STARTUPS (STILL) AREN'T BUSINESSES (YET?)

Summary from the TLDR Founders newsletter

Silicon Valley follows two laws: Richard Sutton's "bitter lesson," which says overwhelming compute beats clever logic, and Silicon Valley's understanding that startups aren't meant to be businesses that make money steadily—they're assets designed to be sold for huge sums all at once. Despite the recent wave of efficient AI startups like Arcade ($5M revenue with 5 employees) and Genspark ($10M in nine days), the fundamental model hasn't changed. Windsurf is reportedly selling to OpenAI for $3 billion after building a profitable coding tool with a small team, which confirms that even the most efficient modern startups aren't being built to keep their profits. The goal remains to sell shares, not generate cash flow. "Efficiency" is just today's trendy scale on which startup shares are weighed.