Lecture 8 - How to Get Started, Doing Things that Don't Scale, Press

1. 0:00 – 1:31

   Stanley Tang’s origin story: building DoorDash while still a Stanford student

   1. STStanley Tang0:00

      Yeah. Thanks for having me, Sam. Um, I'm Stanley. I'm the founder of Doordash, and it's, it's really amazing to be here because it wasn't actually that long ago ago where I sat in, in your seats. Um, I was class of 2014, um, graduated in CS, as well as my co-founder, Andy. And, uh, for those of you who don't know what Doordash is, we're building an on-demand delivery network for local cities. And I want to start off with this photo at, that I took just a few months ago, and I think it... This was the, the night when we just raised our series A, and I took this photo as I was, um, walking back to where I lived. I actually lived in Roble at the time on campus. And, um, I took this photo because I realized just how ridiculous the combinations of things I was holding in my hand at the time. You know, I was holding my CS247 homework, um, and then I had a, my tax forms since it, it was April and I had to fill out taxes, and then also that yellow speeding ticket, and then b- right below that was the, was a $15 million piece of paper I just signed, uh, from Sequoia. And that kind of summarizes just how ridiculous our, our journey has been, you know, starting at Stanford, doing this while I was at Stanford, and then transitioning this into an actual startup, and I want to share that story with you today. Um, it all began two years ago, actually, in a Macaron store. Um,

2. 1:31 – 2:31

   Discovering the problem: delivery pain for local merchants (macaron shop insight)

   1. STStanley Tang1:31

      it was my junior year at Stanford. This was fall quarter, and at the time, I was really passionate about, you know, how do you build technology for small business owners? And I sat down with Chloe, the owner of, you know, Chantel Guillon, um, a Macaron store in Palo Alto at the time, just interviewing her, you know, trying to get feedback on this, on this product prototype we've been working on, and also just learning about, you know, what her problems were in general. And it was during this meeting when Chloe first brought up this problem of, of delivery. You know, she... I remember she took out this really, really thick booklet, and she showed me, um, pages and pages of delivery orders, and a lot of these orders she had to turn down because there's no way she could have fulfilled them. You know, she had no drivers, and she was the one who ended up having to personally deliver all these orders. And, and that was a, a very interesting moment for us. And, and then we... Throughout the next, over the next course of, over the course of the

3. 2:31 – 3:32

   Validating demand: 150–200 merchant conversations and a key hypothesis

   1. STStanley Tang2:31

      next few weeks, we talked to, you know, around another 150 to 200 small business owners, and when we brought up this idea of delivery, they kept, you know, they kept, you know, agreeing with us, saying, "Yeah, this is, this is a really big problem for us. You know, we don't have, you know, delivery infrastructure. Um, it's such a huge pain for us. There's, there's not any good solutions out there." And which, which led us to wonder, you know, delivery is such a common thing, you know, such a obvious thing. Why hasn't anyone solved this before, right? Like, we, we must be missing something here. So we thought maybe, maybe 'cause people have tried this in the past, right, but they failed because there wasn't consumer demand for this. So we thought, okay, how can we test this hypothesis? Um, you know, we were just a bunch of college kids at the time. You know, we didn't own trucks or delivery infrastructures or, or anything like that, right? We c- we, you can't just, we can't just spin up a delivery company overnight. So how can we test this assumption we had? So we decided to create a simple experiment, um,

4. 3:32 – 4:04

   The scrappy MVP: paloaltodelivery.com with PDF menus and a personal phone number

   1. STStanley Tang3:32

      with restaurant delivery. We spent about an afternoon just putting together a really quick landing page, and when I went on the internet, I found some PDF menus of, you know, restaurants in Palo Alto, um, stuck it up there, and then had a phone number at the bottom a- a- which was our personal cell phone number actually. And, and that was it. We, we, we put up the landing page. We called it paloaltodelivery.com, and this is actually what it looked like. Um, you know, super, super,

5. 4:04 – 6:15

   First orders and early traction: delivering food themselves to learn the workflow

   1. STStanley Tang4:04

      you know, simple, ugly. Like, honestly, we, we weren't really expecting anything. We just launched it, and all we wanted to see was, um, you know, would we get phone calls from this? And if we got enough phone calls, then, then maybe this was, this delivery idea was something worth pursuing. So we put it up there. We weren't really expecting anything, and we were, we're driving back home, and all of a sudden we got a, got a phone call. You know, someone called. They wanted to order Thai food, and we're like, "Oh, wow, this is, this is a real order." Um, like, you know, we have to do something about it, right? So-

   2. SPSpeaker4:41

      [laughs]

   3. STStanley Tang4:42

      [laughs] So we, we're in our cars and, and, um, we're, we're like, okay, like we're, we're not doing anything right now. Uh, might as well just, let's just swing by, you know, Siam Royal, pick up some pad thai, and, and let's, let's deliver it to this person and, and let, let's try to learn how this whole delivery thing works. And, and we did. We delivered to this guy in, up in Alpine Road, I remember. Um, he, he told us he was a... I was asking him, "Oh, how did you hear about us?" You know? "What, what, what do you do?" He told us he was a, he was a scholar, and then he handed me his business card, and it said he was the author of a book called Weed the People, and that was like our first ever delivery, right? It was [laughs] he, it was like the best deli- first delivery slash worst delivery you could have asked for. Um, we, we couldn't make this stuff up and, and, and yeah, and then the next day we got, you know, two more phone calls. The day after that we got five, and then it became seven, and then became 10, and then soon we started gaining traction on campus with paloaltodelivery.com which was, which was, um, which was pretty crazy because think about it, right? This was a, a landing page. Um, you had to look up PDF menus to place your order, and then have to call in. Um, this isn't exactly the most professional looking site, yet people were still... We ste- we kept getting phone calls. We kept getting orders, and, and that's kind of when we, when we knew we were onto something. Um, when people are willingLike, we knew we found a s- need people wanted when people are willing to put up with all this. So

6. 6:15 – 8:13

   Launch fast and “do things that don’t scale”: the early DoorDash operating system

   1. STStanley Tang6:15

      I think another key point, um, to remember is that we launched this in about an hour, right? Like, we didn't spend, you know... We, we didn't have any drivers. We didn't have any algorithms. Uh, we didn't spend, you know... We didn't have a back end. We didn't spend six months building, like, a fancy dispatch system, and we didn't have any of that. We just launched, um, because at the beginning, none of that is necessary, right? At the beginning, it's all about testing your idea, trying to get this thing off the ground, and figuring out whether this was something people even wanted, and it's okay to, to hack things together at the beginning. Um, at YC there's a mantra we, uh, we like to talk about, is doing things that don't scale. So at the beginning, we were the delivery drivers. Um, you know, we would, you know, go to class, and then after class, we would go, you know, deliver food. Uh, we were the, you know, customer support. Like, I sometimes had to take phone calls during lecture. Uh, we, we had to, we, we spent afternoons just going down University Avenue passing out flyers about, trying to promote Doordash. Um, I mean, we didn't have any dispatch system, so what we had to do was, you know, we used Square to charge all of our customers. Uh, we used Google Docs to keep track of our orders. Um, we, we used Apple's Find My Friends to keep track of where our, all our, our drivers were. You know, s- stuff like that. Um, just figuring out, like, what's... Just hacking together solutions, just trying to get this thing off the ground. Um, in fact, at one point we were growing so fast that Square actually shut our account down because we were under suspicion of, for money laundering.

   2. SPSpeaker7:55

      [laughs]

   3. STStanley Tang7:55

      Um, I mean, think about it. We're getting small chunks of, like, 15, $20 orders coming in at a rapid pace.

   4. SPSpeaker8:01

      [laughs]

   5. STStanley Tang8:02

      Um, it was... Yeah, and luckily my co-founder Tony worked at Square, so he just emailed s-

   6. SPSpeaker8:07

      [laughs]

   7. STStanley Tang8:07

      ... some buddies there and, uh-

   8. SPSpeaker8:10

      [laughs]

   9. STStanley Tang8:10

      ... everything was solved.

   10. SPSpeaker8:12

       [laughs]

7. 8:13 – 9:14

   Why manual work is strategic: becoming experts through hands-on operations

   1. STStanley Tang8:13

      Yeah, and, um, another thing about doing things that don't scale is that it also allows you to become an expert in your business, right? Like, driving helped us understand how the whole delivery process worked. You know, we used that as, as an opportunity to talk to our customers, talk to our restaurants. Um, we did dispatching, which helped us figure out, you know, how... We manually dispatched every driver s- and that helped us figure out, you know, what our driver assignment algorithm should look like. Um, we did customer support ourselves, you know, getting real-time feedback from, from our customers. I remember, you know, for the first few months when we got started, we would manually email every single one of our new customers, um, and at the end of every night, and just asking them, "Oh, how was your first delivery? How did you hear about us?" And, and we would personalize all these emails, right? Like, if I see someone order chicken skewers from Orange Hummus, I would say, "Oh," like, "I love Orange Hummus." Um,

8. 9:14 – 10:43

   The “ice cream” moment and the transition to scaling systems

   1. STStanley Tang9:14

      you know, "How, how, how were your chicken skewers?" Um, "How did, how did your first delivery went?" You know, just feedback like that was, was really valuable, and our customers really, really appreciated that. Um, and, and I remember, um, one time, this was during YC, we were at a, we just came out of a meeting with one, one of our restaurant partners, and, you know, we, we wanted, we heard about this ice cream store that just opened up, you know, on University Avenue called Cream, and we wanted to go try it out. And then all of a sudden, our co-founder back at our, you know, office/house texted us saying, "Oh, we need drivers on the road. We, we got a huge spike in, in demand." So we debated for maybe, you know, 10 seconds, like, "Should we go get ice cream or should we go, go deliver?" Um, obviously we went and delivered, but that kind of became our motivation on, you know, scaling, right? Like, if, if we can scale, then we could go get ice cream next time.

   2. SPSpeaker10:13

      [laughs]

   3. STStanley Tang10:13

      Um, [laughs] so, so yeah, I think that kind of, um... And, and now of course, we, we've scaled across different cities. Um, now we have to worry about building out automated solutions and, and dispatch systems and figuring out how do you match demand and supply and, and all, all that fancy technology stuff. But none of that matters at the beginning because at the beginning it's all about getting this thing off the ground and trying to find, um, product market fit. So just to summarize. So th-

9. 10:43 – 16:15

   Stanley’s three takeaways + audience Q&A on early growth, timing, and vision

   1. STStanley Tang10:43

      there's three things I would say that I learned from, from doing Doordash is first, test your hypothesis. You wanna treat your startup ideas like experiments. Um, the second thing is launch fast. We launched in, you know, less than an hour with a, with a really simple landing page. And, and finally, it's okay to do things that don't scale. Um, doing things that don't scale is one of your biggest competitive advantages when you're starting out, and you can figure out how to scale once you have the demand. And, and maybe once you've scaled, then you can go get that ice cream. Thanks.

   2. SPSpeaker11:16

      [applause]

   3. STStanley Tang11:22

      Sure.

   4. SPSpeaker11:27

      How did your first customers hear about you?

   5. STStanley Tang11:30

      Yeah. So question, question was how did our first customer hear about us? Um, our very first one, I have no idea. Um, we, we just launched Pal- PaloAltodelivery.com. We didn't do any marketing. Um, so I assume he just must have typed in Palo Alto Delivery into the, the web browser. Um, and then after that, we didn't do, we did barely any marketing. I think I sent out, like, one email to my dorm, and that was about it. It was all through word of mouth, and, and that kind of just validates, you know, just how strong of a need you found, you know, when people just start talking about you and they're willing to put up with all this, um, you know, terrible user experience, terrible design, and stuff like that.

   6. SPSpeaker12:11

      When you started, um, it seemed so obvious to you. You were wondering why has no one done this. What's your answer now looking back?

   7. STStanley Tang12:17

      Yeah, I mean, looking back, I think, um, I think the biggest thing is, is mobile. Um, s- the fact that now everyone has one of those in their pocket, and we kind of saw that trend and, and thought, you know, what if you can design, you know, a delivery system that was entirely based off mobile? You know, where you don't have an... You don't ha- have to have any infrastructure, um, or delivery fleets. Instead, you could, you know, instead of hiring drivers full time, purchasing vehicles, what if you can tap into a more of an on-demand pool of independent contractors and only send orders to them, um, when, when they have time. So, so that's kind of the, the insight we had. We, everything was done through mobile. Yeah.

   8. SPSpeaker13:07

      Um, did you know you were gonna be a startup, or were you just making some money on the side at first?

   9. STStanley Tang13:12

      Yeah, I mean, at the time we just wanted... We were all really passionate about building technology for small business owners. Um, and, and honestly, this delivery thing came out of a experiment, right, with the landing page. Like, it wa- it was literally an experiment. We, we didn't, we weren't expecting anything, and it just took off and, and we went with it. And logistics was always something we were really passionate about as well. You know, like logistics, transportation, and it's kind of the perfect fusion of, you know, how do you help small business owners through delivery? Back, yeah.

   10. SPSpeaker13:45

       Did you launch the mobile app first or the website? And how long did it take from idea to the first launch?

   11. STStanley Tang13:54

       Yeah, it was, we started with this, this, this landing page right here. Um, took us an hour to launch.

   12. WWWalker Williams14:05

       Um, how does DoorDash stand out in a space filled with, uh, Grubhub, Postmates, and Seamless, and other companies?

   13. STStanley Tang14:11

       Yeah, um, y- yeah, the question was how does DoorDash stand out among a very competitive space? I mean, I mean, in the beginning, I mean, for us, consumer demand has never been the problem even up until now. So for us, it's just about, you know, finding a need and, and just focusing on serving that, serving that demand. So in the beginning, competition doesn't really matter when you're getting started.

   14. SPSpeaker14:40

       How long did you dedicate to incorporate into a company after you first delivered?

   15. STStanley Tang14:44

       Yeah, question was how long it took for us to incorporate into a company, uh, when we went through YC. So we launched in January 2013, and then we did YC that very summer, and we, when we decided to take this idea through YC, we incorporated.

   16. SPSpeaker15:00

       Stanley, let's do one more question.

   17. STStanley Tang15:01

       One more? [laughs] Um, yeah, you.

   18. SPSpeaker15:07

       What do you plan to do next or where do you plan to go with this besides, like, food delivery?

   19. STStanley Tang15:12

       Yeah, I mean, the question was where do we plan to go beyond food delivery. I mean, for us, the, when we started DoorDash, it was always, you know, like I said, about, you know, helping small business owners and figuring out, you know, h- how do you serve this for any local merchant, whether you are a macaron store or a restaurant, um, or a furniture shop. I mean, like that's still our focus. Um, that's like the long-term vision. For now we're just focused on restaurant delivery as a way to scale. Um, but ultimately that's where we want to end up in.

   20. SPSpeaker15:46

       Cool.

   21. STStanley Tang15:47

       Thanks. [audience applauds]

   22. SPSpeaker15:54

       Okay, next is, uh, Walker Williams from Teespring. Uh, Teespring went through YC a year and a half ago, something like that.

   23. WWWalker Williams15:59

       Yeah.

   24. SPSpeaker15:59

       Uh, I almost rejected them, um [audience laughs] because it sounded like a dumb idea. But, uh, now they're doing hundreds of millions of dollars a year of revenue, so very luckily I did not. Um, and Walker's gonna talk also about doing things that don't scale.

10. 16:15 – 17:45

    Walker Williams’ framework: ‘don’t scale’ across acquisition, champions, and PMF

    1. WWWalker Williams16:15

       All right, thank you guys for having me. Uh, my name is Walker. I'm the CEO and founder of Teespring. Uh, for those of you guys who don't know what Teespring is, we're an e-commerce platform that allows entrepreneurs to launch products and apparel brands, uh, without risk, cost, or compromise. Today, the company is about 180 folks, uh, and we ship tens of thousands of products each day. Uh, and I wanna talk to you about one of the most fundamental advantages you have as a startup, and that's that you're able to do things that don't scale. And I define things that don't scale as things that are sort of fundamentally unsustainable. They will not last. They will not bring in the millionth user. Uh, and where they break, it's, it's usually time, but it could be a number of other things. But it's really growth strategies that won't take you to a million users. And there's three real places I wanna focus on today. Uh, the first one is finding your first users. The second one is turning those users into champions, and the third one is finding your product and market fit. So finding your first users. The first thing you have to understand is that there is no silver bullet for user acquisition. Uh, you know, everybody, and, and this includes me when we got started, you look for that, that dream solution, that pay-per-click campaign that has tremendous ROI, uh, some accelerating partnership that's gonna springboard you into the stratosphere, an affiliate agreement, something that solves it for you. But the reality is for the vast majority of companies, and in fact for

11. 17:45 – 20:47

    Finding the first users: founder-led, unglamorous, high-effort acquisition

    1. WWWalker Williams17:45

       every company that I've had the chance to speak to the CEO of, that's just not possible. Those are unicorns, and most of the companies that from the outside look like they've had this dream growth curve, the reality is that those first users were impossibly hard to get. And let me tell you about the story of a ridiculously unsustainable business. So this is Teespring in 2012. Uh, when we first got, when we first launched-Uh, the, the business couldn't have looked worse. It took days of meetings. We had to offer free design, days of revisions back and forth. We'd have to launch the product ourselves. We'd have to do the social media, all to sell, like, 50 shirts for a local nonprofit, uh, and generate $1,000 of revenue. A- anybody looking in would have said, "You guys need to give up. This is a, a terrible idea." Uh, but a- as time went on, those users start to add up. And, you know, I, I think something you have to understand is that when, when you first launch a company, just by virtue of the fact that it's a new product, you're gonna be bad at selling it, right? You've got no idea what the pain points of customers really are. Uh, you've never sold it before. You don't have any success stories to point to or testimonials. Those first users are always going to be the hardest. And so it's your responsibility as a founder to do whatever it takes to bring in your first users. And, you know, it, it's gonna be different for every company. The common thread that I hear is founders need to spend personal time and effort, a lot of their personal time and effort, to bring those users in themselves. Uh, it, it, you know, it can mean a number of thing, everything from sending 100 emails a day, getting on the phone and just calling as many people as you can, uh, going through a network if you have a network like Stanford or Y Combinator, uh, anything you can do to get that first user. And, you know, I really equate it to, uh, pushing a boulder up a hill. And if you think of, like, a very sort of smooth hill, the ... When you get started, the incline is the steepest, and those first inches are the hardest. And over time, as you get farther and farther, the incline steadies out. It gets easier, and hopefully, eventually, you reach a point where you're at the top of the hill and the boulder starts to roll on its own. And so those first users, you just cannot focus on ROI in the sense of time. Do not expect to spend an hour and return thousands of dollars. Maybe Stanley is one of those unicorns. That was a pretty incredible story. But for, for most of us, uh, those first users are going to take a lot of hand-holding, a lot of personal love, and that's okay. That's essential for building a company. Uh, and the one sort of caveat of that is that I don't recommend giving away your product for free, and there's plenty of exceptions to this rule. But in general, cutting costs or giving the product away is an unsustainable strategy I wouldn't recommend. You need to make sure that users value your product. Uh, and,

12. 20:47 – 25:49

    Creating champions: obsessive customer conversations and making problems right

    1. WWWalker Williams20:47

       you know, people have a different ... They treat products that are free in a, in a much different way than a paid product, and oftentimes it can give you a false sense of security of, "Oh, we're getting all these users. Surely, we can convert them over to paid." The second aspect is what happens when you get those users? How do you turn those users into champions? And a champion is a user who talks about and advocates for your product. And I'm a firm believer that every company with a great growth strategy has users who are champions. Uh, and so really the easiest way to build, take, turn a user into a champion is to delight them with an experience they're gonna remember, so something that's unusual or out of the ordinary, uh, an, an exceptional experience. And the easiest way to do this early, and again, something that is completely unsustainable, it's not gonna scale forever, is to just talk to those users. And pe- people will say this all the time, and you hear it's one of the sort of core tenets of Y Combinator is talk to users. But I, I cannot stress how important it is that you spend a large chunk of your time talking to users. Uh, and you, you should do it constantly, every single day, and as long as possible. Uh, today at Teespring, I'm still the catchall email address, so anytime somebody misspells support or writes an email address that doesn't exist, I get that email. And so I still do about 12 to 20 customer service tickets every single day. Uh, I spend hours each night reading every single tweet, probably a little bit OCD, but that's okay. Uh, I read through all the Teespring communities. You're never gonna get a better sense for your product than actually listening to real users. Uh, and, and especially in the early days, you're just ... The product you launch with and the feature set you launch with is almost certainly not going to be the feature set that you scale with. And the quicker you talk to users and learn what they actually need, the faster you can get to that point. So there's three ways to talk to your customers. Uh, you can run customer service yourself. Uh, up until Teespring was doing about 130, $140,000 a month, uh, my co-founder, Evan, and I, uh, did everything in customer service. Uh, this is one that there's gonna be an instinct to quickly pass off, uh, a- and that's because it's painful. Uh, even today, when I open our customer service portal, uh, I, I have, like, a, an emotional reaction where my stomach sinks because it sucks talking to users who have had a terrible experience, and it's painful. It's something that you love and you've put so much effort into, and you've gotten it wrong, or they've had a terrible experience, or somebody didn't treat them right. Uh, but it's so important that you go through that and learn what you need to build, what you need to fix. Uh, the second step is to proactively reach out to current and churned customers, and, and churned customers are customers who have left. And this is one that, that often falls by the wayside in the sort of the pursuit of new customers. But y- you wanna make sure that your customers are having a consistent, good experience. You don't wanna just leave those current users as sort of ... You don't wanna take them for granted. And then when a user actually leaves your service, you wanna reach out and find out why, both because that personal outreach can make the difference between leaving and staying. Sometimes people just need to know that you care and it's going to get better, uh, and becauseEven if you can't bring them back, there's a chance that you can learn from the mistake you made that caused them to leave and fix it so you don't churn users out the same way in the future. And the final one is, a- again, the one that I'm probably too OCD about, but it's social media and communities. You need to know how people are talking about your brand. You need to reach out and make sure that, uh, when somebody does have a bad experience and they're talking about it, that you make it right. Problems are inevitable in startups. There's gonna be issues. You're not gonna have the perfect product. Things are gonna break. Things are gonna go wrong. That's not important. What's important is to always make it right, to always go the extra mile and make that customer happy. One detractor who's had a terrible experience on your platform is enough to reverse the progress of 10 champions. It's all it takes is one person out there to say, "Ah, no, you shouldn't use those guys for X, Y, and Z reason," to ruin a ton of momentum. Uh, so even if it's, uh, you know ... There's examples in the early days where we would mess up massive orders. We'd print the color slightly wrong, it would be the wrong size, and it would be like half of our GMV for that month. And we would know we got it wrong. The customer would be unhappy. And sort of this instinct is, well, you know, it's, it's only a little bit off, or it's not completely wrong, it'll be fine. But the reality is you just gotta bite the bullet and make sure that it's right. And those customers, the customers that are often originally the most frustrated, tend to turn into the

13. 25:49 – 32:59

    Iterating to product-market fit: optimize for speed, not perfect architecture

    1. WWWalker Williams25:49

       biggest champions and the longest term users. And the last one I wanna talk about is finding product and market fit. And what I mean by that is that, you know, I mentioned this earlier, but the product you launch with will almost certainly not be the product that takes you to scale. Uh, and so your job in those early moments, in those early days of a startup, is to progress and iterate as fast as possible to reach that product that does have market fit. And as engineers, your instinct is gonna be to build a platform with beautiful, clean code that scales, right? You, you don't wanna write, uh, sort of duct tape code that's gonna pile on technical debt. But you need to optimize for speed over scalability and clean code. A- and sort of an example of this is in the early days, we had a couple enterprise customers come to us, sort of bigger nonprofits and say, "Hey, we really like your service, but you're missing these fundamental things, so we can't, we're not gonna use it." Uh, and we looked at sort of what it would take to build out those features, and we weren't sure they were gonna work long-term, but we wanted to try it. Uh, and my co-founder, Evan, who is, uh, our CTO and a, a million times, uh, better developer than I am, sort of ran the math and figured out that if we did it the right way, it was gonna take about a month to build out these features. And in a startup, a month, you know, you live in dog years, a month is a year, and that just wasn't gonna do. So he actually went out, duplicated the code base, duplicated the, the database, and was able to basically build a completely different product that he didn't have to worry about the existing users for to serve these enterprise customers. We gave them the tool. They onboarded. They generated a lot of revenue. Eventually, we learned what features were core, and we integrated them into the core product. But what would have taken a month, we were able to do in, you know, three to four days. A great rule of thumb is to only worry about the next, uh, order of mani- magnitude. So when you have your 10th user, you shouldn't be wondering, "Well, how are we gonna serve a million users?" You should be worried about, "How are we gonna get to 100?" Uh, when you're at 100, you should think about 1,000. It's, it's one of those things where necessity is the mother of invention, of all invention. So e- when you hit that breaking point, like the Twitter fail whale is a great example. And Teespring, there were months, months stretches where every single night the site would crash, every night and, and during the day. And every single person on the team would go to sleep with their phone on loud under their pillow so that inevitably when the buzzer went off, we could quickly get up, restart the servers, and go back to sleep. And this would happen daily. But the reality is that it was worth it. And, you know, you'll end up with these huge pain points and all this technical debt and regret, uh, but i- i- it's worth it just to get to that end goal and that product fit faster. You will make it work. You will survive. Uh, that, those sort of bumps are just speed bumps, and speed is so, so important early. So the, the lesson that I've been learning lately is, uh, you know, you wanna do these things that don't scale as long as possible. There's not some magical moment. It's not the Series A. It's not when you hit a certain revenue milestone that you stop doing things that don't scale. This is one of your biggest advantages as a company, and the moment you give it up, you're giving your competitors that are smaller that can still do these things that advantage over you. So as long as humanly possible, as long as it is a net positive, you need to be spending time talking to your users. You need to move fast in development, as fast as possible. Uh, but don't give it up willingly. It should be ripped from you. And so sort of trying to practice what I preach, uh, I wanna give you guys my email address. If you guys have any questions, if you wanna learn about Teespring, if you wanna print some T-shirts, fingers crossed, just shoot me an email. Uh, I, I'd love to help and I'd love to speak to you. And the last thing is we've, uh, created an official how to start a startup tee with Sam, uh, and all proceeds are going to Watsi. I couldn't miss this opportunity to sell. Uh, so if, if you guys wanna grab one of the official tees, just go to teespring.com/startup and it's supporting a great cause. Thank you. [audience applauding] Sure.Go ahead. Yeah.

    2. SPSpeaker30:23

       Um, the T-shirt printing business, uh, it seems like it has, um, a lot of competition. So what made you, uh, what convinced you, um, to think this is a viable market, uh, even when-

    3. WWWalker Williams30:36

       Sure

    4. SPSpeaker30:36

       ... it wasn't going well initially?

    5. WWWalker Williams30:37

       You know, i- so the question was, uh, the T-shirt printing business has a lot of competition. What would convince us to get into the market? Uh, i- I think there's two factors to it. So first, I, I completely agree. From the outside, uh, people have been telling us that this is a silly idea since day one. Uh, and sort of at every order of magnitude we reach, people will come and say, "Hey, that's a terrible, terrible idea. Why are you doing that?" Uh, but the reason that we launched Teespring is because we ran into a personal pain point where we had a need, and we looked at the current solutions. I was a student at Brown, and I was trying to create a Remember The Bar shirt for a dive bar that got shut down, and I realized that nothing needed, nothing matched my needs. Uh, and so because I knew that I had that pain point, and I knew there was market fit, and I had seen people adopt the product, I knew there was something there. Uh, and it was also one of those things where you c- you can sort of feel the, i- i- you can, you can sort of feel the wind on your back, where people are adopting the product quickly. Uh, your, the pain point is clearly there. It's not a met need. So I would say that oftentimes great ideas start look, by looking like silly ideas, and then you can sort of feel out whether or not there's a scalable business here by how people are adopting it. Is it possible to bring customers aboard? Sure.

    6. SPSpeaker31:59

       Are nonprofits your biggest customer base? Like-

    7. WWWalker Williams32:02

       No, you know, today our biggest customer base are, uh, entrepreneurs who are trying to build brands and businesses. You know, we have, uh, a g- a little over 1,000 people that make their full-time living on Teespring today, uh, via brands they've launched. And the other side is influencers. So, uh, YouTube stars, Reddit communities, bloggers who want to add product, merchandise as a way to sort of create a brand and, and monetize that affinity. So those are our two biggest markets. We still do work with a lot of nonprofits, uh, and love working with them. Uh, it's still a part of our business, just not the majority.

    8. SPSpeaker32:37

       Thank you.

    9. WWWalker Williams32:38

       Yeah. [clapping]

    10. SPSpeaker32:44

        All right. Now we have Justin Ka- uh, Justin was the founder of Kiko, and then Justin.tv, which became Twitch, and is now a partner at Y Combinator, and is going to talk about PR.

14. 32:59 – 44:38

    Justin Kan on press: set goals, craft real stories, and run the PR ‘sales funnel’

    1. JKJustin Kan32:59

       Cool. Well, while I wait for the slide to happen, um, I started a bunch of startups, but I think you've heard a lot of awesome, you know, kind of how did I get started stories. So I'm gonna talk about something very specific, uh, that people always have questions with, which is press, and like how do you get it? How does it work? Uh, it's something, this is kind of like an abridged version of, uh, what we talk about at Y Combinator and, um, hopefully you guys will find it helpful. So, uh, you know, a lot of people, I think, when they first get started with entrepreneurship think about getting press and being in the press as something that happens magically. Uh, they think about it as like something that, you know, journalists are like out there, like trying to find the best stories and really, you know, like discover the, like it's like a meritocracy. Um, which is like absolutely not the case. Um, so before you think about press, one of the things you really wanna think about is who you wanna reach and like what's your actual goal, right? A lot of people, like I know when I got started, I wanted to just be in the news because I thought that's what like you did as an important company, and it turns out it, if you don't have any goals, you're not gonna achieve them, right? I mean, that's true of like pretty much everything. And with press, if you just like aimlessly wanna be covered, um, it's not really going to do anything for your startup. So getting like in the news is nice because you can send it to your mom or, and say, "Hey, I have a real job. You know, look, we're in The New York Times." But if you don't have a actual, um, goal for your, like a business goal with it, it's really just like not a good use of time. Um, so, you know, there's many different goals. Uh, one example is, you know, you might want to with, with Socialcam, which was a spinoff of Justin.tv, uh, it was like an app that was kinda like video Instagram, and our goal was really to be known as like a video like Instagram app and like be thought of in that context when it was, you know, time to, uh, pitch our like Silicon Valley investors and, and influencers. And so we really wanted to get in like tech press and, um, kind of be positioned as this like new hot social app. Um, with, uh, Exec, one of my goals, um, was the second, like to get customers. So, uh, Exec was like a cleaning s- local cleaning service, and our goal was to get people in San Francisco to use it. It wasn't like useful to get the national press because, uh, you know, 99% of those people couldn't use it. So we really targeted initially a lot of, you know, like SF Chronicle and, um, like local San Francisco press that would directly talk to people who could potentially use our app. Um, for Twitch, which is probably the thing that you guys mostly know, uh, it was, you know, Twitch was a ESPN for gaming or kinda like a live streaming community of g- of gamers. And, uh, our goal was to, with press, was like to reach the gaming industry 'cause like when we, when we started, now it's like 55 million uniques, and like people in the gaming industry know about it. But when we started, nobody really knew that like it was a place to advertise and like it wasn't like known as like a, you know, we were a very nascent small gaming community. And our goal was to like get people in the gaming industry, whether they were developers or advertisers, to think about us as like an important place where like influencers were. So we really targeted, you know, industry trades and game dev blogs and places where like gamers, or you know, Gamesbeat, stuff like that the industry was reading. So, um, you know, what's an actual story? I think there's, you know, there's a bunch of different types of stories, um, but these are usually the ones that you see in, um-You know, startups, uh, those are like product launches, like you la- just launched a new version of your app. Uh, there's fundraising. For whatever reason, uh, you know, press loves to write about fundraising even though it's not very interesting. Uh, so you know, like, if you raise a million-dollar seed round, pretty much you can get that covered. Um, milestones or metrics, like you've achieved a million dollars a, um, a week in revenue. That's one of our, um, one of our, the, the company that bought Exec just, uh, announced that they, they achieved a million dollars a week in revenue, and it was covered pretty widely. Um, like business stories, which generally happen when you're, like, already a successful company. Someone, you know, like a, a New York Times or New Yorker or business magazine will, like, wanna cover, like, kind of the story of your startup. Um, usually you don't have to worry about that in the beginning. Uh, what I like to call stunts, which are like, um... I don't know if you guys remember, but a couple of years ago, this YC company called WePay, uh, dropped a block of ice with money frozen in it outside of the PayPal, like a PayPal developers conference, uh, 'cause they were like, PayPal was like no- in the news for freezing, um, you know, like various, uh, developers' accounts. And so that was like a, uh, widely covered because it was just so, you know, kind of an interesting thing and, and it really, um, it, it, it got them in the story, right? They wouldn't have been talked about in the context of PayPal at all really. Um, hiring announcements. If you're a big enough company and you hire someone really important, people will wanna cover that. And then contributed articles, like you writing some sort of industry overview or some opinion piece in, like, maybe a tech blog or, um, site like that. So those are like, you know, basically any of those things can, can be stories. One of the things that, um, people usually don't think about is that, you know, you really have to think about, like, everything... When you start a startup, you think that everything you're doing is interesting, but, um, that's not true for, like, other people, right? Like y-you, what you need, really need to think about is like, objectively, if I wasn't the founder of this company, would I wanna like read a story about what I'm pitching, right? So you know, your incremental feature release, your 2.01, you know, feature release might not be interesting if, like, j-just because you added like a, you know, find your contacts in Facebook or something. Like, you have to, you really want to take a step back before you invest the time in, like, actually trying to pitch a story and think, does anyone, will anyone actually wanna read this? Because what people are, you know, journalists and bloggers are looking for is things that people actually wanna read, right? Um, the other thing is, like, you don't actually have to be very original. Your press and news doesn't have to be original. Um, you know, like you don't, you just have to be like what I like to call original enough, right? So you don't wanna be the second cooler company to raise five million dollars on Kickstarter, right? That's like, the, the first guy gets like all the news. But like if you're the, um, I think the first, uh, video game console to raise ten million dollars on Kickstarter, like Ouya was, that was like, well, they raised like a million dollars in, in twenty-four hours. That was like huge news because they were kind of like the first in that category, right? Even though other people had raised a lot of money on Kickstarter before. Um, so just like think about your stories in the context of like where they are in the, like what else has been written about, and if they're like kind of novel enough and they haven't been something that was like just written about in the news. Um, so one of the like actual mechanics of getting a story, um, this is like pretty tactical. So what, if you want to get your news in, you know, the, the press, basically there's some easy, simple steps. So it's basically, getting press is like, you can think of it like a sales funnel. So you're gonna talk to a lot of people, and, um, not all of them are gonna convert, right? And so you shouldn't be upset when someone, like one individual person or reporter or whatever, doesn't write your story. Um, the first thing is like you have to think of a story, right? It's gonna be one of those, probably one of those things that I listed up before. Um, the second step is like you wanna get introduced to a reporter or multiple reporters who are gonna write about your thing. Um, it's like much, much easier, just like any sort of business development, to actually get in touch with them through someone, um, it's like, you know, rather than cold emailing them. Uh, the best thing to do, I found, is like, you wanna go to entrepreneurs who were just written about, like your friends who maybe started a startup and they were covered on TechCrunch, get them to introduce you to your, you know, that reporter who wrote about them. Um, the reason that's good is because like from the entrepreneur's perspective, like the easiest thing to do in the world is introduce you to a reporter who already wrote about them, right? They don't like need anything else from that reporter. Um, they're actually doing that person a favor if your story's interesting. It's not like you're asking for intros to investors or potential, uh, you know, people that they would wanna hire, employees. Um, and then from the reporter's perspective, they're getting intro to someone who, you know, they already vetted as interesting. Like they're giving an intro from someone who they know, they thought was interesting enough to write about, and so like by the transitive property, you're basically gonna, they're gonna think you're, you know, probably interesting. Um, so you get like an email that's like, oh, you know, from this guy that introduces you to, um, the reporter, and you want to get in contact with them with enough time that you can actually get them to like write a story, uh, probably a week in advance or more, um, because they're not gonna like drop everything they're doing to just write about your news. So a lot of people, especially first-time entrepreneurs, will come and say like, "Oh, Justin, I'm launching this product tomorrow. Like, can you get me in this, you know, TechCrunch or something?" And that's like probably not gonna happen unless you already have a, a relationship. The best way to do it, to, the best thing to do is like give yourself some lead time, get that intro in advance. And then, um, so then you should, uh, like once, once you've set a date for your news to go out, you're gonna launch your product like in two weeks, you have this intro, you set, set up some sort of meeting, um, and you really wanna get the, the reporter to like invest time and effort in you, right? Because they don't, like there's like kind of a sunk cost fallacy at play. Um, basically, if you, the more time and the m- they-spend with you, the more likely they are to like actually write something. So you, the best thing to do is get like a face-to-face meeting, right? Lots of people, report bloggers actively don't want to meet you face to face. But like, um, if not that, then get like a phone call, right? And get on the phone with them. The worst thing to do is like just have an email exchange, right? Because it's very easy for them to like forget about it, ignore it. Um, so you wanna like actually try to get in contact with them, set up a meeting. Okay, so then the next step is actually pitch them. Um, what I usually do is actually write out all my new... Like the story that I would want to see published, like in bullet points, and I like will write out the story, my, my ideal story, and I'll memorize it, like the entire like set of bullet points. And, uh, when I have a conversation with them, if it's in person, I'll like walk them through this. Like I'll have a conversation that's like structured like my outline, and they'll be like taking notes, right? And then they'll go and transcribe those notes into a story. And so it's like a tell- Like what I wrote will eventually be translated into a actual story. And, um, you know, by preparing, you can actually con- you know, much more easily control the conversation and not forget critical things like, you know, your co-found- mentioning your co-founder's name or like what the f- all the features in your awesome app are. Um, if it's, I'm doing this like on the phone, I will like have these bullet points in front of me, and I will make sure to like walk through a conversation that a- includes all of those things. Um, so, you know, you do that. They, you have a pitch. They take, they take notes. They're gonna write the story at this time, and then the next thing is like follow up. Like a, a couple days or a day before your actual news goes out, you want to send them an email that says like, "You know, this is the time we're launching the app. Like, ju- thanks for meeting. Um, here's like collateral," like media if w- if you have like a video or photos or something you want them to include, screenshots. Um, like how to spell your co-founders' names and your name. Just like include all the information that I really care about, and I bold it, right? Um, and then that's it. Then hopefully the, the day comes, you press submit

15. 44:38 – 52:08

    PR firms, sustainability limits, and the Twitch Plays Pokémon case study

    1. JKJustin Kan44:38

       on the release to the app store, and at the same time they release their article on TechCrunch, and you are famous. [laughs] Okay, so a lot of people ask us about PR firms. Um, so you know, I think in the beginning, it's kind of like, um, everything else you do at a startup. You wanna do it yourself before you hire someone else to do it, and, uh, it's actually pretty easy, especially with tech press who, you know, and, and bloggers who like constantly need new things to write about, and, you know. You should, I strongly encourage people to like try it themselves and kind of get started by learning the process themselves before they hire anyone. One thing I'll say is that like firms can, can only help you with like kind of the contacts and the logistics, but they can't help you know what's interesting about your company or very, you know, I've never had anyone who's been able to tell me what the stories that I'm producing are. They've only been able to tell me, you know, like your, um, you know, like here's are the, here's a list of reporters that you might wanna contact. Um, so you know, you really have to be responsible for thinking about like what's interesting about your company and what are you doing, you know, what's the roadmap of interesting things that you're working on. Um, they're also really expensive, you know. I think we were spending between $5,000 and $20,000 a month, which is like, um, at very, you know, for various firms. Um, that's a lot for a startup, right? You should, it's generally not a good use of money, I would say, especially in the very early days. Um, you know, getting press is, is a lot of work, uh, so you should really make sure it's worth it. Um, you know, like I said, it really, getting press doesn't mean, it feels like, it's like a vanity metric, right? It feels like it, you're being successful because lots of successful companies, you know, like Google and Facebook, are covered in the press all the time. But it doesn't actually mean you're successful. It doesn't q- you know, actually give you, you know, mean that you're getting, you're making money, you're getting users, you're making those users happy. Um, it's, you know, sometimes it's a really good strategy for getting your first 100 or 200 or 1,000 customers, um, but it's really not a scalable user acquisition strategy, so it's something that's really just like a, you know, a bootstrap. Um, you can't like just get like infinity articles written about you. Like eventually people are going to like get tired of hearing about your company, and usually that happens pretty, pretty quickly, right? The, the whole point about news is it's new. And so, um, it's pretty, pretty, pretty hard, unless you're Google, to like get covered in the press like every week, you know, with something. Um, to, you know, if you decide it's worth it though, like you do wanna have like a regular heartbeat of news. Um, so that's like something where, you know, you're planning out those types of the, what, you're thinking about what you're doing that matches those, you know, maybe seven story types in the future. And like, you know, when I was, um, you know, working primarily on marketing and, and PR, it would be, I would like make a schedule on like a calendar of what, when we're gonna launch things and like make sure to space them out, but like have them, you know, appear regular, at regular intervals so that people like didn't, wouldn't forget about us, um, and we could kind of maximize our coverage. And, um, you would really wanna keep your, you know, contacts fresh. It's like really a relationships business, so once you, someone writes about you, should keep going back to them for, for more, um, for writing about, you know, to write about you in the future. It's kind of like, um, you know, when, when basically people, you know, you're more likely to do something for someone you've already like done something for. You know, you really, like it's, if you just, you know, I would try to establish good, good relationships with a couple reporters over time that you can go to to, you know, break news, and it, it will come in handy later if you ever have, are in the position, if you're fortunate enough to be in the position where people are writing negative things about you. Um, you know, having relationships will help you, you know, kind of get your side of the story out. Um, and the last thing is like, you know, it's kind of, uh, golden rule really, or maybe more of like a pay it forward really applies here. Like you should help your fellow entrepreneurs get, get coverage because they will help you get coverage. The best way to get covered is, um, really through these like warm introductions. And so, uh, you know, when I'm, ever I'm, you know, meeting with reporters, I always help like-throwing out the names of like other things that I think would be interesting stories for them, and usually that comes back. They, the, the reporters like it because they, it's like helping them find interesting stories, and, um, you're more likely to get, you know, leads back from those entrepreneurs that you help out. So if you're interested in learning more about press, here's two resources that I really liked. Um, Jason Kincaid, who is a former TechCrunch reporter, just wrote a really, really great overview that covers a lot of the things I just talked about in more depth and from the, you know, blogger side. Um, that was a really great book. And then, uh, kind of an evil resource is, uh, this book, Trust Me, I'm Lying, which was written by [laughs] the, one of the, um, a former marketer at American Apparel, and he talks about like a lot of ways that he pretty, like, evilly actually mani- manipulated the press. But I think it's a pretty good look into, like, the psychology of like how people, you know, th- things spread on the internet, um, you know, how stories spread on the internet, and I, it's, it's, um, might be valuable to take a look at. Cool. That's, that's basically it. [audience applauds] One question? Just one?

    2. SPSpeaker49:50

       Two. Two.

    3. JKJustin Kan49:50

       Two que- Okay, two questions. Or zero questions.

    4. SPSpeaker49:58

       So when is the right time to start, uh, worrying about press altogether?

    5. JKJustin Kan50:02

       Uh, when is the right time to start worrying about press altogether? I think it's a really good way... Like, if you just, uh, the first time I launched, you know, my first products in our, in our first startup, um, for a lot of them, we got like zero attention, and we didn't really know how to even get 100 users. I think it's a really fine way to get 100 users, and a lot of companies in YC when they first launch their product, we'll encourage them to get out and just do one TechCrunch story to like get a few people to, to see it. Um, and it's good to get in the practice. I wouldn't like obsess over getting like coverage in multiple outlets or anything like that in the be- very beginning. All right, anything else? Sir.

    6. SPSpeaker50:37

       It seems like the biggest story about Twitch was the Pokemon thing.

    7. JKJustin Kan50:41

       Yeah.

    8. SPSpeaker50:41

       So like how much of a, how much of a role did you guys actually play in getting that out-

    9. JKJustin Kan50:46

       Yeah

    10. SPSpeaker50:46

        ... in the press, or was that just like, "Oh, shit, like this blew up. Awesome."

    11. JKJustin Kan50:49

        Uh, so Twitch, um, you know, had this thing called Twitch Plays Pokemon where developers set up a, like a Pokemon, like Game Boy game that was controlled by chat. So, you know, millions of people would be typing in A or B, and like the character would run, run, wand, wander around aimlessly.

    12. SPSpeaker51:05

        [laughs]

    13. JKJustin Kan51:06

        And, um, that was like a huge news story. And, um, I think that what we did was, you know, there's a couple parts. One, we set the stage by having other news stories that, so when someone from the BBC would Google like Twitch and be like, "What is this crazy thing that everyone on Reddit is talking about?" Um, they would like have some context. Um, the other thing is like we didn't come up with the idea for Twi- right? That was like fortuitous, but we helped like give it legs by, you know, making the company available to talk to the reporters and, um, suggesting follow-up stories about like, you know, there were stories not just about Twitch Plays Pokemon because 100,000 people were watching this Pokemon game, but because, um, you know, it finally, like there were stories when they beat the game, and there were stories when they launched Twitch Plays Pokemon, you know, Crystal or whatever the next Pokemon version was. And like, so we kind of gave that story like a little bit more legs, um, but we didn't, you know, originate it. It was the community really who, who originated it. All right, I think that's it. Thank you very much. [audience applauds]

Episode duration: 52:13