Founder Fridays No. 182
Why Bundling Works -- Annoying VC Questions -- The Rise of the Supermanager
Sorry…. I thought I had this post set to publish on Friday, but apparently not. So, this Monday evening you get to feel like it’s Friday for just a moment. Cheers!
Why Bundling Works
The pricing strategy that built Spotify, Netflix, and nearly every successful SaaS company isn't a modern invention. it's a decades-old economic principle that most founders still underutilize. In a classic a16z post, Chris Dixon explains why bundling beats à la carte pricing for information-based businesses. The core insight is that different customers value different products differently. A sports fan and a history buff each top out at $10 for their preferred cable channel, but bundle the two channels and both will pay $13 for the package, generating more revenue while leaving customers feeling like they got a deal. The math works because bundling flattens the demand curve, shrinking the "deadweight loss" of transactions that never happen due to high prices. For founders, the takeaway is practical: subscription models outperform transactional ones, bulk discounts capture value that would otherwise evaporate, and bundling works best when your customers have varied, taste-driven preferences. A16Z (8 minutes)
Annoying VC Questions
Most VC objections aren't questions, they're soft rejections wrapped in polite language, and founders waste months chasing investors who were never going to say yes. Every "show me more traction" or "come back when you have a lead" is a signal about fit and timing, not a to-do list. This week, after every investor meeting, force a binary: is this person genuinely excited or are they stalling? If they can't name a specific milestone that would get them to yes, move them to the update list and stop spending time there. Founders who treat fundraising as a numbers game, running toward conviction and away from maybes, close rounds faster and with better partners. Venture Curator (9 minutes)
The Rise of the Supermanager
Cutting middle management looks like efficiency, but without redesigning how managers actually work, you’re just setting your best people on fire. The real problem isn’t the span of control. It’s that most companies flatten the org chart without changing the job description, training, tools, or expectations. This week, if you’ve recently expanded anyone’s team size, sit down with them and ask two questions: do you have clarity on the three most important outcomes for your team this quarter, and what’s one thing taking up your time that I could remove? Managers who operate with clear goals and fewer administrative distractions retain more people and move faster, and that compounds directly into your ability to execute and fundraise. Fast Company (6 minutes)
Open Source Compliance
The free code powering your product could become your most expensive legal problem if you're not paying attention. Open source software is a startup's best friend until a license obligation gets missed, a vulnerability goes unpatched, or a legal audit reveals a compliance gap that should have been caught years earlier. The fix isn't complicated, but it does require intention. Start by building a detailed inventory of every open source component you use, including version numbers, license types, and how each piece integrates into your product. From there, assign someone to own compliance, implement automated scanning tools, and establish a review process before any new component gets added. The licenses governing open source software change over time, so your compliance program needs regular updates, not just a one-time setup. For founders building on open source foundations, which is nearly everyone, treating compliance as a risk management function from day one is far cheaper than cleaning it up later. Westaway (7 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
Is the Billable Hour Right for Startups?
Most law firms bill startups by the hour because that’s the status quo. But while it may work for big companies, the billable hour is likely the wrong model for startups. Why?
It incentivizes inefficiency. Firms are motivated to pad hours rather than work efficiently. This adds unnecessary costs.
It rewards busywork over results. Startups care about outcomes, not hours logged.
Costs are unpredictable. With fluctuating monthly hours, legal spend is hard to budget.
It stifles innovation. Hourly billing gives no incentive to find better solutions. Startups need forward-thinking counsel focused on results. That’s why we’ve ditched the billable hour for transparent flat fees.
If you’re ready to explore a law firm with a better billing model, let’s talk.