Do things that don’t scale

How can you verify your company concept and acquire early momentum without investing a lot of time and money in software development? By doing things manually, you may postpone complexity for as long as feasible. “You have to fake it until you make it.”

Here are some instances of how successful organisations tested their concepts:

Zappos

It wasn’t obvious in 2000 that buying shoes online was a lucrative business. Shoes come in a variety of sizes and comfort levels, and many people believed they had to be worn before they could be sold. “Will people purchase shoes online?” was the most dangerous question for founder Nick Swinmurn’s young firm. One solution would be to acquire millions of dollars in finance, construct a massive warehouse, load it with shoes, construct a full ecommerce system, staff a slew of workers, and cross your fingers and hope customers made orders.

Nick thought there has to be a simpler method to de-risk his company. Instead, he went to FootLocker and photographed their inventory. He uploaded images of the shoes on the internet. When someone made an order, he went to Foot Locker and bought the shoes, then sent them to the customer.

Is this a scalable model? Nope. Did he profit from each order? No way. Was he successful in demonstrating that consumers will buy shoes online and gain early traction? Yes.

Doordash

DoorDash, financed by Y Combinator, is one of numerous digital businesses that employ logistical services to provide on-demand meal delivery from restaurants. Here’s a little extract from the founder, Stanley Tang, on how to get started and avoid doing things that don’t grow.

They created a landing page in the afternoon and were conducting restaurant pick-ups and deliveries by the evening (while still in college!). Yes, within a single day.

Consider this an experiment; just put it out there and see what happens! In the beginning, your goal should be to gather input and ensure that you’re not dealing with a personal bias! The greatest aspect is that you will be able to communicate to your consumers and gain real-time feedback! This may not work for everyone, but for the other 90% of ideas you’re sitting on waiting to construct a “polished & shiny” product before launching, well…

You don’t need algorithms or flawless web pages to solve a genuine issue. All you need is a clean landing page and some tinkering to make things work.

Zynga

In the final 5 minutes of the video below, Mark Pincus, the creator of Zynga, is asked what the ideal approach to do market research is. His response: “Ghetto Test.” If someone wants to develop, say, a hospital simulator, he creates a Facebook ad that reads, “Ever wanted to manage your own hospital?” and links to a survey (or, if it’s really ghetto, a 404 page).

Zynga just has to monitor CTR and compare it to past historical rates to get a solid picture of demand. This is useful for comparing numerous game concepts, product ideas, taglines, names, and so on. therefore, is not a suitable match for experimenting with a novel idea (without a comparison).

Seamless

The people at seamless are said to have spent their first several months without a web product. They contacted legal firms in New York and inquired about their lunch preferences. They contacted the restaurant, made an order, oversaw delivery, and billed the companies at the end of the month.

AirBnb

Airbnb probably has the most talked about articles, podcasts, and videos in the how-they-did-things-that-didn’t-scale-but-got-them-to-where-they-are-now category. 

Taking one out of the book “Hacking Growth” by Sean Ellis:

“Brian and Joe were astonished to find, when establishing the company, that New York City, despite its tourist appeal, was underachieving.” “The graphics were fairly horrible,” co-founder Joe Gebbia recalls after browsing over their posts. People were taking Craigslist-style images with their phones. Surprise! No one was booking because you couldn’t see what you were paying for.” One of their early backers, Paul Grahan of YC, advised that the two attempt a low-tech, high-effort hack to boost bookings — but it was fast to deploy and was incredibly effective.

Chesky and Gebbia rented a $500 camera and went door to door throughout the city, capturing as many listings as they could. They then compared the amount of reservations for the upgraded images listings to the rest of the Updated York ads and found that the updated photos led in two to three times more bookings, instantly doubling their profits from New York.

After establishing their concept, they extended it to Paris, London, Vancouver, and Miami, with similar results. As a response, Airbnb decided to create a photography service that would allow hosts to hire a professional photographer to come to their home and photograph it. It began in the summer of 2010 with 20 photographers and grew to over 2000 freelance photographers by 2012, documenting 13,000 listings across six continents.”

All of the other tactics would have likely aided scaling, but Brian Chesky and Joe Gebbia stuck to things that didn’t scale at all but did help them find the true challenges that consumers were experiencing. It’s easy to lose sight of your North Star Metric in the chase of vanity or needless growth measures, but sticking to the basics and focusing on where you want to go is crucial.

Groupon

Andrew Mason and the Groupon team debuted the initial iteration as a WordPress site. Everything else, apart from posting a transaction, was done by hand.

It was completely ghetto. On the early version of Groupon, we would offer t-shirts. In the [write-up], we’d state, ‘This t-shirt will be available in red, size big.’ Please contact us if you want a different colour or size.’ We didn’t have a form for that… It was sufficient to demonstrate the idea and demonstrate that it was something that people enjoyed… It got to the point where we’d sell 500 sushi vouchers in a day while also sending 500 PDFs to individuals through Apple Mail.

Key Takeaways

Obviously, there are times when a lean strategy isn’t appropriate. For the vast majority of companies today, the most important issue is not whether we can create it, but whether we should. Before you invest a lot of time and money in developing complicated technology, try manually executing aspects of your company for a limited target audience. When your experiments are running well but you are unable to grow faster, invest in technology to automate.

Or as Paul Graham said: “Do things that don’t scale”