When the Rules Change

Last week I published a piece here called The Startup Playbook is Dead. It came out of a growing unease I've felt as a mentor and advisor: that much of what I've learned, practiced, and advised over the years no longer feels relevant to the founders I work with today.

That piece sparked thoughtful conversations - including one that led me back to something written last fall: Jerry Neumann's resignation letter. If you haven't read it, Jerry describes why, after decades of successful angel investing, he's stepping away. It's part personal reflection, part industry critique, and it resonated with me on several levels. We're roughly the same age, and the questions he's asking - what have I built, what else do I want to achieve? - are ones I recognize.

But while I respect Jerry's decision, my own response to the same feeling is very different.

When you no longer know the rules

Jerry writes that he no longer understands the rules - and that's the main reason he doesn't want to invest anymore. That line hit me hard, because it's very close to why I wrote The Startup Playbook is Dead. I too feel that many of the assumptions that guided me - how markets evolved, how founders built companies, how investors measured progress - are shifting faster than I can keep up with.

For Jerry, that dissonance is reason enough to stop. For me, it's a signal that I need to dig deeper. Maybe that's a difference of personality, maybe of circumstance. But I don't want to step away; I want to understand the new rules and find ways to continue helping founders excel in this world that feels so different from the one I thought I knew well.

Jerry's not alone in feeling this way. I've had conversations with other experienced investors and advisors who are quietly stepping back - not retiring exactly, but becoming more selective, more cautious. They're applying old frameworks to new problems and getting frustrated when the results don't match expectations.

It's understandable. Pattern recognition is what made many of us successful in the first place. But when the patterns change, that same expertise can work against us.

The "shopkeeper" critique

One of Jerry's more pointed observations is that founders today are "shopkeepers" - solving small problems for narrow markets, rather than swinging for the fences. I understand the sentiment, but I think it misses something important.

Yes, many of today's startups start with smaller wedges: a tightly defined problem, a very specific segment. But that doesn't doom them to stay small and low-impact. It's often the smartest way to start.

The history of technology is full of companies that began by "just" solving one problem well - and only later expanded into broader, transformative roles. Amazon started with books. Stripe began with simple payment processing. Uber launched as a black car service in one city. Each looked like "shopkeeping" to outside observers. What looked like narrow focus was actually strategic patience.

The difference between 2015 and today isn't that founders have less ambition. It's that the path to building something massive has changed. You can't enter a market broadly and hope to out-build the competition anymore. There are too many players, too much noise, too many ways for good ideas to get copied quickly.

So smart founders pick a wedge they can dominate completely. They prove they can win in one corner before attempting to win everywhere. The wedge isn't the destination; it's the starting point.

If the last decade was dominated by grand narratives - "we will change the world by doing X" - maybe this era demands something different: focus, discipline, the patience to prove value in one corner of the market before claiming the whole map. What Jerry sees as "shopkeeping" might actually be maturity.

The innovation is harder to spot

Jerry's also looking for innovation that feels familiar - the kind of obvious, transformative technology that defined his best investments. But the biggest changes today are often invisible until they're everywhere.

Consider the companies achieving massive scale with tiny teams. Midjourney reached $200M revenue with 11 employees. Multiple startups in the latest Y Combinator cohort have 95% AI-generated codebases while growing 10% week-over-week. These aren't incremental improvements - they represent a fundamental shift in how value gets created.

But if you're looking for innovation that announces itself the way personal computers or the internet did, you'll miss it. Today's transformation is more like the gradual adoption of electricity - invisible infrastructure that makes everything else possible.

The founders I work with aren't building smaller companies. They're building different kinds of companies. More capital-efficient, more globally distributed, more adaptable to rapid change. They may not be inventing new processor architectures, but they're solving distribution problems and coordination problems that enable entirely new ways of organizing human activity.

What experience still brings to the table

The danger for those of us with decades of experience isn't that we'll become irrelevant. It's that we'll convince ourselves the new game isn't worth playing because it doesn't match our historical definition of meaningful work.

Here's what I've learned from staying in the game: the problems founders face today are actually harder than what we dealt with before. Markets are more competitive, attention is more fragmented, and the time between having an idea and seeing competitors emerge has shrunk to weeks.

Navigating that complexity requires both fresh thinking and hard-earned wisdom. Understanding how to build systems that scale. Knowing how to spot the difference between real traction and vanity metrics. Having lived through enough cycles to help founders prepare for volatility.

The most valuable advisors will be those who can bridge both worlds - honoring what we've learned while staying curious about what's changing.

What comes next

I don't have the new playbook. Nobody does yet. But I know that stepping away and saying "I don't understand the rules anymore" isn't the answer - at least not for me. The founders I work with don't have that luxury. They need to figure out how to build in this environment, where capital is scarce, markets are fragmented, and technology cycles move faster than ever.

Our job as mentors and advisors isn't to cling to old rules or mourn their passing. It's to learn the new ones alongside the people who are actually playing the game.

Jerry achieved remarkable success with his approach. His decision to step away makes perfect sense given his circumstances and goals. But departures like his represent a missed opportunity - not just for experienced investors, but for the founders who could benefit from their perspective applied to new realities.

The companies being built today may look like "shopkeeping" to someone calibrated to previous eras. But I suspect we're witnessing the early stages of something much bigger - the infrastructure phase of the next economic transformation.

I may not have all the answers. But I know this: I'd rather keep learning than walk off the field.