Lenny's Podcast: Product | Career | Growth
00:25:03 · Lenny Rachitsky
[00:25:03] S0: Wow, that was fascinating. I think it's important to note, Snap is doing, it's a many multi-billion dollar business, I think a billion monthly active users, all the teams use it. In the scheme of things, it's very successful. It's more just everyone thought it was going to be much, much bigger like the next Facebook.
00:25:25 · Peter Sellis
[00:25:25] S1: Yeah. If you were to peel apart Snap as a product, again, some of my information is dated, and I haven't really looked at, but it's the number one messaging app among teenagers in almost every Western country, 70 to 100% penetration of people under 21. It's their default map, gets used more than Apple or Google Maps by this group. I think it's the most popular astrology app for most of these... It's definitely the most common camera. So, imagine if you're like, hey, there's a holding company, there's a Gen Z Berkshire Hathaway that has the number one camera app, the number one messaging app, the number one maps app, the number one astrology app, the number one content... I guess TikTok would be the number one content consumption one, which is part of the problem with the ad stuff. But you peel it apart, and you're like, that's an insane consumer product track record. And none of this credit goes to me at all, this is that OG design team that cranked out some of the biggest hits of our generation. But I think from an ads product, maybe the chip on my shoulder is, Snap started after Twitter, after Reddit, after Pinterest, it went public before all of them except for Twitter. It was quicker to four billion, I think, in ads revenue than all of them, despite starting later. Twitter is a global town hall, all the most valuable people on the planet are talking on Twitter. Pinterest is literally a place where you tell it what you want to buy. These are really great places for ads. What was Snap known for at the time? I don't know, I don't want to make your podcast brand unsafe, but we can talk about what Snapchat was known for at time.
00:27:09 · Lenny Rachitsky, Peter Sellis
[00:27:09] S0: Disappearing photos of a certain kind. [00:27:11] S1: Yeah. It was still able to scale this ads business, which I think is, it's pretty fascinating. But yeah, it's a fascinating company, and I think just given the dearth of 100 million Dow consumer products that have been started in the United States since then, it still deserves to be studied. [00:27:28] S0: Yeah. When Evan was on the podcast, I pointed out that I think it was the last big successful social consumer product to launch, which was 12 years ago. I think other than TikTok, which is not social really, it's more of a content media sort of thing. [00:27:44] S1: Yeah. Discord technically started in 2015, but very, very, very- [00:27:51] S0: Very different. [00:27:53] S1: ... a niche product. The world's biggest niche is gaming, but yeah, quite a different vibe. [00:27:58] S0: Just maybe a final though here, I'm curious to get your take. You could almost argue that this is an example of more PMs would have been helpful, because it's such an incredibly beautifully designed product and experience, and so delightful, and people love it and are hooked on it, but it's just the monetization and the business basically was not solved. And you would think that's where PMs would come in. And so, I wonder if that was a hindrance, is the low number of PMs involved? [00:28:29] S1: I think that Snapchat+, the subscription product, if it had launched... Subscription products are tough because the math around them is pretty brutal. Essentially, time is your enemy with subscription products. [00:28:45] S0: Churn.
00:28:45 · Lenny Rachitsky, Peter Sellis
[00:28:45] S0: Churn. [00:28:45] S1: Yeah. Anything you do takes a lot of time to matriculate in terms of impact. So, I think Snapchat+ has actually been quite successful and there's a lot of how it's been executed that's really, really, really great. But I sometimes wonder if it had been launched four years earlier, where it would be just because with messaging utilities, and you see this with Discord and Nitro as well, much different than content products, like Spotify or Netflix. You first become acclimated to using the product daily and getting a lot of value out of it, and that's when you see the value of the subscription product, not right when you start. You don't open Snapchat the first time you're like, oh, I definitely need to pay $ 20 a month or $5 a month for something. And so, time is the cohort's essentially penetration grows slowly over time, but grows quite linearly usually. And so, yeah, if Snapchat had this product out four years ago, there might've been less pressure on the ads to scale as quickly as it does, less pressure on the ads business to scale as quickly as it does, allows for more freedom on the content consumption side of things, and the experience, and allows them maybe to compete more with TikTok. I don't know, it's a big brain system thinking like, okay, Snap needs more PM, but yeah, interesting. [00:30:04] S0: Man, systems thinking, that's, I think, the seventh time in a row that term has been used in this podcast. [00:30:08] S1: One of the... Was it the Netflix- [00:30:11] S0: Yeah. Yeah. [inaudible 00:30:12]
00:30:11 · Lenny Rachitsky, Peter Sellis
[00:30:11] S0: Yeah. Yeah. [inaudible 00:30:12] [00:30:12] S1: ... it was supposed to be about this? [00:30:12] S0: That was a big one. Yeah. [00:30:14] S1: Yeah. Sometimes people say systems thinking, then they go out and buy that book... [00:30:19] S0: Yeah, with the Slinky? [00:30:20] S1: Yeah. It's like, I'm a systems thinker now. Yeah, I think it actually the most underrated aspect of systems thinking is having a mathematical background to be able to describe the system in mathematical terms, to actually map it out in terms of stocks and flows and different probability. Is this bimodal, or is this normally distributed? And just being able to understand, to be able to mathematically communicate how a system works... Because otherwise I think it's this famous method, it's a very MBA-ish type bullshit thing, but ironically it kind of works. I think it came out of Toyota or something, the Five Whys. And you're like, "Oh, what's the Five Whys? Must be the super amazing systems thinking method." It's apparently just asking why five times, and then you get to the bottom of things. And I'm like, that's how the majority of people when they say systems thinking, I think they're basically just saying, "I asked why five times and I got to the first principle."
00:30:20 · Peter Sellis, Lenny Rachitsky
[00:30:20] S1: Yeah. It's like, I'm a systems thinker now. Yeah, I think it actually the most underrated aspect of systems thinking is having a mathematical background to be able to describe the system in mathematical terms, to actually map it out in terms of stocks and flows and different probability. Is this bimodal, or is this normally distributed? And just being able to understand, to be able to mathematically communicate how a system works... Because otherwise I think it's this famous method, it's a very MBA-ish type bullshit thing, but ironically it kind of works. I think it came out of Toyota or something, the Five Whys. And you're like, "Oh, what's the Five Whys? Must be the super amazing systems thinking method." It's apparently just asking why five times, and then you get to the bottom of things. And I'm like, that's how the majority of people when they say systems thinking, I think they're basically just saying, "I asked why five times and I got to the first principle." [00:31:14] S0: That is awesome. I was going to ask you to help people understand what is systems thinking because it's this broad term that is hard to really know. And so, I love this answer. So, you're finding basically just ask five whys that is actually the really effective way to develop systems thinking to actually think about the bigger picture.