A Hella Strategic Thesis

Reciprocity and the natural cycle of give and take have been off-kilter for a while now. We talk about the loneliness epidemic, the erosion of community, and the collapse of our collective sense that the ground will hold. Yet when we look at our day-to-day lives and what we build and invest in, it’s clear that our interest in and desire to build hard things that make the society we live in better off has faded. We trust the fate of our society to the whims of institutional capital, venture capital, government officials, and politicians, to arbitrate the flood of business models and ideas - some good, some bad - in order to define the winners and eliminate the losers. We hole ourselves up in the burrows of our individual lives and hope for the best when we have to engage with the apparatus that comprises our bedrock: healthcare, dependent care, education, and housing. Then rage when it doesn’t go as planned. And in the delta of businesses and politicians seeking to maximize profit, and the individuals trying to do right by themselves and their loved ones, is the forgotten scaffolding of our society, which needs tending to, as well. By everyone up and down the stack. 

We Americans look to our startup ecosystem as a mirage of hope. Hope that new technology will make the things in our society that don’t work so well work better. Hope that a new technology will reunite us in a way that we haven’t seen since WWII. Hope that it will make our lives better.

But the startup ecosystem looks at that charge as ill-placed - no, they say, that is the role of government. Our job is to solve hard technological problems and fund technologies that break down barriers to scientific and technological innovation. Our job is to unlock American ingenuity and to fund those businesses that will yield 10x‑plus returns over roughly a decade and show hockey‑stick growth. Our job isn’t to give people hope - our job is to build businesses that exhibit the American dream - by letting companies fail fast and dream bigger. 

So how did we come to a situation where the ‘hardest problems’ that the startup ecosystem rallies itself to solve are technically hard but financially easy, and the bedrock of our society is left to crack and break? It’s because people don’t focus on these issues. I have talked about the crumbling bedrock with dozens of founders and SaaS operators, and everyone says a line like ‘oh yeah, it’s really bad’. And then they either talk about their own interactions with the brokenness and leave it at that, or they say something about someone else needing to fix it - gov’t, another company, a startup they may have worked on that failed, someone else thats certainly not them - and then pivot to how awesome their new unrelated idea is or what they need to make their current totally unrelated technology startup more successful. 

It’s easier to play the part of a founder when the role is spelled out for you on a billion different startup blogs and podcasts.  

A venture capital managing partner recently said the startup path got absorbed into the institutional logic it was supposed to replace. Legibility is the selection mechanism, the pattern match, the institutional stamp, the fundable shape. He's right about the culture. But culture is a symptom. Legibility doesn't just shape who gets funded. It determines which markets get built for. The fundable shape – the pattern that VCs recognize, that accelerators select for, that the ecosystem rewards – is the shape of a software company. 

And the markets that need the building most don't come in that shape.

The founders who inspire me looked at the same crumbling bedrock that everyone else walked past and decided to do something about it. That matters. But conviction isn't architecture. And this is where even the founders who take the leap get it wrong. Not because they lack conviction, but because they approach these markets with tools built for a different species of business entirely. No amount of HBR case studies, industry primers, or high-priced management consultants will close the gap, because the gap isn't knowledge. Its orientation.

Three things are fundamentally different when building here, and getting any one of them wrong can kill a company that deserves to live. 

• First: get clarity on who feels this solution most deeply. Not who will buy it. Not who will approve it. Who is the one person whose life changes because this exists? In most of these markets, that person, the patient, the parent, the aging adult, the worker trying to reskill, is not the one writing the check. The insurer wants cost reduction. The employer wants retention. The regulator wants compliance. They all have legitimate interests, and they all need to be navigated. But they are considerations, not the north star. The moment you optimize for the check-writer instead of the person you set out to serve, you've become a different company. You may not notice for a while. Your investors definitely won't. But the end user will … because they always do. 
• Second: the government is not a line item in your buying committee. Founders who come from SaaS instinctively try to slot government into the buyer framework they already know by subbing in a regulator where the "influencer" or "decision maker" would go, and then running the same playbook. It doesn't work. Government is not your buyer. It is your gatekeeper, your arbiter, your angel, or your angel of death. Sometimes all four in the same quarter. It sets the rules of engagement for every other relationship in the system: what you can sell, to whom, through which channels, at what price, with what disclosures. You don't sell to the government the way you sell to a VP of Engineering. You build in respect to it, and when its regulations or direction are wrong, you find the channels to challenge it while continuing to build. Treating government as a compliance checkbox is how companies get blindsided. Treating it as an immovable god is how they get paralyzed. 
• Third: not all regulatory ground is created equal. There is a spectrum, and where your business model sits on it determines how long it will take to build. 
  • At the top is statute: explicit law, passed by a legislature, durable across administrations.
  • In the middle is rulemaking: agency interpretations that can be expanded by one administration and narrowed by the next. 
  • At the bottom is enforcement discretion: the "we don't intend to enforce this right now" letters, pandemic-era waivers, and temporary flexibilities that can vanish with a single memo. 

Those three truths converge on a single question that every company in these markets eventually has to answer. And that answer reshapes everything. 

Who pays? 

That answer doesn't just determine your revenue model; it reshapes the product, the culture, what you measure, and who you actually serve. What looks like a lifeline is usually a current.

A company that built affordable coverage for freelancers answered "employers" – through a creative reinterpretation of who counts as one. A court later called it an unlawful end-run. The entire product line went to zero overnight. Not because the care model failed. Not because members weren't satisfied. Because the regulatory ground they built on wasn't ground at all.

An eldercare startup that began as companionship for lonely seniors answered "Medicare Advantage" – and kept its gig-economy labor model while serving vulnerable populations. The complaints, the Senate inquiry, and the 36 payers who declined renewal in a single year proved what should have been obvious upon first review.

The answer to "who pays?" is not a new channel in the playbook you already know. It's an identity decision. And most founders don't realize they've made it until the ground has already shifted beneath them, and what they're building no longer resembles what they set out to build.

The founders I work with understand reciprocity. They understand that the bedrock beneath the hard technological quests, or even the easy software ones, needs tending too. They have done the calculus, they have seen the challenges, and they understand the suffering the fracturing bedrock causes. They know that policy, capital structure, go-to-market, and buyer economics aren't a channel strategy; they are the system. And they've decided to tend to the scaffolding anyway.