Right Founder. Wrong Market.

I have a problem. I invested in an amazing founder.

But he’s in the wrong market.

Get the blog before anyone else…subscribe!

His name is Jim. He runs a consumer SaaS company.

Actually, his name isn’t Jim and that’s not his market either. This is a composite.

Jim works really hard. He’s also quite innovative.

Jim finds customer service people at Home Depot. He picks whoever is most helpful and makes them associates in customer success at his startup.

It’s a genius idea!

But Jim’s company is barely growing. They’re also burning a great deal of money.

Being in consumer, their customer acquisition cost is extremely high. After the iOS 14 update in May of 2021, it quadrupled.

They have fought tooth and nail ever since to get it back to a manageable level.

And they succeeded! Thing is though, Google is about to do the same thing this year.

And it starts all over again.

Jim also deals with an enormous amount of customer churn. Individuals love to try a product for a little while and then leave.

I recently subscribed to HBO Max so I could watch Succession. After just a couple of weeks, I cancelled it.

They even offered me a free month. I declined. I know, I’m extremely cheap.

So are a lot of other people. That’s a big problem for Jim.

Remember, when I told you Jim works really hard?

Normally, that’s an incredibly good trait. But not this time.

Being really hard working and unwilling to give up is actually a huge problem here. Jim keeps beating his head against the wall.

Nothing is working…much. The company is growing a little and burn is down. But still, it’s not really going anywhere.

What would I like Jim to do?

Fire everyone but the co founders. Trash the existing business completely.

Use whatever cash is left to find a totally new business. Start with a blank sheet of paper.

Someday, Jim might do this. But probably not.

After all, he never gives up.

None of this is Jim’s fault. But that doesn’t change the fact that our goal of creating an enduring, multibillion dollar company isn’t happening.

So Francis, why don’t you talk to Jim? Why don’t you tell him what you’re saying to us here?

I’m a minority investor. I’m not on the board.

I have no right to say this to a founder. And even if I did, they would never listen to me.

So instead of telling him, I’m telling all of you.

Are you a founder? Be like Jim.

Be tenacious. Work hard. Innovate.

But when something is only kinda sorta working for a very long time, don’t be like Jim.

Give up. Start over. Start fresh.

It’s gonna hurt big time. But it’s what you have to do.

Are you a Jim? Do you know one?

Leave a comment and let us know!

If you enjoyed this post, subscribe for more like this!

More on tech:

From $10 Billion to Zero — Late Stage Ice Age

Down Rounds Everywhere

From Seed to $10M ARR

Save Money on Stuff I Use:


This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $15 on your first order. 


5 thoughts on “Right Founder. Wrong Market.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s