new entrants, rivals, and substitutes. According to Porter, the stronger the force, the lower the profits for the player. Today, Cursor is positioned as a single-player coding AI tool in an industry governed by very strong forces from all of these players.

1. Buyers (Cursor Users)

When it comes to buyers (Cursor's users), they have a strong upper hand. Essentially, what Cursor offers are AI models that users can access from any app. These users have no switching costs should they decide to move to something like Cline or GitHub Copilot. While Cursor's tab completion model has been touted as better than its competitors, the lack of lock-in remains a risk.

2. Suppliers (AI Model Providers)

Cursor's suppliers are the AI model companies such as OpenAI, Anthropic, and Google. These suppliers exert a medium force on Cursor. Cursor can swap out any model with no switching costs. However, suppliers gain power because there are few frontier model providers, and model providers can vertically integrate directly into editors (as OpenAI did with Codex extensions).

3. New Entrants & Substitutes

The threat of new entrants is strong because Cursor is built on VS Code and doesn't have an insurmountable proprietary moat. Similarly, substitutes are readily available: tools like Claude Code, Gemini CLI, and Codex all provide CLI-accessible workflows for developers.

4. Rivalry

Rivalry with established players such as Cline, GitHub Copilot, and Windsurf continues to intensify, forcing intense competition on speed and UX.

How Can Cursor Build Long-Term Moats?

A theme repeated across the analysis is the lack of switching costs. So how does Cursor make it harder for users to churn?

1. Reducing Friction for "Vibe Coders"

Cursor today is mostly used by users who have prior programming experience. But for beginners and vibe coders, a blank project folder and chat can feel overwhelming. Could starter kits, built-in scaffolding, and automated environment setup reduce the time from onboarding to launch? The growth of SaaS starter kits proves that users want to launch without setup friction.

2. Moving from Single-Player to Multi-Player Context

Today, Cursor is predominantly single-player. But the real asset is shared context. As more non-traditional developers build, codebases become harder to navigate. Cursor can be the companion that documents architecture, decisions, and system prompts, enabling teams to collaborate seamlessly with shared AI context.

3. Personalization & Developer Memory ("For You, By Cursor")

Cursor observes where developers struggle—languages, bugs, prompt patterns. By introducing proactive guidance ("You've been struggling with this pattern—want to deep dive?") and workflow capture ("You had success with this prompt—save as a workflow?"), Cursor can create compounding personal leverage that makes leaving impossible.

I'll be curiously watching how Cursor's strategy and positioning progress over the next year. As a daily user of their product, I hope they build enduring defensibility!

Originally published on Sameer Bajaj's Blog. Explore native Mac tools and developer workflows: EnhancedSkills and MacYT.

PSA: Don’t Outsource Your Writing to AI

Sameer Bajaj — Sun, 13 Sep 2026 19:04:53 +0000

In the world of AI, it is just too easy to outsource your writing to an LLM model. Ask Gemini (2.5 pro - my favorite model) to write on an idea you’ve been thinking about and bam - you’ll have a pretty good finished product on your hands.

But what have you really achieved through this? A piece of writing that is mostly fluff to your brain. Why is it fluff? It’s fluff not because of the writing style or content (on the contrary I’ve seen Gemini produce excellent metaphors and analogies with the right prompting), it’s fluff because your brain hasn’t spent any time on figuring out those words. It’s not spent any time figuring out structure, arguments, contradictions, other connections & examples. Your brain has simply read AI’s input. It has not spent time thinking about the idea. When you try to speak about the topic to someone else, you’ll notice the glaring gaps in your understanding of the topic.

“But I’ve ‘written’ about this” - your brain will say. You’re only fooling yourself. You’ve only read about your idea, but you haven’t built the scaffolding around it to truly understand it. This is what Jordan Peterson says about the writing process:

"To summarize what I've learned, I need to iron out the contradictions between what I've learned, and I need to elegantly formulate that. I need to get my word choice right, my phrase choice right, and my sentence choice right. I need to organize the sentences into proper paragraphs, and the paragraphs into proper sequence so that I have a coherent argument. At the same time, what you're doing is integrating your own personality at the highest and most abstract level of organization. You're sharpening your tools, and you're putting yourself straight because you're learning to think. You learn to do that by writing."

"You learn to think by writing. Now, there's more to read, to speak, and all of that, but the best thing you can do is read and write every day. A couple of hours every day, write about things you find important, and see if you can discover what you believe to be true. That'll build you a foundation, and it's unbelievably practical."

If you want to be a better communicator, learn to improve your persuasion skills through writing. When your writing is clear, your thinking is clear and your ideas become powerful. Shane Parrish explores this idea in his book Clear Thinking.

This is not to say that AI shouldn’t be leveraged at all. Personally, I think AI can help writing in the following ways:

1/ Research

AI is an excellent research partner — as long as you double check the sources it’s referencing. To make sure that I don’t break my flow of writing, I’ll add a placeholder where I don’t know the exact dates or stories. After my writing session, I go back to that document and ask AI to help me fill out the background research. This is a massive time save.

2/ Editing

Since I’m actively writing, I want to make sure I’m improving with each piece I put out. After crafting handwritten notes, I ask AI to grade the writing. Pro tip: don’t tell AI that you’re the author to eliminate positive bias. Continue prompting the model to critique and refine your structure.

3/ Admin Writing

Everyone has pure utility writing to do — routine emails, meeting logistics, operational notes. If the outcome of this kind of writing doesn’t improve your thinking, you should export that entirely to AI. As David Perell noted, all forms of pure-utility writing will soon be handled by AI. Keep the deep thinking for yourself.

In summary: develop a writing habit to sharpen your thinking. Don’t outsource the cognitive work of writing to AI. Think of it as going to the gym for your brain. Carefully use AI to give your writing leverage through editing and research, and automate the administrative writing.

I also recommend reading my notes on How to Take Smart Notes and How to Be a Writer. I've also written about how AI can be leveraged for developer workflows in my post on Cursor.

Originally published on Sameer Bajaj's Blog.

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