Jason M. Lemkin says investors now expect startups to grow from $1M to $100M in a single year. Founders pitching 3x revenue growth are told it's not enough anymore, making solid businesses that would have been fundable years ago effectively unfundable today.
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Look, here's the challenge. The challenge isn't even all the clones. I think we've accepted there's a lot of clones. I think we've accepted there's 1,000 competitors now. The challenge that— I mean, you guys know from the show, but not all founders have internalized. It's just investors are expecting insane levels of growth. Insane levels of growth, right? They want— like, the idea that you could go from 1 to 100 in a year is now seen as what you want to invest in. That used to be almost unprecedented. It did happen in the old, old days, right? Now there's, there's companies that like I invested in early, like Higgsfield for video. People never even heard of Higgsfield and it's $100 and something million, right?
It's over $200 now. Yeah.
Yeah. But that's not like Harvey, which we're talking about every week, right? Or Lovable or Replit. And so you— and then, and then the problem, guys, is you look at Figma and it's terrible. But Figma, Figma is almost soul-crushing for investing because you can't get much better than Figma. It's down from its IPO. It's trading less than 10 times revenue. And that's for owning and creating a category. Who's invested in something much better than Figma? I mean, not me. Sure, sure. So on the one hand, it's great, the best times of others. On the other hand, it's like, Figma isn't good enough? Like, let's call it a day, guys, and do media companies because it's just too hard.
Yeah, I mean, I've had at least a couple times over the last year where a portfolio company is like a company that is maybe a pre-seed company trying to go out and raise a seed or maybe an A, and they're like, hey, can you look at my deck? And I'm like, the deck is beautiful, but you're projecting to grow 3x this year, and that's going to be a nightmare for you because it just doesn't look like the business is best in class anymore, even though you're like, wait, I'm going to 3x revenue this year.
Yeah, it's— and unfortunately, there's no great answers to this, right? There's no great answers to the question that, Some great businesses will compound to epic rates, but they're unfundable now and they would have been fundable 2 years ago. There's no— there's literally— I don't know what the answer is today. Right.
