FOUNDERS: WHAT KIND OF FUCKING MORON SIGNS UP FOR THIS?!?
VC was already a horrible deal for the Founder. If this is how the game has changed, I am even further emboldened that the bootstrapped path is the best path for MOST people in this game.
Unless what you do is highly capital-intensive, you should avoid this “changed game” like it’s the plague. The VC game was already bad: a 90% chance you'd kiss a decade of your life goodbye and walk away with nothing but an education. This new game is meaningfully worse in terms of probability-weighted financial success for YOU, the Founder.
I post here because I want people to realize that what I do is an option. I didn't know it was possible until I found a podcast episode in 2017 with Ross Andrew Paquette from Maropost, who dropped enough info for me to back into the fact that he had a $30m ARR biz dropping $20m to the bottom line, and he owned all the equity.
I had two epiphanies that day: 1/ that seemed like a better life for the founder than any other SaaS I had heard of, and 2/ it seemed much more attainable than hundreds of millions of ARR. So I became obsessed with Ross, tried to figure out how he did it, copied what made sense for my business, and fast forward 10 years and we're not quite there ($32m ARR, $15m run-rate profit), but we're close, and I'm more optimistic than ever about growing our profitability.
People always ask me what mistake I see young Founders make the most. It’s raising money, and it’s in two different situations.
Situation 1: they're at $1m ARR, growing 2-3% per month, and think money will speed that up. It won’t. ZERO percent chance. The only thing that speeds up a startup at that stage is more disruptive product + more disruptive marketing. Neither has anything to do with money. Yet they raise from people who think or say they are VCs, and enter the world of pain of the treadmill of capital without growth.
Situation 2: getting to $10m ARR quickly and raising, thinking your TAM is bigger than it is. I made this mistake, but thank GOD we were so profitable that I didn’t actually raise, I just grew my team from 13 to 60 in 60 days, burned through the TAM in 9mo, hit a wall at 100mph, and for the second time in my career fired everybody I hired in that delusional frenzy. When you take money at that point, you don’t have that option. You are forced to try to widen the TAM, you build a bunch of shit no one wants, and you enter the world of pain of the treadmill of capital without growth.
I want to be your Ross Paquette. This game isn’t easy. VC or not, you have to create disruptive products with disruptive marketing to win. That’s the only way you’ll grow. So, WHY NOT do it without selling your soul to a game you only have a 10% chance of winning? I PROMISE grinding your profitability higher from $15m 12 years into the game is amazing, and you have a WAY higher chance of getting there than going $0-$100m in 9mo.
Fuck Lovable. Stay small.
And keep building.
Adam
P.S.
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