Y Combinator and The One Metric that Matters

It’s been a little while since I’ve written about growth hacking and I wanted to write about my experience with growth hacking since going through Y Combinator with One Month.

Y Combinator is known as an accelerator for a very good reason: it accelerates the growth of your startup tremendously.

So what are the things that Y Combinator does to make its startups grow so fast?

They force you to focus on one metric — growth — and look at it week over week.

According to Paul Graham, growth is the only essential thing you need to be a startup. Everything else follows from growth. This is why they don’t really accept companies at the idea stage. Y Combinator isn’t a place for building, it’s a place for growing. This is why every time you meet with Paul Graham, he’ll ask…

“How much did you grow last week?”

When you eliminate all the other factors, things get much simpler. You’re expected to grow at least 7% every week while you’re at Y Combinator. Ideally we’re talking about revenue here, but if you’re pre-revenue then user growth or some sort of engagement metric is fine (ideally as far down the lean marketing funnel as you can get).

This sounds easy enough at first. Just have everyone on your team post to Facebook and you’ve hit your numbers. Time for beers.

The problem is that week after week the bar gets raised and you’ve got to hit consistently higher numbers. On top of that, a few weeks in you’ll start to exhaust easy acquisition channels like friends of friends. That will force you to start thinking long-term and focus on consistent acquisition channels and levers (like increasing your on-site conversion rate).

The stress of having to grow week over week is mitigated by the fact that the end is in sight: Demo day is 12 weeks out and you want to have a growth chart that looks like this:

This is an illusion, because once you’ve gotten the money, you now have to report to investors and there’s an additional level of responsibility. But that’s for another day.

The advantage of focusing on only the growth metric is that it doesn’t lie. You’re either growing or you’re not.

Most startups spin their wheels on things like redesigning their app, building new production features, and other things that don’t really matter. Often t’s because they’re afraid of actually having their dream shattered when they try to grow, so they’re trying to build up the best product possible for launch. Paul Graham says…

“Launch when you have a modicum of value for some people.”

As soon as you start focusing on growth numbers, company decisions start falling into place. Should we take on an intern? Should we release that new product feature? Should we get a new logo? Only if it’s going to help you hit that 7% growth for the week.

On our wall at YC we had a big sign on our wall that said, “Will this help us grow 7%?

It served as a constant reminder and we were always pointing to it when someone had a new feature idea or suggestion.

Admittedly this is short-term thinking, and there’s debate about whether this kind of mentality is healthy for a startup in the long-run, but I think long-term thinking is the luxury of a healthy startup. You can worry about that stuff once you’re certain that growth is under control. There’s no point in thinking about the logo of a startup whose user numbers are going down.

So do you have to be at YC to do this? Obviously not. You can hold yourself accountable, but there’s something about the environment they’ve created that makes it all easier. You’re getting constant reminders from the partners to focus on stuff that really matters. You’re competing with and trying to grow faster than all the other incredibly ambitious startups in your batch. You’re in the middle of nowhere with very few distractions.

So if you’re at a startup, pick a growth metric and focus on that first and foremost. Put it up on a whiteboard for everyone to see, and hold your entire company accountable to it.