Lenny's Podcast: Product | Career | Growth
01:01:36 · Sean Ellis, Lenny Rachitsky
[01:01:36] S1: I mean, your two big levers on on driving a conversion are increased desire, reduced friction. And so, yeah, you definitely want to increase the right desire. And then sometimes it can also just be reminding people along the way of what benefits you're going to get. In the case of LogMeIn, it was probably the most complicated funnel I've ever seen because you couldn't even get to the moment while you're sitting in front of the computer. You actually had go to a different computer to use the service to remote control the computer you're in front of. So it's not surprising that there was so many steps where we could lose people, but we just weren't that intentional about designing each of those steps initially. And it wasn't until we kind of thought through why would we lose someone at this step and studying the data, which steps were we losing the most people at, then deeply trying to contextualize why are we losing them there, coming up with a set of tests that we wanna run, and then having a good way of deciding which one to test first and ultimately focusing the tests on the areas where we're losing the most people. [01:02:45] S0: The other element of this is coming up with an activation metric and aligning on, like, here's what we consider someone activated. I know this is very dependent on the product, but any advice or heuristic for how to help people decide this is our activated user?
01:02:58 · Sean Ellis
[01:02:58] S1: I tend to start qualitatively. So just like when do I think they've had a good enough experience with the product to really know it? So like in the case of LogMeIn, was pretty easy. If they didn't do a remote control session, they didn't use the product. There was no value along the way there. And then at least try to see if there's a correlation to long term retention of doing that. Causation is you need to do some experimentation to prove causation. At the very least, I want to see that correlation. But if I start with two or three ideas of what it might be and then go and study the data, that can help you focus. But again, don't think there's necessarily one exact right answer of what is that moment. There might be two or three different things. I think it's that intentionality about picking something that's experience based and saying, What is a likely experience that someone's going to get a good enough taste of this product? And then I do see some companies that are like, Well, the activation moment should be... They've used it a 100 times. That's going to correlate to long term retention, but it's just not very actionable. It's so far down the user experience. Ideally, there's a way that I could get them there in the first session, in the first day, that's great. And so it's sort of something that's value that can be experienced super early. But I actually give you an example from the first company I worked on was a game company where I actually flipped it and basically instead of making a traditional funnel where they could play our games after they signed up, I made our games the advertisements. So basically, we syndicated our games to 40,000 websites. They started gameplay experience on the other website. Then they would get a message that they now have a qualifying score. And if they register, they'll be in the drawing for the weekly cash prize. And then we could pull them into multiplayer games on the site. And so it's it's kind of the the strategy that YouTube used to grow, but it was, like, two years before YouTube introduced the the approach.
01:05:14 · Lenny Rachitsky
[01:05:14] S0: Yeah. It feels like you basically created Zynga is what I'm hearing there. Okay. So let's move further down the funnel. So we've talked about activation onboarding. The next phase that you focus on is basically... Some people call this growth loops, growth engines, flywheels. Basically, it's like the thing that helps your business grow. And something I... I'm curious if this resonates. I found there's basically four ways to grow, and usually one of these engines is responsible for almost all of your growth. So what I've seen is basically it's... You're gonna go through sales, you're gonna go through SEO, you're gonna go through virality word-of-mouth or paid growth. Does that resonate? Does that feel right?
01:05:53 · Sean Ellis, Lenny Rachitsky
[01:05:53] S1: Yeah. And I wouldn't say it's necessarily one or the other. Like, I I think I think bounce is a really interesting example where SEO was super important for bounce or is super important for bounce. So people who are essentially saying luggage storage, Paris, luggage storage. Most people when they're trying to find a place to store their luggage, they're starting with Google. But at the same time, a huge percentage of the people who use bounce are dragging their bag down a street over cobblestones in Paris. Then they pass a sign that says, Store your bag here for $5 a day. And it's like, Oh, no brainer. So 10,000 partners around the world means that there's a lot of people kind of in the right situation on the demand gen side. So yeah, one would be, I actually think of kind of like, I'm not sure how it would map to this, but like demand generation versus demand harvesting. And so one of those examples would be a demand generation example. Like when you see the signs when you're passing, it's like high context, right place. And then obviously the demand harvesting would be anyone who's Googling. And so that there's paid... They do paid search and organic search there. [01:07:10] S0: Interesting. I don't see that, like, that sign approach work often, but I definitely have seen it work. Like, Yelp, I think, grew in a lot of ways of just like little Yelp stickers on all the restaurants. DoorDash, I think, probably grew through that.
01:07:10 · Lenny Rachitsky, Sean Ellis
[01:07:10] S0: Interesting. I don't see that, like, that sign approach work often, but I definitely have seen it work. Like, Yelp, I think, grew in a lot of ways of just like little Yelp stickers on all the restaurants. DoorDash, I think, probably grew through that. [01:07:20] S1: Yeah. I think every every business could be a little bit different, but for Bounce, it makes sense that that would be a really good growth opportunity for them. [01:07:28] S0: How do you help a business figure out which area to bet on? Like, whether they should go paid, whether they should go SEO, whether they should hire sales. That's... Sales is probably an easier one of, like, probably b to b. You're probably gonna have to do a sales team. I guess, to help them pick, here's where you you have a big opportunity.
01:07:45 · Sean Ellis
[01:07:45] S1: Again, it kinda comes down, like, as I'm as I'm going into it, I'm I'm thinking what what are the realistic customer acquisition angles for this business and I want to have ideally two or three that I'm coming into it with, but it's going to obviously Dropbox is a classic one of like, oh man, this product user get user is going to be just like a classic. There's file share built into it, folder collaboration. There's so many pieces of it that cross from one user to the next. But interestingly, it was fairly similar to LogMeIn in some senses. It's kind of solving two businesses that are solving similar problems in different ways. Where LogMeIn, we grew almost entirely off of paid search. Part of it again is that for us, had a competitor that was spending tens of millions of dollars a month creating the category with a premium only product through radio and TV advertising, GoToMyPC, they were just creating all this latent demand. So it just made sense for us to disrupt them with a premium service and to insert ourselves in the flow of someone like, What was that thing that I heard about on the TV commercial? Now they go and they Google it and same thing but free. So we weren't really pushing for differentiation, but just really trying to harvest that. I couldn't do that at Dropbox. No one was looking for Dropbox when I went there. So we tried a little bit with search to see can we make it work on cloud storage or backup or kind of going to some of these traditional category. Storage wasn't even a traditional category at that point, but backup was. And it was just like it was fairly expensive be able to and there was just not that much demand there that way. So it just made more sense to focus on the user get user loops at Dropbox. I think basically for each business, it's just thinking about what's unique for that business that is going to open up channel opportunities. Everyone's going to be a little bit, I think, jaded from whatever the last thing that worked really well, they're going think they can apply it in the next business. But after enough times myself, I tend to get the most inspiration by just talking to customers and finding out how did they find it, how do they typically find something like that, and that starts to give me some ideas as well.