I came across a Reddit post about “YC’s hidden formula” the other day, and I thought it was the best piece of advice I’ve read on what the first weeks of building a startup should look like—and on the things that actually matter. In this essay, I’ll put that formula into context with my own experience, as a guide for founders who are just starting out and need some orientation on what the process looks like.
Simply put: startups are all about growth. That’s why they exist. Growth is the ultimate measure of a founder’s effectiveness, and the most honest metric to track is revenue—real customer value created.
Instead of inventing metrics that feel comfortable and give the illusion of progress, stick to the simplest measure: revenue. Even if you’re tempted to track DAUs or some specific usage event, your north star should always be revenue. Don’t give in to the part of you that wants to feel good about fake progress. Face the hard truth: in the beginning, this metric might not move for many weeks. But stay disciplined—treat revenue as your guiding light.
Now, here’s the “YC formula”:
Get 100 paying customers at €100/month.
It’s not about hitting a particular revenue target per se; it’s about setting a brutally honest frame for building something people want—and can’t live without. If you apply this standard, you’ll avoid the trap of working on a problem that isn’t genuinely painful to a specific customer group.
The common pitfall is building something that seems cool, but isn’t something your customers desperately need. Getting 100 people to pay proves two things: you’re tackling a truly painful problem, and you’ve validated your hypotheses with a sufficiently large sample to guide you into the next stage. You’ll only get there by focusing on what people need—by talking to them—rather than guessing what they want.
You could argue about the price point: for consumer products, €100 might be too high; for B2B, perhaps too low. The heuristic is to pick a price point that makes you uncomfortable, because you’re testing whether the problem you solve is painful enough. If people will pay a premium, you’ve validated the problem’s severity quickly.
Here’s the playbook, quoted from that Reddit post:
What's the hidden principle? Build something people want. Solve a real problem, then solve it better than anyone else. Growth is a byproduct of retention. If your first 100 users love your product, they'll stick around, and they'll spread the word.
Here's the playbook:
- Start small. Focus on a niche.
- Talk to your users relentlessly.
- Iterate based on what they need, not what you think they want.
- Charge enough to prove value. Free doesn't mean they love it—paying does.
- Retain before you scale. 100 loyal users are better than 1,000 casual ones.
That’s what it’s all about—and what the first weeks of your startup should look like. You can tweak the numbers, but the underlying mechanism and mental model remain the same.