Hey y’all — here’s today at a glance:

My favorite finds of the week.

Fundraising

Growth

ICYMI

Startups win because they lower costs, save time, or increase performance on some vector.

So, in theory, founders are already focused on lowering the cost of living by nature.

But Andrew Yang (no worries if you only vaguely remember him) says there’s “a very rich vein of opportunity” in focusing even more on that right now.

To me, founders shouldn’t look at this so much as some new focus on lowering costs (we already do that) but rather the areas consumers will be looking for new solutions in.

For example, Mark Cuban’s Cost Plug Drugs and Yang’s own Noble Mobile both tackle foundational things that have avoided disruption for a long time due to entrenched brand recognition.

Maybe there are more opportunities like that these days than in the past.

We value organic food more highly than… inorganic food… right?

Apply the same mindset to anything AI can do.

Greg Isenberg thinks we’ll see this idea of actually high quality, human-produced work rise above the value of anything else.

It’ll be seen as premium, luxurious, and worth it… as long as the goods, product, service, etc are actually top quality. This is critical.

Great independent research by Nnamdi Iregbulem at Lightspeed on how no one’s talking about the shrinking number of actually alive seed stage companies:

He elaborates:

“The population of active Seed-stage startups is shrinking. Not necessarily the funding (in aggregate dollars or the average round size) but rather the number of active Seed companies.

Despite the AI boom, exits now outpace new Seed financings, and no one seems to have noticed.”

It turns out that a higher percentage of what we’ll call AI-era seed stage startups are making it to Series A than in the years prior:

And, in total, when startups “exit” the seed stage, a higher percentage now either close up shop or get acquired (often meaning the founders didn’t see a path to a bigger future exit) than graduate to the next stage:

You might’ve expected this at the tail end of the ZIRP era, but for it to continue into the AI era is surprising.

AI is such fertile ground, you’d expect founders to be able to pivot even if their original idea didn’t work out.

So, what’s happening here?

My totally unresearched hypothesis is that the mania around AI’s potential led to at least some founders who might be better salespeople than builders getting deals… and then being unequipped to figure things out.

But that likely can’t account for all of it. Got a theory? I’d love to hear it. Shoot me a reply.

Why are founders reluctant to pivot?

Of course, you don’t want to pivot “too soon” but what actually is too soon?

Sure, if you have a fast growing business but pivot your entire model because some new minor feature didn’t see adoption, you might be doing it too abruptly.

But most founders have the opposite problem: the sunk cost fallacy.

The more blood, sweat, tears, time, and capital you’ve put into one direction makes it feel harder to abandon it.

But if you feel it’s wrong, then won’t more time and capital only make the eventual reality worse later?

Once you reach conviction, cut the cord.

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Founders: treat yourself for once.

A few of our partners are offering $$$ for taking a quick call with them (that’s it).

Honestly, block off a couple hours, knock them all out, and walk away with some cash to get off the ramen diet for the weekend.

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