Lenny's Podcast: Product | Career | Growth
00:09:10 · Nikita Bier
And so, you know, we we went to our investors and we said, look, this this isn't actually what we're excited about doing anymore. And we we offered to give the money back and said, we're we're we're gonna be building consumer apps, here's a few ideas that we have. None of them took the money back. And so then we spent the next, like, four or five years building a variety of different kind of consumer, consumer apps. So we we had a a few, like, kind of mild successes during the course of those four to five years. And one of them was a, an app called Five Labs that ingested your Facebook posts and determine your personality based on the language you use. And it used this exact same model that Cambridge Analytica used, And that was super viral. I I think, you know, we had, like, tens of millions of profiles in it, and, this all... It went viral in, three days. And so we raised some more money based off the success of that. And we we started focusing a lot more on mobile after that first app five labs, and we we launched, you know, basically every type of app you can imagine. We launched mapping apps, chat apps, event meetup apps, any... Like, basically every kind of consumer app on mobile that you could think of. And that actually helped us kind of build a muscle to understand what people want and how to actually make things grow and how to test them. And over time, we started, focusing more on teens. And a lot of people ask why Silicon Valley is so fixated on building apps for teens. And one of the reasons is their habits are pretty malleable. Like, as we get older, we, like, kind of get kind of fixed fixed into our our habits of using certain communication products, and we don't really adopt new things. And then the other thing that we discovered was that adults don't really invite people to new apps. We found that as a user got older from age 13 to 18, like, the number of people that they invite to an app just declines almost exponentially. And finally, and the most important thing is they they see each other every day, and that is so critical. Like, consumer app developers sometimes say smokers are great for, like, targeting an audience because they actually, like, hang out, you know, serendipitously a lot, outside of, you know, buildings. So... But not not to say, like, social apps are cigarettes. I I I don't really like that metaphor.
00:11:50 · Lenny Rachitsky, Nikita Bier
[00:11:50] S1: Just on the note of you talking about why teens are important, I I have this quote actually from you that I love where building on the point you made that for every social app I've ever built, the number of invitations sent per user drops 20% for every additional year of age from 13 to 18. So if you build for adults, expect to acquire every user with ads. And I love that you have a very clear heuristic of per year. The amount of people they invite to the app is 20% lower. [00:12:17] S0: If your users aren't inviting people to your app, you're gonna have to find another way to acquire them, and that most likely means ads. And, if if if you're targeting, older cohorts like adults, you're gonna have to, raise a huge amount of venture capital to finance that user acquisition pipeline. And it's gonna be extraordinarily expensive. As a seed stage startup, it's gonna be basically impossible to, to to grow that, user base, especially to get density if you need, actual network effects among users. Mhmm.
00:12:55 · Lenny Rachitsky
[00:12:55] S1: So, basically, you're building this, help me decide who to vote for app that turned into a real business with, like, government contracts coming to you, trying to help you... Pushing you to build something that you end up realizing. I don't wanna be doing this. Why am I building this app selling government contracts? And so what you did is you... And this is a really interesting lesson to take away is you just realize, don't wanna be doing this. Investors don't force me to be working on this. I'm gonna stop this. I'm gonna go work on some other stuff that I'm actually excited about that I think has a bigger chance of success. And that's where you transition to this startup studio where you're just trying a bunch of apps. And I think it was called Midnight Labs, you said, something like that. Right? Yeah. Awesome. So, basically, I think that's an really interesting insight of just, like, if you're working on something you don't enjoy, you can change that. You can pivot. You can tell your investors, wanna work on something else. Is there anything there that you wanna add along those lines?
00:13:48 · Nikita Bier
[00:13:48] S0: It was really hard for us to pivot to mobile. I think that was one of the most challenging things for me personally because it was a completely different paradigm. Like, I actually have been building web apps since I was 12 years old, And I I, you know, I I I built a, full ecommerce business selling pirated games on the web, and I knew everything about, like, growing a website. But as I... As we pivoted to mobile, I I had to, like, recalibrate my whole brain on how to how to do that. Mobile apps have such a low margin for error when it comes to designing them because I I I have this, like, dogmatic view, that, like, every tap on a mobile app is a miracle for you as a product developer. Because users will churn and bounce to the... Their next app very quickly. If you actually sit behind someone and watch them use their phone, they actually switch between apps at a pretty high frequency. So every tap that you get, every single one is so scarce that you should be optimizing everything. And so I had to change my whole brain when we started pivoting to mobile and building these mobile apps, and it took a lot of failures. Like, we we, you know, we we we... Four... Like, 14 of the apps that we launched were basically duds. And then we started fixating on teens and and building apps for them. And, eventually, we figured out an interesting heuristic for identifying consumer product opportunities that ultimately led us to TBH.
00:15:26 · Lenny Rachitsky, Nikita Bier
[00:15:26] S1: You spent four or five years trying a bunch of different ideas. I think people see this headline and will get into TBH of just, like, nine weeks after launch sells for $30,000,000 to Facebook, and everyone's like, oh, okay. That's amazing. I want that for my life. Nobody knows there's this, like, four or five years of trying, you said 15 different apps before you got there, learning the things that actually work and don't work. [00:15:49] S0: We built, like, 15 apps over that... The course of that pivot to consumer. And we built apps for, like, every single app, you know, map apps, chat apps, you know, to do list. We we just built every type of consumer app you could possibly think of. And, also, we built for every audience too. We built for college students. We built for, you know, post college, and it was always very difficult to get the flywheel spinning for anyone after, like, 22 years old. That that was, like, the cutoff of when people just have... Give up on adopting new products. And and that was a... We kinda... Like, it it took us a few years to really internalize that. A lot of failures to realize no one needs another app after that age. [00:16:44] S1: So the thing that you found there, which is really interesting, because most people are building for people older than 22. That's like a profound insight you had there. Like, every consumer app I see is, like, trying to build for adults. And your lesson there is basically if you're trying to do that, you're probably gonna need to raise money and spend a lot of money in pay downs.
00:17:03 · Nikita Bier
[00:17:03] S0: Yeah. And most likely, you'll never get network effects. There's actually an interesting study, like, many years ago that, like, some academics in Spain did, I think it was in Spain, and they looked at how many people you text, you know, per year of your life. And it goes up, like, very quickly from 14 to 18. It peaks around 21. So it's growing. The number of people you text is growing up until about 21, and then it just falls, it collapses. And then it comes back up in, at end of life. And there's a few reasons all this happens, but, basically, you know, once you exit college, you kind of reduce the number of contacts you have, your daily contacts. Once you get married, it's even fewer. And then when... As you get older, you know, you, and your your kids start having kids and you become a grandparent, you start texting again more and... Or you join a retirement home. But if you're building a product with network effects that's a communication tool, you wanna be on that ups... Upward curve of adding connections to your social graph because then the urgency to connect is higher. So if you really wanna actually innovate at the edges of communication products, you you you really have to target that cohort that has the highest urgency to communicate, and and that's teens.