Paul Graham of Y Combinator fame once gave the advice to “do things that don’t scale”. That advice was given to the Airbnb.com founders in the first YC cohort. I heard this while I was watching the interview with the founders on Mixergy.com.
I thought this was pretty interesting advice. I think the logic here is that you want to go where the competition is not, and there is just so much money flowing through the venture capital funds right now, that just about any SaaS project run by a 20 year old out of Y Combinator or Tech Stars is going to end up with $500k to go build it. And so if you’re not one of the funded, you need to be realistic and stay out of the way.
An analogy that occurred to me while driving the other day is that the “big money” drive large trucks on the Interstate, whereas the unfunded garage startup is like a moped. Sure, the moped can get you where you are going, but not nearly as quickly and you’d better stay off the freeway or you’re going to get killed!
So for this reason, I guess it is pretty smart advice. So then I guess the next question is, what doesn’t scale? I always hear that VCs won’t fund consulting companies becuase they don’t scale. Perhaps this is why so many solo-entrepreneurs end up starting consultancies and agencies (services businesses) instead of products. Perhaps its simply adaptive in that way.