Shiny Garbage
3 takeaways from my conversation with Igor Belagorudsky, President at FastCTO
There's going to be a lot more garbage. It's going to be shiny garbage, but it's going to be garbage.
Today, I’m breaking down 3 takeaways from my discussion with Igor, the serial entrepreneur behind FastCTO.
Check out our full conversation + how to connect with Igor here.
The Observer Express
Don’t have time to read the entire post right now? No worries, here are today’s 3 takeaways:
Best Software DD Question to Ask: Does this Actually Solve the Problem? The technical details are WAY less important.
Second-Time Founder ≠ Higher Odds of Success. Sometimes experienced people have ideas that suck.
Some Tech Debt is Fine (for Now). Track it and prioritize - one crooked log is probably NBD.
1. Best Software DD Question to Ask: Does this Actually Solve the Problem?
Naturally, given his expertise, I asked Igor how he would encourage the average investor to diligence a startup’s tech stack. His response surprised me:
So the stack itself doesn't matter, but the question that non-technical investors need to be asking is: “Does this solve the pain point it aims to solve?” The stack is just how does it solve it?
But the stack aside, the key question is: “Does it solve?”
I'm not a doctor. I don't need to know what polymers you use, because I wouldn't know the names of them anyway. What I need to know is evidence that the thing you're thinking about does the thing you're telling me that people would pay money for.
2. Second-Time Founder ≠ Higher Odds of Success
All else being equal, if given the choice between a 1st and 2nd time founder, most investors would choose the 2nd time founder. Igor’s perspective? That’s less important than you might think.
I'm going to go a little bit against common thought on this because, for a lot of angels, the more times [a founder has] been through this the better chance they have of raising money. I'm more of a “past performance doesn't indicate future returns” type of guy.
I've had a number of startups. And it's not like every next one had a greater chance of success. It's up and down and up and down and up and down because sometimes your ideas are good and sometimes they're not good. And startups are a numbers game.
3. Some Tech Debt is Fine (for Now)
I often hear founders and investors voice concerns about “under engineering” and creating too much “tech debt”. Igor’s response? Keep track of it, prioritize, and we’ll fix it later if we need to.
Imagine you're building a log cabin or Lincoln logs, and imagine that it's just a simple, square tower. If one of those logs is not perfectly on correctly, and you just leave it like that and keep building up, it'll work for a few levels, but it's going to eventually fall over because of that log, right? It's going to start leaning more and more and more and more and more. And the more you build on top of that, the harder it's going to be to shift that log back into place. And the more of these not perfectly placed logs there are, the more tech debt you have.
If you know that you're building five levels high and on level four you have a crooked log, is it worth fixing it?
3 Lessons Learned
Deal terms are a sticking point for everyone right now.⚖️
I had like a dozen conversations about valuation this week. Founders: would you rather have a small % of a big pie or 100% of a pie rotting in the trash? Deal terms are regional - what raises just fine on the West Coast will immediately ostracize investors in the South. It’s all about coming into the discussion at a “reasonable” range to start a conversation, otherwise, investors will just be offended and move on to the next deal.NotebookLM is literally insane.🧠
If you haven’t played with this thing, you should. Carve out the time and just do it. I’m currently building like 5 different brains and it’s truly wild how much content this thing can synthesize. Now accepting preorders for AndrewGPT!
Speak to the people who care. Way more fun.🎤
I think I blew some minds this week. I gave a presentation to a group of students at Texas A&M University for the Startup Fast Pass program, and one of the things I said was “If you have other stuff to do, that’s fine. I’m here to present to those of you who are interested in this.” Several came up afterward and said this was shocking to them, but it’s something I’ve started saying during a lot of the trainings and volunteer teaching sessions I run. Here’s a link to the full presentation.
3 Interesting Links
What is driving high valuations for pre-seed and seed deals? (link)📈
A probabilistic approach to managing uncertainty (link)🔮
Thoughtful piece on why AI requires burning the playbook (link)🔥
Tune in next week for a breakdown of my conversation with the leader of a Boston-based angel group with a unique investment thesis.
Until then, thanks for reading - have a great week.
-Andrew
P.S. Your feedback is important to me. If you enjoyed this post, hit the “like” button or leave a comment with your thoughts.
How did I do this week?
About Me
I cultivate flourishing.
I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and espresso.
💎💎💎 As always Mr. Kazlow!