Lenny's Podcast: Product | Career | Growth
01:21:17 · Sean Ellis, Lenny Rachitsky
[01:21:17] S1: No, I know. Even Amazon, and again, this is just what I know of Amazon's as being, but monthly purchases. But someone else might say, No, Amazon's is a GMV or something. But I think monthly purchases great because it maps to value that people are getting from Amazon. And so even if I spend, say, 1,000 on a TV set with Amazon versus $3 or $10 on an electric toothbrush, Amazon, from the consumer's perspective, delivered the same value. I needed something, Amazon helped me find that thing. And so units of value from the customer perspective, I think is more important than, than, you know, overall revenue. But clearly, clearly, you know, with Amazon focusing on driving more monthly purchases, at least on their store side of the business that has helped them become one the most valuable companies in the world. So I think focusing on value is revenue should be a byproduct of doing things right. It shouldn't kind of guide your day to day actions. [01:22:28] S0: To make this even more concrete for people, are there some North Star Metric examples you could share that you've seen that are good, like say for Eventbrite or Dropbox or any companies you've worked with. And I'll share one real quick as you're thinking about it. At Airbnb, it was... And our star metric was nights booked. And so it... It's similar to Amazon. It's not like the money Airbnb made from bookings, but it's like nights booked. And it it was really... And basically every experiment we ran is like, is this increasing nights booked or is this decreasing nights booked?
01:22:28 · Lenny Rachitsky, Sean Ellis
[01:22:28] S0: To make this even more concrete for people, are there some North Star Metric examples you could share that you've seen that are good, like say for Eventbrite or Dropbox or any companies you've worked with. And I'll share one real quick as you're thinking about it. At Airbnb, it was... And our star metric was nights booked. And so it... It's similar to Amazon. It's not like the money Airbnb made from bookings, but it's like nights booked. And it it was really... And basically every experiment we ran is like, is this increasing nights booked or is this decreasing nights booked? [01:22:55] S1: And so that's that's like a really good marketplace one. Uber, obviously, you know, weekly rides. I'm always surprised with the with the Airbnb that it's there's not a kind of time piece on it, like the weekly rides that you have with Uber. But maybe it's because it's such an infrequent use case on travel that it doesn't make sense to focus on. [01:23:19] S0: Yeah. Yeah. Why is the timeframe important to you? Why do you encourage that? [01:23:25] S1: Daily active users, you saw the difference between monthly active users and daily active users could change behavior a lot at Facebook. It gives you a quantifiable way. If you're just kind of taking an aggregate number over time, it always looks like it's going up. [01:23:40] S0: So it's an engagement element. How often are they engaging? [01:23:44] S1: Yeah. [01:23:45] S0: Okay. Any others? Any others real quick?
01:23:45 · Lenny Rachitsky, Sean Ellis
[01:23:45] S0: Okay. Any others? Any others real quick? [01:23:47] S1: Yeah. I mean, I didn't really think about North Star Metrics when I was at Dropbox in Eventbrite, you know, like the the term itself. But I was thinking about what is what is a valuable experience with Dropbox and how do I get people to have that more time? But, I don't even know what they go with today, but maybe files in Dropbox, files access might be better than just files hosted. And then probably for Eventbrite again, I would say weekly tickets or something like, you could say weekly events, but then you have events that don't sell any tickets where weekly tickets would be more likely to reflect events are gonna be happy if they're selling tickets and, yeah. [01:24:30] S0: Okay. Sean, we've gone through so much stuff. I I have... I'm trying to limit how many more questions we get through just so that we don't... [01:24:36] S1: We're going long.
01:24:36 · Sean Ellis, Lenny Rachitsky
[01:24:36] S1: We're going long. [01:24:38] S0: We're going long, which is amazing. I think there's so much value here that we're collecting for folks. So let me just ask maybe a couple more quick questions. One is actually from Andrew Chen who is currently a partner at a sixteen z. He was... He wrote about growth for the longest time. He think he helped popularize growth hacking for better or worse with his article on it being the future of VP... Oh, what is it? Growth hacking is the new VP of marketing. Right? Is that the title? So he actually had a question for you that he shared with me. His question is, growth strategies have changed a lot over the past decade. What is the biggest difference now versus when you first started working on growth?
01:25:14 · Sean Ellis, Lenny Rachitsky
[01:25:14] S1: When I first started, just being data driven on customer acquisition was enough to win. And being test and data driven on customer acquisition, all the other companies were CPM focused. So we could do really well just with lots of testing and some creativity in how it all worked. But over time, as now I would say most online marketers are very data and test driven. They know they needed lots of testing. So to be competitive today, you actually have to be able to be super efficient at all parts of the business. So, again, how you convert, retain, monetize, and that's when it gets hard. Getting a marketing team to be data and test driven is pretty easy. Once you start getting into activation and referral and engagement and retention, now you're talking about the overlap between marketing, product, if it's B2B, bringing sales in there, customer success, And those teams are not used to working together. And so it's really hard to drive the collaboration that's needed to have an effective testing program across the entire growth engine. That's pretty much any business that's been successful with it, implemented it super early in the business. And so very, very few later stage companies have been able to make much progress in replicating that type of approach. [01:26:55] S0: It's just gotten harder, basically. Things are just getting harder.
01:26:55 · Lenny Rachitsky, Sean Ellis
[01:26:55] S0: It's just gotten harder, basically. Things are just getting harder. [01:26:57] S1: It's gotten harder, but I but I but I I think it's, I think it's possible. So it's what I obsess about all the time is how how how do you how do you get cross functional teams working together on growth now, and it's still a huge advantage when you can pull it off. [01:27:13] S0: Okay. Totally unrelated question going in completely different direction as we close out our chat. So you came up with ICE, the very popular way of prioritizing work, which is crazy. I did not know that until I started prepping for this conversation. What's your thoughts on Rice, the intercom version of ICE, where r stands for reach, I believe. Thoughts?