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Build AI Startup for $10M ARR, Not $1B Exit

If I were starting an AI company, I would not aim for a $1B exit. VCs will hate this, but I think the new startup model looks like this: In this 1,000 word post I’m going to cover: 1. Bootstrap vs Venture Capital 2. The 4 skills that matter now 3. Where the biggest opportunities are 4. How you should go to market 5. What success looks like INTRODUCTION In 2025, what should be the goal of starting a new venture? Simple. Generate +$10m ARR with less employees than fingers on one hand. Either sell that company, or replace yourself, take some time off, and do it again. And again. Why? Because the relative attractiveness of a business like RB2B … …which LITERALLY RAN ITSELF as a $6m ARR company as the 3 FTE’s went off the grid for a week… vs a VC-backed startup is GREATER than it’s ever been. We sat here and proved that it’s simultaneously possible to: - Hit $6m ARR in 18mo - Have only 3 FTE’s, and - Be AI-native enough to leave for a week And today we’re growing FASTER, from a 50% HIGHER BASE, than we were six months ago. ——— BOOTSTRAP VS. VC The risk-adjusted financial outcome of bootstrapping has always been far greater than VC. Most VC founders don’t make money. (The few that have will comment that I don’t know what I’m talking about. Hi guys 👋) At my other business - Retention.com - we were able to DISTRIBUTE $5m in cash to the founders on our way to $10m ARR. And we haven’t sold, and yes, that business is stuck right now, but the reality is that it generates $9m in profit and we find ways to fight the churn and reinvent ourselves. Meanwhile, almost all of the venture-backed vendors in the Shopify space (with a few exceptions) are suffering a similar fate while burning large amounts of capital every year. Yes, Klaviyo is worth $10b. Yes, there are 1-2 other potential epic success stories. But for the most part, I think if the founders of the other 80% of companies could turn the clock back, they would have probably chosen to do it more like we were doing it. And it’s not just about the money the founders make. That’s just a nice perk. Inevitably most founders stall out and are required to reinvent their businesses completely. The stress of having to do that when you owe someone $100m and your equity is FOR SURE worth less than that, vs. experiencing a mini-exit once a year while you’re doing it, is a night-and-day difference. I can’t imagine how miserable I would be if we’d raised $50-$100m in 2022. If I’m honest, I probably wouldn’t be around anymore. ——— THE 4 SKILLS THAT MATTER NOW I believe that an entire internet will be built on top of the current version of LLMs, with little incremental improvement of the base layer necessary. It can already do an incredible amount of things unbelievably well… IF AND ONLY IF you know how to prompt well. Realistically, the average joe will NEVER be able to prompt well. And there is a multi-100-trillion-$ opportunity in that fact. CONTINUED BELOW 👇