Company has 15 employees and 12 paying customers. Revenue maybe $8k/month. CEO goes we need to implement Salesforce for our CRM. I'm like why? You have 12 customers, you could manage them with a notebook. But no. They spend 3 months evaluating enterprise platforms, hire implementation consultants, train the whole team on software that has 400 features they'll never use.

Six months later they're paying $3,600/year for something that a $15/month tool would've handled perfectly.

Real example from last year marketing agency, 8 employees, maybe 20 active clients.

They needed enterprise project management software. Looked at Monday, Asana Business, even considered custom development. I asked what's wrong with a shared Google sheet?

"We need something scalable! Professional! Enterprise-grade!" Enterprise-grade for 20 projects? Really?

They spent $8k on software licensing and setup. I checked back 6 months later - they were using maybe 10% of the features and half the team had gone back to email for project updates.

Meanwhile their competitor manages 50+ clients with Trello and seems way more organized. The pattern is always the same

Startup sees successful big company using Enterprise Thing Assumes Enterprise Thing is why big company succeeded Buys Enterprise Thing despite being 1/100th the size Discovers Enterprise Thing is overkill and confusing Goes back to simple tools but keeps paying for Enterprise Thing

It's like a 5-person company buying an 18-wheeler to deliver pizza. The psychology is weird too. Simple tools feel unprofessional even when they work perfectly. Google Sheets = amateur Salesforce = serious business. But Google Sheets might actually be better for a 12-customer company. Easier to use, faster to set up, everyone already knows how it works.

I learned this the hard way with clients' businesses. They try to use professional tools from day one. HubSpot for 3 leads per month. Slack for a 2-person team. Advanced analytics for a website with 100 monthly visitors. They spend more time configuring software than talking to actual customers.

Now I tell early-stage companies start with the simplest tool that works, upgrade only when you're actually hitting limits. Need customer tracking? Start with Google Sheets Need project management? Try Trello first Need team communication? Maybe just text each other

Boring advice but it works. Save the enterprise stuff for when you're actually enterprise-sized.

Here's my rule: if your monthly software costs are higher than your monthly revenue, you're doing it wrong. Most startups could run their entire operation with $200/month in tools. Instead they're spending $2,000/month trying to look like Google.

Dont do it

Look at the top startups founded in the last couple of years, nearly every founder seems to come from an Ivy League school, Stanford, or MIT, often with a perfect GPA. Why is that? Does being academically brilliant matter more than being a strong entrepreneur in the tech industry ? It’s always been this way but it’s even more now, at least there were a couple exceptions ( dropouts, non ivy…)

Edit: My post refers to top universities, but the founders also all seem to have perfect grades. Why is that the case as well?

On behalf of /u/alooPotato, Aleem Mawani, Founder and CEO, Streak

Founded the company over a decade ago, timeline: - went through YC and raised small seed round - grinded for 4 years, became breakeven - 4 more years grew revenue at the same rate as headcount, remained breakeven - next 3 years slowed hiring, and became very profitable

The path we’re on now (profitable but not venture scale growth) has a lot of upside and we get to run it much differently than venture backed companies. We get to design our ideal roles and day to day work. We learn a lot.

The company as it is today isn’t for everyone, it especially didn’t make sense for some of our investors so we’ve bought back a lot of their equity over time.

Have advised a lot of YC startups on this lesser known startup path, happy to answer questions here!

Questions will begin to be answered around noon Eastern Time today!

(Note: I'm not English-native. Used Gemini to help with clarity and readability. Appreciate your understanding regarding the writing style!)

Raised a Ton of Money, Peaked on Day One

Four years ago, we raised a big round to build the "Asian Roblox" - a UGC game platform for kids in Asia, starting from China.

It made sense back then. Roblox never really took off in China due to regulations and monetization issues. Meanwhile, we already had a self-built game engine and millions of kid creators on our platform from our coding education business. It felt like a solid idea.

Little did we know, raising that round would mark the peak of our entire venture.

With the money in hand, we were confident and hyped. We quickly grew our team to over 50 people and worked intensely on our game engine. We didn't give a single thought to how we'd actually make money - "If Roblox can do it, we can do it too, right?" We just had a big vision and the hype to go with it.

Then Reality Hit

Later on, we came to painful realizations:

1.Our game engine could never compete with mainstream ones, yet it consumed massive resources and time to build. So, we pivoted to other ways to monetize our engine: Web3 and the metaverse. We figured our games weren't good enough for serious gamers, but maybe they'd be "just enough" for less quality-sensitive spaces like Web3 and the metaverse.

Little did we know that the NFT space was a total scam - a Ponzi scheme where people just wanted to cash out on you. The only reason we even gained traction was because we were backed by top VCs. We were basically cashing out on their names, and I felt bad about it.

1. Our kid creators were simply not good at building commercial games - they were just building for fun. And we didn't know much about commercializing games either. So, we tried working with professional developers and studios. The problem was, our tool was too limited for them, and the potential return was too low since kids weren't really paying.

The Inevitable End

Two years later, there was no real business progress. The little money we made couldn't even cover our server costs or the refunds parents requested, let alone feed a team of 50+ people.

We tried to find other ways to make money, like building game development courses for kids. We later found out that Chinese parents primarily pay for things that are essential for academic advancement or school admission. Our courses didn't fit that "must-have" category.

Earlier this year, with our bank balance dipping below the red line, we shut down all business operations and let go most of the team. Sadly but thankfully, most of them are doing much better without us.

With just a few people left and not much in the bank account, we're back to square one.

Not sure what to build next yet. Staying close to the community to keep ourselves in check with real problems and real users.

Edit:

Lessons Learned from the Experience & the Community

• Having someone who really knows the business run the business can spare you tons of rocky mistakes, huge opportunity costs, and possibly millions of dollars. If you are not that person, find a complementary team or learn actively with the community.
• Investor validation doesn't mean market validation. Your true validators are your paying customers/users. Stay close to them to find real problems worth solving. Investors burned by the bubble are now picky enough to only invest in profitable businesses anyway.
• Chase cash flow from day one. The "scale first, make money later" days are over. And having lots of users love you (we did) doesn't mean it's a good business either. Now it's better to "sell first, build later". Don't overbuild until you see cash flow.
• Consider cultural norms & regulatory limitations when you go to a new market (e.g. game time limits & strict purchase approvals for kids in China). They can be dealbreakers if you don't understand and build around them from day one.
• And for what's coming ahead, remember that AI is a tool, not the goal. Don't chase it like another hype. Instead, use it primarily to provide better solutions or speed up the dev process.

A few things to add:
- Started building the engine in 2016 as a side project in our coding education company.
- Had millions of active builders and players when we got funded in 2021.
- Initial investments came through YC-like incubators and angels for the previous startup. Then you just get connections.

Thank you all so much for your constructive feedback, advice, and discussions in the comments!

Hello all, I am 24M entrepreneur and software engineer.

Just wanted to vent a bit and say GovTech might be one of the hardest types of startups out there.

People always say "focus on PMF first" but when you are dealing with government, there's no shortcut. It takes you at least a year just to find the right people to even begin the sales process.

And since you have no sales early on, there's no growth proof to show investors. Most VCs don't even like GovTech to begin with. So it's a long game that needs a tons of patience and motivation just to survive.

I started a GovTech company in the law enforcement space 1.5 years ago. It's been rough. Constantly asking myself: "Am I wasting my time?"

On top of that, being 24 yo doesn't exactly help when trying to get government officials to take you seriously. Took a lot of effort just to convince them I am capable.

I'm still not fully out of the woods, but I can at least feel we reached to PMF, even though we haven't closed any contracts yet.

Tell me your experiences and thoughts about that.

I will not promote.

So, the solo founder who is also a software engineer came up with the idea, Brought the tech design, idea, path to revenue, launch plan and GTM, etc etc.

She couldn’t code due to her full time job.

Worked with this dev team consists of 3 people.

Among the 3, one left. Those two love to join the founder as co-founders. But among the two, only one writes code. The other doesn’t.

1) How to pick titles and split equity between the founder who brought the project and the rest two joining her team? 2) Those two treat themselves together as one team.

“I will not promote”.

My wife is about to accept a VP role at a mid-sized startup (around 300 people). Up until now, she’s spent her whole career at large Fortune 500 companies, always in salaried roles with no equity component.

This is a new world for both of us, and we’re not sure what’s typical or appropriate when it comes to compensation at the VP level in a startup. Is it common to ask about equity in a situation like this? And if so, how should she approach that conversation without seeming out of place?

We’re just trying to understand what’s fair and standard—we don’t want to overstep but also don’t want to leave something important on the table. Any advice would be sincerely appreciated.

Trying to build my MVP and realized I can’t code to save my life. Curious where fellow non-tech founders found their first dev. Did you team up with a friend, hire an agency, or used ChatGPT to do it yourself? Drop what worked, what didn’t, and what you did differently.

Started a deeptech company a little over 2 years ago and with the current global situation and a very heavy contraction in VC deployments we're likely not going to raise our next round and will go our of buisness right before any meaningful revenue.

Is sad but I've accepted that this was always the eventuality.

That being said after becoming a founder I have felt that the traditional job market has almost cut me out. Recruiters don't respond back, job posters don't respond back, and the whole market seems to devalue me because I decided to try and start something. I know the job market it shit but I didnt think being a founder would hurt more than the value of the experience provides.

Is this everyones experience? What are people's tactics for bouncing back after their companies go under?

Hi everyone,

As mentioned in the title, that's a pivoting move for me and my career. I've been working for companies my whole life, been taught to get good grades in school so that I can get a good job. I was not taught to think ambitiously nor pushed to reach my potential. Now I'm stepping on this path, feeling a little lost, sometimes discouraged and second guessing if I'm doing the right thing.

I've always wanted to build something of my own. I like the feeling of building something from nothing. However I realized in the world of entrepreneurship, it's not as easy as it seems. Everything that the YouTube gurus told us, was oversimplified. Success takes a lot of blood, sweat and tears. And I felt it deep in my bones.

I started to go around my city to network, meet people, talk things out. And that made me felt a little bit better. It helped me make a little bit of traction to keep pushing. So I decided to create a Discord community to gather folks like myself, who are also on the entrepreneurship journey, to support one another, bounce ideas, talk things out, and be accountable for each other on this rough journey. When you don't have a boss who tells you what to do, it is on you to make things work and to show up everyday, continue to push. Having entrepreneur buddies who are passionate and who want to make the world a better place, who can keep me on my toes is truly lifechanging.

What does your entrepreneurship journey looks like? What is one thing that helped you get through your lowest?

I've been a Frontend Engineer for 8+ years and come to the realization that I want to work for a company without too much hierarchy. I've worked through some farther along startups (more hierarchy) before, but I'm really trying to figure out how to find opportunities that are just starting/early (that are able to provide rent $$$)? I would love to be a part of something like that, but I'm not sure where the best places to look are. Where are these people posting jobs?

I’m a technical founder of a bootstrapped AI startup that recently pivoted based on customer feedback.

We discovered users were using our product to solve a different but much larger problem than we originally targeted, which opens up significant growth opportunities but requires VC funding and rapid scaling.

Where do I find a non-technical co-founder to lead go-to-market, sales, and marketing while I focus on product development. I've handled founder-led sales so far, but the new direction demands dedicated attention to both sides.

Beyond YC Co-founder Matching and Bay Area networking events which is what I am doing, what are the best platforms or communities to find sales/marketing co-founders interested in AI?

I will not promote.

I used to pitch with “Hey, I’m building X wanna try?” Zero excitement.

Then I changed it up: “I’m building X for Y. I’ll guarantee a 2% revenue bump, set it up for free, and if it doesn’t work, just delete it. No hassle.”

Same product, but the offer was clear, the risk was gone, and they could picture exactly what they’d get out of it.

For context, we raised ~350k in an angel round for an iOS app. Right now the dev team is just me, a college student (part time), and a senior engineer who will be working part time, more as a passion project for him. Although we expect to go without monetization for a few months, 100k is more than enough to pay the current bills (in fact probably 30k would be enough).

I'm wondering if anyone has been in a similar situation before who might have advice.

The options are

A. Hire a qualified U.S. based engineer, cost is ~$150-200k and probably have to entice with equity. This would eat through our budget fairly quick. I'm a bit confused on how this works, as we couldn't really guarantee him job security, and if we have struggles monetizing it could burn through a lot of our cash. We would post on linkedin or other hiring boards.

B. Boutique type agency, cost is variable but you get a team of engineers working for a blended hourly rate of $40-80/hr, contract length of a couple months, but each engineer is working on other companies.

C. Upwork/Toptal other agencies, cost is cheap $40-50 and very flexible in terms of contract, but quality is not guaranteed but we can specify that the engineer works full time for us.

Context: I have bootstrapped my first company and want to delay raising money until I have more traction. Currently have 12 paying customers. However, there are two critical services I need - web re-design and some legal work. I've scowered the market and I know exactly what I need however it'll cost me $20k-25k. I don't have the cash but this will help me immensely.

Question for you all: Should I consider 'Sweat Equity'? Basically convince these service providers to accept a discounted cash rate in exchange for a small slice of equity in my company. Anyone have any experience / wisdom in this? Any and all insights appreciated.

I'm looking for information on how to hire a software company to build a product.

If you've ever hired a company to develop your idea or startup, how did you go about finding the right one?

What worked well, and what would you avoid next time? Any red flags?

Was the software company you hired based in the US or another country?

I’ve spent the last 5-6 years at a top VC backed startups and leveraged myself to become head of engineering at my most recent startup from seed stage to series C. I have very good intuition and knowledge on building products end to end. I know how to scale engineering as an organization, technically, as well as product. I have an idea I’ve been working on and a customer willing to pay.

But I’m frightened.

I have offers for other successful startups that are making millions at seed stage and want me to bring my expertise. One of the offers, from my experience, seem like a shoe in and pass all of my startup shit-tests as well and are likely going to become a billion dollar company within 2 years. (They’ve been able to hit millions in ARR with a small team and no resources in a few months and have barely scratched the surface of what’s available.)

However, I would just be another founding engineer. And my work life balance will suffer tremendously (we’re talking 12 hour days 6d a week). And I don’t think I want to go down that road again unless it’s my company. Realistically I have much less non-financial gains to make at another startup at this point in my career.

So that leaves me with taking on the risk of my own venture. Waking away from amazing opportunities to pursue my own and that opportunity cost is paralyzing me. What if I fail? Should I have just taken this offer?

I’m curious to know how others in this position have felt and why they chose what they chose to eventually become founders.

Thanks.

Hello.

Unsure if this is the right place for this but wanted to reach out to see how founders handle working a job while building a startup.

For context on where I am at, I believe that I have found a gap in the market I am targeting and am currently in the process of building an MVP.

I have a stable and decent paying job and am doing just enough to retain it but some days, especially when traveling for my job, I don’t really make much progress on building the startup and that is a frustrating feeling.

Pretending I want to grow at the company to leaders and smiling with co-workers like I fully desire to be on the team while in the back of my mind I am half-way out the door is a viscous feeling.

My goal is to eventually be in a position to leave my job and go all in on the startup but that’ll be another couple of months.

I’ll be fine and am confident in my ability to “fake it till you make it” but wanted to see if anyone else has a similar experience and how they are or have handled this.

took me way too long to learn this. a founder's most valuable currency isn't money. it's energy. i used to run full speed every day until I burned out. now I know better. sleep matters. breaks matter. family time matters. because you can't pour from an empty cup and your team needs you at your best.
take care of yourself first. the work will still be there tomorrow.

We're a biotech team that has a new IP project that now needs seed funds. We've always been self-funded up to this point, and are new to shopping around for VC/seed/angel funds. I've been reading through this helpful sub for ideas. Any suggestions on where to start to find, and how to contact potential good partners for a project like this would be most helpful. I did see early posters' lists of startup investors, so we're starting there. Thank you for any other tips.

Having raised money multiple times as a founder (YC alum) and now invested in early-stage companies, I'm curious about what founders are really dealing with in today's fundraising environment.

If you're actively fundraising or about to start, what's your biggest challenge right now? What's actually keeping you up at night or proving to be more challenging than expected?

Hey everyone, I’ve got a startup and I’m looking to connect with other young entrepreneurs or students who are also running startups. I’d love to make new friends and build a network worldwide, so if you’re interested or know someone who might be, let’s chat now!

For those who made it to the “quit their job to go full time” stage, how long from the time you first launched your website/app/product until you took that leap?

We are coming up on one year of our startup and still dreaming about that full time phase. But started making our first profit last month so feeling optimistic.

i will not promote

So, l've come up with what I believe is a strong concept for a consumer-facing mobile app. I'm currently working on a lean MVP with a freelance developer, but I'm new to the startup world and trying to understand how venture capital fits into the bigger picture.

Specifically, I'm curious about:

• How does the funding process typically work from MVP to seed and beyond?

• What does traction usually look like before investors take interest?

• What kind of structure do early stage deals follow (SAFE notes, equity, etc.)?

• At what point should someone seriously consider applying to accelerators like YC?

I'm not looking to raise capital tomorrow, just trying to understand the playbook so I can plan ahead.

Would love to hear thoughts from founders or investors.

TIA I will not promote

Hey, do you know any innovative startups that are in the construction industry? Doesn’t need to be AI-based, honestly a bit over the AI hype and half-baked tools. Just looking for solid, creative ideas. Just drop a few names if you’ve got them.

I will not promote