Y Combinator Startup Podcast - The Best Way To Launch Your Startup with Kat Mañalac | Startup School

Episode Date: February 24, 2023

YC's Kat Mañalac wants to change the way you think about launching. In her talk, she shares the multitude of ways to launch and get attention for your product, with tangible strategies and examples from companies like Airbnb. Apply to Y Combinator: https://www.ycombinator.com/apply/

Hey everyone. I'm Katman Yallick, head of outreach at Y Combinator. So I've been at YC for about nine years now, and that means I've seen over 3,500 companies go through the program and launch. At YC, one of the things my team does is help companies with their first launches. And today, I want to change the way you think about launching. Most founders overthink their first launch. They think they have just one shot at launching their product publicly. And that, the messaging has to be perfect or that no one will ever buy or use or invest in their product. I talk to founders constantly who lovingly prepare their launch for months. But if you're like most startups, you'll launch something and no one will care. And if it takes you six months to get the first version of your product in front of anyone,

your startup may be dead before you get another chance to launch. So in the same spirit of always be shipping, I want to be. you to think about launching as something that you do continually. So here's what we're going to talk about today. First, we'll talk about when to launch and why. Second, we'll walk through some strong one-line company descriptions, including some that I pulled from the startup school community. And third, we'll talk about the types of launches you can do during startup school.

So first, a lot of people ask, when should I launch? And the answer is ASAP. It's probably right now. Why? So founders are really good at lying to themselves. A lot of you have really strong convictions about what you're building. And that's good. Founders need that conviction.

But many of you have strong but theoretical notions of how you're going to solve a problem and how people are going to interact with what you're building. So putting your product out there, even in its early state, will help you determine whether you're solving a big enough problem that someone is willing to pay for you or use you even in the product's really unpolished state. So if you launch too early, what's the worst case scenario? What's the worst thing that can happen?

People might think the product is ugly or it sucks. Investors might hear about the product before it's ready. You know, competitors might see it. Or worse, no one will see it or no one will care. And that's fine. Just launch again. Airbnb launched three times before they really started to get users. Launching and having no one care, that feels terrible.

But it's not a reason to give up. It's a reason to iterate and launch again. Launch and iterate. Launch and iterate until you have a core of users who really love you. Paa Buhait, he's the creator of Gmail and a longtime YC group partner. He has said, it's better to make a few people really happy than to make a lot of people semi-happy. So early on, as long as you've made something that a few years,

users absolutely love, you are on the right track. It'll be good for your morale to have even a handful of users who really love what you're doing. And it'll help you figure out what to focus on. What is it about your product that they love? And how can you do more of that? Where can you find more users who love that sort of thing that you're doing? If you have a core of users, even 10 users who really love you, all you have to do is expand that number. And it might take a while. But if you keep going, cockroach style, you can win in the end. So now that we've determined you should all launch, let's talk about something every one of you needs before you launch.

To create a strong one-sentence pitch, you need clarity of vision. We believe that people who have thought deeply about an idea can explain it clearly and succinctly. They use less words. They can explain complex concepts in a way that it. a five-year-old can understand. And having a clear idea is important because a clear idea is the best foundation for growth, the best companies and movements grow organically by word of mouth. And that's good news because word of mouth growth is the cheapest way to grow. And if you think

back to the first time you heard about something like, say, TikTok or Slack, there's a good chance you heard about it through a friend or a coworker. Talking about what you do clearly and succinctly is going to be one of your most important jobs as a founder. It's a skill that you'll need to convince potential co-founders, investors, users, employees, and eventually, hopefully, shareholders to believe in you. It's also a skill you'll need to grow. To grow, you need to get all these groups of people talking about you to help you spread the word. That's why it's necessary to make it easy for anyone, your grandfather or the person that you meet at the airport, to talk about what you're doing so that word can spread about you virally.

When people sit down at the dinner table, they should be talking about you and your company. And you don't have to be naturally good at talking about your company at first. It takes some of our founders at YC months to get comfortable doing this. So here's how we think about coming up with a short, memorable description of your company. So first, we recommend leading with what, not with why. And this may seem counterintuitive because we tell most stories chronologically. It's natural to start with how you discover the problem you're solving and why it's important.

And one reason a lot of you do this is because you're all very ambitious people. And you want to solve these big problems. And that's really awesome. And founders need that ambition. But when you only have a limited time with someone, it's important to give them context up front. So start with the company name and what you do. And there's no need to set up the problem. Just get to the point.

So I'll use a real example from a YC company's application. The company is called Pave. If they'd started with why they were building this company, they would have said, many of my friends are super confused about their stock options and it pisses me off how stress they get thinking about them. But before you give me the backstory, again, start with one sentence that tells me what you're building first. Press people and investors and even other founders get pitched tens of times per day, per day, definitely per week, and they have particularly short attention spans. So here's the actual description of the company, Pave. Pave lets companies plan, communicate, and benchmark your compensation in real time.

This is a straightforward description of what they're building and who they're building for. They are building tools to make compensation and pay more transparent for companies and their employees. So hopefully whoever you're talking to asks follow-up questions, and then you can get to the Y later. So the second mistake founders make is adding a lot of meaningless marketing speak to their pitches. So this is a tweet from Gary Tan. He said, meaningless jargon is the number one issue I spend time trying to fight when

helping startups. So here is an actual description of a company. Don't worry, it's not a startup school company or a YC company. Indy Cloud is a know-how and synergy platform. Don't say should like this. It has zero informational content about what you actually do. When you're describing your company, the person you're talking to should have some idea of what they'd have to build to reproduce what you're talking about.

A know-how synergy platform could literally be anything. It could be a collaborative ed tech company or it could be a marketplace for experts. Like you literally have no idea what you'd have to build to reproduce a know-how synergy platform. Another mistake founders make is rambling. They just go on and on and on and don't do this. The person you're talking to will have already zoned out. So here's the actual description Airbnb used on their YC application. We built the first online marketplace that lets travelers book rooms with locals instead of hotels.

This is a tight description. It describes the problem they're solving and who they're solving it for. So here's one I pulled from the Startup School Forum, OpenQ. Find and talk to your target B2B users fast. Again, they tell you the problem they're solving and who they're solving it for. They're making it easy for B2B companies to reach potential customers. And you can sort of imagine what you might have to build to reproduce what they're doing. Okay, here's another one I pulled from the Startup School Forum.

Young, it's a clever name, adaptive ML-driven mental health for your team. And I get this what this is. It's a digital mental health tools to help your team cope with stress and burnout. But I think you could workshop it a little bit. If you're showing this to potential customers, I think they'll care less about the fact that the product is ML-driven and more about the fact that it's personalized digital therapy. So I'd change it up to personalized digital therapy programs for your team. Some people ask me whether the X for Y construction is too cliche to use when describing their company.

And let's be honest, the term, you know, Uber for X or Airbnb for X has been a bit overused. I want to emphasize that all of you should have a one-line description that does not use the X for Y construction. But the X for Y construction can be used in certain cases. So, for example, Pasey, which is a YC alum, can describe themselves as stripe for his former Soviet Union countries. But they could also describe themselves as payment processing. for former Soviet countries. But let's talk about when it's okay to use the X for Y construction.

Going back to Paisi, if the founders are talking to people in Silicon Valley, so investors or press, for example, then it might make sense. You might use the X for Y analogy if it really is the best way to paint a picture of what you're building very quickly. If you go with this construction,

you need three ingredients. First of all, X should be a household name, Second, it should be reasonably clear why Y might want X. And third, Y should be a huge market. So one YC company described themselves early on as Buffer for Snapchat. Even though Buffer is doing well as a company, it's not a company that not everyone necessarily knows. When I was reading this description in their YC application,

I literally had to go to Google and Google Buffer. So in this case, you're better off describing the problem that you're solving. So here's an X for Y example from the startup school community that I think works. Harkalive is Airbnb for dance and movement classes. It paints a fast picture of what Harkalive is. But honestly, you could also just as easily say Harkalive is a marketplace for dance and movement classes. So to review, the best one-liners are descriptive. They describe what you do, the problem, and who you're solving it for.

They're conversational and don't use jargon or marketing language. and there's no long-winded lead-up, they're concise, short and sweet. So now that you know what you need for a good one-sentence pitch, let's talk about why you want to launch continuously, even before you have a fully functioning product. Launching early gives you the chance to practice and refine your idea. You can A-B test the idea or messaging on people. You get an opportunity to see how people will respond to it. And then once you have a product, launching through different channels will give you an opportunity

to see how people respond to the actual product. And launching on different channels will also help you determine whether you're even talking to the right users. Different channels will naturally reach different audiences. So let's talk about some of the types of launches you can do in your early stages. Here are different types of launches, and I'm going to go through each one of these briefly. So first is the silent launch. and this is something every one of you should do while you're in startup school. I clicked on 10 random startup school companies today,

and only half of them had landing pages. So you don't need anything fancy. At the very least, you need a domain name, your company name, a short description, a way for users to contact you, and a call to action. Your call to action might be sign up for a newsletter or sign up to here when we launch. Here's an example of a startup school company landing page, Lara. They have their domain name, a company name, a short description, and a call to action. Sign up for the wait list.

And this is all you really need. The next type of launch is to friends and family. Even if you're at idea stage, you can test out your one to two sentence pitch on friends and family. And once you have an MVP, you should do a Friends and Landshed Family launch as quickly as possible. So in its earliest days, Reddit was shared among the founders of the first YC batch. I use the Wayback Machine to find the earliest view of Reddit I could find from 2005.

So this was even before they called Upvotes, upvotes. So share your product with friends and family, watch them use the product, and ask them for feedback. But one thing about the Friends and Family launch, don't stay in the space for too long because your friends and family might not be the ideal users for what you're building. And sometimes their feedback isn't going to be as helpful as a real user. Next type of launch. launching to strangers. I want to share the MVP for DoorDash.

This is the very first version of the DoorDash site. When they first started out, the founders were building other things. They were building tech for small business owners. And so they started approaching store owners for feedback. And they spent a lot of time talking to this one store manager, Chloe. She was the manager of a Macaron store in downtown Palo Alto. In talking to Chloe, they realized that the app they were building really didn't solve any of her problems. But just as they were about to leave, Chloe said, hey, there's just one thing I want to show you.

And it was this thick booklet with pages and pages of delivery orders. She said, this drives me crazy. I have no drivers to fulfill them. And I'm the one doing all the deliveries. Over the course of the next few weeks, the founders interviewed over 200 small business owners across the Bay Area. And they kept hearing the same issue. Deliveries are painful. then after they, you know, absorbed enough information about the product, they built this,

their MVP, in just a few hours. So if they'd waited too long to get direct feedback from their customers, they might have spent way longer, you know, six months plus building out the wrong solution for small business owners. So I'd recommend you get out there, even if it makes you slightly uncomfortable and start talking to your potential customers as soon as possible. Do what DoorDash did and talk to 200. So next is one of my favorite ways to launch through online communities.

So I think you should plan a launch for every single community that you are part of. When a company goes through YC, for example, they have the option of launching on Bookface before they launch publicly. BookFaces are internal platform for founders. It's like Facebook meets LinkedIn, meets Quora, all for YC founders. And there are currently over 6,000 founders on Bookbase. So for many companies in YC, it's a good way to get some things. first users and some early feedback. And it's a fairly low risk way to launch because you're launching in front of a friendly community of other founders. There are countless examples of companies that

have launched and gotten their first or first thousand customers through online communities. Another community that you have access to is HACC News. They have something called show HN. So many YC alumni, Dropbox and GitLab, for example, and hundreds more have launched on Hacker News. Robin Hood is an example of another company that successfully launched on HN. So back in December 2013, they had a really simple site and all it said was commission-free trading, stopped paying up to $10 per trade. At the time, they only had a button that let you join a wait list. The wait list would show you how many people were ahead of you in line and how many people were behind you in line.

So it was a Friday night and they'd been working on building this wait list in preparation for a launch they'd were planning the following week. With someone totally random, posted them on HN, and boom, they got to number one on HN, and ended up getting 10,000 sign-ups the first day and then over 50,000 over the next week. So each community is different. They have different tones, audiences, interests, launch to communities you're genuinely, genuinely engaged with. So be authentic. Don't get bogged down in too much marketing and promo language.

people these days just shut off when they see that. Do your research and get an understanding of what will compel members of that community to be interested in what you're doing. So we don't have time to do a huge deep dive into these next types of launches, but I wanted to skim them briefly and share some resources and things that I found recently. So in a Q&A we did with the Replit founders a few weeks ago, you asked Amjad and Haya, how did you get your first users? And they said, you just have to be everywhere. Hacker news, Twitter, Reddit, et cetera.

So I wanted to share a thread that YC alum Catherine Cross tweeted out about building her community on TikTok. Anja Health, Catherine's company, helps parents freeze their baby's abelical cords and placentas for their stem cells. So she wrote this thread about how she committed to posting TikToks to start building a community in advance of the company's launch. and in just a month she hit 10,000 followers. So she shared this thread on tips for building a community on TikTok, which we will link to in the chat. There is, of course, the pre-order launch. And if you are a hardware or product or physical product,

you can do a pre-order campaign on a platform like Kickstarter or Indiegogo. So preparing for a pre-order launch could honestly be a whole presentation of its own. And honestly, there's a little bit more. skepticism about crowdfunding and pre-orders than there was, say, five years ago. So it's worth thinking about whether it's the right thing for your company. But YC. Alumni ShipBob wrote a guide on pre-orders that talks about why you should or should not consider doing this type of campaign. There are a lot of great, you know, sort of guides that walk you through pre-order campaigns and how to prepare for them online as well. All right. And then there's the waitless launch.

We talked about a really good example of that with Robin Hood earlier. And there are other examples like superhuman that launched successfully with a wait list. One note on the waitlist launch, the longer you wait to launch an actual product, and the longer you wait to onboard people, the harder it is to convert people from your wait list. So please don't sit on your waitlist for too long. Okay, so why are we not going to talk about press it all in this talk? These These days, if you are an early stage company that hasn't raised, you know, say a million or more, it's going to be incredibly hard to land press stories, at least in the U.S. But that's said, even if you do land press, it's not a silver bullet.

It's not a scalable way to get users. It might help you get in front of some early users and investors, but as you see, press can't be counted on for sustained growth. It will not get you to product market fit. So don't spend a ton of your time during startup school worrying about getting press. What I do want to emphasize is, while you're in startup school, you should start to build your own community. It can be as simple as starting an email list of your supporters and figuring out how to engage them on an ongoing basis. And you may be surprised who reads the email and shows up

to help. And in the future, every time you release a new product or a new feature, you can use all these channels to launch on them again, Stripe has always been great at engaging with the community each time a new product launches. They blog about it. The founders get on Hacker News and they talk to the HN community. They spread the word on social media. They pitch press. Stripe, they are masters at launching again and again. So to sum up, I want you to stop thinking about launching as just one moment in time. If you launch and no one pays. attention, do what Airbnb did, and launch again and again.