Why saying "no" is the secret to growing faster as a startup founder
Most founders think raising $100M means spending aggressively. Adit Abraham raised $108M and spent only $1M - while landing Fortune 10 contracts very early on and having experienced zero enterprise churn to date.
In this episode, he reveals the counterintuitive focus strategies that helped Reducto turn documents into data better than anyone else, including why they fired a $5K contract, limited engineers to one priority per week, and spent months recruiting a single PhD instead of scaling the team quickly.
Adit Abraham is the co-founder and CEO of Reducto, an AI company that transforms documents into structured data for language models. He previously worked at Google and attempted other startups before Reducto, where he learned the hard lessons about focus that now drive his company's success. Reducto has raised over $100M from A16Z, Benchmark, First Round Capital, and Y Combinator.
In Today's Episode We Discuss:
02:04 - Pivoting from a viral product before Y Combinator even began
05:48 - How free computer vision consulting revealed real product-market fit
07:29 - The exact moment founders know they've found product-market fit
08:03 - Why going one layer deep on ideas is the most dangerous founder trap
11:10 - Choosing two PDF features over 35 file types competitors supported
14:54 - Turning down construction document contracts worth millions in revenue
17:10 - Past startup failures that became the blueprint for saying no successfully
22:25 - Cutting engineer to-do lists from 10 items to 1 weekly priority
27:45 - The doctor-patient framework that makes rejecting customers feel collaborative
31:35 - Maintaining velocity while scaling from 4 to 20 high-agency employees
36:08 - Prioritization without spreadsheets: qualitative judgment over point systems
38:50 - Spending $1 million after raising $108 million from top-tier VCs
40:52 - Why their first research hire is one of 10 best in world for document AI
46:35 - The fitness trainer analogy every founder misunderstands about company building
49:14 - When "stay lean" advice becomes the wrong strategy for your stage
50:16 - Why full-time commitment creates space for different experiments than side projects
52:04 - The VC conversation that made sharing bad news feel safe instead of scary