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Speaker 1

00:02

Thanks for having me. So, today I am going to be talking about how to go from 0 users to many users. I'm just assuming that you have many great ideas in your head at this moment and you're kind of thinking about what the next step is. So I wrote this up early this morning and a lot of this is based off of mistakes I've made in the past.

Speaker 1

00:28

So as Sam mentioned, I went through YC in 2010 and spent a number, 3 years basically, going back and forth, pivoting a bunch of times, starting over a bunch of times. And have learned a lot about what not to do if I were to start another startup after Homejoy, if that should ever happen. And so a lot of it comes from failure and just telling you about what you shouldn't do. And kind of making journalizations of what you should do from that.

Speaker 1

00:57

So, just a reminder that This is sort of, you know, all advice you should take as directionally good guidance. Like it's all, it's like, it's kind of in the right direction, but every business is different, you are different, I'm not you. And so just take everything with, you know, that in mind. So, since this is a college course, you know, when you start a startup, you should basically have lots of time on your hand to concentrate on the startup.

Speaker 1

01:26

And I'm not saying you should, you know, quit school or you should quit work. What I'm saying is, you should have a lot of time, compressed time in a row. Really dedicated to immersing yourself in the idea and developing problems, or developing the solutions to the problem you're trying to solve. So for example, if you're in school, you know, it's better to have 1 or 2 days straight of, per week, on working on your idea versus, you know, spending 2 hours here and there every single day during the course of the week.

Speaker 1

01:55

It's sort of like, I think this is engineering class, so it's sort of like coding, like there's a lot of context watching and, and just being able to really focus really, really focus and immerse yourself is very, very important. So, like I said, I sort of first, when I wrote this up, was thinking what is What are, what are the things that most people, some people do or most people do that is not the correct way to do a startup. And sort of the novice approach I think is what you see up here, which is, you know, I have this really great idea, I don't want to tell anyone about it. I'm gonna build, build, build, build.

Speaker 1

02:33

I'm gonna maybe tell 1 or 2 people. And then I'm gonna launch it on, you know, I'm gonna launch it on TechCrunch or some, somewhere like that. And then I'm gonna get lots of users. But what really happens is because you did not get a lot of that feedback and stuff like that.

Speaker 1

02:46

You know, maybe you get a lot of people to your site, but no 1 sticks around because you didn't get that initial user feedback. And then, you know, if you, you know, if lucky enough you have some money in the bank, you might go buy some users. But sort of, it just whittles out over time and, and you just give up. And, it's a sort of a visual cycle and, you know, I actually did this once and I did this while I was in YC.

Speaker 1

03:08

And that was, you know, like, when I went through YC, I didn't even launch a product. Like, I didn't even launch in TechCrunch, which is a thing that you should definitely do. And, and so you don't want to ever get into that cycle because you'll just end up with nothing good. So, the next thing is you know, you have an idea and you should really think about what the idea is really solving.

Speaker 1

03:36

Like what is the actual problem? And so their problem statement should, you should be able to describe it in 1 sentence. And then you should think, how does that problem relate to me? Am I really passionate about that problem?

Speaker 1

03:46

And then you should think, okay, it's a problem I have, is it a problem that other people have, and sort of verify that by, you know, just going out and talking to people. 1 of the biggest mistakes I've made is, you know, we started my co-founder and I, who is also my brother, he and I started a company called Pathjoy in 2009, 2010. And our goal was basically to, you know, we, we had 2 goals in mind. 1 is to create a company that made people really happy.

Speaker 1

04:15

And and, and create a company that was very, very impactful. And so a good proxy for that is to just create a huge big company. And so we thought, okay, here's the, here's sort of what we're gonna solve is, you know, make people happier. And our, we first went to the notion of, who are the people that made people happy?

Speaker 1

04:36

And we, you know, we came up with life coaches and therapists. So it seemed kind of obvious to just create a platform for life coaches and therapists. And what happened as a result though was that, you know, when we started using the product ourselves, we, we, you know, we're not cynical people by any means, but life coaches and therapists are just not people we would use ourselves, it was sort of useless to us. And so it wasn't even a problem we had, and certainly wasn't something we were super passionate about building out, Yet we spent, you know, almost a year trying to do this.

Speaker 1

05:06

And so, if you just start, you know, from t equals 0, just like think about this before you even build any product, I think you can save yourself a lot of headache down the road from doing something you don't wanna do. So, say you have a problem and you're able to state it. Where do you start? Like, how do you think of solutions?

Speaker 1

05:30

So the first thing you should do is think of what the industry that you are getting yourself into. Whether it's big, whether it's huge, you should really immerse yourself in that industry. And there's a number of ways to do this. 1 is, you know, to really become a cog in that industry for a little bit.

Speaker 1

05:49

And so it might seem a little counterintuitive to do this, because most people say, you know, if you really want to disrupt an industry, you should really not be this, you know, player in it. You should, You know, it, it, you know, someone who's spent 20 or 30 years in an industry probably does, you know, sit in their ways and is just used to the way things work. And really can't think about what the inefficiencies are or the things that you can quote unquote disrupt. But, However, as a new, like, coming into the industry, you really should take, you know, 1 or 2 months just really understanding what all the little bits and pieces of the industry are and how it works.

Speaker 1

06:27

Because it's when you get into the details, that's when you start seeing things you can exploit, things you can really, things that are really, really inefficient and provide, you know, huge overhead costs that you can cut down. And so an example of this is, you know, when we started Homejoy, we, we, we decided to go, we started with the cleaning industry. And when we started, you know, we just were cleaners ourselves. And we started to clean houses and we found out really quickly was that we were very bad cleaners.

Speaker 1

06:58

And so as a result, You know, we said, okay, we gotta learn more about this. And we went to buy books. And we bought books about how to clean. Which helped maybe a little bit.

Speaker 1

07:11

We learned a little bit more about cleaning supplies. But it's sort of like basketball, you know? You can watch and you can learn, or you can watch and read about basketball, but you're not going to get better at it if you don't actually, you know, train and, you know, throw, throw basketball around and throw into the hoop. And so, We decided 1 of us basically had to go and learn how to clean.

Speaker 1

07:33

And so we went or get trained by, you know, a professional, some sort of professional training program if that existed. And that meant we actually went to get a job at a cleaning company itself. And the cool thing was that, you know, I learned how to clean from, you know, training for the few weeks that I was there at the cleaning company. But the even better thing was that I learned a lot about how a local cleaning company worked.

Speaker 1

08:01

And in that sense, you know, I learned why a local cleaning company could not become huge like Homejoy is today. And that's because they have, you know, they're pretty old school and they have a lot of things. Just, just from, anywhere from booking the customer to optimizing the cleaner schedules was just done very inefficiently. And so, there's, so, so, so, so when you go, if you are in a situation like mine where, you know, there's a service, there's a service element of it, you should go and do that service yourself.

Speaker 1

08:36

If your thing is related to restaurants, you should become a waiter. If it's related to painting, become a painter and kind of get in the shoes of your customers from all angles of what you're trying to build. The other thing is, there's also a level of obsessiveness that you should have with it too as well. Like you should, you should be so obsessed to know like, what everybody in the space is doing.

Speaker 1

08:59

And it's things like, you know, running a list of all the potential competitors or similar types of companies. Google searching it and clicking on every single link and reading every single article from what, from like search result number 1 to 1,000. You know, I, I found all potential competitors big and small and if they're public I would go read their S1s. I would go, I would go read all their quarterly financials.

Speaker 1

09:24

I would, you know, sit on the earnings calls. There's, you know, most of these, you don't get much out of it, But there's just these golden nuggets that you'll find once in a while and you won't be able to find that unless you actually go through the work of, you know, getting all that information in your head. So, yeah, you should become an expert in the industry. There should be no doubt when you're building this, that you are the expert so that people trust you when you're building this product.

Speaker 1

09:51

The second thing is identifying customer segments. So, you know, ideally at the end of the day, in the end game, you've built a product or a business that everybody in the world is using. But realistic, like in the beginning, you kind of want to corner off a certain part of the cu, of a customer base so that you can really optimize for them. And that's just, you know, it's just a matter of focus and a matter of, you know, just, you know, catering towards whether it's teen girl, teenage girls or whether it's, you know, soccer moms.

Speaker 1

10:22

You'll just be able to, you know, like I said, focus a lot on, on their needs. And lastly before, you know, before you even create the product, before you put code down, you should really storyboard out the ideal user experience of how you're, how you're gonna solve the problem. And that, and that's not just meaning, you know, the website itself. It's meaning, you know, how does the customer find out about you?

Speaker 1

10:50

You know, whether it's, you know, could be through an ad or through a word of mouth or whatever, so they find out about you. They come to your site, they learn more about you. What's all that text say? What are you communicating to them?

Speaker 1

11:01

So the actual, when they sign up for the product or they purchase the service, what are they actually getting? To after they finish using the product or after they finish using the service. What's, you know, there's, there's sort of like an evaluation period, like they leave me a review or, or they leave comments or what not, And just being able to go through that whole flow and, and visualize in your head, like just envision what the perfect user experience is. And then put it down on paper, and then put it into code, and then start from there.

Speaker 1

11:34

So, you have all these ideas in your head now. You kind of know what the core customer base you want to go after is. And you know like everything about the industry. What do you do next?

Speaker 1

11:45

So you start building your products. And you know, the common phrase that most people use these days, like, you should build a minimal viable, the MVP, minimal viable product. And I underline viable because I think a lot of people skip that part. And they just go out with a feature and then the whole user experience in the very beginning like is flat.

Speaker 1

12:07

So, middle of the line product, viable product pretty much means, you know, what is the smallest feature set that you should build to solve the problem that you're trying to solve. And I think if you go through the whole storyboard experience, you can kind of figure out that very quickly. But again, you have to be talking to users, right? You have to, potential users, you have to be seeing What is, what exists out there already and what you should be building to solve their immediate needs.

Speaker 1

12:37

And the second thing is, before you put in, things in front of a user, you should really have your product, a simple, you know, product positioning down. And what my, what I mean by that is that, you know, you should be able to go to, you know, a person, and you should be able to say, hey, you know, this does X, Y, and Z within a sentence. And so for example, you know, at Homejoy, we started off with something actually super complicated. We're like, we're an online platform for home services.

Speaker 1

13:04

We started with cleaning and you can choose, you know, blah, blah, blah, blah. And it just went off for paragraphs and paragraphs. We present and we want to, you know, potential users to come on our platform. They just get, kind of get bored after the first, first, first, first few sentences.

Speaker 1

13:20

And so, what we just, what we found out was that, you know, we, we really need this 1 liner. The 1 liner is very important, and it kind of describes the functional benefit of, of what you do. You know, In the future, when you're trying to build a brand or whatnot, you should be able to describe what are the emotional benefits and stuff like that. But you're starting with no users, you really need to tell them what they're going to get out of it.

Speaker 1

13:41

So we simply, after we changed our positioning to get your place cleaned for $20 an hour, then everyone got it. And we were able to get, you know, users to, users in the door that way. So, you have a MVP going out there. Now, how do you get your first few users to start trying it?

Speaker 1

14:04

So, your first few users should be, you know, obvious people, the people that you're connected with. You should use it obviously, you and your co-founder should be using it. Your mom and dad should be using it. Your friends and co-workers should be using it.

Speaker 1

14:19

Beyond that you want to get more user feedback. And so you, and I've listed here kind of some of the obvious places to go to and depending on what you're selling, you know, you can take your pick of the draw here. So online communities, there's, on Hacker News now, there's the Show HN, that's a great place. Especially if you're building tools for developers and things like that.

Speaker 1

14:44

Local communities, so if you're building a consumer product, there are a lot of influential local community mailing lists. Especially those for, you know, parents. So those are places you might want to hit up to. Okay, so when you go to, by the way, Homejoy, we actually tried all of these.

Speaker 1

15:06

So we used it ourself, that was fine, cuz I mean, we were on a cleaner, so that was pretty easy. And then our parents lived in Milwaukee, so we were based in Mountain View, so that didn't work. Friends and coworkers are kind of like in San Francisco and elsewhere. So we didn't have too many of them use it.

Speaker 1

15:21

So we actually ended up in a dead end of not being able to convince many people to use this in the beginning. So what we did was, because we're in Mountain View, some of you guys might know, on Caster Street, they have street fairs there during the summertime. And so we'd go out and basically chase down people and try to get them the book of cleaning. And almost everyone would say no.

Speaker 1

15:44

Until 1 day we just took advantage, you know, it's a very hot and humid day. And what we noticed was, you know, and this is like an any, any fair. People, you know, there might be arts and crafts and things like that and random people will, you know, gravitate towards that. But everybody gravitates towards the food and drink area, especially on a hot day.

Speaker 1

16:03

So what we did was, okay, we need to, we figured we need to get in the middle of that. And by getting in the middle of that, we just took water bottles, froze them, and then we started handing out free, free bottles of water that were cold. And people just came to us. We, I think we basically guilt tripped people into booking cleanings.

Speaker 1

16:23

But the proof in the pudding was that I figured most of these people were guilt tripped into doing it. But when they went home, they didn't cancel on us. Some of them did, but majority of them did not. And so we felt, like I thought, okay, that's good.

Speaker 1

16:38

I gotta go clean their houses, but at least there's something we're actually solving here. So, and I don't, I think showing up to fairs, or I know another startup in the last batch, I forgot their name right now, but they showed up, they were selling shipping type products. We're trying to replace shipping products or, or the content of the mailing stuff. And so they would show up to the US postal office and just like find people who were trying to ship products.

Speaker 1

17:15

And just take them out of line and try to get them to use your product and have them ship it for you. So, you just have to go to places where people are going to really show up and, you know, your conversion rate is going to be really, really low, but to go from 0 to 1 to 3 to 4, these are kind of things you might have to do. Okay, so you got some users using you. Now, what do you do with all these users?

Speaker 1

17:43

Customer feedback. So, 1, the first thing you should do is make sure there's a way for people to contact you. So support at homejoy.com. Ideally, there's a phone number.

Speaker 1

17:56

And if you put a hook up a phone number, 1 really good idea is to make sure that you have voice mail or something like that so you don't have to be picking it up all the time. But in any case, a way for people to get inbound feedback is good. But really what you should be doing is going out to your users and talking with them. You know, get away from your desk and just get out and do the work.

Speaker 1

18:22

It's, it seems like a slog and it's going to be a slog, but this is where you're going to get the best feedback ever for your product. And this is going to teach you on what features you need to completely change, get rid of, or what features you need to build. And so, 1 way to do this is to send out surveys, you know, to get reviews after they've used the product. This is okay, but generally, you know, people are only gonna respond if they really love you or they really hate you.

Speaker 1

18:51

And you never get like the in between. So kind of get the in between and not get all the extremes is to go out and actually meet the person that is using your product. And it's not a good idea to, you know, I've seen people go out, meet the user, and they sit there, and it's like a laboratory, and it's, it's like an inquisition almost. You're kind of just like poking and poking and poking at them.

Speaker 1

19:17

Like why don't you do that, why don't you do that. That's not going to give you the best results. What you should really do is make it into a conversation. Get to know them, get them to feel comfortable.

Speaker 1

19:27

Because you want to get them at a level where they are, they feel like, you know, they should be honest with you to, to help you and, and, and improve, improve things for you. So I found that actually taking people out for drinks and stuff like that was a very good way to do that. Not sure if all of you are old enough to do that, but you can take them for coffee. So another way, another thing you should be tracking is, how are you doing in general, from like the macro perspective?

Speaker 1

19:56

And the 1 way to do that, the best way to do that is by tracking customer retention. That is, the number of people that came in the door today, how many are coming back tomorrow, the next day, and so on and so forth. Usually over time, you're kind of looking at monthly retention. So people who came in the door today, are they still using it next month and so on and so forth.

Speaker 1

20:18

The problem with that metric is that it's, you know, it takes forever to collect that data and you don't have, sometimes you don't have a month or 2 months or 3 months to, you know, to, to figure that out. So good leading indicators actually collecting reviews and ratings like 5 star, 4 star reviews. Or collecting some notion of NPS, which is Net Promoter Score. So you're basically asking them from a rating from 0 to 10, how likely are they to recommend you to a friend?

Speaker 1

20:44

And calculating the NPS. And so over time, what you'll see is, as you're building a new feature, is you should be able to see that the reviews or the retention is going up over time, which means you're doing a good job. If it's going down, you're doing a bad job. And if it's kind of staying the same, that means you probably need to go out and figure out what new things you, you, you should be building.

Speaker 1

21:06

The other thing is, I'll get to the qualitative thing later. But the 1 thing you should be wary of is the honesty curve, which is, some people will just lie to you. So I was gonna just, just do, so I mean, this is like degrees of separation from, from you, and this is like level of honesty. Like, so here it's, here this is your mom.

Speaker 1

21:39

This is like your friends of friends. And here's like random people. So I don't know if you can all see this, but. So your mom is going to be, you know, they, she should use your product, but she's gonna be proud of you anyway.

Speaker 1

21:55

And so she'll like maybe be honest like this much. And your friends will, you know, they'll be pretty honest with you and give you feedback because they care about you. By the way, this is assuming it's a free product that you're giving them. And then over time, like, as you get more and more random, these people don't even know who you are.

Speaker 1

22:13

It doesn't go like this really, but it kind of goes like this. Where people don't care about giving you feedback. They just like, okay, here's a survey, type, type, type, type. And so you should take this into consideration when getting user feedback.

Speaker 1

22:27

Now let's say you make, you pay. It's a paid product, right? Well, let's just do this in green. So, the paid, you know, your mom is gonna be like down here.

Speaker 1

22:37

Like, she's just gonna lie to you and say, you know, she's just gonna feel sorry and say, this is a great product of course. But then, you, kind of it goes like this, right? Which is to say that, you know, your friends are kind of gonna give you the right they're, they want to support you and give you the right feedback. But it's actually these random people out here that, you know, if, If they, if they really don't think what they paid for was worth it, they're gonna really tell you.

Speaker 1

23:06

Because, you know, it's money out the door. And so, this is another way of saying, you're gonna get the best feedback. Like, This is obviously, you know, down here. You're gonna get more feedback if you just make someone pay for it.

Speaker 1

23:22

So that's not to say, you know, you should, you know, the first time out, make people pay for it. But it's to say that you should very, if you're gonna build a product that you're gonna eventually need to, you know, they're going to pay for, for the, for the software, for the hardware, whatever. You should do that, get to the point where you can do that very, very fast. Because then that's when you get the real meaty stuff to help you in the future of how you can get more paying users in the door.

Speaker 1

23:49

All right, so you're getting a lot of feedback and what do you do before you want, officially launch the product? So what you want to do is, you always want to be building fast, right, and you want to be optimizing for this stage of growth, that is, you know, you, you might have 10 users at this point, don't, there's no point in trying to build features for the point when you have a million users, right? You want to optimize for the next stage of growth, which is going to be 10 to 100 users. Like, what are the features you really need for that, and just go with that.

Speaker 1

24:28

Sometimes, and, And basically on the slide is just many ways of stating that notion, manual before automation. 1 of the things that I found when building a marketplace is that process is very, very important over time as you scale. But you need not try to automate everything and create software to just, you know, have robots just run everything. What you really should do to understand what you should build is to manually do it yourself.

Speaker 1

24:56

And, and an example of this is When we started taking on cleaning professionals onto our platform, we would have them, we would ask them a bunch of questions. Over the phone and then in person, we asked them a bunch of questions too. And then they would go to a test clean, and then they would, you know, get on boarded to our platform if they were good enough. And so this took a, doing all this question asking for that many candidates.

Speaker 1

25:27

You know, we had about AA3 to, 3 to 5 percent acceptance rate. And so you can imagine all the people we were talking to in the beginning of the funnel that never even made it onto the platform. But what happened over time was that we learned certain questions that we were asking were, that were indicators of whether they're going to be a good or bad performer on the platform. We through just like data collection and just you know looking at, looking at everything.

Speaker 1

25:56

We could just ask on an online form. So that's when we put on, put in an online application. They could apply and then we would ask them maybe several other questions in the interperson interview. So it's, if you try to automate things too fast, then you run into this problem, potential problem of, you know, not being able to move quickly on trying to iterate with things like questions on an application and stuff like that.

Speaker 1

26:24

And the third point here is temporary brokenness is much better than permanent paralysis. By that what I mean is, you know, perfection is irrelevant during this stage. You should, when you get to the next stage of growth, like what you're trying to maybe perfect in this 1 stage is probably going to not matter anyway. And so, do not worry about all the edge cases when you're building something, just worry about the generic case of who your core user is gonna be.

Speaker 1

26:54

And then, as you get bigger and bigger and bigger, the volume of those edge cases will increase over time. And you'll want to, you know, build for that. And lastly, beware of the Frankenstein approach, which is great, you talk to all these users, they give you all these ideas. You know, the first thing you're gonna wanna do is go build every single 1 of them and then go show them the next day and make them happier.

Speaker 1

27:20

You should definitely listen to user feedback, but when someone tells you to build a feature, you shouldn't go build it right away. What you should really do is, you know, get to the bottom of why they're asking you to build a feature. It's usually, usually what they're suggesting is not the best idea, but what they're really suggesting is, I have this other problem that you've either created for me while using the product. Or, I really need this problem solved before I'm ever going to pay to use this product.

Speaker 1

27:47

And so figure that out first, instead of piling on a bunch of features which then hides the problem altogether. So you have a product that you're ready to ship. And so some people at this point will continue building their product and not ship it at all. And I think The whole idea of being stealth and, you know, perfecting the product to, to no end is is the idea that, you know, imitation is is, is cheaper than innovation in, in terms of time and and money and capital.

Speaker 1

28:34

And so, I think everyone should just always assume in general, like, there's going to be, if you have a really good idea, no matter when you launch, someone's going to be, you know, someone's going to fast follow you and someone's going to execute as hard as they possibly can to catch up with you. And so, there's no point in holding out on all that user feedback that you can get by getting a lot of users. Because you feel like, you know, you feel paranoid that someone's gonna do this to you. And I hate to keep harping on it, but this is things I see today with founders.

Speaker 1

29:08

It's something I went through as well. And I think unless you're, unless you're building something that requires hundreds, like tens of millions of dollars just to start up. There, there's really no point in, in waiting around to launch a product. So say you have something that you feel ready to get lots of users on.

Speaker 1

29:30

So what do you do at this point? So I'll look at my time. 20 minutes. 20 minutes, okay.

Speaker 1

29:35

So I will go over various types of growths in the next slide. But the 1 thing to note here, early on, when you are trying to get, when it's just you and your co-founder and maybe like a couple other people building. You're not going to be, you know, create a team just for growth. It's going to be 1 person and 1 person only.

Speaker 1

29:59

And so you need to really focus. And you need to, you should only, you're gonna be tempted to try like 5 different strategies at 1 time. But really what you should do is take 1 channel and really execute on it for an entire week and, and just focus on that. And then, if that works, continue executing on it until it caps out.

Speaker 1

30:18

If it doesn't work, then just move on. By doing this, you will feel more certain that, that, that, that channel that you were working on, that initial hypothesis is wrong. You'll be, you know, then if you tried only working a third of your time on it over the course of, you know, 3 or 4 weeks. So, learn 1 channel at a time.

Speaker 1

30:41

Second is, always be, it, When you find channels that work, you find strategies that work, always be iterating on it. You can potentially give it to some, like create a playbook and give it to somebody else to iterate on it. But these channels always change, you know, anything from Facebook ads to, you know, even Google ads to, you know, the, the, the distribution channels. The, the environments that you don't control change all the time and so you should be always iterating, optimizing for that.

Speaker 1

31:11

And lastly, in the beginning you're probably not, when you see a channel that fails, you know, just get rid of it and go on and move on. There's many other things to try. But over time, go back to those channels and look at it again. So, and what I mean by that is an example is, in the beginning at Homejoy, we had no money.

Speaker 1

31:31

So when we tried to do, we tried to buy users from MaryMade, or not from MaryMade, that's just an example of a competitor. We tried to buy Google ads to get users in the door quickly. And what we found was that MaryMades, MollyMades, all these other national companies, they had more money than us. They were making a lot more money on the job than us.

Speaker 1

31:57

And so they were able to pay for users at a much higher, at a much higher CAC, a much higher, they were able to acquire them at a much higher cost than us. And so we couldn't afford that, and we had to go to another channel, which turned out to be something else. But today, you know, we make more money on the job, we're much better at certain things. And so, we should probably revisit the idea of buying Google ads and buying, you know, going to the STM channel.

Speaker 1

32:24

And so, that's what I mean by that. And the key to all this is creativity. Performance marketing, you know, or marketing or growth in general can, can be very technical. But it's actually technical and you have to be creative.

Speaker 1

32:37

Because if, if it wasn't, if it was really easy and bland, you know, like everyone would be growing right now. And so you always have to find like that little thing that no 1 else is doing and do that to the extreme. So there are 3 types of growth. When, Yeah, 3 types of growth.

Speaker 1

33:02

Sticky, viral, and paid growth. And hopefully I'll get enough time to talk about all of this. So really briefly, sticky growth is trying to get your existing users to come back and pay you more or use you more. Second is viral growth, so that's when people talk about you.

Speaker 1

33:21

So you use a product, you really like it, then you tell 10 other friends, they like it. That's viral growth. And the third is paid growth. So if you happen to have money in the bank, you're gonna be able to perhaps use part of that money to buy growth.

Speaker 1

33:38

And the central theme I'm gonna go through is sustainability. There's a lot of, by sustainable growth I mean, You're basically not a leaky bucket. Money you put in or time you put in has a good return on investment on it. So, sticky growth is, like I said, getting your existing users to keep buying stuff.

Speaker 1

34:00

So, the only thing that really matters here is that you deliver a good experience, right? If you deliver a good experience, people are gonna keep wanting to use you. If you deliver an addictive experience, people are gonna keep wanting to use you. And the way to measure this and to really look at this and how you're doing over time of whether, you know, you are providing good sticky growth is to look at the CLVs and retention core analysis.

Speaker 1

34:29

Now, Does anyone not know what cohort analysis is or should I go over it? Okay, so I'll go over it. Okay, so CLV is, some people call LTV, is called customer lifetime, which is basically the amount of the net revenue that a customer brings in the door for you over a certain amount of period. So a 12 month CLV is how much net revenue does a customer give you over 12 months.

Speaker 1

34:57

And sometimes people look at 3 months and 6 months and so on and so forth. So, so when I say cohort, basically what you're looking at is, this is time. So, let's just call this, yeah, time. So, and this is percent of users coming back to you.

Speaker 1

35:20

So, at time 0, right, at period 0, we're at 100. I'm missing. 100%. So, so cohort is, is another name also for like customer segments and stuff like that.

Speaker 1

35:40

So you can, like you might look at the female versus male cohort you know, people in Atlanta, Georgia versus people in Sacramento, California. But the most common 1 is by, by month. So cohort equals month. And let's just say for this exercise we are looking at like March of, I don't know, 2012.

Speaker 1

36:07

So March 2012, 100% of people, you have like, I mean, n equals 100 people. So 100% of the people obviously are using your product because, you know, that's the definition. Now, once, 1 month later, you might have, you know, the scale is not right, but 50% might come back. And so you come here.

Speaker 1

36:34

Now in the second month, how many people that came in March come back in the second month, or 2 months later, and that might be, you know, down here. And so, over time, you'll have a curve that looks like this. There's always some initial drop off, you know. The reasons why people don't stay after the first use is, you know, it wasn't worth it.

Speaker 1

36:57

Had a bad experience, stuff like that. And then over time, what you want is, you want this to flatten out over time, so that your churn basically goes to 0%. That means you attrition out less, less and less users over time. And these over here, kind of become your core customers.

Speaker 1

37:18

These are the ones that are like sort of staying, staying with you for a long time. And now, now core analysis or, you know, using this as a way to show if you have sticky growth or not is, now say you're, say, you know, say we're 1 year later and you've built a bunch of stuff, right? You graph out the same thing and hopefully what you'll see is that you have a curve like this. That is, in the first period, even more people than 50% came back to you, and more and more people are sticking with you.

Speaker 1

37:59

A really bad, you know, retention curve looks like this. Which is like, after the first use, they just hate you so much, no, like, no 1 even comes back. It's just like 0, right? And I don't know what kind of business that is.

Speaker 1

38:11

I mean, it's obviously a shitty business, but I, like, I, I can't explain a good business that has a retention curve like that. So anyway, so over time as you are thinking of strategies to increase this curve, like keep making it go up and up and up. You want to basically look at this analysis over time to see if, if that strategy is working for you. Okay, does that make sense?

Speaker 1

38:41

Okay, cool. The second kind of growth is viral growth. And like, like sticky growth, you need to also deliver good experience. But on top of that, you need to deliver a really, really good experience.

Speaker 1

38:55

Like what's going to make these people shout out loud on Twitter, on Facebook, whatever, and tell all their friends. And email all their friends and family members about you. You have to really deliver a good experience. Combined with that is, you need to have really good mechanics for the referral program itself.

Speaker 1

39:12

Like you have 100 customers who really want to talk about you now, how are they gonna talk about you? So, to, so in that sense, a viral growth, the viral growth strategy is all really about, 1, building good experience. But if you have that, it's how do you build a good referral program? And so I've listed the 3 main parts of that.

Speaker 1

39:31

1 is the customer, customer touch points, which is where are people learning that they can refer other people? So that might be just, you know, after they book or after they sign up, there is a, you know, usually you see these like right after you sign up, for whatever reason, most people just immediately tell you to invite all their friends, even though you've never used the product before. And so, but that's a customer touch point, it's just right after you sign up. A better 1 is after you've used the product after a while and you see that they're highly engaged, then to show them that link and get them to send it out to everyone.