Y Combinator Partners on DoorDash, Instacart, and doing things that don’t scale

The best example that I love is from Instacart. A normal person starting this business might think, oh, we want to support Trader Joe's and Whole Foods, so let's go and like, talk to like management of Trader Joe's and try and get some kind of like corporate partnership or something, get access to their data and all this kind of stuff. It might take years. And instead what Instacart did was they took their YC money and went to Trader Joe's and just bought one of every item at Trader Joe's and over a weekend got access to a photography studio, took all the produce that they bought, took it to the studio and took pictures of it all, wrote down the prices, and on Monday morning put all of it online and said, we're Instacart. You can order anything from Trader Joe's. Some founders might say, like, maybe this is not like perfectly legal. Trader Joe's might object. You'll get a cease and disease. Even if it is legal. Does this matter? I think it matters that you're not doing anything illegal. I think if Trader Joe's object to you running this thing, honestly, they'll probably only notice when you get to a certain scale. And then you have the negotiating leverage. You have all these customers who are already buying through Trader Joe's that actually they don't want to shut you down. And that's exactly how it played out with Instacart. They struck deals with these grocery stores eventually after they got to scale, and they'd use this kind of hacky, janky solution to get to scale. All of these examples ended up succeeding, but the cases where you do things that don't scale and it turns out no one wants a thing, actually that's good as well, because you've just saved yourself months or potentially years of building something that actually no one wants. It's way better to know that upfront and to be able to like, pivot your product slightly or choose a whole new idea complete. And by doing this stuff that doesn't scale, you can give the appearance of that service or product already existing by basically faking it manually, by pulling the strings in the background, doing tons and tons of hard work yourself to deliver that incredible white glove experience to customers.

Doing things that don't scale lets you experiment, fail fast, and try new things. It lets you test your assumptions before you spend months building a product. Next, Diana and Michael talk about DoorDash and how they built the first version of their product in one day and did a lot of clever manual work. To find out whether people wanted what they were building.

DoorDash as a product was built in one afternoon. Whether you believe it or not. The tech stack was basically Google Drive to upload the menus. HTML CSS for putting the menus. The phone was Tony's phone. And then find my friends to pretend to have real time dispatch and the orders were just taken on Google form. Granted, the team was actually very technical. It was a team with Stanford engineers, Stanford MBAs. They totally could have done the fancy thing and build like a dynamic side with Google Mac, real time tracking and everything. But the founders were very pragmatic. That was not the hardest thing to prove out. It was like, is this even a thing that people wanted?

That's the path no big company would ever take. This is the advantage you have as a startup, right? It's the thing you can do and no one else can do. To your point, too many founders, we have to unteach them what they learn at the big companies. And turns out that like when you are dying because too many people are using your product, the motivation to fix those bugs goes through the roof and they get fixed rather quickly.