Why do pre-seed and seed stage founders fail?

It's not because of bad ideas!

Hey, Aaron here! Welcome to this bi-monthly startup newsletter. In each write-up, I tackle questions about building products, financial planning, growth, and raising capital! Today we dive into -

Education: How to know if you should join an accelerator

Opinion: Pre-seed and seed stage founders don’t fail because of bad ideas — they fail because of bad resource allocation

Notable News: An affordable new EV truck, crowded orbital space could be a problem, and NVIDIA releases a powerful new AI tool.

Education:

Should you join a startup accelerator?

Opinion:

Pre-seed and seed stage founders don’t fail because of bad ideas — they fail because of bad resource allocation

Most early-stage founders don’t have a resource problem. They have a priorities problem.

It’s easy to think, “If I just raise a little more, or if I just work a little harder, I’ll figure it out.”

But the unfortunate reality is that raising money and/or working insane hours will not fix bad judgment. In fact, both just magnify the problem.

At pre-seed and seed stages, every dollar spent and every hour worked is either buying progress towards product-market fit or dragging you further away.

The Biggest Mistakes in Early Resource Allocation

In my experience, early-stage founders love spending time and money on the wrong things:

  • Hiring too early (before there’s real product or customer demand)

  • Polishing branding and design (before a real offer is tested)

  • Building massive features (before basic demand is proven)

  • Blasting paid ads and PR (before you know if anyone even stays)

These feel productive, and they certainly make you look like a real company, but startups don’t die because they lacked “polish” — they die because they wasted resources before proving that customers actually cared.

At the pre-seed and seed stages, your resources — your money and your time — have one job: buy answers faster.

Every decision should validate something meaningful — whether it's about the problem, the solution, the customer segment, or key features. If it doesn't, it's dead weight — wasting time, effort, or money.

My #1 Rule for Early-Stage Resource Allocation

Spend and work to learn, not to impress.

Until you can consistently create paying, happy customers, there really is nothing to "scale." Scaling bad assumptions is how startups fail faster, not get better. The early stage is all about getting better. The better you can get at engaging your audience, sourcing your leads, activating your product, etc., the better your business will be.

The founders who survive the early-stage chaos are the ones who treat both their cash and their hours with great care:

  • They don’t hire or build “just in case” — they wait until operational pains force action

  • They don’t endlessly polish product — they launch good enough versions fast

  • They don’t pour into sales and marketing — they spend sparingly until organic pull proves real demand

My Takeaways / Next Steps (if I’m a first-time founder)

  • Write down your assumptions. Be crystal clear on what you’re trying to prove before you spend time or money. It’s okay to be wrong / make a mistake, it’s not okay to not have a goal in mind before starting.

  • Create a simple validation roadmap. Tie every significant spend or major project to a clear milestone (e.g., 10 paid users, first renewal, 100 early signups, etc.).

  • Delay building and scaling until the strain demands it. If nothing’s breaking because of demand, you’re not ready to grow yet.

  • Audit your burn rate and your calendar. Ask: "Does this dollar or this hour get me closer to validation or product-market fit?"

Bottom line: Pre-seed and seed stage aren’t about looking successful. They’re about becoming undeniable through strategic action. I’d ask that you consider allocating your time and money like your survival depends on it — because it does.

Notable News

That’s It For Today!

Written By Aaron @(un)conventional Team