6 – Users/Distribution

<< (5 – Idea)   |  6 – Users/Distribution  |  (7 – Writing Tips)  >>


Summary: Deeply understand your users, make them extremely happy and know how you’re going to find them. If you’ve got traction, show it off.

Users

Understand your users. That’s the key. The essential task in a startup is to create wealth; the dimension of wealth you have most control over is how much you improve users’ lives; and the hardest part of that is knowing what to make for them. Once you know what to make, it’s mere effort to make it, and most decent hackers are capable of that.

Paul Graham – Startups in 13 Sentences

Every startup has users/customers. How well do you understand yours? The problem that sometimes comes up for founders (especially ones with a strong technical/engineering background) is that their product is a solution looking for a problem. Another is that they’ve built an overly complicated product that doesn’t really address the root needs of their users.

Show YC you understand your users. One question we and many other startups hear at office hours again and again is “Who needs this? … No, who really needs this?”

Your first answer is rarely good enough. You’ve got to convince the YC partners that you truly know who your users are, how to reach them, what their problems are, why this product fits into their life/workflow and solves their problems.

The thing we care most about in interviews (at least of things one can change) is how engaged the founders are with users. How do they know people actually want what they’re building? Have they talked to real, live users? What have they learned from them?

PG – Questions You’ll Probably Be Asked on Your YC Interview (HN Thread)

Let’s look at the way YC tries to get at the answer to these questions (YC application):

Q (1/3) Why did you pick this idea to work on?

Be careful! This is not a question asking you to explain why you’re personally passionate about X. Just because you love X does not make X a good idea. It’s fine if you feel this way, but I would not make this your primary reason for doing this idea.

It’s better that you chose this idea because you know a lot about the domain and see a real, unmet need either via personal experience or because you know certain businesses are willing and able to spend money to solve this problem.

Q (2/3) Do you have domain expertise in this area?

Ideally you have spent time studying this area, either academically, or through work experience / personal projects. It’s not the end of the world if you aren’t the world’s expert on this topic, but demonstrating any sort of expertise, even a highly trafficked blog in this area, would be a plus.

Q (3/3) How do you know people need what you’re making?

Ideally you can point to some interesting / surprising data or evidence to indicate that people really have this problem.

Distribution

Q: How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won’t be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?

the YC application

Distribution is also really important. I’m guessing a lot of applicants haven’t thought as much about this part of the app. That’s ok – I think distribution comes after finding product market fit (the whole thing about users) but it’s still a place where you can demonstrate you know your stuff.

Some obvious / basic ideas:

  • Double-sided referral (ala Dropbox) Make sure this really applies to your business as it is everyone’s favorite “free” marketing tactic and doesn’t always work.
  • Viral mechanics – Some products give their users a very strong incentive (or involuntarily cause them) to share your product with others and can
  • SEO – In order to pull this off, you need to prove there is a lot of long tail search traffic (or huge volume a few keywords) AND convince YC you can rank highly for the right keywords
  • Advertising – I would only bring this up if you can prove (with data) that you can acquire and monetize your users at a rate that is sustainable (Revenue per click > Cost per click) and scaleable (your targeted audience is sufficiently big)
  • Communities (blogs/forums/networks) – Ideally you are already an influencer in these communities or you could get in there and quickly build strong relationships with the right people.
  • PR – Some products are loved by the press (Hipmunk, Airbnb). Perhaps yours is too, but otherwise, unless you have amazing press contacts, this is likely not an easy option
  • Direct sales – This probably is going to be an important channel for enterprise level products or startups selling big-ticket items like Carwoo
  • Partnerships – For this to work, there needs to be strong partners with good distribution in your space and someone on your team who is a hustler / willing to get good at business development.
If you DO have a chicken and egg problem (it sucks!) it’d be worth reading this great article by Ribbon Farm – Ubiquity Illusions and the Chicken and Egg Problem. It’s long, nuanced and thought-provoking. A teaser:

If you want your metaphoric t‘s cross and i‘s dotted, the solution we are talking about is: fake the chicken while the egg incubates.

There are many ways to do this, most of them both stupid and illegal. For instance, you could doctor your resume and make up fake letters of recommendation.

A ubiquity illusion is a much more subtle mechanism, and in most cases, is not illegal.

Distribution is where you show you’ve done your homework. Marketplaces in particular have serious challenges when it comes to distribution

How do you solve the chicken and egg problem? The truth is that there is usually no answer a priori, you have to try a ton of shit and grind and hustle your way to user growth, but the answer you put on the app needs to show that you at least have some good ideas.

Two more useful links, but remember, there are no silver bullets

Traction

Remember, the unofficial official motto of YC is make something people want. Traction is proof that you’ve built something users want. Users, beta clients, growth, partnerships, revenue are all forms of traction.

When I think about it, the motto is a condensed version of this:

Make something that many people want badly enough to build a viable startup around it.

Many people – this depends on the kind of start up you are building. If it’s a free consumer web app, you really need high volume to show traction. Or medium volume in a very specific niche (from which you could plausibly expand). If it’s expensive enterprise software, you could do with much lower numbers

Badly enough – having users is not the same as having engaged users. Do your users login more than once? Are they actually doing stuff on your site? Are they willing to pay for it? Do they share the product with their friends? Show YC how happy you are making your users. And remember what PG learned from Paul Bucheit:

it’s better to make a few people really happy than to make a lot of people semi-happy

Viable startup around it – You need to convince YC that your startup’s trajectory is toward success. That you are going to make more and more users happier and happier in a way that you’ll be able to build a legit business around it. Speed matters, size of growth matters. Try to choose your strongest points of traction when writing your app.


<< (5 – Idea)   |  6 – Customers/Distribution  |  (7 – Writing Tips)  >>