Lenny's Podcast: Product | Career | Growth
01:10:32 · Casey Winters, Lenny Rachitsky
[01:10:32] S0: So your growth just has to continue boggling. You run out of humans. Like, it's... Yeah. It's really hard. So, like, if you can retain people incredibly well, meaning those people just never churn, yeah, you've got a great business. But look at the effort the companies that have done that are doing to do that. Spotify does make profit. Netflix, Amazon, they spend so much money to try to do that. And how replicable is that for a startup? I'd rather say, like, let's try and get some network effects involved here. Let's get our customer acquisition cost to zero. You know? Let's think about other ways to monetize because this alone feels like heartburn. [01:11:08] S1: And this is also why a lot of these companies pivot to b to b. They realize, there's... They're not gonna get anywhere with B2C. The other lesson I took away because I interviewed a lot of these early B2C subscription app founders and employees, and I think about companies like Grammarly, Duolingo, Noom. Forget there are a few more. One of the other trends across them all is they're all very efficient and very small for a long time because they needed time to figure out how to make anything work and then just continue to stay small and super scrappy. [01:11:37] S0: I think that's a great point. It was an interesting case study between Calm and Headspace. [01:11:41] S1: Because [01:11:41] S0: Calm remained, like, 10 people forever. [01:11:44] S1: Wow.
01:11:44 · Lenny Rachitsky, Casey Winters
[01:11:44] S1: Wow. [01:11:44] S0: And, you know, Headspace had gone into, like, you know, hundreds of people. And Calm, like, basically never lost money, and that allowed them to be... You know, allowed them to pivot easier during, you know, massive changes, like, you know, app tracking transparency, like, through a wrench into all paid acquisition. So if you're not losing money, like, cool. You have time to figure out how to, like, grow again. But if that increases your burn by, like, a $100,000,000, you have a lot more of a panic on your hands. [01:12:12] S1: So maybe just to tie the loop, tie the knot, close the thread on this, topic. If you're a b to c subscription founder, what would be some takeaways that you would want to put in their head to think about how to maybe survive?
01:12:12 · Lenny Rachitsky, Casey Winters
[01:12:12] S1: So maybe just to tie the loop, tie the knot, close the thread on this, topic. If you're a b to c subscription founder, what would be some takeaways that you would want to put in their head to think about how to maybe survive? [01:12:26] S0: Yeah. So if what your plan is is to use paid acquisition on top of a freemium model to get a percentage of people to convert and hopefully stick around forever, I'd pivot right now. It's like, I just can't see it working. So how do you pivot? Well, how do you make it social so that people are bringing in other people? How do you get a supply side to the, you know, content or education or whatever you're building and make it in the supply side's interest to refer people. Like, you have to do something that's either, you know, building some more organic growth loops into the business or building network effects into the business, or else, like, we could go spend two hours and model out exactly when you're gonna run out of money. Like, it's just that predictable. And, you know, a lot of founders don't like to hear it when I tell them that, but I'd rather them hear it now than learn it three years from now. [01:13:15] S1: Well, we've reached our very exciting lightning round. I'm just gonna dive right in. What are two or three books that you've most recommended to other people? [01:13:23] S0: Definitely The Goal by Eliyahu Goldratt, which explains how my brain works pretty well. [01:13:31] S1: Thinking
01:13:31 · Lenny Rachitsky, Casey Winters
[01:13:31] S1: Thinking [01:13:33] S0: Fast and Slow by, Danny Kahneman. I took a lot of the behavioral economics classes in, my MBA program, and and then his book came out, like, the year after. So I just, like, absorbed it as quick as possible. [01:13:48] S1: Wait. Was he a professor, that was just the the topic? [01:13:51] S0: Some of his, like, pupils were professors of mine. Yeah. Amazing. [01:13:55] S1: Very cool. [01:13:56] S0: And then the third is a book called Profit from the Core by Chris Zook. [01:14:02] S1: Amazing. That's a new one. I love when there's new books being added to the collection. There we go. Okay. Next question. Favorite recent movie or TV show? [01:14:10] S0: Well, Party Down just came back, and that's like [01:14:14] S1: I've been watching that. [01:14:15] S0: My favorite. [01:14:16] S1: I've never heard of it. [01:14:16] S0: It's one of my favorite comedies of all time. Yeah. Go back Cool. Go back and watch the first couple seasons [01:14:20] S1: of Beyond. That's what I've been doing. That's what I've been doing. Great.
01:14:20 · Lenny Rachitsky, Casey Winters
[01:14:20] S1: of Beyond. That's what I've been doing. That's what I've been doing. Great. [01:14:22] S0: Other things like The The Last of Us is great, and, you know, I really enjoyed the the video games. Severance is great. Station Eleven is great. I I loved the book too, but I I thought that was really good. Movies? There there haven't really been a lot of great movies lately, but I I did rewatch Kicking and Screaming from the nineties, and it really holds up well. It's, I don't know how many of you have heard of it, but it's about a group of college kids who graduate, but they just decide not to leave campus and start their lives, they just stick around campus. So I I really enjoyed that one. [01:14:58] S1: Amazing. We have a drinking game anytime men... Someone mentions Last of Us. So if you're driving bit to work listening to your podcast on your commute, take some coffee or whatever you got. Two more questions. What's something relatively minor you've changed in your product development process or maybe that you've recommended people change that has had a tremendous impact on people's ability to execute?
01:14:58 · Lenny Rachitsky, Casey Winters
[01:14:58] S1: Amazing. We have a drinking game anytime men... Someone mentions Last of Us. So if you're driving bit to work listening to your podcast on your commute, take some coffee or whatever you got. Two more questions. What's something relatively minor you've changed in your product development process or maybe that you've recommended people change that has had a tremendous impact on people's ability to execute? [01:15:20] S0: You know, I preach, like, cross functional teams and alignment pretty aggressively. So how do you get people from all the different functions aligned on on the same OKRs and working together? And I used to say, like, look. If someone in that cross functional team is pulling rank, it means, you know, something's fucked up on the team. But something we started doing more recently at both Eventbrite and Whatnot is just designating the person on the cross functional team who drives the project. At Eventbrite, we call it the driver. At Whatnot, we call it the DRI, directly responsible individual. But once that person makes the call, it's disagree and commit time. There's no escalation path. Like, if you're not the DRI and you're on the team and they made the call, alright. It's time to sign up and and and go forward on that decision. And if they made the wrong decision later, okay, we'll learn, you know, once once we should. [01:16:11] S1: Final question. Something I love that you do in your own newsletter and blog as you share what you're listening to. What are you listening to these days?