Friedman defines hard tech as work that takes substantial time and money to build, with no certainty it can be built at all. Unlike a typical app startup, where the main uncertainty is whether customers want the product, hard-tech companies often face greater technical risk. He argues that an ambitious idea can make recruiting, press attention, and investor interest easier, even when building the product is much harder.
Advice for Hard-tech and Biotech Founders
Speaker
Jared Friedman, a partner at Y Combinator, explains how hard-tech and biotech founders can reduce technical and market risk, make early progress, and plan fundraising at Startup School.
When a first product would cost millions to build, Friedman advises finding smaller ways to demonstrate progress. Boom used advisors, simulations, a scale model, and airline conversations to support its case for a supersonic jet. Solugen began with a beaker that produced about a cup of hydrogen peroxide, while Astranis built a test satellite for under $50,000 to demonstrate its ability to build and launch one.
Friedman recommends presales when they are possible, citing Jetpack Aviation’s campaign for its flying motorcycle. For products that cannot be presold, he suggests seeking a letter of intent, a nonbinding agreement to buy once the product is ready. A specific LOI can test whether a customer is serious, reveal the buying process and stakeholders, and help define what the company needs to build.
Friedman cautions against asking investors for a very large sum based on an idea alone. He recommends breaking the funding need into smaller rounds, each supported by progress and tied to milestones that make the next round achievable. He says founders should keep reducing the size of each step so they can reach the next fundraising milestone without hitting a wall.
Takeaways
- Find a small, affordable experiment that proves part of the technical idea.
- Use customer conversations, presales, or specific LOIs to test demand early.
- Treat a hard-to-get LOI as evidence that the problem may matter to the customer.
- Break a large funding need into rounds linked to concrete milestones.
- Use an ambitious mission to attract talent, while still planning carefully for hiring.
Mentioned in this talk
Y CombinatorBoom SupersonicSolugenAirXNotable LabsAstranisGinkgo BioworksJetpack Aviation
General Motors
Cruisesupersonic passenger jetmobile shopping apphydrogen peroxidemedical devicetumor-screening servicescancer drugstelecommunications satellitesflying motorcycleself-driving carhard techbiotechsynthetic biologygenetic engineeringpresalesletter of intentfundraising plan
Sam AltmanBlake SchollSearch inside this talk
What was claimed 12
- role atJared Friedman is group partner atY Combinator
“one of the partners at YC”
YouTube Verified4 sources· Talk
- acquiredGeneral Motors acquired Cruise
“Cruise ... was acquired by GM for $1 billion”
YouTube Verified3 sources· Talk, Web· archived
- featureBoom Supersonic: building an aircraft to replace the Concordebuilding an aircraft to replace the Concorde
“they're building a supersonic passenger jet to replace the Concorde”
YouTube Unverified1 source· Talk
- usesSolugen uses synthetic biology
“they use synthetic biology to produce hydrogen peroxide”
YouTube Unverified1 source· Talk
- builtSolugen built hydrogen peroxide
“a beaker that can produce about one cup of hydrogen peroxide”
YouTube Verified2 sources· Talk
- featureAirX: used an existing approved device to launch a basic version of its serviceused an existing approved device to launch a basic version of its service
“using an existing medical device that was already approved”
YouTube Unverified1 source· Talk
- featureNotable Labs: generated revenue and data to support drug developmentgenerated revenue and data to support drug development
“providing tumor-screening services to pharma companies”
YouTube Unverified1 source· Talk
- builttest satellite built in less than three months for less than $50,000
“They built it in less than three months during YC for less than $50,000”
YouTube Unverified1 source· Talk
- usescustomer contracts to show demand before making organisms
“close contracts to create those organisms before they had actually made them”
YouTube Unverified1 source· Talk
- usesJetpack Aviation uses presalespresale campaign to demonstrate demand
“ran a presale campaign”
YouTube Unverified1 source· Talk
- featurefundraising plan: Split the total funding target into smaller rounds tied to specific milestones
“splits it into five discrete fundraises that start very small”
YouTube Unverified1 source· Talk
- builtCruise built self-driving caroriginal car built in less than three months during YC
“The original Cruise car was built in less than three months during YC”
YouTube Unverified1 source· Talk
