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The First Cut
They say "The first cut is the deepest", but I don't wan't you to think this newsletter is full of "Deep cuts".
Ali Moiz
February 13, 2023
Welcome to the first edition of the Founders Only newsletter — brought to you by the Stonks team (More specifically: Ali Moiz, Founder & CEO of Stonks).
This first issue was given the odd title of “The First Cut” to represent our acknowledgment of what will happen to the intended audience of this newsletter. There are over 14,000 of you receiving this email, and I expect that number to be cut in half (at least) over the next few days.
You’re on this list because you have interacted with Stonks using the persona of a “Founder.” You’ve probably signed up to attend a Demo Day (and used the label “Founder”) or applied to fundraise on Stonks. One way or another, we’ve classified you as a Founder, and we wanted to reach out and provide you with some value and entertainment.
If you stay on board, you can expect the following:
Insights from a Founder with 20 years of experience, 3 venture-backed exits (over $200M) with successful raises from Sequoia, a16z, Matrix, Pioneer Fund, and 300+ angels.
Trends in VC from helping 1,500+ startups raise.
Insights from the most prolific Angel/VC Investors and highly successful founders.
🔥 Memes!
A first look at what’s new with Stonks and how it could benefit you.
If you're sticking around, grab some 🍿🍿; Google and Microsoft are gearing up for a fight to the death over the future of Search and AI.
Today's Launch Plan:
Big G in the Ring: Google announces Bard AI and immediately gets punched in the face.
Wework’s Adam Neumann: Next startup will make tenants plunge their own toilets.
Level-Up: Michael Seibel (YCombinator) on why founders should consider getting a coach
One Question for Everyone: We asked prolific Angel Investors, VCs, and Top Tier Founders the same question.
What's the big Deel?: The $12B startup tries to create the "Apple of HR"
Bard makes a blunder; Google takes a tumble.
Last week, Google announced its answer to ChatGPT — a chatbot called Bard that will become “more widely available to the public in the coming weeks.” But the bot is not off to a hot start.
Google shared a GIF with their announcement that shows Bard answering the question: “What new discoveries from the James Webb Space Telescope can I tell my 9-year-old about?” Bard immediately drops some "facts," including one that states that the telescope “Took the very first pictures of a planet outside of our own solar system.”
One problem: the JWST did NOT take the first pictures of exo-planets. This was done in 2004 by some other cool tech.
This flub by Google immediately caused their stock to slide about 10%, which isn't surprising. It kind of makes you want to root for Microsoft, no? We're having fun with ChatGPT, aren't we? Time to switch to Bing? ¯\_(ツ)_/¯
WeWork’s Neumann finally explains what his new startup Flow does
At an investor conference, Adam Neumann finally sat down to explain what his new startup Flow does. And we know about as much now as before that session…which is not much at all.
We do know that investors have poured hundreds of millions into Flow, it has something to do with residential real estate, and that Neumann will incentivize his tenants to plunge their own toilets instead of calling him at 11pm.
Regardless of where this goes, the reality distortion field is strong with this one.
Founder Level-Up ⬆️ ⬆️ ⬆️
Being a startup founder is one of the toughest jobs in the world, particularly pre-PMF fit. We want to make it a little easier and help you level-up by sharing practical, useful tips & tricks in this founder-focused newsletter. It’s 2023, and it’s honestly surprising that founder coaching isn’t a best-practice already. Having an executive coach isn’t expensive, and truly helps founders get better outcomes. Investors should consider putting this in the term sheet: take my money, but get a coach.
Hear Amy Buechler and Michael Seibel from YCombinator on why every founder should consider getting a coach.
"One Question For Everyone" V-Day Edition
We asked some insightful Angels, VCs, & Founders the same question:
Is Product Market Fit binary, or can you plan for it?
If you're not sure if you have PMF, you don't. It hits you like a bus, and it's completely obvious when you have it.
PMF is a fuzzy metric, but generally, you know it when you see it, driven by intense customer demand. But finding PMF isn’t a one-time event. Many startups find traction among a specific use case or audience, and then it plateaus. The most successful startups expand their offering horizontally and/or vertically to capture PMF among a broader set of problems or audiences.
Yes, it is binary, AND you can forecast its arrival. It’s like falling in love.
When pre-PMF, you pick the right customer persona (the “right significant other”), do the right work necessary, and you’ll start to see positive indicators in the market (the “attraction”). You can plan accordingly when pre-PMF if the outcomes with customers continue to trend up and to the right (“the connection deepens”); however, premature planning can be risky, so you must be careful not to lose focus and continue to do right by the customers. Do enough work, and eventually, you’ll pass the threshold and “fall into” PMF.
And like love, you can fall out of PMF — the market is dynamic, so it’s important to continue to do the work to hold onto that state.
But unlike love, PMF is quantifiable and measurable. For more details, see “How Superhuman Built an Engine to Find Product Market Fit.”
PMF is usually obvious.
If you're wondering about it, you probably don't have it.
"Early signs," in my opinion, is just, "we think we have it, but too soon to celebrate."
When you have PMF:- The market is saying, "give me more."- You stop worrying about features and start trying to fulfill the demand.
I like the eric reis way of thinking. You have a Value Hypothesis and a Growth Hypothesis.
Value = do people want what I'm offering?
Growth = do I have a sustainable way for the actions of one user to drive me to the next user? (e.g., user 1 pays $, you take that $ and acquire another customer for less than what user 1 paid you)
Finding Product-Market Fit is a bit like falling in love — sometimes it's at first sight, sometimes it takes a shared experience for it to click, and sometimes it evolves over time. But if it's not meant to be, it's never going to happen, no matter what you do.
PMF tends to be really stark.
it's like a founder jumping into a river that is flowing 100 mph (if the river represents the pull from the market).
For example, one of the best companies I ever backed struggled for 18 months, experimenting with many ideas in a cool market. Once she found what to work on (within the first year), she had millions in revenue, and the growth has been parabolic ever since. She almost doesn't have to do any marketing because the clients are seeking her out to get her solution. It's remarkable.
What's the big Deel?
Unless you've been under a rock since before the pandemic, you're probably familiar with Deel, an HR/payroll platform that claims to have more than 15,000 customers, including Nike, Subway, Reebok, Forever 21, and Klarna.
The Company's Co-Founder & CEO confirmed that Deel's most recent round was at a $12B valuation 🤯
Founded in SF in 2019, this YC (W19) company's mission is to "allow businesses to hire employees and contractors in other countries in less than five minutes." Deel also says that it gives companies the ability to pay teams in more than 150 currencies with “just a click.” (Including Crypto!) It has since evolved its strict fintech model to what it describes as a “full-stack, truly global HR platform that is designed to manage your entire workforce in just one system, compliantly—from direct employees to international workers and everything in between."
They do all of the above QUITE well. Proof? They did $295,000,000 in ARR last year. That's a lot of zeroes. They say they'll hit $1B in revenue in the next 2-4 years.
BTW, they aren't sponsoring this email, but Stonks IS a Deel partner and if you try them out using this link, you'll get 10% off 👍🏻 (don't say we never gave you anything :)
The End
Thank you for your time and attention today. Hopefully, you found this first edition of Founders Only valuable! I'll leave you with some sage words of wisdom from Alex Hormozi:
— Ali Moiz, Co-Founder & CEO @ Stonks