Lenny's Podcast: Product | Career | Growth
00:44:31 · Sean Ellis, Lenny Rachitsky
[00:44:31] S1: five benefits. Group of people, to be clear. [00:44:33] S0: Group. Got it. Awesome. And then it's like, which of these four or five benefits is is what you're getting out of this product? And then the question is, why is this benefit important to you? [00:44:41] S1: Yeah. And then you'll see, we have, like, eventually the the survey.io got closed down, but essentially the template that I typically used was then moved to pmfsurvey.com. And so you'll see some other questions that I have on there as well. Like what would you use instead if this product were no longer available? And that's one of the interesting things as you start to see people who say they'd be somewhat disappointed. Usually, they're focused on a commodity use case, and they know an easy alternative to switch to. So to be a must have, it needs to be both valuable and unique. [00:45:18] S0: Okay. Anything else on this topic of the Sean Ellis test, Product Market Fit test before we move on to growth strategy advice? [00:45:24] S1: No. I think that's good.
00:45:24 · Sean Ellis, Lenny Rachitsky
[00:45:24] S1: No. I think that's good. [00:45:25] S0: Yeah. That's good. Think we did almost an hour on that one topic, which I love because I feel like this is such a powerful tool that I think people sort of know and have used, but I think there's a lot of opportunity to use it more effectively. And and all the stuff you pointed out about, like, it's not just get this... You have the threshold. Cool. Let's move. Let's grow. It's like, this is just... This is how you figure out how to make it better and better and grow faster and faster. And it's actually a good segue talking about growth. So even though you coined the term growth hacking, you spend most of your time on the opposite essentially, which is helping companies figure out sustainable growth strategies, not just a bunch of hacks to grow for a little bit and then disappear. And from what I've seen, it's all rooted in this idea of product market fit and what helps you find product market fit and I imagine many of the stuff we've talked about. [00:46:10] S1: Yeah. Just one one one quick, interjection there is that when I coined growth hacking, I did not think of it as a bunch of one off hacks that when I thought of it was much more about what is the way to ultimately drive sustainable growth, but it's over time, maybe more interpreted the way you described it, but just to jump in and say that. [00:46:30] S0: That's a really good clarification. So how did you actually initially frame it?
00:46:30 · Lenny Rachitsky, Sean Ellis
[00:46:30] S0: That's a really good clarification. So how did you actually initially frame it? [00:46:34] S1: Yeah, just said it's about looking at every single thing that you're doing and scrutinizing its impact on growth in the business. And particularly, I think most marketers, when I first moved to Silicon Valley, most CEOs who were asking me to help their companies, they were saying, we need help with awareness building and I'm getting introductions from top VCs. So, so much of, I think, the way people were approaching growth was sort of like textbook marketing, marketing textbook, to approach it. Startups just don't have the luxury to do all of those things. So you got to be really focused on how do I acquire customers to an experience that's going to make them want to keep using this product. And so maybe I picked the wrong term in calling it growth hacking, but I think it at least opened the conversation to getting more people thinking about maybe we should be thinking about growth in a different way than as it's traditionally taught in marketing courses in school. [00:47:33] S0: Is there another term you think you should have used? Do you always think back, I should have called it this. Is there anything that you've had in your mind?
00:47:33 · Lenny Rachitsky, Sean Ellis
[00:47:33] S0: Is there another term you think you should have used? Do you always think back, I should have called it this. Is there anything that you've had in your mind? [00:47:38] S1: I don't. Think sometimes having something that's a little divisive is almost better because it's too easy to just go completely unnoticed. But I was trying to put a name on not just how I was approaching growth, but seeing Facebook obviously had a very different approach to growth than most companies. LinkedIn, Twitter, there a handful of companies that were approaching it in the same way I had previously been approaching it. And I just thought we need... This thing needs a name. And so sat down with a couple of friends, came up with a name, and it stuck. And, but but, yeah, obviously, from from day one, it was pretty, pretty divisive with different groups. [00:48:22] S0: That's a fun story. Thanks for sharing that. Okay. So talking about growth and helping companies figure out how to grow. So say you go to a company, they're getting 40, say, 2%. 42% on the Sean Ellis test, and they're like, okay. Cool. Let's start thinking about growth. What's your first piece of advice to them to start when they're thinking about growth? And then just broadly, how do you approach helping them figure out how to grow?
00:48:45 · Sean Ellis
[00:48:45] S1: Ultimately, it's it's about trying to get as many of the right people to that same state that we just talked about with the must have users. So trying to get as many people to experience the product in a way where they'd be very disappointed if they could no longer use the product. And so that's not just acquisition, which is how most companies think about. Initially it was awareness, then maybe the more developed way was like, oh, let's at least focus on profitable acquisition. But in my experience, hardest part really sits inside the product team. How do you shape that first user experience so they actually use it in the right way and it's not so difficult that they give up and that ultimately, like, we understand what makes it a must have product. And then and then what we're trying to do is is build a... Yeah, sounds kind of theoretical here, but I can go into the details on on how but build a flywheel around that must have value. So step one would be understand it. Step two for me is then figure out a metric that essentially captures units of that value being delivered. And so when I think about a North Star metric, that's what I'm thinking about is like something that reflects how many people are coming in and experiencing that product market fit experience, whatever that is. And it's not just me telling them, here's what your North Star metrics should be. Ultimately the team needs to decide that together. And then really just diagramming what are all of the different ways that we can grow that North Star metric? So that's where you start to actually build. I call it like a value delivery engine, but it's what does our onboarding look like? What's that moment, that activation? What what does the engagement loop look like? Is there any referral? Like, try to capture it as it is today. And then from there thinking about where are the biggest opportunities for improvement. So those high leverage opportunities, and then ultimately, you know, starting to run experiments against those opportunities. Generally, I think I touched on it a little bit earlier, generally the sequence that I like to do is start with activation because that's that one's just so critical and it's easy to get lost in between. Especially for an early product, the product team is so focused on the roadmap. We're two features away from not even needing marketing anymore.
00:51:20 · Sean Ellis
This thing's going to take off. And then the marketing team so focused on bringing new people in. But that how do you get those new people to a great first experience kind of falls through the cracks a lot of times. So a lot of focus on on activation, and then, engagement and referral and getting the revenue model right. And then once each of those pieces working well, then starting to really obsess on the channel side. One thing that I'll say when I go in and directly and involve with a company on the acquisition side, I am thinking about my hypotheses on the acquisition pretty early on. Because if I go into it and I have no idea how we'll acquire those customers, I'm not real confident I'll figure it out when I'm there. So I want to have like two or three things that seem pretty viable as ways to profitably acquire customers and knowing that once I get deep into it, I'll probably come up with one or two more and I've got like five, one of them is likely to work. But I don't want to like just be under the pressure of having to come up with that once I come in if I don't at least see an angle from, from from, before I get involved with the company.