From Zero to $10M ARR: Why Paul Graham’s “Founder Mode” fails, and how do it properly (+ my 4 rules for running a startup that changes your life)

Welcome back to issue #10 of the Zero to $10M ARR newsletter. We've got a serious value packed newsletter for you today! In the last week, there's been a raging conversation (courtesy of Paul Graham and Claude 3.5 + Cursor) on how to run a startup and what it fundamentally means to be a founder (and HOW to be a founder). So today, I'm weighing in on the conversation. Without further ado. Here is what we have on the docket for today's newsletter: - How-to "Founder Mode" the RIGHT way without destroying your company and reputation -- what Paul Graham failed to tell everyone (also check out [today’s LinkedIn post]() where we dive even deeper into the topic). - Alex Turnbull’s 4 rules for building B2B SaaS startups - Code is no longer the moat, and everything is changing because of it… ​ Alright! Let’s dive in! How-to "Founder Mode" the RIGHT way (without destroying your company and reputation) If you’re going “founder mode” as a first time founder, you’re going to come off like a micro-managing jerk and do more harm than good. ​ Now don’t get me wrong, I actually love the concept (and it’ll go down as a classic essay. I’m not going to lie, it’s a good read). It's a call to founders to be involved in their business on a fundamental level, and contradicts more than a decade of Silicon Valley conditioning about raising a round, quickly hiring a big team to "scale", and delegating responsibility instead of getting your hands dirty. And unfortunately, that philosophy leads to a 99% failure rate. So, enter Paul Graham and Brian Chesky with the rallying cry of "founder mode"! Now, even though Paul Graham (Y combinator founder) just branded it, I’ve been living this “founder mode” for 15 years at Groove and Helply. It’s WHY I’ve been successful. I also learned the hard way. Here are 6 steps Paul graham (Y Combinator Founder) DIDN’T tell you about how-to “founder mode” properly. This is a decade worth of learning condensed down to a 60 second read, and will spare you years of pain and missteps. 1. Data does the heavy lifting: Before making any move, do the research to ensure all major decisions are backed by solid data and research. Understand the “Why” driving your decision (hint: it’s in the data), potential outcomes, and risks. Steel man the counter arguement (do just as much research to counter your assumptions as you do to form a hypothesis). Only after you’ve done this do you pitch your stakeholders to get 100% buy-in. If you do the work and research but still miss the mark, you’re truly learning. When you do this, all effort leads to progress. I call this “Proof of Work”. 2. Learn from competitors but talk to your customers: Don’t just copy. Talk to your customer. Survey them, get on calls, handle support tickets. Learn their pains like they’re your own. This is how your business finds it’s legs. I used to mimic my top competitors, but it wasn’t what my customers were asking for. With a small team, there’s only so much you can focus on. 3. Communicate with data, not aggression: I used to be overly aggressive in my communication with my team. I thought it was passion. But the truth is, I didn’t do the “Proof of Work” to make a strong case. Passion is good, but let the data and your research do the heavy lifting. The hard charging CEO plays great in the movies, but not so great in the real world. Basically, don’t be an asshole. 4. Create a self-governing system: How?👇 Head over to [today’s LinkedIn post]() to see #5 and #6. I’d love to hear your take on the sudden rise of “Founder Mode” and your thoughts about it. Alex Turnbull’s 4 rules for building B2B SaaS startups Paul Graham’s new essay sent me into a deep dive reading his Y Combinator archive. As a serial tech founder and bootstrap evangelist, I thought the way he and other Y Combinator faithful (Sam Altamn, Garry Tan, etc) communicated the Y Combinator philosophy was a death sentence for 99% of young founders. But, fundamentally I actually liked some of his advice. So, it got me to thinking What if (for fun) I were writing the "bootstrapped tech entrepreneur commandments", if you will. This is what I came up with… Here are the 4 most critical rules for building a bootstrapped SaaS startup, IMHO. What do you think? 1. Interview at least 50 potential customers before writing a single line of code. I call this proof of work. Understand and internalize their pain points as if they were your own. 2. Be able to pre-sell your product before you’ve built anything. That means building a solution to a problem that is actually “lighting people’s hair on fire”. That also means receiving pre-payment (or at least an email list signup to a waiting list). There’s plenty of noise on the internet, I only want to build things people absolutely need. If the product doesn’t have “I can’t even imagine what my life was like before this product” potential, is it truly worth building? 3. Build in public, share every aspect of the journey with your ICP (meet them on the platform they are on). This will create community around your product and lead to more inbound and opportunities than you could ever imagine. 4. Keep your team lean. It only takes a team of 5 people max to hit $1M ARR as a B2B SaaS company. 1 founder who interviews customers, answers support tickets, and sets the course for the vision of the product 2 full stack developers 1 designer 1 growth marketer 5 (bonus). Oh yeah… be PROUD of your first product. If you build something you’re embarrassed about, it’s probably because didn’t talk to your customer, and the product sucked as a result. If you did talk to you customer, you’d be shipping something you’re proud of (doesn’t mean it can’t be rough around the edges) because you know you’re solving an important problem! That feeling would then be compounded by your customer getting something they desperately needed. This is the way. Code is no longer the moat, and everything is changing because of it… I saw this post by Shane Levine (Founder [@turbodesignco]() and I had to share it. This hit me right in the gut. I’ve been feeling this tide shift, but to hear it articulated in this way was spot on. ​ As a non-technical solo founder of a B2B SaaS, the world is a completely different place than it was 15 years ago. As a whole don’t think this rate of progress (the rise of AI) is comparable to anything that we have experienced as humans — and it’s only accelerating. AGI is going to re-write our first principles understanding of the world on a weekly (if not daily) basis. The rate of “progress” will be mind numbing. B2B SaaS and tech startups are one thing, but I don’t know how the human mind is going to adapt to having the fundamental truths of “reality” redefined on a near weekly basis as we achieve AGI and beyond. Exciting and terrifying all the same. Onward to the future! Alright, that does it for issue #10 of the Zero to $10M ARR newsletter! See you next week! Alex CEO & Founder, [Groove](=) & [Helply]()​ P.S. I’ll also be posting on LinkedIn seven days a week, 365 days a year. I’d love to hear your feedback on the new newsletter in the comments of my latest post. I read and reply to every single one. ​ Don't want to hear from us? You can [unsubscribe here](.