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“Guys, Let’s Grow The Hell Out Of This Company”: How Y Combinator Startups Go Big

The startup factory’s philosophy can be summed up simply: Grow fast! A look at how startups figure out what that means.

Liz Wessel has a number in mind: a jaw-dropping digit that she believes will be significant enough to convince even the most skeptical audience that she’s onto something big. The Number looms over every decision she has made over the past six weeks and every decision she will make between now and Y Combinator’s Demo Day in March, when she’ll present the company to a room full of venture capitalists and reporters. This isn’t because of what The Number literally represents–a daily tally of employment applications processed by her recruiting startup, Campus Job–but because of what it says about her company: rocketship growth.

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Wessel won’t tell me The Number–she’s saving the big unveiling for Demo Day–but she says she’s close to hitting it. “We’re eating, sleeping, breathing Campus Job,” says Wessel. Her company matches college students with part-time gigs and internships, and, she adds excitedly, “The business is actually working.”

Last year, the 24-year-old Googler and her co-founder, a 25-year-old McKinsey analyst named JJ Fliegelman, quit their day jobs to focus on Campus Job full time. In September, they launched, announcing that they’d raised $1 million from a group of investors including New York’s Lerer Hippeau Ventures and BoxGroup. Two months later, Wessel and Fliegelman blew their lives up again to join Y Combinator, trading their Manhattan apartments for a Los Altos, California, house that they share with six of their employees, who have agreed to temporarily relocate and to work 13 out of every 14 days. The cofounders share a bedroom, with a screen in the middle for privacy. Wessel’s message to her team in December when she told them about the temporary relocation plan: “Guys, let’s grow the hell out of this company.”

Growth, whether that means adding customers or enlarging revenues, matters to every startup founder, but nowhere is the concept celebrated with quite as much fervor as it is within Y Combinator’s cavernous dining hall. At most companies, a growing user base is a meaningful yardstick; here at YC, it is practically a religion. “If I ask a founder, ‘How’s it going?’”explains Kevin Hale, a YC partner (and 2006 graduate of the program), “I’m really trying to figure out, ‘What’s your rate of growth?’” As YC co-founder Paul Graham put it in a 2012 essay, “The only essential thing is growth.” In that essay, Graham suggested that startups aim for at least a 5% to 7% rate of expansion every week, or 10% for “exceptional” startups. Wessel, like most YC founders I’ve spoken with, is aiming even higher: at least 15%.

If growth is a given, what exactly to grow is less certain. “You should pick metrics that show that people want what you’re making,” says Qasar Younis, another YC graduate-turned-partner. Because Campus Job is a marketplace—that is, it will only succeed if it can grow the number students applying for jobs and the number of available job openings—Wessel is focusing on those two metrics, along with her trump card, the number of daily job applications. But every startup is different. “There’s no one metric to describe a business,” Younis says. This reality helped fuel a recent debate over whether tracking monthly active users, the current preferred method at Facebook and Twitter, offers an accurate picture of a business’s health.

As Y Combinator has embraced more ambitious technology startups, like those I wrote about last week, these questions have gotten thornier. YC’s biotech startups rarely have any realistic hope of goosing sales in the short term, meaning that the concept of startup growth takes on a different meaning. “It’s trying to identify what is the riskiest part of the business and figuring out what you can do to get rid of that risk,” says longtime YC partner Paul Buchheit. That could mean tracking letters of intent (for startups that sell products to large, slow-moving companies) or the results of trials and pilot programs (for companies attempting to develop medical devices or complex hardware) or both.

Of course, for many YC startups the only metric that matters is revenue. “The partners literally said, ‘Welcome to Y Combinator. Stop building backend solutions. Just focus on getting customers,’” says Tom Harari, the CEO of Cleanly, a YC-backed app that allows people to have their laundry picked up, washed, and delivered with a few taps. On the surface, Cleanly’s business seems undistinguished. There are other startups doing the nearly exact same thing–including a YC-backed startup, Prim, that shut down in January, and a New York startup, Fly Cleaners, which in late 2013 announced that it had raised $2 million–making Harari’s ability to demonstrate growth in the coming months all the more important. “I heard this was a dumb idea from journalists probably 20 times,” he says. “Investors have said to my face, ‘So what?’”

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Harari’s plan to counter this type of skepticism come Demo Day is simple: He’s going to show a chart showing revenue growth at an impressively steep slope. Since YC started, Cleanly has been expanding aggressively, moving from two neighborhoods in New York City to cover much of Manhattan today. By the end of the month it plans to be in Brooklyn. Because the company’s customers are in New York, Harari chose not to move to the Bay Area like most of his YC peers. Instead, he flies to San Francisco on Tuesday mornings for office hours and takes the red-eye back late Tuesday nights, after the weekly YC dinners. By Wednesday morning, he’s back on the street, putting Cleanly door tags on apartment buildings and working the room at meetups and cocktail parties as he looks for potential customers. When the company’s drivers get overwhelmed, Harari and cofounders, Itay Forer and Chen Atlas, handle the deliveries themselves. Their growth obsession has “made us more focused,” Harari says. “We want to hit 7% to 10% [revenue growth] each week, and if we don’t hit that, we’re pissed at ourselves.” He seems run ragged by the schedule, but happy. Last week’s revenue growth was 70%. That’s a pretty good retort to “So what?”

Next week: How (and why) Y Combinator got serious about diversity. This is part six of a series.

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