Lenny's Podcast: Product | Career | Growth
00:12:22 · Elena Verna
[00:12:22] S1: Yeah. So retention, really, I look at it in two ways. Retention that it comes as a subscriber retention. So how much mini pay subscribers do we get and how many of them are we capable of renewing? There's also very important aspect of it is how many of them can we expand? Because if you can get positive or above a 100% net dollar retention, which is super important metric for investors. If you don't know about net dollar retention, please read it up. That's like a superpower to get bigger multiple if you can show NDR that is over 100. And then there's actual engagement retention as well, because that is the leading indicator for how your paid retention is going to look like. For paid retention, I know there is so much on the market of, oh, this is a high product and it just it's a leaky bucket and it has really high churn rates. Although I'm not I shouldn't share it's not public numbers for us to share actual retention. However, what I can say it's on par with benchmarks of other B2B SaaS products that I've ever worked at. And I worked with Miro, Dropbox, SurveyMonkey, Netlify, Amplitude and others. So are we absolutely crushing with paid retention? No. Are we where most of the other companies are? Yes. Our NDR is quite good because when people bill, they want to buy more credits to bill. So we're seeing really good revenue retention, but we're honestly more focused right now on engagement retention than even paid retention because our North Star is just to get as much usage as possible, and we will fix and tune our monetization model afterwards. So engagement retention, I would say, is by far bigger priority focus for us at the moment.
00:14:04 · Lenny Rachitsky, Elena Verna
[00:14:04] S0: That is incredibly interesting and optimistic to hear because of the growth rate. Rarely is growth rate this high and retention is on par with great companies. [00:14:15] S1: Yeah. And I'll just say too, which is a little bit maybe counterintuitive to... Would be to a lot of companies. We don't optimize for revenue at all. In fact, internally, we have a lot of discussions about how can we give more products away? How can we reduce our revenue growth rate by just getting more paid subscribers, more users using Lovable to just get bigger share of the market. So our revenue is an outcome of us just trying to get more people through the door, not us trying to optimize for revenue per user or to get them to monetize at the higher rate. So there's like a very interesting path here where by actually focusing on the inputs like you should, it translates to a good output, but we don't look at that output as something that we're trying to grow. [00:15:02] S0: Let's talk about growth. Let's talk about what you've learned about growth in this space. You had this post online where you said that you've had to throw out most of your growth playbook. This is a huge deal. You've led growth a lot of really successful companies. Lovable is growing incredibly well. This tells me there's a lot we can learn from what you've seen. So tell us what you're seeing, what's still working, what's not working, what you've learned about what it takes to drive growth at a company like Lovable.
00:15:28 · Elena Verna
[00:15:28] S1: Yeah. I would say that in any other role that I've come into before, I felt confident in about 80% of the patterns that I can bring to that role, meaning that I can identify inputs, understand which framework kind of applies. I know a launch of examples that fit in within that framework. So we just need to localize a solution and push. And it was quite productive in terms of getting a company those additional acquisition, conversion, engagement, monetization rates. So I felt very repetitive in a way after some time because I feel like I'm just coming in and copy pasting, copy pasting. And although every single company loves to say that they have unique problems at the end of the day, all of the problems were very similar. And I felt like I was like doing the same job over and over again. When I started at Lovable, the one thing to me that was very clear is that this company was growing like crazy before I joined. So I want to make sure that there's not that much value on what I have even added to date because this company is on the tear. And yes, we're rounding the edges and removing barriers for growth. So we're not standing in our own way. But there's something more magical happening here that is not a pattern that I've ever seen before. It's not a framework that I can even conceptualize in my head. And plus it's a new category that I've never seen or I've never been in a company that is in the new emerging category that hits fast moving water so quickly. And that's the difference because when you're usually trying to create a new category, it takes years. I know it's every marketer's dream to create a new category, but it takes decades often to like really to really get that much hype and adoption around it versus with vibe coding. This has seemed to have happened really quickly. It's like it's hit the nerve with the market. So, yes, we're at the right place. We're at the right time. But we're also in really fast moving waters. And the demand that is coming to us, like we need to capture it mostly, we don't need to generate a lot of it yet. But at the same time, comes with a really big downfalls of we're not in control of a lot of our growth. I mean, let's be honest about it. There's so much incredible word-of-mouth that is happening and we're trying to grow that, but to enable as much of that as possible. But it's the company is moving.
00:17:50 · Elena Verna, Lenny Rachitsky
We're just like hanging on to it as fast as possible and making sure that we're not going to hit a wall, so to speak, in front of us and that the wheels are greased and that all of the pieces are in places like your race car framework that you have as well. We're really just putting a lot of oil into it and figuring out what is our engine actually going to be that is going to take us forward. But when I'm thinking about the patterns here and what I have to unlearn, I feel like only 30 to 40% of what I've learned in the last fifteen to twenty years of being in growth transfers here. And some of it is very straightforward. Okay, this is how you're going to do paid marketing. This is how you're going to do some of the habitual retention. Here's the free to pay maybe monetization frameworks that still stand. But the rest of it, I was just say, it doesn't feel like it even matters anymore because we just need to invest in such bigger bets and innovate and create new growth loops here as opposed to trying to optimize it to the moon and beyond, which would I usually be focused on in a scaled business like this. [00:18:57] S0: Let's follow those threads. So what is it that no longer is worth it in this bucket of just like, let's not spend any time on this thing? And then what do you find is actually moving the needle?
00:19:06 · Elena Verna
[00:19:06] S1: Not worth it In growth, most of the people spend most of the time optimizing existing user journeys. So you already have maybe some of your growth loops that you understand that you try to optimize or you just know, hey, there's big drop offs from acquisition to activation. Let me go figure out how I can tweak the dials to get it done. Here what I find is that optimizations are just not worth our time. So a lot of the times my growth team actually ends up working on new features or just standing up new growth loops one after another. And yes, there's of course the saying of like more growth loops does not mean more growth, but at the same time, the market is moving so quickly. You need to stand up a bunch of initiatives to capture it because it's perishable. Or we also have so much competition. We're not alone here. So we can't ignore that there's everybody and their mother is starting a vibe coating business nowadays and we need to figure out how to be ahead of them. And to be ahead of them is not optimization of the problem. It's reinvention of the solution. So I just feel like I usually spend maybe 5%, maybe 10% if I'm lucky innovating on growth in my roles, in my previous roles. Right now I'm spending 95% innovating on growth and only 5% on optimization. And most of my frameworks are on optimization because it's really hard to come up with frameworks for innovation because by default, they're by definition, they're innovative.
00:20:38 · Lenny Rachitsky
[00:20:38] S0: What I'm hearing here is new features, launching new features, new product is one of the bigger growth levers versus like you have a bunch of cool stuff, make it easier to use, increase activation, reduce friction, things like that.