July 2013One of the most common types of advice we give at Y Combinator isto do things that don't scale. A lot of would-be founders believethat startups either take off or don't. You build something, makeit available, and if you've made a better mousetrap, people beat apath to your door as promised. Or they don't, in which case themarket must not exist.[1]Actually startups take off because the founders make them take off.There may be a handful that just grew by themselves, but usuallyit takes some sort of push to get them going. A good metaphor wouldbe the cranks that car engines had before they got electric starters.Once the engine was going, it would keep going, but there was aseparate and laborious process to get it going.RecruitThe most common unscalable thing founders have to do at the startis to recruit users manually. Nearly all startups have to. Youcan't wait for users to come to you. You have to go out and getthem.Stripe is one of the most successful startups we've funded, and theproblem they solved was an urgent one. If anyone could have satback and waited for users, it was Stripe. But in fact they'refamous within YC for aggressive early user acquisition.Startups building things for other startups have a big pool ofpotential users in the other companies we've funded, and none tookbetter advantage of it than Stripe. At YC we use the term "Collisoninstallation" for the technique they invented. More diffidentfounders ask "Will you try our beta?" and if the answer is yes,they say "Great, we'll send you a link." But the Collison brothersweren't going to wait. When anyone agreed to try Stripe they'd say"Right then, give me your laptop" and set them up on the spot.There are two reasons founders resist going out and recruiting usersindividually. One is a combination of shyness and laziness. They'drather sit at home writing code than go out and talk to a bunch ofstrangers and probably be rejected by most of them. But for astartup to succeed, at least one founder (usually the CEO) willhave to spend a lot of time on sales and marketing.[2]The other reason founders ignore this path is that the absolutenumbers seem so small at first. This can't be how the big, famousstartups got started, they think. The mistake they make is tounderestimate the power of compound growth. We encourage everystartup to measure their progress by weekly growthrate. If you have 100 users, you need to get 10 more next weekto grow 10% a week. And while 110 may not seem much better than100, if you keep growing at 10% a week you'll be surprised how bigthe numbers get. After a year you'll have 14,000 users, and after2 years you'll have 2 million.You'll be doing different things when you're acquiring users athousand at a time, and growth has to slow down eventually. Butif the market exists you can usually start by recruiting usersmanually and then gradually switch to less manual methods. [3]Airbnb is a classic example of this technique. Marketplaces areso hard to get rolling that you should expect to take heroic measuresat first. In Airbnb's case, these consisted of going door to doorin New York, recruiting new users and helping existing ones improvetheir listings. When I remember the Airbnbs during YC, I picturethem with rolly bags, because when they showed up for tuesday dinnersthey'd always just flown back from somewhere.FragileAirbnb now seems like an unstoppable juggernaut, but early on itwas so fragile that about 30 days of going out and engaging inperson with users made the difference between success and failure.That initial fragility was not a unique feature of Airbnb. Almostall startups are fragile initially. And that's one of the biggestthings inexperienced founders and investors (and reporters andknow-it-alls on forums) get wrong about them. They unconsciouslyjudge larval startups by the standards of established ones. They'relike someone looking at a newborn baby and concluding "there's noway this tiny creature could ever accomplish anything."It's harmless if reporters and know-it-alls dismiss your startup.They always get things wrong. It's even ok if investors dismissyour startup; they'll change their minds when they see growth. Thebig danger is that you'll dismiss your startup yourself. I've seenit happen. I often have to encourage founders who don't see thefull potential of what they're building. Even Bill Gates made thatmistake. He returned to Harvard for the fall semester after startingMicrosoft. He didn't stay long, but he wouldn't have returned atall if he'd realized Microsoft was going to be even a fraction ofthe size it turned out to be. [4]The question to ask about an early stage startup is not "is thiscompany taking over the world?" but "how big could this companyget if the founders did the right things?" And the right thingsoften seem both laborious and inconsequential at the time. Microsoftcan't have seemed very impressive when it was just a couple guysin Albuquerque writing Basic interpreters for a market of a fewthousand hobbyists (as they were then called), but in retrospectthat was the optimal path to dominating microcomputer software.And I know Brian Chesky and Joe Gebbia didn't feel like they wereen route to the big time as they were taking "professional" photosof their first hosts' apartments. They were just trying to survive.But in retrospect that too was the optimal path to dominating a bigmarket.How do you find users to recruit manually? If you build somethingto solve your own problems, thenyou only have to find your peers, which is usually straightforward.Otherwise you'll have to make a more deliberate effort to locatethe most promising vein of users. The usual way to do that is toget some initial set of users by doing a comparatively untargetedlaunch, and then to observe which kind seem most enthusiastic, andseek out more like them. For example, Ben Silbermann noticed thata lot of the earliest Pinterest users were interested in design,so he went to a conference of design bloggers to recruit users, andthat worked well. [5]DelightYou should take extraordinary measures not just to acquire users,but also to make them happy. For as long as they could (whichturned out to be surprisingly long), Wufoo sent each new user ahand-written thank you note. Your first users should feel thatsigning up with you was one of the best choices they ever made.And you in turn should be racking your brains to think of new waysto delight them.Why do we have to teach startups this? Why is it counterintuitivefor founders? Three reasons, I think.One is that a lot of startup founders are trained as engineers,and customer service is not part of the training of engineers.You're supposed to build things that are robust and elegant, notbe slavishly attentive to individual users like some kind ofsalesperson. Ironically, part of the reason engineering istraditionally averse to handholding is that its traditions datefrom a time when engineers were less powerful — when they wereonly in charge of their narrow domain of building things, ratherthan running the whole show. You can be ornery when you're Scotty,but not when you're Kirk.Another reason founders don't focus enough on individual customersis that they worry it won't scale. But when founders of larvalstartups worry about this, I point out that in their current statethey have nothing to lose. Maybe if they go out of their way tomake existing users super happy, they'll one day have too many todo so much for. That would be a great problem to have. See if youcan make it happen. And incidentally, when it does, you'll findthat delighting customers scales better than you expected. Partlybecause you can usually find ways to make anything scale more thanyou would have predicted, and partly because delighting customerswill by then have permeated your culture.I have never once seen a startup lured down a blind alley by tryingtoo hard to make their initial users happy.But perhaps the biggest thing preventing founders from realizinghow attentive they could be to their users is that they've neverexperienced such attention themselves. Their standards for customerservice have been set by the companies they've been customers of,which are mostly big ones. Tim Cook doesn't send you a hand-writtennote after you buy a laptop. He can't. But you can. That's oneadvantage of being small: you can provide a level of service no bigcompany can. [6]Once you realize that existing conventions are not the upper boundon user experience, it's interesting in a very pleasant way to thinkabout how far you could go to delight your users.ExperienceI was trying to think of a phrase to convey how extreme your attentionto users should be, and I realized Steve Jobs had already done it:insanely great. Steve wasn't just using "insanely" as a synonymfor "very." He meant it more literally — that one should focuson quality of execution to a degree that in everyday life would beconsidered pathological.All the most successful startups we've funded have, and that probablydoesn't surprise would-be founders. What novice founders don't getis what insanely great translates to in a larval startup. WhenSteve Jobs started using that phrase, Apple was already an establishedcompany. He meant the Mac (and its documentation and evenpackaging — such is the nature of obsession) should be insanelywell designed and manufactured. That's not hard for engineers tograsp. It's just a more extreme version of designing a robust andelegant product.What founders have a hard time grasping (and Steve himself mighthave had a hard time grasping) is what insanely great morphs intoas you roll the time slider back to the first couple months of astartup's life. It's not the product that should be insanely great,but the experience of being your user. The product is just onecomponent of that. For a big company it's necessarily the dominantone. But you can and should give users an insanely great experiencewith an early, incomplete, buggy product, if you make up thedifference with attentiveness.Can, perhaps, but should? Yes. Over-engaging with early users isnot just a permissible technique for getting growth rolling. Formost successful startups it's a necessary part of the feedback loopthat makes the product good. Making a better mousetrap is not anatomic operation. Even if you start the way most successful startupshave, by building something you yourself need, the first thing youbuild is never quite right. And except in domains with big penaltiesfor making mistakes, it's often better not to aim for perfectioninitially. In software, especially, it usually works best to getsomething in front of users as soon as it has a quantum of utility,and then see what they do with it. Perfectionism is often an excusefor procrastination, and in any case your initial model of usersis always inaccurate, even if you're one of them. [7]The feedback you get from engaging directly with your earliest userswill be the best you ever get. When you're so big you have toresort to focus groups, you'll wish you could go over to your users'homes and offices and watch them use your stuff like you did whenthere were only a handful of them.FireSometimes the right unscalable trick is to focus on a deliberatelynarrow market. It's like keeping a fire contained at first to getit really hot before adding more logs.That's what Facebook did. At first it was just for Harvard students.In that form it only had a potential market of a few thousand people,but because they felt it was really for them, a critical mass ofthem signed up. After Facebook stopped being for Harvard students,it remained for students at specific colleges for quite a while.When I interviewed Mark Zuckerberg at Startup School, he said thatwhile it was a lot of work creating course lists for each school,doing that made students feel the site was their natural home.Any startup that could be described as a marketplace usually hasto start in a subset of the market, but this can work for otherstartups as well. It's always worth asking if there's a subset ofthe market in which you can get a critical mass of users quickly.[8]Most startups that use the contained fire strategy do it unconsciously.They build something for themselves and their friends, who happento be the early adopters, and only realize later that they couldoffer it to a broader market. The strategy works just as well ifyou do it unconsciously. The biggest danger of not being consciouslyaware of this pattern is for those who naively discard part of it.E.g. if you don't build something for yourself and your friends,or even if you do, but you come from the corporate world and yourfriends are not early adopters, you'll no longer have a perfectinitial market handed to you on a platter.Among companies, the best early adopters are usually other startups.They're more open to new things both by nature and because, havingjust been started, they haven't made all their choices yet. Pluswhen they succeed they grow fast, and you with them. It was oneof many unforeseen advantages of the YC model (and specifically ofmaking YC big) that B2B startups now have an instant market ofhundreds of other startups ready at hand.MerakiFor hardware startups there's a variant ofdoing things that don't scale that we call "pulling a Meraki."Although we didn't fund Meraki, the founders were Robert Morris'sgrad students, so we know their history. They got started by doingsomething that really doesn't scale: assembling their routersthemselves.Hardware startups face an obstacle that software startups don't.The minimum order for a factory production run is usually severalhundred thousand dollars. Which can put you in a catch-22: withouta product you can't generate the growth you need to raise the moneyto manufacture your product. Back when hardware startups had torely on investors for money, you had to be pretty convincing toovercome this. The arrival of crowdfunding (or more precisely,preorders) has helped a lot. But even so I'd advise startups topull a Meraki initially if they can. That's what Pebble did. ThePebbles assembled the first several hundred watches themselves. Ifthey hadn't gone through that phase, they probably wouldn't havesold $10 million worth of watches when they did go on Kickstarter.Like paying excessive attention to early customers, fabricatingthings yourself turns out to be valuable for hardware startups.You can tweak the design faster when you're the factory, and youlearn things you'd never have known otherwise. Eric Migicovsky ofPebble said one of the things he learned was "how valuable it was tosource good screws." Who knew?ConsultSometimes we advise founders of B2B startups to take over-engagementto an extreme, and to pick a single user and act as if they wereconsultants building something just for that one user. The initialuser serves as the form for your mold; keep tweaking till you fittheir needs perfectly, and you'll usually find you've made somethingother users want too. Even if there aren't many of them, there areprobably adjacent territories that have more. As long as you canfind just one user who really needs something and can act on thatneed, you've got a toehold in making something people want, andthat's as much as any startup needs initially. [9]Consulting is the canonical example of work that doesn't scale.But (like other ways of bestowing one's favors liberally) it's safeto do it so long as you're not being paid to. That's where companiescross the line. So long as you're a product company that's merelybeing extra attentive to a customer, they're very grateful even ifyou don't solve all their problems. But when they start paying youspecifically for that attentiveness — when they start payingyou by the hour — they expect you to do everything.Another consulting-like technique for recruiting initially lukewarmusers is to use your software yourselves on their behalf. Wedid that at Viaweb. When we approached merchants asking if theywanted to use our software to make online stores, some said no, butthey'd let us make one for them. Since we would do anything to getusers, we did. We felt pretty lame at the time. Instead oforganizing big strategic e-commerce partnerships, we were tryingto sell luggage and pens and men's shirts. But in retrospect itwas exactly the right thing to do, because it taught us how it wouldfeel to merchants to use our software. Sometimes the feedback loopwas near instantaneous: in the middle of building some merchant'ssite I'd find I needed a feature we didn't have, so I'd spend acouple hours implementing it and then resume building the site.ManualThere's a more extreme variant where you don't just use your software,but are your software. When you only have a small number of users,you can sometimes get away with doing by hand things that you planto automate later. This lets you launch faster, and when you dofinally automate yourself out of the loop, you'll know exactly whatto build because you'll have muscle memory from doing it yourself.When manual components look to the user like software, this techniquestarts to have aspects of a practical joke. For example, the wayStripe delivered "instant" merchant accounts to its first users wasthat the founders manually signed them up for traditional merchantaccounts behind the scenes.Some startups could be entirely manual at first. If you can findsomeone with a problem that needs solving and you can solve itmanually, go ahead and do that for as long as you can, and thengradually automate the bottlenecks. It would be a little frighteningto be solving users' problems in a way that wasn't yet automatic,but less frightening than the far more common case of having somethingautomatic that doesn't yet solve anyone's problems.BigI should mention one sort of initial tactic that usually doesn'twork: the Big Launch. I occasionally meet founders who seem tobelieve startups are projectiles rather than powered aircraft, andthat they'll make it big if and only if they're launched withsufficient initial velocity. They want to launch simultaneouslyin 8 different publications, with embargoes. And on a tuesday, ofcourse, since they read somewhere that's the optimum day to launchsomething.It's easy to see how little launches matter. Think of some successfulstartups. How many of their launches do you remember?All you need from a launch is some initial core of users. How wellyou're doing a few months later will depend more on how happy youmade those users than how many there were of them.[10]So why do founders think launches matter? A combination of solipsismand laziness. They think what they're building is so great thateveryone who hears about it will immediately sign up. Plus it wouldbe so much less work if you could get users merely by broadcastingyour existence, rather than recruiting them one at a time. Buteven if what you're building really is great, getting users willalways be a gradual process — partly because great thingsare usually also novel, but mainly because users have other thingsto think about.Partnerships too usually don't work. They don't work for startupsin general, but they especially don't work as a way to get growthstarted. It's a common mistake among inexperienced founders tobelieve that a partnership with a big company will be their bigbreak. Six months later they're all saying the same thing: thatwas way more work than we expected, and we ended up getting practicallynothing out of it. [11]It's not enough just to do something extraordinary initially. Youhave to make an extraordinary effort initially. Any strategythat omits the effort — whether it's expecting a big launch toget you users, or a big partner — is ipso facto suspect.VectorThe need to do something unscalably laborious to get started is sonearly universal that it might be a good idea to stop thinking ofstartup ideas as scalars. Instead we should try thinking of themas pairs of what you're going to build, plus the unscalable thing(s)you're going to do initially to get the company going.It could be interesting to start viewing startup ideas this way,because now that there are two components you can try to be imaginativeabout the second as well as the first. But in most cases the secondcomponent will be what it usually is — recruit users manuallyand give them an overwhelmingly good experience — and the mainbenefit of treating startups as vectors will be to remind foundersthey need to work hard in two dimensions.[12]In the best case, both components of the vector contribute to yourcompany's DNA: the unscalable things you have to do to get startedare not merely a necessary evil, but change the company permanentlyfor the better. If you have to be aggressive about user acquisitionwhen you're small, you'll probably still be aggressive when you'rebig. If you have to manufacture your own hardware, or use yoursoftware on users's behalf, you'll learn things you couldn't havelearned otherwise. And most importantly, if you have to work hardto delight users when you only have a handful of them, you'll keepdoing it when you have a lot.Notes[1]Actually Emerson never mentioned mousetraps specifically. Hewrote "If a man has good corn or wood, or boards, or pigs, to sell,or can make better chairs or knives, crucibles or church organs,than anybody else, you will find a broad hard-beaten road to hishouse, though it be in the woods."[2]Thanks to Sam Altman for suggesting I make this explicit.And no, you can't avoid doing sales by hiring someone to do it foryou. You have to do sales yourself initially. Later you can hirea real salesperson to replace you.[3]The reason this works is that as you get bigger, your sizehelps you grow. Patrick Collison wrote "At some point, there wasa very noticeable change in how Stripe felt. It tipped from beingthis boulder we had to push to being a train car that in fact hadits own momentum."[4]One of the more subtle ways in which YC can help foundersis by calibrating their ambitions, because we know exactly how alot of successful startups looked when they were just gettingstarted.[5]If you're building something for which you can't easily geta small set of users to observe — e.g. enterprise software — andin a domain where you have no connections, you'll have to rely oncold calls and introductions. But should you even be working onsuch an idea?[6]Garry Tan pointed out an interesting trap founders fall intoin the beginning. They want so much to seem big that they imitateeven the flaws of big companies, like indifference to individualusers. This seems to them more "professional." Actually it'sbetter to embrace the fact that you're small and use whateveradvantages that brings.[7]Your user model almost couldn't be perfectly accurate, becauseusers' needs often change in response to what you build for them.Build them a microcomputer, and suddenly they need to run spreadsheetson it, because the arrival of your new microcomputer causes someoneto invent the spreadsheet.[8]If you have to choose between the subset that will sign upquickest and those that will pay the most, it's usually best topick the former, because those are probably the early adopters.They'll have a better influence on your product, and they won'tmake you expend as much effort on sales. And though they have lessmoney, you don't need that much to maintain your target growth rateearly on.[9]Yes, I can imagine cases where you could end up makingsomething that was really only useful for one user. But those areusually obvious, even to inexperienced founders. So if it's notobvious you'd be making something for a market of one, don't worryabout that danger.[10]There may even be an inverse correlation between launchmagnitude and success. The only launches I remember are famousflops like the Segway and Google Wave. Wave is a particularlyalarming example, because I think it was actually a great idea thatwas killed partly by its overdone launch.[11]Google grew big on the back of Yahoo, but that wasn't apartnership. Yahoo was their customer.[12]It will also remind founders that an idea where the secondcomponent is empty — an idea where there is nothing you can doto get going, e.g. because you have no way to find users to recruitmanually — is probably a bad idea, at least for those founders.Thanks to Sam Altman, Paul Buchheit, Patrick Collison, KevinHale, Steven Levy, Jessica Livingston, Geoff Ralston, and Garry Tan for readingdrafts of this.
