Founder Fridays No. 125
Rich But Rudderless: A Founder’s Confession -- The One Important Thing -- Stackable Business Models
Happy Friday.
Rich But Rudderless: A Founder’s Confession
"I'm rich and I have no idea what to do with my life" — these words from Loom founder Vinay Hiremath reveal the uncomfortable truth that having everything can leave you with nothing to chase. After selling his company at a $975 million valuation, he cycled through classic post-exit phases: the delusional next venture (robotics), the escape to nature (Himalayas), the savior complex (government reform), and finally, permission to just be. The journey revealed that true wealth is being able to say "I don't know what's next" without needing to manufacture grandeur or purpose — yet that might be the hardest thing to do when you've built your identity on achievement. What emerges is a profound truth about ambition: sometimes the bravest thing isn't climbing another mountain but sitting still long enough to face yourself. vinay.sh (7 minutes)
The One Important Thing
What if being bad at 99 things doesn't matter, as long as you're revolutionary at one? The iPhone launched as a terrible phone without even copy/paste functionality, yet it dominated because it delivered one revolutionary thing — real internet in your pocket. This pattern repeats across legendary companies: rather than trying to match established players across every dimension, they identified their "important thing" — that single compelling advantage so powerful that customers willingly overlooked all other flaws. The key is choosing something worth obsessing over for five to 10 years that genuinely excites customers, then relentlessly focusing resources there while letting other fires burn. Success doesn't require fixing everything — it requires being extraordinary at the one thing that matters most. A Smart Bear (5 minutes)
Stackable Business Models
While most artificial intelligence (AI) founders obsess over their technology, the winners of this era will master something far more mundane yet powerful — business model innovation. NFX partner Pete Flint reveals that a shocking 42% of AI startups haven't even monetized their products yet, exposing a critical blindspot in the industry's rush to build. Rather than copying basic subscription or usage-based models, the most successful companies are developing "stackable" approaches — starting with either price disruption or quality innovation, then methodically layering on complementary revenue streams that compound value over time. This strategy isn't just about making money — it's about building defensibility in an increasingly crowded AI landscape where viral growth alone won't guarantee survival. The hard truth is that breakthrough technology without breakthrough business models is just an expensive experiment. NFX (11 minutes)
Founder FAQ: What Are the Risks of a Startup Misclassifying a Worker as a Contractor Instead of an Employee?
In their quest for flexibility and agility, startups may sometimes misclassify workers as independent contractors rather than employees. Unfortunately, this misstep carries serious legal and financial risks, including: 1) Back Tax Withholding. Employers might be required to pay back tax withholdings, including state, federal and Federal Insurance Contributions Act (FICA) taxes, with interest. In California, this liability typically extends back three years. 2) Unpaid Minimum Wage and Overtime Compensation. Employers may have to cover unpaid wages and overtime with interest. In California, for instance, this could date back three years for non-willful violations and four years for willful violations. Some states, such as New York, have longer statutes of limitations, up to six years. 3) Civil Penalties. Employers may face civil penalties for violations of employment laws. For example, California imposes penalties for not providing itemized wage statements or failing to give workers mandated meal and rest periods. Westaway (6 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Convertible Note: Guide / Video
Saving Time and Money on Legal
When we met this Series B startup, they were frustrated with their law firm's slow turnaround and high fees. Contract reviews took four to six weeks, and they charged $250,000 annually for basic work. The startup wanted to reduce sales cycle times and legal spend. They switched to General Counsel at Westaway. In year one, we 1) saved them about $200,000 in legal fees; 2) shortened their sales cycle by about four weeks; and 3) our streamlined processes saved their ops team eight to 10 hours per month previously spent managing legal. By switching to Westaway, they expedited deal closures, saved hundreds of thousands in legal bills and regained one day per month in productivity. If you’re curious if we could save you time and money, let’s talk.