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EP36: What Actually Works when Raising Money

Startup Club
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EP36: What Actually Works when Raising Money

Getting it right the first time & setting up for success

(Recorded Live on Clubhouse November 12, 2021) 

We were joined by Lil Roberts, CEO and founder Fintech platform Xendoo, for insights into raising capital for your startup. We learned where to look and what to look for in an investor, preparing to meet with potential investors, plus Lil’s top tips for perfecting your pitch.

Moderators: Colin C. Campbell, Michele Van Tilborg, Rachael Lashbrook, Jeff Sass

Guest: Lil Roberts

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The Hidden Cost of Playing it Safe in Business

Nivu Hussain
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Is playing it safe costing your business? We’re speaking with Steve Rolle, investor and entrepreneur, to learn when to scale back, and when to take the leap.

Can You Build a Moat Around Your Idea in an AI World?

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Can You Build a Moat Around Your Idea in an AI World?

Adapted from Chapter 6 of Colin C. Campbell’s Start. Scale. Exit. Repeat. for the AI era.

AI has made it incredibly easy to start a company.

It has also made it incredibly easy to copy one.

A competitor can study your website, recreate features, generate similar content, launch ads, build software, and enter your market faster and cheaper than ever before.

That changes the question entrepreneurs need to ask.

It’s no longer just: Can I build this?

It’s: If this works, what stops someone else from building it too?

That’s your moat.

A Great Idea Is Not Enough

In Start. Scale. Exit. Repeat., I talk about building a moat around your business the same way you would protect a castle.

The stronger the business becomes, the more people will want a piece of it.

In the AI era, those walls need to be even stronger.

Technology itself is becoming less defensible. Features that once required a team of developers and months of work can now be replicated surprisingly quickly.

Your advantage has to come from something deeper.

Brand. Distribution. Data. Intellectual property. Customer relationships. Network effects. Exclusive partnerships. Community. Expertise.

Ideally, several of them working together.

Brand Can Become a Moat

One of the simplest moats we built was Paw.com.

The company originally operated as Treat-a-Dog, selling premium dog beds and blankets. We later invested in acquiring Paw.com.

It wasn’t cheap.

But it transformed the business.

The domain gave us a short, memorable brand that immediately communicated what we were about. In the year following the rebrand, the business more than doubled in sales and profitability.

Today, that lesson may be even more important.

When AI can generate hundreds of competing brands overnight, being remembered matters.

A great domain, recognizable brand, trusted voice, loyal audience, and strong reputation are assets a competitor cannot simply prompt into existence.

Own Something AI Can’t Easily Replicate

Founders should also ask a more difficult question:

What do we own?

That might mean patents, trademarks, copyrights, proprietary technology, exclusive contracts, unique datasets, or specialized processes.

AI can reproduce a feature.

It cannot automatically reproduce years of proprietary customer data, an exclusive licensing agreement, a trusted community, or intellectual property you legally control.

With Paw.com, for example, we pursued design and utility patents where possible. Those protections made copying our products harder.

The goal isn’t to make competition impossible.

It’s to make competing with you harder.

Distribution May Be Your Strongest Moat

At Hostopia, we learned this lesson the hard way.

We initially tried selling web hosting directly to small businesses. The problem was that we were entering a crowded market against companies with far more established customer acquisition engines.

So we changed the model.

Instead of fighting telecom companies and hosting providers, we began powering their services behind the scenes.

Our competitors became our customers.

That distribution strategy helped turn Hostopia into the gold standard in its market and ultimately contributed to the premium valuation we received when the company was sold.

The same opportunity exists today.

Thousands of companies may have access to the same AI models.

They do not have access to the same distribution.

If you control the audience, partnerships, sales channels, community, or customer relationships, the technology underneath the product becomes only one piece of your advantage.

Sometimes a Smaller Market Creates a Bigger Moat

Entrepreneurs love massive markets.

Investors do too.

But massive markets attract massive competition.

Sometimes the smarter strategy is to dominate a smaller category.

When we launched .CLUB, we had something extremely powerful: exclusivity. We held the rights to the .club domain extension. Google couldn’t create another one. Amazon couldn’t outspend us and take it away.

We had infinite digital inventory combined with a protected position.

AI founders should think the same way.

Instead of asking, How can I get 1 percent of this enormous market? ask:

What specific category could we become known for?

Being the dominant company in a valuable niche can create far more defensibility than being another small player in a gigantic market.

Give Your Idea a Defensibility Score

Before committing serious time and capital to an idea, rate its defensibility from 1 to 5.

1: I have no clear moat.

2: I know how I could build one, but haven’t started.

3: I’ve taken at least one meaningful action to protect the business.

4: I have multiple layers of defensibility.

5: Competitors would have a very difficult time replicating our position.

Then ask yourself what would move the business up one level.

Maybe it’s acquiring the right domain.

Maybe it’s filing a trademark.

Maybe it’s building proprietary data.

Maybe it’s signing an exclusive distribution agreement.

Maybe it’s creating a community competitors can’t easily recreate.

The important thing is to start building the moat before you desperately need it.

In an AI World, Build What Gets Stronger Over Time

AI will continue lowering the cost of creating products, content, software, and companies.

That’s an incredible opportunity for entrepreneurs.

But lower barriers to entry work both ways.

The companies that win won’t simply be the ones that use AI best. They’ll be the ones that use AI to move faster while building assets that become increasingly difficult to copy.

Build the product.

Build the brand.

Own the customer relationship.

Control distribution.

Protect what you can.

And keep widening the moat.

Because if you build something worth scaling, eventually someone else is going to want your castle.

Pick a Business Idea That Can Scale: A Guide for Entrepreneurs

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Pick a Business Idea That Can Scale: A Guide for Entrepreneurs

A great business idea isn’t just about what you can start. It’s about what you can grow.

Entrepreneurs naturally spend a lot of time thinking about the first stage of a business: Is there a market? Can I get customers? How much money will I need? Can I actually pull this off?

But there’s another question worth asking before you commit years of your life to an idea:

What happens if this works?

That’s the central lesson from Chapter 5 of Start. Scale. Exit. Repeat.: Pick an idea that can scale—or at least understand exactly what scaling your idea will require.

Small Doesn’t Necessarily Mean Easy

There’s a common assumption that running a small business is easier than running a large one. That isn’t necessarily true.

Every business comes with challenges, and some small businesses can be surprisingly difficult to grow because their revenue is directly tied to physical space, people, or the founder’s time.

Colin uses the Montessori school he owns with his wife as an example. The school has capacity for 110 students. Once those seats are filled, adding even one more student isn’t as simple as selling another product or adding another account.

Expanding could mean buying neighboring property, getting municipal approvals, renovating or constructing a building, buying equipment, and hiring additional staff. Suddenly, going from 110 students to 111 could require an enormous capital investment.

The school can be a successful business without expanding. But its structure creates a natural ceiling.

Restaurants, gyms, retail stores, medical offices, and many other brick-and-mortar businesses face similar challenges. Growth often requires another location, additional employees, more equipment, and more capital.

That doesn’t make them bad businesses. It simply means entrepreneurs need to understand what they’re signing up for.

Scaling Is a Choice

Not every entrepreneur wants to build a massive company.

A profitable business that provides a great lifestyle, financial security, and control over your time can be an incredible outcome. In Colin’s case, his wife is perfectly happy with the Montessori school at its current size. She doesn’t want another location or a much larger operation.

There’s nothing wrong with that.

The important thing is recognizing that scaling—or choosing not to scale—is a decision.

Your business should support the life you want to build.

Before pursuing an idea, ask yourself:

  • How large do I actually want this business to become?
  • How much of my time am I willing to give it?
  • How much capital will expansion require?
  • Will growth require significantly more employees?
  • Does every new dollar of revenue create significantly more cost?
  • Can the business eventually grow without depending entirely on me?

Those questions can completely change how attractive an idea looks.

Rate the Scalability of Your Idea

One practical way to evaluate an opportunity is to give it a scalability score from 1 to 5, with 1 representing a business that is extremely difficult to scale and 5 representing one with significant scaling potential.

A rough framework looks like this:

1 — Brick-and-mortar businesses
Think schools, restaurants, retail stores, and medical offices. Growth is constrained by physical capacity, location, staffing, and high fixed costs.

2 — Time-and-materials businesses
Consulting firms, agencies, and service providers fall into this category. Revenue can grow, but usually by adding more people and more billable hours.

3 — Product or service businesses
E-commerce and online training businesses can reach larger markets, but inventory, production, financing, and fulfillment can create constraints.

4 — Recurring-revenue businesses
Subscription businesses, accounting software, and cloud services have strong scaling potential because customers continue generating revenue over time. However, building the product, retaining customers, and competing effectively can require substantial investment.

5 — Digital businesses
SaaS, domain registries, AI-driven businesses, and other digital models can potentially serve enormous markets without physical expansion for every incremental customer. The opportunity can be huge—but so can the competition.

The point isn’t that everyone should only pursue a 5.

The point is to know your number before you build.

Two Tech Companies, Two Very Different Outcomes

Colin illustrates this distinction through two companies he helped build: Brisk Mobile and .CLUB Domains.

Both were technology businesses. Both needed talented people. Both required startup capital.

But their scalability was dramatically different.

Brisk Mobile operated using a time-and-materials consulting model. More revenue generally meant winning more contracts and having more skilled people available to complete the work. People and time were directly connected to growth.

Colin rates that model around a 2 out of 5 for scalability.

.CLUB Domains was fundamentally different. It could sell domain registrations through a worldwide marketplace, and a relatively small team could support a much larger revenue base. During the period Colin owned the company, nearly a million domains were registered.

That earns the model a 5 out of 5 on his scalability index.

The distinction highlights one of the most important questions entrepreneurs can ask:

What has to increase when my revenue increases?

If doubling revenue requires roughly doubling your employees, office space, equipment, and management complexity, scaling is going to be difficult.

If revenue can multiply without expenses increasing at the same rate, you may have something much more scalable.

Scalability Creates Leverage

The best scalable businesses have leverage built into their model.

Build software once, and potentially thousands—or millions—of customers can use it.

Create a digital product once, and it can be sold repeatedly.

Build recurring revenue, and existing customers can continue producing revenue while you acquire new ones.

That leverage can create higher margins and dramatically increase the potential value of the company.

It can also make a business more attractive to investors and eventual acquirers because they’re not simply buying today’s revenue. They’re buying a system capable of generating substantially more revenue tomorrow.

But More Scalability Can Mean More Risk

There’s another side to the equation.

A highly scalable business can access a much larger market, but so can its competitors.

A local restaurant may compete primarily with other restaurants in its area. A digital platform could find itself competing against businesses anywhere in the world.

The larger the opportunity, the more people are likely to chase it.

Scalable companies can therefore face intense competition, copycats, aggressive pricing, rapidly changing technology, and constant pressure to defend their market position.

In other words, higher scalability can create both higher potential reward and higher potential risk.

That’s why choosing a scalable idea isn’t enough. Eventually, you also need to build something defensible.

Ask Yourself What Happens at 10X

One of the simplest exercises you can do before launching a company is to imagine that it succeeds beyond your expectations.

If you had 10 times as many customers tomorrow, what would happen?

Would you need 10 times as many employees?

Ten more locations?

A bigger warehouse?

Millions of dollars of additional equipment?

Or could your existing infrastructure handle much of that growth?

You don’t need perfect answers at the startup stage. But thinking through the question exposes the structural limitations of a business before you’ve invested years trying to overcome them.

Choose With Your Eyes Open

There is no universal rule that says every entrepreneur needs to build a massive, global company.

A single restaurant can be a great business. So can a consulting firm, medical practice, school, real estate business, or local service company.

But every business model comes with a different growth equation.

Understand that equation before you commit.

Know how much capital growth will require. Know how dependent the business will be on hiring. Know whether geography limits you. Know whether revenue is tied directly to your time. And know whether that’s compatible with the life and company you actually want to build.

Because picking an idea isn’t only about deciding what business you want to start.

It’s deciding what kind of business you want to own when it succeeds.

Key Takeaway

Don’t judge an idea only by whether it can become a business. Judge it by what has to happen for that business to become bigger.

Rate its scalability. Understand the trade-offs. Decide how much growth you actually want.

Then build accordingly.

The Exit Window Is Open. Most Founders Aren’t Ready.

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The Exit Window Is Open. Most Founders Aren’t Ready.

Buyers are back. In July 2026 alone, venture-backed M&A cleared $9 billion and twelve companies went public above a billion-dollar valuation.

Most founders will miss it. Not because they don’t want to sell. Exit readiness takes eighteen to twenty-four months — every clean exit I’ve been part of did — and most founders start the week a buyer calls.

That week is the worst possible moment to begin.

Windows Close Without Announcing It

I’ve been through this cycle enough times to know its shape. Liquidity freezes. Everyone waits. Valuations hold up on paper while nothing actually sells.

One market analysis put the problem plainly this month: higher private valuations “may improve paper returns, but they do not return capital to limited partners.”

Then the ice cracks. Acquirers who hoarded cash for two years start shopping. Bankers float the next big listings — OpenAI, Anthropic, Databricks, Stripe. Crunchbase read July’s mix of billion-dollar rounds, M&A, and IPOs as an ecosystem where capital “is also beginning to recycle through exits.”

Beginning. Not finished.

That word matters, because this window will close, and it will close faster than it opened. One bad quarter, one rate surprise, one geopolitical shock, and the acquirers go quiet for another two years.

Rule: You can’t time an exit window. You can only be ready when one opens.

Exit Readiness Is the Whole Game

An exit is not an event. It’s a process that starts long before anyone makes an offer, and the founders who get clean, high-multiple outcomes did the unglamorous work years earlier.

I’ve sold companies. I’ve also sat in the room where a buyer repriced a great business downward in diligence over things that would have taken six months to fix — if anyone had started six months earlier.

Nobody hands you those six months once a process is live. Every week you spend fixing something is a week the buyer spends finding a reason to pay less.

The Exit Readiness Checklist

What has to be true before the phone rings.

1. Your books survive a stranger.

Not “my bookkeeper knows where everything is.” Clean, accrual-based financials going back three years, ideally reviewed or audited. Revenue recognized consistently. Add-backs documented and defensible.

Rule: If explaining your numbers takes more than ten minutes, your valuation is already falling.

2. No customer is worth more than 20% of revenue.

Customer concentration is the fastest way to lose a turn of multiple. A buyer sees one client at 40% of revenue and sees a company that could halve the day after closing. They price that risk aggressively.

Fixing it takes years. Start now.

3. The business runs without you for thirty days.

The hardest one, and the one founders fight. If you are the salesperson, the product decision-maker, and the person approving invoices, you aren’t selling a company. You’re selling a job — and buyers pay far less for jobs.

Test it honestly. Leave for thirty days. What breaks becomes your work list.

4. Your contracts transfer.

Go read your customer agreements. Find the change-of-control clauses that let clients walk or renegotiate on acquisition. Check your key employee agreements. Check your IP assignments, especially for anything a contractor built in the early years.

I watched a deal stall four months over one missing IP assignment from a freelancer nobody could find.

5. Your growth story has a number attached.

“We’re growing fast” is not a story. “We grew 62% year over year for three consecutive years with net revenue retention of 114%” is a story. Buyers pay more for predictability than for velocity.

6. You know your walk-away number before you enter the room.

Decide it while you’re calm. Write it down. Once a term sheet sits in front of you, excitement, exhaustion, and eight months of sunk cost wreck your judgment.

Rule: Set your floor before the adrenaline arrives.

The Mistake I See Most

Founders treat the exit as the reward for building. It isn’t. It’s a separate discipline with its own skill set, and it sits third in Start. Scale. Exit. Repeat. for a reason — between scaling and starting again, and you have to earn it deliberately.

The founders who do this well aren’t smarter. They ran the business as if it were for sale, every year, whether or not it was.

That habit has a side effect: a company built to be sold is a better company to own. Clean books, diversified revenue, a team that operates without you. None of that is exit prep. That’s just good business.

The Item You’ve Been Avoiding

Go back through those six. One of them made you flinch.

That’s the one costing you a turn of multiple, and it’s the one you’ve been deferring for two years because fixing it means an uncomfortable conversation — with your largest customer, with your accountant, with the person who shouldn’t be running your sales team anymore.

Book that conversation this week. Not the easy items. The one you skipped.

The window is open now. The work should have started two years ago.

Second best time is today.

Second-Time Founders: Repeat Is the Hardest Word

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Second-Time Founders: Repeat Is the Hardest Word

Six weeks after the wire hits, most founders feel nothing at all. Not relief. Not triumph. Nothing.

That’s the part of the exit nobody warns you about, and a lot of people are about to walk into it. July 2026 alone produced twelve venture-backed companies listing above a billion dollars. A cohort of second-time founders is forming right now, and most of them think the hard part is behind them.

The Exit Doesn’t Feel Like You Think It Will

You sign. The money lands. And within about six weeks the feeling you expected — relief, triumph, arrival — doesn’t arrive. What shows up instead is a flat quiet.

Not depression. Not regret. Just the absence of the thing that structured every day for years.

For a decade you woke up with a problem to solve and a team that needed you. Then one Tuesday you wake up with neither. Your calendar is empty, and it’s supposed to be a reward.

It doesn’t feel like one.

That’s not ingratitude. It’s withdrawal.

I’ve been through this cycle. I’ve talked with dozens of founders in Startup.Club sessions who have too, and the pattern repeats with unsettling consistency. The ones who struggle hardest are the ones who identified hardest with the company — the ones who, asked what they do, gave the company’s name instead of their own.

Selling the company sold the answer to that question.

Why Second-Time Founders Have It Harder

The second company should be easier. You have money, a network, a reputation, and a proven playbook.

Every one of those turns into a liability.

Money removes the constraint that made you good. The first time, you couldn’t afford to be wrong for long. Every dollar bought a test. Now you can fund a bad idea for two years, and you will, because you can.

The network gives you false validation. Your friends will tell you the idea is great. They said that about the first one too, but back then you didn’t believe them — you went and found strangers who’d pay. Now the flattery lands differently, because you earned it.

The reputation makes you slow. The first company failed in private. This one fails in public, in front of everyone who watched you win.

That fear doesn’t make you careful. It makes you avoidant. You spend nine months on strategy and zero on customers.

The playbook is the worst of them. It worked. It worked so well you sold a company. So you run it again — same channel, same pricing, same hiring sequence — and it fails, because the market moved while you were busy winning.

Rule: The playbook that got you out is not the playbook that gets you back in.

What Repeat Actually Requires

“Repeat” in Start. Scale. Exit. Repeat. does not mean do the same thing again. It means returning to beginner conditions on purpose while holding the judgment you earned.

That’s a narrow path. Here’s how to stay on it.

1. Constrain yourself artificially. Give the new company a budget it has to live inside, and hold that line as though outside money were the only option. If you’d fund it from a $500K seed, fund it from $500K — not from exit proceeds, which carry no discipline at all.

2. Go find strangers. Your first ten customers should be people who don’t know your name and don’t care about your last company. If early traction comes only from your network, you’ve proven your network is loyal. Nothing else.

3. Separate the transferable from the situational. What you actually learned was judgment: how to read a customer, when to cut a hire, what a real signal looks like next to a polite one. That travels. The tactics — the specific channel, the price point, the launch sequence — don’t.

4. Give yourself a real gap. Not a vacation. A genuine stretch with no company, long enough to notice who you are without one. Founders who start the next thing three weeks after closing are running from the quiet, and a company started as an escape is a company you won’t want to run in year three.

5. Say the hard thing out loud. To a peer group, a coach, another founder who’s been through it. The isolation after an exit is worse than the isolation during the build, because during the build you at least had a team. Afterward you have a bank balance and a lot of people who assume you’re fine.

Why It’s Still Worth Doing

None of this argues against repeating.

The founders I know who built more than once are, without exception, better the second and third time. Not because it got easier. Because they got more honest.

They cut faster. They hire better. They stop confusing motion with progress. They know which fears are signal and which are noise, and that distinction is worth more than any amount of capital.

That improvement isn’t automatic. It shows up only for founders who treat the second company as a genuinely new problem instead of a rerun.

Start is exciting. Scale is grinding. Exit is technical.

Repeat asks who you are without the thing you built.

Answer that first. Then build.

How to Scale a Startup: What Actually Breaks

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How to Scale a Startup: What Actually Breaks

Most companies don’t die from lack of demand. They die from getting it.

How to scale a startup is really one question: what happens when the thing that was working stops working? The cruelty of it is that nothing looks wrong from outside. Revenue is up. The team is bigger. The press is better.

Inside, four systems are failing on different timelines, and no two fail at the same moment.

Here’s what breaks, in order, and the warning sign for each.

1. The Founder’s Calendar Breaks First

It goes before anything else, and almost nobody notices, because it doesn’t feel like a system failing. It feels like being busy.

At five people you sit in every conversation and that’s an advantage. At fifteen you sit in every conversation and it’s a bottleneck. At thirty you are the reason decisions take four days, because everything routes through the one person holding context on everything.

Warning sign: your team stops bringing you problems and starts bringing you approvals. They’ve learned that deciding without you carries risk. The moment that happens, your personal throughput caps your company’s speed.

The fix isn’t delegation. It’s context transfer. Delegating a task moves work. Transferring context moves judgment, so your team makes the next twenty decisions without you.

Rule: If you’re the fastest way to get an answer, you’re the slowest part of the company.

2. Hiring Breaks Second

Your first ten hires came through your network. People you knew, or people known by people you trusted. They arrived pre-vetted, culturally aligned, and willing to do whatever the week demanded.

That well runs dry somewhere between fifteen and twenty-five people. Then you hire strangers, and the hit rate collapses.

Founders respond by hiring faster, which is exactly wrong. A bad hire at forty people doesn’t just underperform. They hire more people like themselves, and now a whole branch of the org chart doesn’t work.

Warning sign: you describe a new hire as “we’ll see how they work out.” You never said that about hire number three.

What works:

  • Write the scorecard before the job post. Five outcomes, ranked. Can’t name what success looks like in twelve months? You don’t know what you’re hiring for.
  • Let someone who isn’t you make the final call on at least one hire per quarter. It’s the only way to learn whether your standard transferred.
  • Fire in weeks, not quarters. The cost of a bad hire isn’t their salary. It’s the good people who leave because you tolerated them.

Rule: Slow to hire is not a virtue. Slow to decide is the mistake.

3. Cash Breaks Third, and Quietly

This one kills companies that were, by every other measure, succeeding.

Growth eats cash. You pay for inventory, headcount, and infrastructure before the revenue those things generate arrives. The faster you grow, the wider the gap — and profitable-on-paper businesses run out of money in the middle of their best year.

I’ve watched it happen to businesses with excellent margins and a full pipeline.

Warning sign: you check the bank balance more often than the P&L. That instinct is correct. Listen to it. Your P&L tells you a story about the past. Your cash position tells you about next month.

What to install:

  • A rolling 13-week cash forecast. Weekly, not monthly. Thirteen weeks is long enough to see a problem coming and short enough to stay accurate.
  • A hard cash floor. Pick the months of runway below which you will not go, and act at that line instead of past it.
  • Your cash conversion cycle. Days from spending a dollar to collecting the revenue that dollar produced. Shorten it by fifteen days and you’ve funded a hire.

Rule: Profit is an opinion. Cash is a fact.

4. Decision-Making Breaks Last, and Worst

The endgame failure. This is the one that turns a fast company into a permanently slow one.

Early on, decisions happen in hallways. Somebody asks, somebody answers, done. Nobody writes anything down and it works fine, because everyone shares the same context.

Past fifty people that shared context is gone. The hallway conversation now excludes six people who needed to be in it.

So meetings appear. Then meetings to prepare for meetings. Then a process to manage the meetings.

Warning sign: two groups make the same decision and reach different answers. That’s not a communication problem. That’s a missing decision structure.

What to install:

  • A single owner for every decision. Not a committee. One name.
  • A split between reversible and irreversible. Make reversible decisions fast and alone. Give irreversible ones a week and a room. Most companies do this exactly backwards.
  • The “why” written down, not just the “what.” A decision with no documented reason gets relitigated every six months by whoever wasn’t in the room.

Rule: Speed doesn’t come from working faster. It comes from deciding once.

How to Scale a Startup: Replace Proximity With Systems

Every one of those four failures has the same root cause. Something that worked because of proximity stops working when proximity disappears.

So scaling is one job: replacing proximity with systems, on purpose, before you’re forced to. That’s the whole argument of the Scale chapter in Start. Scale. Exit. Repeat., and it’s the stage where founders resist hardest, because building systems feels like bureaucracy when you’re used to speed.

It isn’t. Bureaucracy is what you get when you build the systems late, in a panic, after something already broke.

Take the four above and ask which one is currently your constraint. Not which is most broken — which is holding back everything else.

Fix that one. Then look again, because it will be a different one.

Scaling isn’t a phase you complete. It’s a bottleneck you keep moving. Just make sure you’re the one moving it, and not the last person to notice it moved.

Focus on Something You and Others Love: A Founder’s Framework for the AI Era

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Focus on Something You and Others Love: A Founder’s Framework for the AI Era

Adapted for an AI world from Chapter 4 of Colin C. Campbell’s Start. Scale. Exit. Repeat.

In 1993, I made a decision that looked questionable on paper.

My partners and I had built ComputerLink, a profitable BBS company. The business worked. It had customers. It made money.

And we decided to shut it down.

Why?

Because we could see something much bigger coming: the internet.

We loved what we had built with ComputerLink—the community, the connectivity, and the ability for technology to bring people together. But we realized that the BBS itself wasn’t the thing we loved most.

It was the idea behind it.

The internet was becoming a vastly better vehicle for that idea.

So we took the assets of a profitable company and used them to start Internet Direct, venturing into an industry that was still largely uncharted.

More than three decades later, entrepreneurs are facing a remarkably similar moment with artificial intelligence.

AI is changing how companies are built, how work gets done, and what customers expect. New tools and business models seem to appear every week.

That creates enormous opportunity.

It also creates enormous distraction.

The founders who thrive in this environment won’t necessarily be the ones who chase AI the fastest. They’ll be the ones who understand what they truly care about, what their customers care about, and how AI can become a better vehicle for delivering it.

Here is a framework for doing exactly that.

1. Separate What You Love From the Vehicle Delivering It

One of the most important lessons I’ve learned as an entrepreneur is this:

Don’t fall so deeply in love with your business that you go down with it.

Fall in love with the purpose instead.

In the early 1990s, BBS operators had built thriving businesses. When the internet arrived, some couldn’t let go. They had fallen in love with the vehicle rather than what the vehicle accomplished.

The same danger exists today.

Maybe you love your SaaS product.

Maybe you’ve spent years building a marketplace, agency, app, consulting business, or software platform.

Then AI arrives and suddenly customers can accomplish part of what your product does with a prompt.

The wrong response is to protect yesterday at all costs.

Ask instead:

What did customers actually love about what we built?

Was it the software itself?

Or did they love saving time?

Making better decisions?

Feeling more creative?

Connecting with other people?

Growing their business?

Removing frustrating work?

Once you understand that, AI stops looking purely like a threat. It can become the next vehicle for delivering the thing people already value.

That leads to the first question in the framework:

What do we love about the problem we’re solving—and is there now a better way to solve it?

2. Don’t Confuse AI Excitement With Customer Love

There’s another problem with transformational technologies: entrepreneurs want to build everything.

I know this problem well.

I’ve joked that entrepreneurship should be classified as a drug. A new idea can produce an incredible rush, and serial entrepreneurs often don’t struggle to generate ideas.

They struggle to pick one.

AI has multiplied that temptation.

Every week brings another model, agent, platform, capability, or startup category. Suddenly you can imagine dozens of businesses that weren’t technically possible a few years ago.

But possible doesn’t mean valuable.

And interesting doesn’t mean customers will care.

Instead of asking:

What can I build with AI?

Try asking:

What do people already desperately want that AI now allows me to deliver dramatically better?

That distinction matters.

Technology can create capability.

Customers create businesses.

Before committing significant time and capital to an AI opportunity, look for three overlapping signals:

Founder Love:
Would you still care about solving this problem after the novelty of the technology disappears?

Customer Love:
Do people genuinely want the outcome enough to change their behavior, recommend the product, or pay for it?

AI Leverage:
Can AI make the solution substantially faster, cheaper, easier, smarter, more personalized, or previously impossible?

The strongest opportunities sit at the intersection of all three.

Love it. Prove others love it. Then use AI to amplify it.

3. Avoid the Shiny-Object Trap

In previous technology revolutions, entrepreneurs could spend years riding a trend.

AI cycles can move much faster.

Today’s breakthrough can become tomorrow’s commodity.

That makes focus even more valuable.

When every founder can rapidly prototype ten ideas, the competitive advantage isn’t necessarily producing the eleventh.

It may be having the discipline to decide which one deserves the next ten years of your life.

Ask yourself:

If AI stopped being exciting tomorrow, would I still care deeply about this problem?

That’s a powerful filter.

Because building a meaningful company remains hard.

There will still be difficult customers.

Hiring mistakes.

Cash-flow problems.

Competitors.

Failed experiments.

Slow months.

Products that don’t work.

Strategies that have to be rewritten.

AI may accelerate parts of entrepreneurship, but it doesn’t eliminate the emotional roller coaster of building a company.

Which is why love still matters.

4. Build Something Humans Still Care About

The more capable AI becomes, the easier it is to become obsessed with what machines can do.

Founders should spend just as much time thinking about what humans want.

People still want to save time.

They still want to belong.

They want status, convenience, security, entertainment, health, wealth, connection, confidence, and meaning.

They want someone to understand their problems.

They want products that make their lives better.

Those human motivations don’t disappear because the technology underneath a business changes.

So don’t start your strategy with the model.

Start with the human.

Ask:

Whose life gets meaningfully better if we succeed?

Then ask:

How does AI allow us to improve that outcome by 10x?

That produces a very different company than simply attaching AI to an existing product because the market expects you to.

5. Make Sure the Idea Reflects Your Values

Love is difficult to quantify.

One useful way to evaluate it is through your values.

Write down the ideas you’re considering and ask what genuinely excites you about each one.

Then ask:

Does this idea reflect something I care deeply about?

If sustainability matters to you, how does the company contribute to it?

If education matters, how does the company help people learn?

If entrepreneurship matters, how does the company help founders succeed?

If you care about improving people’s lives through technology, where does that show up in the product?

This becomes especially important with AI because founders aren’t simply choosing what they can automate.

They’re choosing what they should automate—and what role they want technology to play in people’s lives.

Values can become a strategic filter.

Just because AI can do something doesn’t mean that’s the company you should spend a decade building.

6. Use Other People’s Excitement as Evidence

Loving your own idea isn’t enough.

Other people need to love it too.

Talk to potential customers. Show them prototypes. Explain the vision. Watch their reactions.

But don’t only listen to what people say.

Look at what they do.

Do they ask when they can use it?

Do they introduce you to someone else who needs it?

Do talented people want to join you?

Do potential partners start suggesting ways to help?

Most importantly:

Will customers pay?

Authentic enthusiasm has a way of spreading.

When the founder loves the mission, customers love the outcome, and talented people want to participate, you may have found something worth pursuing.

7. Let AI Change the Business Without Changing the Mission

This may be the most important lesson of all.

ComputerLink wasn’t our mission.

It was a vehicle.

When a better vehicle arrived, we moved.

Entrepreneurs in the AI era should develop the same willingness.

Your product may change.

Your interface may change.

Your pricing model may change.

Tasks that once required twenty employees may eventually require five employees working with AI agents.

Entire features may disappear.

Your competitive advantage may move from software functionality to proprietary data, distribution, community, trust, workflow integration, brand, or customer relationships.

That’s okay.

Preserve the reason the company deserves to exist. Be willing to reinvent almost everything else.

The AI Founder Love Test

Before pursuing your next idea—or deciding whether AI should transform your existing company—answer these seven questions:

  1. What do I actually love about this idea?
  2. What outcome do customers love?
  3. Would I care about this problem if AI weren’t fashionable?
  4. Does solving it reflect my values?
  5. Does AI materially improve the solution rather than merely decorate it?
  6. Are customers demonstrating love through behavior, not just compliments?
  7. Am I willing to change the vehicle while protecting the underlying mission?

If you can’t answer those questions clearly, keep exploring.

If you can, focus.

Because the abundance created by AI makes focus more important, not less.

We’re entering a period in which entrepreneurs can build more, test faster, automate more, and pursue opportunities that would have required enormous teams and capital only a few years ago.

But that doesn’t mean you should pursue all of them.

Life is still too short to spend your time, attention, and resources building something neither you nor your customers truly care about.

Find the problem you love.

Make sure other people love the outcome.

Use AI to build a dramatically better way of delivering it.

Then focus long enough to make it matter.

And once you’ve found that idea, two timeless questions remain:

Can you scale it?

And can you defend it?

The #1 Skill for the AI Age: Learn How to Learn

Nivu Hussain
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The #1 Skill for the AI Age: Learn How to Learn

https://www.clubhouse.com/i/the-1-skill-for-the-ai-age-learn-how-to-learn/npX7t2E1

Global Startup Funding Has a Passport Now

Startup Club
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Global Startup Funding Has a Passport Now

Founders built 43.6% of the world’s new billion-dollar companies outside the United States this year. You don’t have to move anymore. Global startup funding came to you.

In the first half of 2026, 195 companies crossed a billion-dollar valuation — more in six months than in all of 2025. Eighty-five of them were built outside the U.S.

China produced 38. Last year it produced 10.

The Money Is Building Fences to Keep Founders In

The clearest signal landed on August 11. The European Commission launched the Scaleup Europe Fund, targeting €5 billion — about $5.7 billion — and selected the Swedish asset manager EQT to run it through an open call.

The first €1 billion has already closed, funded by the European Commission alongside institutional investors. The founding investor list reads like a map of European capital: Allianz, the Dutch pension manager APG, Santander’s Mouro Capital, CriteriaCaixa, Denmark’s EIFO and Novo Holdings, and a stack of Italian foundations. The ambition is to grow it to €25 billion.

Its first check co-led ICEYE’s Series F at a valuation above $11 billion.

ICEYE’s CEO said the purpose plainly: the fund “exists so companies like ours don’t have to leave Europe to compete globally.”

Read that again. A fund targeting five billion euros, built to stop the brain drain to Silicon Valley.

Europe watched its best companies grow up and move away for two decades. Now it writes checks big enough to make staying rational.

Not Where You Live. What Your Money Understands.

The old constraint was geography. You were near the money or you weren’t.

The new constraint is legibility — whether the capital that exists around you can understand what you’re building.

Look at where the new unicorns clustered: robotics, AI, AI infrastructure, defense, semiconductors, aerospace, financial services, healthcare, biotech. That isn’t a random spread. That’s a map of what sovereign-scale capital wants right now — strategic industries governments have decided they can’t afford to import.

Build in one of those categories outside the U.S. and more capital is available to you today than at any point in your career.

Build a consumer app in a market with no consumer-app funds and geography still bites. Then move.

Rule: Don’t ask where the money is. Ask what your money understands.

Speed Is the New Signal in Global Startup Funding

One number in the H1 data deserves more attention than it’s getting. Nineteen companies raised fast follow-on rounds that doubled their valuations, often inside six months. Etched went from $5 billion to $10 billion in half a year.

The whole cohort added roughly $440 billion in value against $80 billion raised across their entire lifetimes.

That ratio tells you something. Investors aren’t paying for years of steady compounding. They’re paying for evidence of acceleration.

Which changes what you measure. Not “are we growing?” — everyone is growing. Is our rate of growth increasing? A company going 20% → 30% → 45% tells a story. A company going 40% → 40% → 40% tells a much quieter one, even though the absolute numbers look better.

If You’re Not Building a Unicorn

Most of you aren’t, and shouldn’t be. So here’s the practical version.

1. Audit your local capital before you audit Sand Hill Road. Government-backed funds, regional development capital, strategic corporate investors, sovereign wealth programs.

This money is less glamorous and often less demanding. Founders skip it because it doesn’t come with a famous logo. Bad reason.

2. Find out what your government decided to fund. Every major economy publishes a list of strategic sectors. Sit on one and you have access to capital that has nothing to do with venture returns. Sit outside it and know that going in.

3. Build for a market, not a zip code. Remote work solved the team question. The harder question is where your customers are, and whether you understand them well enough to sell without being in the room.

4. Read the terms, not the headline. Public-private capital comes with strings — reporting requirements, domicile conditions, hiring commitments.

Some of those are fine. Some will constrain an exit later. Know which before you sign.

The Community Advantage

In Startup.Club sessions I hear from founders in Lagos, São Paulo, Tallinn, Bangalore, and Fort Lauderdale inside the same hour. Ten years ago that mix was impossible, and the founders outside the traditional hubs operated at a real information disadvantage.

That gap closed. The playbooks are public. The tools are identical everywhere. The conversations are open.

The remaining edge isn’t access. It’s judgment — knowing which advice applies to your market and which someone wrote for a different one.

Capital got a passport. So did knowledge.

The founders who win stop waiting for permission from a place they don’t live.

Record Startup Funding Is Not a Strategy

Startup Club
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Record Startup Funding Is Not a Strategy

Venture capital just set a record, and almost none of it is coming to you.

July 2026 delivered $65 billion in record startup funding. Double last July. Fourteen companies raised billion-dollar rounds inside thirty-one days, the highest monthly count on record. AI took $35 billion of it, more than half of every venture dollar on the planet.

Read those numbers fast and you’ll conclude money is easy again. Read them slowly and you’ll see something else.

Fourteen Companies Took a Fifth of the Money

Do the arithmetic nobody does. Fourteen billion-dollar rounds inside a $65 billion month means a handful of companies absorbed at least a fifth of all the capital raised worldwide. Blue Origin took $10 billion by itself, July’s largest deal.

August opened the same way. In the first week alone, Hadrian raised $1.37 billion for manufacturing. Base Power raised $1 billion for energy storage. Valar Atomics raised $1 billion for nuclear.

Those are not startups. They are industrial programs wearing startup clothing.

Now look at who writes the checks. In 2025 the ten largest U.S. venture funds took nearly a third of all the money that limited partners put into U.S. venture. Andreessen Horowitz recently raised more than $15 billion across five funds — over 18% of all U.S. venture fundraising in 2025.

One firm. Almost a fifth of the market.

Meanwhile first-time fund formation fell to its lowest level in over a decade.

Fewer funds. Bigger funds. Bigger checks to fewer companies. That is not an open market. That is a concentrating one.

Record Startup Funding Is Real. It Just Isn’t Yours.

A concentrating market still produces euphoric headlines. Founders read them, decide the window is wide open, and go raise instead of going to sell.

Then they spend seven months in a process that was never available to them.

I’ve watched founders in Startup.Club sessions burn three-quarters of a year on a raise while a competitor spent the same seven months signing customers. Guess which one still owns their company.

The money did come back. It came back for a specific profile: category leaders, capital-intensive hard tech, and anything with AI in the first line of the deck and revenue behind it. If that isn’t you, the record numbers describe a party in a different building.

Revenue Is the Only Round Nobody Can Cancel

Term sheets get pulled. Diligence drags. Lead investors go quiet in December and reappear in March with a lower number.

I have lived every one of those.

A customer paying you does none of it.

Rule: Revenue is the only funding round nobody can revoke.

This is not anti-venture. Venture capital built companies I’m proud of.

It is anti-default. Raising money became the reflex answer to every problem, and the reflex is expensive. You give up ownership. You give up control. You take on a growth expectation calibrated to a fund’s return model instead of your business’s reality.

Before you raise, answer three questions honestly:

  1. What does the money buy that time cannot? If the answer is “speed,” ask whether speed is worth 20% of your company.
  2. Would this business work if nobody ever funded it? If no, you don’t have a business. You have a project that needs a subsidy.
  3. Can you name the specific milestone this round unlocks? Not “growth.” A number, a date, a proof point.

Miss any of the three and you’re not fundraising. You’re procrastinating with a pitch deck.

What Concentration Does to the Middle

There’s a second-order effect most founders miss. When capital concentrates at the top, the middle gets quieter, not louder.

I hear it constantly from founders in our sessions: the $2 million seed round that used to close in six weeks now takes months. The reason is structural. Funds that used to write $2 million checks either got much bigger or stopped existing, and a multi-billion-dollar fund cannot deploy $2 million efficiently. So it doesn’t.

That leaves a real gap, and a real opportunity. The businesses in that gap run on customer money instead of investor money. They grow slower. They also survive the downturns that erase companies holding eighteen months of runway and no revenue.

In Start. Scale. Exit. Repeat. I argue the Start phase exists to prove the thing works before you pour fuel on it. A concentrating capital market doesn’t change that. It enforces it.

Watch the Exits, Not the Entrances

Want a signal that actually matters to your business? Stop tracking funding rounds. Start tracking exits.

The $65 billion got the headlines. The number with real consequences was quieter: in the same month, twelve venture-backed companies listed publicly above $1 billion. Acquirers buying companies means acquirers will buy your company.

Funding rounds only tell you which competitor just got a war chest.

One is a market you can sell into. The other is a market you have to survive.

What to Do Monday

Pick the one that applies:

  • Pre-revenue: stop building the deck. Go get three paying customers. The deck writes itself afterward. You won’t need it.
  • Growing on revenue: resist the pull. A record funding month is not evidence you should raise. It’s evidence that the companies raising sit in a different weight class.
  • Genuinely raising: target the funds that still write your size of check. The mega-funds are not your market, no matter how loud they get.

The headlines will keep growing. Sixty-five billion will look small by December.

None of that builds your company. Customers do.

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