Daily Grind July 28, 2025: Money and Talent Flows from SaaS to Steel

Welcome to Tech's morning newsletter, where you get one headline, one page of a great book, and one question to start your day.

Author

Ben Putano
July 29, 2025

Good morning and welcome to The Daily Grind for Tuesday, July 28.

Today we are talking about a change in the startup landscape. More and more founders are choosing the path less traveled and taking hard tech. The headline below exemplifies this shift.

Plus, we have a page from Ben Horowitz on The Struggle, and then we’ll attempt to tackle the challenges in our own lives.

Let’s get into it!

📰 One Headline: Money and Talent Flows from SaaS to Steel

AI is eating venture capital, as we discussed last week, but another trend in the startup world could be just as significant long-term: the shift of money and talent from SaaS to hard tech.

Yesterday, TechCrunch reported on Daniel Liss, the founder of the social media app Dispo and dating app Teaser AI, whose next venture is an AI-forward steelmaking company.

The new company, Nemo Industries, aims to modernize the steel industry and help rebuild the American supply chain.

“These plants are run on, at best, Excel spreadsheets. At worst, clipboard technology,” [Liss] said. The people who run them have “unbelievable expertise,” he added, but that’s the sort of thing that doesn’t scale well.

As a software founder, Liss teamed up with an energy industry veteran, Michael DuBose, who previously worked at Cheniere Energy, a natural gas company.

Nemo’s mission goes beyond modern software for the steel industry. They are rebuilding the infrastructure from the ground-up:

Nemo is planning to build its own furnaces. The decision was driven by Liss’ conviction that companies that use AI from inception will have a “20% to 30% margin advantage” over competitors.

From Software to Steel: VC focus shifting

Liss is not the only founder shifting from software and hard tech. The number of global VC deals for SaaS hit a 10-year low in 2024:

Despite this, total VC dollars into SaaS rose 29% from 2023 to 2024, thanks to larger deals across all rounds.

In other words, SaaS VCs are piling into winning companies, but not taking as many bets.

Meanwhile, major VC firms like Andreesen Horowitz are focusing on American manufacturing and industrial startups as part of their American Dynamism thesis.

Nemo Industries now belongs to a small cohort of startups aiming to disrupt the steel industry. Boston Metals has raised over $200 million for their green technology, including a $51 million convertible note earlier this year. In August 2024, another green steel startup, Element Zero, raised $10 million.

Other hardtech industries, like supply chain, transportation, and defense, are much larger and relatively flush with cash. But those industries, as Liss points out, rely on raw inputs like steel to survive.

“Our core supply chain of the arsenal of democracy — literally, the ships that my grandfather fought in — we don’t have the ship-building capacity. If we did, we don’t have the steel to make it,” he said.

As with all industrial ventures, the success or failure of new steel startups will be heavily impacted by the US government. The Trump administration pulling back on funding for green construction technology could hurt new startups like Nemo, which will rely on subsidies early on. However, there are still initiatives in place that Nemo can capitalize on:

Liss said the company is considering capturing the furnaces’ carbon pollution; tax incentives introduced under the Inflation Reduction Act remain largely intact, and they make the endeavor profitable for Nemo, he said.

America was once the leading steel producer in the world. Today it sits at #4, with China leading the way by a large margin. But with the introduction of steel tariffs, a renewed vigor for American industry, and the power (and hype) of AI, Liss believes his new venture is perfectly-timed.

📚 One Page: The Hard Things About Hard Things by Ben Horowitz

Software and venture capital are a match made in heaven. Software’s low startup costs, near-infinite scale, and juicy gross margins allow VCs to place big bets, knowing that just one hit will return their funds.

Hard tech, on the other hand, is hard. Capital expenses are high, margins are low, scale is expensive, and growth is slow (relative to software).

That’s not to say VC and hard tech don’t have a history. In fact, the first VC deal was on a semiconductor company. And today, we are seeing a renewed interest in hard tech for manufacturing, supply chain, and defense.

But funding—and building—a hard tech company remains a struggle. That’s why today’s One Page is from Ben Horowitz’s sobering startup tome, The Hard Thing About Hard Things.

Welcome to The Struggle:

THE STRUGGLE

Every entrepreneur starts her company with a clear vision for success. You will create an amazing environment and hire the smartest people to join you. Together you will build a beautiful product that delights customers and makes the world just a little bit better. It's going to be absolutely awesome.

Then, after working night and day to make your vision a reality, you wake up to find that things did not go as planned. Your company did not unfold like the Jack Dorsey keynote that you listened to when you started. Your product has issues that will be very hard to fix. The market isn’t quite where it was supposed to be. Your employees are losing confidence and some of them have quit. Some of the ones who quit were quite smart and have the remaining ones wondering if staying makes sense. You are running low on cash and your venture capitalist tells you that it will be difficult to raise money given the impending European economic catastrophe. You lose a competitive battle. You lose a loyal customer. You lose a great employee. The walls start closing in. Where did you go wrong? Why didn’t your company perform as envisioned? Are you good enough to do this? As your dreams turn into nightmares, you find yourself in the Struggle.

ABOUT THE STRUGGLE

“Life is struggle.” —KARL MARX

The Struggle is when you wonder why you started the company in the first place.

The Struggle is when people ask you why you don’t quit and you don’t know the answer.

The Struggle is when your employees think you are lying and you think they may be right.

The Struggle is when food loses its taste.

The Struggle is when you don’t believe you should be CEO of your company. The Struggle is when you know that you are in over your head and you know that you cannot be replaced. The Struggle is when everybody thinks you are an idiot, but nobody will fire you. The Struggle is where self-doubt becomes self-hatred.

The Struggle is when you are having a conversation with someone and you can’t hear a word that they are saying because all you can hear is the Struggle.

The Struggle is when you want the pain to stop. The Struggle is unhappiness.

The Struggle is when you go on vacation to feel better and you feel worse.

The Struggle is when you are surrounded by people and you are all alone. The Struggle has no mercy.

The Struggle is the land of broken promises and crushed dreams. The Struggle is a cold sweat. The Struggle is where your guts boil so much that you feel like you are going to spit blood.

The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak.

Most people are not strong enough.

Every great entrepreneur from Steve Jobs to Mark Zuckerberg went through the Struggle and struggle they did, so you are not alone. But that does not mean that you will make it. You may not make it. That is why it is the Struggle.

The Struggle is where greatness comes from.

The Hard Thing About Hard Things is a must read for startup founders. There’s a reason everyone you know recommends it.

❓ One Question: What are you avoiding because it is hard?

Most of us have a tendency to look for shortcuts. We avoid those things—work, conversations, feelings, projects—that feel too hard to get started. We opt for easier paths in hopes we will still reach our desired destination. This is rarely the case.

As Ryan Holiday says—paraphrasing Marcus Aurelius—”The Obstacle is the Way.”

The hard thing in front of you? That is actually the path you must take.

So today’s question: What are avoiding because it is hard? 

Take a second look at that thing and size it up. Maybe it’s not as hard or scary as you thought. Or maybe it is. All the better, because those brave enough to tackle it will face less competition and greater rewards.

Don’t shy away from hard things. Lean in.

🗳️ Wrap Up and Feedback:

That’s it for today’s The Daily Grind! As always your feedback means a lot. What did you think of today’s Headline?

Talk to you tomorrow.

Cheers,

Ben

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