Founders are returning to lead their pre-AI B2B companies as AI presents challenges, exemplified by Daniel Dines at UiPath and Aneel Bhusri at Workday. These companies face stagnant growth, evidenced by Workday's decelerating revenue and UiPath's guidance cuts, necessitating foundational rebuilds that non-founder CEOs struggle to execute. While founders' returns stabilize and rebuild the foundation, reigniting growth remains elusive, highlighting the unique role of founders in these transformations.
Selling software into Europe now comes with a breach-reporting clock, and it starts this Friday. From September 11, any company selling hardware or software that connects to a network in the EU has to report an actively exploited vulnerability under the Cyber Resilience Act. The first warning is due within 24 hours of finding out, a fuller notification within 72 hours, and a final report within 14 days of a fix. Severe incidents follow the same 24- and 72-hour steps. There is no revenue threshold, so a five-person startup with one EU customer is inside the rule.
A comprehensive dataset shows that around 38% of VC professionals have at least one successful investment, but only 3% hit ten or more successful ventures. Success correlates with skill, not luck, as the top 1% of VCs account for over half of all net profits in the industry. This concentration of success suggests that a few individuals drive most of the economic impact in venture capital.
Consumer attention is hard to win over because people crave novelty. People are so cognizant of AI slop that any sign of AI use can ruin an entire product. The upcoming abundance of products will mean there will be an infinite amount more supply than demand. This means average product retention will collapse.
Sequoia advises its portfolio companies to own their AI models down to the weights for better performance. Open-weight models like Qwen and GLM allow companies to start near the performance frontier and improve from there. Sequoia's framework outlines a four-step roadmap for deciding which parts of the AI stack to own versus rent, emphasizing cost, speed, and control.
Lovable is a product-led growth company, and most of its revenue comes in self-serve. It has a great sales team, but its main motion is still very bottom-up. It is an AI company, so every time someone uses its product, it costs the company money. A huge part of Lovable's growth strategy is based on giving away the product for free. This post explains how the company does this while remaining profitable and the problems that can arise from doing so.
Claude for Microsoft 365 enables Claude to work inside Excel, PowerPoint, Word, and Outlook. The integration allows users to ask questions about data and create content, as well as draft emails. Every edit is reviewable, and the agent follows users' templates and formatting. Claude for Microsoft 365 works with organizations' existing compliance frameworks.
CDN costs should be predictable, but viral launches, traffic bursts, or misconfigured routes sometimes turn an otherwise normal month into an unexpected bill. Vercel has introduced Flat Rate CDN for Pro teams to provide more predictable monthly bills. It has built-in spike protection and service tiers designed for different traffic profiles. Teams can now choose the CDN capacity that corresponds to their typical usage profile, pay a known amount monthly, and avoid surprise overages from temporary spikes.
TeamAI manages a team's skills, rules, MCP, and knowledge across AI agents. Teams just create a shared-experience repository on their git host, grant write access to team members, then run the assistant. Once initialized, every AI session will automatically pull the latest skills, rules, and other harness updates published by administrators without any manual sync required.
Consumer AI products built around single-player utility remain vulnerable to rapid switching as model performance changes. Durable advantage still comes from network effects, marketplaces, and platforms that become more valuable as more users join, transact, and coordinate.
You've failed as a manager if someone is surprised they are getting fired for performance. Underperforming employees should have their performance discussed regularly before anything happens. If they still aren't performing after several weeks, have a lawyer create separation documents for them to sign, then offer them severance in exchange for signing the documents. Communicate the decision to the team with respect.
The shortlist worth building is a list of people who make each other better.
Roman Ugarte, product lead at SpaceXAI, recently appeared on a podcast to talk about how a small, isolated team took Grok Bot from its first line of code to a working internal product in four weeks, and to a hugely successful public launch just three weeks later.
To drive growth, focus on understanding and mapping your company's complete growth system, identifying constraints before choosing tactics or making hires.
AI can generate memos but fails when follow-up questions arise, exposing a lack of understanding.
Early investors might not follow into Series A due to fund math, not a lack of confidence.
Sponsored
micro1 partners with companies to license operational data for training and evaluating frontier AI models.
If your company has 30+ employees and years of data showing how work actually gets done, including SOPs, project histories, knowledge bases, CRM data, QA processes, or internal workflows, it could qualify for an Enterprise Data Partnership.
Businesses can earn $100K-$2M+ [5] depending on the volume, quality, and uniqueness of their data. Your company retains ownership of its underlying data, and all data is securely transferred, de-identified, masked, and transformed before onward licensing for AI training.
California signed SB 122 on June 29, which will apply sales tax to SaaS and AI tools starting on January 1. The rate is 7.25% at the state level plus local district taxes, so the total lands between 7.25% and 10.75% depending on where the buyer sits. Sacramento projects about $2B a year. Remote sellers cross into collection duty at $500,000 in California sales. Every California customer's invoice grows by up to 10.75% that day, and the vendor collects it, so pricing pages, billing systems, and renewal conversations all change before year-end.
A small e-commerce analytics company compared over 2 million product listings across more than 100,000 search result pages and AI Mode answers over 23 days in August, covering the US and UK. Products that appeared in both surfaces were 21.6% more expensive in AI Mode, with a median price of $149 against $100 in traditional search. Only 1.28% of products in traditional results also showed up in AI Mode for the same query, so a rank in traditional search says almost nothing about whether a product is in the answer box. The main seller differed on 49.6% of matched products.
AI will make systems of record more important as customers will soon be able to pipe the system's data into an AI agent and skip the AI-native app. An incumbent system of record working with a general agent will be enough to get the work done. The incumbents have an incentive to control and charge for access to their data, and also to push their own agents forward. The vertical AI-native company has to perform a specific cross-system job better than an incumbent's purpose-built agent or a general-purpose agent that can reconstruct it from the underlying tools.
Announcing the behavior you want does approximately nothing. You get the behavior you reward. This is true anywhere people watch each other for signals about what counts. It matters most when trying to fix something in the culture.
Your first customers are most likely already in your network. Start with ten warm prospects, make a direct offer with a price and deadline, deliver manually, and use ten real sales conversations to validate or reject the idea quickly.
A one-person company can run recurring work through Slack by giving one AI assistant shared business context, connected tools, scheduled briefs, and strict approval gates. The setup works best when workflows are added gradually and corrections become standing rules.
Zenith is a ready-to-code, distraction-free experience on Windows on developer-class devices. It will first become available with AMD's Ryzen AI Halo. Zenith devices will come with a preconfigured Windows setup for development and a set of tools curated for what developers need. They will be capable of running 30+ parameter models locally and unmetered.
Project HydraFusion delivers frontier intelligence through runtime orchestration. It can create a full execution plan, choose from models across multiple providers to draft, critique, and revise, or cascade to more powerful models to complete tasks. Developers just select HydraFusion like any other model, and it chooses a workflow that balances performance, cost, and latency for each task. HydraFusion is now available to users on all GitHub Copilot plans as a research preview.
Tokens are getting so cheap in China that businesses give them away as loyalty rewards. Daily token use there reached 500 trillion this year, up from 100 billion in early 2024. Chinese models cost 60% to 90% less than American ones. China Telecom sells 10 million tokens a month for about $1.40. A Beijing dumpling restaurant hands out more than 100 compute vouchers a day, and a Shanghai bank bundles up to 3 billion Qwen tokens with a credit card, in the slot where airline miles used to go.
Industrials made up 23% of the 245 companies launched so far in YC S26. The previous five-year average for industrials was just 6.6%. SaaS has fallen to 12% vs a 28% five-year average. B2B software overall is at its smallest share since S22 at 52%. AI appears to be on a downward trend, but this may just be due to companies no longer tagging themselves as such as it has become a default.
Nearly all startup ideas can be duplicated - their value is the other ideas they lead to.
Charging per seat is slowly making less sense.
Most founders try every acquisition channel at once and never learn which one works.
Your buyers are asking ChatGPT what your product costs, and it is mostly not reading your pricing page to answer.
Sponsored
8 million tech professionals read TLDR to stay on top of the news, ideas, and tools shaping their work. Put your brand in front of them. Become a TLDR sponsor [4].
Venture capital in the US skews towards scaling over profitability, with significant implications for startups. Founders face a choice: build a smaller, profitable business or pursue rapid revenue growth, often giving up control and delaying profit. Market dynamics, industry structure, and access to capital heavily influence these critical decisions, leading to diverse outcomes from successful scale-ups like Google to flawed models like WeWork.
2026.09.04·aswathdamodaran.substack.com·33 min read·TLDR Founders 74% of 150 enterprise IT professionals in a survey plan to expand their AI budgets in the next 12 months, and the rest plan to hold spending steady. However, these same enterprises say that fewer than half of their AI pilots ever make it into full production. Even when an enterprise does roll out the AI tech, it doesn't commit to it long term. Enterprise revenue remains insecure, even after a startup's AI product graduates out of a pilot phase and gets adopted by a company.
Forward-deployed engineering can teach you which workflows to own, how to institutionalize them, how to price the value you create, and give you the customer perspective and language to understand how to sell and market. Companies that use FDE as a crutch risk becoming consulting firms. Using FDE with reckless abandon may result in a sprawling roadmap and an incoherent product without compounding value. The best Vertical AI founders use FDE to parse granular customer operations, iterate to a generalizable product, and unearth the action layer of an industry.
Warm investor introductions work best when founders first create value and credibility around a fund's thesis. Portfolio founders, useful content, helping portfolio companies, and advice relationships can turn outreach into trust before any fundraising ask.
A founder who took GojiberryAI from nothing to about $3.5M ARR in twelve months, and got into YC, wrote up what he would do from zero. His answer is that reply rates come down to who you send to. He sold with a six-slide deck and made his first $10K before writing code. His customer was painfully specific: founders at 20-person SaaS companies about to hire a first sales rep. Outbound went only to people showing intent, and he puts the reply rate at 25-40% against the usual 1-2%. One channel at a time, priced at $99 a month.
Agents need identities and credentials. This usually means handing them a long-lived API key or letting them borrow a user's session. Agent Auth gives agents real identities in AuthKit. Users define blueprints for what an agent is allowed to do, and the agent gets short-lived, tightly scoped tokens every time it runs.
Google has added three new voice-activated features to its Google Workspace products. Users can now speak naturally to draft documents, locate important information from their inbox, and capture fleeting thoughts quickly. The new features are rolling out this week. They will be available in Gmail and Keep for Google AI Plus, Pro, and Ultra subscribers, and in Docs for Pro and Ultra subscribers. They are also coming soon for Google Workspace business customers.
AI productivity may raise quality rather than reduce human effort. In one writing workflow, editing volume stayed constant while AI lifted the quality floor, suggesting automation lets knowledge workers concentrate on craft and produce better work with the same effort.
Series A rounds are growing larger, with median sizes quadrupling over the last decade, pushing many funds out and refocusing investments into pre-seed and seed stages. The market now features fewer Series A investors, leading to less liquidity and an emphasis on companies with extreme growth or ambitious narratives. Small funds struggle as they must adapt to these expectations while focusing on higher concentration strategies and potential exits in the changing landscape.
Prepare for Silicon Valley fundraising by adjusting to its faster pace and intense urgency. Seek feedback from current, local founders or spend 2-3 weeks in San Francisco for real-time insights. This approach helps bridge the velocity gap between Silicon Valley and other regions.
AI tools are masking critical growth issues in startups by making operational workarounds too easy, preventing necessary organizational changes for scaling.
65% of startup failures result from co-founder conflicts, making solo founding an attractive alternative despite its own challenge of isolation.
Doug Leone, after 26 successful years at Sequoia, says he will consider retiring if he feels irrelevant in nine months.
People love to say build something people want, but a seed fund estimates that about 5% of its early-stage portfolio has a demand problem, while the other 95% have a customer-acquisition problem.
2026.09.04·thefounderplaybook.hustlefund.vc·4 min read·TLDR Founders Sponsored
THE BIGGEST FALSE DICHOTOMY IN AI: a costly frontier model for everything, or a cheap model everywhere. (Only to restart tuning with each new model release.)
Finest finds the model your work needs:
👉 FINEST API [5] serves a lower-cost configuration only when it clears your task's quality bar. Otherwise, the model you named serves.
👉 FINEST CODE [6] brings the same evidence-gated approach to Claude Code, with Claude as the default and fallback.
All you do is change two lines of code. You keep your prompts, model IDs, tools, and workflow.
Investment committees now pause weekly on AI companies with great revenue curves to ask what is truly unique, since every viral product has copycats. As one founder-investor put it, AI made it 10x easier to build a $10M ARR company but did not make it 10x easier to build a $1B one. A seed and Series A investor at FPV Ventures calls the stall zone the new valley, $5M to $25M in ARR. Carta found 15.4% of Q1 2022 seed companies reached a Series A within two years, down from 30.6% for 2018. The four ways out are talent M&A and seed-strapping, raising small, getting profitable fast, and keeping 80% of the company.
There are three ways to make money in the AI industry: models, the harness, and everything else the model and harness need to stay healthy at scale. Founders picking a category need to make sure they're using the right playbook. The categories are obvious, but the strategies are close to inverted. This article looks at each category to see what works.