Lecture 8: How to Start a Startup

Wow, I had no idea about typeform before you comment. Awesome stuff there.

Checklist for lecture #8

https://chris.typeform.com/to/Oto5xV

> we're now ripping apart at the seams

Congrats on the growth. It sounds like its time to start automating some of your processes / tasks.

I'm not sure why you got downvoted because our experience matches yours. Just like everything, this mantra needs to be put in context. There are different stages in a startup life. It is possible that some strategies would cease to be valid once you go beyond certain stage.

Home delivery has been around in India for ages too. Not only for restaurants (for which it became common only some 10 or 15 years ago, IMO, though existed before too), but much more for small general stores - called kirana stores here - what are called mom-and-pop stores in the US. And the owners of those small stores, who often are from the Marwari community (at least in northern and central India) are very entrepreneurial.

Only because you've not changed the slides in a while.

it took me a little longer to post Justin's quotes, but here they are for anyone who's interested- 20 Quotes from Justin Kan on Getting Press for your Startup: https://medium.com/how-to-start-a-startup/20-quotes-from-jus...

Timestamped notes for this lecture series:

https://timelined.com/how-to-start-a-startup

> Can someone explain why so much more emphasis is placed on doing things that don't scale? Doing things that scale seems to be more important to me.

By doing things that dont scale, you learn the problem deeply and then figure out the details needed to make it scale later on.

If you hadn't read yet, read the original Paul Graham essay on this: http://www.paulgraham.com/ds.html

The idea is part you must do whatever it takes to have your first users/clients and keep growing from there (as the guy from Teespring says) and part is that you must first know what to scale.

Sure, startup = growth, no one starts a startup without imagining it will grow a lot. But that is why this advice is particular powerful, because, as PG says for a lot of things on startups, it is counter-intuitive.

So the advice is more about doing things that don't scale until you actually reach product/market fit (which means "Make sure your retention flat lines at the appropriate level.", as said by Alex Schultz in his lecture); you should do things that don't scale.

But, sure, when you focus in big growth and scale, yes, then you start scaling stuff.

PS: I really sound like the ass-kissing student on your class who repeats everything teachers said before to look good. But I really think al of it makes sense.

> DoorDash adds value by delivering more efficiently than small businesses can on their own...DoorDash is competing on one main dimension: cost. And how do they achieve lower cost than a mom & pop macaroon shop? By scaling. Operating at scale is their main competitive advantage.

You make some good general points in your comment, but since you're holding up DoorDash as an example of success, I thought I'd point out that DoorDash is just one of a number of "on demand" companies that are currently en vogue.

In many cases, their ability to scale is heavily dependent on their ability to shift major costs (taxes, vehicle operation, commercial auto insurance, etc.) onto their workers, who they classify as independent contractors. The big question is whether the workers are actually independent contractors. This is a topic of discussion in legal circles[1] and the trend does not look favorable for many of these companies[2]. Uber is already being sued for misclassification[3] and the same attorney says she's looking at Homejoy[4].

One adverse outcome in a legal action could change the economics of these businesses significantly, and potentially even put some of them out of business.

[1] http://www.pepperlaw.com/publications_article.aspx?ArticleKe...

[2] http://www.msnbc.com/msnbc/fedex-loses-court-case-against-dr...

[3] http://uberlawsuit.com/

[4] http://www.washingtonpost.com/news/storyline/wp/2014/09/10/a...

he said it in the lecture: it's more important to go fast than to worry about scaling when you're trying to get your first users/customers.

of course you need to scale later, but the activation energy of getting users/customers is high and you will likely need to try many solutions to overcome that activation energy, so fast is better than scalable in the beginning.

You raise a good issue, the role of mobile phones.

Okay, I heard that point in the lecture and read it again in your post.

Okay, now for me -- I'm slow this evening, and I still just don'e get it on the crucial role of a mobile pbone. A phone, sure. But what's the crucial role of the mobile part?

A guess: For a given delivery job, the candidate drivers typically are not close to a land line or desktop phone. Instead they are out and about typically in the car they will use for the delivery. So, the fact that their phone is mobile, that is, with them always, is what is crucial. A guess.

A second guess: The phone should be not just mobile but also smart so that it has GPS to say where the heck the driver is currently. Then, with an app on the smart phone, could let the central office or dispatching system pick the driver closest to the location of the pickup. But this would meant that they have an app, and I thought that maybe so far they didn't.

Gee, I had heard that it was standard for taxi services to be willing to pickup from a restaurant and deliver the food.

And I'm confused: Where I've lived in the US, it has long been standard for pizza shops and Chinese restaurants to be willing to deliver. So, sounds like the problem of delivering food for such restaurants had long since been solved.

Apparently there's going to be more of this stuff of a customer pushing some buttons and have some product delivered within, say, an hour. So, apparently one goal of Amazon is to have warehouses in major cities so that there can be same day delivery of orders. Okay, then, Doordash could be looking to do those deliveries?

There should be some economies of scale here: That is, for five pizzas, have two ways to proceed. First way, just pick up the pizzas one at a time and deliver them. The second way is to pick up all five pizzas and deliver them using a solution to the traveling salesman problem with six stops, the pizza shop and the five customers. So, of the pizza shop is busy, get to pick up several orders there within, say, 5 minutes. Or, maybe pick up from several restaurants in the town center and deliver to the surrounding houses and offices -- one Doordash with nearly all the restaurants in the town center would have an economy of scale.

Doordash got such fast response from their simple landing page that maybe a lot of taxi drivers, some of which are just sole proprietorships anyway, and, sure, now likely making heavy use of cell phones, that they could just offer a service like Doordash for any pairs of customers and restaurants that want a delivery. I'm failing to see why the taxi drivers in Peoria need Doordash to follow the same idea.

Non-scalable things usually can still scale to tens or hundreds of customers, and those first tens or hundreds are the hardest customers to acquire for startups. The hardest thing for startups is to get started (hence gain insights to what problems are most important to solve first), and these non-scalable things are the fastest/easiest ways to start. For typical hackernews readers, solving problems and scaling are usually not too hard (challenging but quite doable), but getting started fast and finding THE problems are very very hard and often not fun to do.

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