Startup Experts Discuss Doing Things That Don't Scale

Intro (00:00:00)

• Founders' early interactions with customers and employees are crucial and shouldn't be overlooked.
• Paul Graham's essay, "Do Things That Don't Scale," transformed Silicon Valley culture by emphasizing learning and customer delight over theoretical scalability.
• The essay provided a playbook for startups to get from zero to one.

Paul Graham's Essay (00:02:09)

• Google's success in content marketing created an obsession with scalability among founders and investors.
• Founders were expected to have scalable solutions to raise funds, leading to a focus on scalability rather than customer needs.
• Paul Graham's essay challenged this mindset, arguing that most startups fail because they can't get users or make something people want, not because of scalability issues.
• The essay encouraged founders to prioritize learning and customer delight, even if it meant doing things manually and one-off.

Prioritizing Scalability (00:04:17)

• Paul Graham's essay emphasizes focusing on the most pressing problem at any given time, rather than worrying about future scalability.
• Scalability should be addressed when it becomes a luxury, not a necessity.
• The goal is to get from zero to one, which means acquiring the first customer and building the first product.
• Scalability is not a concern at this stage.

Solving Immediate Problems (00:05:38)

• The Airbnb founders inspired Paul Graham's essay by taking action to solve their immediate problems.
• They focused on creating high-quality listings with professional photos, even though it was a time-consuming and unscalable task.
• This approach helped them gain traction and get their flywheel turning.
• Successful founders are willing to do any task, no matter how small or manual, if it serves their customers and helps them achieve product-market fit.
• Companies like Fleek exemplify the concept of doing things that don't scale.
• In Fleek's case, the founders started without a website, clothes, or any infrastructure.
• To get their marketplace off the ground, they went directly to wholesalers in London and built relationships with them.
• This unscalable approach allowed them to deeply understand their users' needs and tailor their platform accordingly.

Fleek's Manual Connections (00:08:53)

• Fleek founders manually transported clothes from wholesalers to shops to learn about the market.
• They gained insights into customer preferences, pricing, and demand elasticity.
• This hands-on approach helped them gather valuable data before building their online marketplace.
• They transitioned to an online platform after 4 months of manual operations.

Algolia and Stripe (00:10:32)

• Stripe founders directly implemented their software into customers' systems.
• Algolia did the same for Product Hunt, helping them implement search functionality.
• Establishing personal connections with customers through direct assistance fostered stronger relationships.
• These connections enabled more candid conversations and a deeper understanding of customer needs.
• The insights gained from these interactions aided product development and improved customer experience.

Learning Over Scalability (00:12:25)

• Focus on learning rather than scalability.
• Manually doing the job yourself ensures you're building something valuable.
• Founders who optimize for learning are more successful.
• Interacting with customers in the trenches helps you learn about their pain points.
• Founder FaceTime with customers provides a significant advantage over competitors.
• It's important to sell yourself when you don't have a product.
• Founders should be willing to do whatever it takes to make customers successful.
• People are more likely to choose you if they feel you care about them.
• Don't be afraid to take non-scalable steps to validate your idea.

Embrace Unscalable Tasks (00:15:20)

• Instacart launched without a single grocery store partnership.
• Instead, they bought one of every item at Trader Joe's, took pictures, and put them online.
• This allowed them to test the market and get customers before negotiating deals with grocery stores.

Experiment and Adapt (00:17:41)

• Doing things that don't scale allows you to experiment and adapt quickly.
• It lets you test your assumptions before spending months building a product.
• From an engineering perspective, doing unscalable things gives you freedom to move more quickly.

DoorDash's Pragmatic Approach (00:19:06)

• DoorDash built their product in one day using simple tools like Google Drive and Find my Friends.
• They focused on validating their idea rather than building a complex system.
• Startups have the advantage of being able to do things that big companies can't.

Swift Problem Solving (00:21:26)

• Startups should embrace errors and use them as opportunities to learn and improve.
• When a product has too many users, the motivation to fix bugs increases, leading to rapid problem-solving.
• Startups rarely die due to scalability issues because the incentives to fix problems are high.

Transition to Scalability (00:22:33)

• Knowing when to stop doing unscalable things and transition to scalability is crucial for startups.
• Good advisors and investors can help startups make this transition.
• Early unscalable actions serve as quick ways to validate important questions, leading to opportunities for investment.

Consulting Services (00:23:30)

• Startups can make money by selling consulting services to other companies.
• The first version of a product can be something that helps make delivering consulting services more productive.
• Consulting revenue won't scale and can't build a big business.
• Setting ambitious growth targets helps differentiate startups from consultancies or small businesses.
• Real software businesses can grow 10x in a year, consultancies can't.

Outro (00:25:05)

• Doing things that don't scale is the best advantage startups have over larger competitors.
• It helps startups intimately learn about their customers and their problems.
• It ties early users more tightly to the startup and creates opportunities to delight them.
• It enables quick experimentation and failure if things aren't working.
• Read Paul Graham's essay for more information.