Two massive shocks hit both my businesses in the past few months. Within 60 days, 80% of inbound leads for SimpleDirect and ANC just disappeared.
Not because my products got worse. Not because I stopped working hard. Not even because competitors crushed me.
Because third parties I depended on - that I had zero control over - changed the game.
I'm almost on the other side now. Maybe 70-80% there. Still figuring things out, still pivoting both businesses. You can see it if you visit our websites - everything's changing. Value propositions, product offerings, entire business models.
I'm sharing this while I'm still living through it, not after I've solved everything and can package it into a neat framework. This is raw, this is real, and this is probably happening to more founders than want to admit it.
Here's what happened, the patterns I missed, and the framework you can use to audit your business so you don't get caught like I did.
The ANC Story: When Government Changes The Rules
ANC is my consulting business. For two years, it was doing well - premium clients, strong margins, helping international students in Canada establish businesses.
We focused on a specific pathway: helping entrepreneurs build strong business fundamentals so they could qualify for Canada's Start-Up Visa program. When I was a student, this was my biggest concern - how do I become an entrepreneur and get permanent residency without working for someone else?
Our service worked. Every year we had 10-15 clients getting real results. One-on-one transformation, market research, product validation, investor introductions - the full package.
But here's the problem: the hook that got people to us - that specific pathway - was controlled by an external entity. The government.
And the government changed the rules.
Back then, approval took 12 months. Now? It's stretched to 85-87 years. Not a typo. Eighty-seven years.
No warning. No announcement. They just pulled levers behind the scenes. First it was 12 months, then 5 years, then 10, then 35, now 87.
80% of our leads evaporated overnight. Not a quick death - a slow drip as the rules kept changing.
Our services didn't get worse. Our clients were still happy. But the specific reason people came to us? Gone.
I built a valuable service on top of a trap door someone else was holding.
The SimpleDirect Story: When Your Infrastructure Owners Cut You Off
If you remember, SimpleDirect Financing was our flagship product. We connected contractors' customers to a lending marketplace - one application, 10+ national banks and fintech lenders, get matched with the best rate.
Great idea on paper. Leverage existing infrastructure, capture margin, help customers access capital.
Except we were solely reliant on our lending partners. And I didn't realize the danger until a few months ago when the economics broke.
The problem? We depended on high approval rates. Customers didn't come to us because they loved our product - they came because they wanted cheap financing for their roof or HVAC.
We weren't delivering the results. Our lending partners were. And when something went wrong on their side - API went down, bad decision made - customers didn't blame the lenders. They blamed us.
Customer support tickets became overwhelming. Eventually, we couldn't take it anymore.
We're shutting down SimpleDirect Financing on December 31st this year. We're launching a new product called ChangeLock that we control end-to-end. No more third-party dependencies.
The Pattern I Missed Twice
Two businesses. Same mistake. Same blind spots.
With ANC and SimpleDirect, I was a facilitator, not a builder. I was helping people navigate someone else's system. My expertise was valuable, my transformations were real - but I didn't own the outcome.
I was a coordinator. A customer experience wrapper. Not the actual infrastructure.
This felt safe at first because we had revenue coming in. Business was clearly working. We were getting paid. I thought: "We'll keep connecting customers to existing infrastructure. We don't even need to build it ourselves."
Lower upfront investment. Faster to revenue. Made total sense.
Until it didn't.
You build a business, hire a team, get dependent on cashflow, maybe your personal burn rate adjusts up. Then boom - partner changes, government rule changes, policy changes. And you have zero leverage, zero control, zero warning.
It's Not Just Me: The Infrastructure Owner Always Wins
BlockFi processed billions in crypto lending volume. Great UX, real customer value. Built on centralized counterparty infrastructure.
When their counterparty collapsed, BlockFi vanished overnight. A billion-dollar business gone. Not because they did anything wrong - because someone else they depended on failed.
Travel agents knew everything about booking flights, hotels, packages. Then airlines launched direct booking, Expedia happened, Google Flights launched. The infrastructure owners cut out the middleman. Knowledge got commoditized overnight.
Music labels used to control distribution. Now we have Spotify, YouTube Music, social media. Artists don't need labels anymore for many things.
The pattern repeats everywhere: middlemen create value initially, but eventually infrastructure owners always cut them out.
If it can happen to BlockFi, travel agents, and music labels, it can happen to you.
What I'm Building Instead: The Four Principles
I'm not out of the woods yet. There's still hard grinding ahead. But everything I build now follows four non-negotiable principles:
1. Own The Transformation, Not The Transaction
Old model: "Come to us, we'll help you access this pathway/lending/whatever."
My value was navigating someone else's system. When the system changed, my value evaporated.
New model: "We'll help you build a business with fundamentals so strong that you qualify for five different options across the world."
For ANC: Transform founders from $0 to $500K ARR. Build real traction and positioning. When those fundamentals are strong, doors open everywhere. When one closes, I route you to four others.
The transformation itself is the moat, not the pathway.
2. Own The Full Stack
SimpleDirect old way: Connect people to lenders (facilitation).
SimpleDirect new way: Build the entire operating system for founders (infrastructure).
We're launching ChangeLock and Roadmap for founders. Products we own completely. We control pricing, UX, features, roadmap. No external dependencies that could cut us off.
Like Basecamp - they build everything end-to-end, even their own calendar and email client. No third-party provider can pull the rug.
ANC new way: Create in-person transformation experiences with founders. Not lecture sessions where we route people to someone else's program. Get founders in the same room, same AirBnB, launch businesses in days through direct transformation.
3. Diversify Ruthlessly
ANC old way: 80% of leads from one source.
ANC new way: Five different sources, none over 30%. If one closes, four backups remain.
Product diversification matters too:
- SimpleDirect: SaaS software
- ANC: Service/transformation
- Eventually: Equity in businesses we support
Three different revenue streams, three different customer types. If one struggles, others carry the weight.
It's not about launching a bunch of products to see what sticks. Launch one that works, then think about different business models that de-risk your startup. Build an ecosystem where each layer feeds the next and each is independently viable.
4. Equity Over Transactions
The sovereignty move: Own a piece of whatever you're helping build.
Want the full playbook? I wrote a free 350+ page book on building without VC.
Read the free book·Online, free
We had chances to take equity in startups we helped in the past. I thought: "We're consultants, not equity investors." That was wrong.
Going forward: Take less cash, own a bit more of our customers' companies. Align incentives. Make it less transactional.
No matter if you're doing SaaS, consulting, or creator business - own a piece of the customer experience. Maybe own a piece of customer equity. That's what creates lasting value.
The Three-Question Audit For Your Business
Every founder should ask these three questions:
Question 1: What If They Change The Rules Tomorrow?
List every external dependency: platforms, APIs, partners, governments, suppliers.
For each one, ask: "If they change terms tomorrow, would I survive?"
If the answer is no, you're a middleman.
Examples:
- My entire lead gen is Facebook ads - what if cost per click triples?
- I resell another company's product - what if they cut my margins in half?
- My customers need external approval - what if the approval process breaks?
If any of these make you sweat, you have a problem.
Question 2: Do I Own The Outcome?
Do you deliver the transformation/service/experience end-to-end? Or are you coordinating someone else's delivery?
Simple example: If you're a huge Twitter, LinkedIn, or YouTube creator, and those platforms change rules tomorrow, your traffic could go to zero.
I personally know someone whose mentor knew a guy who jumped off a building when Google changed their algorithm in 2023 and his web traffic dropped to zero. Terrifying but true.
Don't build your entire business on one thing you don't control. It could be lethal.
Question 3: Can I Get Cut Out By The Infrastructure Owner?
Could your customer go directly to your supplier or partner? What stops them?
For SimpleDirect: Our customers could technically go to 10 different lenders directly. They don't because they'd get credit-checked 10 times. But competitors exist who offer the same "one check, multiple options" service.
We were making money from information asymmetry. In an AI-first world, that doesn't last. If our business hadn't failed for other reasons, this would have killed us eventually.
The 30% Rule
You can't build everything yourself. Some dependencies are necessary - like Stripe's API. The argument: Stripe is too big to fail, everyone uses them, if they break we won't be the only ones affected.
Fair enough.
Here's my simple rule: No single dependency should represent more than 30% of your revenue.
- Not a single customer over 30%
- Not a single partner over 30%
- Not a single platform over 30%
- Not a single demographic or geographic market over 30%
Violate this rule? You're in the danger zone.
In my free book "The Anti-Unicorn: The Consulting Way," I recommend that even at $10K MRR, if you're banking on one or two customers, you're in danger. You need at least 5-10 different customers at $10K MRR before you're safe enough to quit your job.
Same reason: If you rely on one or two customers, they can easily leave. Always have backup.
What To Do If You Fail The Audit
If you realized you're too dependent on external infrastructure, here are your options:
Option 1: Expand Your Wedge
- Offer more pathways, product lines, features, partners
- Own more layers of your service
- Add services that transform customers instead of just coordinating
Option 2: Build Your Own Infrastructure (Best Option)
Identify what you're currently renting or facilitating. Can you build it yourself?
Start small. MVP first. Prove it works. Expand.
Example: I use ConvertKit for email subscribers. Every month I download the list and store it on Google Drive. Not because I don't trust the platform - because anything can happen. The safest approach is not relying on any single partner, ConvertKit included.
I've been burned by Slack, Heroku, and many intermediaries that promised free stuff. Don't trust any SaaS completely. Always have backups.
The Hard Truth Nobody Tells You
You can build a great product. You can have incredible revenue and happy customers. And in an instant, you can still lose everything.
Because if you build on someone else's infrastructure, you're one policy change away from disaster.
Here's what I learned the hard way twice:
The new model:
- Own the transformation
- Own the infrastructure
- Diversify ruthlessly
- Take equity, not just fees
SimpleDirect is becoming a founder operating system. Full stop. Not connecting people to infrastructure - building the infrastructure.
ANC is building businesses so strong that founders have multiple options, become enterprises themselves. We're selling transformation, not specific pathways. And we'll eventually take equity in every company we transform.
Compounding for 30 years, not starting over every month.
This isn't theory anymore. This is survival.
Your Homework
Run the audit on your business today:
- List every external dependency
- Ask if you'd survive if they changed rules tomorrow
- Check if you own the outcome end-to-end
- Calculate if any single dependency exceeds 30%
If you fail the audit, you know what to do.
I'm almost there - almost at the end of this transformation. If I can smile and stay optimistic through the toughest time, so can you.
The storm will pass. Build something anti-fragile so the next storm doesn't destroy you.
Need the frameworks? Full show notes and transcripts available at founderreality.com
Daily insights: @TheGeorgePu on Twitter
Newsletter: newsletter.founderreality.com
George Pu builds AI-powered businesses at SimpleDirect and ANC. Follow along for unfiltered founder insights at @TheGeorgePu.