Arjun Kava

Applying for YC ? WAIT...!! Y Combinator (YC) is often seen as the holy grail for early-stage startups. But for many Indian founders, the path to YC is becoming increasingly difficult. Here's why: 🌎 The Jurisdiction Barrier YC only invests in startups registered in: • United States • Cayman Islands • Singapore • Canada For Indian startups, this means: 1. Changing registration to qualify 2. Navigating complex legal & tax issues 3. Losing out on local benefits & networks 📉 Indian Representation Dwindles The impact is clear: • Indian startups in YC down since 2021 • Summer 2024 batch had record low Indian presence • Talented founders looking elsewhere 💡 The Rise of Local Alternatives As YC's appeal wanes, Indian accelerators are stepping up: • Peak XV Surge: Up to $3M funding, India-friendly terms • Smaller cohorts, personalized support • Emphasis on growth vs. investor pressure 🙌 Founder-Friendly Focus FITTR's Jitendra Chouksey shares his experience: • Left YC after 3 weeks due to investor pressure • Joined Peak XV Surge, found supportive community • Relaxed structure, expert resources, no fixed hours As an Indian startup mentor, I've seen firsthand how the right accelerator can make all the difference. While YC's prestige is undeniable, it's time for Indian founders to critically evaluate their options. Is YC's jurisdiction policy holding back Indian innovation? What can be done to level the playing field? Share your thoughts and experiences in the comments. #Startups #YCombinator #IndianStartupEcosystem #Entrepreneurship #Accelerators

31

3 Comments

Sequoia Capital's Framework to Find Out If a Startup Has Achieved Product-Market Fit (PMF) 👇 The First is "Retention Curve" - "The retention curve is what percentage of your users keep coming back over some time while using your product/service." Essentially, there are 3 kinds of retention curves, and you should plot this curve by day, week, or month, once you launch your product. 1. Declining Curve (dark grey line), let's say you’ve launched a consumer internet app on day 0, and every week your retention rate declines by 10%, which essentially means that by the end of 3rd month, all your initial users would have churned, then that's a declining curve, which indicates that you don’t have a product-market fit. 2. Flattening Curve (orange line) is actually good, although it kind of varies depending upon the category (Health-Tech, EdTech, etc.,) but generically speaking if the retention curve flattens between 20%-40% that could be quite good. 3. Finally the best one is the Smiling Retention Curve (green line), which means that retention drops but then as time goes on you keep reactivating users, which indicates that you're getting close to your product-market fit. Another question that founder should think is - 2. Do Customers Love Product? Net Promoter Score (NPS) is a metric that organizations use to measure customer loyalty toward their brand, product or service. NPS works by asking your customers a single question: "How likely are you to recommend our products/services to others?" NPS = % Promoters (score 9-10) - % Detractors (score 0-6) If the magic score is = 70% or more, then you have an amazing product-market fit. But if the number declines to 40% or below, then you don’t have it. It's that simple! What do you think of these two methods? Check out my free newsletter for more insights: https://lnkd.in/dTzRN9HK . #startup #fundraising #venturecapital #funding #fundraising #founders #founderjourney #entrepreneurship #entrepreneur #founderstories #startuptips #sharktankindia #siliconvalley #startups #vc #vcfund #vcfunding #funding #startups #pmf #product #sequoiacapital

47

4 Comments

Understanding SaaS valuation VCs love #SaaS (Software as a Service) businesses because they have a long track record of creating significant value for investors. In the US, dozens of SaaS businesses are listed. Some of the biggest Indian startup successes are in SaaS. How do investors value SaaS #startups? SaaS valuation starts with ARR – Annual Recurring Revenue. SaaS companies (B2B and B2C) have a recurring revenue model because they sell subscription plans. When you buy a Netflix plan, you pay a fixed amount every month until you cancel the subscription. Most customers (Enterprises or Individuals) don't cancel subscriptions unless they are unhappy. Hence, SaaS companies get monthly revenue after acquiring customers. In D2C, Logistics or Fintech startups, companies get a one-time sale revenue. Say you are the founder of an early-stage SaaS startup and your subscription revenue for the current month is $100,000. What's your ARR? ARR = Monthly Revenue x 12 = $1.2M VCs use an ARR multiple to estimate Valuation. This multiple depends upon the availability of capital in the market. ARR Multiples have come down from their 2022 highs because of Funding Winter. Right now in #India, this multiple is between 5x to 10x. What's the valuation of our startup if VCs offer us a 7x multiple? Valuation = ARR x Multiple = $1.2M x 7 = $8.4M In NASDAQ, the average current multiple of the top 10 SaaS companies is 16.1x while the overall median multiple is 5.8x. As we can see, the difference in multiples between the best-performing and average companies is huge. What determines this difference? 1. ARR Growth = If a startup is growing quickly, it gets a higher multiple because revenue growth is directly correlated with valuation. 2. GM (Gross Margin) = High GM business models get higher multiples because GM is a measure of future profitability. 3. Churn = In SaaS companies, churn means the average percentage of customers that leave in any period. Churn = Customers lost in a month / Total customers at the start of the month. 5% monthly churn means 5% of your customers cancel their subscriptions every month for some reason. Lower churn indicates customers are happy with your service and are less likely to leave in the future. VCs love companies with low churn. A low churn indicates a good product and high future revenue. Companies with lower-than-average churn get higher multiples and vice versa. These 3 factors broadly influence the valuation multiples. If you score highly on these indicators, VCs will give you a higher multiple than the industry. Finally, ARR multiples become useful once you hit a minimum revenue milestone. $1M is the ARR threshold in the SaaS. At lower ARRs, VCs don't use valuation multiples. If your ARR is $100K, no multiple would make sense because the valuation would still be too low. At such stages, the founders' profile, product potential, market conditions, and negotiations decide the valuation.

105

13 Comments

The number of Indian startups in YC has been on the decline since 2021, with their Summer 2024 batch having the lowest Indian representation in years. Here's why: Y Combinator invests $500,000 into portfolio startups. $125,000 of this is for a fixed 7%, and the other $375,000 is invested on an uncapped MFN safe, but there’s a catch: YC only invests in corporations registered in the United States, Cayman Islands, Singapore, and Canada, so if you’re an Indian startup – if you’re registered as a private limited company here in India – you won’t be accepted into YC unless you flip your corporate structure to have a parent company in one of those four countries. But the good news is that India does have some great alternatives to Y Combinator, and unlike YC, these accelerators let you register your business in India. Take for example Peak XV Partners Surge, which has been around since 2019 and currently has applications open for their 11th cohort. Unlike YC which is a 12-week program, Peak XV Surge is a 16-week program, and it’s also intentionally small and curated, usually between 10 and 20 companies per cohort, compared to Y Combinator’s huge batches that are typically upwards of 200 companies. YC also writes cheques of $500,000 whereas Peak XV Surge invests as much as $3 million into participating companies. Jitendra Chouksey, the founder of FITTR, got into Y Combinator, but after the initial hype died down, he found himself feeling suffocated by the heavy focus on impressing investors. The $375,000 uncapped MFN safe only converts if you raise subsequent funding, so everything that happens at Y Combinator is intended to maximise your chances of raising that round, even if it means severely altering your product or service, which is what happened to Jitendra – they wanted him to stop focusing on community, which was the core of his business, so he quit – he left Y Combinator after 3 weeks, flew back to India, and after some due diligence, got in Surge. Jitendra said the agreement given to them by Peak XV Surge was extreme founder friendly and the format of the accelerator was very different from YC. He said it was more cozy, there were no fixed hours, and he was given access to a network of people from legal, PR, hiring, social media, and tech who were all just a message away. Looking back, he said, “YC was all about impressing the investors, [whereas] Surge was all about focusing on the business and customers.”

34

Bolt raised $1.4 Bn and Fast raised $120 Mn in 2021-22 5 companies in that year’s YC cohort were building Checkouts for LatAM, South East Asia, etc As we were still narrowing down on a problem, this was impossible to ignore. Having seen Flipkart build Amazon of India, Ola build Uber of India, it made sense that “someone will build Bolt/Fast of India” It became a good starting point For our VC experience, we also knew such pattern matching is useful in fundraising We launched the product and had some customers. That’s when stories of bolt and fast failing started to do the rounds on Twitter. There was a lot of drama. It was hard to look away. After some introspection on what this means for us, we realized that 1) Customers were excited about the problem and were willing to pay. To the extent, people were signing up for demos inbound via word of mouth 2) It was merely a starting point. As we started spending more time with customers, we started to see plethora of problems in “effectively engaging customers” they were facing 3) India (our first market) is uniquely different from US (their first market) : Phone number as an identifier, un-standard addresses, low trust, Cash on Delivery, So many more payment options 4) US had likes of PayPal, ApplePay and GooglePay solving this problem making the competitive landscape even more intense I personally think it is a great wedge into the market. It got us the customers who shared several insights turning the wedge into a product, which we hope to turn into a platform. It was also clear that everyone is writing their own story. Pattern matching only goes so far. Is there another company who you think has successfully executed the “X for Y” strategy like Flipkart and Ola? #floBTS This post is a part of our effort to share the behind the scenes of building our company. You can see the other posts by clicking on the hashtag or link in the comments.

105

4 Comments

After watching 100+ startups' founder-led sales demos, I am honestly surprised that ONLY ~90% of startups fail. As a first-time founder, I didn't understand sales, didn't realize how difficult it was, and didn't realize how different pre-PMF sales was from post-PMF sales. I also didn't realize that selling & delivering are THE core generative process for finding PMF... NOT research, experiments, & all the other nonsense I was taught. Which means I spent less time and mental energy on sales than I should have. Worse, I got stuck believing a bunch of bad ideas about pre-PMF sales: That I needed to "challenge" my prospective customers, that I needed to pitch the vision, that I needed to create a category, etc. When I watch pre-PMF sales calls, here are the FOUR cardinal sins I see: 1 - Spearfishing for pain points We're taught to discover pain points and problems... so we take the first 10-15 minutes of the call probing for pain points. Guess who likes to have their pain points probed for? Nobody. The idea is that if you find big problems & pain points, you can then convince customers to solve these using your magical solution. Which sounds right. But... has this ever been said? "WOW! You've done such a good job probing my pain points that I'm going to drop my existing projects and initiatives to buy your innovative new software!" Quite simply: We don't understand *why people buy software.* There is something that CAUSES people to buy software; nobody wakes up and says, "Yes! Today's the day I get to buy new enterprise software!" Plus, about pain points, remember: Life is a series of pain points that we mostly do nothing about. 2 - The investor pitch crossover If you're using your investor pitch deck for sales calls... may god have mercy on your soul. Investors like to see: - Big, abstract problems - Huge market opportunities - The 10-year vision - Where the product will be in 3-5 years, assuming you raise $50M+ - How you're going to be the main character of the next technological wave Customers couldn't care less about any of this. They care about themselves, their goals, their projects, their jobs. When you show customers your investor deck, you speak in a different language that's offensive to them. 3 - The "let me prove it works" demo Prospects ask to see your software for the same reason you walk them through every screen in your product: Because you both hope that by seeing something tangible, some lightbulb will go off in their minds that causes them to get it and want to buy it. In some ways, it's like we show them every screen of our product to *prove the product works.* I get it, it's kinda a miracle at this stage that the product DOES work. The purpose of the demo isn't to prove the product works, or to show them every screen in hopes that something clicks. 4 - Dealing with objections like a blindfolded hockey goalie Ran out of space, this is the most important one. Another time.

275

82 Comments

The 5 metrics which startup founders must track Cost per Click (CPC) Customer Acquisition Cost (CAC) Click Through Rate (CTR) Cost Per Lead Conversion Rate ROAS These are very important terms that every startup founder must know while running ads for their brand. And not knowing them will always pull you behind in the race. You might be thinking -"But I'm not a numbers person." “You don't have to be!” Learning these metrics helps you answer questions like: - What works for your TA? - Is the audience taking the desired action? - What is your effective cost when someone clicks on your ad? - How much should we spend on ads? - Are we reaching our target market? It's time for you to sit down and introspect your business. Doing this will take care of your startup's success. Follow Vineet Patawari for more valuable information about startups. #startup #founder

90

9 Comments

The worst-kept secret in retail is that retailers are overstocked. Buyers mistook COVID-19 growth for marketing skills. It was luck. Founders have lost their brands because of this. The biggest lie is that the root cause of this issue has been fixed. The second biggest lie is that there is an easy fix. Inventory Planning Software is not a new category. It pre-dates DTC, but DTC demand dynamics have certainly stirred the pot. It is incredibly nuanced, and each software has its place in the market depending on a brand size, sales channels, product types and categories, seasonality, assortment, continuity of products and growth rate. That's before you consider integration to your Ecommerce platform, ERP or WMS. Yikes. No wonder Operators burn more time reviewing these solutions than any other. The vendors find this tough, too. Some of the vendors I am highlighting here rejected my request for a demo 👀 Even if you're not currently shopping in this category, save this as your shortlist for when you need to. 📥 If you're one of these vendors, please use the comments to state your differentiation and call out your ideal customer profile to help people qualify themselves. Inventory Planner by Sage - Wider SKU range. Repeating products. £10K+ per year. Toolio - Merchandising focused. Works well with NetSuite. Retail+DTC forecasting. $10K+ per year/module. Flieber - recommended by a client of mine. Uses AI. No pricing intel. Singuli. Data scientists. Strong in 'What to buy'. Starts at $3,000/month. Optiply. AI and automated buying. Great for seasonality and resellers of brands with big catalogues. Syrup Tech. Google-backed. I don't know much, but logos look cool. I would love a demo tbh 😂 Lokad. The nerds of inventory forecasting. Over my head, but one for the more studious operator. Prediko is Shopify-focused. It integrates with the Bundle app and Shopify bundles. It is Felix Capital-backed. It starts from £119/month. Slimstock. Veterans of the game. Solid platform. Pricing is not disclosed. Netstock. ERP-Focused inventory planning. Works well with NetSuite in particular. It's a solid option you have an ERP-stack. Madden Analytics. Fashion-focused merchandise solution. I've got a demo lined up next week. More soon 👀 No inventory planning solution is going to replace the art of merchandising. These are tools to make the merchandise team's life easier so they can focus on making the right decisions. The hottest tip outside these solutions is Klaviyo waitlists and using pre-orders on new products to gauge demand and reorder before they land. Airtable isn't the right solution for figuring out what to buy. Airtable can help combine your costs, purchase orders, and supply chain workflow with the 'what to buy' data your inventory planning software generates. What Inventory Planning tools did I miss? Which of my summaries sucks and needs to be amended?! #inventoryplanning #techstacks #ecommerce #shopify

70

37 Comments

5 things broken in the India VC system. 1️⃣ Low Returns over the years: The cat is out of the bag. The returns delivered by most VCs back to their LPs have not been stellar. This makes them much more risk-averse and likely to be less entrepreneurial and more conservative money managers 💰 2️⃣ Lack of operators in the high chairs: There is a telling lack of ex-founders, operators, and ex-entrepreneurs in the top echelons. With the tech changing rapidly, anyone who has not operated for over a decade, it is hard to stay in touch with the shifting grounds of tech, marketing, post-sales customer success etc. Being a successful operator of '90s or early 2000s is good for pedigree, but may not be great for prevalent realities 🏆 3️⃣ Very little Indian Money: Most of the VC money in India is from US/EU/ME etc. The share of Indian money is very low. Since the VCs have to answer to the money, there are constraints on what they can and cannot do. In some cases, they are responding to the US overlords' wishes - surely not a great sign 💸 4️⃣ No dedicated tech specialization: There is hardly any sector-focused VC in India that can bring deep sector expertise on the table to spot the naughts and, more importantly, breakout techs. The same goes for general tech (AI, SaaS, mobility, etc.). Hardly any VC firm has a CTO office to inspect the innovations deeply and spot the snake oil claims vs real breakthroughs 🎯 5️⃣ Momentum and trend worship: The only game in town is momentum and conforming to trends (AI in recent days). These are the only two parameters that have got the job done in the recent past 🔍 VC = Vision + Capital. It is a game where the bets need to be entrepreneurial with deep tech diligence as the right to win rather than ultra-focus on distribution as the lynchpin (GTM - a pure function of money). Without that, they are destined to perpetuate the underwhelming past results 😐 #VC #startups #founders #funding #India

81

12 Comments

EdTech startups in Y Combinator's latest batch   75% of the companies in the YC’s S24 batch implemented AI in the product, including the only 2 EdTech startups in the batch: Educato AI and Undermind.   Both startups are using AI in very creative ways:   🔹 Educato AI creates quality AI-based exam preparation materials. Its target audience is low-income students from around the world who can't afford tutors. Currently, students can prepare for 10 exams. Over 15 more, including the popular GMAT and SAT, are in development. 🔹 Undermind is a specialised system for finding answers to complex questions.  The assistant is designed for those who need accurate information from the scientific literature, namely scientists, researchers, and doctors. The platform uses LLMs to explore databases and, as the developers claim, is up to 50 times more effective than existing search and AI-based retrieval methods. #edtech #aitools #educationtechnology #ycombinator

9

𝗕𝗲𝗶𝗻𝗴 𝗮 𝗽𝗿𝗲-𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝗦𝗔𝗔𝗦 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝗰𝗮𝗻 𝗯𝗲 𝗮 𝘁𝗿𝗶𝗰𝗸𝘆 𝘀𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻. I have seen so many early-stage startups that are pre-revenue, struggle with raising capital in the last 6 months. In this current climate, it feels that it’s been near to impossible to convince investors to invest at pre-revenue stage. So, how do you navigate this challenging phase and attract investors? Here are some ways that I think can help getting investors on board: 𝟭. 𝗦𝗵𝗼𝘄𝗰𝗮𝘀𝗲 𝗬𝗼𝘂𝗿 𝗧𝗲𝗮𝗺 𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲: When it comes to pre-revenue startups, investors often bet more on the team behind the idea than the idea itself. They're looking for a blend of experience, expertise, and entrepreneurial grit that can turn a vision into reality. So, make sure to shine a spotlight on the collective expertise and track record of your startup team. Also, highlight your past experiences in the industry and what makes you the right person to run the startup - your past successes, industry knowledge, and relevant skills that demonstrate your capability to execute the business idea. If you keep getting feedback that there is a detrimental skill missing as part of your team - take it on board and figure out how to plug that gap. 𝟮. 𝗗𝗲𝘃𝗲𝗹𝗼𝗽 𝗧𝗿𝗮𝗰𝘁𝗶𝗼𝗻: Even if revenue isn't pouring in yet, having a solid pipeline of potential clients or partnerships can significantly boost interest from investors. Investors need to see that you are planting seeds for future growth. Focus on building traction by growing a waitlist of users or signing up LOIs.  Investors are more likely to see the potential for future revenue generation, even if you're currently pre-revenue. 𝟯. 𝗦𝗵𝗼𝘄𝗰𝗮𝘀𝗲 𝗬𝗼𝘂𝗿 𝗟𝗼𝘄-𝗰𝗼𝘀𝘁 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗠𝗼𝗱𝗲𝗹 One of the perks of being a SaaS startup is its low operational costs compared to traditional businesses. Investors love this because it means higher margins and higher scalability potential. So make sure to highlight how your lean approach to operations translates into a competitive edge. Talk about the efficiency and agility of your business model, emphasizing features like automated processes, cloud-based infrastructure, and scalable pricing models, among other things. 𝟰. 𝗕𝗲 𝗨𝗽𝗳𝗿𝗼𝗻𝘁 𝗔𝗯𝗼𝘂𝘁 𝗬𝗼𝘂𝗿 𝗘𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗟𝗶𝘀𝘁𝗲𝗻 𝘁𝗼 𝗧𝗵𝗲𝗶𝗿 𝗙𝗲𝗲𝗱𝗯𝗮𝗰𝗸: Be open to feedback from potential investors. Listen to their perspectives, concerns, and suggestions. Then use all that feedback to refine your approach and address any misconceptions or uncertainties. This can go a long way, as it shows to investors the founders’ ability to take on board feedback and can set a precedent for a good foundation. Raising a pre-seed investment round pre-revenue? If yes, please share your experience in the comments below 👇

17

4 Comments

30 Early-Stage Startups Now Hiring 📈 All have under 50 employees. Top-tier VCs like Benchmark, a16z, Khosla, and Greylock back most of these companies. 1) Softr (remote) 2) Spellbook (remote) 3) Kognitos (Bay Area / Bangalore) 4) DraftWise (remote / New York) 5) Modal Labs (New York) 6) Foundry (Bay Area) 7) Levelpath (Bay Area / Latvia) 8) BrainLogic AI (Bay Area / Uruguay / remote) 9) Cradle (Amsterdam / Zurich) 10) Sakana AI (Tokyo) 11) Pika (Bay Area) 12) Braintrust Data (Bay Area) 13) Sybill (Bay Area / India) 14) Clay (New York) 15) Ideogram (Toronto / New York) 16) Pylon (Bay Area) 17) Railway (remote) 18) Unleash (Tel Aviv) 19) Siro (New York) 20) Replo (Bay Area) 21) ExtendApps (Bay Area) 22) ScholarshipOwl (remote) 23) Chargeflow (Tel Aviv / US) 24) Pulley (New York / Bay Area) 25) Stable (New York / Bay Area / remote) 26) Finley Technologies, Inc. (New York / Bay Area / remote) 27) Vizcom (remote) 28) Rundoo (Bay Area) 29) Batch (remote) 30) Series AI (Bay Area) Shoutout to Ben Lang for putting this gem together. It's such a valuable list. #startups #entrepreneurship #careers ____ Enjoy this? Follow Robin John for daily startup & VC advice. You also might get a meme or two! 😊

1

Startup Equity Distribution Guide for Founders. Founders often ask how they should split equity with their co-founders & early employees.... If you search web on this topic, you will see horrible advice, typically advocating for significant inequality among different founding team members. Lot of founders follow this trend because of following reasons: - I came up with the idea for the company - I started working n months before my co-founder - This is what we agreed to - My co-founder took a salary for n months and I didn't - I started working full time & months before my co-founder - I am older/more experienced than my co-founder - I brought on my co-founder after raising n thousands of dollars - I brought on my co-founder after launching my MVP - We need someone to tie-break in the case of founder arguments Founders tend to make the mistake of splitting equity based on early work. All of these lines of reasoning screw up in four fundamental ways: 1️⃣ It takes 7 to 10 years to build a company of great value. Small variations in year one do not justify massively different founder equity splits in year 2-10. 2️⃣ Startups often fail, so the more motivated the founders, the higher the chance of success. Giving founders a larger equity stake can increase their motivation and drive. 3️⃣ Investors view founder equity splits as a signal of how the CEO values their co-founders. Unequal splits can imply that certain founders are not highly valued, which can deter investment. 4️⃣ Dramatic equity disparities can overemphasize the initial idea rather than the team's ability to execute and generate traction. Startup success relies more on execution than the original concept. Equity should be split equally (or near equally) because all the work is ahead of you. My advice : Split equal (or close to equal) equity splits among co-founders. - These are the people you are going to war with. - You will spend more time with these people than you will with most family members. - These are the people who will help you decide the most important questions in your company. Finally, these are the people you will celebrate with when you succeed. I believe equal or close to equal equity splits among founding teams should become standard. If you aren't willing to give your partner an equal share, then perhaps you are choosing the wrong partner. Check out the attached PDF to learn more about how to compensate your co-founders & early employees with equity. It includes 👇 1️⃣ Founder's pie, 2️⃣ Slicing the Founders’ Pie, 3️⃣ Distribution Issues and Consideration of Values, 4️⃣ Stock-Vesting Agreement, 5️⃣ Founder Relative Contribution, 6️⃣ Rules of thumb for founders and employees equity distribution& More. PDF Credit: Frank Demmler . #founders #equity #funding #fundraising #founder #money #vc #investors #angelinvestors #startuptips #rules #employees #venturecapital #fund #entrepreneur #entrepreneurship #tech #investor #startup

80

2 Comments

metrics that keep startup alive 🏃‍♂️ . . 1. Runway 2. PMF 3. Recurring revenue 4. Burn Multiple 5. Churn 6. Compounded Growth Rate 7. Active users 8. Conversion Rate 9. CAC 10.Payback Period Mention in comment, which relevant metrics do you track for your startup ?

9

1 Comment

This is an exceedingly helpful framework for Founders navigating core considerations: • How does the startup need influence existing perceptions? • How should it go about building a solution? • How to predict growth? • What defines meaningful progress? To win, you need to know what game you're playing. Thanks Sequoia Capital for sharing this!

3

Can technical founders become effective CEOs? Srinath Sridhar knew he needed to step out of his comfort zone when he founded Regie.ai four years ago. Now he and cofounder Matt Millen have raised more than $20 million and landed on G2’s list of fastest-growing software products of 2024. My full conversation with Sri is in the comments.

33

3 Comments

Monolithic CeAI 🐇 vs Modular DeAI 🐢 👇🏻 #CeAI 🐇 Early out of gate & rapid tech gains (with resulting shock & awe media hype) from centralised & closed decision making, masked malpractice & ethical shortcuts.. but whose negative monopolistic outcome stalls broad ecosystem engagement, where product outcomes eventually plateaux leading to UX theatre 🎭 and equally creating a regulatory backlash #DeAI 🐢 Early tech dev slowed by fragmented and decentralised decision making, building in public, auditable infra… However which, when combined with better incentive alignment, network hardening, eventually kick in to catalyse an ecosystem flywheel with better regulatory fit and buy in. This is not theory. I’ve bet the farm on this outcome. Tell me which approach is the most likely to coordinate the $7.5 trillion in funding Sam Altman thinks he needs to reach AGI? And if I’m wrong we are all screwed anyway because CeAI can not ever produce Sovereign AI… if users don’t feel comfortable with it watching their most personal of life moments they will always hold back the stuff that makes it truly our best of best friends Sam’s @OpenAI approach is Web2 move fast and break things 🔥 with Web3 (Worldcoin) bandaids 🩹 #ChatGPT4o

6

4 Comments

Vinod Khosla 's statement highlights a harsh reality that many founders face: choosing the right investor is crucial, and the wrong one can indeed be more of a liability than an asset. From our perspective at Unbar.vc, the issue often stems from a lack of strategic alignment and insufficient operational support from the VC side. Our work with venture funds focuses on optimizing their processes and providing deeper due diligence, not just to mitigate risks, but to ensure they’re truly equipped to add value beyond capital. The funds that invest time in improving deal flow, conducting thorough due diligence, and offering tailored portfolio support are the ones that make a significant, positive impact. The key takeaway? VCs need to invest as much in their own capabilities as they do in the startups they fund. When VCs bring specialized expertise and strategic guidance to the table, they can be powerful enablers of growth rather than hindrances

4

In effect there are two different ways to run a company: founder mode and manager mode. Till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode. But we can infer the existence of another mode from the dismay of founders who've tried it, and the success of their attempts to escape from it. There are as far as I know no books specifically about founder mode. Business schools don't know it exists. All we have so far are the experiments of individual founders who've been figuring it out for themselves. But now that we know what we're looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode. We can already guess at some of the ways it will differ. The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. You tell your direct reports what to do, and it's up to them to figure out how. But you don't get involved in the details of what they do. That would be micromanaging them, which is bad. Hire good people and give them room to do their jobs. Sounds great when it's described that way, doesn't it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground. One theme I noticed both in Brian's talk and when talking to founders afterward was the idea of being gaslit. Founders feel like they're being gaslit from both sides — by the people telling them they have to run their companies like managers, and by the people working for them when they do. Usually when everyone around you disagrees with you, your default assumption should be that you're mistaken. But this is one of the rare exceptions. VCs who haven't been founders themselves don't know how founders should run companies, and C-level execs, as a class, include some of the most skillful liars in the world. Whatever founder mode consists of, it's pretty clear that it's going to break the principle that the CEO should engage with the company only via his or her direct reports. "Skip-level" meetings will become the norm instead of a practice so unusual that there's a name for it. And once you abandon that constraint there are a huge number of permutations to choose from. For example, Steve Jobs used to run an annual retreat for what he considered the 100 most important people at Apple, and these were not the 100 people highest on the org chart. Can you imagine the force of will it would take to do this at the average company? And yet imagine how useful such a thing could be. It could make a big company feel like a startup. Steve presumably wouldn't have kept having these retreats if they didn't work. But I've never heard of another company doing this. So is it a good idea, or a bad one? We still don't know. That's how little we know about founder mode. - Paul Graham

4

2 Comments