Tag Archives: loops

The Kindle and the Fire

Entrepreneurs ask me about how to grow all the time. They ask about SEO, about virality, and about increasing conversion, about onboarding. They ask about hiring local teams, building up new functions, and hiring executives. What almost all of them miss is that all of this is context specific on what stage of company they are in. There are two types of growth strategies: non-scalable strategies to get to scale and scalable strategies. I have come to call these kindle strategies and fire strategies. I’ll explain a little bit more about that, and how to think about them.

Kindle strategies can be very unsustainable. Their only goal is to get the company to a place where more sustainable strategies are available. The classic example is in marketplaces. Marketplaces only work when their cross side network effects kick in. Those network effects can only kick in once you get to liquidity. Once network effects do kick in, they can generally be optimized for very sustainable growth. When I left Grubhub, my former co-workers started complaining to me about how much Doordash, Uber Eats, and Postmates were spending on paid search and promotions. They were losing tons of money. There was no way any of those companies ever made this money back from consumer LTV. I told them that wasn’t their goal. Their goal was to get enough consumers so the cross-side network effect kicked in. Those companies were paying their drivers no matter what. Might as well spend money to make sure they’re actually delivering something. And these companies would be willing to almost spend an infinite amount to get the cross-side network effect going because of its value to the company.

I’ve never seen a company as aggressive with promotions as Postmates besides perhaps Homejoy.

This does not only exist in marketplaces however. Superhuman, for example, does live calls or meetings with most people who sign up. This will never scale if they have millions of users, but until either their LTV increases to make this strategy profitable, or they improve self-serve onboarding, they are doing it, because no one would retain without it. You’re willing to do anything it takes in kindle strategies no matter how silly it might seem long term. This is what Paul Graham is talking about when he says “do things that don’t scale.”

Airbnb sold politically themed cereal to raise money for the startup in the early days.

For kindle strategies, it’s more important they work quickly rather than sustainably or efficiently. A lot of early stage companies, for example, ask me about SEO. SEO, unless you have very clever hacks for content and authority, is a fire strategy. It takes too long to work. It might be a great fire strategy to sequence to, though. A lot of companies also ask me about local teams in each market they launch. This can be a great kindle strategy, but it’s generally a terrible fire strategy. Read more from me on this topic here.

Fire strategies by definition need to be sustainable. They need to be able to scale the company 100x and set up a long-term profitable business. So a question all entrepreneurs need to be asking when they pursue their kindle strategy is what fire strategy am I sequencing to. Pinterest used DIY meetups to sequence to influencer blog campaigns to sequence to virality to get enough content where it could scale via personalization on the retention side and SEO on the acquisition side. Most startups won’t go through that many sequences. I’ve seen many companies that have a successful kindle strategy, but it’s not sequencing them into any eventual fire strategy. For example, I spoke with an automotive startup that hacked SEO to get answer box results for their content to get initial users. That eventually caps on how many users it could drive, and it didn’t sequence them to something greater. They eventually shut down.

There aren’t that many fire strategies. Those that involve network effects are generally the best. Sales, paid acquisition, virality, and user generated content with a scalable distribution channel are the most common ways to create sustainable loops to either scale a network effect or scale a product that doesn’t have network effects. This is sobering when I tell entrepreneurs this. There just aren’t that many ways to scale, and almost all involve having extremely good retention as well. Otherwise, you won’t have the profit in the system to invest in sales or paid acquisition, or you won’t get enough users to invite or create content to attract more users.

There are many ways to sequence to a network effect or some other sustainable growth loops, but there are not that many ways to scalably grow without these loops. If you want to learn more about these strategies, it’s exactly what we cover in the Reforge Advanced Growth Strategy course.

Currently listening to Perception by Grant.

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.