Why Silicon Valley VCs giving location advice to founders is complete BS. A technical founder's contrarian take on the "move to SF to maximize luck" myth that's costing bootstrap companies millions.

The cringe-worthy VC advice that sparked this rant:

• Well-known Silicon Valley VC telling founders to "move back to SF"
• Claims "being successful as a founder is about luck, so maximize your chances"
• Treats founders like chess pieces on his board: "You should move here, you should do this"
• Classic example of someone who's never built anything giving expensive advice

Three questions every VC should answer first:

• Have you ever stayed up at 3am debugging code?
• Have you ever chosen between paying yourself and paying your developer?
• Have you ever had customers screaming at you because something broke and you're the only one who can fix it?

Why the "move to SF" advice is outdated and expensive:

• Building SimpleDirect from Toronto, serving contractors across Ohio and Texas
• Customers don't care if you're in San Francisco or Bangkok - they care if the product works
• Single bedroom in SF easily tops $6-8K - impractical stress for bootstrap founders
• Better to start from parents' basement/garage and reinvest capital in business

The 2025 bootstrap reality:

• Cost of bootstrapping has gone essentially to zero thanks to AI
• Building two companies with just 5 people using simple SaaS tools
• AI enables same capabilities whether you're in SF or Wyoming
• Teams in South Asia and Africa use identical tools to SF teams

The venture capital math problem:

• VC funding up 60-70% year over year, but mostly going to AI startups
• If your company name doesn't end with "AI," you're likely not getting funded
• VCs optimize for their outcomes (1-2% annual management fees), not yours
• You're a chess piece in their portfolio, not the player

Personal experience with VC vs founder networks:

• Made mistake of following prominent VCs on Twitter early on
• Real network effects come from knowing actual founders, not attending SF parties
• Morning Slack conversation with founder friend more motivating than any VC meeting
• Technical founders are probably coding at home, not at networking events

The AI bubble reality check:

• Sam Altman himself admits we're in an AI bubble
• When it pops (like dot-com bubble), where will SF-dependent founders be?
• Companies like Amazon survived bubbles by building real value, not chasing hype
• Opportunity exists for builders who think contrarily while others chase trends

The sovereign business model:

• Complete abandonment of venture capital approach
• Building companies like sovereign wealth engine - compound equity forever
• Optimize for decades, not quarters (Berkshire Hathaway model for tech)
• Focus on profitable, sustainable growth without investor permission

Key mindset shifts:

• Stop taking advice from people who've never done what you're trying to do
• VCs have never built bootstrap businesses or chosen growth vs survival
• Your luck comes from solving real problems, not being in same zip code as investors
• Future belongs to founders building global businesses from anywhere

Red flags you're following the wrong advice: Taking location guidance from VCs, believing geographic proximity equals business success, prioritizing investor convenience over customer needs, choosing expensive markets for "network effects."

Bottom line: While everyone fights over expensive SF apartments and chases AI hype rounds, massive opportunity exists for independent builders. Stop seeking permission from Sand Hill Road. Build something real that customers want from wherever you're most comfortable and productive.

New episodes Monday/Wednesday/Friday at 9am EST. Real founder lessons, not startup theater.

Daily thoughts: @TheGeorgePu on Twitter/X

Full episodes: founderreality.com

Email: george@founderreality.com

How guaranteed payment turned my best partner into my worst nightmare. A five-year partnership destroyed in 12 weeks - and the expensive systems lesson every founder needs to learn.

The brutal reality of incentive misalignment:

• Had a 5-year partnership with David, splitting revenue 60/40 (he kept 60%)
• Performance-based system worked perfectly - he was engaged, responsive, calling multiple times daily
• The moment we signed a guaranteed monthly contract, complete radio silence
• From proactive partner to only caring about paycheck status in 12 weeks

The partnership that worked (until it didn't):

• David was industry veteran who could speak to home improvement contractors
• Incredibly generous 60/40 split in his favor on all revenue
• Pure performance model - no sales, no pay
• Regular calls about business development, customer issues, strategy
• He delivered results, we both made money

Warning signs I ignored:

• Angry Sunday morning emails: "WHERE ARE THE FREAKING LEADS?"
• Increasing discontent despite generous compensation
• Had tried guaranteed payments with him before in 2020-2021 - didn't work
• Became pushy about wanting monthly retainer after years of success

The switch that flipped:

• Signed guaranteed monthly agreement in May after persistent pressure
• Immediate complete behavior change - like turning off a light switch
• Zero proactive outreach, zero customer care, zero business development calls
• Only communications: "What's the status of my pay?"
• Customers couldn't reach him - he'd just say "call George or support"

The painful irony:

• We'd recently been terminated by lending partner for not delivering results
• They had performance expectations, we couldn't meet them, they cut ties immediately
• Here I was paying someone who completely checked out for 5 months
• My empathy and difficulty saying no became expensive business liability

Four systems changes I'm implementing:

1. Mandatory probation periods - Test 30-90 days before long-term arrangements
2. Delivery-based compensation - No deliverables = no payment, period
3. Regular check-ins with clear expectations - No more "figure it out as we go"
4. Trust but verify - Empathy-first leadership with verification systems

The hard truth about systems design:

• Your systems determine your results, not your intentions
• If you reward showing up, that's what you get
• If you reward results, that's what you get
• I created a system that rewarded doing nothing - got exactly that

Key insight: Real stability comes from consistently delivering value, not from having a signed contract. The fault was mine as founder - I designed incentives that pushed away from behaviors I wanted instead of toward them.

The expensive lesson: Most people rise or fall to meet the expectations and systems you create. As founders, we determine our own destiny by the systems we build. Next time, I'm designing systems where the only way to win is actually doing the work.

Red flags you're making the same mistake: Paying for promises instead of performance, guaranteed payments without proven sustained performance, ignoring past failed attempts at same arrangement, letting empathy override business judgment.

Bottom line: Guaranteed payment without accountability is a recipe for disaster. Structure agreements that align incentives with success. Your system determines your results - choose wisely.

New episodes Monday/Wednesday/Friday at 9am EST. Real founder lessons, not startup theater.

Daily thoughts: @TheGeorgePu on Twitter/X

Full episodes: founderreality.com

Email: george@founderreality.com