Why Being Broke Makes You Smarter

The brutal clarity that comes when you’ve got no money to fool yourself.

Mental Model 🧠

Constraint Clarity

When you can't afford to be wrong, you stop pretending complexity equals sophistication. Turns out, empty bank accounts make great BS detectors. Constraints strip decisions down to what works. Not what looks impressive.

Quick Insights

🎯 How One Guy Exploited VC Hiring
Dozens of funded startups hired the same person simultaneously. Nobody checked references. He was the guy sending ‘nothing from my end’ replies while raking in six-figure salaries from ten startups.

🔥 $100 Billion Down the Drain
90% of VC-backed startups fail from preventable mistakes. 29% just run out of cash. 74% scale too fast and implode.

💰 VCs Fund Perfectionism, Not Progress
When you're broke, MVPs ship in weeks. When you’re flush with VC cash, you end up debating which shade of teal to use while your competitors launch.

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When money runs out, BS ends

The fairytale 🧚

More money equals better decisions, proper testing, and higher quality products

"We need proper market research before we ship"

"Let's A/B test every possible variation to optimise conversion"

"We should hire the perfect cultural fit for our team"

"Our brand needs to authentically represent our values"

The reality ✅

Cash is like makeup. It hides all the blemishes until it runs out.

When you’ve got $5k left, you can’t A/B test your feelings. User research becomes simple. Build for who'll pay you tomorrow. Not some imaginary persona named Ryan who ‘likes artisanal coffee and SaaS dashboards.’

You ship the ugly thing that works instead of perfecting something nobody wants.

You hire whoever ships fast, not whoever nails the culture fit interview. Rent due next week is the ultimate productivity hack. Payroll’s a hell of a project manager.

Constraints kill the BS.

No VC money means:

– You ship what works
– You talk to real customers
– You hire doers, not vibe matches
– Every dollar spent has to make bank

Here’s the data

Startups with big funding are actually more likely to fail.

CB Insights found that of 76 startups that raised at least $50 million before failing, the average total funding was $180.7 million. Most of that money was burned right before collapse.

Meanwhile, Harvard research shows that constraints drive better decisions and creativity. Too few constraints breed waste, while too many stifle action.

Your new constraint clarity playbook

1. The Reality Filter

Before spending a dollar, ask: "Does this directly solve a customer problem that someone will pay for?" If the answer isn't an immediate yes, cut it. No brand guidelines, no team retreats, no perfect office setup. Just customer problems and solutions.

2. The Shipping Speed Test

Can you ship a working version in 48-72 hours? If not, you’re overthinking it. Besides, perfection is just procrastination wearing designer clothes.

3. The Conversation Requirement

Talk to 10 potential customers every week. Real conversations where you can hear their actual pain in their voice. Funded teams schedule research. Broke teams live in their customers' world.

4. The Hire-Fast Framework:

• Can they ship working code/content/results in their first week?

• Do they ask good questions about customer problems?

• Can they work without detailed instructions?

If yes to all three, hire them. Cultural fit interviews are for companies that can afford to get it wrong.

5. The Momentum Math

Track only three numbers: customers acquired, money collected, and weeks of runway remaining. Everything else is distraction until you're profitable. Your Notion dashboard can wait.

North star reality check for scrappy teams

I'm not romanticising being broke.

Money is better than no money. But constraints don’t hold you back from running a successful business. They just stop you from pretending you’re running one when it’s actually an expensive hobby.

A funded startup can spend six months debating product direction. A broke team has six weeks or they’re done. Constraints force you to do what real businesses do such as solve real problems for real people who pay real money.

Next time you wish for more funding, ask yourself would it buy progress, or just buy you more excuses?

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This Week's Intel 📚

Some interesting Substacks I read this week

• Lies per Second, Meetings per Decision Ratio by

  Andrew Chen
  
  Thanks to this, I’m now obsessed by micromorts.
  

• Behind the Scenes of a $40 Million Growth Loop by

  Andreas Just
  
  How VEED turned a tiny watermark into a $40M growth machine.
  

• The $2,000 presentation Apple just gave away for free 💸 by

  Tom Orbach
  
  Genius move. You can apply it to any B2B sales deck.

Got something I should read? Hit reply, I actually read every suggestion.

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Until next week, keep building. No fairytales required.

Martin, Chief Ranter at Uncharted

P.S. this week’s track is Time by Pink Floyd