Never tell investors you've raised zero. The best narrative is that the round is nearly complete, creating urgency and social proof. This makes attracting the final checks easier, as no one wants to be the very first money in a cold round.
A powerful fundraising tactic is to continually increase your total round size as you hit initial targets. This allows you to always be '50% closed' or more, constantly signaling momentum and de-risking the opportunity for new investors you speak with.
A product's fit with the market can vanish overnight in the fast-moving AI space. Continuous innovation is required not just for growth, but for survival. What provides a competitive edge today might be commoditized by a new model release or a competitor tomorrow.
First-time founders often fear competition. Experienced founders, however, see it as validation that a market exists. The absence of competitors is a major red flag that people may not want your product. It is easier to out-execute in a validated market than to create a new one.
While getting a design partner to pay is good validation, getting them to invest in your company is the ultimate form of commitment. This aligns incentives at the deepest level, ensuring you get consistent, high-quality feedback and strategic support from top decision-makers.
Following advice from YC's Michael Seibel, the founders of Fancy launched with a simple app and no backend; orders came in as text messages. They manually bought items from local shops for delivery, proving core demand without wasting engineering resources on an unvalidated idea.
While competitors burned cash fighting over major hubs, delivery startup Fancy focused on Tier 2 cities. This strategy gave them a local monopoly, leading to far better unit economics and retention. This strong performance was a key factor in their acquisition by GoPuff.
A weekly call with a design partner is a sign of failure. True product iteration speed comes from being deeply embedded. Founders should aim to work from their design partner's office, sitting next to the users. This proximity provides a constant, high-fidelity feedback loop.
In enterprise markets, leaders hit "escape velocity"—a point where adoption is so widespread that potential customers see it as a career risk to choose a competitor. Once a company reaches this status, it's exceptionally difficult for new entrants to compete as the market consolidates around them.
Model ML, a fast-growing fintech AI company, started as an internal tool for the founders' family office to automate investment due diligence. The product was validated when senior finance professionals saw it and asked to use it, proving demand before it was even a company.
A powerful, non-obvious indicator of product-market fit is when your demand outstrips your ability to supply, and customers become upset about having to wait. This frustration is a clear sign that you've built a must-have product, not just a nice-to-have one.
Fat Llama's founder learned that strong user demand doesn't equal Product-Market Fit. His first company had users who loved the service for three years, but it took a full year *after* their Series A to make the unit economics work. True PMF requires both aspects.