A Product Market Fit Show | Startup Podcast for Founders
00:35:38 · Dan Novaes
And this is, that's a very specific example, but this is happening in wearables, right? The next, basically, Frontier Labs are trying to figure out when does someone go from being a healthy person to a person that's developing diabetes. And in order for them to do that, they need to get significant amounts of wearable data and general data from healthy humans and then essentially extrapolate that data and essentially, you can reward the consumer for doing that, right? And so I always go back to an example of like, I did my first marathon last year, right? And I started religiously using Strava. It took me nine months to pay the $70 that Strava charges for the Strava premium because I just didn't see the value in it. Eventually, I caved, but I can definitely afford it. A large percentage of people would not pay for that subscription. However, if Strava came out and was like, hey, if you give me your Apple health data, I will give you Strava premium for free for six months. That Apple health data anonymized, because it would be anonymized, it's probably worth about $20 or $30 on an annual basis. If you think about what Strava's actually earning in a six-month period minus App Store fees, it's about $20 or $30. And so the thesis is, you know, a certain percentage of people are never going to share that info, but a larger percentage of people will. And that's the whole back, go back to the whole theme where it all started with Slyker, Bearnap, all that stuff. People are willing to take action if you align incentive with them and you get their consent. And that's our whole business model, right? And now we're just doing it across a bunch of different apps and services that have product market fit that we can create incentive systems that allow the free users to provide insight and get rewards. And that could be in the format of money. It could also be in the format of free product, like the Strava example that I just gave.
00:37:14 · Pablo Srugo
[00:37:14] S1: It's just that, yeah, I love that it's just such a direct way of getting the outcome that you want. Like, I want your data, give me your data, I'll give you this, period. Like, not this crazy roundabout way of everything else, which makes a lot of sense. Let's pause there. Let's do these two kind of tactical deep dives we're going to do. The first one, let's talk about, you know, you're a growth person, right? Like, let's talk about growth marketing. You were talking about this, let's say, emerging channel. I mean, there's always different things that are working better than others. And, you know, TikTok comes, it's TikTok, and then the next thing in your case, Instagram's at the beginning, the app store, et cetera. Today, we're talking a lot about creator-led growth marketing. Tell me about what you're seeing in that channel, how a founder might be able to leverage that to grow their app, whether it's consumer, B2B, whatever.
00:37:53 · Dan Novaes
[00:37:53] S0: If I were starting in this space, right, again, and I didn't have, like, a huge UA budget, and even if I did have a UA budget, like, you know, I would do this, and we are doing this, but we see a lot of apps, right? We're always in the business of looking for new products that have product market fit, and I'm meeting all these, like, 20-something-year-olds that, you know, were basically me 10 years ago, you know, doing these, like, one-off apps, and the amount of times that I have seen, like, how have you scaled this? It's not through paid user acquisition. It's not them going to Facebook and Google. Like, sometimes they do that a little bit, but a lot of them don't even know how to do that. What they're doing is, there's this idea of clipping, right, which, you know, you can essentially, that's how a lot of the, uh, big kit guys and YouTubers are growing their channels, and this is slightly different. It's like, basically, they get creators, and creators is different than influencers. Creators are people that are good at making those little short-form TikToks and, you know, reels, et cetera, and they basically pay them, like, $30 to $50 per video and give them basically, hey, look, I have this product. I need you to create captivating content for, like, a specific niche and then post it on, you know, TikTok or Instagram reels or whatever, and basically, it's like one video a day, but if you think about it, say every video is $30 and it's 30 videos, it's about $1,000 a month. If you get 30 creators that are doing that, you're getting, 30 times 30, you're posting 900 videos. Of 900 videos, if you mathematically think about how the algorithm generally operates, if 1% goes viral, that's nine videos, right? Some of those videos will get hundreds of thousands, if not millions of views. Those people then see that video, it feels organic because these people are good creators. They're not, it doesn't feel like an ad.
00:39:32 · Pablo Srugo
[00:39:32] S1: And the difference between them and influencers is just the number of followers. These guys will have no followers effectively.
00:39:37 · Dan Novaes
[00:39:37] S0: They most of the time have no followers. And in fact, they're actually, their entire job is to just make videos for you effectively. And that's like, and then you can give them like bonuses on that, but it has to be, it has to feel organic, right? That's what they're really good at. And look, if you want to look at who did this really well and actually got an exit out of it, relatively bootstrap team, the Cal AI guys, right? Cal AI sold to MyFitnessPal. I can't remember if it was like 50 or 75 or whatever. They had thousands of these guys, right? And essentially like, you know, that's working really well right now, right? So tactically, that's a great opportunity for you to, it's something that I see, it's like almost the language. Like, you know, it's, I think like, you know, I'm middle-aged millennial, I guess I'm 37, right? In my 20s, the big growth loops were the shares and the referrals and you could do stuff with like texting, like mass texting. And then the generation before me, when I was in college, it was the email stuff, like how LinkedIn grew and Dropbox and all that stuff. So if you think about it, it's like that was the referral system. The next referral system was, you know, kind of what we were doing in the apps and like, you know, but these things get shut down over time because people, you know, capture. The one I see now that's most common with these like 20-somethings and like the Gen Z is this content creator-led marketing because the algorithm in TikTok and Instagram are incentivized to help accounts with zero followers grow or else it messes up their loop. Like how do people become creators? And so as long as you can post stuff that resonates with people, feels authentic, you're going to get views. And so it's a great addition to paid marketing and paid marketing today is getting more and more competitive because in the world of AI, products are easy to build, eCPMs are going up and it's becoming harder and harder and the payment periods go longer and longer and you're competing with like the TikToks of the world on budgets and it's very difficult.
00:41:24 · Pablo Srugo, Dan Novaes
[00:41:24] S1: Do you think on the creator-led, do you think it works for consumer and B2B or do you need to have like a mass market, you know, like Duolingo, I'm Duolingo, like no brainer to do this because everybody could use it, right? But does it matter or if you're B2B in a niche, you just got to find the right creators? [00:41:39] S0: I actually think that like the niche is actually the best. Like think about how TikTok actually works, right? Because it's like if I'm a nurse and I only talk about nurse stuff, the algorithm's going to know, show this to nurses. It's the best time ever in history to start a niche business, I think because with this strategy at least because the algorithm will find the people who care about whatever you're talking about. And so B2B is great too. Like B2B is even better if it's a niche B2B product. Like if I build tech software solutions for plumbers, I can create a lot of great content. [00:42:11] S1: Yeah, walk me through how to do that. I mean, I've got a company, for example, doing B2B SaaS, AI B2B SaaS for property managers, right? Like short term, like you sell things, you have an Airbnb or whatever, right? They sell software that helps you make, you do that better. And they're like, you know what? I'm spending on Google, I'm spending on Instagram, I'm doing all this stuff. It's okay. Nothing's flying. I want to do this creator-led strategy. What do I do?