Lenny's Podcast: Product | Career | Growth
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.
01:10:28 · Lenny Rachitsky
[01:10:28] S0: I think that last point is really powerful, and I'm just writing it down. You said so. Essentially, one of your tactics is talking to users, asking them how did you find this product, and how do you normally find products like this? Was that the second question? I I think that's that's like such a... It's like similar to your Sean Ellis test. It's such a simple question, but it's so powerful because how else will people find your product? It's... They go to a place to find stuff like this. Yeah. And, like, they... I Google... I search Google for folder sharing. Like there's so much there that I
01:11:01 · Sean Ellis
[01:11:01] S1: I think you need skip think the reason that you don't actually kinda hear people taking the obvious route there a lot of times is because... And I I I used to be in the same thing that people tend to be either over indexed on qualitative or over indexed on quantitative. So it's kind of like, you know, analytics. I'm going to get all my answers from testing and analytics, or I'm going get all my answers from traditional customer research. I was very much in that initial camp for the first five years of my career. I'm just going to measure everything and test the heck out of things and find stuff that works. I had a VC who was our lead VC at LogMeIn who just said, When was the last time you talked to a customer? Just pushed me to survey and talk to customers all the time. At first I was gave like, the smart ass answer. I don't care what they say, I care what they do. That's what he's like, no, you got to talk to them. Then just to appease him, would try to have a conversation every day because he was in our office a lot. And so I could say, Hey, yeah, I talked to a customer today when would ask me. And then I started finding that my experiments were so much better the more I talked to customers. Eventually I became very much like the blend of qualitative and quantitative research leads to much better tests.
01:12:21 · Lenny Rachitsky, Sean Ellis
[01:12:21] S0: That is another amazing story and insight. It's so interesting that people sometimes think of you as growth hacker guy experiments data when most of the advice you've been sharing so far is very qualitative driven, very survey driven, talking to customers driven. [01:12:35] S1: Yeah. And it's it's just really hard to run good experiments when you can't deeply contextualize what's going on. [01:12:42] S0: I love this. By the way, I I don't know if I knew this. So you helped develop the Dropbox referral program?
01:12:47 · Sean Ellis
[01:12:47] S1: I was there at the time. I basically... When I... Even when I first started talking with with Drew before I came in, I was like, I think the way we're gonna grow this business is by leveraging the really passionate customer base, and that's what we need to double down on. And we had tried a similar kind of referral program at Zodney and my friend who actually started Ring, Jamie Siminoff had previously had a company called PhoneTag like way before Ring and he had actually done a lot of the testing on kind of double sided referral programs and having incentive on both sides. He found that that worked the best. And so between what we had tested at Zobny and those conversations with him, I hadn't actually seen PayPal yet at that point what they were doing. But yeah, that was kind of like, yeah, it seems like a referral program where we have incentives on both sides is the best way to go. Interestingly, six months before I was at Dropbox, I was at LogMeIn and I really thought about having incentivized referrals that LogMeIn, but 80% of our new users were coming in through word-of-mouth and I had 100,000,000 devices connected in on our system and I was just so afraid of breaking this growth engine by adding an incentive that I didn't want to risk it. But at Dropbox, was so early that, yeah. I would still say no experiment is one person. It happened to be when I was there, I had some insights that I brought in, ultimately the guy who built it was actually an intern named Albert Ni. He ended up dropping out of MIT to stay with Dropbox for a few years after that. Yeah, he was kind of my right hand guy to collaborating on growth day to day.