Building Startups that Last (Part 1 of 5)

This is Part 1 of a 5-part series on the critical factors that startups need to win.

There's no shortage of startup advice, and most of it is easier to give than to use. So before I add to the pile, here's where mine comes from. Then you can decide how much weight to give it.

Parse.ly: 13 years, start to finish

I started Parse.ly in 2008 and ran it as CEO until Automattic, the company behind WordPress.com, acquired us in 2021.

It took 13 years. We grew to tens of millions in revenue and were profitable well before a sale was on the table. At the time, we were Automattic's largest acquisition by cost and revenue. It wasn't a straight line: we pivoted, nearly folded more than once, and made plenty of wrong calls. Much of this series comes from those years.

Turning down money

In 2017 we set out to raise about $5 million. We were offered more than $40 million. We took $6.8 million.

We wanted to grow at a pace the business could support, not one a giant round would demand. I worry we're back in a market where big raises will sink a lot of promising startups.

Doing it again with elvex

Now I'm building elvex, an agent platform that helps every employee become AI native. We raised a $6.4 million seed round, and we're working through the same problems as any early-stage company: proving value to enterprise buyers, and building AI that people use rather than just demo.

So far it's working. We reached several million in revenue within 18 months of launch, with 140% net revenue retention and gross retention above 90%, without raising a huge round. The lessons in this series aren't from memory. I'm using them every week.

What investors look for

Raising for two companies in very different markets taught me that investors care about one question: can you build a business that works? What counts as "works" shifts with how much money is around. When capital is cheap, investors fund vision. When it's tight, they fund execution.

Across cycles, they look for three things:

1. Proof you can execute. You ship, iterate and close deals, and you can show it.
2. A moat. Vertical specialization, proprietary data or workflow lock-in: something that makes you hard to replace when competitors show up.
3. Unit economics that work. You don't need to be profitable yet, but each customer has to be worth more than it costs to win and serve. If that math doesn't work at 100 customers, it won't at 10,000.

Mentoring other founders

I've also mentored founders through several startup accelerators. Seeing many teams up close makes the patterns easier to spot: what tends to sink a team, and what keeps it going.

What this series covers

Luck matters, and I won't pretend it doesn't. But this series is about what you can control. In the next four parts:

• Part 2: The Two NECESSARY Company Traits to Win
• Part 3: The Foundations of Founder Success
• Part 4: Creating a Betting Culture
• Part 5: Farming Talent over Finding Talent

Let's get to work.