Lenny's Podcast: Product | Career | Growth
00:43:49 · Lenny Rachitsky
[00:43:49] S1: Along these lines of onboarding activation and getting a user activated is really important. And I'm curious, do you have an example of what an activation milestone was at Calendly or Twitter or Typeform just to give people a sense of like, here's a good example of an activated user milestone?
00:44:03 · Oji Udezue, Lenny Rachitsky
[00:44:03] S0: I think this goes back to, you know, people with Pendo's and the Amplitude of this world. You have to sort of think through your journey, right? Like, at Calendly and also at Typeform, we have three thresholds of increasing activation, right? And we just try to make sure that people go through each one, as many people as possible. And frankly, we try to forget a drop off between the increasing definitions of activation. So at Calendly, we wanna make sure you've you've you've created your first meeting. Right? But then if you've created five within a week, that's really much more powerful. At Typeform, it's it's really about have you published the form and have you gotten responses and have you gone to look at what the responses mean in the insights page, for example. At Twitter, is are you following anyone or are you being followed? Right? Because that that verb, follow, is the way you start to construct your informal community. Remember what I said is Twitter is for people who want informal community around a topic. That is not... You know, Facebook is about who do you know. Twitter is about who do you wanna know, who's passionate about what you're passionate about. And so if you haven't set up your follow graph at all, you're not gonna really activate. It's not gonna be compelling for you. [00:45:23] S1: Awesome. Those are great examples. It's funny hearing that Twitter activation milestone out of context sounds so creepy. Have you followed anyone, or is anyone following you?
00:45:23 · Lenny Rachitsky, Oji Udezue
[00:45:23] S1: Awesome. Those are great examples. It's funny hearing that Twitter activation milestone out of context sounds so creepy. Have you followed anyone, or is anyone following you? [00:45:31] S0: Yeah. Because a lot of people go in and then they don't... They tweet into the void or they don't feel like they have a voice. Right. But that's not the most important thing. Most important thing is are you getting content that you're interested in? That makes you wanna come back and see more and follow is a huge part of doing that. [00:45:47] S1: Yeah. Just on the point of Twitter, I don't know if this goes anywhere, but it's crazy how it keeps going no matter how much destruction is happening all around. [00:45:58] S0: You want you want me to talk about that? Because I wanna talk about [00:46:00] S1: it. Please. Let's do it.
00:46:01 · Oji Udezue
[00:46:01] S0: So, you know, one of the things they they they they... I wanna say they. One of the things I learned early on is network effects. Yeah. Network effects... Let me define it. Network effects is when you create value for passive members by other people joining the network. So I am by myself. I have done nothing. I'm at home chilling, but one person joins the network and immediately I gain benefit. Okay. So think about Facebook. If there are 8,000,000,000 people on Facebook, it means that all of a sudden I can reach everyone on the planet. And so the more people on Facebook, the more it's valuable to me regardless of my effort. That's network effect. If I'm into Word, Word, you know, Word processor, you know, Microsoft Word, and the more people who use that file format, it means that the more Word documents I can read. And so I did nothing, so by increasing the people adoption of Word, I gain benefit. Network effect. That's what it is. So Twitter, know, and then this is the mental model of critical mass. Network effect is about critical mass. You hit a critical mass, and sometimes that's not mathematically defined. And then you've hit network effect because people wanna come because people are already there. Right? So Twitter has hit critical mass in lots of your favorite social networks. Network effects is a feature by itself, and it's the most powerful feature. A good way to illustrate the power of network effects is Twitter did not die because threads came up... Came about. Right? That's the power of network effect. In fact, the last telegram was sent in 2016, over a hundred years after it was invented because of network effects. It had to be manually closed down. I believe Friendster is still alive. So we have to be really clear that it's really hard to kill a network effects business. Now how do you how do you actually accomplish it if you were to accomplish it? Well, the revenue side of any social network is vulnerable to attack. So for example, if advertisers stop being on Twitter, for example, they're not gone because, again, network effects affects them. They wanna go where their eyeballs are. But if for some reason they disappeared, then while the people will continue to come, the ability to have money to improve the network will disappear, and that is sort of a negative spiral. But it's very, very hard to kill business...
00:48:47 · Oji Udezue, Lenny Rachitsky
It's hard to kill software that has reached network effect, although you can kill businesses that have reached network effect. [00:48:56] S1: That's a really important and interesting insight. I think what's even especially interesting about Twitter is Elon and the team have kind of, like, removed every other benefit of Twitter. Like, the brand gone. Employees, 80% gone. Like, every part of it is being cut off except for the network effects, and so it's a really cool case study. Dan Hockenmaier tweeted this. He was a previous guest of just, like, it's a good case study of what is just the power of just network effects. [00:49:19] S0: That's right. I think that people will... You know, when I did a really interesting course at Berkeley Business School, Haas, about technology companies and so on. And this is a perfect case study on network effect, the best I've ever seen. It is incredible. [00:49:35] S1: Yeah. That's why all threads isn't able to get there quickly, unlike what it felt like initially. [00:49:42] S0: I mean, threads will prosper, I believe. And they... Again, you know, it'll just be another click for advertisers who understand the Facebook marketplace versus the Twitter ad marketplace is much harder to access. And so I think the way Threads wins is the... Is a revenue spiral versus the, like, pure activity spiral. [00:50:02] S1: Interesting. Where essentially they find ways to, even with lower base, make... Generate revenue, which drives advertisers, drives more investment. [00:50:10] S0: Correct. Correct.
00:50:10 · Oji Udezue, Lenny Rachitsky
[00:50:10] S0: Correct. Correct. [00:50:11] S1: Awesome. Alright. That'll be funny... Fun story to watch. Kind of along those same lines, I wanna chat about virality a little bit. You worked on some of those viral products out there in b two c, as Twitter is an example, but also in b two b, which is really rare and interesting. And I know there's no silver bullet for increasing virality, but everyone's always wondering how do I increase the virality of my product. So I'm curious, anything you could share, any tactics that you've seen work to increase the virality, especially of a b two b product? [00:50:36] S0: Well, as is my style, I want people to understand what virality is in the first place because I think people have misconceptions about it. People think virality is some, you know, Hotmail's tag at the bottom that says, go get a free account. Virality is really when the word-of-mouth of a product is high quality. That's really the essence of it. Let me rephrase that. It's when customers market your product, right? And that is incredibly powerful, but also that's incredibly actionable, if that makes sense. There are products who try to be viral just for what I call synthetic virality that fail. Because in the end, if you're synthetically viral and people get to the product and it sucks, that's it. That's the end. Even Hotmail, for example, people talk about the viral tag. I don't know. You you know what I'm talking about? Because [00:51:32] S1: I Absolutely. At the bottom. Like, yes. Yeah.