In this interview, the co‑founder of Outschool explains how the company tackled the classic chicken‑and‑egg cold‑start dilemma of a two‑sided marketplace. The team embraced Paul Graham’s “do things that don’t scale” mantra to an extreme degree, manually recruiting the first ten teachers and parents by networking within secular homeschooling groups in the Bay Area. Before any code existed, they faked the product as an email list, manually posting class listings and handling enrollment through Zapier alerts that triggered PagerDuty pages, which the founder then followed up with Square invoices. As supply and demand began to concentrate in this narrow niche, they incrementally built self‑serve teacher sign‑up, class posting, search, and a native payment system. Each functional milestone was celebrated as a “hurrah moment” when a user completed the flow without any manual intervention. The strategy hinged on choosing a tight niche, extracting referrals from early users, and only after achieving sufficient concentration did they move to broader, scalable marketing tactics.
Chapters
You know, when we're starting a marketplace, of course, you know, face the chicken and the egg or that kind of cold start problem, right? So, you know, how did you initially solve for this with Outschool?
So many different tactics, but they all boil down to what Paul Graham calls do things that don't scale, but to an extreme level, because, you know, in consumer, you always worry about this, like, like if it seems too, too kind of hands-on, you worry about, worry about scaling. But we recruited Like the first customers, like the first 10 consumer customers, like manually, like literally networking into initially secular homeschooling groups in the Bay Area. That was our initial target audience. So, you know, I guess like recruiting initial customers both on the supply and the demand side as if you were a B2B startup. So not worrying about scale, like literally going and selling. So things that look nothing like what people usually regard as consumer activities. And having a business model before we had a product. So you can kind of fake your products as an email list. It was like literally like a craze list. I'd send out these, you know, network into these homeschooling groups, find teachers who were already trying to offer their services to the groups, and then just send out an email and manually create it. So before we even even having a product and charging, even charging and testing the business model before having a product. The product's an email. And then because so many things had to work in order for the marketplace to be successful, we kind of had to build it a piece at a time while faking most of it. So for the longest time, it was not possible for a teacher to sign up for Outschool self-serve. You know, we'd literally like hand recruit them and then, you know, you put, you know, get all their materials from them, manually post on the site. But while we're building out the demand side sites, the listings, the ability to search, the ability to see a class listing, and then, you know, for the longest time when you hit enroll, um, on the sites, it would, it would be hooked up via Zapier to PagerDuty, and I'd literally receive a page that someone had enrolled and put in their details, and I would then send them a Square invoice in order to affect payments until we built payments into the site. And then it was a big hurrah moment when it finally was possible for a parent to enroll and pay. And it was an even bigger hurrah moment when someone did that and we didn't really know where they were from. Like, they hadn't been kind of manually kind of walked through the process. And then we started building out the teacher side saying, okay, can we get to the point where teachers can self-serve? And then we built the product out to the point that teachers could technically kind of come to the sites and post their class, having gone through the application process. And again, it was another hurrah moment after we built that functionality when people did that without, yeah, again, we didn't know where they came from. And so it was that real kind of detailed sequence of blocking and tackling. I think the final thing I'd say that people ask, like, how do you find the people? Who do you target on the demand and supply side? And I think it's important to start with the right niche. In our case, it was secular homeschoolers in the Bay Area. So very narrow niche to go after. And then you have to build concentration within that niche, by which I mean, if you're gonna appeal, if you're gonna target those customers on the demand side first, you have to get exactly the right suppliers to appeal to them, not general supply. I think people think about like trying to blow it up too early on each side. So we would ask the initial customers like, Who do you work with already in terms of teachers? And we'd also ask them, what are you missing? And we'd ask a bunch of parents that. And then we discovered that parents already, other parents already had resources that would be useful to other parents. And we targeted those specific, like, 10 teachers, not teachers generally who are looking to appeal to homeschoolers. And so you build this concentration on the demand and supply side, and then you get to a particular scale, you could start using more more general and scalable marketing techniques. That's how— that's the kind of things we did in the early days to solve the chicken and egg problem.
