JC

YC Founder • Advisor • Investor • Builder • SMB Owner

[JC @shiftj]

A bit about me: YC Alum. Eng turned CEO.

- I raised $3m in 14 days.
- No decks. No board seats.
- I built to $1m+ ARR
- Turned it profitable
- Now spinning off more companies

Follow if you want unfiltered founder takes.
The kind of stuff founders can't talk about.

[JC @shiftj]

Legal is pretty similar to coding.

1. lot of dense reading and writing.
2. the people doing it are very expensive.

Hard time to see a future in either one that isn’t heavily ai

[a16z @a16z]

AI power users are showing up outside tech. The fastest-growing Codex adopters since February:

Legal: 108x
Sales: 41x
Recruiting: 41x
Marketing: 26x
Healthcare: 24x

Charts of the Week: https://t.co/7YT2BXvuUu

[JC @shiftj]

Raised >$3m in under 14 days.

It’s not easy, but it is straightforward 👇

1) Build something worth investing in.

Focus less on investors, focus more on customers.

If you’ve got customers
Then you’ve got investors.

The inverse doesn’t work.

2) Rig the game

Unfortunately this game is a lot like poker.

Bluffing. Puffing your chest. Bullshit.

You can win that way but an easier way to win is to have an unbeatable hand.

The difference?

Poker players can’t create the hands they’re dealt. But founders can.

Instead of relying purely on storytelling (ie bluffing), give yourself an unbeatable hand. Something they’d be stupid not to invest in.

Stack the deck in your favor.

3) Run a tight process

Zero process = $0 Raised.

Too many founders go in with a scarcity mindset. They’re just happy to have landed a call.

They whip out all the stops, answer all the questions, let investors drag them along. No deadline, no urgency, no bidders.

Founders who raise have an abundance mindset.

“There’s plenty of investors, but only one of me.”

How would that founder act on a call?

Act as they would.

—
Most of you reading will say “what lame advice, all you said was build a great company”.

Yes, that’s the point.

[JC @shiftj]

Midjourney raised $0.

They do what they want.

I think that’s cool.

[Midjourney @midjourney]

Announcing a new division of Midjourney called "Midjourney Medical"

[JC @shiftj]

One of the largest opportunities in SMBs has nothing to do with AI.

The average software company treats demand generation like a science.

The average SMB treats it like weather.

Software companies will spend months optimizing:

• ad creative
• landing pages
• lead routing
• attribution models
• CRM workflows
• email sequences

Entire teams exist to improve conversion rates by a few percentage points.

Meanwhile, most SMBs are running on:

• referrals
• reputation
• gut feel

And yet, 10 out of 10 SMB owners tell me the same thing:

“We need more leads.”

Lot of folks talk about bringing AI to SMBs yet most of the opportunity I see are bringing modern demand generation to those who don’t have it.

(and yes, AI is a part of that)

[JC @shiftj]

@NickBergelt It probably correlates to many other local businesses.

[JC @shiftj]

This heatmap might be worth $10M+.

10 years ago, capabilities like this were reserved for companies like Starbucks.

Today, a small business owner can build them over a weekend.

That’s what I find most interesting about AI.

It’s not changing what’s possible.

It’s changing who gets access.

[JC @shiftj]

I helped an SMB owner make $1M this weekend. 

here’s the story 👇

A small business owner was looking to expand to 4 more locations.

if successful, this would net him $1m/ year.

The problem?

If it fails he’s millions in debt and he was relying on:
> gut feel
> personal experience
> randomly clicking thru google maps

So I helped build an AI agent that scouts locations.

We combined:
> his 10+ years of industry knowledge
> data across population, demographic, income, competitor, comparable businesses types
> 30+ factors from a decade of experience.

Then ran it across every subdivision in the United States.

The result? We overshot.

By a lot..

We ended up finding 50 exact-match expansion opportunities.

The exact profile he was looking for.
He was stunned.

4x locations makes him one million/yr
this list is closer to $10M.

But here’s my favorite part:

These capabilities used to be reserved for large companies but are now rapidly becoming available to those with less resources.

This kind of sophistication you’d normally expect from a company like Starbucks.

Now available to a small business owner.

Giving opportunities to people who didn’t think they had them.

The type of scale he didn’t think was possible.

Pretty damn cool.

[JC @shiftj]

@Pv Currently? No.
Theoretically? Yes.

Sounds like a cool use case for real estate brokers.

[JC @shiftj]

I helped an SMB owner make $1M this weekend. 

here’s the story 👇

A small business owner was looking to expand to 4 more locations.

if successful, this would net him $1m/ year.

The problem?

If it fails he’s millions in debt and he was relying on:
> gut feel
> personal experience
> randomly clicking thru google maps

So I helped build an AI agent that scouts locations.

We combined:
> his 10+ years of industry knowledge
> data across population, demographic, income, competitor, comparable businesses types
> 30+ factors from a decade of experience.

Then ran it across every subdivision in the United States.

The result? We overshot.

By a lot..

We ended up finding 50 exact-match expansion opportunities.

The exact profile he was looking for.
He was stunned.

4x locations makes him one million/yr
this list is closer to $10M.

But here’s my favorite part:

These capabilities used to be reserved for large companies but are now rapidly becoming available to those with less resources.

This kind of sophistication you’d normally expect from a company like Starbucks.

Now available to a small business owner.

Giving opportunities to people who didn’t think they had them.

The type of scale he didn’t think was possible.

Pretty damn cool.

[JC @shiftj]

@julianweisser All advice is wrong, depending on who you ask.

[JC @shiftj]

For every advice, there’s a billion-dollar exception.

Lot of ways to win.

[weisser @julianweisser]

“I was told outright, repeatedly — no one was even making an argument, they were just stating it: ‘You can’t build a billion-dollar business selling into SMBs. You can’t do it.’ … And that was wrong. That was completely wrong.”

Acquired for $3.6B

[JC @shiftj]

One of the top AI Native Services at the moment. Great playbook.

AI Native Law firms are crushing too.

What’s the next big AI native service?

[PrivateEquityGuy (Mikk Markus) @PrivatEquityGuy]

Accounting roll-ups are attracting significant attention right now.

The playbook is the same:

Purchase high-quality local accounting firms, then leverage AI and centralized infrastructure to drive productivity, margins, and growth.

Similar to Berkshire Hathaway and Kelly Partners Group, Thrive Holdings is also leaving meaningful minority stakes with local partners to maintain entrepreneurial incentives and client relationships.

Add long holding periods instead of the traditional PE model of buying and selling, and you have a great compounding machine.

[JC @shiftj]

The claim that it's "so good it's unsafe to release" is a beautiful marketing pitch, well done.

Have you used it?

Any good?

[Claude @claudeai]

Introducing Claude Fable 5: a Mythos-class model that we’ve made safe for general use.

Its capabilities exceed those of any model we’ve ever made generally available.

[JC @shiftj]

Category creation is a dangerous place for startups.

Most category creators fail.

Ironically, many end up retreating back into the established category they came from.

↓

The playbook is usually much simpler:

1. Find a growing market
2. Build the best product in it

You don’t need to create demand, just capture it.

Your odds of success just increased 10x.

[JC @shiftj]

What should you do if you’re young and ambitious but don’t know what to work on?

Meet as many business owners as you can.

Every industry, company type, and business model. Find one that interests you. Find one you can see yourself waking up for. Diving into. Where you’d be so pumped to win that you can’t lose. Where losing would still be a win because you can’t imagine a better way to spend your time.

Expose yourself.

You’ll probably find it.

[JC @shiftj]

Customers are the only thing that matters.

Period.

With them you’ll succeed.
Without them you won’t.

It’s not easy but it is simple.

[Hubert Thieblot @hthieblot]

You can raise millions and fail.

You can raise almost nothing and win.

Investors are not validation.

They don't know whether your idea will work.

Fundraising is not traction.

The market decides.

Not investors.

Don't confuse it with progress.

[JC @shiftj]

Don’t take advice from VCs..

Full thread: https://t.co/5TZJgiEzW7

[Ryan Petersen @typesfast]

During a pitch a prominent VC once told us the market size for global logistics was only $6B.

My CFO’s response: “So you’re saying it’s smaller than the market for USB cables?”

[JC @shiftj]

The AI-native services I’m seeing crush it right now:

• Law firms
• Bookkeeping/accounting
• Tax preparation
• Insurance back-office operations
• Medical billing

Notice a pattern?

None are sexy.

They’re all industries where businesses already spend thousands per month on human labor to move information between systems, review documents, and complete repetitive workflows.

The AI playbook isn’t:

“Build software and hope people buy it.”

It’s:

> Sell a service people already buy.
> Replace labor with AI.
> Improve margins.
> Productize the workflow.
> Slowly become software.

That’s why some of the most interesting AI companies today look more like service businesses than SaaS companies.

[JC @shiftj]

If you’re looking to build a startup, build an AI Native Service.

my favorite AI playbook by far.

Instead of selling AI products, use it yourself.

You’ll reap far more benefit that way:
> higher prices
> larger market
> better product
> more defensible

These days it’s hard to tell what companies will stand the test of time.

These companies will.

[JC @shiftj]

If you’re looking to build a startup, build an AI Native Service.

my favorite AI playbook by far.

Instead of selling AI products, use it yourself.

You’ll reap far more benefit that way:
> higher prices
> larger market
> better product
> more defensible

These days it’s hard to tell what companies will stand the test of time.

These companies will.

[Y Combinator @ycombinator]

Some of the biggest companies of the next decade won't be software businesses. They'll be services companies like insurance carriers, law firms, and tax practices rebuilt from scratch with AI doing most of the work.

In this episode of Startup School, YC Visiting Partner @CharlieWarren walks through the playbook for building AI native services companies, covering how to pick a market with the right traits, why variance kills these businesses faster than anything else, and the P&L math that’ll transform your business model.

00:00 — Intro to AI Services Companies
01:01 — Picking the Right Market
02:55 — Markets YC Likes Right Now
03:43 — The Sam Altman Test
04:35 — The Right Founding Team
05:28 — Building the Product
06:19 — Variance Is the Existential Problem
07:08 — The Early Demand Trap
07:53 — How to Price AI Services
08:41 — The P&L Walkthrough
09:33 — AI Operating Leverage
10:27 — Don't Buy Your Way In

[JC @shiftj]

Successful founders are rarely good at just one thing.

When you look at their life you’ll find several areas in which they excel; often being in the top 5% of that field.

It’s never JUST business.

They’re successful in anything they take seriously.

Ex:
> D1 athlete
> world class gamer
> top-tier programmer
> top performing student
> exceptional salesperson
> competitive poker player
> military special operations
> nationally ranked chess player

—
There are exceptions to every rule.

But if you've never been great at anything, it's hard to believe you'll suddenly become great at startups.

[JC @shiftj]

I’ve been spending more and more weekends with SMBs, helping them adopt AI.

So far I’ve helped:

1) a law firm save thousands per month and 2x case load capacity

2) a small business identify 50 franchise worthy locations worth >$1m

Who should I help next?