TK Kong

Zynga sold for $12.7 billion. Its founder says startups fail due to this: They try to innovate too early (unless its deep tech). Mark Pincus calls it the “All new fails” rule: 1/ Don’t start with “new”: Start with what’s already proven to work. Copy it legally, study it deeply. 2/ Proven means 10 out of 10 users say: “Yeah, that works.” If they don’t, it’s not proven. 3/ Founders fail because they skip the proven phase: They chase novelty before they’ve earned the right to innovate. 4/ The Zynga story began with poker: Same table, same felt, same gameplay, nothing original. 5/ Then they made it better: No downloads. Just click and play. Friction cut in half. 6/ “Better” means 10 out of 10 users agree: Not your team, not your investors, real users. 7/ Only after proven and better do you earn “new”: That spark that surprises and delights users emotionally. 8/ Zynga’s “new” was showing your friends’ faces: It made games social, not solitary. 9/ Forget MVP, build a minimum viable idea: A concept that hits emotional resonance before metrics. 10/ Seek true signal: You’ll feel it viscerally before you can measure it. 11/ Silicon Valley worships originality: But originality without resonance is noise. 12/ Better founders are great students first: They copy what works before they try to change it. 13/ Most products die from founder ego: They’re “new” before they’re useful. 14/ Users don’t care about novelty: They care about ease, trust, and delight. 15/ “Proven → Better → New just works. And it built a $12.7B company. 📩 Get ai + vc intel in your inbox via my newsletter Startup Riders, link under my name ☝️ 📌 Source: Mark Pincus on Why Most Startups Fail a16z #ai #llms #agent #startups #founder #vc

40

4 Comments

To my dear VC friends, We are all very excited about the growth rates of AI companies. But when you declare "Triple–Triple–Double–Double–Double (T2D3) is dead," you create chaos in your own firm and with your LPs. And your IR team pays the price. 𝗛𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗽𝗿𝗼𝗯𝗹𝗲𝗺: IR teams just spent 24 months explaining LPs that albeit their portfolio lack liquidity, the fundamentals of their existing portfolio companies are solid, etc... LPs committed hundreds of millions based on that narrative. Now the partners, from the same firm, are saying that model is outdated.... 𝗧𝗵𝗲 𝗿𝗲𝘀𝘂𝗹𝘁? Confused LPs asking: - "So what are the paper returns marked at 3x MOIC on your Saas companies really worth ?" - "Why did you say that the existing portfolio companies were doing well?" - "Why should we trust the new narrative?" - "What else will change next quarter?" IR teams scrambling to explain: --> Why yesterday's pitch is today's problem --> How the new model is totally different (but also kind of the same) --> Why this pivot strengthens the strategy (somehow) 𝗧𝗵𝗲 𝗿𝗲𝗮𝗹𝗶𝘁𝘆 𝗻𝗼 𝗼𝗻𝗲 𝘄𝗮𝗻𝘁𝘀 𝘁𝗼 𝗮𝗱𝗺𝗶𝘁: T2D3 isn't just a growth model. It's a framework LPs have internalized for 10 years on how to evaluate B2B Software companies. They use it to model returns. They use it to compare companies and portfolios. They use it to explain venture investing to their boards and ICs. When you suddenly declare it dead, you're not just changing metrics. You're breaking the narrative that built trust. 𝗧𝗵𝗲 𝗳𝗮𝗹𝗹𝗼𝘂𝘁: → Every fundraise gets harder → LPs hesitate on re-ups and do more due diligence on the portfolios → New LPs question your consistency → IR teams on calls with LPs 10 hours a day and burn out managing the confusion 𝗧𝗵𝗲 𝘀𝗺𝗮𝗿𝘁𝗲𝗿 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵: Evolution, not revolution. Show how the market is expanding. Explain why multiple models can coexist. Build on what LPs understand, don't demolish it. Because here's what matters: LPs need clarity, not contradictions. They need consistency, not pivots. They need to trust your story won't change with the wind. The future of venture depends on this. You can celebrate new growth models without torching the frameworks that built LP confidence in the first place. Your IR team will thank you. Your LPs will trust you. And your next fundraise might actually be smoother. ❤️

14

2 Comments

A lot of VCs use founder age as a proxy for how well they’ll leverage LLMs and the latest AI. In my experience, the stronger signal is how technical they are. Technical founders understand how LLMs work and can exploit them fully; non-technical founders see magic, not mechanisms.

49

11 Comments

Everyone's panicking about the proposed $100K H-1B visa fee, but here's how I think it will actually play out, especially for startups and tech jobs. If this fee really goes through, the first group to feel the pain will be early-stage startups in the US. These are the teams that rely on immigrant engineers to ship product fast, and suddenly they'd be staring at massive added costs just to keep talent in the country. Many of them won't pay. They'll simply stop sponsoring visas. What happens next? Two things. First, we'd see a lot more remote hiring. Instead of going through the headache of immigration, companies would just open dev offices in India, Eastern Europe, or Latin America and hire directly. Second, we'd likely see a shift in global talent flow, a kind of "brain drain reversal." Fewer people would dream to move to the US, and more would choose to build from home. In a way, this could accelerate the trend we're already seeing: Silicon Valley is no longer just in California. It's everywhere, especially Bengaluru. If this rule passes, that shift just gets 10x faster.

63

6 Comments

NYC is losing young technical founders to SF — and it’s not about vibes. It’s about cost of entry. SF has far more entry infrastructure than NYC: i.e. the housing, community, and early support (financial and otherwise) that lets founders start building before they raise capital. This is widening the gap between the two cities' tech sectors. We are specifically calling for ideas (and hopefully action) to address NYC’s dearth of hacker houses: physical spaces that combine housing, workspace, community, and early peer support. I’m convinced that seeding hacker houses, if done right, is a low-cost, high-impact way to attract more young technical founders to NYC — and critically, something this community can actually do. And we should. The data is stark. Venture investment in NYC is ~19% of SF’s total — the lowest since 2017 — and the biggest, most innovative companies (especially in AI) are overwhelmingly being built in San Francisco. People who want to be entrepreneurs tend to work where those companies are. Unsurprisingly, many students and young builders assume they must go west. But do they actually want to — or is it just easier to get started there? I spent significant time in the Bay last year, and one difference stood out immediately: SF is dense with hacker houses and founder residences that help people get from 0→1. These resources are especially critical for recent grads and first-time founders who might lack capital or built-in networks. NYC may have long-term pull, but at the earliest stage, higher upfront costs and friction (recent Economist data suggests ~50% higher rents than SF) push many founders away. Hacker houses may sound anachronistic, but they’re real centers of gravity. We estimate SF has at least ~10x more active hacker houses than NYC, and that these houses have helped foster hundreds of billions of dollars in market value. I’m an NYC tech evangelist. I’ve worked on tech ecosystem development at New York City Economic Development Corporation, helped design national innovation programs for the Obama White House, and now invest in early-stage companies as a GP at Max Ventures. From a dollars-to-impact perspective, seeding hacker houses in NYC is one of the most efficient levers the city can pull. We wrote an overview doc (linked below) that explores this concept — and we'd welcome feedback from the NYC tech community. We are also hosting a small series of conversations — starting with a dinner in February co-hosted with Tech:NYC, Keel (Brent J. Smith), Company Ventures and Inspired Capital — to bring together leaders across tech, real estate, and policy. 👉 If you’re a founder, operator, VC, student, or have built / lived in a hacker house: • Does this resonate? • What would make this work in NYC? • Who’s already doing something adjacent we should talk to? Would love to connect if you’re interested in contributing or joining the conversation.

480

167 Comments