📣 Announcement: ICYMI, we wrote a book!

We just dropped A Dunky Digest: What is Angel Investing - a completely free guide that breaks down everything first-time angels need to know before writing their first check.

Learn the foundations: whether angel investing makes sense for you, how to navigate risk and diversify like a pro, how early-stage investments can multiply your capital, and real stories from founders and investors who've been there.

Think of it as your starter toolkit for joining the startup economy without risking your family's future.

📰 Today's topic: Does this startup need customers to rip out what they already use?

Here's something that trips up a lot of new angel investors.

You see a pitch. The product is great. Solves a real problem. The founder is sharp. Then you look closer at how they plan to get customers, and it falls apart.

Why? Because the product requires people to rip out whatever they're already using.

An amazing product isn't enough. One of the biggest considerations always has to be switching costs.

Low switching costs = fast entry

Let’s take ad products as an example.

Hustle Fund co-founder Elizabeth Yin previously ran an adtech company, and her sales process was easy. (Marketers try out different ad platforms all day long, so the friction is basically zero.)

But, there was a catch. 

If the ads didn't perform, marketers moved on just as fast. Great entry conditions; challenging retention.

Now on the other hand…

High switching costs = long, painful sales

Now look at marketing automation software. 

It's deeply integrated into a marketer's workflow, and you can't casually trial a new one because switching is a massive lift.

That's great if you're already embedded. Terrible if you're trying to sell in.

You basically have to nail the timing. Catch customers when they don't have software yet, or when they're so frustrated they'll endure the pain of switching. 

(And who really knows when either of those moments hit?)

The playbook that actually works

This is why so many successful SaaS companies target customers who don't use anything yet.

HubSpot did exactly this. Go after smaller fish who haven't adopted a solution, get embedded, then grow with them.

It's usually easier to build something that doesn't require ripping out other software. Sell in with a new angle, then expand from there.

Bonus: if you're not going head-to-head, you don't need to build as many features. 

Matching everything a competitor already has is a massive lift, and even then there's still inertia.

Before you write that $5k check, ask:

Is the startup targeting companies that don't have a solution yet?

If not, will this product require customers to replace something they already use? Or could it slide in alongside their existing workflow?

Low barriers to entry aren't a bad sign. That's often the fastest way in. 

The real question is whether the startup can get sticky enough once it's through the door.

Easy in, hard to leave. That's the sweet spot.

– Brian from Angel Squad

🌎 Come hang with us IRL

Our Hustle Fund team is always hosting events around the world. If you’re into pizza, pitches and bad punchlines, we’d love to have you. Check out our full events calendar, and three upcoming events below!

🤖 Virtual on February 24, 2026 - High Velocity Teams & AI Planning: Join Haley Bryant from Hustle Fund and Doug Peete from Atono.io on keeping your product team moving fast without drowning in scattered tools, lost context, and endless rework.

🇺🇸 Los Angeles, California on February 26, 2026 - Founder Friends LA: Join the local founder community to connect and hear war stories from a founder who went through the wringer and came out the other side.

🇺🇸 Saratoga, California on May 11, 2026 - Camp Hustle 2026: ​​​Camp Hustle is where investors meet. Join 250+ angels, VCs, emerging fund managers, and family offices for three days of meaningful connections and pure fun.

Overheard in SF…probably

“Our minimum viable product is just a landing page with an email signup, but it's validated because 12 people signed up.”