The Startup Playbook: Real Lessons from Silicon Valley Office Hours
Tonight, I hosted another monthly office hours session with founders from various stages of their startup journey. The conversations were raw, honest, and packed with tactical advice that every founder needs to hear. Here’s what we covered:
The Art of Fundraising: It’s Not About the Valuation
One founder asked about raising their seed round with a good amount of revenue. My advice? Stop obsessing over valuation and focus on momentum.
The hack that’s worked for many founders: Have a YC SAFE note ready. When you finish a conversation with an angel investor, say: “I’m sending you the SAFE note and assuming you’re in for [$some amount].” Create a forcing function. Give them 3 days to decide. This isn’t pushy—it’s clarity.
Remember: The higher your valuation cap, the harder it is to raise. I’ve seen founders with not much revenue struggle to raise because of a high cap, others without revenue raise on high valuation caps. It’s all about risk perception and founder credibility.
Revenue is Everything (And Services Revenue Counts)
To the founder pivoting from services to software: Revenue is revenue. Some of the best software companies started as service businesses the move into becoming a software company over time:
Athena Health was an OBGYN clinic before becoming a multi-billion dollar software company
Airbnb founders personally photographed apartments, some of what they did initially was just good service
I installed computers at my customers’ offices to get my first users in past startups
Services can give direct customer feedback, fund your product development, and prove market need. Don’t let anyone tell you it’s not “venture-scale” if you’re using a services business to build something bigger in software over time.
The Series A Reality Check
Want Series A funding? Here’s the brutal truth:
A lot of the time you need around $1M+ in annual recurring revenue
Your chances are low in getting an investment, you’ll need to talk to several several investors to get one “yes”
Always ask VCs: “How much dry powder do you have?” and “How many investments have you done this year?”
If they’ve done zero investments this year, your chances are essentially zero getting them as an investor. Do the math on their fund size and deployment pace.
The 100 Users Who Love You
Forget about scaling to millions when starting. Get 100 users who absolutely love your product. That’s it. That was Airbnb’s initial goal, and look where they are now.
If you’re using your own product weekly and fixing what bothers you, others will start to love it too.
Going Against Industry Giants
To the founder working alongside established players: Be a barnacle on the rocket ship. Go to your competitors’ events (yes, really). It’s awkward, but you learn faster than trying to figure everything out yourself.
The Geographic Reality of Silicon Valley
If you’re not in SF/Silicon Valley, you’re at a disadvantage. I tell founders this. The density of events, investors, and serendipitous encounters here is unmatched.
Check https://luma.com/sf daily—there are literally dozens of events happening every single night. Screenshot attendee lists from virtual events. Build your network relentlessly, even if you’re remote. The concentration of capital, talent, and opportunity in this small geographic area is abnormal and powerful.
The Hard Truth About Runway
I shared a cautionary tale: A company figured out product-market fit after 2 years but ran out of money and shut down last week. They had paying customers (including me) but burned through runway experimenting too long.
Every month, track your revenue on a spreadsheet or let us help at JustPaid and collect it for you. Put your revenue goals on your walls like the Airbnb founders did.
Final Thought: Startups Absorb Risk
Michael Seibel and Dalton Caldwell, former partners at Y Combinator, told me something profound last week: “Startups are designed to absorb risk.” You’re doing things established companies can’t or won’t do. That’s your advantage. Successful startups operate where others fear to tread.
Established players will try to block you. But if you have the determination to iterate weekly, to get those 100 users who love you, and to keep pushing when everyone says no—you might just build something that changes the way we all live our life’s.
Building a startup? Remember: momentum beats perfection, revenue is paramount, and 100 passionate users beat 500 indifferent ones. Keep shipping, keep selling, and keep showing up.
These insights come from running monthly office hours with founders at every stage. Currently building JustPaid, modernizing accounts receivable with AI.
Join my monthly startup office hours here.