Lenny's Podcast: Product | Career | Growth
00:11:31 · Lenny Rachitsky, Elena Verna
[00:11:31] S1: So just to summarize a few of the things you just said just for folks, you basically have seen startups look for a head of growth to join and solve their growth problem, And your insight there is just almost always almost always that is not gonna be the solution to your problem until you have strong retention already, have a really high score in the Sean L score if you don't have a ton of data yet. And part of your advice is just the founder should continue to do this for as long as possible. A million AR is like one milestone a lot of people recommend. Your point, a lot of companies wait a lot longer. [00:12:05] S0: Yes. Yes. And honestly, the longer you wait, the better it is because that way your entire company will be trained to be responsible for growth as opposed to putting this one island with a growth team and saying they're gonna be growing and what is the rest of the company is doing. So honestly, the longer you wait, the better. [00:12:23] S1: As you talk about this, sales is a part of what you described here, like hiring your first salesperson. And so I guess how do you think about, like, your first head of growth versus salesperson? Is there anything advice there is... Like, for b to b SaaS, you probably don't hire head of growth for even longer. Right? You hire sales first or what's your advice?
00:12:41 · Elena Verna, Lenny Rachitsky
[00:12:41] S0: It depends. It depends on how you actually gonna collect the monies. If your money collection is gonna happen through sales team primarily, then you absolutely should be hiring sales way before growth. In fact, in the sales led companies, growth teams are not necessarily needed even that much. You might have a growth marketing team, which is really a demand gen team that is rebranded for growth marketing so they can charge you 20 to 30% more in their salaries. But at the end of the day, sales is doing your monetization. They are doing your activation. They are doing your retention and success efforts. So, for sales led companies, yeah, higher sales, absolutely. Unless you're starting to do self serve revenue, so you're trying to have product sell itself through potentially freemium acquisition, trial acquisition, or you actually having product led activation, monetization, that's when you would need a growth person. So, if you're starting with self serve monetization, growth hire should be, frankly, first before sales. Your sales are going to be more opportunistic in nature versus if your sales led company, Go ahead. Higher sales. Wait for growth until you're ready to overlay product led growth on top of your sales motion. [00:13:56] S1: Okay. That's an excellent clarification. So basically, what I'm hearing the advice is hire ahead of growth only when you have clear product market fit and you're a product led company and beyond a million ARR, ideally, something like that.
00:13:56 · Lenny Rachitsky, Elena Verna
[00:13:56] S1: Okay. That's an excellent clarification. So basically, what I'm hearing the advice is hire ahead of growth only when you have clear product market fit and you're a product led company and beyond a million ARR, ideally, something like that. [00:14:11] S0: Right. And I won't say you're product led company. You are relying on product led motion to resolve a lot of the growth levers within you because you don't have to be fully product led company. But so if product, let's say, acquires people, let's say, with the SEO or Centimeters, then its product is meant to activate them and then sales closes them, sales would be obviously important as well, but growth would have to be coming a little bit sooner as well. So if you have any product led components, where product is responsible for acquisition, activation, monetization, or retention, that's where growth comes in. [00:14:46] S1: Okay. We talked deeply about that specific topic in our first conversation. Yes. I just wanna go deeper [00:14:52] S0: I there and need to talk lot bring it back. This is like it keeps I need to repeat it. Need to repeat it three times, right, before it sticks to people. So hopefully this is the third time. [00:15:01] S1: Absolutely. I'm only saying that because I... People may be wanting more of what you're describing and I will point them to our first episode, which goes deep on that one topic. [00:15:09] S0: Amazing. [00:15:10] S1: Excellent. Anything else before we move on to number two?
00:15:13 · Elena Verna
[00:15:13] S0: No. Let's move on to number two. Let's do it. Okay. So number two, this is on the other side, on the matured company, where I see a trend over and over, and it's becoming even more prominent right now, of when companies' growth slows down, which inevitably happens for a lot of businesses. Businesses. It It happens happens for for a variety of reasons. We're not going to go into the reasons as to why growth can be slowing down. And then they hire a shiny growth head to fix the problem. So basically saying, Hey, our business is slowing down. We're on a decline. We're going to bring this person or we're going to put this team together and our growth is going to accelerate. That just does not happen. If you have the overall business slowing down, your head of growth is destined to fail because the reason the business is slowing down is much deeper than not having a growth team. Growth team can optimize, growth can maybe lift it by 10, 15%. Maybe that's enough for you, even though Adelaide is on the upper end of what growth team would be able to do if there is a slowdown trajectory. But what's important is that if you have core product and core marketing issues, Growth Team will not be able to fix them for you. You're going to have to address the big elephant in the room as to why business is slowing down in the first place, as opposed to just plopping a growth team on the issue and expecting them to do miracles while the rest of the business continues chugging on the same trajectory that caused the slowdown in the first place.
00:16:41 · Lenny Rachitsky
[00:16:41] S1: Wow. That is a... I've never heard this point before, and it's such an important one. It's very related to your first point. Growth isn't gonna build a product people want. They will help you grow it. And your business is slowing, your product market fit basically might be disappearing and growth isn't solving that problem.
00:16:59 · Elena Verna, Lenny Rachitsky
[00:16:59] S0: Disappearing and maybe segregating, it may be being eaten by a competitor because there's somebody that is stomping on your territory. The point is growth can amplify great product market fit and growth can help you grow faster once you're already growing. But if you're slowing down and you have issues with either your go to market strategy or your core product strategy with your core product market fit, growth is gonna be absolutely helpless to do anything. And it's honestly, it's a huge waste of money because at those sides of the companies, you would need fairly large growth teams in order to tackle every single product flow and interface that is already out there and invented. So, it's a huge expense. ROI on it, maybe at least one to one. Like what you put into it, you might get that much out of it, but it's not gonna be enough to create a J curve of the reacceleration by just relying on growth team. So I think it's just like this is where the name growth team plays against it because like, Oh, we're looking for growth. Do you have a growth team? No, that's actually... I don't have a better idea, by the way, how to name it. But this is where I think it's misunderstood that there is the silver bullet of a perfect head of growth, perfect growth team that can reverse the trajectory of the business. [00:18:26] S1: So then for folks that are thinking about, oh, wow, maybe I shouldn't be hiring head of growth, when should you hire head of growth when you're kind of an established company?