Lenny's Podcast: Product | Career | Growth
00:14:30 · Sean Ellis
[00:14:30] S1: Yeah. I mean, it it does... It tells you something really important, which is, you know, you're... You you haven't created something that, people don't care about. So that's an important insight. But until you deeply understand that product market fit, kind of don't have the tools to be able to grow the business. So that's really the next step is to dig in and figure out who considers it a must have, how are they using the product, what did they use before, what problem are they solving? Of my favorite questions is, so I tend to have a lot of questions that I build off of, that I'm using that filter of trying to drill into the users who say they'd be very disappointed without the product. One of my favorite questions is, what is the primary benefit that you get? And then I use that initially as an open ended question to kind of crowdsource different benefits people are getting. Then I run another survey where I turn it into a multiple choice question, force them to pick one of four kind of distinctive benefit statements. Then the question that follows on that next survey is, why is that benefit important to you? And then I start to get really good context. I actually came up with this question when I was working with an early YC company called Xobni, and just inbox spelled backwards. And when I ran that question, basically the people who said they'd be very disappointed without the product were focused on Xobni helps me find things faster in my email. It's great to know, okay, that's the benefit. But when I asked, why is that benefit important to you? They said, I'm drowning in email. I kept seeing that statement as a written statement. And so when I then was trying to figure out how to acquire customers, when I tested drowning in email question mark, that set such a good hook that was the context that people were living in, that they were really responsive to the message of find things faster with Xobni and then a description of what Xobni is. So I think when you can really dig into the context of why that must have benefit is important to people, you start to get the ingredients to build that flywheel that leads to long term sustainable growth.
00:16:51 · Lenny Rachitsky, Sean Ellis
[00:16:51] S0: So what I'm hearing is whether you have 40%, whether you have 60% or even 7%, the actual best use of this tool is look at that percentage of highly disappointed and see what they're looking for, what they're [00:17:03] S1: excited Start drilling in, start peeling back that onion and just deeply understand them and make sure that ultimately your product roadmap is doubling down on the things that are important to your must have customers. Your onboarding is bringing new people to the right experience. Your messaging is setting expectations, your acquisition campaigns are targeting people who actually have the need. And so it's all about getting the right people to the right experience. Then even your engagement loop is about just reinforcing how to get people to experience that benefit more often. [00:17:40] S0: Awesome. And the 40% threshold, so what you shared is you basically emerged from just looking at tons of startups doing the survey and finding a pattern. How firm is that 40%? Like how big of a deal is it? 39 versus 41?
00:17:40 · Lenny Rachitsky, Sean Ellis
[00:17:40] S0: Awesome. And the 40% threshold, so what you shared is you basically emerged from just looking at tons of startups doing the survey and finding a pattern. How firm is that 40%? Like how big of a deal is it? 39 versus 41? [00:17:52] S1: I don't think it's that firm. You know, to me, I think the real power is having some kind of some kind of target for the team to be shooting for that basically says, we're not going to aggressively start to grow until we hit this target. And I think that as just a focusing piece is really important because I think one of the biggest challenges in an early stage startup is half the people feel like we're years from having this product ready to grow and half the people are like, what are we waiting for? Where if you can actually get people on the same page of what does product market fit look like for our business? And it's at that point that we're going to... Yeah. Before I ever heard the term product market fit, I remember the conversations back at LogMeIn in the mid-2000s of kind of like, when do we step on the gas? What is the combination of factors that need to be in place before we start pouring fuel on the early fire? And so, I think that kind of nail it and scale it, it's probably been term that's been around for decades now. But, you know, it's it's all kind of pointing to that same concept of product market fit.
00:17:52 · Sean Ellis, Lenny Rachitsky
[00:17:52] S1: I don't think it's that firm. You know, to me, I think the real power is having some kind of some kind of target for the team to be shooting for that basically says, we're not going to aggressively start to grow until we hit this target. And I think that as just a focusing piece is really important because I think one of the biggest challenges in an early stage startup is half the people feel like we're years from having this product ready to grow and half the people are like, what are we waiting for? Where if you can actually get people on the same page of what does product market fit look like for our business? And it's at that point that we're going to... Yeah. Before I ever heard the term product market fit, I remember the conversations back at LogMeIn in the mid-2000s of kind of like, when do we step on the gas? What is the combination of factors that need to be in place before we start pouring fuel on the early fire? And so, I think that kind of nail it and scale it, it's probably been term that's been around for decades now. But, you know, it's it's all kind of pointing to that same concept of product market fit. [00:19:03] S0: How often do you do you... Have you seen false positives with this test where someone gets 40% and something is not not right? They... They're actually far from it. Or is it generally pretty accurate?
00:19:14 · Sean Ellis, Lenny Rachitsky
[00:19:14] S1: If if you're having people say that they'd be very disappointed without your product, that... That's that's a really good sign. What I can tell you is that not not just a... Not necessarily a false positive, but, like, what is driving people to say they'd be very disappointed. One of my favorite books is Hooked by Nir Eyal and he talks about in the engagement loop that your last step is investment. And so I ran the survey on a business that I thought was a fairly commoditized business part of that I wanted to see, could I use the same go to market approach on a later stage company and use it to accelerate growth? And so this was a business called webs.com and they eventually got acquired by Vistaprint, but they'd been pretty flat for the year before I went in there. And then I started to kind of use this approach to try to dial in their their growth engine. And I ran the survey thinking, you know, you've you've had products like Wix and Weebly that have have come on to the market since this, you know, more legacy website building product has been around. And I personally think they're a little easier to use. They're a little better. And so I didn't have high hopes when I ran the survey, but it came back with one of the highest scores I'd ever seen. It was like 90% of the people saying they'd be very disappointed if Oh, they could no longer sure. Use [00:20:38] S0: the Never seen that.
00:20:38 · Lenny Rachitsky, Sean Ellis
[00:20:38] S0: the Never seen that. [00:20:39] S1: And I was like, how could that be possible? Product is kind of a commoditized category. I wouldn't even say it's one of the best. And then when I dug into it again, it comes back to that nearly all hooked model is that the investment people have made in building that website, they put so much into that. They know exactly how to make the changes in the CMS kind of side of things. They have spent a lot of time just making it beautiful. So ultimately it was something that that was why they were saying they'd be very disappointed. I mean, but for kind of fast forward and on when I initially went in, still doing these things help the business resume growth and have significant growth over the next twelve months after we did these things. So still the signal we got from why people would be very disappointed without the product was important and speed to value and kind of all the other things I think about in go to market for an early stage product still were relevant, but just the I think they were a little stronger on the percentage, you'd be very disappointed. Even Eventbrite when I was there when we ran it was probably the second highest I'd ever seen. But with event organizers, if they've already set their event up on that platform and they've sent it out to their list and all those people are coming in and they're managing their event, again, they've invested a lot in the platform. Sort of switching costs, I think, can factor in there. So it's a function of both switching costs and utility of the product.