The next Dallas Software Founders meetup is Tuesday, September 29, from 5:30-8:00 in Richardson. Dallas SaaS, AI, and fintech founders: Join us for a conversation with Robin Alex, co-founder at @goHighLevel. Robin will share how this fast-growing company is leveraging AI to grow faster -- and how they aren't using AI. ​HighLevel is the AI-powered sales and marketing automation platform that small businesses run on — with over 1,000 employees worldwide. Robin is based here in Dallas. You'll have plenty of time to meet other founders at this event. ​ Dallas Software Founders hosts a free, invite-only, in-person quarterly event for CEOs, founders, and cofounders of software companies in the Dallas-Fort Worth area. ​More info and sign up at dallassoftwarefounders.com There is a lot more going on in SaaS and AI startups in Dallas than anyone can see.

This week, I hosted 41 SaaS CEOs at our 3rd annual Practical Founders Summit, held over two days in Phoenix. It was awesome to meet in person with Practical Founders CEO Peer Groups members after meeting monthly on Zoom (in 5 groups) for another year to work on their businesses. Most of these founders know each other very well from our monthly meetings and previous events in the last four years. These relationships compound. There were no conversations about raising money — or selling their companies any time soon. Why sell when your company is growing and getting better every year? This year's conversation was about finding leverage with AI across your business to build a much better business next year. Software coding is speeding up, and AI agents are doing more work across our businesses. Your competitors are doing that too. So what? We focused on how each of these founders is rethinking their businesses amid this crazy platform shift right now. - Should we build more products for your sticky customers? Be more all-in-one? - Go upmarket and finally compete with bigger competitors? - Build agentic "system of action" capabilities on your system of record? - Grow faster and sell our company sooner? Or get more profitable and resilient for the long term? - Add services or hardware to solve the whole customer problem? - Open up our platform with MCPs and APIs? Or protect our unique data? Founders shared examples of all of these in every discussion. What are you doing? How's that working? What does that change about your business? No standard playbook works for every practical founder. We do it our own ways. And it's working.

Seed & early-stage software deal counts in North America are down ~26% YoY (Crunchbase) — a multi-year slide since 2023. But total VC funding has gone up. Most VC funding is concentrated into a handful of massive late-stage checks for LLMs, hyperscalers, and frontier labs. Almost all software startups are built and getting to revenue without raising a dime.

A founder asked me yesterday: “Should I raise VC funding for my AI startup? It has customers and revenue.” Me: How much did you spend to build your working vertical AI product? Him: $300. Me: So what do you need funding for? Him: I don’t know. It seems to be what winning founders do. This conversation is as old as startups. Most founders got it wrong in the SaaS days—raised too much and got burned when they didn’t need it. VCs only fund rocket ships: 5X+ growth every year, billion-dollar exit or bust. Is that what you’re building? Why not a $3M revenue company that spits out $1M in profit for you every year? Not easy either, but your odds are 10X better. “Really? I can do that?” Yes. Stop watching mega funding rounds. Create amazing value for customers you can reach efficiently. Never stop. AI is 10X cheaper to build with. Agents deliver 10X more value. That means 10X more founder-scale companies with life-changing outcomes. You don’t need permission. You need customers. The practical software revolution is happening again.

A new wave of AI-powered features and products is bringing back the word “magical” to SaaS software, not just in the marketing hype. This has happened with every new wave of tech since the beginning of PCs and Macs.

Magical thinking about spending big to hire senior executives quickly is one of the main reasons SaaS founders raise large VC funding (and spend it on executive recruiters). But the "Hire Fast to Grow Big" approach usually doesn't work, so it creates more VC-funded SaaS companies that stall out and get stuck.

30% average annual revenue growth is healthy and sustainable for most bootstrapped SaaS businesses, but it's a nightmare if you raised big VC funding.

It’s not common for VC-funded software companies to acquire companies for partial cash plus equity, but it happens. VC-funded companies are much riskier than bootstrapped ones. SaaS founder interview with Ian Manners of Vivor. practicalfounders.com/podcas…

Serious SaaS founders have learned that pursuing big VC funding too early decreases their odds of success. The longer you can go without raising outside funding, the better your odds of success as a SaaS founder. Thanks, @finnthormeier, for the clip from your pod!

Rand Fishkin, @randfish, on the Practical Founders Podcast, talks about his experience growing two SaaS companies—his first with VC funding and then @sparktoro without VCs. practicalfounders.com/podcas… #practicalfounders

I'm headed to Dublin next week to help out at the #SaaStock conference and meet practical SaaS founders from all over the world. See you there.

I just canceled my subscription to the @WSJ after being a paid subscriber for over 20 years. The new WSJ apps completely ruined the reading experience on both iPad and iPhone. Now it's just painful to use. WTF WSJ? They just pissed off all their long-time digital subscribers.