You don't owe your investors (or yourself) a pivot.

Maximizing your expected value sometimes means calling it quits.

I’m in Italy for a week and as those who follow closely know, I believe in the sanctity of the extended VC vacation. This trip is too short so the transaction costs of taking it are proportionally too high! Back to the content mines:

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When early companies fail/are failing, founders feel obligated to give it another go and make something, anything work. But that’s not the deal we made.

We gave you money to try something and to prove whether or not it’s a good idea (that is viable and valuable).

The only thing you owe us is proof (positive or negative). You should absolutely feel obligated to make good on that commitment. Exhaust every avenue and resource to do what we set out to do and turn over the card. That’s the deal we make going in.

But if you prove that it’s NOT possible on half the money we gave you instead of all it, that’s even better. You’ve fulfilled your obligations and commitments to yourself and your investors.

Pivots almost never work:

• You need an actually good idea. These are rare and hard to come up with in real time.

• You need resources sufficient to test it. You've already spent much of the money you raised.

• You need the energy and excitement to keep going RIGHT NOW. Struggling is exhausting and you've been struggling for a long time.

Most of the time, companies heading into a pivot are playing from behind/operating with one hand tied behind their back. They have insufficiently validated ideas, not enough money, and exhausted teams. Even on the curve of startups that almost never work, pivots really almost never work.

Much better to just shut it down knowing that you’ve fulfilled your promise to yourself and your investors. If you have a really great next idea, you’re almost definitely better off just starting again (after some time off and time in the idea maze).

If you need help deciding if you should shut down or keep going, we can chat. The rest is easy; your VCs will get over it.

Finn Murphy took the opposing stance, which, like, I get:

I am a firm believer that great teams are not enough and I do not back companies on the basis of team alone. You need great ideas and provable hypotheses. So when I invest, especially when I invest super early, we have a very clear understanding of our goals. Sometimes we even create criteria by which to shut down the company and move on in <12 months if it’s not going as we collectively hoped.

The key factor here is pressure and expectations. It’s not that pivots never work - they sometimes do - but rather that you shouldn’t feel obligated to do them.

If you’ve discovered something better, then great. Let’s figure out how to make it so: either as a newco, a recap, or a continuation with the existing capital.

But very often/most of the time pivots are executed from a place of fear and obligation, not excitement. Antitode put it well:

Most pivots are less ambitious than the original idea. Founders are scared to fail twice and of course you have less runway. If you do a pivot, do not lower ambition because it still needs to be a credible venture bet.

I will not pressure you to shut your company down and I will not pressure you to pivot for my sake. But you owe it to yourself to do the expected-value-maximizing thing. Your investors can eat the losses but you can’t get the time back.

Ali Partovi agrees with me.

Podcast

Megan and I made a joint appearance on the Going Direct podcast to talk about decentralizing the economy and empowering long tail business builders across creators, commerce, and code. You can listen to/watch the podcast on Spotify, Youtube, and Apple Podcasts

We get into the mechanics of our creator fund, SMB investing, real world entrepreneurship, etc. As you’ve heard me say before, it’s kind of all one bet across multiple trades.

I Read

• I just finished Skinny Dip by Carl Hiaasen. These are really fun books about the seedy underbelly of crime and environmental degradation in South Florida. Classic crime and caper. We’ll see how much reading I get done in Italy: short trip with a busy itinerary.

• U.S. Will Receive ‘Golden Share’ in Steel Deal - NYT

  • “As part of a national security agreement that the companies will sign with the Trump administration, the federal government will get a so-called “golden share” in the deal. As a result, the administration will have a say in who is appointed to the company’s board from the United States.”

  • Trump wants to start nationalizing companies and bringing them to heel under his political control. MAGA Maoism strikes again!

• Toward a Unified Theory of Uncool: Considering the NBA's swag crisis, Zyn, and the West Village Girls - Never Hungover

  • This is gonna be catnip to a few of the real sickos on here. Looking at you GC. Basic thesis is that the totems of our culture are no longer cool; they’re legible, optimized, and inoffensive.

• Everyone Is Cheating Their Way Through College - James Walsh, NY Mag.

  • I’m very nervous about what happens to reading comprehension, critical reasoning, etc. as a result of AI. It’s not necessarily true that it has to diminish our abilities but I do believe it’s likely that it will, at least for a substantial part of society. In order to avoid that future we need to substantially change what schools do and how, which probably includes incorporating AI into the classroom/syllabus as a tool.

What steps, if any, have you taken to ensure that AI is enhancing rather than replacing and atrophying your cognition?

• Mississippi’s education miracle: A model for global literacy reform - The Conversation

  • There’s some really awesome progress going on in the Deep South where schools are implementing a new evidence-based approach to literacy and test scores are soaring. Educators are getting more training, students are getting more resources, requirements are going up (if you fail the test you repeat third grade), and there’s a new curriculum emphasizing phonics and parental support. It’s working!

  • “Students exposed to [the new program] from kindergarten to the third grade gained a 0.25 standard deviation improvement in reading scores. That is roughly equivalent to one year of academic progress in reading, according to educational benchmarks. This gain reflects significant strides in students’ literacy development over the course of a school year.”

  • So this is all to say that hope is not lost for reading and thinking in America. This is also the exact opposite of whatever the hell seems to be going on in the SF public school system.

I Wrote

• You don’t owe your investors (or yourself) a pivot. We make a deal about spending money to prove/disproven something. Once you've done that (even if the answer is "false") your obligation is done.

Hackathon

My good buddy is doing this hackathon in NY in a couple weeks. I’m probably gonna stop by for a hang. Seems like it’ll be a good group.

General Catalyst, Stripe, and Amazon are hosting a one-day hackathon in NYC on June 14 focused on the next wave of commerce — powered by AI agents.

We’re bringing together top builders from companies like Ramp, OpenAI, Shopify, Meta, and more to explore:

•Agentic Payments 🛒

•Multi-Agent Shopping Assistants 🧠

•AI-Native Product Experiences 🎯

•Infra for Agent-Led Commerce ⚙️

If you or someone on your team loves shipping fast, thinking from first principles, and building at the edge — apply to join or nominate a teammate. Teams are 1–3 people max. Limited spots, we are filing fast.

Apply here