Don't Put Your Eggs In An Investor's Basket

Here’s today at a glance:

Opportunity → AI eBook Reader

Framework → Product Discovery Framework

Tool → Resonance

Trend → Estate Planning

Quote → Don’t Put Your Eggs In An Investor’s Basket

PS, share your thoughts on today’s issue in the community groupchat.

🔗 Houck’s Picks

My favorite finds of the week.

Fundraising

How this company got 100 warm intros for their pre-seed round (Link)
A list of VCs that do a lot of pre-seed funding (Link)
How (unfortunately) to win pitch competitions (Link)

Growth

Step-by-step guide to go from 0 to $5M ARR (Link)
AI is a once-a-decade opportunity to build fast growing products (Link)

ICYMI

Founders in Los Angeles get a FREE month of therapy to help your mental health find PMF and crush loneliness (Link)*
An equity model for working with freelancers (Link)
Tips on thinking through an acquisition offer (Link)
The median salary for seed stage founders (Link)
A contrarian view on weekly 1:1’s (Link)
Sam Altman on the “bad” advice he gave founders at YC (Link)
How to bring “fun” to your company (Link)
Is having a cofounder outside the US a growth hack? (Link)
Loom’s new AI SOP builder will save founders time and money (Link)
Palmer Luckey’s advice on how to poach people from big tech (Link)

Opportunity: AI eBook Reader

It’s easy to forget how early AI still is, and also how slow incumbents are.

Wouldn’t you have expected existing ebook apps to implement AI features basically right away?

Link to X

The truth is that hardware takes longer than software, especially when it hasn’t had to evolve in over a decade.

The idea of rewriting is particularly powerful here, a killer feature. Want to read Harry Potter in the style of Cormac McCarthy or Ernest Hemingway?

This may seem like an obvious application of LLMs to a founder, maybe even one that borders on novelty, but there are genuinely useful features here that are waiting for someone to enter the market and build from first principles.

🧠 Framework: Product Discovery Framework

Chris posted this framework in January of 2022. It got 7 likes.

Since then, he’s founded a YC-backed startup that makes it incredibly simple and easy to send transactional emails and sequences for any company, with a revenue growth chart that looks like this:

freemium works
— Chris Frantz (@frantzfries)
3:50 PM • Mar 29, 2024

So maybe he knew what he was talking about, even if his Twitter followers weren’t too interested at the time.

Here’s the framework:

Pick a customer you enjoy talking to
Talk to 15 of them to be sure you do (and can get in touch with them)
Ask them to tell you a problem that’s more important than an 8 on a scale of 1-10
If that problem is generalizable to, make the smallest MVP you can (no code required, if possible)
Ask the 15 people if they’d pay for what you built, or would pay if you prioritized a certain feature they ask for
Repeat, with 50 new people. If the feature requests you’re getting are too varied, you may be solving the wrong problem.

Super practical and simple, but true! If you can’t find people to pay for your product, you likely don’t have a product that can turn into a business.

Click into the thread to read it in full:

Here’s a simple framework you can use to build a product that generates revenue and solves a real problem for your users.
This is a framework I’ve landed on after too many years building things people don’t want.
This gives you market pull, instead of push.
— Chris Frantz (@frantzfries)
5:01 PM • Jan 31, 2022

🛠 Tool: Resonance

Another week, another YC-backed AI-powered B2B startup.

But seriously, Resonance looks useful.

Traditional onboarding tools let you create static flows or experiences that users see. Resonance, on the other hand, lets you create contextual experiences that show up based on user triggers.

For example, maybe a user is hovering over one area of your app’s dashboard after signing up but not doing anything. Resonance lets you trigger a modal to explain more about what that feature does. The key is that this is entirely based on contextual user behaviors, so users get the information they actually want.

Pretty cool!

📈 Trend: Estate Planning

Fun fact: My first job after college was as an software engineer at a product studio where one of our products was estate planning software.

As boomers age out of employment, the interest in estate planning both by them and their younger, more digitally savvy children will increase.

We’re seeing the early signs of this with the estate planning subreddit (some more stats about and trending topics within it here).

Thankfully for you, the software we built was basic and (obviously) didn’t make use of AI. Tools that can prepare wills, trusts, and other estate documents can capture this trend, but there are likely larger opportunities around holistic trust management.

💬 Quote: Don’t Put Your Eggs In An Investor’s Basket

Over the last 2 months I’ve been interviewing founders who’ve successfully fundraised.

I’ve done about 50 interviews so far.

One of them mentioned their raise took 5x longer than it should have because they didn’t “run a process” and maximize the number of simultaneous investor convos.

Instead they tried to make it work with one or two at a time.

Save yourself the time! Talk to as many as you can without materially impacting growth and development.