In a deep dive with Karri Saarinen, cofounder of Linear, they discuss their unconventional approach to building a company with emphasis on quality over rapid scaling. Karri shares insights on maintaining a net-negative lifetime burn rate while raising funds and navigating ‘Founder Mode’ challenges. They also explore innovative hiring practices from Airbnb and Coinbase, and even dive into the delicious world of Finnish potatoes versus American varieties. This conversation is a refreshing take on entrepreneurship that prioritizes craftsmanship and sustainable growth.

Chris and Brendan, co-founders of Wistia, discuss their journey of creating a sustainable lifestyle business. They emphasize the importance of patience and long-term thinking over venture capital dependency. Their experience with a company buyback fostered a culture of ownership and profit-sharing among employees. They advocate for a focus on solving significant market problems while balancing creativity and profitability. The duo highlights that meaningful growth takes time and that building strong workplace relationships is key to success.

The conversation kicks off with an analysis of shifts in the funding landscape, urging venture capitalists to embrace diverse strategies. Exceptional founders who dare to deviate from the norm are celebrated for their unique visions. Insight into the need for support systems reveals how personal aspects, like family, can enhance productivity. Themes of storytelling and emotional journeys in startups highlight overlooked narratives and the importance of genuine fulfillment, while balancing the intricacies of love and business is explored.

Product-market fit requires both customers willing to pay and stay. It’s not just about initial sales, but also retention. Early-stage sales should focus on research and understanding customer problems rather than immediate revenue generation. Founders often skip this crucial research phase.Abstract solutions require focusing on specific problems rather than leading with the technology itself. To create urgency, you need to demonstrate how a problem is growing or intensifying for the customer. If a problem isn’t being measured or managed, it’s likely not a priority.Early adopters are often those early in their buying journey who are willing to experiment. They buy into the founder as a subject matter expert rather than expecting a fully-built product. Successful startups often start by focusing on a specific niche before expanding horizontally. Being highly specialized allows you to understand customer problems better than they do.Invalidation is a healthy part of the startup process. If you’re not invalidating assumptions, you’re likely not learning or going deep enough. Sales feedback is valuable for positioning and refinement, but product vision should come from founders or product leads. Salespeople should not drive product vision. Demonstrating expertise by setting boundaries on what your product does (and doesn’t do) can actually increase customer confidence.

— Capital has no insightsEric argues that venture capital alone doesn’t solve business problems, and having more capital doesn’t necessarily lead to better outcomes.— Compounding value vs. negative valueThe importance of building companies that compound positive value over time, rather than scaling prematurely and compounding negative value. Funding should primarily be used for experimentation and scaling proven business models, not for scaling unproven ideas, because it’s easy to compound negative value if you’re not paying attention to the right things.— Vanity metrics vs. intrinsic valueThe industry often focuses on vanity metrics like growth rates and valuations, rather than building long-term intrinsic value and durable businesses. The venture capital industry’s incentive structures often encourage behavior that may not be in the best interest of building sustainable businesses. It’s important to maintain a long-term perspective on building value, rather than getting caught up in short-term growth or fundraising cycles. In many tech businesses, there are often diseconomies of scale rather than economies of scale as companies grow.— Playing the game on your own termsCEOs and founders are ultimately responsible for making disciplined decisions about resource allocation and scaling. While entrepreneurs can’t completely ignore the “game” of venture capital, they should focus on building value on their own terms rather than getting caught up in comparisons or unrealistic expectations.

Some takeaways:— There’s a significant gap between the hype around AI and its actual implementation in businesses. Many companies are still in the experimental phase, with few AI solutions in production. The main barriers to AI adoptions are technical challenges, cost considerations, and lack of expertise. We’re still very early in realizing AI’s promise.— AI adoption was slow, then immediate. In a pre-ChatGPT world, the focus was on convincing companies to care about data science and machine learning. Post-ChatGPT, there’s been an explosion in demand, with companies actively seeking AI solutions.— Most companies are still in the proof-of-concept stage. There’re limited production-ready AI use cases, which hinders adoption. But with major cloud providers (Microsoft, Amazon, Google) aggressively pursuing AI strategies, that’s bound to change. There’s constant evolution in model performance and capabilities. Companies need to view AI as a continuous investment, similar to cloud infrastructure, rather than a one-time project.— Tribe’s approach to AI implementation is what made it such an interesting investment for indie. Their focus on education to help companies understand AI's potential, and emphasis on quick, cost-effective proof of concepts to demonstrate value, means they’re positioned to continue rapidly growing. As a services business, they’re able to help companies balance cost with value creation, navigate rapidly evolving AI technologies, and future-proofing AI investments.

A few takeaways from this conversation:— Early crypto applications were challenging to use and primarily attracted tech enthusiasts and speculators. Over time, the technology matured, making applications more user-friendly and broadening the user base. While there’s still a long way to go, the maturation of the technology also led to a shift in focus from speculative gains to building durable and sustainable businesses.— A significant issue in the crypto space is the short-term focus of many projects, prioritizing quick liquidity events, like token generation events (TGEs), over long-term business building. This emphasizes the importance of founders who are serious about building lasting companies rather than those looking for quick gains.— Market cycles heavily influence behavior in the crypto space. Bull markets attract a lot of attention and speculative projects, while bear markets tend to wash out less-committed participants, leaving behind those genuinely interested in the technology. smac notes that bear markets often lead to better quality projects and more serious builders.— Events like the FTX collapse and the Silicon Valley Bank (SVB) crisis reinforced the importance of self-sovereignty and distrust in traditional institutions. Compound's belief in the growing importance of self-sovereignty extends beyond financial institutions to healthcare, education, and data institutions.— Compound looks for founders who are serious about building their companies and have a long-term vision. They value founders who are thoughtful about their projects and not just looking for quick liquidity.— How crypto can be applied in areas like distributed energy and healthcare data. We also highlight the potential of decentralized physical infrastructure networks (Deepin) and decentralized science (DeSci) as promising areas for future investment.

When you end an essay with a line like:"Majoring in computer science today will be like majoring in journalism in the late 90’s.”You’re bound to ruffle some feathers. In the case of Chris Paik’s “End of Software” essay, not only were feathers ruffled, but the entire farm was flustered. And then the pitchforks came out…Given the violent response to the piece, both positive and negative, we approached Chris with the idea of adapting the Jimmy Kimmel “Mean Tweets” skit to address some of the critics and dive into the nuances of such a bombastic proclamation. What we ended up with was an incredible, and occasionally comical, deep dive into his thinking and observations around the innovation that’s emerging at the intersection of software development and Artificial Intelligence.Some insights from this one —The cost of creating software is approaching zero, which will fundamentally change its nature.  Software is shifting to a new phase where it will be created on-demand to serve a specific intent and then disappear. This is similar to how content creation and distribution costs went to zero with the internet, enabling ephemeral user-generated content.People are lazy and want software that routes them directly to what they want with minimal effort. Platform providers that can best deliver on user intent will monopolize the market, just as social media platforms monopolized attention.Solving the discovery and distribution challenges amidst this coming explosion of near-zero cost software will be the source of the biggest future opportunities and venture returns.While AI will make average software more accessible, it will also shift the curve to enable the creation of revolutionary new software that is better than what exists today.

Will Quist, Partner at Slow Ventures, discusses the Slow PhD program, emphasizing the importance of pairing the right ideas with the right capital sources. He delves into the decoupling of great products from successful companies and the challenges of abundant venture capital. The conversation explores the significance of personal beliefs in investing philosophy, the relationship between great products and great companies, decision-making in venture capital, navigating entrepreneurship towards going public, defining purpose in VC, and challenges faced by hardware startups.

My friend, Michael Dempsey, Managing Partner at Compound, and I have an ongoing thread about the intersection of indie ideals and his areas of focus in deep tech. Most of these conversations happen over meals or online, so we decided to dive in a bit with the cameras on.Our conversation was as fun as it was wide ranging. I’ve watched for years as Michael has built Compound into a research focused, thesis-driven firm that has moved from the edges to the center of some of the hottest investment areas today. We get into details behind his early conviction around AI juggernauts like RunwayML and Wayve, to new themes they’re exploring in crypto and biology. Some quick takeaways and highlights to look for —There’s a trend of deep tech startups pursuing overly ambitious “narrative rotations” by constantly expanding into new areas, which Michael aptly calls a “Ponzi scheme of ambition.” This is driven by the need to justify raising large amounts of venture capital.His bias towards building one big business in a massive market rather than narrative expansions. For shelling point investments, like SpaceX and Palantir, the focus is on owning and expanding a principle or market over time, rather than narrative rotations.Compound’s approach to investment themes that are considered “too early or too ridiculous” with no real customers yet, and funding those contrarian opportunities.The value of developing specific year-by-year theses on how certain sectors will play out, acknowledging that 80% may be wrong but aiming for the 20% that are very right. You only really need to be right twice per fund.