Lenny's Podcast: Product | Career | Growth
00:56:45 · Brian Balfour, Lenny Rachitsky
[00:56:45] S1: Yeah. Yeah. That's so interesting. [00:56:47] S0: Okay. So coming back to the advice, say someone is sitting there and talking to their manager, Brian just shared all this mind blowing advice. We gotta pick our battles. We gotta pick our platform. What would your advice be for them to decide where to where to place their bets?
00:57:05 · Brian Balfour
[00:57:05] S1: Yeah. So I think this is a great question because once again, you know, put my personal prediction aside for a second, and and I would encourage everybody to think about it from... First principles from their... Like, who their audience is, what their product is, what stage of company they're at, like, all the... All those... There's current strengths and weaknesses. You gotta take all this into account. But if I had to boil it down to a few criteria, the main things I would think about is when you're looking at new distribution channels and new platforms to choose on, one, kind of going back to what we said before, is the better signal is retention and depth of engagement of the users on this platform than it is like pure kind of user level, like, some some other, like, number of sign ups, know, one of one of those vanity metrics. So look at that number one. Number two is there's some element of user quality and ability to monetize the users on this platform. I think the starkest example here would be iOS and Android. It's like even though... Even today, it's something like Android has seventy seventy some percent of devices, but only 30% of the market share by dollars, and it's the exact flip, for iOS. So it kinda goes back to what we were talking about earlier, which was if you bet on Android only, you probably lost. But if you bet on iOS only, even though smaller user base, you could... You you were still able to parlay that into a win, later. The third thing to look at is as these platforms emerge, just analyze what the value exchange is. Right? So what are they giving you to incentivize you to develop on their platform? And, and, like, all these platforms are a bit of a... It's a bit of a game of whoever understands the rules and how to arbitrage the rules the best, right, tend to be the ones with the with the edge, and figure that out. And then and then finally, fourth on my criteria would be pure scale. Right? Obviously, even if you have those other three, but there's, you know, 200 x difference in in scale and and momentum, then, like, obviously, you probably opt to choose, the the bigger platform. But last but not least is as you go through these criteria, this is... This... These are how you think through entering the game. You know?
00:59:25 · Brian Balfour
And once you enter the game, then you immediately need to move to starting to think about how do you exit the game. Knowing once again that that that last step is going to come at some point in the future that there's gonna be some closure for monetization, then that's where you have to start thinking through your strategy to exit. And that comes down to things like, okay, well, how are you going to own a important part of the user experience or workflow? Or how are you going to accumulate specialized data in context that the major platforms don't have? Or how do you create different types of micro network effects? Like, all of these types of things. So just once again, though there is the entrance criteria, but once you figure that out and you feel like you're in the game, you immediate... Immediately need to move towards, okay. You know, what what... What's my exit plan here knowing this is all coming?
01:00:22 · Lenny Rachitsky
[01:00:22] S0: It's interesting that another way to think about this model you've described is building... The strategy of building on top of LLMs and becoming a GPT rapper. Because essentially, this tech allows you to say, create a cursor that is incredible. And then you could argue, oh, you're just gonna be this rapper and why wouldn't anyone like, they're getting all the money here. Everyone can copy you. Like, what's your defensibility long term? And the answer is what is the moat you will build over time sitting on top of this thing that will make you more and more valuable long term and not have to rely on this thing. So it feels like you could use the same framework for building a GPT wrapper business. Yep. To use that euphemism. Yep. Say someone is sitting there today, is there anything they can do to start making a bet? Is it simply creating an MCP that allows LMs to suck in your data? Is that the one thing you could do today? Is there anything else that's available today to start using these platforms, or is it just a little too early and they haven't released the good stuff yet?
01:01:24 · Brian Balfour
[01:01:24] S1: It might be just, like, a tad too early. Like, we're, like, right on that edge, but, you know, some of the questions I'm asking myself is I I... Like, I'm kind of going through all of these these players and where our customers and target audience live, and I'm asking myself, you know, the question, okay. If this player launched, you know, some type of platform, like, how would we evaluate it? You know, so on and so forth. It's hard to... You can also try to cozy up, to these folks. I would place a large portion of my net worth right now that if we could sit in the OpenAI offices, like, at that front desk, that they are having, you know, meetings with potential preferred developers, like, talking about that we could probably sit there and and and log it. So I I do think some people are going to be in a place to develop, preferred relationships and and make a note. And if you're you're in that spot, then you you should definitely play that card. A lot of early stage charts will be in that card place. Other than that, I would say, we we still need... Like, once they launch these platforms, it's like, we... You can't do much else until you really kind of know what the the value exchange is and what they're gonna expose, for you. But also just be prepared to turn your strategy on a dime and go all in. I think that's probably one of the hardest parts of this is that, these things emerge, you have to capitalize extremely quickly. And a lot of times, it's just it's hard for leaders to do that because they don't want to create a feeling of whiplash into the unknown. We've got all these projects in play. They all... You you know all the things. So I think that's, I think that's probably the the the last part of what what we can be doing right now versus just, you know, kinda staying on top of everything as as it emerges.
01:03:13 · Lenny Rachitsky, Brian Balfour
[01:03:13] S0: As you were talking, this reminded me, I recently noticed that ChatGPT is driving me to my newsletter more traffic than Twitter, And I feel like that recently shifted. I didn't even know this was a thing until I just started looking through my referrals. I'm like, ChatGPT. What the hell is going on there? And I think it's like a different version of what you're talking about, but essentially, it's like, in theory, I could block ChatGPT from... I don't know. I don't even know if I can from the You [01:03:39] S1: can in you can in Substack now. Yeah. I just saw that setting in there. Yeah. [01:03:42] S0: Okay. Oh, interesting. But that's the... A similar kind of decision is, like, is it better for me for it to be recommending my stuff and telling people, hey. Go check this thing out, or is it better to block it off? And I think per your point, and then this is how... The way I felt. Like, take it all. Just, like, it's good. It'll... It's... It... That, it's better that it's, like, from Lenny's newsletter than something else. So someone else will come in and eat that market share. [01:04:07] S1: Yeah. That's right. Yeah. Like, if if you if you don't do it, you know, somebody else's. Yeah. And I think... And and I think that's also kinda what all the major media publishers are really contending with right now.