A Product Market Fit Show | Startup Podcast for Founders
00:22:55 · Peter Walker, Pablo Srugo
[00:22:55] S0: Yeah. It's a good question as to whether or not the returns will flow to places two through five in a lot of these industries. I think historically, even though we said they were winner take all, we never actually believed it. Like, you can do pretty well as number two. Now I think that is an open question, especially at the scale that you need to like, back again to the Decacorn plus kind of scale. If you are not the clear market leader, the worries, like, compound on themselves a lot faster. [00:23:22] S1: And then you have data on the employee front, like team sizes. I know that's been a trend. Obviously, people talking a lot about, you know, the single person unicorn, which I know is more kind of story than reality. But what are you seeing in terms of team sizes, you know, ESOP, all these sort of things? [00:23:37] S0: Well, I don't know. Maybe, you know, the OpenClaw founder got there. We don't know. We don't know what the purchase was, but [00:23:43] S1: That's true. Perhaps? One out of 7,000,000,000 has accomplished it. Yes. Great. [00:23:48] S0: Right. Outlier case for sure. Team sizes are getting smaller. We're seeing, like, the median seed stage company on Carta has four employees, not counting the founders. The median series a company probably has between fifteen and seventeen, but probably closer to 12 to 15 by the end of the year. So definitely the case that they're doing this with fewer people. [00:24:09] S1: Do you know what it might have been, like, three, five years ago for median c, median median a?
00:24:09 · Pablo Srugo, Peter Walker
[00:24:09] S1: Do you know what it might have been, like, three, five years ago for median c, median median a? [00:24:13] S0: Yeah. Median c would have been more like six or seven. Median a would have been more like 45. [00:24:17] S1: Okay. [00:24:17] S0: Yep. [00:24:18] S1: Four is small. Like, and again, I think I think it's great if we end up with more seed companies, each one is smaller. Right? Like, that would that would be the best possible outcome in my opinion.
00:24:18 · Pablo Srugo, Peter Walker
[00:24:18] S1: Four is small. Like, and again, I think I think it's great if we end up with more seed companies, each one is smaller. Right? Like, that would that would be the best possible outcome in my opinion. [00:24:28] S0: I hope that's the case. I mean, the data from Stripe Atlas suggests that that is the case. Like, we're seeing it, you know, more and more companies are signing up for card at our launch stage where they're not you know, they're they're getting it for free until they raise a million bucks. I think it's a big question as to more companies are not being venture backed. Oh, interesting. So it's it's a question of do you just, like, is the thousand flowers blooming mostly bootstrapped angel funded companies, or is it gonna be VC backed companies as well? Because we really haven't seen the VC part of the market change all that much. It hasn't experienced the same sort of rapid growth that the Bootstrap side of the market has. So I think there's think that's an open question. And then as you said, yeah, each one of those companies is gonna be smaller in terms of headcount, but net, will they employ more people? The employment question is everyone's favorite one. You know, I go back and forth on the day about what I think the impact of AI is gonna be on employment. But right now, it's seems like it's hiring is at a low ebb across VC backed startups. So maybe that'll change, but I'm not sure.
00:25:26 · Pablo Srugo
[00:25:26] S1: I mean, my complete like, my end fully anecdotally backed kinda thesis is assuming you can get the more or less the same done because of AI, you're all else equal better off with four people at seed than seven in terms of those odds of success just because not only is potentially your burn lower, that depends on the the salaries, but not only is potentially your burn lower, just in terms of the overhead that it means, like, you and two other people in a room is one world. You and six other people potentially not even in a room is a different world and obviously a 20 and so on. But every single time you add, you double the team size. It might seem like a small difference, four or seven, but it's almost a doubling of the team size. The amount of communication, the amount of interpersonal problems, the amount of non related defining product market fit issues you might have just grow. And so, again, all else being equal, I like the odds better if all seed startups somehow are able to do it at four versus needing seven in terms of their ability to to figure something out?
00:26:22 · Peter Walker, Pablo Srugo
[00:26:22] S0: I do too. I think it's probably better overall and more capital efficient in a lot of old things. I mean, it's just a question of, is that enough net employment for for startups as a whole? I mean, I guess, you know, it's not it's not the job of an individual founder to care about that. But across the industry, you know, there's a lot of worries. There's just a lot of anxiety. I don't know if you feel this as much. But in SF, it's exciting. Yes. But people are really anxious too. There's just like an undercurrent of uneasiness that is all over tech right now, it feels like. [00:26:53] S1: Yeah. I I think there is. I think it goes, like again, it's not where my given what I do, like, I spend most of my time thinking about. But and there's also a wide spectrum though of, like, how much people, especially outside of tech, really leverage these things and use them and rely on them. Like, I mean, we're in a bubble. Like, we're a 100% in a bubble. Right? [00:27:09] S0: So 100%. [00:27:10] S1: Yes. And what do we usually do with the bubble? It usually pops. [00:27:14] S0: At some point, it usually pops. [00:27:16] S1: Question is when? [00:27:18] S0: You got a great s one out there. A great maybe not as great as people were expecting for SpaceX. We'll see. But I don't know. I expect that IPO to go well. And then the next two, maybe later this year, maybe the year after. I don't know. And then then it's all on the table. Like, if one of those IPOs really flops, there's gonna it's gonna be a serious problem.
00:27:37 · Pablo Srugo
[00:27:37] S1: Yeah. For sure. But it's hard to imagine, like, you look at op like, the amount of interest in my again, no expert, but, like, OpenAI, Anthropic, plus the numbers. And the multiples on those numbers are high, but not crazy high relative to their growth. So it's not as clear as '99 type bubble stuff. We're just not The multiples at least are not at that level. Now what could happen is it just plateaus. That's where things really hit the fan, because all of a sudden the multiple eye looks great when you're 10x ing, looks absolutely ridiculous when you're growing 20% a year. Right? We saw it in SaaS. We just saw it in SaaS. So that could happen, but who knows? The other thing I was gonna ask about is if you have any data on solo founders. That's related to that other question, but that's been a big topic, especially for potentially nontechnical people. I went through this not long ago, where it's like you start playing with coworker Claude, and all of a sudden you're building an app. And it was a shitty little app I'm never gonna deploy, but I'm like, man, I've never built anything on my own. It's a true zero to one moment. And I can imagine, you know, many different founders across the world saying, holy shit. Like, I don't need anybody else.