Happy Friday.
YC Request For Startups
Most founders read YC’s Requests for Startups as a wish list of hot AI apps, but the Winter 2027 list says the bottleneck has moved from the models themselves to the hardware, financing, government and specialized software that carry AI into the real economy. That shift is where the openings are: YC estimates cities would gain about $16 billion a year in tax revenue if building permits cleared in a tenth of the time, large power transformers carry roughly a three-year lead time, and banks still treat a robot earning about $500,000 a year like a forklift. This week, take your product and ask which of these physical or regulatory bottlenecks it sits closest to, then write one sentence on how you would sell into it. Do this and you build where capital is about to flow, instead of competing in the crowded app layer that a single frontier lab release can flatten. Y Combinator (9 minutes)
Sell What Comes After V1
Every SaaS founder worries AI will build their product for free, and it largely can, because AI now hands customers a working first version at no cost. The survivors earn their money on the work that comes after that first draft: Webflow CEO Linda Tong narrowed her buyer from designers to marketing teams at large companies, focused on editing and publishing rather than generation, and now treats ChatGPT’s site builder as a feeder channel instead of a rival. This week, pull your usage data by job to be done, find the job the most job titles share, and list what the frontier labs won’t build for that buyer, such as governance and collaboration. Do this and you stop competing with a free version one and start owning the ongoing work that keeps customers paying, and even brings back the ones who left to try AI-first tools. Product Growth (9 minutes)
The Hiring Market Flipped
Most founders assume the AI era makes engineers the scarce hire, but the late 2026 data shows the reverse: open product manager roles are at their highest in nearly four years, while engineering openings grew just 2.5% in the past year. The catch is that openings are outrunning actual hires, so strong PMs are getting harder to land, “LLM” is now the most requested skill in PM job descriptions, and only 14% of open tech roles offer remote work, a record low. This week, rewrite your next job description around the AI skills candidates are actually being screened for, and decide now whether the role is truly remote or in person. Do this and you hire for the market as it is today, instead of the 2022 market your old job descriptions were written for, and you stop losing the best candidates to companies that moved faster. Lenny’s Newsletter (10 minutes)
Founder FAQ: How Do I Convert My LLC to a Delaware C Corp?
Most founders treat converting their LLC as paperwork to handle when an investor asks, but waiting has a cost that grows every month: the QSBS holding period only starts at conversion, and value built inside the LLC generally stays outside the exclusion. The hard part isn’t the filing, it’s translating LLC deals into corporate ones, like a profits interest that converts at its current liquidation value (in our example, 2.5% of the company instead of the 5% headline) or an angel whose $150,000 preference a flat pro rata split would shortchange. This week, pull out your operating agreement, find the vote it requires for a conversion, and talk to any member who could block it before you make the formal ask. Do this and you convert on your own timeline, at least a month before a term sheet, instead of rushing it on your investors’ schedule. Westaway (14 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
Control Legal Spend
Startups suffer from unpredictable legal bills under the billable hour system. Fees fluctuate month to month without warning. Law firms drag out billable hours, but startups foot the bill. Even basic work can lead to surprisingly high legal bills. This unpredictability cripples financial planning. Budgets rarely match actual spend. With utter uncertainty around legal spend, startups cannot forecast or manage burn rates effectively. The antiquated billable hour system fails them. Our General Counsel flat, monthly fee service gives startups cost certainty. Legal spend becomes predictable with bundled services and no surprise overage bills. By switching from hourly to our flat-fee model, startups finally get confident budgeting, accurate forecasting and predictable legal spend. If you’re sick of getting surprise legal bills and are interested in controlling your legal spend, let’s talk.
Sell what comes after V1 is the one I'm thinking about. AI can basically build the first version of anything now. So the question isn't can you build it, it's why would anyone switch to yours. That was already the hard part, it just got louder.