When reddit started out and had almost no user base, they had employees each impersonate a handful of different users to give the site a sense of a pre-existing community. When Dwarf Fortress was starting out, their sole developer would create custom ASCII-art scenes to send to every supporter above a certain dollar threshold.
It is counterintuitive at first but when you think about it actually makes a lot of sense. When you're getting started you should focus on doing things to get started. Worry about scaling when you're scaling.
You can work on automating it and hooking various payment providers.
Integration with payment providers is a lot of hassle and engineering work. So when you have 5-10 customers it does not make sense to automate that.
Sending invoices manually does not scale of course - but that advice is given in specific context of company. Where you should focus on working on your product and not on automating invoices "because somewhere in the future it will be needed."
Do you have examples to share of companies who were as devoted to talking to their customers and making something people want as Airbnb, but who failed to build a successful company?
That YC W09 batch had about 16 companies. They were all far less successful than Airbnb (though some of them did well and got solid exits, and others live on and are going OK, like mine). But none of the companies who did less well than Airbnb were remotely as engaged with their users as Airbnb was. It was blindingly clear, even in the first month of the batch.
Airbnb probably made a bunch of people very rich, which could probably count as success, however we could also point out that they're a great example of the toxicity of VC funded startups:
1. They business model seem to be disrupting housing markets and regular neighborhoods, more than it's actually disrupting incumbents (Accor & co.).
2. 13 years after their launch, this is their bottom line:
> Net income -$4.584 billion (2020)
Which, yeah, is during the pandemic, but they've never been profitable.
Though I guess these days success is measured by how much money you can get from investors, than building an actually profitable business.
As for financial losses, yes of course the pandemic year was hard, but it's completely false to say that Airbnb has never been profitable or that it is not a financially strong company. Indeed they have financial strength built into the foundations of the company; they were revenue-focused and profitable in their first few months, and the very thing that made them attractive to investors was that their unit economics (dollar margin per transaction) was so strong. And they have had several profitable periods in the years leading up to their IPO. Yes they may have ended up posting losses, because they've spent heavily on marketing/growth and expansion into new product categories, but that doesn't make them a weak company, quite the opposite. If you're trying to equate them to money-sinks like Theranos, WeWork, Uber, etc, you're mistaken; they are the very antithesis of those kinds of companies.
I thought you gave away 7% of your company for the big pile of VC money that YC hooks you up with, so you have a few years of runway to find an intersection between "an idea you had" and "an idea people are willing to collectively spend a lot of money on".
We went to YC because it seemed like the best place to learn how to build successful companies and to be around others doing it.
I don’t dispute that there are negative externalities to what they do and that their existence and growth are not without controversy, but my comment has nothing to do with that controversy, it’s about the useful advice in building a financially successful company.
For example: "Challenge HN: build pg-bot" https://news.ycombinator.com/item?id=2598026 (148 points | May 30, 2011 | 39 comments)
I never meet him, but apparently he repeat this kind of advice a lot, and someone of the first batches of YC made an image of a fake action figure of pg that repeats the advice when you press a button. I can't find the link :( .
Yes, you are, if you're using the site he created (not to fault you for not knowing but often many HNers will reference Paul Graham by his initials so it's useful to know).
The advice is so simple, it's hard for a lot of outsiders to believe it's worth anything. "Make something people want." "Talk to your users." "Do things that don't scale." "Keep typing and avoid dying." People hear about this and ask "You gave away 7% of your company for that?" No, you give away 7% of your company to join a network of people showing you what it really looks like to do that.
My company got into the Winter 2009 batch of YC, the same batch as Airbnb. They weren't around for many of the dinners; they spent a lot of their time away from the Bay Area doing exactly those things that PG advised, mostly in NYC, where many of their most active users were. They just did that stuff, over and over, for several years. Now they have one of the most successful companies out of Silicon Valley in the last 15 years. (I saw PG tweet a couple of years ago that he'd recently dinner with them, and Brian would still write down PG's suggestions in a notebook.)
During that batch, I was flailing about trying to find some magical trick to make our company work. I remember one office-hours session with PG, excitedly telling him some buzzword-filled story I'd dreamed up about how our company could be a brilliant success. "Just make a good website" he replied.
It took me a while to work out how the Airbnb guys were able to follow the advice so effectively whilst we and so many others got stuck in the weeds, but looking back now it's pretty obvious. They were just very comfortable in their own skin. They didn't have ego issues around needing to seem like geniuses, needing validation all the time, fearing rejection or embarrassment. "Talk to your users" was easy, as they were sociable, likeable people who put on cool parties and who were naturally able to make everyone in their company feel welcome and valued, and everything else emerged out of that.
[1] https://en.wikipedia.org/wiki/Paul_Graham_(programmer)