How Did Successful Startups Use Paul Graham’s “Do Things That Don’t Scale” Strategy? | VC Jobs
If you build a better mousetrap, people will find it naturally, and your startup will take off..... ?
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Deep Dive: How Did Successful Startup Use Paul Graham’s “Do Things That Don’t Scale” Strategy?
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TODAY’S DEEP DIVE
How Did Successful Startup Use Paul Graham’s “Do Things That Don’t Scale” Strategy?
“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 his house, though it is in the woods.”
Ralph Emerson would probably not have been an outstanding entrepreneur.
Now, Emerson lived 150 years before the iPhone. However many believe the idea still resonates today -
If you build a better mousetrap, people will find it naturally, and your startup will take off.
Simple, right?
In reality, building a better mousetrap is usually not enough. It’s not enough to be very good. To get something from 0 to 1 typically requires something remarkable It takes solving a problem others haven’t solved.
Startups take off because the founders make them take off by doing well what was never done before. Usually, it takes some sort of push to get them going.
Many of you might be aware of the term called - “Do things that don’t scale” which is popularized by Paul Graham in his 2013 essay. I am sure, you’ve read that article too, but Do successful startups use this strategy at an early stage? & What does it take to follow this strategy and does it practically work?
To answer all these questions I thought to share my views and how startups like Reddit, Doordash and other Y-Combinator startups used this strategy to build their business. So Grab your coffee and let’s deep dive into it. ☕
In Simple words “Do things that don’t scale” means -“Early-stage startups should focus on learning and validating their business model rather than on growth. This means doing efficient and effective things, even if they don't scale well. For example, a startup might initially make manual sales calls to each customer, rather than building a complex automated sales system.”
But does every successful startup follow this strategy at its early stage? I have studied 50+ successful startups and found that almost all startups used this strategy in their early days.
To get clarity on this in a better way, let’s see how some startups used this strategy :
DoorDash
DoorDash, backed by Y Combinator, is one of numerous digital businesses that employ logistical services to provide on-demand meal delivery from restaurants. Here’s a little extract from the founder, Stanley Tang, on how to get started and avoid doing things that don’t grow.
“They created a landing page in the afternoon and were conducting restaurant pick-ups and deliveries by the evening (while still in college!). Yes, within a single day.
Consider this an experiment; just put it out there and see what happens! In the beginning, your goal should be to gather input and ensure that you’re not dealing with a personal bias! The greatest aspect is that you will be able to communicate with your consumers and gain real-time feedback! This may not work for everyone, but for the other 90% of ideas, you’re sitting on waiting to construct a “polished & shiny” product before launching, well…”
You don’t need algorithms or flawless web pages to solve a genuine issue. All you need is a clean landing page and some tinkering to make things work.
Airbnb
Airbnb probably has the most talked about articles, podcasts, and videos in the how-they-did-things-that-didn’t-scale-but-got-them-to-where-they-are-now category.
Take one out of the book “Hacking Growth” by Sean Ellis:
“Brian and Joe were astonished to find, when establishing the company, that New York City, despite its tourist appeal, was underachieving. ‘The graphics were fairly horrible,’ co-founder Joe Gebbia recalls after browsing over their posts. People were taking Craigslist-style images with their phones. Surprise! No one was booking because you couldn’t see what you were paying for.” One of their early backers, Paul Grahan of YC, advised that the two attempt a low-tech, high-effort hack to boost bookings — but it was fast to deploy and was incredibly effective.
Chesky and Gebbia rented a $500 camera and went door to door throughout the city, capturing as many listings as they could. They then compared the number of reservations for the upgraded image listings to the rest of the Updated York ads and found that the updated photos led to two to three times more bookings, instantly doubling their profits from New York.
After establishing their concept, they extended it to Paris, London, Vancouver, and Miami, with similar results. As a response, Airbnb decided to create a photography service that would allow hosts to hire a professional photographer to come to their home and photograph it. It began in the summer of 2010 with 20 photographers and grew to over 2000 freelance photographers by 2012, documenting 13,000 listings across six continents.”
All of the other tactics would have likely aided scaling, but Brian Chesky and Joe Gebbia stuck to things that didn’t scale at all but did help them find the true challenges that consumers were experiencing. It’s easy to lose sight of your North Star Metric in the chase of vanity or needless growth measures, but sticking to the basics and focusing on where you want to go is crucial.
Groupon
Andrew Mason and the Groupon team debuted the initial iteration as a WordPress site. Everything else, apart from posting a transaction, was done by hand.
It was completely ghetto. On the early version of Groupon, we would offer t-shirts. In the [write-up], we’d state, ‘This t-shirt will be available in red, size big.’ Please contact us if you want a different colour or size.’ We didn’t have a form for that… It was sufficient to demonstrate the idea and demonstrate that it was something that people enjoyed… It got to the point where we’d sell 500 sushi vouchers in a day while also sending 500 PDFs to individuals through Apple Mail.
Even Reddit has used this strategy “Do Things That Don’t Scale” to just get a lift from the ground…
Reddit
On Reddit's first day, “Steve and Alexis (Co-Founders) had to start with no users and a blank page. Their strategy involved creating subreddits before the official launch. They ran ads to attract users interested in various topics and implemented an influencer strategy to have influencers moderate subreddits. On launch day, they aimed for a big splash with hundreds of thousands of signups. They used a tool to submit fake links with invented usernames to create the illusion of a thriving community. Even when emailing their initial six friends, it seemed like there was already a page full of users.
But both of them found that someone other than them submitted a link on a non-launch day. After a night out, he forgot to load fake links the next morning. To his surprise, the site wasn't blank because there were already a significant number of other users submitting links. This early success, with 20 or 30 people participating, marked a major milestone for Reddit.”
Cruise
Cruise, during its time at Y Combinator, developed the first version of its driverless car in just three months. Kyle and his small team retrofitted an Audi, though calling it fully "driverless" would be an exaggeration. The car had a mysterious red button on the floor, limited functionality to highways, essentially working like adaptive cruise control, and struggled even with simple challenges like shadows. In contrast to Google's advanced retrofitted cars, Cruise's initial version highlighted the humble beginnings of autonomous vehicle technology.
Zappos
It wasn’t obvious in 2000 that buying shoes online was a lucrative business. Shoes come in a variety of sizes and comfort levels, and many people believed they had to be worn before they could be sold. “Will people purchase shoes online?” was the most dangerous question for founder Nick Swinmurn’s young firm. One solution would be to acquire millions of dollars in finance, construct a massive warehouse, load it with shoes, construct a full e-commerce system, staff a slew of workers, and cross your fingers and hope customers make orders.
Nick thought there had to be a simpler method to de-risk his company. Instead, he went to FootLocker and photographed their inventory. He uploaded images of the shoes on the internet. When someone made an order, he went to Foot Locker and bought the shoes, then sent them to the customer.
Is this a scalable model? Nope. Did he profit from each order? No way. Was he successful in demonstrating that consumers will buy shoes online and gain early traction? Yes.
Zynga
In an interview - Mark Pincus, the creator of Zynga, is asked what the ideal approach to do market research is. His response: “Ghetto Test.” If someone wants to develop, say, a hospital simulator, he creates a Facebook ad that reads, “Ever wanted to manage your hospital?” and links to a survey (or, if it’s ghetto, a 404 page).
Zynga just has to monitor CTR and compare it to past historical rates to get a solid picture of demand. This is useful for comparing numerous game concepts, product ideas, taglines, names, and so on. therefore, is not a suitable match for experimenting with a novel idea (without a comparison).
Seamless
The people at Seamless are said to have spent their first several months without a web product. They contacted legal firms in New York and inquired about their lunch preferences. They contacted the restaurant, made an order, oversaw delivery, and billed the companies at the end of the month…..
If you read these carefully, you will find that there is one thing common between these startups at the “Do things that don’t scale, pre-product market fit” stage, which is
”founders ability to embrace the less glamorous work, low-status work and focus on getting shit done.”
So as a CEO/Founder of a startup - What Does It Take To Implement “Do Things That Don’t Scale” For Your Startup?
In the early days of a startup, especially before hitting the sweet spot where your product meets the market's needs, being a CEO and co-founder is a far cry from the image of a high-flying, visionary leader. Forget about the grand ideas and the spotlight; it's time to dive into the nitty-gritty.
Instead of chasing after the glamorous and high-status tasks, the real deal is to roll up your sleeves and embrace the less-than-exciting work that needs to be done. The mantra here is to "do things that don't scale."
As a CEO in these early stages, your job is to get your hands dirty, tackle the toughest and least appealing tasks, and personally make sure every part of the startup is running like a well-oiled machine.
Unlike the typical picture of a CEO as a powerful and big-picture thinker, the truth in a startup's “early days is about doing whatever it takes to keep the whole system running smoothly.” Founders need to shift their mindset away from mimicking the leaders of giant, established companies and instead focus on the hands-on, gritty work needed to make things happen in the initial phases of their startup journey.
I come across a bunch of super smart people, but when it comes to finding their own thing? Not their favourite. Why? Well, brainiacs usually avoid the not-so-fun tasks, like dealing with customer service or handling angry customers.
But for founders, it's a different story. They have to get their hands dirty, especially in the early days.
Sure, it might not be the most efficient way of doing things, but here's the deal: “Diving into the messy stuff pays off big time. Founders learn directly from the source, creating better products because they understand what customers need.”
They experience the challenges firsthand, unlike big companies shielded by layers of managers."
So, if you want to be a founder, get ready for the not-so-pretty, unglamorous work. It's the secret ingredient to learning, building, and serving customers the right way. Embrace the tough parts, founders – that's how the magic happens.
You might be thinking that, if I do such work while building a startup, your friends and family will make fun of you -
And It sounds tough dealing with friends making fun of your startup, especially when they work at a comfy tech giant like Google. It's easy to feel insecure comparing your hand-delivered food runs to their free laundry and Google buses. But here's the thing:
“Building a company is like climbing a gnarly mountain. Google might be a fancy ski resort, but it's not the peak. The climb's brutal, full of sweat, scrapes, and maybe even some puking. Most folks take one look at that mountain and say, "Nope, I'll stick to the slopes, thanks." That's why there aren't more Googles in the world.
The early startup grind weeds out most people. It's hard, risky, and often thankless. You're saying, "I'll trade comfort and stability for a shot at something big, even if I face failure." That's not for everyone, and that's okay.
So, when your friends poke fun, remember this:
they're not on the same climb. They're chilling on a different mountain with its own set of challenges. You're on a different path, one that's way less crowded and potentially way more rewarding.
Instead of feeling insecure, own your hustle. Be proud you're taking the hard road, the one less travelled. Tell your friends, "Yeah, I'm hand-delivering food and adding links myself, but I'm building something I believe in. This might suck now, but the view from the top will be epic."
Focus on your journey, not their vacation. Celebrate your milestones, big and small. And remember, the world needs more scrappy climbers, not just comfy skiers. So keep hustling, keep grinding, and keep your eyes on the prize. That's the real flex.
P.S. And who knows, maybe one day you'll be offering your friends free laundry/perks like Google at your own startup HQ.”
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FEATURED POST
Fundraising tips: How To Answer 'Why Now?'
When talking to investors, you’re answering the what (product), why (mission), where (if relevant) and how (strategy and go-to-market).
But founders often ignore another important question: Why now? Why wouldn’t it have been possible to have built the company five years ago? Why would five years from now be too late?
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Successful companies usually have these things in common: They were the right company, solving the right problem at the right time..… Read More Here
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That’s It For Today! Will Meet You on Tuesday!
Happy Thursday! 🥂
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✍️Written By Sahil R | Venture Crew Team