How VC Money Kills Great Products

Many great products started as a side project. Those that continue as side projects (in the long term) tend to become great companies (GitHub, Sentry, Zapier, etc.). Unfortunately, many get swallowed into hype cycles and lose their relevance.

What follows is a description of what the life-cycle of such a product journey may look like from a founder's perspective.

So you started a side project and it gained some traction.

For a while, it feels like you are riding the wave. You started something that you had an itch to solve (a hobby). It's gaining adoption, users are giving feedback, the community is growing, etc.

Then one day you wake up and your side project is being discussed at the top of Hacker News and other websites. It's exhilarating!

A few copycats emerge, but you ignore them because you are solving your own problem and no one knows how to solve it better than you.

At this point, you might receive a few investor emails. Typically associates. Nothing serious yet, but they are asking for a call. You feel recognized, but (assuming this is not your first rodeo) you stay focused and ignore them.

You go back to building. You are still working on your project part-time, but you wish you could spend all your time on it. Regardless, you are having a great time and building something that you enjoy obsessing about.

Then, a few weeks or months pass, and you wake up to headlines talking about your competitors (those same copycats) announcing their seed round. Maybe a few million, maybe more. It's unexpected. Slight panic kicks in. But… you are way ahead of them, so you continue to build, but now you start to think that what you have might be more valuable than you thought before.

This is also where you consider switching to your project full time. After all, the market has validated your idea.

Except now your competitor is in the news every other day (leading with preposterous revenue claims), their job offers are being discussed by your users, they sponsor the newsletters you subscribe to, suddenly every other Reddit post is about them (influencer marketing), etc. They even relaunch with a way prettier (agency-built) landing page than yours. It is becoming hard to ignore them.

Meanwhile, if you have been bootstrapping, your bills are due. Your roadmap suddenly feels overwhelming. Your users are asking for free credits because your competitor is giving $100 to everyone that signs up, etc. You start to feel the pressure.

Furthermore, everyone sees their "success" and suddenly a handful of copycats turn into 10, 20, 30… and soon 100+ similar products being announced (I counted 78 products launched in the MCP space in the last 12 months).

Additionally, if you managed to retain some of the early mover advantages (like SEO, community, thought leadership, etc.), then suddenly occasional investor emails become a daily event. Except now, it is not the associates emailing opportunistically, but the managing partners writing essays, asking for intros through your friends, somehow getting your phone number – heck, some will offer to skip due diligence and commit after one call.

Long story short, most founder friends that I have cave at this point, and one way or another, take the money. It's sad because from that point on, you are no longer building for the community, but you are building to "grow."

What prompted me to write this was an interaction with a founder at a company that recently went through a similar path. We followed the same path, but eventually they decided to take the money.

I recently messaged him to check in and shared a feature suggestion that had been on my mind for a long time. He replied that it would be neat, but "they are focused on revenue-generating features." I knew exactly what he meant: not features users were asking for, but features designed to lock users in.

Another product chasing 10x returns instead of listening to users. The edge they had – being down to earth, actually caring what people wanted – was the first thing they traded away for growth metrics.

So what's the practical advice?

Try to build for fun. At least once. Build driven by curiosity, user love, and the desire to create something meaningful. Not for growth metrics or fundraising milestones.

It may not work out—building something from the ground up is incredibly hard, especially outside media hype cycles. But you'll learn what it feels like to build with intention. And should you choose to raise VC money later, those learnings will guide you through the deep waters. You'll know what you're trading away, and whether it's worth it.

Appendix

Thank you to the teams at Inngest, Sentry, and Fly.io for supporting Glama early on. Your small but timely help made bootstrapping possible. Still early, still uncompromised, still loving it.