What I've Learned from Users - The Secrets to Establishing a Successful Startup: Insights Learned from Users

Yigit Konur's Curation

"This article written by Paul Graham in 2022 states that his best advice to those applying to Y Combinator is ""Explain what you've learned from users."" Graham shares what YC has learned from its users, i.e., the startups they fund. He notes that most startups experience the same problems, which remain the same regardless of what they do. He also points out that it's impossible to automate or reduce startups' problems to a formula, as each startup is unique and therefore needs advice from specific partners who know them well. Graham asserts that YC's value lies in enabling founders to move faster by providing them with an extra boost in focus.

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# What I've Learned from Users (The Secrets to Establishing a Successful Startup: Insights Learned from Users)

September 2022

I recently told applicants to Y Combinator that the best advice I could give for getting in, per word, was

> Explain what you've learned from users.

That tests a lot of things: whether you're paying attention to users, how well you understand them, and even how much they need what you're making.

Afterward I asked myself the same question. What have I learned from YC's users, the startups we've funded?

The first thing that came to mind was that most startups have the same problems. No two have exactly the same problems, but it's surprising how much the problems remain the same, regardless of what they're making. Once you've advised 100 startups all doing different things, you rarely encounter problems you haven't seen before.

This fact is one of the things that makes YC work. But I didn't know it when we started YC. I only had a few data points: our own startup, and those started by friends. It was a surprise to me how often the same problems recur in different forms. Many later stage investors might never realize this, because later stage investors might not advise 100 startups in their whole career, but a YC partner will get this much experience in the first year or two.

That's one advantage of funding large numbers of early stage companies rather than smaller numbers of later-stage ones. You get a lot of data. Not just because you're looking at more companies, but also because more goes wrong.

But knowing (nearly) all the problems startups can encounter doesn't mean that advising them can be automated, or reduced to a formula. There's no substitute for individual office hours with a YC partner. Each startup is unique, which means they have to be advised by specific partners who know them well. [1]

We learned that the hard way, in the notorious ""batch that broke YC"" in the summer of 2012. Up till that point we treated the partners as a pool. When a startup requested office hours, they got the next available slot posted by any partner. That meant every partner had to know every startup. This worked fine up to 60 startups, but when the batch grew to 80, everything broke. The founders probably didn't realize anything was wrong, but the partners were confused and unhappy because halfway through the batch they still didn't know all the companies yet. [2]

At first I was puzzled. How could things be fine at 60 startups and broken at 80? It was only a third more. Then I realized what had happened. We were using an _O(n2)_ algorithm. So of course it blew up.

The solution we adopted was the classic one in these situations. We sharded the batch into smaller groups of startups, each overseen by a dedicated group of partners. That fixed the problem, and has worked fine ever since. But the batch that broke YC was a powerful demonstration of how individualized the process of advising startups has to be.

Another related surprise is how bad founders can be at realizing what their problems are. Founders will sometimes come in to talk about some problem, and we'll discover another much bigger one in the course of the conversation. For example (and this case is all too common), founders will come in to talk about the difficulties they're having raising money, and after digging into their situation, it turns out the reason is that the company is doing badly, and investors can tell. Or founders will come in worried that they still haven't cracked the problem of user acquisition, and the reason turns out to be that their product isn't good enough. There have been times when I've asked ""Would you use this yourself, if you hadn't built it?"" and the founders, on thinking about it, said ""No."" Well, there's the reason you're having trouble getting users.

Often founders know what their problems are, but not their relative importance. [3] They'll come in to talk about three problems they're worrying about. One is of moderate importance, one doesn't matter at all, and one will kill the company if it isn't addressed immediately. It's like watching one of those horror movies where the heroine is deeply upset that her boyfriend cheated on her, and only mildly curious about the door that's mysteriously ajar. You want to say: never mind about your boyfriend, think about that door! Fortunately in office hours you can. So while startups still die with some regularity, it's rarely because they wandered into a room containing a murderer. The YC partners can warn them where the murderers are.

Not that founders listen. That was another big surprise: how often founders don't listen to us. A couple weeks ago I talked to a partner who had been working for YC for a couple batches and was starting to see the pattern. ""They come back a year later,"" she said, ""and say 'We wish we'd listened to you.'""

It took me a long time to figure out why founders don't listen. At first I thought it was mere stubbornness. That's part of the reason, but another and probably more important reason is that so much about startups is [counterintuitive](before.html). And when you tell someone something counterintuitive, what it sounds to them is wrong. So the reason founders don't listen to us is that they don't _believe_ us. At least not till experience teaches them otherwise. [4]

The reason startups are so counterintuitive is that they're so different from most people's other experiences. No one knows what it's like except those who've done it. Which is why YC partners should usually have been founders themselves. But strangely enough, the counterintuitiveness of startups turns out to be another of the things that make YC work. If it weren't counterintuitive, founders wouldn't need our advice about how to do it.

Focus is doubly important for early stage startups, because not only do they have a hundred different problems, they don't have anyone to work on them except the founders. If the founders focus on things that don't matter, there's no one focusing on the things that do. So the essence of what happens at YC is to figure out which problems matter most, then cook up ideas for solving them — ideally at a resolution of a week or less — and then try those ideas and measure how well they worked. The focus is on action, with measurable, near-term results.

This doesn't imply that founders should rush forward regardless of the consequences. If you correct course at a high enough frequency, you can be simultaneously decisive at a micro scale and tentative at a macro scale. The result is a somewhat winding path, but executed very rapidly, like the path a running back takes downfield. And in practice there's less backtracking than you might expect. Founders usually guess right about which direction to run in, especially if they have someone experienced like a YC partner to bounce their hypotheses off. And when they guess wrong, they notice fast, because they'll talk about the results at office hours the next week. [5]

A small improvement in navigational ability can make you a lot faster, because it has a double effect: the path is shorter, and you can travel faster along it when yo...