Limitless Founder: The Full 30,000-Character Interview — A 7-Minute Pitch, Thousands of Investor Inquiries, and the Fundraising Secrets of a Startup | Z Talk

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This past April, Limitless AI released its new AI wearable device, the Limitless Pendant, focused on recording conversations around the clock and extracting key takeaways. Last spring, its predecessor company Rewind AI went public with its fundraising through a launch video, received over 1,000 preliminary investment indications, and ultimately closed an A round at a $350 million valuation — its "life search engine" concept generating widespread discussion.

Limitless founder Dan Siroker is a serial entrepreneur. He graduated from Stanford University with a degree in computer science, and worked at Google as a product manager helping build Google Chrome. Before founding Limitless, he was the founder of Optimizely, which reached $120 million in ARR. In a recent in-depth interview, Dan Siroker drew from his perspective as an experienced serial entrepreneur to share the differences between serial and first-time founders, as well as lessons on fundraising negotiations for early-stage companies.

ZhenFund actively tracks frontier technology and innovation trends. Going forward, we will continue bringing you insights and deep thinking from the world's top entrepreneurs — stay tuned. This content comes from the 20VC podcast; below is the full translated transcript.

Key Takeaways

- The biggest difference between serial and first-time founders is focus: Only three or four things truly determine a company's success or failure. Remember: "The most important thing is to treat the most important thing as the most important thing."

- The secret to fundraising negotiations: Every funding conversation is a negotiation, and the best negotiations are ones where both sides consider each other's motivations and drivers. One of the most common mistakes founders make is not trying to understand the world from the investor's perspective.

- Identifying worth-investing subjects in the AI era: The most important thing is finding founders who are obsessed with the problem itself, not those "holding technology and looking for a problem."

01

"I've Always Loved Computers, Since I Was 10"

Harry Stebbings: Dan, I've been looking forward to this conversation. We've been chatting on Twitter, and I've been a longtime fan — thank you so much for coming on.

Dan Siroker: Thanks, I feel the same way. I've always admired the show, and I'm thrilled to be here.

Harry Stebbings: I think great entrepreneurs' growth is deeply tied to their early experiences, so I want to go back in time. How do you think your parents or teachers would have described you at age 10?

Dan Siroker: They definitely would have mentioned how much I loved computers. From a very young age, we always had computers at home. My mom was a secretary at Stanford University, and her boss was Professor Héctor García-Molina. Her boss was an incredibly generous person — every time he bought a new computer for his own family, he'd buy the exact same one for my mom. So my twin brother and I had lots of exposure to computers. Because of his generosity, we always had the latest and greatest at home. I think that pushed me toward what I do today, because I've loved computers since I was 10 or even earlier.

Harry Stebbings: He sounds like a great person — that kind of influence is really powerful. In life we encounter many "yeses" and "nos" that shape our ups and downs. Before we go deeper, I want to ask: what was an important "yes" that truly shaped who you are, and what was a "no" that stuck with you?

Dan Siroker: About eight years ago, my wife said yes to my marriage proposal — that was the most important "yes" for me. Every other yes from VCs, employees, and so on pales in comparison, nothing comes close.

As for "no," there's a type of "no" that hugely energizes me. It usually starts with "No, that's impossible."

My team all knows that I firmly believe technology has the power to do things previously thought impossible. When someone is skeptical or pessimistic about what technology can do, it massively motivates me to prove them wrong.

I do it through demos, products, new features — proving that technology can do this. In a way, every startup I've built has contained some version of a "no, this can't be done" idea that drove me to keep going.

Harry Stebbings: Do you agree with Marc Andreessen's view that there are no bad ideas, only wrong timing?

Dan Siroker: I think that's largely correct. My startups have pivoted many times, and almost every time, what I gave up could have worked. Maybe this is my delusional, optimistic founder mindset, but I've never thought "oh, this path definitely won't work."

It's like climbing a mountain. If you start from the base, along the way you'll see other paths to the summit that look easier, less strenuous — but you'll also learn a lot on your journey. So you might backtrack a bit to take that path, but that doesn't mean your current path can't reach the summit. You'll get there eventually; this one is just harder right now.

So in that sense, I think ideas are easy; everything that matters is execution. I think almost any idea can work with enough perseverance. Very few ideas are fundamentally unworkable.

Harry Stebbings: Slightly off-topic, but UiPath founder Daniel Dines was also on my show. It took him 10 years to reach $500K in ARR — not exactly hypergrowth.

You've achieved massive scale and growth, and you've pivoted many times. If I were a founder coming to you for advice, Dan, what would you tell me? Pivot or persevere? Based on everything you've been through, what advice would you give founders?

Dan Siroker: The best advice I can give is advice I once received myself. I've heard two pieces of advice on this.

One came from an early investor of mine, Elad Gil, also a former colleague at Google and now a very successful investor. I went to him for advice on exactly this question, and he told me bluntly: things that work tend to work quickly.

This is somewhat counterintuitive. Most people would say "you have to persevere, you need grit, you have to keep banging your head against an idea, you have to keep executing."

It doesn't have to be working completely, but you have to see some glimmer of hope in what you're doing. Even a story like Airbnb — they persevered for years, but actually, they saw a glimmer of hope very early on, something proving their idea had power and promise. So if you've been at it for six months and haven't seen even a flicker, maybe it's time to pivot.

The other advice I saw recently was Dalton Caldwell being asked this by a Y Combinator partner. He answered: "A good pivot feels like coming home."

I genuinely share that feeling. Every time I've pivoted, changed ideas, or adjusted focus, I've felt that way. It's similar to my mountain-climbing analogy — it feels like you're on a better path, closer to your core, closer to solving the real problem. Like you were on the periphery before, and now you're at the core.

Those are my two pieces of advice: things that work tend to work quickly; and if you've pivoted correctly, it should feel like coming home.

Harry Stebbings: I agree with you. I also always ask: "Do you have any other experiments you really want to run? If so, what are they?" If there are no other experiments you want to run, it's probably time to change direction.

Dan Siroker: Yeah, I think that's exactly right. I think of these experiments as something like Pareto optimality or the 80/20 rule. We always pull out the most interesting, most exciting hypotheses to test, and if none of those work, then it's time to pivot.

Because we can always come up with new things to try — "if the last five things didn't work, will this new sixth thing be the key to success?" Almost always, you'll naturally try what you're most optimistic about first.

So in a way, the inflection point for changing direction isn't when you feel like you have nothing new to try. It's when you start asking yourself, "Is this worth trying? Could what I'm about to try next possibly make any difference?"

02

Focus Is the Biggest Difference Between First-Time and Serial Founders

Harry Stebbings: What's striking to me now, talking to you, is that founding a company is like this: going through hard times, finding PMF, not finding PMF, pivoting. That's why I love backing serial founders, while backing first-time founders is hard — because they make so many mistakes you can't foresee, mistakes that waste precious time.

Do you agree that serial entrepreneurship is valuable? Or do you think it's overrated — that every startup situation is actually quite different?

Dan Siroker: I compared first-time and serial founders on Twitter, and it went viral. The content was usually painful, true things I did as a first-time founder and the insights I gained from them.

One of them was that first-time founders brag about having many employees; serial founders brag about having few. That's some deep insight about how to build a company, and I think there's truth to it.

What surprised me was that despite so much great public content out there — Y Combinator publishes so much of it, trying to help first-time founders — they still make the same types of mistakes over and over, without truly internalizing this learned wisdom.

Harry Stebbings: Why? Is it too much ego? Human vanity? Or is human nature just inclined to raise more money and hire more people?

Dan Siroker: I think a successful founder typically doesn't follow established rules. But this makes things hard for them, because either the market pushed them out of traditional jobs where they couldn't succeed, so they started a company; or entrepreneurship attracted them, giving them deep, autonomous control over their own destiny.

So it's really hard, and I've been struggling with it myself. I was just talking to my Optimizely co-founder about this, getting his advice — Pete Koomen, who's now a partner at Y Combinator. I don't know how to advise other founders and get them to actually take it, but my best investors influenced me like they were using Jedi mind tricks, because they never directly stated what they thought — they persuaded me instead.

I think that's why many first-time founders make mistakes and don't follow this common sense. They're inherently rule-breakers; doing things in an old, traditional, boring way is less exciting. There's a certain naivety to it. So it's vanity, arrogance, nonconformity, and probably naivety too — all of that combined, and you get a lot of founders who typically don't destroy their companies, but who waste enormous amounts of time and energy on things that ultimately don't matter.

Harry Stebbings: What other obvious, core differences do you see between first-time and serial founders?

Dan Siroker: Focus. That's a huge difference. My first time around, I compensated for lack of focus with long hours — every waking hour I was working. But now, with ten years of prior startup experience under my belt, I recognize that there are really only three or four things that determine whether a company succeeds or fails.

Back then I was doing thousands of things that I thought all mattered, but in the moment you can't tell. You don't know which are the critical things that will meaningfully change the output and outcome, versus which are just work that feels important.

And that ability to focus, to remember that "the most important thing is to keep the most important thing the most important thing" — that's something a lot of first-time founders don't do.

Also, for me personally, having kids now forces me to truly focus on the main, important things in my second startup, because I simply don't have as much time as I did the first time around. So it's a skill that I think many first-time founders need to develop.

Harry Stebbings: "Keep the most important thing the most important thing." You know what those two or three things are. But I've talked to many of your team members, and they say something special about you is your ability to go deep, to really be in the weeds, to know exactly what's happening in every part of the business.

How do you do that — hire great people and let them do their jobs, while staying focused on the two or three things you should be focused on, without doing everything for everyone?

Dan Siroker: I've made a lot of mistakes in the past with hiring and delegating, which the Ramp founder also talked about recently on your show. You can't just push responsibility onto your employees — you have to be deeply involved in order to truly hold them accountable to know the details, to dig deep and drive the work.

I made many mistakes my first time around. I hired some genuinely amazing people. The reason I hired them was because they were incredible, with 15 years of experience in what they did. And here I was, a founder in my twenties, who had never been the go-to-market leader at a multi-billion-dollar public company — how could I advise them or hold them accountable? So I really struggled my first time. I didn't even know it was my job. I thought I should just get out of the way, be a founder who gave them ownership and autonomy.

But what I truly learned is that as the founder and CEO, you're ultimately responsible. Many people who join your company, even if they're excellent executives, are only going to be there for a short period of time.

At Optimizely, there were several times when employees chose to join, then made their own decisions, and eventually left. And I was forced to bear all the responsibility. So I thought, if I'm going to be the one holding the bag in the end, I might as well be involved in what we're doing.

One of the biggest mistakes I made was abdicating responsibility in a sense. So now I try to be genuinely involved in what I think are the most critical things for the company. I don't manage everyone — only the things and parts of the business that I think have the highest impact on the company. I think that level of ownership and attention helps set an example for other managers in the company, showing them that their job is to know the details well enough to hold others accountable.

But it's a balance you can never perfectly strike. I'm trying to pick what I think will have the highest impact, though often you can only determine that in hindsight.

Harry Stebbings: Before we dive into the lessons from Optimizely, I want to ask one question. If you were an investor today, would you lean more toward backing serial founders or first-time founders?

Dan Siroker: Serial founders. The important advantage of investing in serial founders is that by the time they've decided to start a second company, they've already proven their perseverance.

I'd rather invest in someone who will 100% stick with it and work to make it succeed, even if they might only have 80% of the intelligence, than the opposite.

There are many smart people who ultimately give up because entrepreneurship is hard. The fact that serial founders are willing to take on that challenge again is a strong signal for me. And people on their second startup have learned a lot from before — I'm certainly someone who learned a lot from my first.

Harry Stebbings: I also think speed is critical in the zero-to-one process. And an important step in increasing speed is building the best team to take your company from 0 to 1. As a serial founder, your network is more developed and higher quality than a first-time founder's, who might only be able to hire friends and whoever is available to join at that stage.

Dan Siroker: Absolutely. The quality of talent Limitless can hire now is far higher than what I could hire at Optimizely. I think that's also a massive factor.

If you do well enough on your first startup, even sell the company, then you can hire much better people on your second. When employees are considering whether to join you, they think, this person has already built something once, maybe they can do it again.

Harry Stebbings: Though I don't like when founders say "if I start another company I'll do it this way." I feel like great founders focus on just one company their whole life, that they should have a mission. Like Daniel Ek at Spotify, the Collison brothers at Stripe — this is the unwavering mission of their lives. I expect founders to view entrepreneurship as their mission. Do you think that's right?

Dan Siroker: I think when you're the founder and CEO of a company, that should be your mindset. But you never know where the company will go, and if you define failure as not becoming the next multi-billion or even hundred-billion-dollar public company, then a lot of people will fail.

The second most likely outcome is that the company achieves moderate, decent results, and if they decide they want to start something new after that, I don't think they should be blamed for any reason. If their company failed due to fraud or something like that, then you shouldn't invest in them.

But more likely, failure is due to market timing and other factors. There are explainable reasons for failure, and I wouldn't not invest in them because of that. It's just — if you could invest in Zuckerberg every time, you should. But there aren't many opportunities like that, and often you might not even be able to get into that round.

---

"Not Trusting My Gut

Was the Biggest Mistake I Made"

Harry Stebbings: Let's talk about funding rounds, because I think we may have some different views here and I'm looking forward to exploring that. I want to ask — we just touched on mistakes and lessons, and I think the best thing about podcast episodes is when someone shares their mistakes and distills the lessons.

When you look back at Optimizely, which you scaled to $120 million ARR, what was the biggest mistake you made in your leadership — one mistake you did not bring into Limitless?

Dan Siroker: The biggest failure mode falls into this category: my gut said we should do A, but others thought we should do B, we ended up doing B, and it went badly.

Of course there were also many times when I said we should do A and it went badly too. But the things that truly kept me up at night, that stuck with me, were when I went against my gut. I've made peace with them now, but it took a long time.

As a founder, there are things you deep down, intuitively don't feel are the right move, the right focus, or the right investment, but you listen to the advice of smart people you've hired. It's not because you were tricked by them — it's because you decided to let these people influence the direction you chose, or you went along with their decision, and it went badly.

I have many examples of this — moving too quickly to the enterprise market, or not recognizing that our core was solving user churn.

Time and again, I had this feeling in my gut that we should do something, but I couldn't even put it into words or make the argument. I like to think of myself as very analytical and data-driven, but many times my gut would kick in. Because I couldn't articulate my intuition, I didn't even feel like I should defend the direction we should take. I failed in my duty as CEO to make a decisive call.

I think those are the biggest lessons I learned, and the biggest mistake I made was not trusting my gut.

Harry Stebbings: Many founders make this mistake of moving too quickly to the enterprise market, thinking it's the holy grail of success. Having had this experience, what's your biggest advice to founders on when to enter the enterprise market and when to stay true to your core?

Dan Siroker: I think the most important thing is to understand what's working for your business and what isn't. I think from the very beginning of Optimizely, we had a core strength: product-led growth.

That term didn't exist at the time, and the person who coined it actually used Optimizely as the example to illustrate the concept. A great example: in 2013, when you visited our website, you could enter any website URL — you didn't need to sign up — and immediately start making changes to the site and see what the visual editor was like.

That single feature alone was one of the most magical parts of our product. It attracted not just small businesses, but Starbucks. The person at Starbucks responsible for website optimization and conversion experienced our product, saw the results, and was willing to pay $79 a month for it even without getting permission. He put our A/B testing product on the Starbucks homepage.

Starbucks is a large enterprise, but we were confused at the time. On one hand, we were attracting SMB customers through product-led growth. On the other hand, we felt like we needed to reach enterprise customers through human sales — flying people out to Seattle to meet with headquarters and that sort of thing.

We actually had a very unique path to getting large enterprises to adopt our product without human sales. But I think we gave up on it too quickly. We should have recognized that it was working. At the time, we looked at the data and saw that our highest-retention customers were large enterprises, so we said, let's go after large enterprises, and we hired an enterprise sales team.

But that was too hasty. We should have thought more about: what's the best way to get Fortune 100 companies to use our product? We could have stayed true to our product core and gone after this bigger market.

Harry Stebbings: If I were a founder coming to you for advice, as one of your angel portfolio companies, how do I know when the timing is right? What advice would you give me?

Dan Siroker: When you feel market-driven pull. Like the Starbucks example I just gave — that employee skipped all the procurement processes to use our product. They were even more inclined to use it without management approval and ask for forgiveness later.

You see a signal — not just the company's logo, but a person at that company who genuinely feels like they're struggling to do their job, so they've either heard about what your product does or tried it themselves.

And in that situation, what salespeople can do is amplify and maximize the potential of that relationship. Instead of making cold calls to Fortune 100 companies trying to get their attention for your startup. They're more likely to reject you even if they meet with you, because they have no intrinsic interest in what you're doing.

---

People Should Ask for More Compensation

Than They Think

Harry Stebbings: I find that one mistake early founders often make is giving away titles too easily — CPO, head of sales, whatever. But in my experience, titles actually carry quite a bit of weight. Do you agree that you shouldn't hand them out lightly? What lessons do you have here? I took a lot of heat this weekend because I proposed getting rid of titles like "founding engineer" — you're either a founder or you're an engineer.

Dan Siroker: I do think titles are hard to evaluate. They're free in one sense, but they're expensive because they create a mutually destructive dynamic. Once you give out the first VP title, everyone wants to be VP.

That's why I think early-stage companies should adopt this approach: everyone is the lead of something — marketing lead, engineering lead — without distinguishing between VP and SVP. I think this is actually the best strategy, because what you want is clarity on who is ultimately accountable for a given function.

You don't want everyone to be an individual contributor, which is why I like this "lead" title — it's clear, and it doesn't box you in. After all, one day you might hire an executive from outside and give them titles they're more accustomed to.

On titles, I think one thing is important — at least in certain circles, especially in the Bay Area, anything with the word "founding" in it, like founder or co-founder, carries weight. I don't think you should dismiss the concept of "founding engineer." For some people, it means a lot.

For example, if 80% of your friends are founders of companies, and you're just a software engineer, but you're the first employee at the company — that's going to eat at you. You'll constantly wonder, should I leave? And many of your founder friends have founder titles, and you'll think, "If they can be founders, so can I." Giving them that title is about retention, out of fear that they'll leave and try to start their own company.

Harry Stebbings: That's why you have employee #1, #2 — people take enormous pride in being the 4th employee at Ramp or some great company. But then you have some "founding" marketer who's just employee #26.

Dan Siroker: What's wrong with calling them a "founding marketer"?

Harry Stebbings: It dilutes what founder and founding team should mean, makes them seem less valuable. And I think it makes layering much harder.

If you have a very junior marketer called "founding marketer," and then you want to bring in someone more senior — that becomes difficult. They'll think, wait, so I'm working under a "founding marketer" who's clearly not as good as me? No, I don't want that.

Dan Siroker: On titles, there's one thing I firmly believe. If a candidate brings this up early in the interview process, or raises it throughout the entire process, that's a pretty dangerous signal. It indicates their values.

The best people I've hired came in with very senior titles, but they never brought up title at all. They might be CTO or Principal, but they'd say "I'm a software engineer, no big deal."

When title isn't something they're overly focused on, that's a very positive signal. It shows they care about the problem, they care about the company. They know that if they do well, they'll grow within the company.

So I think it's almost unquestionable — what someone focuses on when they join reflects their values and what matters to them.

Harry Stebbings: What lessons do you have on compensation during the hiring process?

Dan Siroker: I generally feel that people should ask for more compensation than they think. I think this especially applies to some funded startups. We were fortunate to be well-funded from the start, so I may not be the right person to speak for unfunded companies. But I believe that on cash compensation, employees joining startups shouldn't take a pay cut — that's unfair.

While some startups obviously can't match the highest-paying companies — OpenAI is paying millions, Google and Microsoft do too. But even if you can't match that, you can still pay 75%, and you shouldn't make your team make massive lifestyle changes just because they joined a startup.

I think 10 years ago, people believed you were trading risk for reward, so you should take less on compensation. But I feel that if a really talented person has two startups to choose from, and one gives them lots of equity and little cash, while the other gives them lots of equity and lots of cash — they'll choose the latter.

You want to hire great people, not people willing to accept the lowest compensation you can offer — that's my philosophy. I also practice fairly equitable compensation internally. Our model, like how I run things, is that if everyone knew everyone else's compensation, they'd feel like, okay, this is broadly reasonable.

So for example, we hired a great software engineer. We thought, wow, the market actually says this person should be paid $30,000 more than others on the team. So we not only hired her at that rate, but also raised everyone else's compensation to match, because we felt that someone shouldn't earn less just because they joined earlier, even if the market later showed others should be paid more.

---

Giving Employees a Chance to Sell Stock

Every Six Months Is a Healthy Thing

Harry Stebbings: Secondary stock transactions are more prevalent than ever, and this is a particularly challenging moment — especially for early team members. Obviously in many cases it's important to give people the right to sell stock. What lessons do you have on how to do this properly? How do you keep someone motivated when they've suddenly made $5 million from early stock?

Dan Siroker: My views on secondary stock are quite inconsistent with most of my investors, who hold the exact opposite view. I believe you should let early employees who already hold stock sell it at any time.

If they already hold that stock and are working at your company, that stock should almost be treated as compensation just like cash would be, if there's a willing buyer. As the founder, you need to make sure your employees aren't out there looking for buyers.

But for us, for example — we raised far more than we needed in our Series A. We closed it over a year ago and haven't even started using the money. So we have more investors who want to invest, but no more capital to sell them.

So I gave my employees the opportunity to sell up to 25% of their vested stock. I don't judge it, and it's not viewed as discouraged behavior.

Because by my philosophy, we'll eventually see whether that choice proves right or wrong. My philosophy is giving people the opportunity to treat their stock as a more liquid asset actually improves retention, not reduces it.

Most investors will tell you to put "golden handcuffs" on employees, forcing them to stay. But I think that's equally an outdated notion — they assume there's no market liquidity, that team members can't go elsewhere.

So I'd rather be known as a startup that lets team members sell vested stock and grants them more when they do well, rather than treating stock as something locked up that you can't sell.

Harry Stebbings: I love this idea, but it reminds me of a founder friend of mine who was in this exact situation. He said it creates a divide between new and old employees — new hires don't have vested stock yet, while old employees do, and suddenly after a sale event you have some "rich" people on the team with more cash, while newer people have less, creating a subtle tension between old and new. Does that worry you?

Dan Siroker: Not particularly. I mean, it's a possibility, but we haven't seen it. We tend to hire more experienced people — we don't hire fresh out of college. So we're not hiring people who are just starting to build wealth. Overall, I haven't felt that dynamic.

Also, if there are repeat buyers coming in between financing rounds, we'll give employees a chance to sell too. If you can provide that kind of liquidity and there are willing buyers, I think offering opportunities like this every six months or less is a healthy thing.

It relieves some pressure for people, especially those living in the Bay Area, who can take that money to buy a house, make a down payment, do things they were previously constrained from doing by money.

This ability to offer liquidity options is powerful, because if you create differentiation for employees on something like "can I buy a house or not," that generates a retention force that's very difficult to achieve through other means. So I think it's worth it.

Harry Stebbings: Why don't you hire fresh college graduates?

Dan Siroker: I've done that before. I think in most cases today, the best team is a tight, highly focused small team.

If you look at everyone on a team as an opportunity cost, then if you have a position that could go to a lower-paid recent graduate or to someone with five to ten years of experience, I'd rather spend more money on the more experienced person and keep the team small, rather than inflate the team just to fill seats.

We have 20 people now, but I feel like we have more impact and deliver faster than when I had 120 software engineers at Optimizely. So this works, and I don't want to mess it up by hiring a bunch of junior people. There's a saying, "the best way to slow down a project is to add a person to it."

So I don't want to do that. I don't want to hire a bunch of junior people and have to train them, which would sacrifice our speed when we're moving very fast right now.

Harry Stebbings: On the topic of the oversubscribed round you mentioned earlier, our first interaction on Twitter was because I said a round where you're only putting out 10% of the company won't attract great investors, because great investors won't want to participate in something that's only 7% or 8%. And you pushed back on Twitter. Why did you push back? What experience gave you that perspective?

Dan Siroker: It's a classic line that investors say publicly. Most founders don't know the counterexamples. There are many such rules that serve founder or investor interests, widely circulated and accepted fundraising rules, but there are also exceptions that aren't as accepted.

But people rarely see the exceptions. One of them is that the best investors will invest in the right company even below their stated minimum check size.

If your startup is performing poorly, you can't just fundraise however you want. But if the company is doing well, you shouldn't assume these constraints and rules apply to you just because you saw somewhere that this is what most average companies do.

Minimum check sizes are a great example. If you talk to these LPs and say: "Hey, LP in a big successful VC fund, do you want the fund to invest in the most likely company to succeed this year? If the only condition is holding below the target ownership percentage." Every LP would say "I'm in." I'd certainly rather own 1% of the next Google than 0%.

So that's why I pushed back, I think a lot of founders just get trapped in pattern-matching to what they think is conventional wisdom. They don't know that relative to all these standard, very investor-favorable terms, there are plenty of exceptions.

Harry Stebbings: I see what you mean, but what I'd say is, you and I are both exceptional, this isn't flattery, you did scale your business to $120 million ARR, and Limitless's zero-to-one right now is very successful.

But 99.9% of founders aren't like you and me. I almost worry they'll take this advice and say in fundraising, "we're doing 10% dilution," but that's just Dan Siroker's individual situation.

Dan Siroker: Thank you for saying that, but before I became who I am today, I went through this too. My very first Series A, I got Benchmark to agree to only about 8% ownership.

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One of the Most Common Mistakes Founders Make

Is Not Understanding the World from the Investor's Perspective

Harry Stebbings: So how did you get that round done? Did you meet Peter, or meet someone else? What was the process?

Dan Siroker: This was 2013, Peter was the first person I met. It was a memorable conversation, competitive too. They were willing to make some concessions, they had certain constraints, and I could meet their needs, it was a negotiation.

It was a negotiation, every negotiation is, everything is negotiable. They got lower ownership, and in exchange the valuation was lower too. So I think what's worth considering, if I step back and look at fundraising more broadly, one of the most common mistakes founders make is not trying to empathize with investors, not understanding the world from the investor's perspective.

They'll take a clip from me on your show and say: "Oh, Dan said ownership below 10%." They think their job is to get everything for themselves, when in reality, the best negotiations are often where both sides consider each other's motivations and drivers.

If you can find common ground, you can negotiate on things that don't matter much to you but matter a lot to the other side. It's a great way to trade for something you want with something they might want.

Harry Stebbings: What advice do you have for founders on what to concede and what not to concede in negotiations?

Dan Siroker: I think it's reasonable to make concessions on valuation. You have to recognize that often, the person investing, depending on where they are in their career, is betting a lot of reputation on you.

So you need to give them something where they can, like, brag to other investors at some ski conference in Utah about having invested in this company. Tell them "actually, what I got here is really valuable." And every other investor in their circle will say: "Oh, great!" and congratulate them.

So, think about what it takes to let that person do that, I think that's important. You have to make compromises in every negotiation, because that's how you make the other person feel like you want to work with them. And you know you ultimately have to work with this person, you don't want to squeeze every penny out of them and bleed them dry. That way, there isn't a pile of resentment on day one after the term sheet is signed.

So I think it's important to recognize where the other side is coming from and how you can let them get some wins. This is different for every stage and every investor, but it all starts with empathy. You have to understand their position.

Harry Stebbings: How do you advise founders on when to be willing to set up a board? Usually VCs want a board seat.

Dan Siroker: I was fortunate that Limitless doesn't have a board. But I do think that, generally, boards are helpful for first-time founders, and certainly the right board members are helpful for any company.

I've also worked with many very good VCs. Usually, the best advisor and investing VCs can help even without being on the board. For example, there's someone who invested a small amount in our company, I called him when I was confused, he picked up, and we talked. That kind of thing can be really meaningful.

I do think that as companies get bigger and closer to going public, boards become really important for governance and accountability. But when a company is still very early stage, it's hard for board members to keep up quickly and understand the situation.

They show up once a quarter, and you as the founder have context they may not have. So I generally think that if you're a first-time founder and find someone who shares your same long-term values, setting up a board might be worth it. But again, you shouldn't assume you have to do this with every fundraise.

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When Investors Ask "How Much Are You Raising"

It's Best Not to Answer with a Number Directly

Harry Stebbings: You're a master at fundraising. When you think about your own fundraising, how do you approach it? Can you walk me through step by step how you construct your fundraising strategy?

Dan Siroker: It's actually interesting, I've raised about $280 million across two companies in my career. Every time I've done it, it's actually been a little different. It's also been like honing my craft, like a stand-up comedian going to bars on Wednesday afternoons or whatever to learn what bits land, then keeping those.

So for me, every fundraise I've done slightly differently. The most recent one was very different and worked really well, I broke from the conventional wisdom that you should fundraise privately. Everyone says you should go meet with those specific five investors and hope they'll agree to invest.

I want to use an analogy to illustrate how absurd this is, given that 90-95% of companies fundraise this way. When you add an investor to your company, especially if they're a board member, it's like marrying them. Actually it's harder than marriage because you can't really get divorced. If you're going to be at your company for 5, 10, or 20 years, it's a very important, very significant decision.

Now imagine if you wanted to marry for love, and the only way you could find who you wanted to marry was, you had to drive to Sand Hill Road in Menlo Park, walk into five nice offices, and pick one of them.

If that was the only way you could decide who to marry, you'd find that absurd. Now, you can do the opposite through social media. Like Tinder or any dating app, cast a wide net and see who's a fit for you.

That's what we did in our last fundraise, we cast a wide net. It wasn't initially for fundraising, it was genuinely about building trust with customers and showing our business. And what happened was, we released our pitch deck, about seven minutes long. It went viral online, we had millions of views, received thousands of investment indications.

We got a lot of offers, with a wide distribution of valuations, and ultimately we chose a partner. I maybe could have found them on Sand Hill Road, they actually do have an office there. But I think this way is the best approach now.

Harry Stebbings: Who did you choose?

Dan Siroker: We chose NEA, and they've been great partners. One thing I really like about NEA is that they have a genuinely long-term perspective. They're often buyers at IPO, not sellers. That appealed to me, and they walk the walk on this long-term orientation — it really comes through when I talk to their portfolio companies and other founders.

Harry Stebbings: Dan, do you always just go with the highest price?

Dan Siroker: No, absolutely not. In fact, always chasing the highest price is almost certainly a mistake. I have real data to back this up.

Our last Series A had a distribution of valuations. We actually received 22 term sheets at a $1 billion valuation. We turned them down and chose $350 million instead. I literally have this distribution — the most common valuation was $200 million, there were a few in the $300 to $400 million range, and a small number as high as $1 billion.

Not only did we choose $350 million, but we invited every investor who had offered above $350 million to participate in a small allocation in this round if they wanted to.

So we got a great lead investor plus hundreds of smaller investors who became evangelists and supporters — they'd retweet when we launched new products. We got the best of both worlds.

Harry Stebbings: I totally understand and agree with you. I think the biggest challenge is people trying to stretch valuations to enormous scales. You mentioned NEA and their long-term investment approach. Typically people tell founders that if previous investors don't participate in the next round, it's a dangerous signal. As a serial founder, what do you think?

Dan Siroker: It's definitely something to consider.

You have to put yourself in the investor's shoes again. Especially when someone says, "I want to invest in Limitless," and tells their partner, "I think we should invest at this very high valuation relative to revenue" — you need to understand that they need the right evidence, motivation, and desire to do that.

Because if there's one objection — "Wait, it looks like Andreessen Horowitz invested in their seed round. Why isn't Andreessen leading this round?" — you need to have a good answer for that. And I don't think most founders realize this.

It comes back to empathy. You have to understand that for this person, if you have a good company and you're doing well, it's impossible that no VC would like what you're doing. And your job is often to give this person the data, information, and support to convince their partners that this is a worthwhile investment.

Harry Stebbings: I completely agree. I think people forget to apply sales skills and capabilities within a partnership relationship. What advice do you have for founders on how much to raise and how to price it? Like should they set a smaller amount and let the actual amount oversubscribe? Is it a cat-and-mouse game? How would you advise them?

Dan Siroker: First, I want to share some negotiation tactics you might not know.

When investors ask "How much are you looking to raise?" they often want more than just the amount. More often, they're actually asking, "What do you think you're worth? Let's start negotiating valuation right now."

Because like you said earlier, typically 10% or 20% — let's say 20% — is what investors want. If you say "We're looking to raise $10 million," they just divide $10 million by 0.2 and that's what they think you value your company at.

So it's better not to directly answer how much you're looking to raise. A better answer is: "We don't need to raise a specific amount, so we don't have a budget. We're looking to sell no more than this percentage of the company, and we'll let the market determine the valuation."

That's how I framed it. It kind of annoys investors because it doesn't fit their game. When they're writing memos for their partners saying "What valuation should we go in at?" it doesn't give them the information they need, so they get a little frustrated.

But I also usually say something else that annoys many investors. I've been doing this for 10 years, so I probably need a better answer. Usually when people ask me a very simple question — "Are you raising?" — my answer is almost never a simple "yes" or "no."

They just want a simple yes or no. But usually my answer is something like "No. But if we receive a term sheet we can't refuse in the next week, we might take it."

So you also have to recognize that when you say "yes," they feel like there's a clock — like "If they've been out there for three months or six months and haven't raised, other investors must know something I don't."

These are all traps you can fall into, but ultimately I don't think it matters that much. These are just marginal gains you get from understanding the investor's perspective.

Harry Stebbings: The worst thing I've heard investors and team members say is that they're not raising right now. I mean, if you want to make something happen, you can always get a round done if you want to.

How do you manage timing when you have a pipeline, you're waiting for others to get back to you, but there's pressure from another firm on the other side to give them an answer while you want to wait and see what others say?

Dan Siroker: This is actually something you can think about ahead of time and proactively plan for. For example, when we raised last year, we did it publicly. We released our deck, and for investors we felt were good final candidates, we gave them a Calendly link to schedule their first meeting. And all those meetings happened within one week, not spread out beyond that.

Another benefit of raising publicly is that you can run all your meetings simultaneously. If you're just taking investor meetings ad hoc, you run into exactly the problem you described — you might get a term sheet from one investor before you've even started meetings with another investor you actually want to work with.

I think we should think about how to plan and schedule the fundraising timeline in advance. For me, all first meetings happen in one week. Then everyone asks, "Where are we in the process?" And I tell them, "From this date to this date is first-round meetings. I have four final partner meetings. Next Monday I have three final partner meetings, then the following Monday I have two."

Then they have transparency, and they also don't want to miss out. So it's actually a win-win. Investors who haven't given you a term sheet yet also want to make sure they're not missing out. And then you set expectations with everyone that you'll make a decision by a certain date, and they'll work backwards from that.

So I think if you don't set these constraints, you fall into exactly the situation you described, where the investor who offers a term sheet wants to get ahead. They want to come in early, want to get a better price.

They know it helps them if they do this before you've gathered information from others. So you should work backwards to avoid this.

Harry Stebbings: Do you think in this process, you might not have enough time to get to know them as partners because you're so focused on getting the deal done?

Dan Siroker: I see what you mean. I think there's some truth to that, but I also want to make the opposite argument.

For example, when an investor, usually a junior investor, reaches out proactively and says, "Hey, we really like your business. We want to meet you" — that's actually transactional behavior on their part.

Because their full-time job is to get meetings for their senior partners, and when you meet that partner, it's not a relationship-building conversation. It's an evaluation of you that determines whether they want to try to get ahead in the next round.

That doesn't mean you should be transactional and utilitarian with them too. You can also quickly build relationships, like I did with NEA as our lead, by doing extensive reference checks.

The moment it becomes clear you might do a deal with them, the moment you get a term sheet, you can ask them for contact information for every founder they've invested in over the past five years. Even Peter Fenton gave me references, and he was a leader in the industry at the time.

I asked him for references and he gave me 12 founders' and CEOs' phone numbers and emails. He didn't even make introductions, just told me to reach out directly. Then I had great conversations with all 12 of these outstanding people. I talked to every single reference of his. That's how you really get to know the person who's about to invest in you.

When you meet them during the fundraising process, you only get a very specific and narrow perspective. When you do background checks on them afterwards, that's when you truly understand who someone is.

Harry Stebbings: Should founders always be fundraising? Some say founders should focus on building long-term linear relationships with investors rather than episodic short-term interactions, but this takes time away from operating the core business.

Dan Siroker: I strongly believe that you should have a clear dividing line on whether you're in fundraising mode or not.

Actually, I really recommend practicing and refining your pitch before a public fundraise, which is what I did. Before that, whenever an investor reached out, I'd send them a Calendly link for my investor meeting week. I used to think maybe once a quarter. Now I do it every two quarters. But I typically schedule a solid week of meetings with junior investors where I grind through my pitch repeatedly.

When someone reaches out, I say, "Hey, very interested, but I'm not fundraising right now. If you're interested, you can book a slot this week." So you accumulate some bookings, and then that week comes and you go into investor mode, which frees you from product mode or customer mode. You're not distracted in the middle of things. You can have 30 consecutive associate-level meetings to practice your pitch and adjust your deck in each one.

By the end, you have a very refined product, like I mentioned before.

Harry Stebbings: I completely agree on the continuous A/B testing and really measuring what works and what doesn't. Should founders engage with analyst-level people? What's the difference?

Dan Siroker: I think so. My take might reinforce what people on Twitter say about analysts not having much value. I treat them as practice.

A lot of the time, analysts won't even Google us beforehand, show up ten minutes late to a thirty-minute meeting, and by the end they're just going through the motions.

But I use those twenty minutes with them to truly hone my craft, the same way Chris Rock performs at bars in New Jersey. If you can sharpen your skills on an analyst who's checked out after twenty minutes and doesn't understand your business, then you can really shine in front of someone who does.

I know others disagree with this. Some people believe the questions you get from a truly great investor are different from what you get from an analyst.

There's some truth to that. But I think that by practicing on analysts, at least your deck is polished, you've answered all the right questions, and you've heard plenty of objections in advance. For me, my secret — and I probably shouldn't reveal this — is that almost any time I get asked a question, I will edit the deck or add a slide to the appendix.

So if I get asked that question again, it looks incredibly impressive to the other person. I think when they ask you, "Oh, so how do you plan to compete with Apple?" and you say, "Oh, let me pull that up in the appendix."

If you can answer their question with a carefully prepared, well-transitioned slide in the appendix, you're already signaling to investors — at least demonstrating your preparation. You're not improvising. So another reason I meet with analysts is to build out my appendix.

Harry Stebbings: I completely agree with you. I think an FAQ is a great way to proactively address their concerns and essentially provide them with internal materials they can use to pitch their own partners.

Dan Siroker: Exactly. I've noticed this a lot too — you can tell pretty quickly if the person you're meeting with has a predisposition, if they want to invest from the very beginning. Actually, I think every question they ask is what they think their partners or the senior partners at their firm will ask them.

So they just want to get some free "ammunition," so that when their senior partner comes back and says, "Wait, what's going on here?" they're prepared.

"How is this differentiated from AI? Is it commoditized? How are they going to pick something at the application layer?" And when you answer, you've already got everything ready — you're essentially doing their job, you're doing their homework for them.

And when you're in a meeting like that and you're in a good mood, you can feel the energy of their questions. It's not just because they're interested — it's because they can go report back and pitch to their partners. That's a good sign.

Harry Stebbings: At this stage, do you dislike people who have to go back and sell others? Like Peter Fenton doesn't need to do that — he just presents the facts, people see his excellence, and he doesn't need to "sell" the way we're talking about.

Dan Siroker: My view on this has actually changed quite a bit.

I think the best investors you can find for your company are people who are on the rise in their careers. You want the 35-year-old Peter Fenton, not the 45-year-old — and I don't mean that literally in terms of age. But you want someone who hasn't had their IPO yet, and you want them to be betting on you the same way you're betting on them.

Because when someone has already had a lot of success — and I'm not trying to diminish these people, I've been fortunate to work with some incredibly successful investors like Peter Fenton and Marc Andreessen who've had enormous success — the chances of you truly being the inflection point of their career are very small.

So what you want is someone for whom, deep down, you are the key to them reaching the pinnacle of their career. It's the same as wanting an NBA player who's in their prime, not someone who's already had a great career and is winding down.

I think you get the best out of someone when they're building something with you. Not when you're just another fancy logo in their collection of public companies.

Harry Stebbings: What's the difference between investors in the pre-success phase of their careers versus when they've become legendary?

Dan Siroker: One thing I've noticed is that some competitive investors can be incredibly helpful to companies. Because that state is just in their DNA — they're not doing it out of rational calculation. Because if they were rational, they might spend more time on other portfolio companies that could generate greater returns for their fund. Some investors fall into this category.

Then there are others — I can tell with some investors it's like, "Alright, I'll do the bare minimum of what I need to do. I'll show up to board meetings, I'll do what I need to do, but I'm not going to go all-out to help you recruit the best engineering leader I can find."

You have to know this: for a period of time, you'll be the favorite. There will always be a period, even after you close your round, where there's this favorite effect. But pretty quickly, they'll start allocating their time proportionally like highly rational economic actors, directing it to where they can have the greatest impact.

My take on this is, that moment does hurt a bit, but you also have to understand — this is a business. They're investors, this is a rational decision. And you're a founder, your job is to make the company successful. One thing I can't stand is seeing founders play the victim, saying, "Ugh, my investors aren't giving me enough help."

That's not an investor's job. Their job is to give you money and hopefully not cause trouble. If you get some help along the way, great.

But as a founder, your job is to make the company successful. So playing the victim, assuming your investors are the reason for your success or failure — I think you're deceiving yourself and your investors.

Harry Stebbings: Can I ask — with some of the world's best investors like a16z as your benchmark, how much does VC brand backing actually affect your company's trajectory?

Dan Siroker: I think it helps, but it's not decisive.

It helps with hiring. Great people can work anywhere, and if they have options, joining a company and founder where great investors have already done extensive due diligence significantly de-risks the decision. I think that's the most obvious benefit.

It may help a bit with customers, though rarely. If you're a B2B company, maybe somewhat in the enterprise market, but for the most part, I think it's mainly about building traction and momentum in the market, and potentially scaring off competitors. I did notice this — the round we raised, I think inadvertently put a lot of pressure on competitors.

I think it made other founders try to compete with us harder, made their jobs more difficult, because we had hundreds of investors and it created a lot of conflicts. You get competitive momentum, like their appendix slides are all answering, "How are you going to compete with Limitless?"

Harry Stebbings: Do you think there are major misalignments between VCs and founders that don't get pointed out enough?

Dan Siroker: For most of the journey, until the very end, their goals are fairly aligned.

But at something like selling the company, their motivations and incentives may diverge. I think a lot of founders have a very binary view of outcomes. They think it's either zero or a multi-billion dollar public company.

Actually, I think the more likely scenario is that they ignore the middle outcomes — like 2x or 3x the money you raised, or slightly more.

And things like liquidation preference really matter, so I think these are different middle outcomes you need to have in mind and think about, and where you might diverge from them, to make sure you don't, for example, raise too much money and then get a bad outcome.

You know, investors have very different payoff rules. Basically, if you sell the company for around what you raised, or slightly more, the difference between "around what you raised" and "slightly more" is hugely meaningful for your employees. But for investors it barely matters, because they're basically just getting their money back.

So in that situation, you really need to think carefully about what you've raised and how you structure the company. Never accept more than 1x non-participating preferred liquidation preference. Otherwise it can lead to severe misalignment.

Harry Stebbings: Do you think we're heading into a painful world of liquidation preferences? We're seeing a lot of people who raised a lot of money, and I think in many cases investors will get their money back. Not all, but in many cases everyone else will be in pain. Do you agree, and any advice?

Dan Siroker: I think it's very possible, especially in situations where during COVID a company raised at a certain valuation, and they had too much pride and fear around that valuation — if they needed more money, they were terrified of doing a down round. So they deceive employees and say, "Hey, we did an up round." But behind the scenes, what they actually did was triple the liquidation preference, which basically means none of the employees' stock will be worth anything.

So I do worry about this. If you're a founder considering an up round with liquidation preference, or a down round — please, 100% choose the down round. It's much better for you as a common stockholder, and much better for your employees.

When someone says, "Oh my god, this company I thought was worth a lot of money is now worth less" — that hurts, but it's okay. They'll leave, or you can hire other people. You'd rather be at a company with a lower valuation and lower liquidation preference.

Harry Stebbings: When you look at founders around you, what do you think is the biggest mistake they make when fundraising?

Dan Siroker: They don't recognize that control is something important to preserve.

I do think when you think about control and governance, you shouldn't view it as offensive to investors. Investors are highly rational. If they were founders, they'd ask for and want as much control as possible.

Many former founders who are now investors wish they had had more control. So I think you should make sure to ask for multiple board seats. You should ask that certain investors not have board members, maybe just board observer seats.

That can feel a bit personal, I think, because you think, well, you don't trust me. But ultimately, you're just being rational. As the founder of the company, you actually have a fiduciary duty to represent the interests of common stockholders.

That's your employees. So if you want to do what's best for your employees, you want to control the outcome of the company as rationally as possible. Representing them, and representing your own interests too, because you're probably also a large common stockholder. You should be willing to fight for things like super-voting rights and multiple board seats.

Harry Stebbings: Do you think most investors get in the way?

Dan Siroker: No, I actually don't think that. I have some of the best investors in the world, and I've come to accept that they're busy.

I'll send updates to our investors. We probably have 200 people on our investor list, but usually only get 20 replies. Most people are like this — we're just one of many companies they've invested in. So you just have to recognize that even great investors, you're just one of many companies they've invested in.

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"Dan, five years from now, what about this keeps you excited?"

Harry Stebbings: What's the best VC meeting you've ever been in? Looking back, you think, "That was the one." Including your experience at both companies.

Dan Siroker: Probably the first time I met Peter Fenton in 2013. I think what made it memorable was, first of all, he came in with a full brace on his knee. He could barely walk. The reason was he had just gone heli-skiing and destroyed his knee, but he still came to the meeting.

I think there was something kindred between him and me, this need to prove something else to the world. Anyway, he later learned to fly helicopters because he wanted to conquer the thing that had destroyed his knee.

I very clearly remember the first question he asked me. At the time I didn't know why he was asking it or why it mattered. But in retrospect, I totally get it.

The first question he asked me was, "Dan, five years from now, what about this keeps you excited?" This was 2013. In 2018, exactly five years later, I started feeling trapped, resentful, alienated — going through all these emotions. He had pinpointed and asked this question with remarkable accuracy.

At the time I probably gave him some answer that I thought was true, but if I had really internalized that question, I could have done better and maintained my love for the business.

Because what he had found — maybe based on his own experience, or his experience taking companies public — was that all these accomplished founders were persistent people. They were able to stick with it. They were able to maintain their love for the business for 5 years, 10 years, 20 years, 30 years.

At the time I misinterpreted that question as, "Oh, that's an interesting question." You know, I thought maybe he was trying to flatter me. But he was actually genuinely trying to understand my motivation, what drove me.

This is what I've learned in starting Limitless. I'm going to make Limitless my life's work. Even if we fail, I'll keep working on it. I'm proud to be trying to solve the problem we're solving. So that was probably my most memorable meeting.

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In the AI Investment World, What Matters Most Is Finding People Obsessed With the Problem

Harry Stebbings: As an investor, this is a very difficult world to navigate. Investing in an AI world where leadership is so fleeting: one week it's Mistral, next week it's Llama, next week it's OpenAI.

How do you think about where we are now, and how do you analyze the space today? I know it's a broad and thorny question, but how are you thinking about these things?

Dan Siroker: I think if you're an investor today, the most important thing is to find founders who are obsessed with the problem rather than the solution to the problem.

Many founders, especially former crypto founders, tend to think AI is the solution to all the world's problems, when in reality they're looking for a problem for their technology.

I learned this wrong pattern at Google. I started my career there as a junior PM, and Google was notorious for building products that looked for problems for their technology — Google Wave, Google Buzz, Google Glass, all these products basically started with some smart engineer or technical person saying, "Wouldn't it be cool if..."

So if the startup you're evaluating, or the technology you're considering, starts with "Wouldn't it be cool if..." and that "if" refers to the technology rather than the problem, then I think that's a very strong wrong pattern.

Now, the only type of company I really invest in are companies that deeply care about a problem, where AI technology just happens to potentially solve it, rather than being ideologically wedded to that idea.

So I think that's the filter you should use. It shouldn't be "Is this company application layer or infrastructure layer?" It shouldn't be "Is this person a first-time or second-time founder?"

It should be: "Is this founder obsessed with some problem in the world? Is this problem real? Do other people have this problem? And do I have confidence that this founder will persist in trying to solve this problem, and maybe has some of the necessary skills and technology to do it?" I would focus on founders who are obsessed with the problem.

Harry Stebbings: How do you think about the visibility of problems? I mean, everyone knows AI customer service and AI sales reps — these are the two most common use cases we see. These are definitely "problems," but everyone sees them. If it's a problem that the whole world can see, does that mean it's not a quality problem? How do you think about competition?

Dan Siroker: I think every problem has the potential to expand over time, so I don't think the size of the problem should be the deciding factor.

To some extent, you actually want to select founders who get excited about smaller problems, because that tells you they're not just interested in what they saw on social media — they actually care about something. The best example is founders who found something incredibly annoying at their last company and said, "You know what? I started this company to solve this problem." It might just be a niche problem.

We want to find people who have seen this problem with their own eyes, who have even personally experienced it. For AI customer service, the best CEO would be someone who's been doing customer service their whole career — answering support calls, all of that. That's who you're looking for.

Is this founder the right person to build a company around this problem? Rather than someone from McKinsey whose first slide is a market map, TAM, and then saying, "We're going to pick this segment." That's an immediate red flag for me, at least.

You want the person who can't sleep at night if this problem doesn't get solved. Maybe there are already a hundred other companies in the market, but you know this one will succeed because the founder cares so deeply about it and understands it.

Let me give you some examples to illustrate why this matters so much. When we started Optimizely, it succeeded because it was the product I wished I had during the 2008 Obama campaign.

Because I had used Adobe and Google's A/B testing, I saw all the pain points. I saw where those products were difficult. And it wasn't about missing features — on the contrary, what the market needed was a product that didn't require a developer to understand, a WYSIWYG product.

We didn't do a lot of things that McKinsey consultants advised us to do. We didn't do multivariate testing, we didn't have all these things they thought were necessary. But if you're an insider, if you've personally solved this problem, you quickly know what's important and what isn't.

So as a founder entering a new market, if you've personally handled customer service calls, you'll understand this problem better than an outsider who hasn't had that experience. So that's who I would vote for, that's who and what I invest in.

Harry Stebbings: You mentioned features, and I think feature bloat is one of the most dangerous things. How do you think about product simplicity and its importance today? And how do you prevent feature bloat?

Dan Siroker: I think this is something the CEO really needs to lead, because it's hard for everyone else in the company to say no. Especially when a customer says "I have this problem," and your engineer says "I know how to solve it," you end up with a product that just solves that customer's problem.

Which isn't terrible. Your engineer can empathize and listen to customers — that's good. But what about a hundred such features? You end up with a bloated, unfocused product.

I think founders need to be able to accept, understand, and intuitively sense the market, customers, and investors.

Ideally, you should know enough about technology to understand the effort required to build things. Not just the upfront effort to build, but the ongoing effort to maintain. So you have to know that everything you build, you're making a commitment around that feature.

I've never seen a situation where we ship a small feature and we're done. There's usually some "Oh crap, there's an edge case we didn't think of," or "Oh, now this other person wants to do something else." So you're making a commitment that you have to keep feeding.

So again, it comes back to saying no, making decisions, choosing what you think is most important. "The main thing is to keep the main thing the main thing." What are the key features users actually care about? What will they actually use?

Harry Stebbings: At any of your companies, was there something you should have said no to but said yes to, and what did that teach you?

Dan Siroker: At Optimizely, we passed on areas that ended up becoming huge, successful companies.

Product analytics is a great example. I had tried to acquire Amplitude when they were just four people, about to raise money. I remember sitting down with Spenser Skates — to this day I'm impressed by them — and I offered them a life-changing amount of money.

But they took Benchmark's term sheet. At that moment I should have said, "We're going to crush them, we're going to do product analytics too." I think it had a lot to do with my ego. I should have been more like Zuckerberg: "Fine, they didn't take our offer. Let's crush them." We already had the channel, we had the market, we could have been a much bigger company. And now Amplitude is a large public company.

Another example is Segment, another company in an adjacent space. We tried to acquire them, but they were already late-stage at that point. They said no, and they ended up succeeding too.

We had these adjacent ideas that were actually very compelling, and we saw them early enough. What's interesting is that for both of these companies, I thought, "Oh, it's too late. Amplitude already has a huge head start."

So I think it was my own insecurity, maybe too much ego, not seeing that this had to be my idea too. But I think both of these were cases where I should have said "no" but said "yes."

Harry Stebbings: Your product launches have been incredibly successful, almost like Apple product launches. When doing the Pendant launch, what important lessons would you share?

Dan Siroker: If I were to give you any advice, it's to focus on the problem, care enough about the problem that when you talk about your product and your launch, the problem is crystal clear.

I think it's a big mistake that founders sometimes make — they do this big, flashy launch, and by the end people are scratching their heads wondering, what problem does this actually solve? Like, how does this improve my life?

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Rapid Fire

Harry Stebbings: I could talk to you all day, but we're short on time. So we're going into rapid fire. I'll make a short statement, you give me your immediate thought. Sound good?

Dan Siroker: Sure.

Harry Stebbings: Why didn't you go through Y Combinator for the second startup?

Dan Siroker: I probably should have, I kind of regret not doing it. I think maybe it was my pride, I felt like I didn't need it. Even if you're a repeat founder, YC has so much to continuously offer — recruiting, Office Hours, I'm really impressed by the innovations Gary's made at YC. So I probably regret it.

Harry Stebbings: If you were to start another company, and you could have any one person on your board, who would you pick and why?

Dan Siroker: Probably Sam Altman or Elad Gil, they've been incredibly helpful to me. They're two just wonderful people who always give prescient advice, have deep intuition about markets, and have always been honest and direct.

That's another thing I need from a board member or anyone — they won't shy away from telling you the truth you need to hear, trying to protect your ego. So I'm especially grateful for that from them in the past.

Harry Stebbings: Imagine you could call yourself and give yourself advice before your wife gave birth to your first child. Knowing everything you now know about fatherhood, what advice would you give yourself?

Dan Siroker: This is going to be harder than anything you've ever done, and you should set your expectations very low. If you want to do one thing well and focus on what you care about, you have to give up a lot of things in your life that you think are important.

Harry Stebbings: Why is it so hard?

Dan Siroker: Especially in the early days, these tiny lives need you to feed them and care for them. You have this training window before they start walking. I think maybe that's why humans evolved to walk so late, because it's so hard. Combined with a startup, by the end you're just exhausted. Honestly, I've basically cut out most social time. I have almost no hobbies.

But for me, all my time is spent with my kids, my wife, and work — and I'm happier than I've ever been. So it's created a level of focus for me. Three kids is way harder than one.

Harry Stebbings: Would you have a fourth?

Dan Siroker: I haven't ruled it out. It's just considering everything I have going on right now, it's definitely not the time. And, I really enjoy and cherish this age with the kids.

It's special with them, like a five-year-old who just wants to run around the house with you or let ladybugs go or whatever, it's very special time.

A fourth kid would mean dividing more time. I feel like we're very happy with our life now, and it's getting better and better.

Harry Stebbings: Someone once told me, cherish every moment your kids run to you when you come home, because you never know which time will be the last time they do that.

Dan Siroker: I really treasure and appreciate those moments, and it's given my life a focus I didn't have before. I have purpose and meaning, and you might miss that feeling if you don't have kids.

Another thing I love about it — this sounds very technical — I love observing how they learn and grow, imagining the parallels to AI and AGI. And from first principles, witnessing and understanding intelligence, and what it means to be human.

In a world where AI and technology can do the same things as humans, observing and learning from this world is really so fortunate and fascinating. Being able to do both, and become an expert in learning both at the same time, is really interesting.

Harry Stebbings: Over the next 20 years, what are you most worried about the world they'll grow up in, and what are you most optimistic about?

Dan Siroker: Honestly, what I'm most worried about is technological pessimism. People who are pessimistic about technological innovation, they cling to a past that doesn't exist and never will.

I remember when I started Optimizely in 2010, being a founder was a cool thing. Even in San Francisco, being a founder was cool.

But I think after the Google bus protests, actually The Social Network movie inspired a lot of people, brought a lot of entrepreneurs. But you went through a period where being a technologist, building something, was a cool thing, and I think that was good for society.

It was good for entrepreneurs, but it's not always true. In some countries, it's definitely not true today, especially in America. Florida just banned lab-grown meat. It's this counter-current against technological optimism, and I think that can be very dangerous. We might enter a dark age, you know, it's happened at least once in society.

Harry Stebbings: Don't you think it's too late? Technological pessimism can't stop the development of AI anymore?

Dan Siroker: Maybe, I don't know. I mean, governments have control, it just takes one or two bad policies and they can do whatever to you.

We're not far from regulation of AI models, and unfortunately the challenge is that technological pessimists are on the same side as regulators, and there's a lot of money involved.

So, technological pessimists plus regulatory capture could create a world where a lot of AI innovation stalls. And to do a lot of foundation model AI innovation, you need to spend a lot of money.

So if it were as simple as the internet, where you didn't need much money to start an internet company, you could leverage the natural advantages of the internet, get more and more people on the internet. In 1996 or even 2000, you just built a website, and if it was good enough it grew. If not, it didn't.

But AI today isn't like that, you need massive capital. You want the government not to interfere with you, but there's a good chance they will. My kids might grow up in a world where we look back at today like we look back at the Renaissance.

There's a good analogy here. The way we view AI today might be like how people viewed the Space Shuttle before SpaceX — like, "Hey, we had the Space Shuttle, we retired it, now we're not going to space anymore." Until SpaceX came along, new technology was developed, entrepreneurs like Elon Musk pushed the boundaries, and things got better. That very well could be true.

I want to see a thousand flowers bloom, see lots of startups, I want to see lots of new innovation. But people like to hoard their pearls, technological change is hard. And when it might affect your job, I don't think it's impossible for the technological pessimists to win.

Harry Stebbings: Last question. If you were to paint a picture of Limitless in 10 years, in 2034, what would you say?

Dan Siroker: There will be millions of active users using our product every day.

One of our biggest advantages today is that people first look at our product and say, "Why would I capture every word I say here? What's the point of that?" Our product goes from weird to accepted.

Like Wi-Fi on airplanes. You think, "Wow, this is weird. What's happening?" Then you think, "Ah, it's not fast enough!" It's this shift in societal perception of what we're doing.

Capturing what we say, what we hear, what we see, and using it to augment human intelligence combined with AI, rather than replace human intelligence. For me, success in 10 years is our product being taken for granted.

People will look back at today and say, "Wait. You're telling me in 2023, when you wanted to remember something, you pulled out this rectangular object made from a tree called paper. You took this pen with ink at the end, and scribbled on the paper. That was the best way to remember things in 2023?" People scoffing at what memory used to mean — that would be success in 10 years.

Harry Stebbings: That's fantastic. I've really loved this conversation. Honestly, it's so refreshing to be able to discuss something with such candor and detail. So thank you so much for being such a wonderful guest, I've loved this.

Dan Siroker: Thank you, Harry. It's truly an honor to be on your podcast, and great to be here.

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