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. Episode Sponsor This episode is brought to you by Gearheart.io, which specializes in helping early-stage founders validate ideas, prototype SaaS products, and build AI-powered MVPs with real user testing, so your code won’t crumble when your first customers show up. Founded by entrepreneurs who’ve launched and exited their own startups, Gearheart has helped launch over 70 B2B SaaS products, including SmartSuite (which raised $38 million). They get where you’re at. Book your free strategy session at gearheart.io and mention Startups for the Rest of Us to get 20% off discovery, validation, or prototyping services. 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! Subscribe & Review: iTunes | Spotify