Y Combinator Startup Podcast
00:43:32 · Garry Tan, Paul Copplestone
[00:43:32] S1: We're seeing this moment where vertical SaaS founders actually are kinda struggling with raising series a's, you know, when you're subscale at, like, you know, five to ten mill ARR even, which, like, historically is a lot of ARR. Yeah. That's like a guaranteed series a even, like, nine or twelve months ago. And today, it's like, I don't know. People are kinda, like, not really into it for vertical. Like, horizontal and AI investments, like, seems like it's totally green light, but like vertical SaaS people are really struggling. But it's also sort of happening right at the moment where you can get to 10 to 15 mil, you know, often 25, 30 mil, 50 mil, with like 10 or 15 people. And so at that point, like, you're very profitable at that point. [00:44:19] S0: Yeah. Yeah. Yeah. It was like, if you got 15 people, 2,000,000 ARR per head, and with 50% margins, you're all making a million million a year. I mean, that's an amazing outcome for for a lot of people. Yeah. [00:44:31] S1: Simultaneous to that, we just do a lot of office hours with people who do... Like, they got the brass ring, and then they're bummed out that they can't raise the series a. And so, you know, many of my office hours there are just like, you're probably gonna look back on this as a blessing because you don't need the money. Like, time was, you had to raise like a $100,000,000 to get to like 30,000,000 a year in revenue because you just had to hire all these people, and now you don't have to do that.
00:44:31 · Garry Tan, Paul Copplestone
[00:44:31] S1: Simultaneous to that, we just do a lot of office hours with people who do... Like, they got the brass ring, and then they're bummed out that they can't raise the series a. And so, you know, many of my office hours there are just like, you're probably gonna look back on this as a blessing because you don't need the money. Like, time was, you had to raise like a $100,000,000 to get to like 30,000,000 a year in revenue because you just had to hire all these people, and now you don't have to do that. [00:44:56] S0: Yeah. Yeah. There's a real thing in startups like the badge. I mean, it was the same for me. Like, to get funding at the start, like, feel... Felt like, you know, I was achieving something great. But actually, you know, to actually not fundraise now would, in my mind, be like, oh, that's achieving something great. So, like, I'm a little bit envious of these companies that that are getting to that point. [00:45:20] S1: Yeah. So I don't know. I mean, it's a super changing world, but your Supabase of all the companies has really been able to ride high through every single wave. Do you have any thoughts for people as they try to emulate what you've done?
00:45:34 · Paul Copplestone
[00:45:34] S0: One thing that helps me sleep well at night is that it's kind of the Lindy effect. Databases have been around for fifty years. I'm... I think they'll be around for another fifty years. And this is one that at the end of AI, no matter what, I'm pretty certain there'll be databases. So pass from that whatever you will. Like, you gotta choose categories that are very durable. And if you're going to bet your entire life, which is basically what I'm doing, you choose the category that you feel is worth investing in. I think the other one is, like, things are changing so fast. So we don't try to have all the answers as Supabase, but we just try to make sure that we're always adapting the fastest. And, you know, for me, I've evaluated or, like, watched a lot of my favorite DevTools. They kind of start with the developer focus, and then they always move up, and they become very corporate, and they kind of stagnate a lot and they lose that that love. And from our point of view, at least from my point of view, companies like Stripe, for example, they have this real... Like, someone like a a founder who just cares about just, like, almost focusing on what the new ways of building are. And so if you're, like, building for this next wave, you just always need to be one eye on the future of what is next, which is a very short timeline now. Things are moving so fast. But being super adaptable and making sure you've got capacity within your team to shift very fast, that's the thing that we're that we're focusing on for the next year.
00:47:15 · Harj Taggar, Paul Copplestone, Garry Tan
[00:47:15] S2: I think that you've learned maybe any specific things you've learned there? Like, because you've had, maybe you had the initial vibe coding inflection point and then Opus four eight inflection point and just cogen, like, when the next sort of wave, hopefully next, like, many inflection point hit for you, but are there things that you'll you'll do differently to be better prepared for it? [00:47:34] S0: Well, first of all, like, dogfooding is one of the most important things, at least from our perspective. So I'm always trying these tools with ours to know, oh, where are the gaps? There's no better feedback than you getting stuck on your own tooling. And then having capacity. So we try to partner with with the the key players in the space. And this ecosystem player has been really helpful because they give us feedback on what they're building so that... And we try to leave some capacity within the team, which is also very difficult. But... So that when they have ideas, we can we can give it a shot. And not a lot of the bets actually win even when they seem like we're partnering together to do some new cool thing. We actually don't know. They might sound cool, and we try them out and they they they kind of flop. But the ones that do work then end up meaning that we ride this awesome wave together. [00:48:28] S1: That's a great note to end on. Paul, thanks so much, man. We'll see you guys next time.