Lenny's Podcast: Product | Career | Growth
00:34:15 · Lenny Rachitsky, Sean Ellis
[00:34:15] S0: And there's this obvious element of you may have product market fit with people, but that group might end up being very small. And the business you build around it could actually be cool, but it's not gonna be a massive business. Is there anything there you can share just like... It's hard to know the size opportunity even though you know some people really, really like it. [00:34:35] S1: Yeah. I talked about I I go to a multiple choice after I initially use open ended to open ended questions to sort of crowdsource the different use cases. But then I try to force people in a bucket. And then I can run filters on each of those buckets and I'll be like, Oh, people who use it this way are like 60% likely to be very disappointed without the product, but people who use it this way are 35% likely to be very disappointed, but way more people use it the 35% way. And so then having to like, do you want that intensely loyal group or the much broader group that's maybe a bit less, but almost there? I think that becomes a bit of a strategic conversation of like, we want to have a better chance of surviving going after a niche that we know we can serve well? Or have we raised so much money that we have to go after a really big market that one's not going to be long term, but maybe then you're like, Okay, once I have traction in that market, I can start to try to appeal to some other markets. But I think that's where kind of some strategic decisions come in. [00:35:47] S0: Do you have a heuristic of which you often recommend, is it very dependent on the situation?
00:35:47 · Lenny Rachitsky, Sean Ellis
[00:35:47] S0: Do you have a heuristic of which you often recommend, is it very dependent on the situation? [00:35:52] S1: I prefer kind of a more passionate customer base and work from there just because I think your biggest competition when you're really innovating is just being irrelevant. And so if you're deeply relevant to anyone, I think that gives you a much better chance of long term success. [00:36:11] S0: Awesome. That's a really good insight. Okay. Two more questions along this line, and then I wanna talk about growth strategy. One very tactical question. Is there a tool you recommend for doing this sort of survey? Like, you recommend Inline, In the Product, In email, something else? [00:36:25] S1: I've used a lot of different tools. I actually had a survey business that I sold to private equity years ago and that was a on product. It's called Qualaroo that's kind of an inflow survey tool. I think just using SurveyMonkey with emailed surveys works fine. And for me, it's a lot more of like, what's pleasant for the customer to fill out and then what's going to give me something where I can work really easily with the data? So at Bounce, for example, they had already Intercom in place that had just introduced surveying, but it was kind of a really crappy customer experience on at least at that time. That's been almost a year now, or actually a little over a year. And so I'm really sensitive to like, is it a good survey experience for the consumer itself? And then, but yeah, I don't think I'm stuck to any one platform there.
00:37:30 · Lenny Rachitsky
[00:37:30] S0: Such an important topic. Yeah. Just like, again, to remind people why this is so important. One of the most common questions founders ask is, do I have product market fit? Have I built something people want? Like, that's just an endless series of I don't know. How do I know? When do I know? And this is telling you in a really interesting way. So your advice is this is a leading indicator. You don't actually know until people actually start using it and whether they retain and continue using it. Is there just, like, advice on the shift you make from relying on the survey to actually looking at retention cohorts? Is it just once you have enough data, once you have a couple cohorts, then start looking at that, forget about the survey?
00:38:05 · Sean Ellis, Lenny Rachitsky
[00:38:05] S1: Yeah. What I would say is, like, but retention cohorts don't don't give you any of the qualitative insights into the why. So that's why we continue to do the survey. So initially, I would say if the survey comes back and it shows whatever your target number is, if you want to be like Nubank, it'd be a 50% or I spent a few years with two of the companies I launched, we launched in Hungary and I would say it's kind of the opposite end of the spectrum of Brazil, maybe more pessimistic than average kind of culture. And so maybe 30% is good enough there. But that ultimately, whatever your target is, you have the signal that says, Okay, we have enough value here. Let's start working on growing the business. But while you're working on growing the business, I would be paying attention to those retention cohorts. And if you're churning out all the customers who were saying that they'd be very disappointed without the product, then okay, let's retrench and rethink, we really have product market fit here and what do we need to do to get it if we don't? [00:39:12] S0: Awesome. And speaking of Nubank, if anyone wants to see how a company has actually operationalized this in the way they operate, that... There's an episode that we'll link to in the show notes where every new product at Nubank they build, before they launch it, they wait for a 50% threshold for people to say 50% of people would be disappointed if this product did not exist as they're developing it. And only then do they launch it publicly.
00:39:12 · Lenny Rachitsky, Sean Ellis
[00:39:12] S0: Awesome. And speaking of Nubank, if anyone wants to see how a company has actually operationalized this in the way they operate, that... There's an episode that we'll link to in the show notes where every new product at Nubank they build, before they launch it, they wait for a 50% threshold for people to say 50% of people would be disappointed if this product did not exist as they're developing it. And only then do they launch it publicly. [00:39:36] S1: Yeah. I think they even do it down to the feature level. [00:39:39] S0: Wow. [00:39:39] S1: So if think about it, you know, how would you feel if you can no longer use this feature? It starts to give you, again, the signal, is feature a must have feature? And if it's not, maybe we shouldn't have it. And so, yeah, I was super excited when I when I saw how they were using the the survey, and they they were doing it before I engaged with them. [00:39:59] S0: Oh, wow. [00:40:00] S1: But... Yeah. That's awesome. They they were doing it, I think, from pretty early on in the business. [00:40:05] S0: The reason they can do this is they have a lot of users. They have millions and millions of users, so they can ask some small percentage of people this question. Because people hearing this might be like, oh my god. How many times am I gonna be asked this question when I'm using this feature? But they have a lot of users, so it's easier. [00:40:17] S1: Yeah. Yeah.
00:40:17 · Sean Ellis, Lenny Rachitsky
[00:40:17] S1: Yeah. Yeah. [00:40:18] S0: Okay. Last question, I promise, along these lines. Say someone is listening and they're like, okay. Man, I'm getting, like, 10%. I'm getting 15%. I don't know what to do to increase my product market fit. You shouldn't just like a strategy of just dig into the people that are very disappointed and see what they have to say. But any other advice slash what do you find often works in helping people move from, say, 10% to 40%?