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How do startups like Cluely raise so much money when their product is below average?

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Entry-Level Software Engineer at Taro Community7 hours ago

Cluely is all the rage in Silicon Valley with the founder getting kicked out of Columbia and the company raising $15 million recently.

The thing is, if you visit https://www.reddit.com/r/Cluely/, you'll quickly see that most people think the product is just not very good. (Maybe there is a silent majority of people who think the product is great, but I wouldn't be sure of that.)

If the product is subpar and has no path to rocketship success, then what is the team doing with all of this funding, and what do investors think is possible with this idea? Are they more invested in the founding team (I will admit they are good at marketing and getting people's attention)? Even then, how are they different than all of the other LLM wrappers?

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    Tech Lead @ Robinhood, Meta, Course Hero
    7 hours ago

    Cluely is an extreme example where the company is almost entirely focused on marketing and hype instead of building an actual product. I read a TechCrunch article recently that explains it well: https://techcrunch.com/2025/06/26/why-a16z-vc-believes-that-cluely-the-cheat-on-everything-startup-is-the-new-blueprint-for-ai-startups/

    Despite having some semblance of a product, the startup has yet to unveil the solution it has been hyping.

    “The internet is up in storm saying, ‘Where’s the product?’” Lee said. “We’re earlier than the latest YC batch of companies. Yet, we’re generating more views than every single one of them.”

    Marketing is really important (many startups go in the opposite direction where they have 0 marketing muscle and just write code that is never used by anybody), but I do think Cluely has gone off the deep end. At the end of day, you need a real product if you want your company to last.

    In terms of how they're able to raise money, it's important to remember that the goal of VCs isn't solely to invest into sound businesses. VCs also want to build up their reputation + brand, and investing in startups that constantly make the news help them do that. a16z also didn't invest that much (just $15M which isn't huge by today's Silicon Valley AI landscape standards), so it's a small price to pay to get some notoriety.