Founder advice from Aleem Mawani’s Reddit AMA: Bootstrapping, growth, and building Streak

Last month, Streak founder Aleem Mawani hosted a Reddit AMA in r/startups to share what he’s learned from 12+ years building a profitable, product-led company.

After going through Y Combinator and raising a small seed round, Streak spent four years grinding to breakeven. The next four years, revenue grew steadily alongside headcount. In the last three, the team slowed hiring and became very profitable.

“We get to run it much differently than venture-backed companies,” Aleem wrote. “We get to design our ideal roles and day-to-day work.” But the current approach doesn’t work for everyone—especially some early investors—so over time, Streak bought back much of the equity it had given up.

Aleem kicked off the AMA with some of the background above and:

“Have advised a lot of YC startups on this lesser known startup path, happy to answer questions here!”

Below are some of the most insightful Q&As from the AMA, organized by topic.

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The lesser known startup path: Startup funding, YC, and bootstrapping

Q: How did YC take it? How did you manage to run it differently to venture backed businesses if they were still on there before you bought back the shares? And how did you structure the buy back scheme of the shares?

A: On the investor thing, it's important to remember that their business model works only if some of their portfolio companies 1000x in value. Their entire fund's returns depends on getting in at a good price on a company or two that completely outperforms. The outcome of the rest of the companies is largely irrelevant.

It's also important to remember that most funds have a lifetime before they have to return capital to their LPs - this is usually around 10 years.

So in our case, we had two things that were incompatible with some of our investors interests:

1. our growth has been steady and consistent (if you graph it you can put a ruler through our growth graph) but never compounding at a rate where you could see us becoming a billion dollar company
2. we had been at it long enough where it didn't seem like this would change and they wanted to close out their fund.

Once this became clear and we had some profitability, we were able to buy back *some* of our investors where our company just didn't fit their model. It's important to note that this wasn't every investor. Some investors wanted to hold our equity forever (which we were happy with as well!). We're still happy that YC is an investor as well as a few others. We bought back around 60% of the equity we gave out to investors in the first place.

In terms of structure - we negotiated a fair price to have the company buy the investors common stock. Be careful with this and talk to a lawyer about how this might change your 409A valuation or blow up your QSBS.

As to why we were "allowed" to run our company this way - we never gave out board seats in our seed round, and everyone (including myself) has common stock (which insiders still hold the majority of). But the real answer is that great investors (which we have) know that they can't really force a company to do anything and still have a good outcome (at least at the early stage).

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Q: When you bought back were you just giving something like 2-5x what they originally bought in at? Or converting it to stock?

A: We bought their stock back at a price we thought was fair and wouldn't put the company at risk of not having enough cash to operate. It's not necessarily the market price but rather a price that works for both parties. Sometimes, $1 works for an investor. Others might want a fair market valuation done (like a 409A). It's all a negotiation in good faith.

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Q: What went through your mind when you decided that bootstrapping is the way for your startup?

A: A little bit of failure. Because we were going for the big exit.

A few months later - it was great, we had a great team, a growing business, customers loved the product and we were profitable. Pretty great by all accounts.

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Q: Do you think it's a good idea to do YC, and then live frugally off that 500k for awhile before deciding whether to continue bootstrapping or raising a seed round? Do you think you would've done better if you never raised a seed round?

A: We would have died if we hadn't raised a seed round. We needed the money because we were grinding for a while before we had much revenue. We prob would have gotten to revenue sooner but also would have been at risk of dying.

I think if you're going to take investor money you need to be upfront about your intentions. In our case, we were going for a big exit. We only had the optionality to not do that because we only raised a seed round and didn't take a lot of money or give board seats. Even in our case, we were very upfront with investors when we realized we weren't on the path to become a $100B company. We were in a good situation where we could still make a great business.

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Q: Curious what tools or workflows helped you stay lean during the breakeven years?

A: Hard work.

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Advice for founders and startups

Q: I’m working on two side projects, one that’s exciting but harder to monetize (B2C), and another that feels more likely to succeed financially… Should I go all in on the one with more conviction, even if it’s less exciting? Any advice on staying consistent while building solo?

A: Startups take way longer than you think. Work on whichever one will let you last longer. You need to make sure there is *something* (not everything) you like about the startup you're building. It could be that you love the product, the customers, the industry, the team.... something. I've found that I need to be spending 20% of my time on design or coding for it to be sustainable for me personally. I love those things. I don't love everything about my job. But if I get to do that 20% it's sustainable over the long term.

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Q: If you were to start over, bootstrapped, what would be some of your first hiring decisions (either full-time or fractional) at $500k ARR and $1M ARR?

A: I would have hired a designer much much earlier. I love design and coding so I did a lot of Streak's early product development. But there have been several occasions when we've been bottlenecked by me.

Now that I think of it, hiring a designer that can do more than just product design but can also do marketing design (homepage, sales collateral, newsletter design, etc) is such a huge level up. Adds so much credibility with users and tbh seems required nowadays to be competitive.

We recently made this hire and it's been a huge unlock (go to the wayback machine and compare our homepage today to what we had 6 months ago - world of difference for our customers).

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Q: Where do you hire designers that can do all of that? 

A: We recently hired a great marketing designer. He came inbound to us from one of the job posting sites (angelist I think). I think hiring designers is one of the easiest roles to evaluate candidates but one of the hardest roles to find someone great like we did.

They are easy to evaluate because their work product is so visible and you can instantly tell if they vibe with your style, culture and brand. Also the hiring process should be heavily project based - pick a small focused project that you're actually working on, pay the candidate for their time and make them do real work. We did a 10 hour project and you learn loads about their skillset.

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Founder sales and marketing

Q: How did you do your first few sales

A: I talked to people I knew. Then I got them to introduce me to their friends. I was selling to startup founders so they all knew each other. Nothing better than meeting a customer.

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Q: I'm a huge fan of Streak and use it for my early-stage edtech startup. With a background in AI/CS, I'm strong on the product side but new to sales. What was the biggest lesson you learned when transitioning from building a product to actively selling it?

A: I think the thing people get wrong is thinking they can just "sell" something that a customer doesn't need. The easiest way to sell something is to make it so goddamn good that the person really wants to buy it. The only thing you have to do to "sell" is help that person buy - help them get budget, help them with push back from their VP, help them get their team trained, help them stick to a regimented pilot process - but ultimately, they have to want to buy.

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Q: How to deal with a market where 1 player is very present and capturing a big part of the market?

A: We have this problem with HubSpot. The key is just find one thing you're much much better at. In our case, it's the deep native gmail integration + team email sharing that we wow users with. I think our next act will be AI functionality that is 10x better than theirs.

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AI impact at Streak and in the startup landscape

Q: How do you see Streak evolving with AI?

A: CRM is the perfect use case. We're investing heavily here. It makes the product soooooo delightful. No chat bots. But using AI to deeply understand your business process and help you move it forward with smart recommendations, automated data entry, web research on customers, always up to date summaries of every deal, + so much more. We just started investing >50% of our eng resources to AI specific features.

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Q: What are your thoughts on AI and the venture model? Seems some companies can get by with raising less capital now, thus less of a need to cede control and company culture to VC.

A: I don't quite but the argument tbh. Maybe for some companies. But from every startup I've seen from the inside, they are always constrained by how many great people they can hire. There's always more work to do than what can be done. I look at AI as a way to 10x everyone. But your company isn't doing it in isolation - other companies are 10x'ing as well. So competitively, its not like you can hire less people than what you used to be able to. I think this is true of any company over 10 people.

Under 10 people, one bottleneck used to be that you couldn't justify certain types of hires because there wasn't enough work for them. Like it wouldn't make sense to hire a full time copy editor, or landing page designer, or paid ad specialist. Usually this meant those tasks fell on the founder who had to learn to be decent at it. With AI, you can level up people in your company to new skills much much faster and at much higher quality. So really just the work improves.

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Aleem’s story and beliefs

Q: Where did the initial idea for Streak come from? And which industry group do you find used your product the most?

A: We were working on a first, crappy startup idea and built something we ourselves wanted. Also realized other founders in our batch had the exact same problem - all the stuff we were doing (sales, hiring, fundraising) was happening over email yet there was no good tool that managed those processes integrated into our email.

To this day, the product is hyper optimized for founders.

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Q: Was your family a big factor in any decision making in terms of the business or your own career at any point in time and how did you make decisions around them if it was?

A: Yes definitely. There was a period where my risk tolerance lowered because I wanted to guarantee a minimum win. That lasted for about 18 months - both because it's not my natural personality but also because we became profitable enough that we were secure. Now my risk tolerance is the highest it's ever been.

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Q: You mentioned that your risk tolerance is higher than it's ever been. What's your decision process when it comes to vetting which resources to invest in for growth?

A: For product stuff it's heavily biased towards whether I would want to use it myself for my own use cases. I try to think about what people in the future will be doing and just build towards that.

For non-product stuff, I just consider things that potentially could have a large upside. Just not worth working on the small stuff, there are too many small things we could do.

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Thank you to the r/startups community!

Thanks to everyone who joined the AMA and asked thoughtful questions—we loved the conversation and hope these insights are helpful for others building their own thing.

If you want to follow along as we continue to share lessons from the past 12 years (and what we’re building next), subscribe to our blog or check us out on LinkedIn and  X (Twitter).