Scale & Strategy
This is Scale & Strategy – the Strategy newsletter that’s easier to consume than that treat you promised yourself you wouldn’t eat until later.
Here’s what we got for you today:
- Quick news
- Before You Sign a VC Term Sheet, Ask These 3 Questions
Quick news
OpenAI Races to Fix GPT-4o's Overly Agreeable Personality
OpenAI is working to fix a surprise issue with its latest GPT-4o update, after users and industry leaders flagged that the model had become excessively flattering — often agreeing with everything, including potentially harmful or false statements.
The backstory:
OpenAI rolled out the upgraded GPT-4o last week, touting better reasoning, memory handling, and more natural personality traits.
But users quickly noticed that the new version leaned too hard into being likable. The model showered users with compliments and validated nearly anything they said — even when it shouldn’t.
CEO Sam Altman called the behavior “annoying” and “sycophant-y,” saying OpenAI plans to eventually offer multiple personality options for users to choose from.
In the meantime, the company has already deployed a patch to reduce the excessive flattery, with further updates rolling out this week to find a better balance.
The bigger picture:
AI industry veterans say this isn’t just a ChatGPT quirk — it highlights a broader tension in AI development: building assistants that are both helpful and honest.
As AI tools grow more conversational and persuasive, the challenge is clear: ensuring long, engaging interactions don’t come at the cost of truthfulness or user safety.
This GPT-4o stumble shows just how delicate that balance really is.
Bluesky’s losing steam
Feeling a draft? Bluesky’s growth is cooling fast.
After a whirlwind year that felt like Harry Potter discovering Hogwarts, daily installs of Bluesky have now dipped to their lowest point since election season.
The app racked up 20M+ downloads since launch, but momentum is fading quickly.
If Bluesky is part of your content strategy, it might be time to monitor engagement more closely — the hype train is slowing.
Meta’s making your catalog ads pop.
You can now add dynamic overlays to Meta Advantage+ Catalog campaigns — think price tags, discounts, shipping details — layered directly onto product images.
These digital “stickers” can be customized or auto-generated by Meta to help boost attention and clicks.
And Microsoft’s getting a makeover too: Bing Shopping ads now span two rows in search results, giving more advertisers a shot at top-of-page visibility.
Bonus: users can click to expand and see even more ads.
Expect stronger CTRs and a fresh wave of retail competition.
Click-to-Message Ads: Quick Wins from Meta
Click-to-message ads spark direct chats with your audience — a personal way to drive results without sounding sales-y.
Meta shared tips to get more from them:
Basics:
- Greet users warmly and invite engagement.
- Link your Messenger, WhatsApp, and Instagram accounts.
- Pick the right campaign objective (usually “Engagement”).
- Test what works. Always.
Pro Moves:
- Build lookalike audiences from past message-based buyers.
- Write like a human. Conversational copy gets better responses.
- Sync your product catalog (Shopify, WooCommerce, etc.) for dynamic product messages.
- Optimize for leads by capturing info mid-chat.
Especially useful for influencer campaigns.
Fast, friendly, and effective.
Before You Sign a VC Term Sheet, Ask These 3 Questions
When you’re pitching investors, it’s easy to focus entirely on impressing them.
But before you accept a term sheet, it’s your turn to ask the hard questions.
There are three things every founder should ask a VC — and surprisingly, most don’t.
But knowing these answers can directly impact how much support you’ll get, how future rounds go, and whether the money will actually arrive on time.
Let’s get into it.
Question #1: How are the GPs compensated?
(GPs = general partners — the people actually making decisions and backing you.)
Why does their pay structure matter?
Because it affects your support after the check clears.
In some firms, partners share profits equally — meaning every GP is incentivized to help every portfolio company win. Even if they weren’t the one who sourced the deal, your success = their upside.
Other firms use an “eat what you kill” model, where the partner who brought you in earns most of the carry. That means if you need help from other GPs, they might prioritize their own companies where they earn more.
Bottom line: Ask how compensation works. It tells you whether you’re getting the support of one partner — or the whole partnership.
Question #2: Where are you in your fund cycle?
Timing matters more than you think.
If you’re one of the last checks in a fund that’s halfway deployed or nearly done, it could limit your access to future funding — even if you're outperforming.
Most funds have a 10-year life span, and capital is typically front-loaded. If you're getting funded in year five or later, there might be little to no follow-on capital reserved for you.
Ask where they are in the deployment cycle. Ideally, you want to come in when the fund is still fresh — not when they’re writing their final checks.
Question #3: How fast can you wire the money?
This one’s deceptively simple — but crucial.
Some VCs sign term sheets without actually having capital ready to deploy. They may still be fundraising themselves, or rely on capital calls (i.e. requesting funds from their own LPs once a deal is signed).
If their LPs are slow — or worse, can’t fulfill the call quickly — you are left waiting. And if you're trying to make payroll, "waiting" is not an option.
So always ask:
- Do you have deployable capital right now?
- What’s your typical wire timeline after signing?
- Are funds sitting in an account, or do you need to do a capital call?
These Questions Aren’t Awkward. They’re Smart.
You’re not being difficult. You’re being diligent.
Your startup’s survival might literally depend on the answers.
So before you sign anything, don’t just evaluate the check.
Evaluate the partnership — and the processes behind it.
Be bold. Be curious. Ask better questions.
You’ll make better decisions because of it.
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