Congratulations to Murage and Amit, who have completed their grants!

To apply for a grant or investment, see here.

Cheers, Ronan

Murage Kibicho. For LeetArxiv - a coding platform for implementing research papers, with 1000+ subscribers and growing sponsorship revenue.

Amit Halkhoree (Stealth Bio). Working on novel small molecules targeting the gut brain axis.

To apply for a grant or investment, see here.

Cheers, Ronan

Uttam Singh Somvanshi. For prototyping and piloting an indoor navigation map with a dynamic emergency evacuation system.

Kush Agrawal. For Cipher - a tax filing solution for small and medium-sized HFT firms, handling high volumes of transactions with optimized algorithms and tax rule compliance.

Congratulations to those who completed grants or received an investment over the last quarter:

• Askar Uval [Investment]: An ultra-fast, zero-friction course platform. Potatix.com.

• Vivek Kommi: A novel way to calculate caloric intake non-invasively using a wrist-worn wearable device aimed at aiding obese individuals. Linkedin.

• Eva Fata: Creating a healthier version of Ensure for cancer patients, without the added sugar, additives and preservatives. LinkedIn.

Two brief updates:

1. Éire Ventures is now Arraig. I called it Éire Ventures (Ireland, in Irish) because I do love Ireland. However, most participants have not been from Ireland. And, if you read any of the other posts on this website, the program has always been about finding great talent worldwide, particularly though online means. I don’t want applicants to think the program is limited only to people in Ireland. Arraig (the middle part of the Irish word for sea) is the name of the company behind the grants, and it’s a nice short name where I own the .com, so it’s a better name going forward.

2. There’s now an updated application form here (and on the grants page) for those seeking grants and investments. Notice that it’s one application form, whether you’re applying for a grant or an investment. The application form also unifies applications for Arraig and also for Trelis (offering AI grants).

Cheers, Ronan

Signalling

One of the most valuable things you can do as a founder is to:

i) get signals about whether your startup is a good idea, and

ii) listen and act on those signals.

Entrepreneurs are great at trying, listening, moving-on and locking-in - based on signals.

The best signal that your startup is promising is revenue. Another strong signal is a competent cofounder joining. A third signal is investors wanting to invest a meaningful amount in your startup.

If you are considering fundraising, you have accepted to compete internationally. This is because the returns for investors in startups come from a small number of large outcomes. These large outcomes are in the largest markets. Yes, maybe you are starting with a beach-head market for your product, but you should consider yourself in the global market for fundraising.

In 2025, the better startups - with first time founders - are raising over $1 million in their first round of funding, probably more (low single digit millions). If you are raising less than that, this is going to be a negative signal in two ways:

1. It is a signal to you that your startup – as conceived – is not among the better startups.

2. It is a signal to future prospective investors that your startup was not among the strongest, i.e. the effect will endure.

Other Practical Problems

A. Every round of fundraising often dilutes founders by 20-25%. You might raise a round of $500k to start, and then a round of $1.5M later. Stronger founders start by raising $1.5M and skip a whole round of dilution. This is bad for you the founder. Future investors know this is bad for the amount of equity owned by founders.

B. Less than $1M is not a lot of money when you are spending on hiring. Soon, you’ll need to go back for more.

C. Taking money from investors is a responsibility, no matter the form of investment, e.g. SAFE, convertible note, equity round. Regardless of how much money you raise, this responsibility switch flips from 0 to 1. If you are going to flip the switch, you want the amount raised to be meaningful.

What counts as one million?

It counts as clearing the one million threshold if it comes from financial investors, namely - angels or VCs. Taken as a whole, financial investors are well incentivised to give you a meaningful signal.

With corporate and public monies, be cautious counting investments as part of the one million threshold. Why?

• Corporate investments from a strategic partner can be good, but the incentives are complicated. They may be competing in similar markets and may be valuing information as opposed to financial outcome.

• As with VC firms, public entities that make investments can be well run or poorly run - there are exceptional examples in each category. The difference is that VC firms and angels have stronger financial pressures to be good at what they do. Angels have direct skin in the game. VC partners need to perform well to keep raising new funds.

What should you do if you cannot raise one million?

1. Have you travelled abroad and spent time talking to founders there? …especially to the US - to get an idea of how much they are raising and how they are getting to know investors. If not, this is a good option. I see a) many founders moving to the US, but also b) founders spending time in the US, raising money there, but basing themselves abroad. Both are options to consider.

2. Have you considered NOT raising money? I have raised a first round of one million before. I have also NOT raised any money - as I am doing with Trelis.com . You can learn a lot from cutting back on spending, and being profitable. You don’t have to do this for the rest of your life. It can be a short- or medium-term experience before a new startup.

3. Change something about your startup. Before you raise money.

If you’re an early stage entrepreneur, consider reading more on this website, and potentially applying for a micro-grant, that’s what this website is about.

Grant completed

Mustafo Mustafokulov. Building Chloropept, an algae-based feed additive that expresses novel peptides as antibiotic alternatives to prevent antimicrobial resistance in the livestock industry. Personal Links: LinkedIn.

Grants remain open for applicants on a rolling basis.

Apply Here

Cheers, Ronan

** To the extent you're comfortable, re-posts/shares are appreciated to help new entrepreneurs hear about the program! **

Grants completed

Congratulations to the three grantees who completed their milestones over the past quarter!

Ayana Farooq: For ConstructCrew. An app that matches temporary trades workers with open shifts from construction companies. Project Link: ConstructCrew Personal Links: LinkedIn.

Bavukile (Bavu) Vilane: Developing Whatsnxt, an app to help users find their next event and experience. Project Link: Whatsnxt App Landing Page. Personal Links: LinkedIn.

Saanika Kulkarni: Building Aesthatech, a software platform for beauty professionals to acquire and retain clients through custom memberships and packages. LinkedIn

Updates for 2025

There is one update for 2025, namely that applicants can opt-in to be considered for a $10,000 investment upon completion of their grant. Further details are available here.

As previously, grants remain open for applicants on a rolling basis.

Apply Here

Cheers, Ronan

Grants completed

- Josh Ajayi (X. LinkedIn. Youtube.):

• PayDai (Private Beta) - a financial hub for remote sales teams, featuring invoicing, automated payroll and accounting.

Quite a few more projects are in the pipeline and will be announced in the 4Q2024 batch.

Early stage entrepreneurs - apply for a grant here.

Cheers, Ronan

When I founded a membrane technology business - Sandymount Technologies - our price/product points were as follows:

1. $200. Paid samples = we would process 300 ml samples of the customer’s product (beer, in this case). Later, we raised the price a lot for this because it was quite a bit of work.

2. $10,000. Paid trial = the customer sends 8 kegs of beer, we process them on our site and the customer comes to visit.

3. $15,000/wk, typically for 2-4 weeks. Paid rental = we rent the customer a machine that can process 8 kegs per hour.

4. ~$600,000 = we sell a “small” industrial machine (as it turns out, we skipped this step because a customer bought bigger).

5. ~$2,000,000 = we sell a “large” industrial machine.

There a few underlying points to note here - worth exploration:

a. The difference between free and paid trials.

b. Reverse engineering the price point escalator.

Do you really understand the difference between free and paid?

Perhaps there are cases where it makes sense to offer free trials, but you should understand the behavioural difference between the two.

Your goal as an entrepreneur is to efficiently find strong signals of willingness to pay.

Free trials are a weak signal because:

1. Free trials have no economic skin in the game for the customer. It costs them nothing to do a free trial*.

2. MORE IMPORTANTLY - Free trials have no reputation/career skin in the game. If a customer does a free trial, and it goes badly, they can move on as though it never happened. If a customer does a paid trial then a) their manager probably knows about it because they had to get approval to pay and b) the individual won’t want the paid trial to fail because then it makes them look bad to their manager. Many times, I saw customers who had paid for trials rooting very strongly for the success of the trial. Individual reputation is a powerful force not to be under-estimated.

*yes, sometimes a customer has internal costs to do a “free trial”. If they can afford those internal costs, then typically they should also be able to afford paying you something!

Not only are free trials a weak signal, they are inefficient. Most free trials go nowhere, so you expend a lot of effort for not learning much.

Reverse Engineer the Price-point Escalator

Is it hard to get someone to pay you $1,000,000? Yes, that is hard.

Is it hard to get them to pay you $100. That is a lot easier!

And once they have paid $100 - and you deliver - it’s a lot easier to get them to pay $1,000.

And once they have paid $1,000, then they’ll more easily pay $10,000 - and so on.

It makes sense to forget about product and just ask, ok:

1. What can I sell for $100?

2. What can I sell for $10,000?

3. What can I sell for $1,000,000 etc.?

It’s hard to sell $1,000,000 products, but if you sell something worth $X, then you can get to a price point of 10-100X, and then to a price-point of 10-100X again.

Interviews have been underway over the last month, and grant applications remain open until the end of September 2024. At that point, I’ll announce the names and projects of grantees who have completed their grant milestone.

Learn More and Apply Now

Maximising your chances

Here are two specific tips:

1. Financial sustainability. It should be clear you have put thought and effort towards making your project financially sustainable. You should have a specific plan for how you will make your first $100.

2. Proof of tinkering. I turn down many applications because the applicant has little online presence. This makes it hard for me to evaluate if this person has curiosity and can build projects. You don’t have to have any or all of these, but having one or some certainly helps: A personal website; an active GitHub page; a paper/publication/article that you wrote; anything else online showing what you have done. What you link doesn’t have to be related to this grant, in fact, I want to see a breadth and depth of your projects and interests.

Specific Ideas

You can apply for a micro-grant with any project. However, if you really want a specific topic to work on, I can suggest two:

1. Build a small scale Nuclear Magnetic Resonance device, inspired by this video. This can allow for low cost diagnostic tools.

2. Figure out how to get more information on whether there is geologic hydrogen available on the island of Ireland (or, pick any other country where geologic hydrogen resources are not known). Geologic hydrogen refers to natural hydrogen stores underground. These could potentially be used as a clean and cheap fuel source.

Applications are now open.

Learn More and Apply Now

I’ll be present at “Ideas for Ireland” next week on May 6th, and announcing a pilot grants program for Éire Ventures.

Full details will be available on this blog right afterwards.

You can find out more about the “Ideas for Ireland” event here.

Cheers, Ronan

And yet, when choosing a startup idea or raising funding, the mantra is: GO BIG OR GO HOME.

Unfortunately:

• Entrepreneurship is about search and execution. He or she who can search most widely at the lowest cost will - on average - stumble upon the greatest ideas. Leaving your job, taking on funding or hiring employees are all things that reduce your ability to search and explore. [1]

• Being a lottery ticket in someone else’s investment portfolio might be a good idea for them, but that doesn’t make it a good idea for you. It’s the opposite, YOU should be the one picking up lotto tickets. [2]

So, don’t be a lottery ticket [3]. That’s too low a chance for one short life.

Instead, get in a position to pick up lotto tickets from the ground.

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The world is a convex place.

The value of a network - whether a communication network, or a network of suppliers - grows rapidly as the network gains more members, more rapidly than the growth of members. This is convexity.

Lots of things in the world are worth zero until they are worth something. Behaviours don’t change continuously, they change dramatically when we cross thresholds, e.g. One year we took the ferry to France, but then flights got so cheap we switched to taking the plane. This discreteness (flipping of outcomes as opposed to continuous change), is another driver of convexity in the world!

If behaviours and markets are convex, knowing this should change how you think about entrepreneurship. It should raise the importance of exploring because you don’t know what’s around the corner.

And so:

The formula for success is to a) put yourself in a position of strength to explore, b) try the most things for the least cost, and c) keep doubling down on what’s working.

A Position of Strength to Explore.

Yes, once you leave your job, you have more time to explore. On the other hand, you are under pressure to make ends meet. Maybe this pressure drives you on, but it will also hinder your ability to patiently explore.

The “side-project” is your convex friend who comes with the option of doubling down.

Trying the Most Things for the Least Cost.

A convex world makes it a) hard to be concrete on ultimate rewards (~market size), and b) critical to be concrete about upfront costs.

The optimal strategy is to go after large incalculable rewards from many small calculated costs.

When it comes to costs, entrepreneurs today have the right ideas of:

a) “minimum viable product”, e.g. starting with a small offering

b) small markets are exciting, e.g. The best projects are initially small markets (convexity makes it easier to be concrete about what is small). [4]

On the other hand, entrepreneurs (including me) are ignoring the costs (especially time and reputation costs) of going all-in on ideas too early. Going all-in stops you from trying more ideas and being more selective on where you double down.

Going all-in reduces your ability to explore.

Doubling down on the best ideas

It’s the same for startup founding strategy as it is for investing strategy. The best outcomes come from having the greatest selection to choose from.

Why? Because of convexity - a small portion of opportunities are MUCH better than the rest.

Better to have a large selection to choose from, than knowing what to choose.

How to pick up lottery tickets from the ground.

Favour side-jobs and -projects. These provide a position of strength. You can always add another project. You can easily shut down what’s not working.

Leave room from for exploration. Nobody wants to invest in or join a startup where the founder isn’t committed. Commitment can be a virtue. But, even when you are doubling down on some ideas, you must leave room to explore.

Limit your time commitment. My new products at Trelis.com (AI training software) are $25-$50 and take ~2 weeks to make. Some don’t sell well. For the products that do sell, I to expand both the product and price point over time. I now have four products selling at prices above $100, and - over all products - am selling 100+ units per month. Still, my formula for new products is the same: start small and pick the winners.

Building Ambition to Explore

The world is a convex place and you can make that your advantage.

With any big decision you take, ask yourself the question:

How will this affect my ability to explore?

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References

[1] Taleb - “Understanding is Poor Substitute for Convexity”.

[2] Vassallo - “Don’t be a bet in someone else’s portfolio”.

[3] Thiel in Zero to One - “You are not a Lottery Ticket”.

[4] Graham - “Probably not a Big Company”

Yet, we are copying Silicon Valley founders who spend 50%+ of their time pitching for investment.

Unfortunately:

• Investment is a weak signal that your startup is strong - much weaker than revenue.

• Silicon Valley’s emphasis on fundraising money doesn’t make it a good idea. Emphasising fundraising when you get 5x lower valuations is an even worse idea.

You don’t have to play the game that way…

To maximise success as a founder → Revenue over Investment.

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Revenue is your Strongest Signal.

When it comes to building startups, the flow of information is primarily from ideas to founders to investors.

If founders spend 50%+ of their time fundraising, they misunderstand how information flows. Instead of getting signals directly from problems and opportunities, they get a derivative signal from investors….

Put differently:

• Revenue is a direct signal that your opportunity is good.

• Investment is a derivative signal. It’s a signal that investors saw a signal that your idea is good.

Not only is revenue a more direct signal than investment, it’s a less biased signal. Investors have a motivation for you to drive high revenue, but only after they have invested (and even then, they will want to invest again later).

Consider what is best for you as a founder (and later, for you and your employees). It is in your interest to get direct validation - as soon as possible - that what you are spending your time on is worth it.

Revenue is your Comparative Advantage.

Startups outside of Silicon Valley fundraise at much lower valuations. Therefore, outside startups that focus on over investment are at a comparative advantage.

Focusing on investment outside of Silicon Valley is even worse than that… VC firms and YCombinator have made fundraising sexy, so Silicon Valley’s focus on fundraising has itself become overrated.

Irish startups focused on revenue are at a comparative advantage.

How to focus on Revenue.

Software companies can easily focus on revenue. Building products is now cheap with tools like ChatGPT and Adalo. Organic distribution is free with YouTube, X, LinkedIn and Instagram. This is how I am building Trelis.com .

Most hardware companies should be able to get revenue before investment. Payment for milestones or for trials makes this possible. When I ran a membrane technology company, I refused to give free trials to customers. Free trials are a weak signal of customer interest.

Harder companies. If you really can’t generate revenue, then maybe you should park this idea for later. You have a long life, and spending a few years being successful will put you in a far stronger position.

Building Ambition for Revenue

Revenue is under-rated and can be your advantage.

Post on social media when you have learned from customers, not pitched to investors…

…when you close a deal, not a funding round.

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Yet, I still hear how:

1. The Irish market (or maybe Ireland + UK) can be a launchpad for going international later, and/or,

2. Someone is already doing “that” over in America.

Focused on Ireland/UK = Earn revenue like Ireland/UK = Be valued off Irish/UK metrics.

Most great ideas or founding teams won’t make up that difference.

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Selling to Global Markets

I run a business that sells software for training and deploying large language models. My main route to market is a YouTube channel. The people who buy are the people who find me on YouTube (and now a bit on Google and Substack). Here’s the breakdown of revenue by region:

and here’s a zoom in on the top ten countries:

That’s the reality of doing international business in software. Imagine if I was just selling to Ireland and the UK…

Purchasing Power and VAT

An under appreciated dimension of selling internationally is the impact of purchasing power and VAT/GST.

Consider a software package I sell for fine-tuning language models.

• In the US, where companies and developers have more money, I can charge about $125 for a package. By and large, the sales tax rates are zero or single digits.

• In Ireland (and similar for Europe), there is less money, so it makes sense to price products lower, e.g. at $100 (probably, the optimal premium/discount between the US and Europe is even larger). Then, there’s a VAT rate of 23%.

So, the same product I sell:

• To the US, will yield about $120 in revenue.

• To Ireland (and much of the EU), will yield about $80.

That’s a radical difference and we’re only talking price, not volume. Maybe the premium/discount on startup valuations should be even larger?

Policy notes:

1. While the above dynamic disincentivises serving Irish/EU/NZ/Australian markets, one should not overlook the virtues of VAT as a tax: a) it spreads the Irish tax base between income, VAT and corporate tax, b) there is low avoidance (as businesses claim back VAT paid to suppliers, although there is a bureaucratic cost here to small business), and c) VAT, unlike income tax, is a tax on consumption rather than work (and we like jobs!).

2. Irish entrepreneurs are fortunate that there is not a protectionist environment charging VAT on foreign sales, which would be a massive relative disincentive to have an Irish business. That would be an unusual approach, but it’s worth appreciating we’re in world that is (by historical standards) supportive of international markets, business and travel!

Building Ambition - Internationally

Knowledge and prices move at a pace such that being a top regional player is less relevant.

That offers us two ways to raise ambitions:

1. Building - from the start - for international markets

2. Benchmarking off of global standards, for revenue targets and for valuations.

Irish company. International markets. International ambition.

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