Building a Successful Startup Market: The Importance of Doing Things That Don't Scale

This article explores the counterintuitive advice given at Y Combinator: "do things that don't scale." It emphasizes that the initial success of many startups comes from focusing on user acquisition and engagement in a way that might not be sustainable long-term. However, this early effort is crucial for building a strong foundation and achieving long-term growth.

• The article argues that most startups don't simply take off, but rather need a "push" from the founders to gain momentum. This push often involves unscalable tactics that may not work for larger companies.
• It highlights how critical manual user acquisition is, even for companies with a large potential market. The author provides examples of successful companies that have adopted this strategy, such as Stripe and Airbnb.
• The article stresses that early-stage startups are fragile and require careful nurturing. This often involves going beyond typical customer service and providing an "insanely great" experience for early users.
• It cautions against judging startups based on their initial size or lack of scalability. Instead, it advocates focusing on the potential of the idea and the effort the founders are willing to put in.

User Acquisition: The Unscalable Path to Growth

The article emphasizes the importance of manually acquiring users in the early stages of a startup. While this can be daunting, it's essential for building momentum and establishing a strong base of early adopters.

• The author provides insights into common roadblocks, such as shyness and laziness, that prevent founders from actively recruiting users.
• He also highlights the significance of compound growth and emphasizes measuring progress based on weekly growth rates.
• The article uses Airbnb as a prime example of a company that achieved success by going door-to-door in New York City, manually recruiting users and helping existing ones improve their listings.

The Power of Delighting Early Users

The article argues that creating an "insanely great" experience for early users is essential for building a successful startup. This goes beyond basic customer service and involves actively engaging with users, understanding their needs, and exceeding their expectations.

• The author provides examples like Wufoo's hand-written thank you notes and Stripe's aggressive onboarding strategies as examples of this approach.
• He challenges the idea that focusing on individual users won't scale and stresses that delighting customers can be a scalable practice in the long run.
• He encourages founders to break free from traditional customer service standards and embrace the unique advantages of being a small company.

The Importance of Feedback and Iteration

The article underscores the value of obtaining feedback from early users and iterating on your product based on that feedback. Early user engagement provides invaluable insights and helps you build a better product.

• The author emphasizes that early user feedback is the most valuable because it is direct and unfiltered, unlike later feedback from larger groups.
• He encourages founders to embrace imperfection in the early stages and use user feedback to iterate and improve their product.

Focusing on a Narrow Market: The Contained Fire Strategy

The article advocates for a strategy of focusing on a narrow market initially, similar to a contained fire that gets very hot before adding more logs. This strategy can be helpful for building momentum and achieving critical mass quickly.

• The author uses Facebook as an example, noting that it initially focused on Harvard students before expanding to other colleges.
• He suggests that startups should consider whether there's a specific subset of the market where they can gain traction quickly.
• The article emphasizes the importance of understanding the value of early adopters, particularly other startups.

The "Pull a Meraki" Strategy for Hardware Startups

For hardware startups, the article recommends a strategy similar to Meraki, where the founders initially assemble the product themselves. This helps overcome the challenges of high minimum production orders and provides valuable insights into the manufacturing process.

• The author uses Pebble as an example, highlighting how they assembled the first few hundred watches themselves before launching on Kickstarter.
• He emphasizes the benefits of hands-on experience, including faster design iteration and deeper understanding of the manufacturing process.

The Consulting Approach: Focusing on a Single User

The article proposes a consulting-like approach for B2B startups, where founders focus on a single user initially and act as if they're building a custom solution. This can provide a clear understanding of the user's needs and create a product that resonates with others in the market.

• The author notes that the initial user serves as a model for the product and that by refining it for that user, you often create a solution that appeals to a broader audience.
• He emphasizes that the consulting approach can be a valuable strategy for establishing a foothold in a market and acquiring early users.

The Manual Approach: Doing It Yourself

The article discusses the "manual" approach, where startups manually perform tasks that they plan to automate later. This allows for faster launch and provides valuable insights into the process, which can help with future automation.

• The author uses Stripe's manual signing up of merchants for traditional merchant accounts as an example.
• He suggests that startups can benefit from manually solving user problems, even if it's not scalable, as this provides a deeper understanding of user needs.

Avoiding the Big Launch: The Importance of Incremental Growth

The article cautions against relying on a big launch to generate initial growth. It emphasizes the importance of building a strong foundation through manual user acquisition and engagement.

• The author argues that launches are less important than how well you engage and delight early users.
• He highlights the dangers of relying on solipsism and laziness and encourages founders to focus on building a great product and acquiring users gradually.

The Importance of Effort and Commitment

The article stresses that it's not enough to simply have a good idea. You need to put in the effort to acquire users, delight them, and iterate based on their feedback. This requires commitment and dedication from the founders.

• The author warns against relying on big launches or partnerships for growth and emphasizes the importance of sustained effort.

Thinking in Terms of Vectors: Combining Ideas and Action

The article suggests that startup ideas should be viewed as vectors, comprising both the product and the unscalable actions necessary for initial success. This encourages founders to be creative and innovative in both dimensions.

• The author argues that the unscalable actions taken initially can often have a lasting impact on the company's culture and DNA.
• He encourages founders to prioritize user acquisition and engagement, even if it's not scalable, as this builds a strong foundation for future growth.