Invest Like the Best with Patrick O'Shaughnessy
· Greg Stewart
We didn't know what we would build. But we said, there's something in these concepts. And in February 2020, we said, you can't take on any more business, Lauren. What if we jimmy-rigged the existing app? And we created an experience where there could be more than one person in there. You're going to program for a group of women. You'll go out to your Instagram audience. And you'll say, hey, this is for, I'm in New York, busy women in New York, kettlebell training. I'm an experienced coach. I'm going to give you new workouts every week. It's not customized, but very specific persona that she was talking to. And we're going to have this chat in the app where we all can talk to each other. And the app looked like shit. The functionality barely worked. But the concept was clear. We're in process of dying in this moment. She went out to her Instagram audience and we had like a 100 people sign up at a 100 bucks a month, very fast. I'm like, that was the most exciting thing I'd seen yet, other than getting wins against American Express and her creditors. And that was awesome. We're like, okay, there's demand. Lauren's audience, it came in very clearly that there's interest in this concept. And so that first month, we were just watching what was happening because there was nothing else to look at from a product perspective. I think what the most amazing and impressionable thing to me was these people had found each other in the app. They were similar personas. They lived in a similar place, busy women following the same workouts every day, interacting with the coach and each other. They'd never met each other, but they started posting on Instagram about Lauren and Ladder. And then we saw them meeting up in New York at the park together. They'd never met each other before. And that was like magical. There's community elements and social and they're happy. And we'd never seen anything like that in the original version of the product. So all these little glimmers of hope on this concept of programming, it's not personalized, but it's high quality. It's meant for a specific persona. The social accountability element, all these things are like bubbling up as real tangible proof points of something that could be interesting to go work on. And that group, the renewal rate was 90% plus. People paid again.
· Greg Stewart, Patrick O'Shaughnessy
We're like, damn, like they're doing the workouts and they're staying with us. And if you look at the app, you would go, this is garbage. But the promise was being delivered on what we were proposing. We ran one more trial with another coach. It was the exact same outcome. I talked to almost all those women on the phone. It was like, who are you? How did you find Lauren? Why did you go into this app? What problem were you trying to solve? And we talked to all of them and built a relationship and like all those were inputs. [00:00:00] S0: Did anything surprise you in those conversations? [00:00:00] S1: It validated a lot of things that we were learning in real time. It's like, why did you join? I'm tired of thinking about what workout to do. I'm already into fitness, but I spend time actually planning this. It's a pain point for me. I don't want to go spend a $1000 on a coach. I need something more approachable, but I need help with a plan. I need to know that I'm doing the right thing. I want a coach that is helping me and have confidence that it's the right thing to do. And that was the real thing. And then we saw them meeting up and they would say, oh, I met someone just like me. And they had the same pain points and they become a friend and we work out together. And that was magic. And so all these little kernels just speaking and forming a picture that got clearer and clearer and clearer was the beginning of what that product would be.
· Greg Stewart, Patrick O'Shaughnessy
[00:00:00] S1: It validated a lot of things that we were learning in real time. It's like, why did you join? I'm tired of thinking about what workout to do. I'm already into fitness, but I spend time actually planning this. It's a pain point for me. I don't want to go spend a $1000 on a coach. I need something more approachable, but I need help with a plan. I need to know that I'm doing the right thing. I want a coach that is helping me and have confidence that it's the right thing to do. And that was the real thing. And then we saw them meeting up and they would say, oh, I met someone just like me. And they had the same pain points and they become a friend and we work out together. And that was magic. And so all these little kernels just speaking and forming a picture that got clearer and clearer and clearer was the beginning of what that product would be. [00:00:00] S0: Everyone's very fond of the Elon algorithm for company building now. It's been passed around as like one method for doing this. If you had to distil your algorithm for how you proceeded from that initial kernel of an insight of, okay, here's something that people are paying for and like, and we can do something with this all the way through to where the product is today. What's been your, as the CEO algorithm for that iterative improvement to get from the original kernel to now?
· Greg Stewart
[00:00:00] S1: Well, I can tell you is number one is don't listen to investors on product feedback. That is by far number one. But for us, it's just two things. It's prioritization, ruthlessly prioritize. You have to prove to each other that this is going to be additive to the product. And additive to the product means we have a thesis that is going to increase workout completions. That's our North Star. We're solving, not forgetting you to pay one time. We're solving for you to actually complete workouts with Ladder. And what can we go build to go improve the odds of you doing that and staying with us? And how we get to that is we don't guess. We absorb every piece of information that's coming in and it's all driven by our members. And if you ask the right questions and you have people that are talking to you, you can start forming a picture of what are the huge buckets that actually move the needle. And you can do some work to figure out how complex is this to go build and go do it. And don't do 10 other things just because it's interesting or you can do it. Just do the one thing and do it really well and do it again. That's still the case today. We just launched Nutrition. It's the biggest thing we've built since the first version of the product. And people on the outside were like, that should be a separate app or like, that's a different business. And we're like, well, to our customers, not. We did this survey a year ago. We had 5,000 people spending 50 minutes and it was qualitative and quiet. And we were trying to figure out what are the biggest bets that we could go make. We were ready for a big project and we didn't want to guess. And out of that work, it became very clear that it was nutrition. And what we learned was we have a third of our members who are tracking macros. Of that third, 90% are using an app. Of that 90%, most are using MyFitnessPal and they hate it. And they're really tired of managing their problem set in two different spaces. And what we learned through that experience and talking to members was that for the consumer, it's one problem set. I want to lose weight. I want to gain muscle. There are inputs and outputs to that math equation. Outputs is activity and exercise input is what you're eating. And they're managing this in two places. And they know that's not the right way to do it.
· Greg Stewart, Patrick O'Shaughnessy
Because if you worked with a coach, these things are all symbiotic together. But it all started with a kernel from our members. And we had a really clear line of sight that this would move the needle. They were telling us, I want you to use all of these things, motivational mechanics, streaks, badges, celebrations, and help me with the other side of the equation, which is going to dictate success or not. And then once we have that kernel, we do another survey. We go very deep on nutrition, like extremely deep to understand. And we all review it, read everything. We synthesize it and it gives us a blueprint. And when you do that, it becomes obvious what to build. [00:00:00] S0: What does very deep mean?
· Patrick O'Shaughnessy, Greg Stewart
[00:00:00] S0: What does very deep mean? [00:00:00] S1: The nutrition survey, that was probably a couple 100 questions. We read all of them. Now you can put them in ChatGPT. In the beginning of this, I would copy and paste App Store reviews into a Word doc. I would read every single one of them. And I'd organize the words by buckets. I would color code them. And I would do ChatGPT. And I have these documents that are a 100 pages long. And it's all just deconstructed words from our members. And very similar to survey work. In the beginning, we would do that with surveys. We'd dissect the themes. What do people care about? And now you can use ChatGPT to synthesize all of this. What is the biggest bet that we can make on behalf of our members? And then we'll think about what are the building blocks of what this should do? Is this nutrition coaching? Is it macro tracking? What does the feature set do? And you aim questions at uncovering the pain point and what they're looking for. And that becomes the guide on the first version of the feature. [00:00:00] S0: What did you learn there? What do people want on nutrition?