3-2-1 Traction:
Is AI a bubble? Also, original pitches suck!

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Welcome to a new week, Reader 👋

Here are 3 ideas from me, 2 ideas from others, and 1 question for you.

This is 3-2-1 Traction. Let’s go. 👇

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three ideas from me

Resist originality in your startup pitch. Pitches are stories, stories have structure, and structure creates predictability.

Potential investors hear a lot of pitches — hundreds, maybe thousands.

They all start to sound alike, and that’s where you might think it’s best to stand out. To break the mold. To be different.

But it’s actually the time to blend in.

In the sardonic words of one of my favorite tiktokers: everybody’s so creative.

The goal of a pitch isn’t to get a check — it’s to get a second meeting. Ultimately, they’re trying to answer a single question: is this worth further discussion?

Investors are trying to get information as quickly as possible, so that they can digest, evaluate, and compare.

The heavy lifting is actually done by the pitch format: it creates expectations and allows shorthand. When you break that convention, you increase the cognitive burden on the audience, which means we surprisingly hear less of what you’re saying.

Frankly, it’s frustrating. And we just lose interest.

Remember: investors don’t care how fancy your pitch is, or how original the format is.

They care if it’s a good investment.

The work of a startup is just the cyclical process of validation. If you can’t articulate your current cycle, you’re stuck.

Startup literature is full of cycles:

• build, measure, learn;
• ideate, experiment, data;
• empathize, define, ideate, prototype, test;
• observe, think, hypothesize, experiment, reflect;
• etc.

But they’re all manifestations of the same thing:

1. find a question to ask customers;
2. ask them the question;
3. revise your priors;
4. rinse & repeat.

And it wouldn’t be too reductive to say that’s all a startup “is” ontologically.

After all, startups are just organizations incessantly iterating toward a scalable business model.

Yet, paradoxically, the vast majority of founders I talk to can’t articulate what question they’re currently trying to answer, what experiment they’re running, what prototype they’re testing, or why.

This is the very definition of aimlessness.

How precisely are you able to articulate what question you’re trying to answer right now?

You can’t learn how to do startups before starting one. You have to learn through starting one.

This desire explains the endless supply of books, courses, workshops, webinars, and other ways to procrastinate working on whatever idea a founder has.

That’s not to say that knowledge of process and best practices isn’t valuable — it’s extraordinarily valuable!

But it’s not as valuable as doing the work.

In other words, you could read a book on how to develop good customer interview questions — or you could just talk to a customer. You may not get the best answer, but an imperfect answer today is far better than a perfect answer three weeks from never.

Everyone wants to learn how to do it before doing it.

But you actually learn by doing it.

So start this moment today.

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two ideas from others

​Extending your runway is a creative task. ↗ It’s a simple equation: growth minus burn. But too many founders view “burn” as synonymous with “expenses”. This article lists 7 ways to decrease burn without just cutting expenses or laying off employees. There are many others, if you examine your assumptions creatively.

​Are we in an AI bubble? ↗ I’ve been impressed by the flood of AI-powered startups lately, helping with everything from marketing copy to user interface design. They’re immensely valuable, and they point toward the awesome promise of artificial intelligence.

And it seems every other day there’s an AI startup raising a massive round with unicorn valuations.

Case in point — Buzzfeed announced they were going to use ChatGPT to power quizzes, and their stock jumped 260% in two days.

It will triple the company’s value?

I mean… really?

Yet, most of these startups don’t create AI — they just implement AI. That’s useful for users, but is neither defensible nor sustainable for the startup.

And it really doesn’t make for a good investment.

Sure smells like a bubble to me.

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one question for you

It’s the simplest possible question, but it’s probably the most important.

For me… I’m launching two new podcasts this week: Zero to Traction, a biweekly about how first-time founders create companies that scale; and Startup Meditations, a daily (!) podcast that contains one snippet of startup wisdom for you to ponder.

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