Lenny's Podcast: Product | Career | Growth
00:25:31 · Sean Ellis
[00:25:31] S1: Yeah. I mean, I think to me, it's kind of like, what really is the definition of product market fit is the definition that people who get through my crappy onboarding and actually experience the product love it. And if I'm able to retain those people, that means I have product market fit. Or is fixing that crappy onboarding part of getting to product market fit as well? I think that's up for debate. To me, the hardest... I wouldn't obsess on onboarding if I know those who kind of get through the challenge of getting started with a product still don't like the product, then feels like it's a core product issue or wrong people using it in the wrong way issue. But once you have that, then ultimately it doesn't mean that you're ready to grow. I focus on growth, then customer acquisition is almost the last step. Once I validate that it's a must have for those early users, then I'm thinking about, Okay, how do I optimize speed to value? How do I make sure that people have the right prompts to come back and use the product at the right time? It's kind of more of that engagement loop. How do I get my existing users to bring in more users if there's something that makes sense on that end? Even how do optimize my revenue model? And once all of those things are working well, then I'll obsess on the customer acquisition side. But customer acquisition is so hard that if you're not really efficient at converting and retaining and monetizing people, you're gonna really struggle on the customer acquisition side.
00:27:08 · Lenny Rachitsky, Sean Ellis
[00:27:08] S0: Yeah. Cool. And we'll talk about customer acquisition slash growth. Sure. Another question I wanted to ask and a couple listeners asked is the 40%. So I had a Jag from Nubank on the podcast. I think you may have worked with them, and they use 50% as their threshold because apparently Brazilians are very nice and they just [00:27:28] S1: Optimistic. He's not gonna use what he said. Yeah. [00:27:30] S0: Yeah. So I guess the question is, you find instances where you should increase that percentage and slash in b two b is anything different? Do you change the percentage in b two b? Any advice there just like when you adjust the threshold?
00:27:42 · Sean Ellis
[00:27:42] S1: Yeah. I hadn't really thought thought too much on that. Again, for for me, generally I'm trying to just figure out, is this a product that can grow? So when I'm using it, I'm trying to just... So if I got a 37%, am I going to be like, Oh, no, this would be impossible? Or if I had a 70%, does that mean I guarantee, say, Oh, yeah, I want to jump in and work with this company. It's more nuanced than that. Obviously, if it's a 70% but I have no idea how I grow the business, I'm going to be stuck there. I do think he brought up a really good point that culturally some people are going to be more optimistic or pessimistic. Interestingly, when I came up with a question, I used to just use kind of a normal satisfaction question. When I was working at Xobni, I'm just like an intensely curious person anyway, so I'm just trying to dig in and understand the customers. And so I've always done lots of surveying, but at Xobni, I was going to ask it as, like use my filter as a satisfaction question. So, you know, how satisfied are you with this? I'm very satisfied. I'm somewhat satisfied. And our main customers were actually senior management. And so I thought, senior management's never satisfied. I'm going to get always this super lukewarm thing. How can I change this question more me a more kind of real answer from these guys? Well, if I flip it and say, How would you feel if you could no longer use this product? I'll probably get a more honest answer back from them. And of course, they're very disappointed if they can't get what they want. And so initially it was just for the case of Xobni, but then I went to Dropbox right after Xobni and I'll try the question again. And the insights I got back were really useful. And so each company I went to, I kept using the question. I'm like, this works way better than your typical satisfaction question. But initially, it was more about thinking just senior management to get a more honest answer out of them.
00:29:54 · Lenny Rachitsky, Sean Ellis
[00:29:54] S0: So that's the origin story right there. [00:29:56] S1: Yeah. [00:29:57] S0: Wow. That senior managers are just very harsh and they... They're not... They don't need anything. Yeah. And you have to flip it. That is so interesting. Just like that question is such a good reminder of how hard it is to build anything people really would be disappointed not to have. Like, that's why this works so well. People are like, I don't need this app. Who cares? Right? Like, that's the core of this. It's just... That is hard.
00:30:19 · Sean Ellis
[00:30:19] S1: I mean, especially when I first moved to Silicon Valley. So first, like, fifteen years of my career were not in Silicon Valley. And so that was in Eastern Europe and then New York and then Boston. You moved to Silicon Valley and you have you have people who get really excited about technology for technology's sake. And so, know, just something being cool is isn't it cool that we can actually do this? Drives a lot of people. And so to me, I'm very practical. If it's not something that is really bringing value to people, the likelihood that that product's successful long term is going be pretty low. And so even interestingly at Dropbox, through the six months I was there, I'd ask one question multiple times a month. I broke the early beta users into a bunch of different lists and I'd ask, Which best describes you? I like to be among the first to try cool new technology or I only try things that I think will be useful for me. And over the six months, it flipped from 90% being people who try things that they want to try cool new technology to six months later, it was people who only are going to try something that they feel like is useful. But what's kind of cool is just because what motivates you to try something is like you're an early adopter and you want to try something cool. If you're going to keep using it, it's because it's giving you some utility. So I can still use those early adopters to, help me figure out where's the value inside the product.
00:31:53 · Lenny Rachitsky, Sean Ellis
[00:31:53] S0: Awesome. So actually two questions along those lines. How durable do you find this percentage being? Say you hit 40%, how often does that fade and go away versus stay there or go higher? [00:32:07] S1: Yeah, I haven't seen it really like fade back down, but I've seen companies fail, you know, despite having it. And I think a lot of times then it becomes like an execution challenge. Once you have product market fit. Not everyone's going to be a good executor, but before that, I think getting to product market fit, obviously there's a lot of methodology for doing it today that might make it a bit easier for people, but I still think it's fairly random and pretty dang hard. And so ultimately, the risk factor of creating something that people care about is really difficult. So if you can get to the point where you have 40% of the people who are using it saying they'd be very disappointed and you have a reasonable sample size, let's say, you you got 10 people and four of them said they'd be very disappointed without it, you're still going to get something useful from those four. But I wouldn't say that's a sample size that you can really go to market on. Yeah. [00:33:07] S0: What's a good sample size you look for just like, okay, is actually good data I wanna rely on?