This week, we’re talking:
How to tell if you’ve built a product company… or just a services wrapper with an LLM sticker. 🛠️🍬
The Sam Altman test for real moats: every time the model gets better, does your business? 🏰
What blueberries and pancakes have to do with product-market fit. 🫐 🥞
How to fire bad customers (without becoming a bad founder). 🪓
What we learned naming (and renaming) a company in the age of AI. 💡
My Take:
Too many founders try to be everything to everyone: big teams, bloated roadmaps, slow, ponderous sales cycles. The winners go narrow and deep. They build with compliance in mind. They know their cost to serve, and they know exactly who writes the check—and how to win that person over.
That’s the theme of my conversation this week with Rachel ten Brink, GP and founder of Redbike Capital. Before she was an investor, she co-founded Scentbird and scaled it to 500,000+ subscribers after two decades at Estée Lauder, L’Oréal, and Gillette. She’s seen every version of “move fast and break things,” and she prefers build smart and last longer.
Rachel and I dig into what separates a true product company from a glorified services wrapper, how to design real data moats instead of buzzword flywheels, and why customer love—not fundraising—is the only early metric that matters.
If you’re a builder obsessed with focus, discipline, and depth instead of hype and sprawl, this one’s for you.
Tom: You’ve built startups as an operator and now you back founders. What’s your operator’s test for whether a “vertical AI” startup is actually a product business—or just a fancy services wrapper?
Rachel: First thing I ask is: what level of problem are you solving? How much of it can be fully automated versus handled by humans? And is it a real pain or just a nice-to-have? Because if a general model can do what you’re doing in a year or two, you don’t have a business—you have a moment.
Then I look for replicability. Can this product serve multiple customers without customization each time, or are you basically hand-crafting every deal? If 70% of what you’re doing depends on people, you’re a consulting company, not a software operation.
Finally, I think about scalability and customer love. At pre-seed or seed, I’m happy with modest revenue, but I need at least one customer who’s obsessed—someone who’s sticking with you even when the product’s ugly because you’re solving something real for them.
Tom: That’s dead-on. My first company was like that—every customer needed last-mile customization. It required too much services, a lesson we carried forward into the next company and every one since.. The danger was that the more we nourished that services footprint, the further our engineers drifted from customer reality. The big lesson learned was to: keep zero daylight between builders and customer pain.
Rachel: Exactly. You can’t delegate empathy.
Zero-to-one is handmade, one-to-ten is repeatable, ten-to-a-hundred is scalable. If you skip the first phase, you never get the insight; if you cling to it, you never get margins.
Tom: Let’s talk about moats. Everyone loves to say “data flywheel” or “network effect,” but very few actually have one. What’s the difference between a slide and a moat?
Rachel: The difference is timing—you can’t retrofit a moat later. The best companies design a data network effect at formation. Two ways I see it work.
First, you build a product that encourages users to share proprietary or private data because it makes the product better for them—and that creates compounding value and stickiness.
Second, you take messy public data—things anyone could access but few can use—and you process it in a way that becomes proprietary over time. We invested in a healthcare company right after the “No Surprises Act,” which forced insurers to publish out-of-network reimbursement rates. The insurers buried the data—thousands of files, impossible to parse. Our founders cleaned it up and built a searchable database. Then they went further: they noticed those same providers were entering arbitration when insurers underpaid, a process that runs like baseball arbitration—you submit a bid, the arbitrator picks one. By embedding into that workflow, they generated entirely new data about outcomes. That combination—public data + workflow + proprietary exhaust—becomes a fortress.
Tom: Love that. That’s where most people miss the point. If there’s no net-new data being created, the moat evaporates.
I tell founders now: don’t throw out the market insight just because the execution failed. You can fix the “how.”
Rachel: Right. And I always come back to what Sam Altman said: every time the underlying model gets better, does your business get more valuable—or less? If it’s less, you don’t have a moat.
Tom: Let’s get tactical. Everyone wants the magical “go-to-market motion.” What have you seen actually work for vertical AI?
Rachel: Step one is message fit. Before you do “marketing,” decide what you’re selling and to whom. Early founders love to pitch five different benefits—they’re all technically true, but the buyer only cares about one. At Scentbird, we had a dozen theories: people hate being sprayed at Macy’s, they want to try at home, they’re overwhelmed by choice. All valid, but not all equal. The discipline is choosing one.
Then, test the message fast—mix qual and quant. Talk to customers. And be honest about your current capabilities. Everyone wants to say “product-led growth,” but if your product isn’t yet self-serve, PLG just means you’re hoping. Maybe what works today is founder-led sales, conferences, LinkedIn DMs, or a handful of white-glove pilots. Pick one wedge, do it exceptionally well, and evolve from there.
Tom: Yeah, my shorthand for that is “blueberries and pancakes.” Early on, when a customer says they want pancakes with blueberries at 7:30 a.m., you make them. What does that have to do with software? Absolutely nothing – but that’s how you earn loyalty and learn the recipe. Just don’t confuse the pancake phase for the business model.
Rachel: Exactly. Zero-to-one is handmade, one-to-ten is repeatable, ten-to-a-hundred is scalable. If you skip the first phase, you never get the insight; if you cling to it, you never get margins.
Bad customers aren’t bad people; they’re just a mismatch. Fire fast, politely.
Tom: And then growth hits—what I call the “champagne-problem death spiral.” What breaks first?
Rachel: Product and go-to-market, almost every time.
On the product side: hallucinations, instability, over-promised accuracy. Suddenly your “AI” needs an army of humans in the loop. You thought you were selling $50-a-month software, but the hidden human labor nukes your margins. The shortcut is to ask: are people doing way more manual correction than you expected? If yes, stop onboarding for two weeks, fix the root problem, and relaunch.
On the go-to-market side: early traction makes you greedy. You start taking every customer who raises their hand. But not every customer is a good one. Some are too small to afford you; others are massive enterprises who just want to learn your tech before they build their own. You have to segment ruthlessly.
Tom: We do something similar at super{set}. Every contract starts as a two-month “Proof of Value.” It’s a real SaaS agreement, but cancelable by either side anytime in those first sixty days. It keeps us from getting trapped with customers who’ll drain the company while we’re still baking the pancakes.
Rachel: That’s brilliant—and it’s mutual. Bad customers aren’t bad people; they’re just a mismatch. Fire fast, politely.
Tom: Let’s talk about staying close to the buyer. Technical founders hate this part.
Rachel: They do. But you can’t outsource understanding. I tell them: be a field anthropologist. Run surveys, but always include open-ended questions to find the most articulate outliers—the people who’ll tell you why something hurts. Talk to those people. One of our portfolio founders just hops on planes. He’ll message a prospect and say, “Happens I’m in Chicago Monday.” He isn’t. But he closes deals because he’s in the room.
Tom: I see so many founders dwell in abstractions and use a lot of jazz hands to talk about the segments or the customers they’re talking to. And I’m always like, Look, it’s time for us to put on our safari hats, get into the jungle, pull out our recorders. What exactly did they say? Where do they eat breakfast, and where do they go for lunch? Listen closely to what they say and do, not the shiny pronouncements they share on press releases or meetings where the boss is listening in.
Rachel: Exactly. It’s all discovery.
Tom: Okay, personal time. Your résumé reads like three lives. Where did the entrepreneurial streak start?
Rachel: My dad. He left Cuba at seventeen and built a business from nothing in Costa Rica. My first “job” was doing market research for his tuna company. I’d stand in the supermarket with a clipboard watching who bought our brand and asking why. I was ten. That’s how I learned to connect products with people.
I spent about fifteen years inside giants—Gillette, Estée Lauder, L’Oréal—before realizing I wanted to build, not manage. At Elizabeth Arden I cut a deal: four days a week corporate, one day consulting for startups. Terrible idea. Founders can’t pay and don’t need advice—they need execution. But through that work I met my Scentbird co-founders. Four of us, YC S15, pure chaos and energy. We built the first subscription fragrance business, grew to 500,000+ subscribers, hit nine-figure revenue. And somewhere along the way I realized what I love most is the earliest stage: figuring out go-to-market, pricing, ICP, that messy zero-to-one. That became Redbike.
Tom: Give me the low point—the one that nearly ended you.
Rachel: Oh, easy. Early Scentbird. Our first model was “try-before-you-buy” with full-size perfumes. We shipped three bottles, let customers keep one, return two. Total disaster. People mailed back water. Shipping was expensive, cash flow worse. We had 112 visitors a day and two buyers. We were in a tiny office, four co-founders staring at each other, ready to quit.
Michael Seibel, one of our advisors, told us: you know this market; the execution is wrong. That weekend we threw everything out except the insight. One of us had found these small travel sprays at Sephora so we mocked up a subscription around those. It worked immediately. It felt small at first, but customers loved it. Revenue is the best diplomacy: once you have traction, everyone wants to work with you.
Tom: That’s a hell of a pivot story.
Rachel: It’s the same lesson I tell founders now: don’t throw out the market insight just because the execution failed. You can fix the “how.”
Tom: Perfect note to end on. Rachel, this was awesome. Thanks for bringing the operator honesty and the VC clarity.
Rachel: Thank you, Tom. Always fun to talk to someone who’s lived it.
If you made it this far, go check out Rachel’s work at redbikecapital.com and give her a follow on LinkedIn.
And as always—keep cranking, keep building.