Episode 168 | Things That Don’t Scale (And Why You Should Do Them)

Show Notes

Do things that don’t scale by Paul Graham (July 2013)

  1. Recruit users manually
  2. Expect to be Fragile
  3. Delight early customers
  4. Start in a niche
  5. Consult
  6. Human automation
  7. The Big Launch Usually Doesn’t Work (and neither do partnerships)

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I talked about things that don’t scale and why you should do them. This ladies and gentlemen is Startups for the Rest of Us: Episode 168.

[00:10] Music

[00:17] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:27] Mike: And I’m Mike.

[00:28] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Mike?

[00:33] Mike: Well we had a listener write in earlier this week named Denis Hennessey and he suggested, he was listening to the episode where we talked about some of the different apps we used and I mentioned that I was doing Commit to make sure that I do certain things on a very regular basis. And he actually suggested that I try out Goal Streaks and I really liked Goal Streaks because I checked it out and essentially the idea is very similar to Commit except that you can put in what are basically skip days which I think would work out actually a little bit better for me because there are certain days of the week where I know that I’m not going to do those things.

[01:06] So for example, working out on Friday is just never going to happen. Commit doesn’t allow me to put that in and say no, I’m not going to do that so I can’t schedule those sorts of things. I’m going to give it a shot and see how things go.

[01:17] Rob: Very cool. Well first of all, this is an IOS app is that right?

[01:20] Mike: Yes.

[01:21] Rob: Okay. And then what kinds of things do you have in there? I guess working out is one?

[01:24] Mike: I have working out. I have writing and then I also have working on Audit Shark.

[01:27] Rob: Good. So yeah, give Goal Streaks a try.

[01:30] Mike: What about you? What are you up to this week?

[01:31] Rob: Well I was pleasantly surprised this week. We started selling MicroConf tickets to Micropreneur Academy members. They get a slight discount and then they get early access to the tickets before the general public. We sold out their allotment pretty quickly and in fact we got a few emails from academy members wanting to buy kind of after all the tickets were gone and so it looks to be a sold out crowd again this year. And by the time this airs, we’ll likely already be sold out.

[01:58] But some tickets do become available so if you’re still interested in going to MicroConf, you can always go to microconf.com and click on the ticket link. We tend to have a pretty hefty wait list and if you get in that early, you do have a high likelihood of getting contacted because we have some tickets that become available as the conference approaches.

[02:17] Then the other thing I’ve been up to, my wife right now is on her two day annual retreat and I’m gearing up for mine here in about two weeks and that’s where I go off and don’t check email and look at my goals for the year, figure out really verify those are the things I want to do and then map out as closely as I can over the course of two days exactly how I’m going to achieve them and figure out what it’s going to take on a monthly or a quarterly basis and basically setup my game plan.

[02:42] The reason I do this, I’ve talked about it before. But it’s because I like pursuing too many things. So once this list is locked, I will do almost nothing else that is not on this list for the next year and that’s the only way I’ve found that I’ve been able to stick to things and grow them without wandering all over the place as the next new fun idea comes my way. So needless to say I’m looking forward to that. Looking forward to the quiet time, the thinking time and really getting down to business in 2014.

[03:12] Mike: I’ve been working on Audit Shark and talking to a few different customers getting some ideas about what their needs are for moving forward with the product. It looks like I’ve got a little bit more work to do. There’s a couple of demos that I’m trying to schedule but in order to actually do those demos there’s a few more features that I need to implement because I know there are things that they basically already told me that these are things that they need. So in an effort to kind of make the demo align very well with what their needs are, then I’ve got a little bit more work to do on the product to make sure that can do those things before I can show it off to them.

[03:44] But the demos are for more in the enterprise space so I’m really hoping those go well but again I think that it can definitely go the route of software plus services to make those things work. So I’m pretty excited about it and just kind of looking forward to banging out some of that code and seeing what comes out of those demos. How are things working with Drip?

[04:03] Rob: Drip’s going good. I’ve really started diving in heavy to paid acquisition and just in the learning phase, as usual I’m pretty impatient with things and I don’t know how many months it’s going to take for me to find the Drip flywheel but I certainly haven’t found it in the past maybe 7 to 8 days since I started and yet I’m already wondering why I haven’t. They’re just trial and error at this point to get into the marketing plan, have a bunch of different things going on, an eBook that’s already been written. It’s being designed. I’m working on an infographic. I have a bunch of blog posts in the hopper, stuff that’s just things that I’m going to be experimenting with.

[04:39] But really over the past 7-10 days I’ve wrote some long form sales copy cranked out several variations of landing pages and then basically testing those the traffic that I’m able to generate via the various advertising venues.

[04:53] Music

[04:56] Today we’re going to be talking about doing things that don’t scale. And this phrase has been bandied about quite a bit. I think Paul Graham since he has the largest kind of platform, he wrote an essay on it on July of 2013 so that’s seven months ago. The interesting thing is Paul Graham has such a larger view right? Because he’s invested in hundreds of companies and he thinks very critically about this stuff.

[05:20] The first time I’ve read this because I’ve heard about this essay for the last seven months since it came out but the first time I read it was preparing the outline for the interview and I was surprised at how many things not just the title of do things that don’t scale but how many specific things in his essay align directly with things that we’ve said in the past on the podcast. So that was kind of a nice confirmation that when multiple scientists do multiple experiments and they all arrive at the same results, its multiple confirmation that this theory may at least be more correct than the things people have been saying for the hundred years before that.

[05:55] So that’s the idea here is that multiple people coming up with things independently helps reinforce it and makes me believe that these things are not just our thoughts or our opinions but they’re actually things that multiple experts are starting to embrace. So I think to kick us off, we have seven things that you should do that don’t scale. And to kick us off before that, there’s a little intro piece I want to bring up and Paul kind of attacked this on the end of the episode but he says that people should start thinking of startups as two dimensional objects instead of just one dimension and what he means by that is most people think of a startup as an idea. It’s what you’re going to build.

[06:29] He says the idea of doing things that don’t scale is so important that we need to start thinking of startups as two dimensional objects. Basically the first dimension is what you’re going to build and the second is the unscalable things you’re going to do to get that company going. Now what that means is that when you come up with a startup idea, he’s saying that’s incomplete. That’s not actually a full pledged startup idea that you actually need not just a product idea but the plan to get those initial 100 users or whatever it’s going to take to kind of get you out of the earth’s atmosphere and into orbit. I thought that was kind of a fascinating thought that he thinks this concept of unscalable things is so powerful that he’s actually saying that a startup idea is incomplete unless you’ve fought those early days through.

[07:13] Mike: Well we’ve talked about that as well though. I mean we didn’t phrase it as like a two dimensional thing but we’ve also talked about and say there’s the idea itself and the second is how are you going to bring it to market? How are you going to get in touch with your target customer base? And in a lot of ways, in order to do that, you have to do those things that don’t scale.

[07:31] Rob: Very good. So let’s dive in. Our first point of seven is to recruit users manually. So Paul Graham says that the most common unscalable things founders have to do is 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. And then he gives a few examples, Stripe, Airbnb and a couple others.

[07:54] Well it lines up with two phases of stuff I’ve talked about recently with Drip. There was that initial phase of just vetting the idea where I emailed 17 founders and I’ve got 11 go ahead of yes I would buy this. I mean that was a very manual user recruiting process. And then the second part of it where once I had a launch list in the end it was about 3500 emails and I basically handpicked some early users and started inviting them in but it was that slow launch. It was the heavy on boarding heavy customer development time of basically walking users manually through your app, manually boarding them, finding out what they like, don’t like. If they’re going to stick around and if not, why not. I view that a lot as relating to this concept that he’s saying about recruiting users manually.

[08:38] Mike: I think there’s a couple of different things there. In the early days, you really have to do that because if you just setup a website and you have people sign up and you don’t really know anything about them, what you’re essentially doing is you’re basically taking a stab in the dark at what resonates with people and you don’t get any of that feedback. And they may come to your site and they just leave and you have absolutely no idea why versus if you start a mailing list and you get people – you kind of give them a one or two sentence description of what it is that you’re building or you’re talking to people and you’re giving them invested in it as well that you get to close that feedback loop.

[09:16] So it’s no longer this open loop system where it’s just hitting the gas and you’ve got no idea whether you’re going in the right direction or not. And I think that’s really the important part here is that you have to be able to get that feedback loop closed so that you understand about what direction it is that you’re going in.

[09:33] Rob: The next point that Paul Graham makes is he basically says expect your startup to be fragile in the early days. He says the question to ask about an early stage startup is not is this company going to take over the world? But the question is how big could this company get if the founders did things right? And he brings up Microsoft as an example. He says Microsoft can’t have seem very impressive when it was a couple guys in Albuquerque writing basic interpreters for a market of a few thousand hobbyists. But in retrospect that was the optimal path to dominating micro computer software.

[10:05] And then he also brings up the Airbnb founders and how earl on they were just manually taking professional photos of their first host apartment and that they were just trying to survive. So you couldn’t see them taking over the world at that point. It was very fragile and it was basically a 30 day swing where he says going out and engaging with users as the difference between Airbnb taking off and completely failing.

[10:28] Mike: I think this thought from Paul comes from a little bit of a different perspective than kind of where we come from because most of the stuff that we talk about generally speak in a lot of the people that I talk to and interact with tend to be starting stuff on the side. So this idea of like a 30 day swing before you go out of business just isn’t there because we don’t have investors to account to. Yes there’s these few people who’s decide that they’re going to burn the bridges behind them, quit their job and they’ve got 6 or 9 months worth of money in the bank and that’s it but that is probably the exception rather than a role. So I think to people like us, this is a lot less of it in issue than it is for funded companies where they’ve got to get to a certain point and they have a very, very tight timeline to do it or they’re toast.

[11:14] Rob: Yeah. I’d agree. This one doesn’t apply as much to bootstrappers. The piece of this I do think applies is I would change the world fragile to unstable. And what I mean by that is in their early days as they’re recruiting users, trying to turn them into customers, trying to retain them, you just don’t have enough information to have any kind of stability in your metrics or even in confidence in your sales process, confidence in your user retention, confidence even at sometimes unfortunately in your app.

[11:42] Bottom-line is if you’ve launched and you’re in the first 60 or 90 days and a customer emails and says wow there’s a major bug and there was some issue when I clicked the button and did this, if you’re in the first few months of your app, you really don’t know if you’ve introduced a bug. If your app’s been running for years and its mature and all this stuff, you know that there’s stability there. But I would say expect instability in the early days and expect a lot of uncertainty when there’s any type of challenge. If someone says your pricing is too high, that creates uncertainty because suddenly like oh man, is my pricing too high? You just don’t know yet. Once you’re successful and once you have a lot of people using it, you know that your pricing is fine. If anything, it’s probably too low.

[12:21] The other thing that I’ve seen is in the early days of Drip, someone email and said I would totally try this out but you’re asking for credit card upfront. You shouldn’t do that. And tells me why I shouldn’t do that. Now I know that I want to ask for credit card upfront for a bunch of reasons and for all my trial and error with all my apps, this is how I’m going to start. And yet at that moment the uncertainty and kind of the instability of that moment made me question and think oh, should I take the credit card wall down? I had to think about it. And of course I didn’t because I went back to all the research and the data on this and decided not to. I actually asked someone in my mastermind and he told me I was crazy for thinking about it. Instead of thinking about fragility, I think its more about instability and uncertainty is something that you should anticipate especially in those early days.

[13:06] Mike: Yeah. I’ve definitely gotten already I mean I’ve gotten people saying that the pricing of Audit Shark is too high for them and for some of them I look at their situation I’m like you’re really not in my target market but then there’s other people who are kind of are and it definitely does make you think about it and it does give you that level of uncertainty about whether or not you’re doing the right thing. And part of it’s just because there isn’t this giant history of customers or people that I’ve interacted with to be able to say one way or the other.

[13:36] Rob: Paul’s third point is about delighting early customers. And he says you should take extraordinary measures not just to acquire users but also to make them happy. And he says this whole concept of doing things manually to delight early users is counterintuitive for founders and then he gives three reasons why that is. 1) He says because a lot of founders are trained as engineers and customer service is not part of our training as engineers. Another is we’re worried that it won’t scale and then the third is that we’ve never received attention like that from other companies and so we just don’t feel like it’s something that you can do or should do as a business because frankly when you go into the Sprint store or call Verizon customer service you’re not going to see that kind service so naturally we think that it’s not something that we need to do off the bat.

[14:25] Mike: I agree that I think that this is not something that is widespread but I’ve seen it before. I’ve seen companies do it before and it makes an impression and I’ll give you an example. When I signed up for male chimp, after I had sent one of my first campaigns and made a payment with them, they sent me an email and said hey we’ve got a special gift for you. Click here. And I clicked there and I went to a page and it opened up just a form that I was supposed to fill out where I put in my name, address and everything else and then they would send me something. They sent me a mailchimp t-shirt. That kind of gave me the idea to do something similar for Audit Shark and it’s something that I’ve had kind of down the road.

[15:02] But I definitely wouldn’t say that those types of things couldn’t scale because I think one of the examples he uses is Wufoo sending each new user a handwritten thank you note. I think that if you start acquiring a thousand customers a week, that’s not going to scale as well but you can certainly – like if you’re sending people t-shirts for example, there are services that you can integrate with where they will print the t-shirts and send them and really all you need to do is give them an XML data feed that says hey, send this t-shirt here and here’s our information that says who to charge it to. There are ways to make other things scale but there’s definitely things that you can do that surprise and delight your customers that would not and I think it’s just a matter of hosing the right things it will.

[15:40] Rob: Yeah. I think delighting early customers ties back in with a lot of the manual on boarding stuff we’ve talked about. I do like the idea of t-shirts. I’ve been doing that with HitTail, with certain users when they hit a milestone they get it. Also people blog about it, they get a HitTail t-shirt. Drip, if you get your first conversion, you get an email that says roll out the red carpets. Your first subscriber converted to a paying customer because you can setup a goal in Drip and you can see when they convert and then we give them a link to a form where they can get a t-shirt. So that stuff does scale pretty easily. Once the t-shirts are printed it’s just like slapping an address label on it. So I think that all that rolls into it.

[16:17] Another piece of this and this is a little further down the essay but Paul Graham says over engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups, it’s a necessary part of the feedback loop that makes the product good. Making a better mousetrap is not an atomic operation. Even if you start to weigh most successful startups have by building something you need yourself, the best thing you build is never quite right and so is conjectures that you need those early users to give you feedback on how to improve it.

[16:47] The fourth point we have from Paul Graham is to start in a niche. And he actually has an odd subheading for this. He calls it fire because he says it’s like keeping a fire contained before you go horizontal. But this actually lines up with the very fundamentals of the Micropreneur approach. What’s funny is he uses Facebook as the example of starting in a niche because it was a Harvard student network and then it was a university student network and then it went to everyone. I think more in terms of B to B startups so I think of like Kiss Metrics and how they really started as Saas metrics back in the day and now they’re much more all web and metrics and analytics.

[17:25] Another example that’s happening right now is Drip. Drip has started in kind of the Saas and software space and we’re building out some features that are going to move us more broader into the email marketing space. It’s more become marketing automation tool where you can move people to and from different lists based on their behavior. That is – it’s not completed yet but that’s kind of in the works right now and is the next couple of weeks we’ll be rolling that out.

[17:49] Bidsketch is another example I can think of. Ruben’s app. Remember when Bidsketch was proposal software made for designers? Well that for designers went away a long time ago because there was just so many consultants in a number of niches and designers and developers and all types of people are using it. And so he eventfully went horizontal and opened up this market. But what that niche allows you to do is it allows you to take advantage of those early niche things like the fact that the market’s small that you can out market everyone else in the niche that you can provide a tool that is so good just for that group of people that you could beat out a broader horizontal product.

[18:23] Obviously this is one that I definitely agree with and especially with a startup that doesn’t have early funding, I don’t know how else he would do it. I don’t know many if any horizontal startups that come out guns blazing without funding at their backs.

[18:38] Mike: I think this is one of those things that for people who are launching something on the side, they have this idea in their head that if they make it too small or if they go after too small of a thing then they’re not going to be able to get enough customers to support what it is that they’re doing. And the other challenge that kind of goes hand in hand with that is that when you start thinking of a product and then you go through the process of building it, you always have these grand plans for what it’s eventually going to become. And it’s incredibly time consuming to make those plans come to fruition but at the same time you’re always thinking in the back of your head I want to do this and I want to do this and I want to do this and because of that, you end up with a lot of scope creep in your products. It starts making it larger and larger and you take more and more time to develop it as opposed to taking it to market and really nailing it for one small group of people.

[19:31] This is something that I’ve struggled with Audit Shark because I have thoughts and plans for the product 3, 5, 8 years down the road that I know are going to take a very, very long time to implement. And I’ve got to focus on today, not five years down the road. And it kind of sucks because I can only do so much in the next two weeks or eight weeks or whatever but in the back of my mind I always have these thoughts about oh, what am I going to do for X when X is really something that’s not going to be implemented for probably another three years?

[20:00] Rob: The fifth point that Paul makes about doing things that don’t scale is about consulting. He says sometimes we advice founders of B to B startups to take over engagement to an extreme and to pick a single user and act as if they were consultants building something just for that one user. The initial user serves as a form for your mold. Keep tweaking until you fit their needs perfectly and you’ll usually find you’ve made something other users want to.

[20:26] I have a bit of a tough time with this one. I think it’s dangerous unless you really know that customer number one and you know that they have a clear vision of what they need and that you somehow have other inputs in especially if it’s a domain that you don’t understand or that you’re not familiar with. Taking direction from just a single client I think could be pretty dangerous and could get you into a pigeon hole where basically you’ve built a super specific app for a single client and the one that doesn’t generalize to other people. And that the second side of that is just validating that there’s a market for it. Because finding that one person or one company needs an app is really not enough. You have to go out and verify that need expands into a full pledged market and that’s something I would definitely do before taking this consulting approach.

[21:15] Mike: Yeah. I think the consulting approach can definitely work if you have a product and you have knowledge of that particular space where you already know the space. It’s not that you’re trying to validate a market or doing MVP. You know that there’s money to be had there and you know what types of products are going to be successful. The problem that you have is maybe cash flow or something like that or you don’t have enough of the products built to be able to sell it as a standalone product so you essentially need to couple some services with it. That’s the place where I see consulting working really well but if you’re still trying to validate the market because you don’t necessarily understand it and it’s not some place you’ve worked before, I think this really starts to fall apart because it’s going to be hit or miss depending on the company that you end up working with.

[22:01] Rob: Yeah. That’s a good point. The other thing he points out, I think it’s kind of cool with this consulting. He says another consulting like technique for recruiting initially lukewarm users is to use your software on their behalf. His startup that he sold back in the 90’s was called via web and it was an early shopping cart software. And he says when we approached merchants asking if they wanted to use our software to make online store, some said no. But they’d let us make one for them. Now this is concierge. Right? That’s really what we’re talking about here is essentially a free concierge service to get everything setup and to go beyond and do really manual things that don’t scale to get those early users involved. And if you show them that they’re a success then hopefully they’ll stick around with you.

[22:42] And I love this quote. He says we felt pretty lame at the time. Instead of organizing big strategic e-commerce partnerships we were trying to sell luggage and pens and men’s shirts but in retrospect it was exactly the right thing to do because it thought us how it would feel to merchants to use our software.

[22:58] The sixth point that Paul brings up is he calls it manual and he says there’s an extreme variant where you don’t even write software. You just do all the manual leg work behind it. I’ve called this human automation. I talked about it in my book. We’ve talked about it in the podcast in terms of if I were to launch something like HitTail, I would just do manual keyword research and manually email reports back to someone instead of having any type of software do it and frankly probably hire a VA to do it as well.

[23:22] I think that if at all possible, that’s how you start a startup. That’s how you vet that there is in fact a need and you can get so much information out of working with customers without writing a line of code and without spending anytime. If you’re not a developer, finding a developer and so by the time you do in fact go to find a developer you have so much more information not only about what you want to build but you have the validation that this is in fact going to work and that you can get money from people for it and that it provides enough value that you’re willing to do the cash outlay or the time out lay to go and build it yourself.

[23:59] Mike: I think one thing to keep in mind about that is it’s really about vetting the idea. It’s about testing your hypotheses and that’s really what lean startup is about as well. It’s doing that MVP. And the reason you do an MVP is because you don’t know what the answer is. And if you don’t know what the answer is then you have to figure out a way to test it. And what’s the least amount of work that you can do to test that? And this really falls under that umbrella but again it goes back to the idea like if you know that there’s money there and you don’t necessarily need to prove it to yourself then building software might be the right thing to do especially if you already know how to solve those problems.

[24:38] Rob: The seventh and final point we took away from Paul’s essay is that the big launch usually doesn’t work and neither do partnerships. This one made me pretty happy when I read it. I mean he’s basically saying the tech crunch launch doesn’t work and I’m sitting there squealing with glee because we’ve said this so many times and I get halfway down and he says partnerships too usually don’t work. They don’t work for startups in general but they especially don’t work as a way to get growth started. It’s a common mistake among experienced founders to believe that a partnership with a big company will be their break. Six months later they’re all saying the same thing. That was way more work than we expected and we ended up getting practically nothing out of it.

[25:16] I’ve run into this a number of times and this is why these days partnerships are last on my list for growing things unless I know the founder, unless I know that they have a lot of customers and experience and they’re going to be easy to work with. I would almost never partner with a much larger and impersonal Fortune 500 company as a way to try to stem growth. The partnerships that have worked for me have typically been when I’ve gone and sought them out and when I actually have something to offer. So I already have a large enough customer base that I’m able to cold email or try to get a warm introduction to a founder or somewhat high up in another organization but it tends to be a smaller organization.

[25:55] Even if it’s a multimillion dollar in sales organization it’s still run by one or two decision makers and there’s not a big group at the top where it’s all corporate. I can talk to a single person and they can make a decision as to whether or not we want to do a joint mail and or whether or not we want to do an integration and promote it to everyone or one of these things. I mean these are the partnership things that I’m thinking about that I’ve seen win and unless they bring a lot of traffic and or existing paying customers to the table, it’s almost never worth pursuing.

[26:26] Mike: I think if you look back at the growth curves for I would say probably any successful company, there’s very few where you can look at their growth curve and you see these giant spikes in there from pretty much anything. You’ll see these gradual curves where thing start to work and they figure them out and then they double down on them and you get what’s called the hockey stick growth curve. But there’s never a hockey stick growth curve that I’ve ever seen where things will be going along and then suddenly they vault up like by a magnitude of 3 to 5 and then they level out again and that just doesn’t happen. The great big launch as you said, it doesn’t really work. It helps you get customers but it’s more of a gradual thing. It helps get things started. And the same thing with partnerships. They will help get things started. I think with partnerships, there’s so much work and so much effort involved that early on it’s just not worth the time and effort.

[27:21] Rob: Yeah. This is why with Drip I didn’t go for a big launch. Really didn’t get mentioned via mini press outlets the day that the Drip launched but I’ve been marketing it for what? Maybe 10 months before that and during that 10 months, it was building the email launch list. Right? And then gradually doing that slow launch over 90 days was almost the opposite of the big tech crunch launch where you want to get mentioned on Mashable and the next web and tech crunch and 20 other places all in that one day but that creates A) a lot of headache B) it’s a huge time investment to try to work with all those venues. It’s kind of a crazy thing. People’s sites go down because they get linked to by so many things.

[27:59] If you haven’t already spent time on boarding and figuring out if your software even works and if it’s going to retain people, you can get let’s say get 100,000 uniques in two days and everybody poof goes away then what do you have? You don’t have any assets after that because you haven’t built up something over a longer term. Suffice to say that I agree with Paul’s assertion here that the big launch usually doesn’t work and neither do partnerships.

[28:22] Mike: Well the other thing about that is if you do get at that giant influx of traffic as you said, even if you get a bunch of sign ups out of it, you don’t really know what to over them next and you don’t know how to capitalize on those people who did visit but didn’t sign up to bring them back. I think Joel Spolsky at one point had a blog article where he put it out there where if you have this giant launch and tons of people come and they look at your app and they say it sucks, then they’ll never come back and that’s going to be a big problem especially if you try to make a huge splash in the market about an app that quite frankly is really still in the very, very early stages.

[28:59] So that gradual build up over time is the better approach anyway. I mean you don’t want to go too big too fast because with any given startup, if you grow too fast in too many directions well I mean there’s several directions you kind of have to grow in. But if you grow in a way that is skewed in one direction and it goes much, much further than any of the others, so let’s say that your revenue scales much, much faster than the number of employees. Well, you’re going to have some serious growing pains because you have to grow quickly which means you’re going to drop your standards to bring people on faster. Bringing in too much traffic all at once is very similar. You’re not going to be able to capitals on that in a way that is going to be effective for your business long term.

[29:42] Rob: So to recap, the seven points we pulled out of Paul Graham’s essay do things that don’t scale are number 1) recruit users manually. 2) Expect to be fragile or unstable as we put it. 3) Delight early customers. 4) Start in a niche. 5) Consult. 6) Try human automation and 7) the big launch usually doesn’t work and neither do partnerships.

[30:06] Mike: If you have question for us, you can call it into our voice mail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.

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One Response to “Episode 168 | Things That Don’t Scale (And Why You Should Do Them)”

  1. Amen to the idea of “no partnerships (24+ min. mark). My business coach warned me off from the idea of partnerships, but this is after I had formed up said partnerships. I have found that a partnership is like chaining two cars together– you’re unlikely to get the velocity and direction right. I have found that busy-ness by myself and my partner means that we’re moving at the lowest common denominator for speed and energy, because time demands are limiting how much we can do to drive the company forwards. We’re throwing more bodies at the problems, but we’re going slower and we’re not always on the same page for our messaging.