A Product Market Fit Show | Startup Podcast for Founders
00:25:26 · Pablo Srugo
[00:25:26] S1: I mean, my complete like, my end fully anecdotally backed kinda thesis is assuming you can get the more or less the same done because of AI, you're all else equal better off with four people at seed than seven in terms of those odds of success just because not only is potentially your burn lower, that depends on the the salaries, but not only is potentially your burn lower, just in terms of the overhead that it means, like, you and two other people in a room is one world. You and six other people potentially not even in a room is a different world and obviously a 20 and so on. But every single time you add, you double the team size. It might seem like a small difference, four or seven, but it's almost a doubling of the team size. The amount of communication, the amount of interpersonal problems, the amount of non related defining product market fit issues you might have just grow. And so, again, all else being equal, I like the odds better if all seed startups somehow are able to do it at four versus needing seven in terms of their ability to to figure something out?
00:26:22 · Peter Walker, Pablo Srugo
[00:26:22] S0: I do too. I think it's probably better overall and more capital efficient in a lot of old things. I mean, it's just a question of, is that enough net employment for for startups as a whole? I mean, I guess, you know, it's not it's not the job of an individual founder to care about that. But across the industry, you know, there's a lot of worries. There's just a lot of anxiety. I don't know if you feel this as much. But in SF, it's exciting. Yes. But people are really anxious too. There's just like an undercurrent of uneasiness that is all over tech right now, it feels like. [00:26:53] S1: Yeah. I I think there is. I think it goes, like again, it's not where my given what I do, like, I spend most of my time thinking about. But and there's also a wide spectrum though of, like, how much people, especially outside of tech, really leverage these things and use them and rely on them. Like, I mean, we're in a bubble. Like, we're a 100% in a bubble. Right? [00:27:09] S0: So 100%. [00:27:10] S1: Yes. And what do we usually do with the bubble? It usually pops. [00:27:14] S0: At some point, it usually pops. [00:27:16] S1: Question is when? [00:27:18] S0: You got a great s one out there. A great maybe not as great as people were expecting for SpaceX. We'll see. But I don't know. I expect that IPO to go well. And then the next two, maybe later this year, maybe the year after. I don't know. And then then it's all on the table. Like, if one of those IPOs really flops, there's gonna it's gonna be a serious problem.
00:27:37 · Pablo Srugo
[00:27:37] S1: Yeah. For sure. But it's hard to imagine, like, you look at op like, the amount of interest in my again, no expert, but, like, OpenAI, Anthropic, plus the numbers. And the multiples on those numbers are high, but not crazy high relative to their growth. So it's not as clear as '99 type bubble stuff. We're just not The multiples at least are not at that level. Now what could happen is it just plateaus. That's where things really hit the fan, because all of a sudden the multiple eye looks great when you're 10x ing, looks absolutely ridiculous when you're growing 20% a year. Right? We saw it in SaaS. We just saw it in SaaS. So that could happen, but who knows? The other thing I was gonna ask about is if you have any data on solo founders. That's related to that other question, but that's been a big topic, especially for potentially nontechnical people. I went through this not long ago, where it's like you start playing with coworker Claude, and all of a sudden you're building an app. And it was a shitty little app I'm never gonna deploy, but I'm like, man, I've never built anything on my own. It's a true zero to one moment. And I can imagine, you know, many different founders across the world saying, holy shit. Like, I don't need anybody else.
00:28:37 · Peter Walker, Pablo Srugo
[00:28:37] S0: I can just do this. 100%. We're seeing a lot of that. We have, I think, at last count in 2026, something like 36 or 37% of the companies on Carta that joined us this year are solo founded. A lot of those companies will end up not being venture backed. So the venture backed percentage is probably more like a quarter maybe, But that's still very high relative to where it was ten years ago, and I just think we're gonna continue to see that expand. What I hope [00:29:05] S1: And what do we what what would it have been five, ten years ago? [00:29:08] S0: For the venture backed, it would have been, like, 10%. So it's it's more than doubled. [00:29:12] S1: What about the non like, if you just look at, let's say, three years ago, number of companies started by solo founders, venture backed or not, what would that have been, like, instead of 37%? That would have [00:29:20] S0: been more, like, 25%, 26, and now it's 35, 32. [00:29:25] S1: So it's still a 50% increase. [00:29:27] S0: Yeah. Over the last five years. Material increase for sure. What I hope is that these companies what I haven't seen so far, and what I hope happens, is that these companies that are being built by a solo founder grant equity to their early team in a different way. Like, there are just higher levels of equity granted to those founding engineers, etcetera. We really haven't seen it. I was expecting it to be like [00:29:48] S1: Interesting. [00:29:48] S0: The main way that a solo founder got to throw around their weight differently. Like, it's a competitive advantage. [00:29:55] S1: Yes.
00:29:55 · Pablo Srugo, Peter Walker
[00:29:55] S1: Yes. [00:29:55] S0: But I haven't seen it very much. So that's a shout to solo founders like, you know, if you have that extra 40% of equity, use it on the early team. [00:30:04] S1: And even in the you know, I I could see that in the non but if you look at the solo founders, the 25% that do end up venture backed, in that group, you're still not seeing a difference in terms of those first few grants relative to to your normal venture backed company? Not massively. [00:30:19] S0: I mean, they're a little bigger. They're not a lot bigger. Maybe the fact that they're a solo founder doesn't really play into that compensation conversation like there's other criteria. And I think it probably eventually should if you're competing with the same equity resources for another fantastic candidate that some other startup is super interested in. Or maybe I'm I'm missing a part of the market.
00:30:40 · Pablo Srugo
[00:30:40] S1: I would agree with you. But I would also understand again, and this is like, you look at the data first and you explain the story, but, like, it does make sense to me that it wouldn't just happen right away because a solo founder is certainly not gonna think, oh, I've got extra equity. Let's give it away. It's just not the mindset. They're gonna say, I don't care what I started with, what does it cost me to get a head of sales or a head of engineering or whatever it is that I need? Okay, cost this, I'm giving that, that's what I'm giving. But what might happen over time is the fact is if you give more, you can get more in terms of the bar. Right? That's just you pay more, you can get better talent. It's a very obvious thing. And so I'll give you an angle to tie back to this. I had a a solo founder who's a salesperson. You know, they they build. They have a few engineers that are doing the stuff, great great engineers. And then it just became obvious that they needed, like, a VP eng, a head of eng. And it was funny talking to trying to recruit someone and obviously talking to other founders to get like, hey, who do you know? That's great. And some people said to me, this this is a seed stage startup. They're like, why are you looking for a VPN? This is way too early for a VPN. I'm like, you have to understand that this was a technical founder. Like, you're a technical founder. Not only that, if you think about your average startup in your mind, you're thinking there's two or three founders, and one of them is a CTO or technical founder. In which case, yeah, a seat stage is way too early to hire a VPH. But you have to think of this more like if you're starting a company as a sales business person, it's very classical advice to get a technical co founder. Very classical advice. So if you're not gonna do that because you don't need to, and you don't wanna part with 30%, you're gonna need to fill that gap. There's just a bigger gap for you than somebody else. And then the question is, are you gonna go for your average? Let's say the grant is 2% normally for a VP inch. But if you're this hybrid co founder and you just need to fill that gap more, you can maybe reach up, that's the competitive dynamics that you're talking about, and do a 5% grant, maybe that becomes an edge.