Seattle startup founders are navigating a tricky mix of opportunity and challenges as they search for durable ways to scale.
That’s the word from entrepreneurs who stopped by our office Thursday for a fun summer deck party in Seattle’s Fremont neighborhood.
We spoke to startup leaders about fundraising, hiring, go-to-market, profitability, return-to-office policies, and what’s keeping them up at night. They ranged from a founder who just launched her bootstrapped startup in the HR sector, to an engineering vet who just raised a Series B round for his logistics software company.
Read on for quick key takeaways from our interviews. Big thanks to our longtime partner Davis Wright Tremaine and GeekWork recruiting partners Prime Team Partners for making the event possible.
Hiring
Several founders said they aren’t having trouble finding talent, particularly in the Seattle region. “It’s just still a great area to hire people,” said Tony Small, CEO at heyLibby, which raised $4.5 million this year for its AI sales and receptionist software.
Others noted the value of tapping into their networks to find new colleagues, or hiring people who were recently laid off.
Filling specialized roles remain tough for some startups. “That requires a relaxing of our requirements for in-office and casting a wider net nationally,” said Milton Perque, CEO at radar tech startup Kapta Space, which raised $5 million earlier this year.
- Related: Corporate layoffs create opportunity for well-positioned startups
RTO
Founders were split on their return-to-office policies.
Some stressed the importance of in-person collaboration. “Being able to get on a whiteboard whenever, or just turn around and ask somebody a question — it’s a huge unlock,” said Peter Williams, CEO at Muir AI, which raised $3.25 million in 2023.
Small said his team tried renting out co-working space but abandoned that plan given long commute times for different employees. “After two months it wasn’t paying off,” he said.
Anna Rodriguez, co-founder at heyLibby, added that it’s a “huge advantage” to be able to hire across the globe, versus just in the Seattle area.
- Related: Is 5 days in the office key to startup success? OpenAI’s big Statsig acquisition is a proof point
Fundraising
The funding environment feels like a tale of two worlds, said David Tsai, CTO at GoodShip — easier if you’re a hot AI startup, harder for everyone else.
- Nearly 58% of global VC dollars went to AI and machine learning startups in Q1, according to PitchBook.
GoodShip, a freight logistics software startup that just raised $25 million, found itself in the middle of that trend.
“We didn’t found the company with an AI mission, but we are finding ourselves to be in a strong position to apply AI to this problem space,” Tsai said.
Caitlin Rollman is just getting her talent management software startup, Talvita, off the ground. She’s leaning toward bootstrapping to avoid wasting valuable time.
“We’d have to really push very hard and spend a lot of energy to actually raise right now,” she said. “The amount of time it would take to raise would mean going and spending a month or two dedicated to raising, versus building the product. And if we build the product in a month or two or three, we can get to the point where we actually didn’t even need the raise in the first place.”
Profitability vs. sales
Taylor Halliday, co-founder at Seattle help desk software startup Ravenna, is 100% focused on growth after raising $15 million in April.
“The focus is on proving that we are building something viable and [customers] are paying us,” he said. “There’s no pressure around profitability.”
Williams of Muir AI shared the same sentiment.
“We think the biggest impact that we can have for the world and our customers is to continue to grow the business as large as possible,” he said. “We’re really focused on kind of pushing those metrics.”
Small said you can never assume a successful fundraising round is around the corner — so building a business that turns a profit is important.
“We want to grow really fast and get to our next round,” he said. “But we don’t want to grow really fast and then run out of money in a year.”
Biggest challenges
Founders noted the broader economy and shifting federal government policies as potential challenges.
Muir AI launched in 2022 as a sustainability startup, helping other companies curb their carbon footprints. It still has that mission but tweaked its pitch to focus on providing companies with ways to reduce supply chain costs.
“The macroenvironment has been interesting,” Williams said. “We’ve had to pivot along the way to make sure our business is going to be resilient with everything that’s going on.”
Perque said he’s watching how the Department of Defense is treating small startups such as Kapta Space. “The VCs want to see that the DoD has an appetite to work with smaller companies,” he said.
Halliday of Ravenna said his company is still searching for the perfect go-to-market messaging.
Rollman of Talvita said speed itself is a worry. “How do we move fast is the thing that stresses me out,” she said.
Rodriguez of heyLibby said marketing may be more important as technology becomes less of a differentiator with the advent of AI tools. “Speed isn’t necessarily a differentiator, but it’s a way to win,” she said.
Tsai of GoodShip advised other founders to focus on building products that solve problems that customers will pay for — with both their time and money.
“It’s making sure that whatever you’re doing, you’re actually creating value — long-term value, in particular — from the resources you’re deploying and not just chasing the optics,” he said.
