It’s a challenge every startup faces: they’ve made a prototype and proven the thing works, but now have to sell the product and produce enough to get past the “valley of death” that kills so many companies.
“They are chicken and egg stuck,” Josh Felser, co-founder and managing partner of early-stage venture firm Climactic, told TechCrunch.
The hurdle is particularly high for companies making physical goods. Felser noticed it was a common occurrence among startups producing novel materials. Fesler, who previously founded and invested in software startups, said the problem they faced seemed a bit unfair.
“Software companies sell at a negative margin all the time in the beginning, you know, Uber, Lyft, you can look at lots of different examples,” he said. “But for materials companies, they they’re not allowed to do that. One of the questions I had is, ‘why is that?’”
Felser found that unlike software companies, which can quickly add more capacity from cloud service providers, materials startups face a market skeptical of their ability to scale up production without a guaranteed customer.
Felser decided to give them one.
Felser doesn’t run a company with a big budget for clever materials, but he knows a few. And as a climate tech investor, he knows more than a few startups that could benefit from a well-known customer.
Techcrunch event TechCrunch Founder Summit 2026: Tickets Live On June 23 in Boston, more than 1,100 founders come together at TechCrunch Founder Summit 2026 for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately
Save up to $300 on your pass or save up to 30% with group tickets for teams of four or more. TechCrunch Founder Summit: Tickets Live On June 23 in Boston, more than 1,100 founders come together at TechCrunch Founder Summit 2026 for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately
... continue reading