Lenny's Podcast: Product | Career | Growth
00:09:53 · Sean Ellis
[00:09:53] S1: Yeah. So the company called Lookout, it's a mobile security company. And now most of the things in Lookout are built into iPhones and Androids. But at that time, the product had everything from backup my data to find my lost phone to protecting your phone a firewall and antivirus. And so when we ran this initial survey, I dug into the 7% who said they'd be very disappointed without the product and found that most of that 7% were focused on the antivirus functionality. So they were like, they know they need to protect their computer from viruses. Smartphones were becoming more like computers. So it just made a lot of sense for them that they'd need to protect their phone. And Interesting, at the time, I think there was only one phone virus that had ever even happened, but it was a pretty easy mental leap for people. So now we knew, okay, it's antivirus that people really valued. And so step one was just reposition the product on antivirus so that that kind of creates a filter. So anyone who now is coming in to sign up for the product who doesn't care about antivirus is not going to convert. And those who are excited about antivirus are going to convert. We already know from the initial survey that people value that after they convert. By setting the right expectations around it upfront, you're going to bring people in with the right expectations. But then the second thing that we did was we streamlined onboarding so that the first thing that they did after signing up for the product was to set up the antivirus and then get a message, you're now protected from viruses. And so it's really the combination of those two things. It's set the right expectations and then speed the value. And so the next cohort of people that we surveyed were at 40% saying they'd be very disappointed without the product. That literally took two weeks to make those changes. Six months later, it was 60% on the score. Then I think they hit the billion dollar valuation four or five years later on ultimately being one of the early unicorns. Interestingly, as all of those things were built into mobile phones now, they've completely changed the business, but they continue to do really well, But they've continued to iterate the business.
00:12:22 · Sean Ellis, Lenny Rachitsky
I think that having that kind of finger on the pulse early in the business was important to build the muscle in the business to be really responsive as the market changed. [00:12:34] S0: Sean, this is already amazing. There's just like a fractal of topics I want to explore from this very short conversation already. So the first is just follow this thread of basically you're sharing kind of a growth strategy that I imagine you execute is look for the percentage of people that would be very disappointed if your product went away. See who they are, see what they're excited about, and lean into that both positioning wise, onboarding wise, and probably also cut out stuff from your product that they don't care about. [00:13:02] S1: Yeah. And I was coming at it from a marketing perspective initially. Over time, I positioned myself more in a growth role with product and marketing as areas I could influence. But as a marketer, probably didn't have a lot of influence on a engineering founded company to say, let's cut out stuff. So it made more sense to say, let's just sequence the onboarding so that we're highlighting this and and onboarding to this. That was a little easier to sell. [00:13:33] S0: And just hearing that you can move this score so quickly without even changing the product substantially, I imagine what surprised a lot of people when you think about, like, removing retention often is really hard, and maybe we talk about that. But I guess it sounds like there's often something you can do that's not very hard that might significantly shift this product market fit test.
00:13:33 · Lenny Rachitsky, Sean Ellis
[00:13:33] S0: And just hearing that you can move this score so quickly without even changing the product substantially, I imagine what surprised a lot of people when you think about, like, removing retention often is really hard, and maybe we talk about that. But I guess it sounds like there's often something you can do that's not very hard that might significantly shift this product market fit test. [00:13:57] S1: Right. And then that ultimately, like, yeah, moving retention is really hard, but it's it's usually much more a function of onboarding to the right user experience than it is about the kind of the tactical things that people try to do to improve retention. [00:14:11] S0: Okay. I wanna put a pin in that and come back to that because that's a really important topic. I wanna come back to, say someone runs this survey and they get 40%, what should they have in their mind of, like, this is what this is telling me? Because I think a lot of people are like, I got product market fit. I got this. Let's go. Go. Go. What's the best way to think about what this tells you?
00:14:30 · Sean Ellis
[00:14:30] S1: Yeah. I mean, it it does... It tells you something really important, which is, you know, you're... You you haven't created something that, people don't care about. So that's an important insight. But until you deeply understand that product market fit, kind of don't have the tools to be able to grow the business. So that's really the next step is to dig in and figure out who considers it a must have, how are they using the product, what did they use before, what problem are they solving? Of my favorite questions is, so I tend to have a lot of questions that I build off of, that I'm using that filter of trying to drill into the users who say they'd be very disappointed without the product. One of my favorite questions is, what is the primary benefit that you get? And then I use that initially as an open ended question to kind of crowdsource different benefits people are getting. Then I run another survey where I turn it into a multiple choice question, force them to pick one of four kind of distinctive benefit statements. Then the question that follows on that next survey is, why is that benefit important to you? And then I start to get really good context. I actually came up with this question when I was working with an early YC company called Xobni, and just inbox spelled backwards. And when I ran that question, basically the people who said they'd be very disappointed without the product were focused on Xobni helps me find things faster in my email. It's great to know, okay, that's the benefit. But when I asked, why is that benefit important to you? They said, I'm drowning in email. I kept seeing that statement as a written statement. And so when I then was trying to figure out how to acquire customers, when I tested drowning in email question mark, that set such a good hook that was the context that people were living in, that they were really responsive to the message of find things faster with Xobni and then a description of what Xobni is. So I think when you can really dig into the context of why that must have benefit is important to people, you start to get the ingredients to build that flywheel that leads to long term sustainable growth.
00:16:51 · Lenny Rachitsky, Sean Ellis
[00:16:51] S0: So what I'm hearing is whether you have 40%, whether you have 60% or even 7%, the actual best use of this tool is look at that percentage of highly disappointed and see what they're looking for, what they're [00:17:03] S1: excited Start drilling in, start peeling back that onion and just deeply understand them and make sure that ultimately your product roadmap is doubling down on the things that are important to your must have customers. Your onboarding is bringing new people to the right experience. Your messaging is setting expectations, your acquisition campaigns are targeting people who actually have the need. And so it's all about getting the right people to the right experience. Then even your engagement loop is about just reinforcing how to get people to experience that benefit more often. [00:17:40] S0: Awesome. And the 40% threshold, so what you shared is you basically emerged from just looking at tons of startups doing the survey and finding a pattern. How firm is that 40%? Like how big of a deal is it? 39 versus 41?
00:17:40 · Lenny Rachitsky, Sean Ellis
[00:17:40] S0: Awesome. And the 40% threshold, so what you shared is you basically emerged from just looking at tons of startups doing the survey and finding a pattern. How firm is that 40%? Like how big of a deal is it? 39 versus 41? [00:17:52] S1: I don't think it's that firm. You know, to me, I think the real power is having some kind of some kind of target for the team to be shooting for that basically says, we're not going to aggressively start to grow until we hit this target. And I think that as just a focusing piece is really important because I think one of the biggest challenges in an early stage startup is half the people feel like we're years from having this product ready to grow and half the people are like, what are we waiting for? Where if you can actually get people on the same page of what does product market fit look like for our business? And it's at that point that we're going to... Yeah. Before I ever heard the term product market fit, I remember the conversations back at LogMeIn in the mid-2000s of kind of like, when do we step on the gas? What is the combination of factors that need to be in place before we start pouring fuel on the early fire? And so, I think that kind of nail it and scale it, it's probably been term that's been around for decades now. But, you know, it's it's all kind of pointing to that same concept of product market fit.