How do you answer THAT question?

Here's what you say to an unsophisticated investor who demands exclusivity when investing in your startup...

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Hi Miss Investor,

Thanks for getting back to us.

Completely understand and respect your perspective regarding the issue of exclusivity.

Let me walk you through a chain of reasoning and see if it resonates with you

✅ 1. Any Silicon Valley-style venture scale company's (think Canva, Uber, Atlassian, Xero etc) number ONE mission must be equity growth for its investors. It wants to deliver 10, 100, or even 1000x returns by increasing the value of its equity through a series of funding rounds and eventually an 'exit' to a large acquirer (or some, of course, IPO).

✅ 2. The moment you invest, you will be a major equity holder of the business and will therefore hopefully want the same thing we want (maximum equity growth).

✅ 3. The #1 way to maximize equity growth is to do the following (amongst other things)...

➡️ a) In a rapidly changing and highly competitive landscape (think of all the AI companies, Silicon Valley disruption, etc), the key is to preserve optionality for the business (especially in the early days) so that it can make quick decisions, adapt to circumstances, and WIN no matter what the world throws at it. So any pre-commitments can tie it down and choke it in the crib before it gets a chance to thrive.

➡️ b) Go global as quickly as possible. So we will need multiple vendors and partners across multiple countries.

➡️ c) Successfully convert all qualified opportunities. So we need a mix of vendors to ensure broad coverage for the most challenging use-cases and circumstances.

➡️ d) Be obsessively user-centric (think Netflix, Amazon, etc), including by finding and offering the best solution for any given situation. Better outcomes lead to more trust, more utility, and faster (exponential) growth. So, a marketplace of independent vendors will likely be required to drive competitive pressure and price discovery for users.

I hope this line of logic not only highlights why it would be an amazing opportunity to keep the company free of any exclusivity deals, but also shows just how ambitious and effective we are at executing towards a huge exit for you and all our investors.

Cheers

Mr Founder

The SECRET to validating your startup idea in the age of AI

Here are some things that are NOT validation for your startup in the AI era

❌ VC funding - They have no idea what's going on right now either

❌ Academic endorsement - They don't know what users really need

❌ Media coverage - They just need to fill column inches and air time

❌ Government Grant Beuracrats - They REALLY don't know what's going on

❌ Nice words from your former colleagues - Your MVP should be embarrassing!

❌ Nice words from potential customers - People just like to be nice

❌ 1 or 2 big enterprise clients paying you to do something custom for them - You can't scale this

The only thing that really matters for validation is...

✅ Real users REALLY using your product (Do this first)

✅ Real users paying for your product (Do this second)

Don't screw up these seed stage fundraising tricks

Some thoughts about raising money for a seed-stage company from angels...

I advise founders to have a roadshow period BEFORE they officially start fundraising.

Use this time to introduce yourself and the startup and see if they might be a fit for your round.

There are a few KEY things to do during the roadshow.

➡️ Ask Key Questions

You want to ask them 2 key questions before you finish the meeting.

1. What do you need to see us do/achieve to get conviction on investing during our fundraise?

2. Who else should we talk to in your network who might be interested? We'd love 2 or 3 intros.

Remember, for Question 1, this is less about gathering homework assignments and more about...

1. Uncovering the hidden objections in people's heads.

2. Giving you a chance to commit to something so that when you return, they have evidence that you know how to execute and keep you word.

3. Minimizing or eliminating any room for them to say NO when you come back asking for money.

Pro Tip: Try to guide the requests from Question 1 toward a small set of things you're already planning to achieve! If they give you a random metric or goal, try to get them to agree that the north star metric you've ALREADY decided is the right one to hit.

➡️ Create a methodical pipeline of investors

Make sure you end up talking to 100-150 angels at least. Question 2 above (intros to other possible investors) should help turn your initial list into more and more people.

Make sure you have a methodical spreadsheet with all your notes and what you committed to as part of Question 1 so that you can follow up properly.

➡️ Timing

1. Try to talk to everyone within a 4-8 week timeframe. Don't let this diffuse out into an endless process. You need to keep things tight and build momentum toward the fundraising process itself.

2. Tell everyone that the fundraise will start at the end of the Roadshow (no more than 2 months out) so they know when to expect you back.

Let's talk if you need help with this.

I've been doing a LOT of pitch deck and fundraising advisory work lately.

The path to failure

If you have...

The Right idea

+ Wrong time = Fail

+ Wrong team = Fail

+ Wrong investors = Fail

+ Wrong implementation = Fail

+ Wrong go-to-market = Fail

+ Poor alignment = Fail

+ Weak perseverance  = Fail

+ Slow adaptation = Fail

In startups, like in life, the stars need to align for outsized value creation and success to occur.

In Startups:
Choose your market timing well. Choose your founders and operational team well. Choose your investors well. Choose your implementation details and roadmap well. Choose your go-to-market strategy and tactics well. Manage your team's alignment well. Maintain your team culture and perseverance well. Adapt quickly without thrashing.

In Life:
Choose your life stages well. Choose your spouse and friends well. Choose your career well. Apply your superpowers well. Craft your attitude and personal brand well. Maintain alignment amongst your family and friends well. Continue to invest in each other well. Know when to pivot, adjust, and/or move on.

It’s like threading the eye of a needle.

Very difficult. Nearly impossible. 

However, the effort and the outcome can be very rewarding if you put your heart and soul into it with the right people by your side.

If any of these elements are fundamentally broken, though, the pain, suffering, and failure will be heartbreaking and maybe even maddening.

You can push and push, but you will ultimately get nowhere.

It’s like a supercar on a track with a flat tire. The horsepower will never overcome the friction. And you’ll mess up the rims trying.

Are you OBSESSED with solving problems?

Talking to a former employee at a startup I used to advise about his new startup, "I was just a fly on the wall, but I so admired how you help companies build products that people genuinely love. Every conversation I've had with you, you're so focused on the problem, and I LOVE it."

I love this.

Also, I love bumping into founders who have a BRILLIANT B2C app that they THINK is a B2B play. So much latent potential at risk of being totally wasted. When I tell them the REAL potential of their app to disrupt (rather than support) their "customers", their eyes light up and they get a glimmer in their eye.

Remember: Go forth and disrupt the slow, the lazy, and the unimaginative. Eliminate (rather than optimize) inefficiency, waste, and pain.

Feature Prioritization vs. Effort

When it comes to product roadmap prioritization for your early stage product: If it's worth doing, it's worth doing.

Factoring in "level of engineering effort" and other random data is typically just noise.

Focus on one question: "What is the #1 reason why more people are not getting more value from my app more often?"

Once you've identified the top problem and the key feature ideas for addressing the problem - DO it.

Don't overcomplicate it.

The only reason you need to concern yourself the level of effort is to a) estimate when key features will ship (and therefore when GTM activities and business metrics might change) and b) understand if you might want to slice the iteration into even thinner slices so you can deliver value more quickly (WITHOUT compromising on the final requirements). c) hold your engineering team accountable.

What's left when AI can do everything for you?

What's left when AI can do everything for you?

Taste, judgment, intuition, and taste.

In short, wisdom.

With a core group of truly wise people on your team, you can leverage AI to execute faster, make a bigger impact, improve people's lives, and make big money more quickly and easily than ever before.

Hiring well and firing fast has never been more important.

Having great advisors and mentors has never been more essential.

The market has crashed. Now what?

As always, capital efficiency is key.

Software, AI, and disruptive business models of all kinds tend to deliver maximum value with minimum cost and friction. This means an economic downturn is typically an opportunity for tech startups.

If your product does not deliver efficiencies and scale for your users and customers, then you should ask yourself "why not?"

If your product delivers efficiency and scale, then it's essential that you lean into this story in your messaging and in your product strategy.

This approach should set you up to survive the downturn and thrive when macroeconomic conditions change.

But here’s the catch: how do YOU maximize value and minimize costs and friction within YOUR business?

Certainly, using software and AI tools is key. But it's also essential to recognize that in times of uncertainty, you can’t afford to tolerate mediocre people in mediocre teams with poor alignment and suboptimal outcomes.

In these situations, every decision and every dollar counts more than ever.

Find/retain the very best people, sharpen your focus, and tighten your alignment.

Not sure where to begin? Let’s talk.

Are you wasting your life?

A thought for you - according to ChatGPT…

Your Real Life Span of Joy & Freedom:
• Lifespan: 85 years
• Childhood (0–18): -18 yrs (no agency)
• Elderly decline (75–85): -10 yrs
• Sleep (1/3 of life): -19 yrs
• Work (40 yrs x 8 hrs/day): -11 yrs
• Errands, chores, admin: -5 yrs
• Low-energy evenings, burnout, flu, etc: -4 yrs
• Wrong relationships / misalignment: -5 yrs
• Time after partner passes (avg 5–10 yrs): -7 yrs

Leftover: ~6 years of truly aligned, joyful, free time across your entire life.

That’s ~7% of your life.

Are you in the right job?

Are you striving to make the most possible impact?

Are you in the right city?

Are you wasting it fighting trolls on LinkedIn?

In short… Are you using your previous little time wisely?

Anti-fragility culture

Is your team culture so fragile that it can’t handle vigerous debate and rapid fire collaboration? Change it. Change it fast.

I’m not talking about a tolerance for regular and capricious thrash.

But I *am* talking about

1. The ability to debate ideas in a cross functional team of independent voices without taking it personally

2. Pivoting quickly when new, better consensus emerges

3. An enthusiasm for rapid realignment and making things better all the time.

If your culture and teams can’t do this, then nothing else will work in your company.

If your culture and teams can’t do this, explicitly revise and change your cultural values and performance review criteria.

Those who can’t keep up should be encouraged to leave - quickly.

It's way, way harder than you think

However much effort you think it will take to build a new business - multiply it by 10, and you're probably still underestimating it.

I don't just mean a new "startup". I mean a new business model (E.g., a B2C company trying to kick off a B2B product. A product company adding a new product to its suite, etc.)

So many founders and execs stumble blindly into these decisions without understanding the resource requirements and corresponding resource contention that will not only undermine the success of your new business but also crush the rest of your company as well.

Any time you have a meaningful difference in 1 or more facets of what you're doing (new market, new problem, new business model, and/or new product) - this is basically a new "business." It requires new efforts across everything from engineering, product, go-to-market, customer support, maintenance, and so much more.

Here's the real sneaky truth. Each of those facets doesn't have to be that meaningfully different. Each difference is multiplied by the others. It gets REALLY meaningful, REALLY quickly.

FOCUS.

You suck at running a company!

No one, nowhere, ever, has been good at every part of running a company.

EVERYONE sucks at some part of it.

MOST people suck at MOST of it.

Some founders and executives suck at ALL of it EXCEPT for finding great people and aligning them to their vision.

Building a company is a team sport.

Do NOT fall into the trap of thinking that you need to do this all on your own.

Do not fall into the trap of not sharing your concerns and confusion.

Ask for help.

Recruit the very best people you can find. Ensure they have a clear sense of your vision (or let them help you refine it), and give them the space to help you win!

Everything else is fear and/or ego.

ChatGPT is your friend

If you're not technical and still a little afraid of ChatGPT/GenAI, here's a little thought framework for you.

AI is simply the most obedient, intelligent, and knowledgable person you've ever met.

Provide as much context as a person would need, ask the questions you want answers to (remember it has the totality of human knowledge in its brain with pretty much perfect recall) and provide as much specificity about the way it should answer as you need.

It's a miracle. Make friends with it.

Everything is dumb right now

A lot of really DUMB stuff is happening in politics and business right now.

Profoundly dumb.

Worse is all the dumb people pretending they're smart trying to explain it away like they understand some super complex counterintuitive game theory that the rest of us don’t get.

This has been getting worse and worse for about two decades.

We’re in a negative doom loop.

We can only hope that - by some miracle - the loop can be broken and we reset back to some semblance of normalcy.

However, getting out of doom loops is near impossible and may require some kind of catastrophic failure before it ends.

Just remember. There are words and there are actions. There is stated intent, and there are outcomes. There are accusations and then there are court decisions. There are principled people and then there are those that change their stance based on prevailing winds.

Always pay attention to the latter.

Repeat, repeat, repeat

When it comes to stakeholder alignment, there's no substitute for concise, compelling and effective repetition.

Same info (in the same packaging!), over and over.

Generating revenue is a BAD idea

Trying to use revenue to extend runway (much less break even) is a fantastic way to break your early stage disruptive venture scale startup before it even begins.

Founders trying to do “one and done” or boostrapped startups are going to get their lunch eaten by Silicon Valley startups with the right number (and size) of funding rounds to win their category.

In early stage startups, revenue might be useful as a signal of PMF/traction, but only if it doesn’t create real friction toward scale and/or a disruptive business model down the road.

If it leads them to take big enterprise deals with bespoke, ill-timed or distracting requirements - then it’s insta-fail.

TAM, Growth and S-Curves

If you're thirsty, then you don't need the whole ocean, you just need a glass of water.

If you're chasing traction and growth, you don't need to go after the BIGGEST market, just the Minimum Viable Market for your Minimum Viable Problem so you can build, ship, and grow your Minimum Viable Product.

Then, it's a matter of S curves. As you begin to top out on one, you move into adjacency after adjacency.

If you have plenty of capital, maybe you can do 2 or 3 of these at the same time.

Short-term wins vs. Long-term growth - A false dichotomy.

There's always this perceived tension between short-term wins vs. long-term growth.

I generally find it to be either...

a) A false dichotomy - because if you figure out the right long-term plan, you can take quick incremental steps in the given strategic direction to drive short-term outcomes while building towards sustainable and meaningful long-term innovation.

b) A bad tradeoff - Even if there's a juicy (hard to pass up!) short-term win that isn't aligned to a long-term strategy, it's generally a lousy tradeoff that both costs more than you'd expect and returns much less than you'd hope. Thrash, distraction, and tech/business/ops debt combined with lackluster outcomes all conspire to just make it a shit deal.

Instead, do the work.

a) Take the time to develop a strategy
b) Articulate a clear vision for the ideal future state
c) Develop a roadmap of thin slices that get you from here to there
d) Ship each slice, one by one

This drive short-term growth on the way to long-term sustainable and disruptive change.

Have you wet your pants?

For an early-stage disruptive startup, using a big partnership to build something or go to market is a lot like wetting your pants. It might feel warm and fuzzy at first, but then you realize you've made a bad decision.

B2C companies will win in the end

Pretty much all winning software is B2C in the sense that individual human beings have to love using it and succeed.

The most user-centric product will always win in the end, even if the business model is ostensibly B2B.

Further, the user-centric B2B product that goes beyond the business user and helps the end-user the most will defeat those that don't (I.e. Some B2B2C features).

And in the fullness of time, B2C products will disrupt many of the incumbents and their crappy B2B Software.