gh-tenequm-claude-plugins-founder-playbook/skills/skill/references/founder-playbook.md

# 2025 Founder Playbook

Complete survival guide for pre-revenue technical founders navigating the current startup landscape.

## The 2025 Reality Check

### What's Changed

**AI-Driven Transformation**
- AI captured **52-63% of all VC funding** in 2025—$192.7B YTD through Q3 ([PitchBook Q3 2025](https://pitchbook.com/news/reports/q3-2025-pitchbook-nvca-venture-monitor))
- **41% of all VC dollars** went to just 10 companies in 2025 ([PitchBook, Aug 2025](https://pitchbook.com/news/articles/41-of-all-vc-dollars-deployed-this-year-have-gone-to-just-10-startups))
- Solo founders have unprecedented leverage—SOTA models enable one person to build what required teams
- 35% of 2024 startups were solo-founded ([Carta Founder Ownership Report 2025](https://carta.com/data/founder-ownership/))

**Traction Gauntlet**
- 2021's "idea funding" era is over
- Pre-seed requires MVP + users; median pre-seed raise: **$700K** ([Metal.so 2025](https://www.metal.so/collections/seed-to-series-a-timeline-saas-startups-2025))
- Seed rounds require $10K+ MRR with 10%+ monthly growth
- **Series A crunch is real**: Only **15.4%** of seed-funded startups raise Series A within 2 years—down from 30.6% for 2018 cohorts ([Carta/SaaStr, May 2025](https://www.saastr.com/carta-the-average-time-from-seed-to-series-a-has-hit-2-2-years-and-longer-from-series-a-to-series-b/))
- Time between rounds: Seed→Series A now **2.2 years** ([Carta Q3 2025](https://carta.com/data/state-of-private-markets-q3-2025/))

**YC Dynamics (2025)**
- Standard deal: **$500K ($125K for 7% + $375K uncapped SAFE)** ([Y Combinator official](https://www.ycombinator.com/deal))
- Summer 2025 batch: **160-169 startups**, 60%+ are AI companies ([Extruct.ai, Sep 2025](https://www.extruct.ai/blog/ycs25/))
- Spring 2025: **67 AI agent companies** (46.5% of batch) ([PitchBook, Jun 2025](https://pitchbook.com/news/articles/y-combinator-is-going-all-in-on-ai-agents-making-up-nearly-50-of-latest-batch))
- Median seed round: **$3.5M** (record high in 2025) ([Carta Q3 2025](https://carta.com/data/state-of-private-markets-q3-2025/))

**Pre-Revenue Funding Reality** ([Right Side Capital Management survey, July 2024](https://www.rightsidecapital.com/blog/report-how-are-pre-seed-and-seed-vc-firms-investing-in-2024), n=110 VCs)
- 46.3% of investors will fund pre-revenue at pre-seed
- 27.4% will fund below $150K revenue
- MVP + demand validation is sufficient for many

**What's Working Now**
- Revenue-based financing for companies with recurring revenue
- Non-dilutive grants (NSF SBIR/STTR, corporate programs)
- Accelerators with 0% equity (First Round PMF Method)
- Getting paying customers before fundraising
- Distribution-first approaches (Kellan Carter, Fuse VC: "Product won't win. Distribution will win.")

**What's Not Working**
- "Big launch" strategies
- Building in stealth for 6-12 months
- Raising on vision alone without customer validation
- Strategic partnerships before product-market fit

## Core Principles

### Paul Graham: Do Things That Don't Scale

**The Foundation**: All successful startups manually recruited early users.

**Why Founders Resist**
1. Shyness/laziness: Prefer coding to talking to strangers
2. Numbers seem small: "100 users won't matter"
3. Doesn't seem "startup-like": Want scalable systems immediately

**The Power of Compound Growth**
- 10 users + 10% weekly growth = 14,000 users in Year 1
- Continue = 2 million users in Year 2
- Focus on growth rate, not absolute numbers

**"Insanely Great" Pre-Revenue = The Experience**
- Wufoo: Handwritten thank-you notes to each new user
- Airbnb: Founders took professional photos of hosts' apartments
- Stripe: "Give me your laptop" instant setup (Collison Installation)

**Your Application**
- Respond to every customer inquiry within 1 hour
- Over-deliver on setup and onboarding
- Personally call users after first week
- Make signing up "one of the best choices they ever made"

### The Customer Validation Reality

**Don't Ask**: "Would you use this?" (Everyone says yes)
**Ask**: "Will you pay for this now?" (Shows real commitment)

**Red Flags (Fake Validation)**
- "I'd probably use it"
- "If it were free I'd try it"
- "That's an interesting idea"
- "Let me think about it"

**Green Flags (Real Validation)**
- "Yes, sign me up now"
- "When can I start?"
- "Can I pay annually for a discount?"
- Pulls out credit card unprompted

### The Mom Test Questions

From Rob Fitzpatrick's essential book:

**Instead of asking about your idea, ask about their life:**

1. **"Tell me about the last time you experienced [problem]"**
   - Gets real stories, not hypotheticals

2. **"What have you tried to solve this?"**
   - Shows if they care enough to act

3. **"What was the hardest part?"**
   - Reveals real pain points

4. **"Why was that hard?"**
   - Uncovers root cause

5. **"What would your ideal solution do?"**
   - Customer-defined requirements

**Questions That Actually Validate:**
- "Would you like to be a beta tester and give me feedback weekly?"
- "Can I put you down for the first 10 paying customers when we launch?"
- "Who else should I talk to about this?"

## The First 100 Customers Framework

### Phase 1: Customers 1-10 (Manual Everything)

**Week 1-2: Identify and Research**
- Create spreadsheet of 50-100 ideal prospects
- Research each deeply: LinkedIn, company blogs, industry forums
- Join 5-10 communities where prospects discuss problems
- Document exact language they use to describe pain points

**Week 3-4: Personal Outreach**
- Send 10 highly personalized emails daily (not templates)
- Show you understand their specific problem
- Offer to solve it manually if needed (concierge MVP)
- Goal: Get 3-5 paying customers, even if you're doing work manually

**The Concierge MVP**
- Viaweb founders built stores manually for merchants
- Learned exactly what features were needed
- Could iterate in real-time while building

### Phase 2: Customers 11-30 (Find Patterns)

**Week 5-6: Document and Replicate**
- Which customer segment converts fastest?
- Document your sales conversations
- What objections? What resonates?
- Build 2-3 case studies from successful customers

**Week 7-8: Optimize Process**
- Double down on highest-converting channel
- Create standard onboarding process (keep high-touch)
- Build referral mechanism
- Goal: Achieve 10%+ weekly customer growth

### Phase 3: Customers 31-100 (Systematize)

- Write sales playbook: Exact pitch that works
- Document objections + responses
- Create onboarding checklist
- Build FAQ from customer questions
- Start testing second acquisition channel

## Qualifying Customers

### Michael Seibel's Framework

Ask 4-5 qualifying questions:

1. **"How are you solving this problem today?"**
   - If "I'm not," it's not painful enough

2. **"How much time/money does this problem cost you?"**
   - Quantify the pain

3. **"Have you looked for solutions?"**
   - Active seeking = qualified buyer

4. **"What's your budget for solving this?"**
   - Willingness to pay test

5. **"How soon do you need this solved?"**
   - Urgency indicator

**Only pursue prospects who give the "right" answers**—those experiencing acute pain with budget and urgency.

## Runway Management

### The Survival Math

**Calculate Weekly**
- Cash in bank: $____
- Weekly burn: $____
- Current runway: ____ weeks
- Monthly revenue: $____

**Critical Thresholds**
- <3 months runway = point of no return
- <2 months = must plan orderly shutdown
- Never go insolvent—personal liability attaches

### Default Alive or Default Dead

From Paul Graham:

**Default Alive**: If revenue growth continues and expenses stay flat, will you be profitable before running out of money?

**Default Dead**: If you're default dead, you need to either:
1. Grow revenue faster
2. Cut expenses
3. Raise money

There is no fourth option.

### Extending Runway

**Revenue (Best)**
- Get paying customers ASAP
- Offer annual prepay (12 months for price of 10)
- Sell pilot programs to enterprise ($5K-25K)

**Cut Burn**
- What can you stop doing?
- What tools can you cancel?
- Can you reduce salary temporarily?

**Non-Dilutive Capital**
- Grants (NSF SBIR, corporate programs)
- Revenue-based financing
- Government programs

**Fundraising (Last Resort Pre-PMF)**
- Only after demonstrating traction
- Requires 5-10 paying customers minimum

## Common Founder Mistakes

### 1. Building Without Talking to Users (38% of failures)

"No market need" is the #1 reason startups fail ([CB Insights, 2021](https://www.cbinsights.com/research/startup-failure-reasons-top/)).

**The Trap**: Get glowing feedback for 9 months, launch to crickets.

**The Fix**: Ask "Will you pay now?" and track who converts.

### 2. Running Out of Cash (38% of failures)

"Ran out of cash" is the #2 reason startups fail ([CB Insights, 2021](https://www.cbinsights.com/research/startup-failure-reasons-top/)).

**The Trap**: Underestimate burn, overestimate fundraising timeline.

**YC's Warning**: Never let runway go below 3 months without a clear plan.

### 3. Premature Scaling (70% of failures)

Premature scaling is the most common cause of startup death ([Startup Genome Report](https://startupgenome.com/)).

**The Trap**: Hiring sales team before finding repeatable sales process.

**The Fix**: Founders do sales until process is documented and repeatable.

### 4. The "Big Launch" Fantasy

**The Trap**: Coordinating press coverage, expecting users to flood in.

**Paul Graham**: "Think of successful startups. How many launches do you remember? All you need is initial core users."

### 5. Building in Stealth

**The Trap**: "If I share my idea, someone will steal it."

**Michael Seibel**: "Launch now. Your motivating lie about what customers want becomes deadly if you don't test it fast."

### 6. Ignoring Unit Economics

**The Trap**: "We'll figure out monetization later."

**Reality**: Investors check CAC, LTV, gross margin by customer 50. If these don't work, you won't raise.

**Track from Customer 1:**
- Customer Acquisition Cost (CAC)
- Lifetime Value (LTV)
- Churn rate
- Gross margin (aim for 70%+ in software)
- Target: LTV/CAC > 3, payback < 12 months

### 7. Not Charging Early Enough

**The Trap**: "We need 1,000 users before we can charge."

**Jason Lemkin**: "Charge from day 1. Even $10/month tells you if the pain is real."

## Fundraising Hierarchy (Pre-Revenue)

### 1. Revenue (Best—Zero Dilution)
Get paying customers ASAP, even at non-scalable rates.

### 2. Non-Dilutive Grants (Excellent)

**Federal Programs**
- NSF SBIR/STTR: $200M+ annually, $250K-$1M
- DOE: Clean tech, energy innovation
- NIH: Healthcare, biotech

**Corporate Programs**
- Google for Startups: Cloud credits + cash
- Microsoft for Startups: $120K+ value
- AWS Activate: $100K credits

### 3. Accelerators (Good—0-7% Equity)

**Zero Equity**
- First Round PMF Method: 4-day intensive, free
- NSF I-Corps: $50K + training

**Low Equity**
- Y Combinator: $500K for 7%
- Techstars: $120K for 6%

### 4. Angel Investors (Moderate—10-20%)
$50K-500K typical for pre-revenue with first customers.

### 5. VC (Last Resort Pre-Revenue—20-30%)
2025 VCs require traction. Pre-seed needs 5-10 paying customers.

## Solo Founder Strategies

### Advantages

- AI as co-founder: Handle tasks that previously required teammates
- Faster decisions: No co-founder debates
- Full ownership: Maintain control and equity
- Lean execution: Lower burn rate

### Specific Tactics

**1. Build Your "Virtual Co-Founder" Network**
- 3-5 advisors who fill skill gaps
- Async communication (Loom, voice memos)
- Founder communities (YC Startup School, indie hackers)

**2. Ruthless Scope Reduction**
- ONE customer segment only
- ONE core feature exceptionally well
- ONE channel until it's working

**3. Time Blocking**
- 40% building (coding, design)
- 40% customer development (sales, support, interviews)
- 20% operations (finance, admin)

**4. Leverage, Don't Build**
- No-code tools before coding
- Fractional specialists for non-core work
- Buy infrastructure (Stripe, Plaid, Twilio)

**5. Combat Isolation**
- Weekly co-working with other founders
- Monthly advisor check-ins
- Daily async updates in communities

## Contrarian Takes: What Conventional Wisdom Gets Wrong

### "You need a co-founder"

**Reality**: Solo founders are 2.6x more likely to own ongoing, for-profit ventures than teams of 3+ co-founders ([Greenberg & Mollick 2018, Wharton/NYU](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898)). Of 6,191 startups with successful exits (IPO or M&A), slightly more than half had solo founders.

**The paradox**: Solo founders were 35% of all startups in 2024 but only 17% of those closing VC rounds ([Carta 2025](https://carta.com/data/founder-ownership/)). VCs have bias, not data.

**Better question**: "Can you hire for skill gaps instead of giving away equity?"

### "Build a great product and users will come"

**Reality**: Distribution advantage is increasingly more important than product differentiation, especially as AI commoditizes products faster.

**Justin Kan** (Twitch): "First time founders focus on product, second time founders focus on distribution."

**Eric Bahn** (Hustle Fund): Secured $80K from 6 clients BEFORE building product.

### "Move fast and break things"

**Reality**: Users in 2025 won't tolerate subpar experiences. Ship small scope, high quality.

**Better**: Velocity (speed + direction) matters more than speed alone.

### "Raise as much as possible"

**Reality**: Premature scaling remains the leading cause of startup death. Time between funding rounds hit decade highs in 2024.

**Better question**: "What's the minimum capital needed to reach the next meaningful milestone?"

### "You need revenue to raise pre-seed"

**Reality**: 46% of pre-seed investors will fund pre-revenue. MVP + demand validation is sufficient for many.

**What you actually need**: 5-10 paying customers OR strong evidence of demand.

### "AI startups are sure bets"

**Reality**: While AI captures 50%+ of VC dollars, concentration means most AI startups still fail. Defensibility matters more than differentiation.

**Better question**: "What's your moat when foundation models do this natively in 12 months?"

### "Never give advice, only ask questions"

**Reality**: Pure non-directive coaching frustrates founders who lack information. Know when to switch modes.

**Better**: 80% questions, 20% direct advice—and signal the mode shift explicitly.

### "Long-term coaching relationships are best"

**Reality**: Solution-focused research shows 4-10 sessions is optimal. After that, dependency develops.

**Better**: Set end dates and transition to peer accountability.

### Distribution-First vs. Product-First

**When distribution-first works:**
- Products are undifferentiated
- Founder has existing audience
- Regulatory advantage exists
- Capital requirements are high

**When product-first works:**
- Technical differentiation is the moat
- Market is unproven
- Novel tech requires validation
- Viral mechanics are possible

## Product-Market Fit Signals

### Signs You're Getting Close

1. Customers use product weekly without prompting
2. Retention curve flattens (week 4-8)
3. Customers refer others unprompted
4. Revenue grows 10%+ monthly
5. You can predict why customers buy
6. Sales cycle shortening
7. Inbound interest increasing

### Signs You're NOT There

1. Sign up but don't activate
2. Churn >10% monthly (B2B)
3. Sales require heavy discounting
4. "Interesting" but don't use regularly
5. Each customer wants different features
6. Linear growth, not exponential
7. You dread customer calls

### The PMF Test

**Rahul Vohra (Superhuman)**: Ask users "How would you feel if you could no longer use this product?"

- <40% "very disappointed": No PMF
- >40% "very disappointed": You have PMF
- Target 50%+ for strong PMF

## Prioritization Framework

### The Eisenhower Matrix for Founders

**Do First (Urgent + Important)**
- Sales calls with qualified prospects
- Customer support for paying users
- Fixing bugs that block usage
- Payroll/critical obligations

**Schedule (Important, Not Urgent)**
- Customer development interviews
- Building next MVP iteration
- Documenting sales process
- Advisor check-ins

**Delegate (Urgent, Not Important)**
- Bookkeeping (use Pilot, Bench)
- Design (Fiverr for non-critical)
- Admin (virtual assistant)

**Eliminate (Neither)**
- Networking events (unless customers attend)
- "Thought leadership" content
- Perfect website/branding
- Non-critical feature requests

### The "Hell Yes or No" Filter

Before saying yes to anything, ask:
1. Does this directly get me customers or revenue this month?
2. Does this extend my runway?
3. Does this validate/invalidate a core hypothesis?

If not "hell yes" to at least one, say no.

## Mental Health & Resilience

### The Reality (2025 Survey Data)

- **54%** experienced burnout in past 12 months ([Sifted, Feb 2025](https://sifted.eu/articles/founders-mental-health-2025), n=138)
- **75%** experienced anxiety ([Sifted, Feb 2025](https://sifted.eu/articles/founders-mental-health-2025))
- **66%** considered leaving their startup ([Sifted, Feb 2025](https://sifted.eu/articles/founders-mental-health-2025))
- **84%** cite financial concerns as #1 stressor ([MaRS/District 3, Mar 2025](https://www.marsdd.com/media-centre/new-survey-exposes-critical-mental-health-crisis-among-canadian-startup-founders/))
- Only **12%** seek professional mental health support ([MaRS/District 3, Mar 2025](https://www.marsdd.com/media-centre/new-survey-exposes-critical-mental-health-crisis-among-canadian-startup-founders/))
- Women founders: **65%** burnout vs 42% men ([MaRS/District 3, Mar 2025](https://www.marsdd.com/media-centre/new-survey-exposes-critical-mental-health-crisis-among-canadian-startup-founders/))

### Non-Negotiables

**Sleep**: 7-8 hours (decision quality depends on it)
**Exercise**: 30 min, 4x/week minimum
**Boundaries**: No work after 8pm, one full day off/week
**Connection**: Protect time with people who recharge you

### Warning Signs

**Physical**: <6 hours sleep, frequent illness, weight change
**Emotional**: Cynicism, irritability, can't enjoy anything
**Cognitive**: Can't focus, indecisive, making mistakes

If 3+ are true: Take 3-day break, talk to therapist, reach out to mentor.

## Key Reading

- **Paul Graham**: "Do Things That Don't Scale", "Default Alive or Default Dead"
- **Rob Fitzpatrick**: The Mom Test
- **YC Startup School**: Free online course + community
- **Indie Hackers**: indiehackers.com (solo founder community)