Why Building From Waterloo Beats SF

Chapter 3: Why Building From Waterloo Beats Building From San Francisco

"Have you thought about moving to San Francisco?"

I've heard this question dozens of times. From investors. From advisors. From other founders.

Always asked with a tone suggesting it's the obvious next step. Like it's some kind of graduation you go through as a "real" founder.

My answer has always been the same: No.

Not because I have anything against San Francisco. It's a great city with incredible energy and talent.

But because the premise of the question is fundamentally broken.

The idea that you need to be in one specific city to build a successful company is the biggest lie in the startup world.

Let me show you why — using my actual numbers, not hypotheticals.

Building From a Dorm Room in Waterloo, Ontario

When I started SimpleDirect in 2019, I was in my second year at the University of Waterloo. Computer science major. Living in a dorm room in Waterloo, Ontario — a small college town an hour from Toronto that most Americans have never heard of.

I met Arashdeep in one of my CS classes. He became our CTO. We couldn't afford to pay anyone full-time. Hell, we couldn't afford to pay anyone at all.

We were broke. Like actually broke.

Me, Arashdeep, and a few other co-founders each put up a few thousand dollars at the beginning. That was it. That was our "seed round."

We kept expenses extremely low. No office. No fancy tools. Just students building something in whatever time we had between classes.

My Actual Living Costs (The Real Numbers)

Here's what I actually paid for rent:

Waterloo (2019-2021):

• Student apartment: $750 CAD/month ($565 USD)
• Later upgraded: $900 CAD/month ($680 USD)

Toronto (2021-present):

• Two-bedroom condo (split with co-founder): $2,800 CAD/month total
• My share: $1,400 CAD/month ($1,055 USD)

My salary from SimpleDirect/ANC (2022-2025):

• Pre-tax: $6,300 CAD/month ($4,755 USD)
• After-tax: $4,000 CAD/month ($3,020 USD)
• Actual spending: ~$3,000 CAD/month ($2,265 USD)
• The rest of profits from SimpleDirect/ANC gets reinvested into the businesses

Compare that to San Francisco:

According to Zillow and RentCafe data from 2024-2025:

• SF one-bedroom apartment: $3,000-4,500 USD/month
• SF "founder salary" expectations: $150K-200K USD/year ($12,500-16,700/month)

In other words:

• My Toronto rent: $1,055 USD/month

• SF equivalent: $3,000+ USD/month

• I'm paying 65% less just on housing

• My total monthly spending: ~$2,265 USD

• SF minimum viable lifestyle: ~$6,000-8,000 USD/month

• I'm operating at 30-40% of SF costs

This isn't about being cheap. It's about runway.

If I lived in SF on a "typical" founder budget, I'd burn through my savings 2-3x faster. That means less time to find product-market fit. Less room for mistakes. Less freedom to say no to bad deals.

Lower costs = longer runway = better decisions.

The Expensive Mistakes

Of course, we made stupid mistakes.

We hired a sales consultant. Thousands of dollars down the drain.

We hired a sales agency to do B2B calls. More thousands down the drain.

We didn't know what we were doing. We were copying what we saw other startups doing. And most of what other startups do is burn money on things that don't matter.

But here's what we had going for us: we didn't have money to burn.

So we had to be smart about every single expense.

The $800/Month Software Engineer Who Changed Everything

By year three, we needed to hire a software engineer.

Arashdeep was doing all the heavy lifting on the engineering side. But we needed more capacity. We needed help.

Problem: In Canada, a median software engineer salary is $60,000-$80,000. Even for a junior position.

Did we have $60,000-$80,000 in the bank? Absolutely not.

So I had an idea: hire a developer from India.

A few things made me confident this would work:

I came from a CS background. I'd worked software engineering internships. I knew how to write code. I could evaluate technical work.

Arashdeep was there to train and monitor. We weren't outsourcing to some agency where we had no visibility. We were bringing someone onto our team.

We couldn't afford to fail. This wasn't VC money we were playing with. This was our money. So we had to make it work.

We couldn't even afford full-time at first. So we hired a part-time developer.

His salary: 45,000 Indian rupees per month. About $800 CAD ($570 USD).

Later, I learned that was actually on the higher end. If you're a local Indian company, you pay significantly less. But for us, $800/month was a game-changer.

Compare that to an assumed $60,000-$80,000 CAD annual salary for a Canadian junior engineer: $5,000-$6,667 CAD per month, before employer costs. The original $4,500-$6,000 USD monthly conversion was not supported by those amounts. The part-time remote role and full-time local salary also differ in hours and responsibilities; they are not a like-for-like cost comparison.

We got the same output for 1/6th the cost.

And the developer was great. Talented. Hardworking. Eager to prove himself.

How We Actually Found Him (The Process Nobody Talks About)

People always ask: "How do you find good remote developers?"

Here's the honest answer: you have to be willing to do the work.

The Platform: I used LinkedIn.

Not Upwork. Not Fiverr. Not some freelancer marketplace. LinkedIn.

Why? Because LinkedIn lets you see someone's full professional history. Their education. Their endorsements. Their network. It filters for people who are serious about their career.

The Process:

1. Posted a detailed job description outlining what we needed, what we were building, and what success looked like
2. Got 50+ applications within a week (India has incredible engineering talent)
3. Filtered to 10 candidates based on technical background and communication skills
4. Did technical interviews with all 10 (30-minute calls, live coding, architecture questions)
5. Gave the top 3 candidates paid test projects ($100-200 each to build something small but real)
6. Hired the best one based on code quality, communication, and speed

The hardest part: Communication rhythm.

It took 2-3 months to get smooth collaboration. Time zones were tricky at first (India is 9.5-10.5 hours ahead of Toronto). But once we figured out the handoff process, it became an advantage.

Here's how the timezone advantage actually worked:

I'd work during Canadian business hours (9 AM - 6 PM EST). At the end of my day, I'd send him a detailed task list with context, examples, and expected outcomes.

He'd wake up in India and start working while I slept. By the time I woke up the next morning, there was progress — code written, bugs fixed, features built.

We essentially had a 24-hour productivity cycle. One person's night was the other person's work day.

A specific example:

One time, we needed to integrate a new payment gateway for SimpleDirect. It was urgent — we'd promised a contractor we'd have it ready by Friday.

Wednesday evening (6 PM Toronto time), I documented everything: API credentials, integration requirements, test cases, edge cases.

Thursday morning (8 AM Toronto time), I woke up to a Slack message: "Integration complete. Tested on staging. Ready for your review."

He'd built the entire thing overnight (his morning/afternoon in India). I reviewed it, found one small bug, sent feedback. He fixed it while I ate lunch. We deployed Friday morning.

The lesson: Geographic arbitrage isn't just about lower costs. It's about time zone leverage. You can get 24-hour productivity if you structure handoffs correctly.

The Canadian Advantage Nobody Talks About: Government Grants

Here's something that saved SimpleDirect and ANC in the early days: Canadian government grants.

Most American founders don't realize this, but Canada has incredible support for startups — especially if you're building tech or exporting to the US.

The Grants I Actually Accessed

CanExport (Export Development):

• Helps Canadian companies expand to international markets
• Covers costs like market research, trade shows, business development trips
• We used this for US market expansion
• Non-repayable (you don't give up equity)

IRAP (Industrial Research Assistance Program):

• Supports R&D and innovation in Canadian tech companies
• Covers hiring costs for technical talent working on innovation
• We used this to partially fund engineering work
• Non-repayable

SR&ED (Scientific Research & Experimental Development Tax Credits):

• I haven't used this yet for SimpleDirect (we're pure SaaS, doesn't qualify as easily)
• But I know other founders who've gotten significant money from SR&ED
• Basically reimburses you for R&D expenses through tax credits
• Can be tens of thousands to hundreds of thousands depending on company size

Total accessed: Upwards of tens of thousands of dollars in non-dilutive capital.

Not life-changing money. But enough to fund a product cycle, pay for marketing, or extend runway by 6-12 months.

Here's why this matters:

If I'd been in San Francisco, I wouldn't have access to these programs. Canada specifically supports Canadian companies building tech and exporting globally.

And unlike VC funding, there's no equity dilution. No board seats. No loss of control.

You just have to do the paperwork and report on how you used the funds.

In other words: You can get through a whole product development cycle and launch with government grant money, plus have budget left for marketing — all without giving up ownership.

Kudos to the Canadian federal government for that.

The Multi-Jurisdictional Structure (And Why I Regret Doing It Too Early)

People always ask about my "multi-jurisdictional structure" like it's some sophisticated tax optimization strategy.

The truth? I made mistakes. Here's what I actually did and what I'd do differently.

What I Actually Set Up (And When)

2019: Delaware C-Corp for SimpleDirect

Why I did it:

• We were applying to Y Combinator at the time
• YC founders online said "Delaware C-Corp makes fundraising easier"
• Investors prefer Delaware entities
• It's true that US clients sometimes prefer working with US companies

Why it was a mistake:

• We never raised VC money
• Delaware C-Corps are expensive to maintain (annual franchise tax, registered agent fees, compliance costs)
• We didn't have revenue yet, so it was just a cost driver
• I was 19 and got brainwashed by the Silicon Valley playbook

What I'd do differently: Wait until you actually have US clients or are seriously raising US VC. Don't incorporate just because "that's what YC founders do."

2020-2021: Canadian Corporation for ANC

Why I did it:

• ANC serves Canadian clients (business consulting for founders in Canada)
• The companies we help are here in Toronto
• Canadian corp makes sense for Canadian business
• Access to Canadian government grants (CanExport, IRAP, etc.)

Why this was the right move:

• We had revenue from day one
• Canadian corporate structure was necessary for the business model
• Lower compliance costs than Delaware
• Access to grant programs

Current structure (2025):

• Delaware C-Corp: SimpleDirect (US-facing product)
• Canadian Federal Corp: ANC (Canadian consulting business)
• Lean, simple.

The Lesson: Don't Open Companies When You Don't Have Revenue

Here's my advice:

Start with ONE entity in your home country. Keep it simple.

Only add complexity when:

• You have signed contracts that require a specific entity structure
• You're actually raising capital and investors require Delaware C-Corp
• You have real tax or legal reasons (not hypothetical future reasons)

Why this matters:

Every entity costs money:

• Accountant fees
• Lawyer fees
• Government filing fees
• Annual compliance costs
• Time spent managing multiple entities

If you're pre-revenue, these costs are pure waste.

In other words: Incorporate when you need to, not when you think you might need to someday.

The 14-Person Mistake and Brutal Restructuring

Let me tell you about the stupidest thing I ever did.

By late 2023, SimpleDirect had grown to 14 people.

On paper, this looked like success. We were "scaling." We had engineers, designers, marketers, salespeople, operations people.

In reality, we were bleeding $30,000 per month.

The numbers:

• Monthly burn: $45,000
• Monthly revenue: $15,000
• Net loss: -$30,000/month

I was spending 7 hours per month just on one-on-ones. Daily stand-ups became performative theater. Two shadow societies formed — the quant group and the product group — each thinking they were building the "real" SimpleDirect.

I was failing the Sunday Night Test every single week. Dreading Monday mornings. Anxious about payroll. Creating work just to keep people busy.

The Moment of Clarity

In April 2023: I made a spreadsheet.

Not a fancy financial model. Just a simple Google Sheet with three columns:

1. Person's name
2. What they actually delivered in Q4
3. How much revenue their work generated

The results were brutal.

Only 4 people out of 14 were actually essential.

The rest? They were expensive hope. Bets I'd made on "we'll need this eventually" or "this role will pay off in 6 months."

None of it was paying off. And we were running out of money.

The Hardest Conversations of My Life

January 2024: I cut from 14 people to 3 people.

I paid every single person their severance. Did the calls myself. No HR person to hide behind. Just me, explaining that we couldn't afford to keep going like this.

It felt like failure. Like I'd let everyone down.

But here's what happened:

Results after the restructuring:

• Burn dropped from $45K/month to $12K/month (now $10K/month)
• Revenue stayed flat at $15K/month
• We went from losing $30K/month to being profitable
• Runway went from 3 months to 18+ months
• I started passing the Sunday Night Test again
• Could actually focus on building instead of managing

Two years later (2025):

• 5 people total
• 10x the revenue we had with 14 people
• Still profitable
• Everyone on the team is essential

The Real Lesson About Hiring

Hiring feels like progress. It feels like you're "building a real company."

But every person you hire creates:

• Communication overhead (14 people = 91 potential communication paths)
• Coordination costs (more meetings, more alignment, more process)
• Cultural complexity (cliques, politics, shadow organizations)
• Management burden (1-on-1s, performance reviews, conflict resolution)

Amazon has a rule: teams should be small enough to be fed with two pizzas (6-8 people max).

For bootstrapped companies, I'd say: teams should be small enough that everyone knows what everyone else is working on (3-5 people).

Don't hire until the pain of NOT hiring is unbearable.

And even then, wait another month.

The Real Numbers: SimpleDirect vs SF vs Toronto

Let me show you our actual burn rate compared to what it would cost to run the same company in San Francisco or even Toronto.

My Current Compensation

I pay myself $4,000 CAD per month after tax ($3,020 USD).

That's it. That's my "founder salary." Not the $150K-200K that SF founders pay themselves.

P.S. There's absolutely nothing wrong with $150K-200K. If you're backed by VC funding, paying yourself handsomely is a well-deserved reward for the risks you're taking.

The rest of the revenue stays in the business and keeps compounding.

I spend about $3,000 CAD/month ($2,265 USD), so I'm not saving a ton personally. But the point isn't to increase my lifestyle — it's to reinvest profits and build for the long term.

I keep my salary low to minimize taxes and maximize what stays in the business.

Our Total Monthly Burn: $10,000 CAD ($7,550 USD) for a Globally Distributed Team

Read that again. $10,000 CAD per month. For two profitable businesses (SimpleDirect + ANC).

Team breakdown:

• Me (Toronto) + Co-Founder (Toronto)
• 2 engineers (India)
• 1 operations manager (Nigeria)

Burn Rate Comparison (5-person team)

San Francisco:

• 3 engineers @ $180K USD/year: $540K USD
• Office space: $96K USD/year
• Benefits & payroll tax: $120K USD/year
• Miscellaneous: $60K USD/year
• Total annual burn: $816K USD
• Monthly burn: $68K USD

Toronto:

• 3 engineers @ $110K CAD/year: $330K CAD ($249K USD)
• Office space: $48K CAD/year ($36K USD)
• Benefits & payroll tax: $72K CAD/year ($54K USD)
• Miscellaneous: $36K CAD/year ($27K USD)
• Total annual burn: $486K CAD ($367K USD)
• Monthly burn: $40.5K CAD ($30.6K USD)

SimpleDirect (actual numbers):

• 5 people total (3 outside North America)
• Remote-first (no office)
• Lean operations
• Total monthly burn: $10K CAD ($7.5K USD)
• Total annual burn: $120K CAD ($90K USD)

In other words:

• We're running at 11% of the cost of a comparable SF startup
• We're running at 25% of the cost of a comparable Toronto startup
• And we're profitable — they're burning VC cash hoping to raise the next round

What This Means for Runway

If you raise $500K USD in seed funding:

• SF runway: 7.4 months
• Toronto runway: 16.3 months (2.2x longer)
• SimpleDirect approach: 66 months (5.5 years — nearly 9x longer than SF)

If you raise $1M USD:

• SF runway: 14.7 months
• Toronto runway: 32.7 months
• SimpleDirect approach: 133 months (over 11 years)

With our burn rate, $1M USD gives us 11+ years of runway.

That's not a startup. That's a sustainable business.

We don't need to raise a Series A. We don't need to hit aggressive growth targets to justify the next round. We just need to serve customers and stay profitable.

AI Makes Small Teams Incredibly Powerful

Here's something that's changed dramatically since I started SimpleDirect in 2019:

AI has made it possible to run a business at scale with a tiny team.

That wasn't possible five years ago. But now? You can do things with AI that used to require a team of 10.

Content creation used to require hiring a content person. Now I can brainstorm with Claude, draft with ChatGPT, and edit myself.

Customer support used to need dedicated staff. Now we built SimpleDirect Desk internally and handle 80% of inquiries automatically.

Code scaffolding used to require senior developers. Now junior devs can use Cursor and GitHub Copilot to move faster.

Research and analysis used to take hours or days. Now I can get comprehensive market research in minutes.

AI makes small teams incredibly powerful. It's not about firing people — it's about not needing to hire them in the first place.

But Here's What Most Founders Miss

AI isn't just a tool for staying lean. It's also eating entire categories of work.

The same AI that helps you write content faster is also making "content creator" a commodity skill. The same AI that helps you answer support tickets is also making "customer support" less valuable as a human function.

This connects to something I mentioned earlier in this book: AI is compressing the advice layer, the expertise layer, the information layer.

If you're building a business that depends on any of those layers, you need to think hard about what happens in 3-5 years.

The founders who win aren't just using AI to stay lean. They're positioning themselves in layers AI can't eat: judgment, selection, stakes, accountability, presence.

Geographic arbitrage gave me runway. AI gives me leverage. But the real moat is being in a layer that compounds instead of commoditizes.

More on this in Part 3.

A Note on Geographic Choice

I know some founders who moved to Colombia, Panama, or other low-cost countries specifically for the timezone advantage (same as US Eastern) and lower costs.

It's a personal choice. You should definitely choose wherever is best for you — growth-wise and cost-wise.

The more you can lower your cost of living, the more runway you create for yourself.

But here's the critical thing: Don't do it just because of taxes or cost. Do it because you actually want to do it.

I've thought about moving to different cities around the world and living there for a while. But for now, I've decided to stick around Toronto and not move too much.

I definitely want to move around eventually. But not because I "have to" for the business. Because I want to experience different places.

Geography should be a choice, not a requirement.

The Companies That Prove Geography Doesn't Matter

Let me tell you about two companies in the same space: project management software.

Asana: The VC Darling

Asana raised hundreds of millions in VC funding. They're based in San Francisco. Everyone in Silicon Valley knows them.

I remember a prominent Silicon Valley investor mocking Basecamp back in 2020-2021, saying Asana was "taking over" and Basecamp had "missed their chance."

Let's look at the numbers today (as of early 2025):

Asana:

• Stock price: $13.90 USD per share
• Down 46% from all-time highs
• Quarterly revenue: $196 million (looks impressive)
• Quarterly net income: negative $50 million (losing money)
• Employees: over 1,800 people

They're burning $50 million per quarter with 1,800 employees.

Basecamp: The "Joke" That's Actually Winning

Basecamp is made by 37signals. Bootstrapped. Self-funded. Revenue-positive. Profit-driven.

They're in the same space as Asana.

Here are their numbers:

Basecamp:

• Revenue last year: reportedly over $200 million
• Employees: about 60 people
• Fully profitable
• No VC funding
• No board pressures
• Completely sustainable

Let me repeat that:

Basecamp made $200M+ per year with 60 employees.

Asana has 1,800 employees and is losing $200M+ per year.

Basecamp has 30x fewer employees and is fully profitable.

And yet, a few years ago, Silicon Valley VCs were laughing at Basecamp for being "small" and "not ambitious enough."

Who's laughing now?

The Fairness Context (Why This Comparison Matters)

Now, to be fair: Asana is playing a different game than Basecamp.

Asana is trying to be the enterprise standard (think Salesforce for project management). That requires:

• Massive sales team (enterprise contracts are $100K+)
• Integrations with everything (requires engineers)
• Compliance certifications (SOC 2, GDPR, etc.)
• Enterprise support (dedicated account managers)

All expensive.

Basecamp chose simplicity:

• Self-serve SaaS ($99-299/month)
• No sales team (product-led growth)
• Focus on small/medium businesses who don't need hand-holding
• Minimal integrations (keep it simple)

But that's exactly my point:

Basecamp CHOSE a business model that didn't require 1,800 employees and $50M quarterly losses.

They optimized for profitability over growth. For sustainability over scale. For freedom over funding.

And they're still here, still profitable, still growing — while dozens of VC-backed project management tools have shut down.

You have the same choice.

Choose wisely.

Other Winners Built Outside SF

This isn't just about Basecamp. Look at some of the biggest success stories:

Shopify — Ottawa, Canada — $150B+ market cap. Built from a small Canadian city. Tobi Lütke never moved to SF.

Atlassian — Sydney, Australia — $50B+ market cap. Bootstrapped to $200M revenue before taking VC. Never had a sales team.

Canva — Sydney, Australia — $40B valuation. Melanie Perkins stayed in Sydney.

SpaceX — Los Angeles — $150B+ valuation. Elon chose LA for aerospace talent, not SF.

Wealthsimple — Toronto, Canada — $5B valuation. Now Canada's largest fintech.

See the pattern? The biggest winners aren't in San Francisco.

They're in Ottawa, Sydney, LA, Toronto — anywhere founders decided to build.

The "Move to SF" Advice That Failed

I've seen this play out dozens of times.

Founders move to SF because investors tell them to. Because advisors say "that's where you need to be." Because everyone acts like it's the only way.

Then what happens?

Their burn rate triples. They start paying SF salaries. They rent an office in SoMa because "that's what real startups do."

Suddenly they need to raise more money. Faster. At higher valuations.

The pressure compounds. The stress increases. The runway shrinks.

And most of them fail.

Not because their product was bad. Not because they didn't work hard enough.

Because they optimized for looking like a San Francisco startup instead of building a sustainable business.

The Success Rate Data (And Why Geography Doesn't Actually Matter)

Source correction — October 11, 2026. The original draft compared “12%” SF success with “10-11%” elsewhere, called the gap statistically insignificant and claimed location explained less than 5% of outcome variance. It did not identify a study, sample, observation period, definition of success or statistical model. Naming PitchBook, CB Insights and Crunchbase was not a citation to such an analysis. Those claims are withdrawn as evidence.

What "Succeed" Actually Means

The original comparison did not establish a definition of success. Reaching Series A does not, by itself, establish product-market fit or a profitable founder outcome.

Where the Data Comes From

No specific dataset or analysis supporting this comparison is identified in the manuscript. The named data providers are not substitutes for a study citation.

Why the 2% Gap is "Statistically Insignificant"

The original heading made a finding the chapter could not support. A one- or two-percentage-point difference alone cannot establish statistical significance, causality or how much outcome variance location explains.

The Real Analysis

My experience supports a narrower question: can a particular location serve your customers, hiring needs, legal requirements and operating budget? Compare those actual requirements and costs. This chapter does not supply measured odds showing that geography is irrelevant or that one location is best for every founder.

What Actually Matters

Geography is one part of a decision. In my own business, I focused on:

• Solving real customer problems
• Generating revenue
• Managing your burn rate
• Building something sustainable

None of those require you to be in San Francisco.

In fact, being outside SF makes most of those things easier:

• Lower burn = longer runway = more time to find product-market fit
• Global talent access = better hiring at lower costs
• Less competition = easier to attract and retain great people
• Geographic arbitrage = better quality of life on the same income

The only real disadvantage is access to VC capital.

And as I showed you in Chapters 1 and 2, that's not actually a disadvantage.

It's a forcing function to build with revenue instead of funding.

When Geography Actually Matters (The Decision Framework)

Look, I'm not saying geography is completely irrelevant. There ARE situations where moving makes sense.

Move to SF/NYC if:

• You're raising VC and need face-time with partners (especially if targeting mega-funds like Sequoia, a16z, etc.)
• You're in a market where the customer concentration is there (enterprise sales to Fortune 500 HQs, concentrated in SF/NYC)
• You're in deep tech (AI/ML research, semiconductors, biotech) where the talent density and research institutions matter
• You have funding and can afford the burn rate (you raised $5M+ and can survive 2-3 years at $68K/month burn)

Stay where you are if:

• You're bootstrapping (lower burn = longer runway = higher chance of survival)
• Your customers are distributed globally (SaaS, e-commerce, digital services — they don't care where you're based)
• You can build remotely (software, services, content — anything that doesn't require physical presence)
• You don't have $500K+ in the bank to survive SF costs for 12-18 months

The Calculus is Simple:

• SF gives you VC access and talent density
• But costs 3-5x more than everywhere else
• So you need VC money to afford SF
• But you don't need SF unless you're chasing VC

It's circular logic that traps founders.

Break the loop: Build profitably from wherever you are. Then, if you want SF access, visit for 2-4 weeks at a time without moving.

The Future Is Remote. The Future Is Global.

Look at what happened from 2020-2025:

• SF's share of VC funding dropped from 47% to 40%
• Remote startups raise at 75-85% the rate of SF companies (up from 60%)
• Global talent became accessible to everyone
• The best companies are being built everywhere

The geographic lottery is over.

You don't need to win the birth lottery and be born in the Bay Area.

You don't need to uproot your life and move to the most expensive city in the world.

You just need to build something people want and charge them for it.

From wherever you are.

The Uncomfortable Truth About Scaling

Silicon Valley sells you this narrative: hire fast, scale quick, move fast and break things.

But look at the data.

Meta laid off 21,000 people and posted record profits the quarter after.

They hired hundreds of millions worth of AI researchers while cutting everyone else.

Even companies with "endless cash" realized that more people often means more problems, not more progress.

Your competitive advantage isn't team size. It's team efficiency.

I've seen Y Combinator companies jealous of the organic traction our five-person team generates.

Think about that.

For Founders Reading This

If you're feeling drained by management overhead, if you're failing the Sunday Night Test, if you find yourself creating work to justify people's salaries — you might be scaling too fast.

Ask yourself:

Do we actually need to hire this person? Or do we just want to be bigger for the sake of being bigger?

Can AI handle this? Can a contractor do this? Can someone on the existing team take it on?

Would this person pass the "essential" test? If they resigned tomorrow, would I do everything possible to keep them?

Sometimes the answer is yes, you need to hire.

But question the assumption that more people automatically means more output.

My Advice If You're Not in SF

Stay where you are.

Pay yourself a reasonable salary that works for your local cost of living.

Enjoy the lower costs and longer runway.

Hire great people regardless of where they live.

Focus on customers and revenue, not VC networking events.

And if you do raise capital (if you choose to), do it from a position of strength — because you have revenue, not because you moved to the "right" city.

San Francisco doesn't build companies. Founders do.

Geography is one factor. Not the determining factor.

What Comes Next

In the next chapter, I'm going to show you why revenue beats funding as validation — and why so many founders are afraid to charge customers real money.

Because while everyone tells you to "build first, monetize later," SimpleDirect almost died following that advice.

Then in Part 2, I'll give you the exact playbook: how to find clients, how to price for outcomes, how to deliver results, and how to build runway while everyone else is burning cash.

And in Part 3, I'll show you where this is all going — what AI is eating, what survives, and how to evolve before you get commoditized.

But first, let's talk about why the best validation isn't a VC check or a Product Hunt launch.

It's a customer handing you money.

Author's Note

The personal numbers below are my reported historical account. The location comparison tables are scenarios, and external company and funding figures need dated source verification.

The $10K CAD monthly burn. The $800 CAD/month Indian developer found via LinkedIn. The 14→3→5 person journey. The 7 hours of monthly one-on-ones. The $45K burn vs $15K revenue in late 2023. The Sunday Night Test failures.

My actual rent in Waterloo ($750-900 CAD/month) and Toronto ($1,400 CAD/month split). My actual salary ($4,000 CAD after-tax since 2022). The CanExport and IRAP grants (tens of thousands, non-dilutive). The Delaware C-Corp mistake in 2019 when I should have waited.

These are SimpleDirect's actual numbers. These are my actual decisions and mistakes.

The lesson: You don't need to be in San Francisco to build a real business. You just need to manage your burn rate and build something people will pay for.

Everything else is optional.