Funding, focus, and doing things that don't scale

Executive overview

Taking investment while running side projects signals divided commitment — and kills your chances of building a successful company. Investors, accelerators, and acquirers all read it as a red flag.

Funding demands full focus; side projects and investment don't mix.

The eighth thing founders should never do

• Taking investment then starting side projects is an anti-pattern.
• Investment only works when you're fully committed to one company.
• Spreading effort across multiple SaaS products means none get the attention needed to reach escape velocity.
• Entrepreneurs naturally want to work on many things — but that creative energy is finite.
• Side projects in the same category (other SaaS products) are especially problematic; unrelated hobbies typically aren't.
• If you want to work on multiple products, bootstrap — don't raise funding.

The 1-9-90 rule for funding decisions

• ~1% of tech startups should consider raising venture capital.
• ~9% should consider indie funding (Tiny Seed, Indie.VC, UPECA, similar alt-VC funds).
• ~90% should bootstrap.
• Multiple products can coexist if they form a virtuous cycle feeding the same ecosystem — and if you have teams running each one.

Meta's ad-free subscription in Europe

• Meta is launching a paid, no-ads option in the EU, EEA, and Switzerland to comply with EU regulations.
• Pricing: ~$10.50/month on web, ~$13.75/month on iOS/Android.
• The model lets paying users opt out of ads and data use while keeping the free tier for those who can't or won't pay.
• Unclear whether this rolls out globally — Meta's core business is ads, so they have little incentive to expand it voluntarily.

Doing things that don't scale: Drip's early days

• For the first 20–30 trial users, accounts were created manually via the database console — no signup flow.
• There was no billing page; Rob checked in weekly by email or Skype to help users get value before asking for payment.
• Billing ran manually for months: Rob logged into Stripe and clicked "charge" on a calendar reminder each month.
• No delete buttons existed anywhere in the app for the first year or two; users could rename items instead.
• No search functionality was built until much later — early users didn't have enough data to need it.
• Lesson: you need the minimum viable action for each screen (create, edit, send) — almost nothing else.

Doing things that don't scale: LUGG's early days

• The two co-founders did all the moves themselves in rented trucks for the first four months.
• Their names, photos, and phone numbers were hard-coded into the app as the crew.
• Launched without payments — charged customers with a Square reader at the door.
• Camped in the IKEA parking lot in Emeryville to pitch customers struggling to load purchases.
• A move for a contact of Sam Altman led to a YC interview and acceptance in the Spring 2015 batch.

Why doing things that don't scale works

• Proving demand, sales, and willingness to pay is the hard part — automating fulfilment is usually not.
• Manual processes let you learn fast: Rob discovered it took ~14 days from install before Drip was clearly valuable.
• Pushing off engineering work (billing engines, cron jobs, UI polish) frees time for features that move the needle.
• "Man behind the curtain" operations are a legitimate validation strategy when done ethically.