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  • Writer's pictureJon D'Alessandro

Y Combinator Startup School: Week 2 Takeaways

Quick recap:

  • Y Combinator is a company that invests in and mentors early stage startups.

  • They also offer Startup School, an enlightening 10-week online course that teaches Y Combinator’s secret recipe to building rapidly-growing startups. It covers topics like general entrepreneurship, creating a Minimum Viable Product, getting customer feedback, marketing your venture, and much more.

  • In an attempt to take my own startup to the next level, I’ve enrolled in Startup School, and I’m sharing my insights and key takeaways with my readers.

  • On a weekly basis, companies/participants are required to review lectures (~2 hrs), provide an business/KPI update (~15 min), and attend a virtual meetup with other founders to discuss progress and challenges (~1 hr)

  • In case you missed it, check out my highlights from an enlightening Week 1 here!

Week 2 of Startup School is coming to a close and it continues to evolve the way I think about startups. Needless to say I am loving the program thus far. This week’s lectures covered: building an MVP, setting KPIs and goals, and startup analytics.

Lecture 3: How to Plan an MVP

This lecture covers an often-misunderstood but incredibly important topic: the MVP (Minimum Viable Product). The term was first introduced by Frank Robinson way back in 2001, and then popularized by Eric Ries, Steve Blank, and more.

Like other popular startup and tech terms (e.g. "lean," "agile," etc.), MVP gets twisted and misused, so Michael Seibel from YC is here to provide some much-needed clarity. Here are my big takeaways:

1.) What is an MVP?

An MVP, or Minimum Viable Product, is the first thing you can give to the first set of target users to see if you can deliver any value at all to them. It focuses on a small number of initial users and their highest order problems, and provides only a base to iterate from.

An MVP can be a prototype, a basic version of your product idea, or even a simple website that explains what you do.

2.) Get feedback on the MVP, knowing full well it's not the "full thing"

Your goals should be to build a lean MVP (i.e. in weeks, not months) that you can continuously get feedback on and iterate from.

As mentioned in Week 1, customers should not suggest features, they should only give you their problems.

Avoid "feature death" where users list hypothetical features that they might use. Always steer the conversation back to the core, problem-oriented questions: what their problem is, how often they experience it, how intense it is, whether they’re willing to pay for a solution, do they know others with the same problem, etc.

3.) "Vision big, MVP small"

Seibel actually came up with the term "heavy MVP" the morning before recording his lecture - it's a reminder that your MVP should be lean and small, just a base to get feedback on and change to solve more and/or better problems.

You can still have an ambitious vision or goal, but the best way to get there is via light MVPs which are continuously tinkered with until they solve your core users' foremost problems.

4.) Even great billion-dollar companies “started with something most people would say is pretty shitty”

Never fall in love with your MVP - Seibel says to think of it like a shirt in your closet that you can paint and then destroy. You'd never spend time tailoring or ironing or tinkering with it.

Huge companies like Airbnb, Google, Amazon, and more had, by all accounts, pretty "crappy" MVPs. But they understood that an MVP is supposed to be relatively crappy. Only the final product is polished and "perfect" - and even that continues to be a base to iterate from.

5.) A "launch" is not special

Do you remember when Google, or Youtube, or Facebook launched? Probably not. But you know them now.

Don't get hung up on the perfect launch. Like the MVP, it should be light, quick, and dirty.

The number one most important thing is to get customers. They give you feedback, which you use to iterate.

Lecture 4: How to Set KPIs and Goals

The next lecture dives into the tactical - how to set goals for your startup. Here are my sparknotes:

6.) What are KPIs?

KPIs are Key Performance Indicators - a set of qualitative metrics that objectively indicate your startup’s health.

Remember, what gets measured gets managed, so even though we're all dying to get out there and grow the business, you can't ignore the step of setting goals and tracking progress.

7.) Primary metrics

Your primary metric is the single most important measurement in your startup. Again, startup = growth, so your primary metric should measure growth.

Here are the characteristics of a primary metric:

  • Provides an indication of whether you’re building something people actually want

  • Shows how much value you’re delivering to customers (e.g. revenue, profit, active users) and/or whether your product has recurring or enduring value (e.g. Monthly Recurring Revenue or MRR) 

  • Should be a lagging indicator for success, i.e. it tells you what already happened and doesn’t necessarily indicate any predictions about future performance

  • Should be a useful feedback mechanism

Importantly, your primary metric isn't necessarily a "North Star" that you focus on and ignore everything else. For example, it would be short-sighted to focus on user growth but ignore retention.

8.) The weekly goals of a startup

This one is huge! A startup should be focusing on the immediate term - i.e. growth this week.

This section really resonated with me. I've been thinking about the lesson almost daily, reflecting on how I strayed from this tenet in my early days as an entrepreneur.

Here's why startups should focus on weekly growth:

"We use weekly increments because startups early on need frequent feedback from their users to tweak what they're doing. But also we use weekly growth rate because it helps to divide up the progress you need into doable chunks."

Outside of the entrepreneurship world, we're conditioned to value long-term over short-term thinking. And this is great, unless you're working on a startup.

When you're launching a startup, growing in tiny increments is unsustainable. And it's easy to pass off well-intentioned but unimpactful initiatives as "long-term strategies."

Here's an example: In the first year of launching my startup, I was doing "unscalable things," but to retain customers, not to grow. This is a great practice, but immediate growth should have been my primary focus. It wasn't, and I was instead misinterpreting medium-term tactics for long-term strategies.

If you're focused on the immediate term, you're more likely to go out and hustle, to cast a wider net, to do unsustainable and unscalable things to grow. But in the early days, that's the best, and often the only way to grow. Not to mention, this is how you get early feedback, which in itself will help fuel your long-term viability.

Not only was this lesson a game-changer conceptually, but we're also offered exact, tactical advice and data.

While startups at Y Combinator have monthly growth rates anywhere from 20-200% month over month, most are clustered in the 20-50% range. That means a 5-10% weekly growth rate, which aligns nicely with Paul Graham's recommendation to aim for 5-7% weekly. Like any primary metric, you should be tracking weekly and readjusting as needed. If you're not hitting at least 5%, it's a sign your product or growth strategy might need a complete overhaul.

Lecture 5: Analytics for Startups

Ilya Volodarsky's lecture on Analytics for Startups was heavily focused on specific tools in the analytics and marketing space. But in addition to tech recommendations, he provided some strong insights that connect back to previous lectures:

9.) You use metrics to drive and operate teams

No matter where you are in your growth cycle, metrics are key to the operation of data-driven teams. You set a metric and goal and drive toward it every single day. This relates to the lecture on setting KPIs, which explained how your early focus should be on moving a specific needle – your primary metric – in the immediate term, on a weekly basis.

10.) Publicly display your progress toward KPIs/metrics

Create a data- and metrics-driven culture from the beginning. If you have a founding team, put your daily metrics up on a dashboard where everyone can see. A lot of founders set up analytics but then never look at them again because it’s painful to come up short. No startup will succeed that ignores harsh realities, or the peaks and valleys of growth. By putting your metrics up on display for everyone to see, you have social accountability around your metrics, and all employees have total transparency around shared goals.


Those are my key takeaways from an invaluable Week 2! I hope you enjoyed, and it would mean the world if you would help hold me accountable for graduating Startup School - please be the hokey, inspiring teacher to my wayward inner city kid! Feel free to pester me via DM, email, Insta comments, etc.!

P.S. - If you want to stay up to date on my misadventures in Startup School and other content relating to startups and entrepreneurship, subscribe to my newsletter below!

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