from Y-Combinator 7/13 enhanced by Peter/CXO Wiz4biz
One of the most common types of advice we give at Y-Combinator is to do things that don’t scale. A lot of would-be founders believe that startups either take off or don’t. You build something, make it available, and if you’ve made a better mousetrap, people beat a path to your door – as promised. Or they don’t, in which case, the market must not exist.
Actually startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going. A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate & laborious process to get it going.
RECRUIT. The most common un-scalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.
Stripe is one of the most successful startups we’ve funded, and the problem they solved was an urgent one. If anyone could have sat back and waited for users, it was Stripe. But in fact they’re famous within Y-Combinator [YC] for aggressive early user acquisition.
B2B. Startups building things for other startups have a big pool of potential users in the other companies we’ve funded, and none took better advantage of it than Stripe. At YC we use the term . . .
“Collison Installation” for the technique they invented. More timid founders ask “Will you try our beta?” and if the answer is yes, they say “Great, we’ll send you a link.” But the Collison brothers weren’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.
Why not? There are two reasons founders resist going out and recruiting users individually. One is a combination of shyness & laziness. They’d rather sit at home writing code than go out and talk to a bunch of strangers and probably be rejected by most of them. But for a startup to succeed, at least one founder (usually the CEO) will have to spend a lot of time on sales and marketing. [
Growth. The other reason founders ignore this path is that the absolute numbers seem so small at first. This can’t be how the big, famous startups got started, they think. The mistake they make is to under-estimate the power of compound growth. We encourage every startup to measure their progress by weekly. If you have 100 users, you need to get 10 more next week to grow 10% a week. And while 110 may not seem much better than 100, if you keep growing at 10% a week you’ll be surprised how big the numbers get. After a year you’ll have 14,000 users, and after 2 years you’ll have 2 million.
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