Key Moments
How To Get Your First Users
Y CombinatorKey Moments
Instead of a Minimum Viable Product, startups need a Minimum Evolvable Product that adapts to early users. Paying customers provide the sharpest feedback, guiding this evolution.
Key Insights
Almost no one wants to be a startup's first paying customer; they are typically early adopters or have a burning need.
Charging real money early is crucial for feedback; paying customers give sharper insights than free users.
Targeted personal outreach (cold email, direct visits) is more effective than broad methods like billboards for finding early users.
Early users don't just provide feedback; they steer the product's evolution, akin to evolutionary biology.
Tesla's product evolution, from the Roadster to the Model Y, demonstrates how early adopter preferences for tech and acceleration shaped mass-market features over comfort.
The need for a minimum evolvable product over MVP
The conventional wisdom of building a Minimum Viable Product (MVP) is insufficient for launching a new product. While an MVP focuses on core functionality, the reality is that early users are not typically the mainstream market. Most people don't seek out being the first customer of a new venture. Instead, successful startups need a Minimum Evolvable Product (MEP). This MEP is not the final form of the product but rather a version designed to survive initial contact with a select group of users and, critically, to adapt and evolve based on their interactions and feedback. The focus shifts from just having a product that works to having a product that can change and grow.
Identifying your first critical users
Finding these initial users is less about persuasion and more about a targeted search. Two key groups are most likely to engage with a nascent product: early adopters, who enjoy trying new things, and individuals facing a 'burning issue' for which a new product could offer a solution. These users are often not price-sensitive because their primary motivation is either novelty or problem-solving. For instance, a startup founder seeking a quick solution for API billing and public endpoints found an immediate customer in someone who had a pressing need, illustrating that the problem, not the startup's size or reputation, drove the decision to adopt.
The power of charging real money for feedback
To extract the most valuable feedback from these early users, startups should charge them real money from the outset. The objective here is not immediate revenue generation but the acquisition of sharp, insightful feedback. Customers who pay, especially a significant amount, are far more likely to voice their opinions and concerns than those who receive a product for free. This feedback is crucial for understanding the product's true value proposition and identifying areas for improvement. An analogy used is that an angry customer paying a lot of money provides more actionable feedback than a 'nobody' unwilling to pay.
Targeted outreach and launching early
The methods for reaching these initial users differ significantly from mass-market acquisition strategies. Broad approaches like billboards are unlikely to be effective. Instead, startups should employ targeted personal outreach, such as personalized cold emails or direct one-on-one contact. Furthermore, Y Combinator emphasizes launching early, even with a rudimentary product. This early launch creates a wide surface area for potential users to discover the product, particularly when the startup's identity and target audience are still being defined.
Studying early users like an anthropologist
Once early users are acquired, it's essential to study them intensely, adopting the mindset of an anthropologist discovering a new civilization. Understanding their decision-making processes, their motivations for trusting a new and unproven product, and their overall thought patterns is paramount. This deep dive into user psychology and behavior provides invaluable insights that can inform product development and strategy.
Experimentation, churn, and iteration
Startups should engage in rapid experimentation across various aspects of their product, including pricing, landing pages, onboarding processes, and features. Simultaneously, fostering strong relationships with early users to encourage product loyalty is key. However, founders should not be overly stressed by user churn. Losing a user is often an opportunity to learn and fix issues, especially given the personal nature of early customer relationships. High churn isn't necessarily a death knell; it's part of the evolutionary process, and there are always more potential users to find.
The evolutionary path dependence of product development
Early users significantly influence how a product evolves over time, a concept illustrated by the analogy of a phylogenetic tree. Just as simple organisms evolve into complex ones, products evolve from basic states to mature forms. Tesla serves as a prime example. The Roadster, a high-margin product, was not just a financial necessity but also a tool to find early adopters who were willing to invest in an unconventional electric vehicle. These early adopters' preferences, particularly for speed and technology over comfort and suspension, demonstrably shaped the characteristics of later mass-market vehicles like the Model Y. This path dependency means that the initial choices made about who to target and what to offer have profound, long-term implications for the product's development and market position. The initial 'amoeba' state of the product is shaped by market pressures applied by these first critical users, guiding its evolutionary journey.
Embracing change and user-driven evolution
The understanding that a product will change significantly allows founders to release imperfect versions without fear. The ultimate form of the product is not predetermined but is a result of the evolutionary search algorithm initiated by the founders and driven by the interactions and desires of their first users. This perspective empowers founders to be adaptable, recognizing that their initial vision will likely be transformed by the market's response, leading to a more robust and ultimately successful product.
Mentioned in This Episode
●Products
●Companies
Getting Your First Users: Key Strategies
Practical takeaways from this episode
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Product Evolution Comparison: Standard Design vs. Early Adopter Driven
Data extracted from this episode
| Vehicle Component | Mass Market Design (Vacuum) | Tesla Model Y (Early Adopter Driven) |
|---|---|---|
| 0-60 mph Acceleration | Typical | Faster than Lamborghini |
| Technology Integration | Standard | Better than BMW |
| Suspension & Comfort | High | Worse than Toyota |
Common Questions
A Minimum Evolvable Product (MEP) is an early version of a product that is simple enough to survive initial user contact but designed to adapt and evolve based on market pressures and early user feedback, rather than being a static Minimum Viable Product (MVP).
Topics
Mentioned in this video
A German luxury vehicle manufacturer used for comparison with the Tesla Model Y's technology features.
A luxury car manufacturer used for comparison with the Tesla Model Y's acceleration capabilities.
A Japanese automotive manufacturer used for comparison with the Tesla Model Y's suspension and comfort.
A company where Gustaf worked and which was used as an example of early product adoption.
A company used as a case study for product evolution, starting with the Roadster and moving to mass-market vehicles like the Model S, 3, Y.
The initial high-margin product from Tesla, considered the 'amoeba' stage of their product evolution.
A mass-market electric vehicle from Tesla, part of their product evolution strategy.
A mass-market vehicle from Tesla, discussed in terms of its tech and acceleration being prioritized over comfort due to early adopter preferences.
A mass-market electric vehicle from Tesla, part of their product evolution strategy.
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