The performance art of chasing VC in post-problem markets
You know the type.
They launched a slick website. Hired a big-brain leadership team. Nailed down their pitch from 100s of meetings.
They’re "reimagining payroll," "reinventing marketing attribution," or building "autonomous AI agents."
On the surface, everything looks cool:
- Big market
- Clear TAM
- Existing players (so there must be demand)
- And just enough friction in the buyer journey to justify one more entrant
And yet mere months post-raise you can feel the air thinning.
The product isn't catching on. Buyers are squinting, not signing. The differentiation is cosmetic.
And the founders are tired. Things get antsy. The investors are… well.
Welcome to category theater.
The genre of tech startup where the “big problem” is already solved, but the chase continues… because venture capital and egos need it to.
When the Problem Is Already Solved
Every meaningful category has a "first wave." Stripe, Gusto, Retool, Calendly, Deel, 6sense.
They built platforms that handled core pain – payments, payroll, internal tools, scheduling, GTM intelligence.
The second wave comes with different energy.
Founders don’t discover a new problem. They rediscover an old one and try to make it cooler, faster, more “AI-native.”
What is sold as innovation is actually reskinning.
So they start selling to:
- Users already locked into stickier, complete solutions
- Buyers with no urgency to risk change
- A market segment that’s small, skeptical, or simply… fine with “good enough”
These startups aren’t solving pain. They’re just hoping something out-of-their control changes in their favor. In other words, an expensive experiment in perseverance.
Good people – senior leaders no less – can fumble around in the night for months on this stuff. It's bonkers.
The Venture-Backed Illusion
Here’s the whispered truth:
A lot of these founders know. They can feel the problem isn’t big enough. They see the shrinking MAU curves. They hear the polite but noncommittal buyer feedback.
But they keep going. Why?
Because their VCs (and other polite by-standers) are still clapping.
Venture capital runs on a power law fantasy. That one startup will return the entire fund. And look, this has happened on rare occasions; reinforcing the fantasy for everyone else.
It’s pretty much roulette.
So. To get there, every investment must pretend to be that one.
And it goes that the founder is nudged, then pushed, then outright pressured to:
- Expand the vision
- Chase new verticals
- Add AI
- Add enterprise features
- Raise another round to “unlock scale” that doesn’t actually exist
In short: to hallucinate a unicorn. Usually in a spreadsheet.
And all the while, the fund is fine with the risk. Because even if your company fails, it can block a competitor or feed another portfolio company.
You may be the pawn. But you’re still on the board.
The Bootstrapper’s Advantage
Now, let’s switch scenes.
Somewhere else. Probably not at Money20/20, probably not on Forbes. No, a solo founder or small team is working on the same problem.
Only they’re not raising.
They’re not overspending on ads.
They’re not chasing the press.
They’re building quietly, slowly, and with painful attention to real customer needs.
They say “no” a lot.
They don’t build for the press release.
They don’t jump on every trend.
They survive. Then they thrive.
Ironically, they build what venture capital actually wants:
- Profitable growth
- Deep understanding of their users
- Efficient CAC
- Clear product-market-fit
- Able to calmly pivot and build fast without headcount
- Spinning-off cash at a decent clip
But because they didn’t hallucinate a unicorn story, they’re often labeled a “lifestyle business.”
Funny how the most sustainable companies are the ones VCs would kill to fund… if they just burned a little more cash first.
No Right Answer. But There Is a Cost.
This isn’t a morality tale. VC isn’t evil. Bootstrapping isn’t sainthood. Each path has tradeoffs.
Founders have their reasons and motivations; to try their hand at the “impossible game”.
Venture can be powerful fuel for a real fire. But poured onto wet timber, it just makes smoke.
If you're a founder in a solved category? Deep down, you know if this thing has legs. You know if buyers are actually in pain or just nodding politely. You know if the real work is ahead… or already done.
And if you're bootstrapping, grinding without the hype, building what people actually use? Don’t let the unicorn theater fool you.
The market will always value clarity over charisma in the long run.
The Reckoning
We could be approaching a correction. Not just in how capital is deployed, but in narrative. Startups that exist because they could raise are being exposed. Founders who built because they couldn’t not build are emerging.
So if your company isn’t working, maybe it’s not 100% on you. Maybe it’s the category. Maybe it’s the hallucination you believed you had to maintain.
And maybe the best move isn’t to pivot. It’s to shut it down. Start over. Or leave the stage entirely.
Because chasing a unicorn in a solved problem space isn’t honorable. It’s literal theater.
And you deserve to build something real. Probably ;)
