Lenny's Podcast: Product | Career | Growth
01:12:55 · Lenny Rachitsky
[01:12:55] S0: Yeah. My take is you could always get some percentage of win from all these different channels. Usually one channel's where most of your growth will come from. And so over time, everyone just adds every channel. Everyone's doing ads. Everyone's doing SEO in some form, but it's usually sales or word of mouth or ads that drives everything. Everything else is kind of this little layer on top.
01:13:16 · Jason Cohen
[01:13:16] S1: Yeah. So should you do that? Yeah, probably, especially if you're at some scale and you can just afford to because it's such a clear thing to do, but probably you'll have to get more creative about what it means to add a channel or something like a new product or a new market where it's actually new. It's expanding in a new way rather than trying to incrementally expand what you're already doing. So an example of getting creative on a channel is what Constant Contact did when they had this very problem of, "Growth is slow. We don't know how. We sell email marketing newsletters to small business before all these modern tools existed." And one of the things they did that restarted growth is they physically went to a bunch of cities and held workshops showing, "Here's how to do email marketing for your small business." So the restaurateur and the dentist and everyone would come to these sessions and they'd teach them how, of course, teaching them how with Constant Contact so they became customers, right? Now, you would think there's no way this is cost-effective. Physically being in these cities and dragging people in for a $20 a month product? No way. It was very effective and actually solved, in that moment, restarted growth. They were very clever about... First of all, it's a clever idea, but then they were clever about how to do it. They took power users who are also agencies, so these could become customers of theirs. Okay. So you could be clever about how is it that we do something different, something new. So that's possible. Of course, it's always hard to say, "Think of something clever." That's a weird finger wagging thing to do, but okay, it's true. But yeah, it could be a different type of channel. For example, HubSpot famously tested selling through agencies instead of direct. That ended up being 50% of their revenue after four or five years, so it's one of the main reasons why they were able to continue growing. Same thing happens with my company, WP Engine. Tons of our websites are sold through agencies that create WordPress sites. So there could be something that's not direct anymore. Another channel of human beings or something like that could in fact dramatically change your growth rate. There's lots of examples like those, but it could be it's time for the next product. And I said that earlier, because it's always possible.
01:15:26 · Jason Cohen
Of course, we all know that's very hard, it's risky. I have sort of a framework that I use to think about that kind of expansion, which I'm happy to provide. I've also written it up, but I'm happy to say it right here. But usually you want to stay in the target market you're already good at and grow from there. But sometimes the whole point of the expansion is to change [inaudible 01:15:51] or add something where you're leveraging something else about the company that you have as an asset going somewhere else. So this is what this framework helps decide. But one way or another, you probably want to plant one foot into some strength or asset that you have, move the other foot, which is the risky part, but the idea is that, "Yeah, well, we have this big upside, so we're taking that bet," and that becomes a smart bet. Of course that's true for any of these things, but especially if acquisition channels are full and it's like we literally can't ask the marketing department, that's just not one of the choices, it almost forces us to start taking these more drastic bets to say, "Well, we got to do something and that's not one of them."
01:16:29 · Lenny Rachitsky, Jason Cohen
[01:16:29] S0: I just want to keep saying how awesome this advice is and how many people are going to benefit from... None of this is like, "Oh, I've never ever thought of any of this." It's just the very methodical sequence of questions you should be asking yourself to help you not just undo stalled growth, but also just come up with a bunch of great growth ideas. And this specific section, it makes sense. Somebody's discovered alpha in a growth channel. Say, [inaudible 01:16:56] just launched. TikTok just... There's like, "Oh, cool, what's the new thing? Okay, let's get there quick." And then you drive a bunch of growth, it's awesome. Eventually everyone's going to start doing that. And so you should assume everything that is working for you now will slow down. I missed your post on the elephant S-curve. What do you call it? The elephant curve? [01:17:15] S1: Yeah, elephant curve. [01:17:17] S0: Yeah, that's so real. It's not just this S-curve that will forever continue to drive win. It will actually dip and decline over time because other people discover it and start using it. [01:17:26] S1: Yeah. [01:17:27] S0: I love that. So the idea here is, and the classic advice is, whether it's an S-curve or an elephant curve, think about are you starting to approach the apex of that and start to explore other channels before you slow down or start to dip?
01:17:27 · Lenny Rachitsky, Jason Cohen
[01:17:27] S0: I love that. So the idea here is, and the classic advice is, whether it's an S-curve or an elephant curve, think about are you starting to approach the apex of that and start to explore other channels before you slow down or start to dip? [01:17:44] S1: Yeah. It's easy to hear stuff like, "Well, if marketing is full, do something else." And you go, "I know." But then you look at people's behavior and it's like, "Well, you're not acting like you know." So maybe it needs to be said in enough detail that you actually do something about it.
01:17:44 · Jason Cohen, Lenny Rachitsky
[01:17:44] S1: Yeah. It's easy to hear stuff like, "Well, if marketing is full, do something else." And you go, "I know." But then you look at people's behavior and it's like, "Well, you're not acting like you know." So maybe it needs to be said in enough detail that you actually do something about it. [01:17:59] S0: And it's important to note, this is a very hard problem. Most companies do not really solve this. Something worked for them and then it stops working and then like, "All right, well, we found something," and then it just kind of went away. There's a couple posts we're going to link to in the show notes that will help you come up with ideas that are all around new growth channels that are emerging. One is by Emily Kramer around ecosystems as a new growth channel. And there's a lot of really cool advice there around this kind of emerging combination of influencers and content and partners where it's your ecosystem that helps you grow. Basically, there's a quote from the head of growth at Wiz where it's like, "Why start with zero when you can start with 10,000?" essentially growing through someone with an audience already. And then there's going to be a post out by the time this comes out around ChatGPT's app store, which is going to let you submit apps. And that's a really interesting, potentially huge new growth channel for companies. So cool stuff happening there. So just to summarize, logo retention, pricing, NRR, marketing, channel saturation. What comes next?