What Does It REALLY Mean To Do Things That Don't Scale? – Dalton Caldwell and Michael Seibel

the moment i remember on my first test ride on cruise that i'll never forget is we're driving down 101 and kyle says oh a shadow let's see how the car handles that and it was like oh kyle hey this is michael cybel with dalton caldwell and today we're going to talk about what does it really mean to do things that don't scale this term was massively popularized in a pgsa from 2013 but it was advice that he'd been giving yc founders for a really long time but delton it seems like a lot of founders get this confused doing things that don't scale is doing something that's provocatively manual on your part where you the founder does a thing personally and that isn't counting on a lot of code that you're writing or scalable processes um to run what how you think late stage companies are run might help for us to give some examples let's give examples um reddit so day one reddit exists site no links no users no users blank page but like the click a button to submit a link what do you do if you're stephen alexis so the scalable solution is you first launch subreddits then you run ads to recruit people to come sign up for reddit on different topics and then hold on then you would hire an influencer you would get you have an influencer strategy to get influencers on various topics to come moderate the subreddits okay and so the day you launched you have this big splashy launch with hundreds of thousands of signups right that scales that skills what steve and alexis did was they made a little tool that allowed them to submit a link the same thing that normal users used but they had a little extra field where they could put in a username and they just started inventing different usernames and submitting links like them so day one when they emailed this to their like six friends it looked like there was a page full of users when in fact there were two users and i remember steve tells two stories the story the first day someone else other than them submitted which was not day one and then he tells another story where like i think he went out and he got drunk and the next morning he had forgotten to like load up this morning's fake links and he thought the site would just be blank and he was like so pissed himself but then he opens up the site and it looked like there were enough other people submitting links that the site wasn't blank and then he was like that might have been what 20 or 30 people right and he's like oh wow like major milestone what was the door dash story adult well look when you when you think about something like food delivery um you imagine a scaling you want to be doing hundreds of orders a day and so the way the founders got started was they just did all the deliveries themselves they didn't have to hire anyone or build a driver app or recruit drivers if someone made an order via doordash if some miracle happened and someone made an order um the the founders would like drop everything and go deliver the food [Music] right that was actually how they got started go ahead what's so cool about that is that you know one of the other topics in this essay is like delight your users right well the easiest way to delight your user when you're doing food delivery is you deliver yourself right you race to the freaking restaurant you make sure you get the right thing you throw in an extra you deliver it yourself you say thank you they didn't have to deal with managing a driver network motivating and it's like think about all the other ancillary benefits where they got to see why it was hard to do the deliveries they got to talk to the restaurant owners personally and develop a relationship with them they got to talk to their users they'd be like hey here's your burrito i'm the founder of this company do you like it would you order again isn't that funny like could you imagine a more lower status thing than of course not but that's why it was awesome it was not scalable it is in present day if you order from door dash tony is not going to deliver your burrito or he might statistically he still does this sometimes i'm sure everyone says he still does this to this day the founders still do deliveries um but like that was not a scalable strategy but man that's how they got off the ground i think the last example um you know in light of cruz you know cruz this week allowed any star to allow the general public to drive in a driver free safety driver free driverless car and i remember when cruz was in yc and the v1 of the car the v1 of the driverless car kyle and his tiny built team built in three months they retrofitted an audi to call it driverless would be an overstatement there were a couple things i remember one there was a big red button on the floor and the driver's seat and kyle never explained what that button did but it was clearly important and very easy for him to reach um number two it only works on the highway number three it was basically adaptive cruise control like it was basically cruise control that stayed in your lane it wasn't more fancy than that and then number four the moment i remember on my first test ride on cruise that i'll never forget is we're driving down 101 and kyle says oh a shadow let's see how the car handles that and it was like oh kyle out of everything i was looking out for like curves other drivers signs i didn't know that i should be afraid of the shadow and that was v1 that was v1 and and google had cars on the road retrofitted with all kinds of fancy equipment at that time and kyle had his audi that couldn't deal with shadows that's how it starts [Music] so why don't you talk a little bit more viscerally dalton what is that you know we've given some examples but give us more on what do you think the life and the job of a ceo in these stages and these do things that don't scale pre-product market for stages yeah i think in the do things that don't scale philosophy the job of the ceo and the job of the co-founders is to do the shittiest worst low status work you can think of it's the opposite of whatever your mental model when someone says the word ceo and you're like oh wow ceo visionary you know you know powerful it's like no like you're like doing the work yes and you've got to learn to love and embrace the work that is your job at a pre-product market startup is to actually make everything happen and to be personally accountable for making the entire system run end-to-end and we just see so many founders that think it's their job to be like at the late stage you know they're emulating what they think elon musk is like or you know mark zuckerberg or something but when you're a really small startup it's the exact opposite in every way this thing that came to mind is you know we talk to a lot of smart people who aren't cut out to be founders i think the reason why is that smart people don't tend to want to do work it's like a special kind of person who's smart but who's like no no no like i'll get in my car and go pick up that order or like no no no like i will hand figure out how to build this horrible motor to move a car wheel like i'm gonna get into the guts and most smart people just don't want to do that especially if they can get jobs where they don't have to think about how much for most of our founders their actual job is answering customer support emails and talking to angry i write i rate people that hate them and are like i hate you like you're dealing with like up close and personal feedback cause you're a tiny startup right there's no one else to yell at and so every time like doordash screwed up an order the founders of doordash would have to be like i am very sorry uh we will do better like you're the first lives i love that i love that because sometimes founders want to put other people on the front lines and it's like like no like you are the front lines but it's more scalable again and again we're not trying to be facetious it is more scalable if the if the founders could spend their time on other tasks right that's more scalable but if you're doing things that don't scale you embrace the suck right you give it a hug you're like yes i love doing this horrible work um that is what actually doing things that don't scale is well and then to your point you learn you learn what other people are unwilling to learn so you build a better product and so you serve your customers better and especially when you're dealing with incumbents you better believe that their senior management team isn't out on the front line so whoever is developing the product there they have some researcher or some outsourced person doing all this customer surveys and crap and if you're on the front line you'll learn 10 times more than they will what about your friends who are making fun of you because you're doing this work you tell your friends what you're doing you know they work at google they get free food and free laundry and google bus and they're like what are you you're you're you're hand delivering food like your your hand adding links to your own link sharing website like like how do you get over the know what i was telling you like you are an idiot that's not how it works i know how it works i work at google well you you are an idiot because you started a company no just kidding um like this is what comes with the territory friends like like if it were easy to start a company and anyone could quit their job at google and just magically have product market fit and be successful way more people would do it like how many googles are there in the world not many and it's because there's this um this stage screens out most people because it sucks right it sucks hard and so most people look at this and they're like i have to do what and then most likely i'll fail and i'll go broke whereas i could keep my high status job this screens everybody out this is why they're not more successful founder like the reason why there's not more startups in the world is not because there's lack of good ideas or innovation or i would argue even funding it's basically there aren't enough people that really want to do this stage of the startup and are good at it now let's talk about this kind of we keep on bringing google let's go with this phenomenon i see so many young founders basically saying like before i start a startup i need to work at a big company that's where i'm going to learn how to do it do you think google's going to help or where how do you think it helps and how do you think importance because i think it's it's more nuanced than just one or the other to set the scene if you've ever interviewed for like a programming position at google or facebook or amazon a lot of what they have you do is design algorithms that ideally are scalable algorithms right like ideally you're not you know bubble sorting on the whiteboard um during during your interview at google right and so it gets ground into you during the selection process that your job is to design solutions that scale and when you're inside of a big tech company you you're rolling things out to millions or tens of millions of people and so you you're you're beat into your head that you only scalable solutions are good solutions right like if facebook had some new feature but it required them to buy a hundred times more servers which would bankrupt the company guess what would happen to your bright idea can't do it it's got to be more scalable right or like so every every single product idea or feature that you build inside these companies is viewed through the lens of scalability and rightfully so you still with venus yes now this is what's funny if you think of these jobs as training for startups is that now you've had deeply ingrained into your brain what i would argue is not helpful at the early stages this is helpful when you make it to late stage hallelujah right but the early stages you just got immersed in a culture that is not helpful versus if you never worked at one of these companies and you just like graduated college no one ever told you to worry about scalability you're like yeah cool whatever like you know i wrote the algorithm with a bubble sort that's okay right like like you've never been yelled at by your boss because you came up with unscalable ideas you want to be trained at doing just enough as opposed to doing perfect job and like the startup needs to do just enough and google needs to do way better than just enough and i think that like what's hard for me is that sometimes you see those founders and they can't launch they're like oh something's broken or oh a customer didn't like this and they just like cannot bring themselves to launch because it's not perfect well think about it if you're at google and you launch a new feature or if you're at facebook and you launch a new feature and it doesn't scale like if it doesn't work that's the fail like congratulations you suck and your team sucks right like and again they're not wrong but like the all the incentive structure is set up to not launch a feature that is not scalable this is where that scalable word comes in right you're not helping the company so one thing i think is helpful is like how do we help founders prepare their minds for this zone and we're telling you it's going to suck we're telling you to do things that people are making fun of you we're telling you that you might have to live in this spot for a while before things start looking better i think that the big challenge the founders make is screwed up expectations like the big challenge is that founders think i launch it and then it's gonna work and i really wish founders went in with the mindset like i don't care if it takes two years to work like like how do you set your mind up so that you're immediately not disappointed because i think that it's like you know we talk with somebody all the time maintaining motivation is like three quarters of this game i i think this is a great question and it's funny how much the questions like if someone got to spend time with us michael you know say say someone went to dinner with us what they want to ask us about is like you know i know with it i know exactly what people would want to talk to us about but usually what we usually what you should be asking us to talk about is like emotional well-being and maintaining motivation and dealing with high stress situations and dealing with criticism like a lot of people aren't prepared for people on the internet criticizing them it's hard right and so it's funny how much what people think expertise like what they think they want help with and what they actually need help with are not the same thing yes and think about how many startups that we fund die basically as the founders run out of gas and get sad and want to go back to their jobs at google because this was not what this was not what they thought it was man motivation i don't think motivation is about how shitty something is right like i think it's about how shitty did you think it was going to be when you started i think that's what screws your motivation it's like how should you think it's going to be when it started that's why i mean honestly when i do talks to college kids now i'm just like this life sucks like this is the first thing out of my mind's like this life sucks it's like getting punched in the face every day and like real face punch like not like fake it's like you ever get punched in the face you remember that for like the rest of your life this is like no i mean to this day i'm sure you do too man i have like bad dreams about my startups i still have like it's not like we're we're insulated from this this was hard this was like the hardest we ever did yes by far and we probably will ever do so i mean to kind of wrap this up right like this idea of do things that don't scale one it's going to be counterintuitive two expect people around you to not understand and to actively think you're stupid like not just not understand but actively tell you you're being an idiot like why are you delivering burritos like what on earth are you thinking like you're making them like they'll like stage an intervention for you you're screwing them your friends will come together they'll set you down and be like what are you doing man this is a mistake this is not what you should be doing um expect it to look way different than what your larger competitors are doing now expect to look way different and expect yourself to be the primary actor you're not acting through others you are the doer anything else to add though to wrap this up i think if you look at other companies that raise a lot of money you're inclined to copy that strategy of what they're doing so again if you see someone all these companies are doing i don't know 10 minute delivery right like that's the hot new thing and so they're like oh this company raised 50 million i better raise 50. do things that don't scale is cool yeah not for you go do one delivery like when i see people fail a lot it's that they they want to get a thousand customers and they can't get one just being able to say one we have we've delivered one burrito separates you from the pack yes and so again maybe this is this is an inspiring thing actually doing something is much better than average congratulations you're in the top half of stoddard founders if you can get out of your own way enough to do one thing to extend that and if you can get that person to do it again they enjoyed it enough the first the customer enjoyed your product enough the first time that they're gonna use it again because that's the other question oh we have a ton of users like oh like how often do they come back it's like come back are we supposed to be looking for we're supposed to be measuring that was that on the test i didn't study for that one it's like well okay all right that's two things that don't scale don't just take our word for it though the essay is online you can read it and trust me you'll get a lot of out of it if you just go read it so google search do things that don't scale pg and i'm sure you get the link on the top alright see you later dalton

Channel: Y Combinator

Views: 131,866

Keywords: YC, Y Combinator, yt:cc=on

Id: 4RMjQal_c4U

Length: 18min 51sec (1131 seconds)

Published: Wed Feb 09 2022