What he goes on to explain makes a lot of sense. Startups don't often experience hockey stick growth by themselves. They need a nudge from founders, who need to aggressively market their products and be overly attentive to users in the beginning.
How do you force a startup to scale? According to Graham:
Go out and manually recruit your early users, even if it seems tedious and inefficient. Graham cites payment company Stripe as an example. " At YC we use the term 'Collison installation' for the technique they invented," he writes. "More diffident founders ask [potential clients] 'Will you try our beta?' 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."
Recognize that your startup is extremely fragile and can break at any point. One of the biggest reasons a startup can break early on is a lack of confidence in the founders. " The question to ask about an early stage startup is not 'is this company taking over the world?' but 'how big could this company get if the founders did the right things?'" Graham writes. "And the right things often seem both laborious and inconsequential at the time."
Create an "insanely great" experience for early users and cater to their every need. "I have never once seen a startup lured down a blind alley by trying too hard to make their initial users happy," Graham writes.
Keep the fire contained. In other words, focus on a narrow market, says Graham. He refers to Facebook, which was only at Harvard until it obtained critical mass there. Then it spread to other Ivy League schools. Finally, it opened up to other colleges which already had built up demand. "It's like keeping a fire contained at first to get it really hot before adding more logs," Graham says. If you're a hardware startup though, Graham recommends trying to scale via pre-orders or crowdfunding, like Pebble did on Kickstarter.
Make your product perfect for a single user. Graham suggests this strategy particularly for B2B startups. If you keep tweaking the product until one early user is extremely happy with it, you'll probably create a product many of their peers also love.
Don't have a big launch. It's often a mistake to have a big buzzy launch complete with embargoes and articles in eight different publications, Graham writes. The idea of creating initial buzz is a lazy way to onboard users, and doesn't guarantee startup success. "It would be so much less work if you could get users merely by broadcasting your existence, rather than recruiting them one at a time," Graham says. "But even if what you're building really is great, getting users will be always be a gradual process—partly because great things are usually also novel, but mainly because users have other things to think about." He also cautions startups to stay away from partnerships with big companies at first. It may seem like a user-onboarding shortcut, but it often ends up being too much work for too little reward.
In conclusion: "It's not enough just to do something extraordinary initially. You have to make an extraordinary effort initially," Graham says.
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- Paul Graham