Backing founders building at the edges of what's possible.

First of all, a few core beliefs I have held over the years, just so you have a bit of my “brain map” on what I have learned over a career in engineering, product, business and investing. This isn’t exhaustive but I do believe them strongly enough that over time if we diverge strongly on these beliefs, we should chat and debate more. Doesn’t mean we won’t agree/converge, but just means I would expect you to at least hear me out before you decide to diverge. Underlying all the below is a person who prefers (1) full transparency & high trust (2) always available, and (3) collaborative vs combative.

Over time, the number of founders I have backed who are not successful is greater than those who are/have a shot at success, but what I’ve taken a lot of pride in is that all founders I have worked closely with in the past, I am still closely bonded with, have kept in touch, have helped them in their next chapters, and feel connected & obligated to their success.

Building a startup takes everything out of you; we’ll likely grow old together, so it’s important to be value-aligned and have fun along the way, regardless of success scale. What I expect from founders I back is (1) intensity - you’ve got to bring it (2) transparency - e.g. if you’ve lost steam, admit it, we’ll find a path (3) high ambition & speed while staying strategic, reading the markets and adjusting to win it.

On speed - I think it’s a core advantage that has become even more amplified due to AI. If we aren’t on “2x launches / day” kind of schedule, I think we’ll be in a losing race.

A few months ago I was chatting with a very fast moving Coding startup in SF - they had raised several $100M+ and were competing with another co having raised several $100M+ as well. Their strategy, in a nutshell was: everyone has the same LLMs in backend, but we track our launch schedule and hours @ productive work and we think we do ~1hr/engg/day extra & launch 1-2 features more / week than the competition. We have ~30-40 engineers, so we are essentially gaining a full working week on them every week, and in 6mos, we’ll be 6mos ahead, and so on.

I thought it was such a simple, yet brilliant strategy. Easy to copy at first, nigh impossible to copy over 1-2yrs consistently.

Acts of courage - startups succeed not due to brilliance, but courage. Most of the incredible successes we’ve seen are when courage meets brilliance. Sometimes we see massive successes just at the intersection of luck and courage, but we rarely see successes without courage.

Brilliance & luck is a force multiplier - you absolutely need to apply yourselves - but courage & the sort of leaps of faith that only founders can make is what makes for a great company.

Courage comes in many flavors - deciding to do something with <25% data, having an instinct and backing yourself, going against the grain, having a long-term mindset when things around you are all short-term focused, or even cutting losses with no sunk cost mindset, it all takes courage. Many such examples, but one of my fav is Bezos’ push to become API first.

Distribution vs product - enough said here.

My learnings from Google here when cloud wars were still early; tldr, better products do not always win; clear market positioning, branding, and a very clear articulation on what problem you solve is critical to stand out and have a shot at winning.

My learnings from AMD here when GPUs were still getting shaped; tldr is kind of the same as the one above.

Advice to the founders I work with in how to withstand impossible odds: build a thick skin. Makes everything else easy.

Advice to founders I work with on fundraising:

• VC decisions aren’t purely rational. They are (1) social + (2) mimetic + (3) signaling-driven at almost ALL stages.
• Mimetic drivers are: feeling & perception.
• Feeling that “I want what other smart investors want” + the perception that “future consensus matters more than present fundamentals.”
• What that leads to is a cascading desire. Note the word “desire” as it’s the most critical resource and the one that is hardest to mine. And “cascading” is critical because the desire has to (a) increase with time for the investor in play AND (b) also felt across the market.
• Most successful rounds are therefore social chain reactions.
• What drives mimetic desire? Founder quality - talent, magnetism, confidence, clarity, speed of execution, network gravity; brand; buzz & narrative dominance; FOMO; social proof; scarcity; and irreplaceable insight / proprietary edge / business proof points.

A rejoinder to 06: None of the above means the company is going to be successful, but it does mean the fundraise will be.

That brings me to what I think the core role of a CEO-founder is: it is to (1) set strategy (2) hire the best people to execute that strategy and (3) unblock everything that gets in the way: story/narrative, fundraising, org/culture challenges, etc.

That’s all a CEO needs to do over time, even though in early days you have to do literally everything. A CEO who can evolve to focus on just these 3 things by the time they get to Series B are the founder-CEOs we see becoming eventually successful.

A rejoinder to #7: storytelling has the strongest correlation to eventual success. I do believe great founders, before the step into their greatness, are great stories. Great companies, before they become great, are also great stories.

Without great storytelling, you deduct a zero at the end of your outcome. What could be $10B+ would now be barely $1B. Read books, learn the macros, learn the apparatus of a great story. A clear throughline, a relatable arc, great actors, a surprise here or there, a hook, a refrain, a sense of mystique, a mission that inspires.

Do this well, you will be unstoppable. You will attract the best people, they’ll go through hell with you, you will attract capital, customers, everything.

A few other thought pieces/articles you might enjoy:

• AI Capex Supercycles Part I
• AI Capex Supercycles Part II
• AI Capex Supercycles Part III
• The Crypto Swansong