Tag Archives: growth

How I Grew This Podcast, and How I Unintentionally Started Working on Growth

I caught up recently with Mada Seghete, co-founder of Branch Metrics on her new podcast “How I Grew This”. In the podcast, I talk about my career in growth including some of my early experiments before I even had a real job. You can listen here:

I thought I’d go into a little bit more detail in this post despite how embarrassing it is.

When people ask about how I got into working on growth, I usually respond by talking about my job at Apartments.com, and how I had to measure everything the marketing team was doing to grow the business. It turns out measuring everything and its impact on growth gives you a pretty good understanding of the growth channels. And for me, one of the biggest lessons was that it was none of the things you learned about in marketing classes at school. It was things like SEO, affiliate marketing, paid search, distribution partnerships, et al. As I automated more of the tracking, it gave me more time to actually work on optimizing those channels. This is all true, but it’s not actually the start. So I’m going to talk about the start in hopes it helps other people figure out how to find opportunities to develop skills and learn. This is going to be a somewhat autobiographical post, and it may not be useful, but multiple people have said I should write in more detail about it, so I am.

My High School Passion: User Generated Content
I was pretty early to the user generated content trend. In high school. I spent a lot of time on AskMe.com, which was basically a pre-bubble Quora, answering questions about a range of topics including music, video games, and history. I answered over a couple thousand questions there. I also hung around the IGN message boards, which was the 3rd largest forum on the internet at the time. I became a moderator on IGN eventually for some of the music and video game boards. This is pre-Facebook, pre-reddit, pre-most things you spend time on the internet with. One interesting thing is how all of those multi-billion dollar companies existed in some form back then; they just didn’t become the valuable companies:

  • AIM = WhatsApp
  • IGN = reddit
  • AskMe = Quora

My College Obsession: Tony Hawk’s Pro Skater
In college, I started playing a lot of Tony Hawk’s Pro Skater 3 on the GameCube. I got pretty good at it. When I went online, I eventually found a community of the early online players playing on the Playstation. They were a lot better than me, and posted videos for download of them reaching new high scores. This was pre-Youtube, so they used various archaic methods of recording (I, for example, used a capture card and a VCR to record the play), uploaded them to a server, and you had to download them to play the videos locally on your computer.

I watched all of the new videos. Not only were they entertaining, but they helped me learn how to get better myself. All of the best players used loops of the level to repeatedly hit parts of the level that allowed them to do valuable tricks. Many people started to post tutorials of their loops. You can see one of the loops I used for a good score here (sorry for the quality. All of this was recorded before Youtube existed, and when we finally did upload things to YouTube, they didn’t support high quality yet):

When Tony Hawk’s Pro Skater 4 came out, it became super easy for these players to score billions of points in one combo using these loops, so the quest for higher and higher scores lost its luster. Instead, the best players switched to showcasing themselves doing stylish combos without ever touching the ground. They called these videos “no manuals” or “nm’s” as the manual was a trick introduced in Tony Hawk’s Pro Skater 2 to link combos on the ground. Essentially, these players challenged themselves to play Tony Hawk’s Pro Skater 4 as if it were the first Tony Hawk’s Pro Skater. The entire community shifted from a score based system to a style based system.

When Tony Hawk’s Underground came out, the community didn’t love many of the changes. You could now walk to link combos, which made something that was too easy for the best players even easier, and people stopped posting videos. I was dismayed as well, because the volume of content coming from the community dropped precipitously.

My First Growth Loop: The Get There Challenges
Worried that this community I loved was dying, I tried to think of ways to revive the community. I essentially needed a way to prompt people to post stylish videos. I came up with an idea. I would post a screenshot of a piece of a level in one of the Tony Hawk games to start. I’d post another screenshot of a place you had to get to in the same combo. And you had to do all of this without touching the ground (no manuals, walking, or reverts). The first to complete it got to post the next challenge. I posted two of them to make sure someone would bite, called them the “Get There Challenges”, and a player named Milky posted of a video of himself completing the second. I awarded him the win and challenged him to post the next challenge. He did, and the Get There Challenges were born. Within a day, someone had beaten Milky’s challenge. The loop had officially begun.

By the eighth challenge, the community started adding variations, such as shortest to complete, coolest version to complete, and sub-challenges. Eventually, some even allowed manuals. A website was built (not by me) to host them officially, and a bunch of copycat websites tried to start their own. GT’s (as they had become known) became a pillar of the Tony Hawk’s Pro Skater online community. Over 300 challenges were consecutively posted and completed over the course of the next three years.

Most of these videos are lost to time. Mike, one of the best players in the community, did create a video commemorating 100 challenges, which is probably the best introduction to the concept. Apologies for the video quality, the out of context teenage jokes, and most importantly, the music choices used in the video.

Now, I am probably an idiot for not using this concept to build a billion dollar business ten years before esports and three years before Youtube became a thing. But the framework of the Get There challenges continues to serve me in my career in other ways. I have come to call these loops content loops and not viral loops as what they do is generate content that attracts people instead of invites. I have built a course on them and talked about them. The Get There challenges have a similar dynamic to how Eventbrite (event listings), GrubHub (menus), and Pinterest (boards) have grown. People mistake this as an SEO strategy, but it’s not. As long as you have a place for the content to be discoverable, it can be a loop if enough people interact with it.

There is much more of an opportunity today to leverage your hobbies for learning opportunities than there were when I was a teenager, whether it’s new creation tools available or all of these new online communities. You may be surprised what you learn from them and how they can inform your eventual career.

Bonus content with much better music:


Currently listening to Ritorno by Andrea.

Q&A with Elena Verna at Amplitude Amplify Conference

I recently gave a presentation at the Amplitude Amplify Conference on Growth Models. I then had the pleasure of interviewing one of my favorite leaders, Elena Verna, GM of the Consumer Business at MalwareBytes and previous SVP of Growth at SurveyMonkey. The video is now online. We talk about how MalwareBytes and SurveyMonkey grow, the different types of word of mouth, how to think about freemium as a strategy, the content loops of SurveyMonkey and Eventbrite, building network effects, and much more.

Announcing the next Retention Deep Dive, Growth Series, and something new

Over the last few years, I’ve worked with Brian Balfour (CEO Reforge, formerly VP Growth @ HubSpot) as a Growth mentor and contributor to the Reforge programs. These are part-time programs (no need to take time off work) specifically designed for experienced Product Managers, Marketers, Engineers, and UX/Designers in both B2B and B2C companies.

Today, Reforge announced their three upcoming programs this fall:

1) The Retention + Engagement Deep Dive program. I worked closely with Brian developing this program, which looks at every aspect of retention including activation, engagement, resurrection, and churn.

2) The Growth Models Deep Dive program. This is a new, detailed examination of a key growth topic Brian and I developed this year with Kevin Kwok.

3) The Growth Series program. This is Reforge’s flagship program that provides an overview of the key topics in growth that’s been 100% revamped to reflect today’s growth challenges.

Apply to Reforge (Takes ~5 minutes)

Each Reforge program runs from September 24th through November 16th. Seats always fill up fast, and I’m excited to be involved. I’ll also be doing some speaking and Q&A during the events.

Besides Brian, Kevin and myself, other hosts include Andrew Chen (General Partner @ Andreessen Horowitz), Shaun Clowes (VP Growth @ Metromile, former Head of Growth @ Atlassian), Dan Hockenmaier (former Director of Growth @ Thumbtack), Heidi Gibson (Sr. Director of Product Management @ GoDaddy), and Yuriy Timen (Head of Growth @ Grammarly).

About the Reforge Programs
These are all invite-only, part-time programs that last 8 weeks. Each program requires a time commitment of 4 – 8 hours per week. They’re designed for Product Managers, Marketers, Engineers, and UX/Designers in both B2B and B2C companies looking to accelerate growth in their companies and in their careers by developing a systematic approach to thinking about, acting on, and solving growth problems.

In addition to the course material, we’ll also hear from leaders in the industry through interviews, live talks, and workshops, including:

Fareed Mosavat, Growth @ Slack
Ken Rudin, Head of Growth, Search @ Google
Brian Rothenberg, VP Growth and Marketing @ Eventbrite
Ravi Mehta, Product Director @ Facebook
Mike Duboe, Head of Growth @ Stitch Fix
Josh Lu, Sr. Director, PM @ Zynga
Guillaume Cabane, VP Growth @ Drift
Matt Plotke, Head of Growth @ Stripe
Joanna Lord, CMO @ ClassPass
Gina Gotthilf, ex-Growth Lead @ Duolingo
Elena Verna, SVP Growth @ MalwareBytes
Kieran Flanagan, VP Growth/Marketing @ HubSpot
Naomi Pilosof Ionita, Partner @ Menlo Ventures
Nick Soman, ex-Growth Product Lead @ Gusto
Nate Moch, VP Growth @ Zillow
Simon Tisminezky, Head of Growth @ Ipsy
Steve Dupree, Former VP Marketing @ SoFi
See the full list here

Here’s some more detail about each program below:

About the Retention + Engagement Deep Dive
Retention + Engagement Deep Dive zooms in on one of the most important sub-topics of growth.

Retention and engagement separates those companies in the top 1% of their category. Every improvement in retention improves acquisition, monetization, and virality. But moving the needle on retention is hard.

This program takes a microscope to every aspect of retention, including:

  • Properly define, measure, segment, and analyze your retention
  • Find and quantify the three moments every new user goes through to create a long-term retained user
  • Construct a high performing activation flow from the ground up using detailed strategies across product, notifications, incentives, and more
  • Layer your engagement strategies to build a compounding growth machine at your company
  • Articulating retention and engagement initiatives across teams, as well as influencing how leaders think about retention in your company
  • Walk step-by-step through of lessons applied to dozens of examples from companies like Instagram, Zoom, Spotify, Everlane, Airbnb, Turbotax, Jira, Credit Karma, Blue Bottle
  • And more…

The Retention + Engagement Deep Dive is designed for growth professionals who are looking to zoom in on retention, either because their job is focused on retention, or because they already have an advanced working understanding of the quant and qual fundamentals of growth and are looking to build additional competency in retention and engagement.

Apply for the Retention + Engagement Deep Dive

About the Growth Models Deep Dive
The new Growth Models Deep Dive addresses an essential new skill and topic that every growth practitioner needs to understand. Your growth model is the essential tool that drives alignment, prioritization, strategic investments, metrics, and ultimately, growth. Without it, your team ends up setting faulty goals, focusing on sub-optimal initiatives, and running in opposite directions.

This program goes deep into growth models across companies. You will:

  • Learn how the fastest growing products actually grow (hint: the answer isn’t funnels)
  • Dissect how the fastest growing products like Uber, Slack, Dropbox, Stripe, Airtable, Instagram, Fortnite, Tinder, and others grow using growth loops
  • Learn the detailed components of 20+ growth loops
  • Systematically construct growth loops your product can use after analyzing the three qualitative properties of every growth loop
  • Assess gaps and uncover opportunities for growth by identifying, measuring, and analyzing your products existing growth loops
  • Complete a step-by-step walkthrough to build your quantitative model for a single loop and your entire product
  • Communicate actionable insights from your growth model to obtain buy-in from leadership and across teams
  • And more…

The Growth Models Deep Dive is designed for growth professionals looking to focus on growth modeling, either because their job requires modeling their company or product’s growth or because they’re in a leadership role. It’s especially useful for growth leaders looking to influence leadership, set a team’s direction, and rally colleagues using growth models.

Apply for the Growth Models Deep Dive

About the Growth Series
The Growth Series is a comprehensive overview of the key topics in growth. The program is designed to help you accelerate growth of your product, company and your career by creating a prioritized list of retention strategies, building your quantitative growth model, and much more. Plus, the Reforge team spent +100 hours collecting feedback, investigating new growth concepts with experts, and analyzing the latest strategies coming out of top companies to completely overhaul the content with new topics, frameworks, and relevant examples.

During the Growth Series, you’ll learn:

  • Going from understanding one or two pieces of your growth model to understanding how the entire system works together
  • Evaluating the key components of growth (acquisition, retention, monetization) and how they feed one another
  • How to construct a holistic growth model, bringing together all the components of the funnel
  • How to understand and evaluate the user motivations behind the levers in your growth model
  • Running a continual, self-reinforcing experimentation process to execute against your growth model and user psychology
  • Learn how to properly call, dissect, and analyze an experiment, plus implement the results across your team
  • And more…

The Growth Series is designed for practitioners who already know the basics of growth and are figuring out how to take the next step. Participants are assumed to have knowledge about A/B testing, ad buying, and other fundamental tactics, and are ready to take on the bigger challenge of thinking about the entire picture of growth and forming a coherent and compelling strategy.

Apply to the Growth Series

Align Revenue to the Value You Create

“We want to create more value than we capture.”*

Tim Kendall, the former President of Pinterest, repeated those words at an all hands to describe our strategy for monetization a few years ago. My role as an advisor to Greylock’s portfolio companies allows me to work with many different types of businesses: consumer social, marketplaces, SaaS, etc. I’ve come to realize this saying describes an optimal strategy for a lot more than just an ad-supported revenue model. It should actually be the guiding light for most subscription software businesses.

Align Revenue To The Value You Create
One of the most common questions I receive from subscription businesses is when to ask for a signup and when to start charging customers. In freemium businesses, the slightly different question is how aggressively you upsell the paid product, and how good you make the free product. If you talk to entrepreneurs, you will get definitive answers from them, but they are frequently the opposite of each other. “You should never give away your product for free!” “You’ll never succeed without a free trial!” “Ask for credit card upfront! People won’t take the product seriously.” “Never ask for a credit card upfront! You’ll shoo too many people away.” The default answer I gave to entrepreneurs after hearing all of this feedback is that it depends on the business and needs to be tested.

As I researched more into the problem, these questions actually seemed to be the wrong questions to be asking. Harkening back to Tim Kendall’s advice, I started asking entrepreneurs, “What is the path to actually creating value from your service for your customers? How long does it take, and what actions need to be accomplished?” In other words, very similar advice to what is a successful onboarding? Once you learn that, you can determine how to capture some of the value you create.

Capture Value For The Business After Value Has Been Created For The Customer
When your product is subscription based, the prime time to ask for a subscription is after a successful onboarding occurs. It frequently is based on usage, not time. Dropbox is a famous example. The product is free up to a certain amount of storage. Once a user hits that amount of storage, they cannot add more files to Dropbox without paying. This storage amount also happens to be around the point where Dropbox becomes a habit, and represents real switching costs to find another way to share files across devices. So their conversion rates to paid are very high without any sort of time-based trial period. They don’t have a free product and a paid product; they have a free introduction to their paid product, and it becomes paid as soon as value has been created for the customer.

Your company may not have a long time to demonstrate value though, which may force your product to change to display (and capture) value more quickly. For startups based on search engine traffic, people reach your page with intent at that moment, and you frequently learn that this initial session is your only chance to convert them. So you push for a signup during that session after showing a preview of the value you can provide.

That is what we implemented at Pinterest, and it worked well, but it definitely created backlash from users for whom we had not yet created enough value. Once Pinterest was relevant on search engines for multiple topics, we saw people come back multiple times, and pulled back the signup walls on first visit. At that point, Pinterest was confident users would come back and thus focused on demonstrating more value before asking for signup.

Don’t Try To Capture Value In A Way That Reduces Value Created
It’s interesting to map the revenue growth of Dropbox to Evernote over the same time period. Evernote allows you to store an unlimited number of files and only makes you pay for advanced features like offline storage, storing large files, and (later) sharing on more than two devices. These features would have actually increased value created and switching costs if they were free, because Evernote’s value prop is about being able to access notes everywhere. If Evernote had instead mined their data and seen that people stick around after, say 50 notes, that would probably have had more effective monetization.

You only want to hide features from free users if they do not create habits or virality. Hiding sharing functionality before payment never makes sense because it introduces more people to the product for free. Hiding functionality that helps create retention also doesn’t make sense because you can always upsell retained users, but you can never upsell users who did not see the value and therefore don’t come back.

Decreasing Churn Is Long Term More Important Than Maximizing Conversion
Many people will decry that this strategy actually reduces revenue. In the short term, this sentiment is likely to be true. Decreasing churn might have a lower conversion rate upfront, but it aligns to long term successful retention. Churn rate is usually one of the biggest barriers to long term growth, so it’s worth thinking about this type of strategy even if it has a short-term decrease in revenue. It can be much harder to re-acquire someone after they have canceled, than charge someone for the first time who has been receiving regular value because you charged them for value you didn’t create.

What usually happens when a company captures more value than they create is they will have high revenue growth for a period of time (with a lot of investor enthusiasm), followed by a flattening of growth and then a steep revenue decline. This happens because revenue growth is a lagging indicator. Usage growth is the leading indicator. When usage lags revenue, this predicts churn. As you churn more and more users, it becomes harder and harder (and eventually impossible) to replace those churned users with new users to keep revenue metrics flat. Look at Blue Apron’s valuation to see this playing out currently as subscribers start to decrease for the first time year over year.

You Want Your Revenue Model To Align As Closely As Possible To The Value You Create
Lastly, as you start charging customers to capture value you create, you want your business model to align to the value that is being created. Email marketing tools have mastered this. Email marketing tools’ value is based on reaching customers with messages. Most email marketing tools charge on a CPM (i.e. a price for every thousand emails you send via their platform). As your email volume increases, they continue to drop the CPM. This make these companies more money because customers are sending a lot more email over time. But it actually becomes more valuable to the customer as well, because email is now cheaper on a per unit basis to send.

Compare this to Mixpanel, a product analytics tool. Mixpanel charges per event, and their value is delivering insights based on data from events being logged on your website or mobile app. The more events that are tracked in Mixpanel, the more insights the customer can receive, and the stickier the product. Since Mixpanel is charging per event though, a weird calculus emerges for the customer. The customer has to ask if tracking this event is worth the cost because not all events are created equal. Meaning the customer has to decide which data is important before they use the product. So, Mixpanel’s revenue model actually hurts its product value.

— 

It’s easy for subscription businesses to get attracted to the allure of short term revenue. The goal of your business is first to create value. The creation of that value and the understanding of how it’s created allow for more optimal and sustainable revenue generation opportunities. Don’t pursue short term revenue opportunities that prevent the customer from understanding the value your company creates. When you are generating revenue, you want to align that revenue model to how value is created for your customer. If you’re not sure, err on the side of creating more value than you capture rather than the opposite. This leads to long term retention and the maximization of revenue.

Naomi Ionita, General Partner at Menlo Ventures and former growth leader at Invoice2go and Evernote, and I talk more about this and other subscription growth problems in the Greymatter podcast.

*This quote I believe originally stems from Brian Erwin.

Currently listening to Shape the Future by Nightmares on Wax.

Getting Smart About Growth Podcast with Andrew Chen

Andrew Chen recently wrote a blog post about how growth is getting harder. I invited Andrew to the Greymatter podcast to chat more about why growth is getting harder, and more importantly, what to do about it.

We talk about how viral growth is on the decline in consumer, but not in B2B, and how to leverage paid referrals effectively. We also walk through trends in paid acquisition, how to find your first channel of growth, and much more.

The iTunes link is here, and here is the Soundcloud link for email readers.

What Are Growth Teams For, and What Do They Work On?

This blog post was adapted from a presentation I did recently. Hence, slides. Don’t say I didn’t warn you.

I receive a lot of questions about growth teams. Naturally, there is a lot of confusion. Is this marketing being re-branded? Who does this team report to? What is the goal of it? What do they actually work on? When do I start a growth team for my business?

The purpose of growth is to scale the usage of a product that has product-market fit. You do this by building a playbook on how to scale the usage of a product. A playbook can also be called a growth model or a loop.

The first question you should ask before asking about growth is if you have product-market fit?

The traditional definition above is qualitative, and if you’re like me, you like to have data to answer questions. The best way to get that data for most businesses is to measure retention.

The best way to identify the key action is to find a metric that means the user must have received value from your product. The best way to understand the frequency on which you should measure that metric is how often people solved this problem before your product existed. Let’s look at some examples from my career.

For Pinterest, a Pinner receives value if we showed them something cool related to their interests. The best way to determine if the Pinner thought something we showed them was cool is that they saved it.

For Grubhub, this was even easier to determine. People only receive value if they order food, and when we surveyed people, they ordered food once or twice a month (except for New York).

Once you have a key metric and a designated frequency, you can graph a retention curve or a cohort curve. If it flattens out, that means some people are finding continual value in the product. But that is not enough.

Brian Balfour has a great post on this, which he calls product-channel fit.

If you’ve been around startups for a while, you might remember this tweet from Paul Graham. It talked about the fastest growing startup Y Combinator has ever funded. It is a graph of revenue growth from $0 to $350,000 per month in just 12 months.

The startup was Homejoy, an on demand cleaning service. Investors liked this graph, so they gave the company $38 million to expand.

20 months later Homejoy shut down. From a post-mortem of the company, I highlight the following quote.

If you discounted to get to product-market fit, you didn’t get to product-market fit. Product-market fit is not revenue growth, it’s not growth in users, it’s not being #1 in the App Store. Product-market fit is retention that allows for sustained growth.

So, I though product teams were in charge of creating a product people loved, and marketing teams were in charge of getting people to try the product. What changed?

What changed is an acknowledgement of what actually drives startup growth. There are three main levers. Phase I is simultaneously the most important and the least understood. In Phase I, you change the product to increase its growth rate. Some changes include improving onboarding, helping the product acquire more customers through activities like virality or SEO, incresing the conversion rate, et al.

These initiatives are “free” in that they don’t require an advertising budget. Their cost is the opportunity cost of a product team’s time. They are measurable in that you can create an experiment and understand the exact impact of the change. They are also scalable in that if you make a change that, say, improves your conversion rate, and it has a certain amount of impact, it likely will have that same impact tomorrow, weeks from now, and potentially even years from now.

The other two phases are what we traditionally think of as marketing. Performance marketing initiatives, like buying ads on Facebook or Google, are also measurable and scalable, but scale with an advertising budget. Brand marketing usually requires an even larger ad budget, and is harder to measure or scale. The time frame over which brand marketing works takes years, and can be hard to confirm. If you do create a PR campaign or a TV ad that seems to work on a more immediate time frame, it can be hard to scale. that is because brand marketing always requires new stories to keep people’s attention.

This is why marketing can’t be in charge of all growth initiatives. They don’t have access or capability to the most important ones. They might know they need to improve the site’s conversion rate or get more traffic from referrals, but they don’t have access to the product roadmap to get them prioritized appropriately, and if they do get engineering and design help, they don’t have the expertise in working with them to build the best solutions.


Perhaps what’s more important to understand in the difference between marketing and growth is how the traditional marketing funnel changes with startups. Above is the traditional marketing. This model is based on the old school model of product development before the internet in spending a lot of money to make people want things.

Startups by definition should be making things people already want. When you do that, you can invert the funnel and focus on people that already want the product or people that are already using it. This is more effective on a small (or no) budget.

When you translate that into tactics, you see how product-driven growth initiatives dominate the top of the list of priorities. It does not mean you won’t work on performance marketing or brand marketing, but that they usually become important later on in a product lifecycle as an accelerant to an already sustainably growing company.

So I spent a lot of time explaining why growth is different from marketing. How is different from product?

Growth teams don’t create value. They make sure people experience the value that’s already been created.

The most common examples to start a growth team to address are:

  • improving the logged out experience (for conversion or SEO)
  • sending better emails and/or notifications
  • increasing referrals or virality
  • improving onboarding

SEO and onboarding are harder places to start because their iteration cycles are much longer than the other areas.

Growth teams don’t start by finding mythical VP’s of Growth to come in and solve all of your problems. They are usually started by existing employees at a company (or founders) that really understand the company and what’s preventing it from growing faster. They report to their dedicated functions, but sit together to focus on problem solving.

To find out which area you work on after you have the team, you have to analyze the data. For example, at Pinterest, they originally wanted me and my team to work on SEO. What we saw was that while there was a lot of opportunity to get more traffic via SEO, a bigger issue was the conversion rate from that traffic. So we decided to work on conversion instead.

Then we had to figure out what to work on. Jean, an engineer on the team, had recently run an experiment that gave us a key insight. So, we said, we could use this same modal when people clicked on Pins. Clicking on a Pin could show enough interest in Pinterest for you to want to sign up.

The other thing people did when they liked what they saw scroll to see more. So, we decided to try stopping them where we stopped the Google crawler, and asking them to sign up then.

It took Jean two days of work to launch this experiment, and it resulted in a much bigger impact than expected.

So that’s an example of finding a conversion issue in you data, and putting together a really scrappy experiment to try to improve it. What else can growth teams work on? Here are some examples from my time at Pinterest, and some best practices we’ve learned.

Usually, the biggest area a growth team focuses on improving is retention. That’s right; growth teams are not just about acquisition. Retention comes from a maniacal focus on improving the core product, which I define as core product, not growth, work. Where growth comes in is reducing friction to experience that core product. Simplifying how the current product works usually has much more impact than adding new features. New features complicate the product, making it harder for new people to understand.

So how do you simplify the core product? Well, you have to have data to understand what people do, and pair it with qualitative research to understand why they do it. We spent countless hours at Pinterest putting laptops in front of non-users watching them sign up for the product to figure out why people didn’t activate.

At Grubhub, data pointed out that Grubhub was an S curve when it came to both conversion and retention. This graph is a (now very old) graph of conversion rate in Boston based on how many restaurants Grubhub returned when you searched your address. After 55 results, conversion rate essentially doubled for new and returning users.

Qualitative research gave us different insights. When we asked users why they didn’t use Grubhub more often, they would say, “it’s expensive.” We thought that was weird, because Grubhub wasn’t charging them anything. What they meant is that delivery was expensive due to minimums and delivery fees. So, we went back to our restaurants, convinced a few to try lowering their minimums and fees to see if increased volume could make up for lower margin. When it did, we creates case studies to help convince other restaurants.

At Pinterest, we simplified the signup and onboarding flow. What used to be a flow that required five steps was now three with one of them pre-filled and the other two optional. What we did do was introduce friction that we knew made it more likely a Pinner would find content they care about. This was asking them which topics interested them before showing them a feed of content.

We also realized that the more content people see, the more likely they will find something they like, which will lead to retention. So, we removed content around Pins that was non-critical, like who Pinned it to what board and how they described it. All of these increased activation rates.

We also contextually educated people on what to do next when they were onboarding. There is a common saying that if you need to add education to your design, it’s a bad design. It’s pithy and sounds smart, but it’s actually dangerous. My response is that a design with education is better than a design that doesn’t educate.

Search engine optimization has been a really great lever for organic growth for every company I’ve worked on in my career. It’s not for every business though. People need to already be searching for what you do. That alone isn’t enough though. You need to be an authority on the subject, which Google determines by relevant external links to your domain and your content. You also need to be relevant to what was just searched.

We worked on improving both of these at Grubhub. When Grubhub launched new market, by definition we weren’t locally relevant yet. So we would go to local blogs and press outlets and tell them we were launching there, and that we wanted to give their readers $10 off their first order. All they had to do was link to a page where the discount would auto-apply. After a while, that page would have enough local links so that even though the promotional discount was over, it would still rank #1 for the local delivery terms e.g. “san francisco food delivery”.

For relevance, Grubhub knew which restaurants delivered where, their menu data, and reviews from real people. So we aggregated them into landing pages for every locale + cuisine combination e.g. ‘nob hill chinese delivery”.

We applied the same landing page strategy at Pinterest. While Pinners had created boards on their favorite topics, it was one person’s opinion on what was relevant for a topic. Pinterest has repin data globally for every topic, so we knew what the best Pins were across the Pinterest community. So we created topic pages with the best Pins, and they performed better than individual boards on search engines and with search engine users.

We also worked a lot on emails and notifications on the Pinterest growth team. Emails are a key driver of retention. They won’t solve your retention problem, but they will certainly help if you do them right. At every company I have been at, people hated email and didn’t want to send them to their customers. When they finally did, they saw lifts. You are not your customer. You get more email than they do. Emails help them if they’re connected to the core value of why they use your product. Emails are not helpful if they’re pushing a marketing message.

At Pinterest, I made this mistake. I set up campaigns with emails that explained all of the things Pinterest could do. People don’t care about what Pinterest can do. They care about seeing cool content related to their interests. We needed to stop sending email like a marketer, and start sending email like a personal assistant. So we replaced those emails with popular content in topics of interest for each Pinner, and our retention increased.

Then, we built a system around it. Each Pinner likes different content, at different times, and different amount of it. So we learned for each Pinner what content they liked, when they liked to receive emails and notifications (based on when they opened them), and how much they liked to receive based on testing different volumes and seeing open rate impacts.

If you’re testing emails and notifications, you can test manually first, then automate and personalize. What I have learned at Pinterest and Grubhub is what seems to be worth testing. At Pinterest, one engineer tested 4,500 different subject lines, resulting in hundreds of thousands of additional weekly active users. Around the same time, we spent three months redesigning all of our emails, and it had no impact on usage.

A common issue I see with growth and marketing teams is they think that emails and notifications can only have positive impact. This is not true. You have to measure the lift in usage vs. the unsubscribes (and the impact of an unsubscribe) and app deletions. Those will impact usage, and you need to know how.

Growth teams have a clear purpose, and that purpose makes sense only if you have first found product-market fit. Once you have that, you will find traditional product and marketing lacking in their ability to help scale usage of your product. That’s where growth teams come in. Growth teams use data and qualitative research to help understand the frictions that prevent more people from finding the value in your product. That can mean acquisition, but it can also mean reducing friction in the core product, working on conversion or onboarding, or finding ways to remind existing users about the value you’re creating. If you have questions about growth teams, don’t hesitate to reach out to cwinters@greylock.com.

This presentation was made in conjunction with @omarseyal, who is awesome.

Currently listening to Everybody Works by Jay Som.

Why Focus Is Critical to Growing Your Startup, Until It Isn’t

When I was a teenager, I told my dad about a friend and his dad and how they had seven businesses. He immediately replied, “And none of them make money.” I thought it was an extremely arrogant thing to say at the time, but later, I realized it might be the smartest piece of advice he ever gave me.

When I joined Grubhub, I quickly noticed the founders were incredibly good at staying focused. They said we were building a product for online ordering for food delivery — and only delivery — not pickup, not delivery of other items, not catering, and that’s all we would do for a long time. I remember thinking, “but there’s so much we could do in [XYZ]!” I was wrong. By staying focused on one thing, we were able to execute technically and operationally extremely well and grow the business both very successfully and efficiently. When we added pickup functionality four years later, it proved not to be a very valuable addition, and hurt our conversion rate on delivery.

If you have product/market fit in a large market, you should be disincentivized to work on anything outside of securing that market for a very long time. There is so much value in securing the market that any work on building new value propositions and new markets is destructive to securing the market you have already validated.

There is an interesting switch in the mindset of a startup that needs to occur when a startup hits product/market fit. This group of people that found product/market fit by creating something new now have to realize they should not work on any new value propositions for years. They now need to work on honing the current product value or getting more people to experience that value. Founders can easily hide from the issues of a startup by working on what they’re good at, and by definition, they’re usually good at creating new products. So that tends to be a founder’s solution to all problems. But it’s frequently destructive.

If a product team can work on innovation, iteration, or growth, they need to quickly shift on which of those they prioritize based on key milestones and value to the business. In this scenario, it’s important to define what innovation, iteration, and growth mean. In this context:

  • Innovation is defined as creating new value for customers or opening up value to new customers. This is Google creating Gmail.
  • Iteration is improving on the value proposition you already provide. This can range from small things like better filters for search results at Grubhub to large initiatives like UberPool. In both cases, they improve on the value proposition the company is already working on (making it easier to find food in the case of Grubhub, and being the most reliable and cheapest way to get from A to B in the case of Uber).
  • Growth is defined as anything that attempts to connect more people to the existing value of the service, like increasing a product’s virality or reducing its friction points.

I have graphed the rollercoaster of what that looks like below around the key milestone of product/market fit.

Market Saturation
The time to think about expanding into creating new value propositions or new markets is when you feel the pressure of market saturation. Depending on the size of the market, this may happen quickly or slowly over time. For Grubhub, expansion into new markets made sense after the company went public and had signed up most of the restaurants that performed delivery in the U.S. The only way the company could continue to grow was to expand more into cities that did not have a lot of delivery restaurants by doing the delivery themselves.

All markets are eventually saturated, and that means all growth will slow unless you create new products or open up new markets. But most entrepreneurs move to doing this too early because it’s how they created the initial value in the company. Timing when to work on iteration and growth and when to work on innovation are very important decisions for founders, and getting it right is the key difference to maximizing value and massively under-performing.

B2B Growth Podcast with Naomi Ionita

Naomi Ionita, VP of Growth at Invoice2go and formerly Director of Growth at Evernote, joins me to discuss the growth B2B startups that grow more like consumer businesses. We discuss topics like how to monetize your product in general, converting new customers to paying customers, and preventing churn.

The iTunes link is here, and here is the Soundcloud link for email readers.

Why Onboarding is the Most Crucial Part of Your Growth Strategy

When people talk about growth, they usually assume the discussion is about getting more people to your product. When we really dig into growth problems, we often see that enough people are actually coming to the products. The real growth problems start when people land… and leave. They don’t stick. This is an onboarding problem, and it’s often the biggest weakness for startups. It can also take the longest to make meaningful improvements when compared to other parts of the growth funnel.

In my role as Growth Advisor-in-Residence at Greylock, I talk to startups in the portfolio about getting new users to stick around. Through many failed experiments and long conversations poring over data and research, I have learned some fundamental truths about onboarding. I hope this can function as a guide for anyone tackling this problem at their company.

What is Successful Onboarding?
Before you can fix your onboarding efforts, you need to define what successful onboarding is to you. What does it mean to have someone habitually using your product? Only then can you measure how successful you are at onboarding them. To do so, you need to answer two questions:

  • What is your frequency target? (How often should we expect the user to receive value?)
  • What is your key action? (The action signifies the user is receiving enough value to remain engaged)

To benchmark frequency, look at offline analogs. At Grubhub, we determined how often people ordered delivery by calling restaurants. The answer was once or twice a month, so we used a “once a month” as a benchmark for normal frequency for Grubhub. At Pinterest, the analog was a little harder to determine, but using Pinterest was most like browsing a magazine, which people read weekly or monthly. So we started with monthly, and now they look at weekly metrics.

Identifying the key action can be easy or hard — it depends on your business. At Grubhub, it was pretty easy to determine. You only received value if you ordered food, so we looked at if you placed a second order. At Pinterest, this was a little harder to determine. People derive value from Pinterest in different ways, from browsing lots of images to saving images to clicking through to the source of content. Eventually, we settled on saving (pinning an image to your board), because, while people can get value from browsing or clicking through on something, we weren’t sure if it was satisfying. You only save things if you like them.

Once you know your key action and your frequency target, you have to track that target over time. You should be able to draw a line of all users who sign up during a specific period, and measure if they do the key action within the frequency target after signup. For products with product/market fit, the line flattens as a percentage of the users complete the key action every period:

If the line flattens rather quickly, your successful activation metric is people who are still doing [key action] at [set interval] at [this period after signup]. So, for Pinterest, that was weekly savers four weeks after signup. If your cohort takes a longer time to flatten, you measure a leading indicator. At Grubhub, the leading indicator was a second order within thirty days of first order.

How should you research onboarding?
You can break down cohort curve above into two sections. The part above where the curve flattens are people who “churn”, — or did not receive enough value to make the product a habit. The people below where the curve flattens have been successfully onboarded.

To research onboarding, talk to both groups of people to get their thoughts. I like to do a mix of surveys, phone calls, and qualitative research using the product. I usually start with phone calls to see what I can learn from churners and activators. Our partner Josh Elman talks about best practices to speaking with churners, or bouncebacks. If I am able to glean themes from those conversations, I can survey the broader group of churners and activators to quantify the reasons for success and failure to see which are most common. (Sidenote: You’ll need to incentivize both groups to share their thoughts with you. For those that didn’t successfully activate, give them something of value for their time, like an Amazon gift card or money. For those that did, you may be able to give them something free in your product.)

But it is not enough to just talk to people who already have activated or churned. You also want to watch the process as it’s happening to understand it deeper. In this case, at Pinterest, we brought in users and watched them sign up for the product and go through the initial experience. When we needed to learn about this internationally, we flew out to Brazil, France, Germany and other countries to watch people try to sign up for the product there. This was the most illuminating part of the research, because you see the struggle or success in real time and can probe it with questions. Seeing the friction of international users first hand allowed us to understand it deeper and focus our product efforts on removing that friction.

The principles of successful onboarding
#1: Get to product value as fast as possible — but not faster
A lot of companies have a “cold start problem” — that is, they start the user in an empty state where the product doesn’t work until the user does something. This frequently leaves users confused as to what to do. If we know a successful onboarding experience leads to the key action adopted at the target frequency, we can focus on best practices to maximize the number of people who reach that point.

The first principle we learned at Pinterest is that we should get people to the core product as fast as possible — but not faster. What that means is that you should only ask the user for the minimum amount of information you need to get them to the valuable experience. Grubhub needs to know your address. Pinterest needs to know what topics you care about so they can show you a full feed of ideas.

You should also reinforce this value outside the product. When we first started sending emails to new users at Pinterest, we sent them education on the features of Pinterest. When Trevor Pels took a deeper look at this area, he changed the emails to deliver on the value we promised in the first experience, instead of telling users what we thought was important about the product. This shift increased activation rates. And once the core value is reinforced, you can actually introduce more friction to deepen the value created. When web signups clicked on this content on their mobile devices, we asked them to get the app, and because they were now confident in the value, they did get the app. Conversely, sending an email asking users to get the app alone led to more unsubscribes than app downloads.
Many people will use this principle as a way to refute any attempts to add extra steps into the signup or onboarding process. This can be a mistake. If you make it clear to the user why you are asking them for a piece of information and why it will be valuable to them, you can actually increase activation rate because it increases confidence in the value to be delivered, and more actual value is delivered later on.

Principle #2: Remove all friction that distracts the user from experiencing product value
Retention is driven by a maniacal focus on the core product experience. That is more likely to mean reducing friction in the product than adding features to it. New users are not like existing users. They are trying to understand the basics of how to use a product and what to do next. You have built features for existing users that already understand the basics and now want more value. New users not only don’t need those yet; including them makes it harder to understand the basics. So, a key element of successful onboarding is removing everything but the basics of the product until those basics are understood. At Pinterest, this meant removing descriptions underneath Pins as well as who Pinned the item, because the core product value had to do with finding images you liked, and removing descriptions and social attribution allowed news users to see more images in the feed.

Principle #3: Don’t be afraid to educate contextually
There’s a quote popular in Silicon Valley that says if your design requires education, it’s a bad design. It sounds smart, but its actually dangerous. Product education frequently helps users understand how to get value out of a product and create long term engagement. While you should always be striving for a design that doesn’t need explanation, you should not be afraid to educate if it helps in this way.

There are right and wrong ways to educate users. The wrong way: show five or six screens when users open the app to explain how to do everything — or even worse, show a video. This is generally not very effective. The right way: contextually explain to the user what they could do next on the current screen. At Pinterest, when people landed on the home feed for the first time, we told them they could scroll to see more content. When they stopped, we told them they could click on content for a closer look. When they clicked on a piece of content, we told them they could save it or click through to the source of the content. All of it was only surfaced when it was contextually relevant.

Onboarding is both the most difficult and ultimately most rewarding part of the funnel to improve to increase a company’s growth. And it’s where most companies fall short. By focusing on your onboarding, you can delight users more often and be more confident exposing your product to more people. For more advice on onboarding, please read Scott Belsky’s excellent article on the first mile of product.

Currently listening to Easy Pieces by Latedeuster.