Episode 792 | Hot Take Tuesday: GPT-5 Struggles, the A.I. Bubble, and the Windsurf Debacle

Is GPT-5 a real risk for SaaS founders, or just the beginning of a new chapter?

In this Hot Take Tuesday, Rob Walling, Einar Vollset, and Tracy Osborn dig into GPT-5’s mixed reviews, signs of stress in the A.I. bubble, and how Windsurf’s $2.4B exit left early employees with nothing. They also unpack why returning a VC fund is such a rare (and big) deal.

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Topics we cover: 

• (3:12) – TinySeed returns Fund One
• (9:40) – GPT-5: Upgrade or letdown?
• (19:19) – Are we in an AI bubble?
• (24:09) – The Windsurf debacle: $2.4B exit, $0 for early employees
• (31:06) – The bigger problem: Are startups forgetting to share the upside?
• (40:05) – Lifestyle vs. Ambitious Bootstrapping

Links from the Show: 

• TinySeed Fall 2025 Applications Live Q&A - Join us Wednesday September 3rd
• TinySeed SaaS Accelerator - Applications are Open!
• Invest in TinySeed
• MicroConf
• SaaS Institute
• Discretion Capital 
• Einar Vollset | LinkedIn
• Einar Vollset (@einarvollset) | X
• Tracy Osborn 
• Tracy Osborn | LinkedIn
• Tracy Osborn (@tracymakes) | X

If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!

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