The H-1B Fee Matters More for Customer Strategy than Talent Strategy

Written by Promise Phelon, GWC's founder and managing partner

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The H-1B Fee Matters More for Customer Strategy than Talent Strategy

I've relied on the H-1B pipeline for quality technical talent throughout my 15 years as a Silicon Valley tech leader and CEO. The new $100,000 fee is an irritant but likely not a crisis for startups. What it signals is far more important: a fundamental shift in competitive dynamics. Within three to seven years, trust, relationships and influence will emerge as the planted flag. The battle for enterprise and industrial AI won't be technical — it'll be about being immediately accretive, aggressively goal-driven, with shared upside.

What's actually happening

The U.S. has roughly 583,000 H-1B workers — among them the engineers who built Google, Zoom and AppDynamics. This fee turns the visa into a luxury work permit that only mega corporations can afford. A 10-person startup that once paid $20K to $50K total to sponsor key hires now faces $1M up-front just in visa fees — often more than its entire seed round. When profitability and efficiency matter, founders can't allocate 20% of a seed round to a tax on people.

So what happens? The talent will stay home. They'll build in Mumbai, Shanghai, São Paulo, Kiev. Mentor networks will form. Capital will follow. The world's best engineers won't come here anymore — they'll build startup ecosystems in their native geographies to compete directly with U.S. companies.

Technical parity changes everything

In the AI world, it's no longer about who has better technical features. You and I could use Cursor or Lovable to vibe code a competitive app today. Technical capability has been leveled. The playing field is global and driven by value. The last mile — trust, reliability, responsiveness, compliance — is what customers demand.

Large funds are optimized for concentrated Silicon Valley talent, stable immigration policy and product superiority as the primary moat. We built GWC assuming talent would democratize globally, volatility would be constant and customer relationships would determine winners. The H-1B shock validates what we've been building toward from day one.

How we built for this moment

This is why we're obsessed with founders who are obsessed with their customers. This is why we partner with founders who understand that they must continually evaluate product-market fit. Customer needs constantly shift, as do their expectations.

At our last CEO Forum in Mountain View, we asked each portfolio company three questions that get to the heart of the matter:

1. What unfair commercial practices can you execute to create an unfair advantage in the acquisition of that SOM/SAM?
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2. How much do your ideal customers spend with you annually today — and how much will they spend in the next 24 months? Why will they renew in 12 months? And under what conditions would they NOT renew?
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3. What person, what company, what service has the most lasting influence on your customers? If there's a monopoly inside your largest account, who runs it and why?

It's not a theoretical exercise. Portfolio concentration enables us to work this deeply with every company. We learn markets, work closely with boards and understand what actually matters to enterprise buyers. I'm not being figurative. We're literally in the rooms where these decisions are being made.

What H-1B means moving forward

For founders: Technical parity is the baseline. Differentiation comes from customer intimacy, operational excellence and speed of value delivery.

For investors and LPs: The question isn't whether the H-1B fee creates challenges. The question is: Which portfolios were built assuming stability, and which were built for volatility?

Competition separates builders from pretenders. But the winners won't be determined by who has the best engineers. They'll be determined by who captures customers. That's where we've placed our bets.

Download our 4D Economy whitepaper to see the whole framework driving our strategy. Or get in touch to see how these shifts could shape your company or portfolio.

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Important Note: This newsletter is for informational purposes only and represents the views of Growth Warrior Capital as of the date sent. Nothing herein constitutes investment advice or a recommendation to buy or sell any security.