Three stories from this week reveal something fundamental changing about how you build businesses in 2025. The old VC playbook is dead - here's what's actually working now.

Story 1: Founders walking away from traditional VC (and it's strategic, not desperate):

• Mercury surveyed 1,500 early-stage startups about funding in 2025
• 66% of founders changed their capitalization strategy in the past year
• 73% raised under $5M total, using 4+ different funding sources
• 61% rely on contractor talent instead of full-time employees
• The new funding mix: consulting revenue, grants, strategic partnerships, small angel checks

The consulting-first approach that's working:

• Start with an idea, sell a service before building the product
• Customers understand services immediately - no onboarding friction
• Your first $100K should come from customers, not investors
• Once you have revenue, everything else becomes easier
• Free ebook coming soon on this approach at founderreality.com

Story 2: Perplexity got copied by everyone (Google, ChatGPT, Claude, Gemini) and they're still thriving:

• Launched December 2022 as anti-Google answer engine
• Every big tech company copied their core features within months
• CEO's advice: "Assume big companies will copy anything good"
• Why they survived: competed on experience, not technology
• Fastest loading, fastest throughput, built brand around being anti-Google

My Green Sky competitor mistake:

• Obsessed over competitor that went public at $10B valuation
• Tried to copy what they were doing - completely wrong approach
• Green Sky got merged/sold multiple times, acquirer lost tons of money
• Lesson: Find why customers choose YOU over competitors and double down on that
• Don't copy competitors - build what only you can build

Story 3: The ARR theater problem hurting honest founders:

• Fortune investigation revealed founders abusing ARR (Annual Recurring Revenue)
• Clueless claimed to double ARR from $3.5M to $7M in one week
• Startups counting pilot programs with exit clauses as "locked revenue"
• VCs calling it "vibe revenue" - now skeptical of all ARR claims
• This hurts legitimate founders who report honest numbers

How to report revenue honestly:

• Locked revenue: Signed contracts with money in the bank
• Probable revenue: Strong pipeline with clear next steps
• Possible revenue: Everything else (don't count this as ARR)
• Use MRR for accurate representation, ARR only for full-year recurring revenue
• Build credibility with honest metrics, not inflated numbers

The playbook shift from 2019 to 2025:

• OLD: Raise VC first → build fast → scale aggressively → hockey stick growth
• NEW: Build revenue streams that can't be copied → ecosystem approach → community building → stack multiple funding sources
• Companies thriving in 2027 will have started with consulting revenue and customer relationships
• VC funding still important but no longer the only path

Your action items this week:

1. Audit your revenue reporting - real numbers or "vibe revenue"?
2. What happens if big tech copies you tomorrow?
3. Can you sell your idea as a service before building the product?
4. Start building content authority and community now

Bottom line: Stop chasing the 2019 playbook. Start with real revenue, build real relationships, create real value that can't be copied. That's how you build in 2025.

New episodes Monday/Wednesday/Friday at 9am EST. Real founder lessons, not startup theater.

Daily thoughts: @TheGeorgePu on Twitter/X
Full episodes: founderreality.com
Email: [email protected]