Lenny's Podcast: Product | Career | Growth
00:48:40 · Lenny Rachitsky
[00:48:40] S0: That is fascinating. This episode is brought to you by Persona, the verified identity platform helping organizations onboard users, fight fraud, and build trust. We talk a lot on this podcast about the amazing advances in AI, but this can be a double edged sword. For every wow moment, there are fraudsters using the same tech to wreak havoc, laundering money, taking over employee identities, and impersonating businesses. Persona helps combat these threats with automated user, business, and employee verification. Whether you're looking to catch candidate fraud, meet age restrictions, or keep your platform safe, Persona helps you verify users in a way that's tailored to your specific needs. Best of all, Persona makes it easy to know who you're dealing with without adding friction for good users. This is why leading platforms like Etsy, LinkedIn, Square, and Lyft trust Persona to secure their platform. Persona is also offering my listeners 500 free services per month for one full year. Just head to withpersona.com/lenny to get started. That's with persona.com/lenny. Thanks again to Persona for sponsoring this episode. Let me kinda go back to summarize just real quick the growth levers. I wanna move in a somewhat different direction. So things that help Lovable grow. One is just build something in mind that blows your socks off, as you said. I love these phrases out here. The second is make noise in the market. And the way that Lovable does this, the CEO is tweeting constantly. You build something that blows people's socks off so that they share things on socials themselves, plus this influencer marketing component, and just this idea of building in public has been really helpful. This point about activation being kind of embedded within the product team of the AI of the AI agent essentially. So it's essentially not the growth team thinking about activation. It's the product team that is building the AI magic that is obsessed with activation. And it feels like those are the main the main growth levers. Is there anything else that I missed?
00:50:37 · Elena Verna, Lenny Rachitsky
[00:50:37] S1: Community. I think community is really important here because you need to bring people together as they're exploring these capabilities and as they're seeing what's possible so they can bounce off each other and they can help each other out. So I would say community also amplifies that word-of-mouth. It amplifies all of the social posting. It amplifies retention mechanisms for you as well. The community has been a huge part of Lovable success as well. And that's something that was started very early on. It runs on Discord, so it's nothing fancy. It's not like we build anything completely from scratch for ourselves. And it has hundreds of thousands of members, and it's very lively. We have community managers that are making sure that all of the questions get answered and the right groups are being created. We have incredible ambassador program now as well of people doing it. So I would say community here again of really making software more human is very important role. Now, obviously not everybody can build a community, but maybe at least plugging in into somebody's community is quite important as well. And then there's another one. Unless you have a question on community. [00:51:46] S0: No, keep going.
00:51:47 · Elena Verna
[00:51:47] S1: And another one is giving your product away a lot. And for AI products, it may feel counterintuitive because they're so costly. Every single interaction with an AI product cost company something. There's an LLM pass through cost that is coming through. And a lot of especially traditional tech companies I see are gating AI immediately behind the paywall because they're sitting on the really cush high margin profile. And the moment that you start giving AI away for free, you like cutting into those margins with like a knife through the butter. Now, at the same time, AI being so new and the capabilities being so new, you have to remove the barrier of entry. You have to give a lot of your product away for free. But by the way, I don't just mean freemium. Freemium to me is just like a baseline. If you're in the new category, you need to let people explore what it is free and get that initial wow moment. It's not a moment, by the way. It doesn't need to be a moment anymore. It just needs to be a wow moment. And for Lovable is that first preview generation after your first prompt, even though it's absolutely not gonna be complete thing of what you wanna build, but you just go, this is possible. Like, I had no idea. I wanna keep building. And it becomes an addictive exercise. But we also give so many of our Lovable credits away to every event, to every hackathon. If you want to host a Lovable hackathon, we will sponsor it and give all of the participants credits away for free. So we give them away as candy and we basically track them over our LLM costs on freemium and giveaways as our marketing costs. And it doesn't go into our something we need to reduce to make our margins better. It goes into this is something that we need to spend more in because this is part of our growth secret sauce.
00:53:41 · Lenny Rachitsky
[00:53:41] S0: Okay. I wanna hear more about the growth secret sauce. That is extremely interesting. I haven't heard of that as a strategy, and I can see why this makes sense. If the strategy is blow people's socks off so they could tell their friends, post on all socials, The trick is to get more people to try it. And this is, and it's such a new crazy thing, like why would I pay money, why would I even go take the effort to like try sign up for an account if I don't know what this is, I don't know what I'm doing with it. So I could see how this loop goes faster and faster by giving it away.
00:54:09 · Elena Verna
[00:54:09] S1: Exactly. And again, this is very uncomfortable sometimes for companies that either use to really... AI companies have lower profile of margins. That's absolutely true. To find an AI company with 80, 90% margin profile is absolutely impossible. Let's be real. We're all sitting somewhere in the 40% or so, which is a lot smaller. So any time that you look at those AI costs as your cost center, that's when you're in trouble. You fundamentally have to flip the script and say, I need to expose to people of what is possible and I need to remove the monetization friction out of it. Because if you don't, nobody's ever going to try it or you're going to be very easily overtaken by a competitor that will give it away. And let's face it, once you hook people, they're more likely going to stay with you. So you obviously have to still work on the retention strategy there. But if you can have, like for our case, if somebody, one of our users stands up and say, hey, I'm going to have a hackathon at my work on Lovable. Can you give us all some free credits to play with? Why would we prevent person who wants to do all of the marketing and activating job for us in their company from using us? Of course, we're like, take it. How much do you need? How much would you like? We will sponsor it all. We will give you anything that you need. So we're really leaning into people that are wanting to show this magic to those around you and empowering them as much as possible. And that is something that is actually applies to every single product. And I agree, this is not a growth strategy that I've ever applied in my life on like giving product away as much as possible, but it is something that is more and more becoming something that I see that is absolutely non negotiable.
00:55:52 · Lenny Rachitsky, Elena Verna
[00:55:52] S0: What I'm feeling is like the more mind blowing it is, the more you should give it away for free. Yeah. Especially in a competitive market where everyone is, you know, it's hard. There's like so many companies trying to do this thing. And so so it's almost like the better you are, the more you should give it away. [00:56:07] S1: Right. Right. [00:56:08] S0: And this also explains why so much VC money has to be raised for these sorts of companies because this is not cheap. Like you said, you're paying all these foundational models a lot of money. [00:56:16] S1: Yes and no. I'm only gonna say no is because... So take a look at Lovable. We're over 200,000,000 in ARR. At this point, we're a 100 people large. So our headcount count costs are [00:56:28] S0: very low. Let just let me just make sure people hear that. 200,000,000 ARR. I didn't realize a 100 people work at Lovable.