Lenny's Podcast: Product | Career | Growth
00:47:23 · Peter Sellis
[00:47:23] S1: Yeah. God forbid it's a Discord group. Oh, Jesus. Yeah, I think this actually flows from the whole VORP thing, is that once you have somebody in a position... And there are a lot of tropes around this too, right? If you want something done quickly, give it to the busiest person kind of thing. But I think it's not necessarily counterintuitive, it's counter to human nature, right? If you see somebody drowning, you want to save them, and I did the absolute opposite. And maybe... Right before we started the podcast, I was talking about nominative determinism, where your name creates who you are, and joking that maybe I need to be a salesperson because my last name is Sellis. But there's also this NBA Peter Principle, where people are promoted to the level of their incompetence, which definitely could describe my career. But that's kind of what I seek to do. If somebody is strong and crushing it, I'm just handing them more and more rope to hang themselves with. And I'm pushing them as hard as possible to the point of breaking. Because at the end of the day, one of the biggest leadership principles for me is that the people on my team I will always defend in public, in front of execs and stuff like that, I never, never criticize them in front of others. And so, people who are making consistently good decisions, I just want to load them up with more decisions until I start to see them make bad ones. I think there's so much self-reinforcement or self-fulfilling prophecy of when you have confidence and when things are going well, you're able to do more. And so, yeah, I think I try and really show that I believe in people. And when I don't... Yeah, maybe this is just a personal thing. I just don't have a really good mechanism for helping people improve, so I essentially let them fail on their own. Which could be, I think, probably pretty frustrating for me as a leader to work for, and somewhat sad. I think the thing you need to control for when you adopt this type of management philosophy is that not paying attention to somebody doesn't mean they're failing. There are a lot of people that I've hired over the years, especially if I've worked with them multiple times, where I'm like, "I know you know what to do, so go do it." And I just let them execute.
00:49:47 · Peter Sellis, Lenny Rachitsky
But yeah, it's spend time with your winners, ride your race horses, give a busy person something to do if you want it done quick, whatever the stupid trope... Just give a busy person something to do if you want it done quick. Whatever the stupid trope is, yeah, I try to pursue it pretty aggressively. [00:50:07] S0: Makes sense to me. And there's many ways to say it. The one, some are kinder than others. Another contrarian take you have is that collaboration is a pretty bad use of time a lot of times. You talked about this earlier, but is there anything more to add there? [00:50:21] S1: I think when you're building a team and you talk about the team's principles or tenets or whatever, if you find yourself saying things that no one can disagree with, either those aren't good principles or tenets or maybe they need to be challenged. And yeah, I think collaboration falls under this umbrella a lot of the time. But yeah, I think we talked about kind of my reasoning there. [00:50:50] S0: Okay. Another contrarian take you have is that growth typically comes from the core of the business.
00:50:56 · Peter Sellis
[00:50:56] S1: Yeah. I mean, this one was learned a couple of times, both at Snap and at Discord. And this isn't to say that there aren't these wonderful growth strategies about expansion into new markets or things like that, but I think the nature of network effect oriented businesses is that they want to grow implicitly. And so what you can do to drive growth much more effectively is focus on people who are essentially already using or wanting to use the product for what it's for or some kind of derivative like nearby of that and just making it much easier, much more performing, much more relevant, et cetera. I think the way you could think about this like using very eighth-grade math where if you want to... I think almost every consumer product, maybe it's also a controversial take, needs to be optimizing for daily active use. Like there are very few things in... Eventually, you need to tie everything to people's natural lives and cycles and days are real, right? Weeks, they can be real, but they're not necessarily real for, there aren't a lot of things you do on a weekly regimen regularly, really, really effectively, but you wake up, the circadian rhythm is real. Very few things are done on a monthly basis, like a lot of B2B stuff, like paying bills, et cetera. I guess there's some biological things that happen monthly, we could get into that. But there's something about the daily active use or even hourly active use that I think is essential for almost every consumer product. And the idea, like if you're thinking about a daily active user, if you're going for somebody who uses the product once a month, you're going to need 30 of those to equal somebody who uses it daily. That's like very, very, very, very basic math. And so, that's why I think a lot of the most effective consumer products have extremely high DAU/MAU ratios. And so a lot of growth can come from essentially moving that ratio just a few basis points versus trying to go acquire a bunch of new monthly active users and seeing if they retain. And by the way, DAU/MAU is just a form of retention. Retention can be any period, it's just the next day. Like given you use it today, what's the probability you're going to use it tomorrow.
00:53:06 · Peter Sellis
And so at Snap, the lesson there came from that disastrous redesign in 2018, which was the only time I think that Snap's overall DAU actually flattened out quarter-over-quarter. And what we laser focused on after that was performance, particularly on Android, existing people who are already using the app just making it much, much faster and more performant for them and that led to almost like a growth renaissance that went on for multiple years. At Discord, I think it was even more controversial because at the time, Discord has been something for a lot of people during the pandemic, during crypto, during AI, et cetera. So the time you had Midjourney being built on Discord, and Midjourney was phenomenal, just such a cool company, product, everything, and a lot of people on the outside were just like, "Wow, this is a moment. Midjourney must be huge for Discord." From a user perspective or daily active use, like a metrics' perspective, if I were to show you like, you can even look at this or online, Discord's use over time, you wouldn't be able to pick out Midjourney. The reason people use Discord is to connect with their friends while playing, before, during and after playing games. And what we did in 2024 was completely focused the team around this idea of how can we be the best place for you and your friends to play intentional multiplayer games together. It turns out even though Discord is technically, a) that technical team is phenomenal and b) it's like near-perfect in some ways when it comes to voice and things like that, there were still things we could do to make it better before and after playing games with your friends. And when we focused on gaming, which at the time everybody was like, "Everybody who plays multiplayer games, especially on PC, they already have Discord. They already use it. It's literally 100% penetration, right?" No. There were a lot of reasons that you were just on the edge and you decided not to join voice, you decided to use the in-game voice, you decided to call your friend on FaceTime instead, whatever it was.
00:55:09 · Peter Sellis, Lenny Rachitsky
As we made Discord better, as we focused on performance, we were actually able to drive some of the fastest, I think if not the fastest growth, and I'm not sharing anything that's not public, since the pandemic, obviously Discord exploded during the pandemic, and this was by focusing on the thing that everybody already said we had 100% penetration of, which was intentional multiplayer gamers. Now, from there, you have a lot of options. There are a lot of things that look like multiplayer gaming. Crypto looks like multiplayer gaming, intense coordination costs, time sensitive, et cetera. Honestly, software development looks like multiplayer gaming. There are a lot of things that you could build off of that core. But by focusing on people who play games with their friends, we were actually able to identify a lot of things that brought somebody from using Discord, let's say, 10 days out of the 30 to 11 to 12 to 13. That's actually monster growth when you think about those pockets and moving up people's L-ness, like last seven out of seven days. I think I stole that from Meta, who once again wrote a great playbook on growth. And so focusing on that L-ness of the core consumer base, I think it just ended up being so positive in both the Snap and Discord examples. [00:56:25] S0: This is a really important lesson for people trying to grow a product. The TL;DR to me is there's always money in the banana stand.
00:56:25 · Lenny Rachitsky, Peter Sellis
[00:56:25] S0: This is a really important lesson for people trying to grow a product. The TL;DR to me is there's always money in the banana stand. [00:56:33] S1: We were talking earlier about building a terrorist organization. That's a great example of a phrase that if you could ascribe, in a strategy document, you could ascribe value like there's always money in the banana stand, return to your core users, make sure it's perfect for them, like there was always money in the banana stand. I think at Discord, it had exceptionally positive externalities because the most vocal, critical, honestly like intelligent or high-IQ user base in the world are gamers, honestly. You think you've built for people who are critical about your product, who are detail oriented, unless you've built for gamers, you haven't. And to be able to turn around and say we are focused, like here's a bug thread on Reddit, show us what's messing up. We don't care how small it is, how big it is, we will fix it. It had this unbelievable positive externality of we are delivering for this community. And I honestly think this is why Discord is so great and so without pure in this specific niche is because it's so laser focused on if you play games with your friends and you care about it, this product is going to, like there are people who sit in that office who will make it perfect for you forever.