Intro
Founding teams should be ready to do things that don’t scale. That is the central point of Y Combinator founder Paul Graham’s essay “Do Things that Don’t Scale." Since then, it’s become a central piece of startup advice.
As Paul puts it in that essay:
“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 and laborious process to get it going.”
So, as Paul writes, founders need to push their startups forward in the beginning, and this normally means doing things that a founding team could not expect to do once they reached a scale of 1,000 or 10,000 or more users.
It’s a beautiful idea, because it gives founders the freedom to focus on the things that matter most—getting something into the world quickly (even if it’s a manual, not scalable, version), recruiting users, and getting user feedback. And it can force founders to cut through the tasks that they’re layering on top of these central activities—tasks that have the aura of something important but in fact are a way to avoid actually sending something into the world.
And, doing things that don’t scale gives you a competitive advantage over larger companies, because it allows you to have a personal relationship with your customers that larger companies could not replicate.
Here are examples of how some successful companies did (and maybe still do?) things that don’t scale.
Examples
Superhuman
Superhuman is an email service that took off among tech execs. At its start, the company set up a waitlist. Founder Rahul Vohra would then have a 30 minute one on one call with each user that was coming off the waitlist. In the call, Rahul would walk them through setting up the app and its key features.
The process would raise the chances that new users would be power users. It also gave them a personal connection to the product, increasing loyalty and user excitement.
The calls also gave Rahul the chance to get crucial in-the-moment user feedback.
After that initial stage, Superhuman has continued to required 30 minute onboarding for each new user (with an estimated 50,000 users as of today)—now having a team within the company devoted to it.
Here’s how Superhuman describes the onboarding process. And here’s how a user described his experience with it.
Instacart
Instacart is a public company that delivers groceries from the store to your door. Founder Apoorva Mehta talked about their early approach:
“I find that [doing things that don’t scale] is one of the biggest competitive advantages that a start-up has over a larger company because there’s no way that the larger company would be doing those things unscalably. And, the idea is that once your product has demand, you can figure out how to scale your product.
We took this advice to heart. In the early days of Instacart, you could place orders on our service without there being any
shoppers to fulfill those orders. Of course, this meant that I would drop16:40
everything I was doing and fulfill the order myself.
Now, I don’t have a car and getting a cab in San Francisco is next to impossible. So, in the early days of Instacart, there was a high likelihood that when you would place an order, the order would arrive in the luxury of a Uber black car.”
And here’s how they added Trader Joe’s to their grocery store options:
“When we add a store in Instacart, the first thing we have to do is find the items that are available in that store and get that catalog and put that onto Instacart.com or in the apps.
Now, there is no API or website, which had the item catalog for Trader Joe’s, so the only way we could actually get hold
of the item information was to buy one of every single item at Trader Joe’s, take it to a studio, take pictures of all those things
and then put them into our catalog.
And, so that’s exactly what we did.”
Doordash
Doordash took a similar approach. When they had the idea for enabling restaurants without delivery services to deliver their food, according to founder Tony Xu (starting at minute 17:00 of his How I Built This interview in 2018), they wanted to start with a test to see:
- whether people wanted delivery,
- how much people would pay for it,
- whether restaurants would work with them, and
- whether people would be willing to be drivers.
So, as Tony relays, they put together a simple website, paloaltodelivery.com, and put pdfs of 8 local restaurants on the site. Then they signed up for a google voice number that would ring each founder’s cell phone, and put the number on the site.
When they’d get the orders from the site, the founders would order the food themselves, pick it up—and pay for it themselves, and then deliver it to the people orders—where they would then get the money from the customer (essentially reimbursing them).
As students, they would offer service when they weren’t in class.
There was no app. It was a “janky” web page. None of it was scalable.
And they kept this up for the five months.
Airbnb
Airbnb is a prime example that Paul Graham cites in his essay. As he writes:
“Airbnb is a classic example of this technique. Marketplaces are so hard to get rolling that you should expect to take heroic measures at first. In Airbnb’s case, these consisted of going door to door in New York, recruiting new users and helping existing ones improve their listings.
When I remember the Airbnbs during YC, I picture them with rolly bags, because when they showed up for tuesday dinners they’d always just flown back from somewhere.”
And here’s a video of founder Joe Gebbia talking about it.
Stripe
Stripe’s early strategy was “let us install this for you.” Here’s how Paul Graham describes it:
At YC we use the term “Collison installation” for the technique they invented. More diffident 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.