Lenny's Podcast: Product | Career | Growth
01:00:03 · Anish Acharya, Lenny Rachitsky
[01:00:03] S1: This is so important. And I asked Chris Dixon about this because he sort of authored the famous come for the tool, stay for the network. I think the issue is that our entire generation of founders and CEOs were trained on the theory of networks and network building. And as a result, every network that exists today is hyper-trained to ensure no one else builds a network on their network. So, I actually think that the sort of network effect has gone back to this grassroots true word of mouth. When somebody is getting a ton of mentions on X, and on YouTube, and on Instagram and all of these places organically, that is probably the best form of the sort of third party network effect that you can hope for today. And actually just like the web 2.0 era, unlike the mobile era where you had the app store and you had growth hacking, and you had all of these sort of little cottage industries, we have to build our own channels off of that word of mouth growth. So, in a sense it's a purer growth problem, but a harder one than we've had in a couple of product cycles. [01:01:03] S0: And to get word of mouth you need to build something. I always think about Seth Godin's line, build something remarkable, something that is worth remarking about, which is basically build an amazing product that people want to talk about, which is very hard to do. And it makes sense that because there's so much happening, people are just going to pay attention to what are my friends using and saying is worth paying attention to.
01:01:03 · Lenny Rachitsky, Anish Acharya
[01:01:03] S0: And to get word of mouth you need to build something. I always think about Seth Godin's line, build something remarkable, something that is worth remarking about, which is basically build an amazing product that people want to talk about, which is very hard to do. And it makes sense that because there's so much happening, people are just going to pay attention to what are my friends using and saying is worth paying attention to. [01:01:24] S1: Well, here's the one thing I would say that here's the hopeful point, which is I always say that nobody has a growth problem these days, they have a product problem. And the reason for that is you can build such a wildly ambitious product in any direction, functional or emotional, you can charge a lot of money for it. So my challenge is like, hey, is it that you have a growth problem or is it a failure of our collective imagination? If we imagined our product cost $1,000 a month, $10,000 a month, what if our product was a software Birkin bag? What would it have to do to justify that? Okay, let's figure out how we build that. [01:01:59] S0: And it comes back to the ambition question. [01:02:01] S1: Yes.
01:02:01 · Anish Acharya, Lenny Rachitsky
[01:02:01] S1: Yes. [01:02:02] S0: And still though, you still need some advantage to get in front of people to get it out there, at least initially, because there's like 1,000 things launching every day. Imagine that's still a big opportunity and I don't know, advantage, which to me makes me feel like incumbents have a huge advantage. They have the products, they can tell you, "Hey, go use Gemini and every time you go search Google." I guess, do you feel like it's harder for startups now because of this distribution challenge? [01:02:28] S1: I don't know. I think it's easier, because Gemini, despite all the kind of heavy cross-selling Google has done, nobody would say they're winning. [01:02:35] S0: That's right. [01:02:37] S1: Startups can build in directions that incumbents are uncomfortable building in, like everything we talked around companion, but there's many others. [01:02:44] S0: That's true. [01:02:45] S1: Prices can be pretty high. People are open to paying 200 a month or in the enterprise they're open to signing million dollar ACV contracts without really knowing what they're getting. So, I think the floodgates are open. It feels like Christmas 2009 where everybody got their iPhone and wanted to download new apps, that'll change at some point. People will feel like they're done and they're tired and they don't want to try any more apps, but the windows are open for now. I think it's easier for startups.
01:02:45 · Anish Acharya, Lenny Rachitsky
[01:02:45] S1: Prices can be pretty high. People are open to paying 200 a month or in the enterprise they're open to signing million dollar ACV contracts without really knowing what they're getting. So, I think the floodgates are open. It feels like Christmas 2009 where everybody got their iPhone and wanted to download new apps, that'll change at some point. People will feel like they're done and they're tired and they don't want to try any more apps, but the windows are open for now. I think it's easier for startups. [01:03:09] S0: That's a really interesting insight. And you're lying about how it's not a distribution or growth problem, it's a product problem is such an important one, because if your product was that good people would talk about it and share it and use it. Yeah, yeah.
01:03:09 · Lenny Rachitsky, Anish Acharya
[01:03:09] S0: That's a really interesting insight. And you're lying about how it's not a distribution or growth problem, it's a product problem is such an important one, because if your product was that good people would talk about it and share it and use it. Yeah, yeah. [01:03:35] S1: They're awesome, right? They're sort of like this creative studio that uses technology as their medium, very web 2.0 in that way actually. Many of the Ev Williams, the Kevin Roses, they were painters except technology was their canvas. So, they created this very funny product called Card V Card where they shipped, I think 100,000 people a debit card. And then every day they would text those people with a location that they had to spend the money at and they would put $100 on the card, and everyone would rush out to spend the money, and one or two would be able to spend it and everybody else would get declined. And it was just this hilarious social experiment that went hyper viral. And for me, it was always inspiring in the world of FinTech because it was like, wow, why don't we build more products like that? Money is inherently social and yet all the financial products we have are so dry and personal and embarrassing. I think there's a sort of similar moment happening in AI right now where we can build these wildly ambitious products that touch on many of our social nerves, we just have to do it.
01:03:35 · Anish Acharya, Lenny Rachitsky
[01:03:35] S1: They're awesome, right? They're sort of like this creative studio that uses technology as their medium, very web 2.0 in that way actually. Many of the Ev Williams, the Kevin Roses, they were painters except technology was their canvas. So, they created this very funny product called Card V Card where they shipped, I think 100,000 people a debit card. And then every day they would text those people with a location that they had to spend the money at and they would put $100 on the card, and everyone would rush out to spend the money, and one or two would be able to spend it and everybody else would get declined. And it was just this hilarious social experiment that went hyper viral. And for me, it was always inspiring in the world of FinTech because it was like, wow, why don't we build more products like that? Money is inherently social and yet all the financial products we have are so dry and personal and embarrassing. I think there's a sort of similar moment happening in AI right now where we can build these wildly ambitious products that touch on many of our social nerves, we just have to do it. [01:04:29] S0: So, let me follow that thread. You get to see tons of companies both pitching you and also companies you're working with, that you're investor in. What are some counterintuitive lessons you've learned from watching the companies that operate well and have succeeded? Lessons that maybe go against typical wisdom, startup wisdom?