A Hiring Principle From An a16z Partner

I’ve been working on a course to help address one of the most common pain points when you’re fundraising — how do you know what valuation is right for your startup?!

The course is based on my startup valuation framework that we used to help raise $10 million from a16z. It’s called Setting The Right Valuation and includes 13 videos with slides, exercises, and more.

Use the code PRELAUNCH when you pre-order it here for 40% discount off the launch price and a free trial of premium membership:

Today at a glance:

💡 Opportunity: Mixpanel Analytics for Unit Economics

The best idea for this week is just OpenAI but with, you know, a functioning governance structure… in the absence of that, how about…

Customer-level unit economic analytics.

Let’s be honest — most startups don’t have an entirely trustworthy handle on their unit economics, or even just CAC and LTV, until they’ve raised multiple rounds of capital or are doing serious revenue.

Developing robust reporting takes time and creates structures that make it harder to be nimble and make quick adjustments as you learn what your customers actually want.

But what if you didn’t have to invest the time, and could still make changes on the fly?

Having full visibility into exactly how each individual customer has impacted your P&L and cash burn would be extremely powerful. You could more easily identify profit and cost centers that need attention early on in your startup’s journey. Not only would this save money, but it would inform your strategy and help you make better decisions.

It could be a large company on its own but also be a good acquisition target for a variety of suitors including financial products companies like AMEX, Brex, or Mercury.

Internal tools that were genuinely useful at a startup tend to make great spinout companies. You’ve already proven the product can be useful and have a case study to go sell based on the results of.

🧠 Framework: Super Mario Marketing

Your customers don’t care about your product. At all. This sounds harsh but it’s true. They have no vested interest in it.

They only care what your product can do for them. Here’s an easy example with Super Mario:

• Mario → Your customer who needs help navigating their world.

• Your Product → In a vacuum, this does nothing for Mario. It simply exists.

• Mario, Using Your Product → Suddenly Mario has new abilities and can conquer their problems.

The takeaway? Avoid selling and marketing based on what your product can do.

Focus entirely on the transformation and future state your customers will be in once they buy and use your product. It’s all about the benefits, not the features. What can your product’s features actually do for your users?

📈 Trend: Baby Bump

The subreddit r/beyondthebump has been steadily growing for a few years and now has over 670k members. It’s a community where expecting parents, new parents, and experienced parents help each other navigate parenthood.

I invested in a company this space already, Anja Health, and I’m bullish on it.

Birth rates are down around the world and Elon Musk has warned of a future population collapse crisis.

Reversing the trend will require solutions from the public sector as well but technologies, platforms, and services that address the issue are not only likely to rise in popularity but also are critically important if we want to maintain the societal standard of living that currently exists.

💬 Quote: A Hiring Principle

There’s nothing wrong with prioritizing a balance between work and the rest of your life, but the people who do are not who you want to hire for your startup.

Startups are so hard whether they work or not. In either case, the team needs to be ready to make sacrifices to survive. Arianna Simpson from a16z encourages this mindset in her portfolio companies:

When you’re interviewing candidates just ask casually about what they’re looking to get out of their next role, and why they’re interested in your startup particularly. If their answers are about the mission, that’s a good sign.

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