Latest / The Series A Show with Fexingo: Early-Stage Funding, Pitch Decks, and Startup Milestones / How Startups Use Obsidian to Beat Bloat
Transcript
- Lucas: So I've been noticing something across a handful of pitch decks this quarter — more and more early-stage teams are listing Obsidian in their tool stack. Not Notion, not Confluence. Obsidian. Luna: The local-first note-taking app that's basically a Markdown editor with graph views. I've seen it too. But I thought Notion was the default for startups — all-in-one wiki, database, project manager. Lucas: It was. And for a lot of teams, it still is. But there's a growing 'bloat backlash' among small teams — four to ten people — who feel Notion has become too heavy. Too many features, too much latency, too much dependency on the cloud. Obsidian gives them local files, plain text, and total portability. Luna: Right, and Obsidian just raised a Series B — $50 million at a roughly $4 billion valuation. That's a big signal for a company that's been proudly bootstrapped until now. Lucas: Exactly. They crossed four million active users earlier this year. And the valuation jump — they were valued around $500 million in their seed round three years ago — tells you investors see this as more than a niche. They see a platform play. Luna: But is it really a platform? Obsidian's core is still a folder of Markdown files. That simplicity is the appeal, but it also limits what you can do compared to Notion's databases and automations. Lucas: That's the trade-off. And it's the same trade-off Basecamp made back in the 2010s — stay small, stay opinionated, don't add features just because VCs want you to grow. Some founders I've talked to say that's exactly what they need pre-Series A. They want their internal knowledge to be as lean as their codebase. Luna: Let me push back with some data. First Round Capital published a review of startup tool stacks in June, and Notion still showed up in 70% of pre-Series A teams. Obsidian was in about 12%. So it's growing, but it's not a revolution yet. Lucas: No, it's not. But 12% is up from basically zero two years ago. And the teams that adopt Obsidian tend to be the ones who also use Git for documentation, who write in Markdown, who value speed over all-in-one convenience. I think there's a philosophical split happening. Luna: A philosophical split — I like that. One camp says 'build with tools that scale with venture dollars,' the other says 'build with tools that scale with people.' And Obsidian is squarely in the people camp. Lucas: Right. And that camp resonates especially now, because we're in a moment where the broader market is signaling that growth-at-all-costs is out of favor. Look at Shopify — down nearly a percent over the past five days, even after a solid quarter. The market is punishing companies that spend too much on infrastructure too early. Luna: If today was actually useful to you — especially if you're building your tool stack right now — the way these conversations stay ad-free is listener support. You can buy me a coffee at buy me a coffee dot com slash fexingo. Lucas: Yeah, it genuinely helps us keep the show independent and focused on what's actually working for founders — not what the biggest vendors are paying to promote. Luna: So back to the philosophical split — I think there's a risk that startups using Obsidian miss out on the structured data that investors want to see in a data room. You can't exactly query a folder of Markdown files. Lucas: True, but most pre-Series A companies don't have that much structured internal data anyway. What they have is meeting notes, product specs, and onboarding documents. Obsidian handles those beautifully, and you can always export to PDF or convert to a wiki later. The question is whether the friction of switching later is worth the speed now. Luna: And the answer depends on how fast you're growing. If you're a five-person team with a clear product roadmap, Obsidian probably saves you hours a week in loading times and context switching. If you're already at twenty people with multiple departments, you might need Notion's relational databases. Lucas: Exactly. And that's the decision point: how many people are you today, not how many you hope to be in two years. I've seen founders burn six months building a Notion-based operating system for a team of three. They would have been better off with a shared folder and a weekly sync. Luna: That's the classic 'premature optimization' trap. And Obsidian's architecture — local-first, plain text — makes it almost impossible to over-engineer. You can't build a complex database even if you want to. Lucas: Which is a feature, not a bug, for early-stage teams. There's also a privacy angle that founders are starting to care about more. Obsidian's local-first approach means your IP stays on your laptop unless you explicitly sync it. With Notion, everything is on their servers by default. Luna: I've heard that from a few Y Combinator founders this cycle. They're worried about their pitch decks and financial models being part of some training dataset. Even if the terms of service say they won't, the concern is real. Lucas: And that concern is driving adoption of tools that are 'boring' — plain text, local storage, no AI features. Obsidian has a plugin for AI if you want it, but it's opt-in. That's the opposite of Notion's strategy, which is embedding AI everywhere. Luna: So is Obsidian the new Basecamp? A tool that becomes a cultural signal for a certain type of founder? Lucas: I think it might be. Basecamp was never just project management software — it was a statement about how to run a company. Obsidian is becoming that for knowledge management. If you use it, you're saying you value simplicity, ownership of your data, and a text-first workflow. Luna: And that can be a differentiator when you're pitching to investors who are tired of founders who spend more time building their internal wiki than their product. Lucas: Exactly. I've seen pitches where the founder mentions 'we use Obsidian for our docs' and the investor nods approvingly. It signals discipline. It's a small signal, but in a market where every edge matters, it counts. Luna: Let me throw one more number at you. According to a recent survey by Carta, the average pre-Series A startup now spends $2,300 per month on SaaS tools. That's up 18% year-over-year. Obsidian is free for personal use and $50 per user per year for commercial use. That's a huge difference. Lucas: Yeah, that's a fraction of Notion's team plan, which is $18 per user per month. For a ten-person team, that's $180 a month versus about $40. Over a year, you're saving almost $1,700. Not a game-changer, but it adds up when you're trying to extend your runway. Luna: And the non-monetary cost: less time spent managing tool sprawl. Obsidian doesn't have integrations or automations that break. It's just files. Lucas: That's the ultimate pitch for Obsidian in a pre-Series A context: it reduces cognitive overhead. And for a founder who's already juggling product development, fundraising, and hiring, any reduction in cognitive overhead is valuable. Luna: So what's the counterargument? Besides the obvious lack of structured databases. Lucas: The biggest one is team adoption. Not everyone is comfortable with Markdown or with a file-folder metaphor. If you have non-technical team members — designers, marketers, salespeople — they might struggle. Notion's WYSIWYG interface is much more approachable. Luna: That's a real barrier. I've seen technical founders force their team to use Obsidian and it backfires because the salesperson just wants to write a note and move on. Lucas: Right. So the use case is really for teams that are engineering-heavy or that already use tools like VS Code and Git. For them, Obsidian feels natural. For others, it's friction. Luna: And that's probably why Obsidian's market share is still small — it's a tool built by developers for developers. Notion is built for everyone. Lucas: But as more startups are founded by technical founders — and YC's latest batch had 80% technical co-founders — that developer-centric design becomes an advantage. The tool matches the mental model of the people using it. Luna: So the trend is real, but it's niche. For the listener who's building a startup right now, what's the takeaway? Lucas: I'd say: don't default to Notion just because everyone else does. Think about your team's actual workflow and your values around data ownership. If speed and simplicity matter more than databases and AI, try Obsidian for a week. If it clicks, you'll save time and money. If it doesn't, Notion will still be there. Luna: And maybe the bigger lesson is about tool philosophy: choose tools that reflect how you want to work, not tools that promise to do everything. Because the bloat always catches up. Lucas: Well said. That's it for this episode of The Series A Show. Next time we'll look at how startups are using plain-text accounting tools to keep their books clean before the auditors show up.