Lenny's Podcast: Product | Career | Growth
00:08:38 · Hector Serrano, Lenny Rachitsky
[00:08:38] S1: I think it would be kind of good to start maybe from what we learned previously, actually. So where do we go back to? I think this was, like, early twenty twenty five. We had an intern named Tobin. He's a good friend now. I don't know if you've heard of him. He also went pretty viral a while back. He ended up joining Polymarket. But, basically, Tobin came on as an early internal marketing hire. Didn't really have any experience besides some, like, basic UGC. I think he was studying finance and wanted to be a lawyer. And he came in, and Tanay just gave him, like, a budget and was, like, just throw stuff at the wall, see what sticks. Did a few projects, nothing really worked. And then he found really good success with organic UGC. And this was also around, like, the Cluelly era when, like, there wasn't that many people doing it successfully. [00:09:23] S0: Explain organic UGC. What is that exactly?
00:09:26 · Hector Serrano
[00:09:26] S1: Yeah. So organic UGC is you basically get a bunch of creators in a group. These creators will make videos about your product, and then they will post that on their own Instagram pages or own TikTok pages. So imagine you join Wispr's organic UGC group, and you make an account called Lenny Whispr's. And then you just upload your videos into there, and then you get paid based off of a CPM metric. So maybe it's like, I don't know, $2 per thousand views. And then it tapers off, like, as you get higher and higher. And, yeah, Tobin set that up for us. And I think in, like, two and a half months, it was, like, 500,000,000 views, super low CPMs, and it it worked decently well, but I think it was also early on in the organic UGC phase where everyone was really focused on vanity metrics. And it didn't necessarily lead to a lot of conversions because, obviously, the type of product that Wispr Flow is as well, it's a bit harder to get to students... To get students to pay for it. So, ultimately, we ended up killing the program, which I'm not entirely against organic UGC. It's just making sure that you're not, again, chasing the vanity metrics. And then Tobin did this a lot better at Polymarket, he, like, cracked the code with organic UGC and, like, not just doing very top of funnel concepts. But, yeah, organic UGC does work. We just didn't see that much success or the success we wanted at Wispr, and it was also gonna be really hard to find someone to take Tobin's role after he left. So we're like, let's just kill this. And then, again, paid was working relatively well for us. So that kinda brings us to where we're at now where... I mean, not now, but, like, seven months ago, I realized that paid was working really well, and I was the one making all the paid assets. So I was like, what if we apply Tobin's playbook from organic UGC of, like, building this community, building this roster, and paying off performance, and we just apply it to paid, and we maybe make the ads a bit more middle of funnel, maybe a bit more pitching the product. I mean, not even just middle of funnel because you need everything in paid ads, but more just like pitching the product straight on instead of just like screen on text ads. And then I stumbled upon Trybe, which I don't know if you want me... Do you me to get into that now?
00:11:26 · Lenny Rachitsky, Hector Serrano
[00:11:26] S0: Yeah. Talk about Trybe, it's t r y b e. Right? [00:11:29] S1: Yes. T r y b e. So Lukas Pakter, he's this guy who started Trybe, but before that, he actually started SquidHaus, which is a clothing brand, and he grew it really fast through TikTok shop. But there wasn't really a way to do the same thing on Meta, So he made this internal tool where they could run creators ads and pay them based off performance, and then he basically made it available for everyone. And we were one of the first companies to hop on, and when I saw it, I was like, this is a no brainer. It's like the TikTok shop method, but for meta ads. And since SaaS companies aren't able to use TikTok shop, it's like now they've unlocked this sort of... This new channel for SaaS companies to be able to run performance based ads. And, yeah, we hopped on there, built out our program, and, I mean, if you fast forward to now, we're now launching, like, 500 to 600 ads every single month, and it's been a great process. Obviously, that's kinda skipping a lot to where we're at now, but just wanted to kinda give an idea of what we tried, how it worked but also didn't work, and then how we ended up on the performance based model that we have now for paid UGC. [00:12:30] S0: Okay. Amazing. We're gonna go much deeper, but just to make sure everyone understands what we're talking about here. So when you talk about organic UGC, it's not free. It's basically you're getting influencers, creators to create a pitch basically for Wispr. You take their video, you put it on your channel, and you pay them per views.
00:12:30 · Lenny Rachitsky, Hector Serrano
[00:12:30] S0: Okay. Amazing. We're gonna go much deeper, but just to make sure everyone understands what we're talking about here. So when you talk about organic UGC, it's not free. It's basically you're getting influencers, creators to create a pitch basically for Wispr. You take their video, you put it on your channel, and you pay them per views. [00:12:48] S1: No. So so they post it on their channels. [00:12:50] S0: They post it on their channels. [00:12:51] S1: Yeah. Yeah. So it's a CPM based. So let's say, again, we bring you into the group, and then you make your own channels on TikTok and Instagram, and it'll be like Lenny whispers or Lenny talks. It can be anything really, but it... You wouldn't post it on your main Instagram. You'd post it on an alternate, and then we would pay you a per... CPM based. [00:13:10] S0: Okay. So the big difference here is instead of CPM based, which is basically views based, it's... They take a percentage of spend or Yeah. [00:13:20] S1: Percentage of spend or GMV, depending on if you're in SaaS or if you're e com, something like that. [00:13:26] S0: Awesome. Okay. Cool. Yeah. So you've shifted to this model. It's basically performance based UGC. Just to be very clear about what this... How this works, you find... I think you have something maybe like 50 creators right now? [00:13:40] S1: Yeah. Right now we have 50.
00:13:40 · Hector Serrano, Lenny Rachitsky
[00:13:40] S1: Yeah. Right now we have 50. [00:13:41] S0: Okay. And we'll talk about the progression that you recommend starting with a couple. So you find creators, you... They make a video talking about how awesome Wispr Flow is. You use that video as an ad on Meta and TikTok and other platforms, and then they get a cut of [00:13:56] S1: how that ad performs. Exactly. [00:13:59] S0: And then you have two kind of approaches to the cut they take. Talk about that.
00:14:03 · Hector Serrano
[00:14:03] S1: Yeah. So, obviously, we don't wanna just pay creators just off percentage base, especially early on. Because if you come into the group, you make 30 videos, and you only make a $100 off of commission, then it is pretty demoralizing. And a lot of times we see with our best creators, they're our best creators because they've stuck around for the longest and they've understood how the model works. So one thing we actually have included is is it's it's called a smart retainer. And what this is is basically like us saying, okay. We're gonna back you as a creator, and let's say we're gonna we're gonna do 25 videos, and we're gonna pay you a thousand $500. As long as you hit that quota of videos, we'll pay you that money. But depending on how much they earn in commissions, then we might top them up, or we might not even add that swai retainer in. So here's to make it a bit more clear. Let's say that you're in our program and you hit the 25 videos and you only make $500 in commissions, then we will pay you an additional thousand dollars because you hit that quota. But let's say that you also hit that quota and you make $3,000 in commission, then you strictly keep commissions, and we don't add any smart retainer. So it's kind of us saying, as long as you hit these videos and you hit these metrics, we will pay you x amount, and it makes this so that creators that join in the group month one, month two, month three, maybe they're not able to reach over that amount in strictly commissions, but they're able to make some sort amount of money so that they actually stay dedicated and keep growing. And then three or four months down the line, you see these creators start to break out and make purely commission space, which for me as the guy running the program or if you're a brand owner, that's like the best thing because you're paying them pure profit or or pure of the best performing videos instead of paying out of pocket. Also, I think some good background is I'm a creator myself. So I found that a lot of companies... And even at Wispr, we were doing this sometimes as well. It's like we would give briefs to these creators to make ads for us, and we would give them this whole sheet where it's like, don't say this. Say this. Use these hooks. This how is we want you to talk about the product. This is how you need to film the product.