Lecture 4 - Building Product, Talking to Users, and Growing (Adora Cheung)

Summary

Dans cette présentation, l'orateur partage ses expériences et leçons apprises dans le parcours de l'entrepreneuriat, de la naissance d'une idée à la construction d'une startup prospère. Ayant traversé plusieurs échecs et pivots, l'orateur souligne l'importance d'éviter les erreurs communes, de s'immerger pleinement dans l'industrie concernée, et de comprendre profondément le problème que l'on cherche à résoudre. Il insiste sur la nécessité de tester le produit avec de vrais utilisateurs dès le début, d'affiner constamment l'offre en fonction des retours, et d'adopter une approche stratégique pour la croissance. L'accent est mis sur la construction d'un produit minimal viable, sur l'importance de la rétention des clients, et sur les stratégies de croissance durable. La discussion couvre également l'art de pivoter efficacement lorsque les stratégies initiales ne produisent pas les résultats escomptés.

Takeaways

• 🚀 Lancer une entreprise nécessite beaucoup de temps pour se concentrer sur l'idée et développer des solutions.
• 🎯 Il est important de comprendre clairement le problème que votre idée résout et de s'y passionner.
• 🧐 Immersion dans l'industrie est essentielle pour identifier les inefficacités et les opportunités de disruption.
• 🔍 Analyser les concurrents et les entreprises similaires pour devenir un expert dans le domaine.
• 🛠️ Concevoir une expérience utilisateur idéale en storyboardant avant de coder.
• 📈 Établir un produit minimum viable (MVP) pour résoudre le problème principal.
• 🔗 Créer une positionnement clair et simple pour communiquer l'avantage fonctionnel de votre produit.
• 💡 Utiliser des canaux de croissance variés pour acquérir des utilisateurs, en priorité en se concentrant sur un seul canal.
• 🔄 Always iterate et optimiser les stratégies de croissance qui fonctionnent.
• 💸 La croissance payante doit être basée sur une rentabilité à long terme, en comparant le coût d'acquisition des clients (CAC) au lifetime value (LTV).
• 🔄 L'pivot est une partie essentielle du processus de démarrage, déclenchant une réorientation lorsque la croissance ou la rentabilité ne sont pas atteintes.

Q & A

Comment passer d'aucun utilisateur à de nombreux utilisateurs ?

Il s'agit d'un processus qui nécessite de comprendre profondément le marché, de créer un produit viable minimum (MVP), et de recueillir des retours d'utilisateurs pour améliorer continuellement le produit et le service.

Pourquoi est-il important de se concentrer sur un petit groupe d'utilisateurs au début ?

Cela permet de mieux comprendre les besoins de ce groupe spécifique, d'optimiser le produit pour eux et de fournir un service qui répond à leurs attentes, ce qui facilite la croissance et la rétention des utilisateurs à long terme.

Quels sont les avantages d'une approche de pivotement itérative ?

L'approche de pivotement permet de s'adapter rapidement aux retours d'utilisateurs et au marché, d'apporter des améliorations significatives au produit et de s'assurer que le produit répond aux véritables besoins des utilisateurs.

Comment Homejoy a-t-il attiré ses premiers utilisateurs ?

Homejoy a utilisé une variété de stratégies pour atteindre ses premiers utilisateurs, notamment en se rendant sur les lieux de foires en plein air pour promouvoir leur service et en distribuant des bouteilles d'eau glacées pour attirer l'attention des passants.

Quelle est la différence entre une croissance sticky, virale et payante ?

La croissance sticky vise à faire revenir les utilisateurs existants en utilisant le produit plus fréquemment. La croissance virale dépend de la recommandation du produit par les utilisateurs satisfaits. La croissance payante utilise des investissements financiers pour acquérir des utilisateurs, comme les publicités ou les promotions.

Pourquoi la rétroaction des utilisateurs est-elle si importante au début d'une entreprise ?

Les retours d'utilisateurs sont essentiels pour comprendre si le produit répond aux besoins du marché, pour apporter des améliorations et pour éviter de se lancer dans une direction incorrecte qui pourrait entraîner un échec commercial.

Comment mesurer la croissance sticky ?

La croissance sticky peut être mesurée en utilisant l'analyse des cohortes de rétention et en surveillant la valeur de lifetime du client (CLV) pour voir si les utilisateurs restent fidèles au produit et continuent d'y consacrer du temps et de l'argent.

Quels sont les éléments clés d'un programme de recommandation virale ?

Les éléments clés d'un programme de recommandation virale incluent des points de contact client où les utilisateurs apprennent qu'ils peuvent recommander d'autres personnes, des mécanismes de programme bien conçus pour encourager les utilisateurs à partager et une optimisation du flux de conversion pour les nouveaux utilisateurs qui cliquent sur les liens de recommandation.

Comment évaluer l'efficacité de la croissance payante ?

Pour évaluer l'efficacité de la croissance payante, il est important de comparer le coût d'acquisition du client (CAC) avec la valeur de lifetime du client (CLV). Si la CLV dépasse le CAC, la croissance est considérée comme rentable et durable.

Quelle est la meilleure façon de convaincre les utilisateurs de changer de produit ?

Pour convaincre les utilisateurs de changer de produit, il est préférable de mettre en avant un ou deux aspects clés qui différencient clairement votre produit de l'option existante, en mettant l'accent sur la commodité et les avantages significatifs pour l'utilisateur.

Quand est-il temps de considérer un pivot ou un changement de direction ?

Il est temps de considérer un pivot lorsque le produit ne montre aucun signe de croissance malgré des efforts continus et une stratégie de croissance bien définie. Si les utilisateurs ne restent pas fidèles et si les économies ne sont pas viables, il peut être nécessaire de changer de cap ou d'idée de produit.

Outlines

00:00

🚀 Starting from Zero: Initial Considerations

The speaker begins by discussing the process of going from zero to many users, emphasizing the importance of having a solid idea and understanding the next steps to take. They share personal experiences from going through Y Combinator in 2010, including the challenges of pivoting and starting over multiple times. The speaker highlights the value of learning from failure and stresses the importance of dedicating concentrated time to immerse oneself in the startup idea, rather than spreading efforts too thin across daily activities.

05:02

🤔 Identifying the Problem and Industry Immersion

The speaker advises创业者 to identify the core problem their startup aims to solve and to be able to describe this problem statement succinctly. They also stress the importance of verifying if the problem is one that others face too. The speaker shares their experience with Pathjoy, a startup they co-founded with their brother, and how they spent almost a year trying to solve a problem they themselves were not passionate about. They suggest immersing oneself in the industry by becoming a part of it and understanding its workings to identify inefficiencies and opportunities for disruption.

10:03

🛠️ Building for a Specific Customer Segment

The speaker discusses the importance of focusing on a specific customer segment in the early stages of a startup. They suggest that创业者 should storyboard the ideal user experience, from how the customer finds out about the product to post-usage evaluation. The speaker also emphasizes the need for创业者 to build a minimum viable product (MVP) and to have a clear, concise product positioning statement. They share their experience with Homejoy, explaining how they simplified their product positioning to attract users effectively.

15:03

💡 Gaining Initial Users and Customer Feedback

The speaker shares strategies for gaining initial users, starting with friends, family, and co-workers. They also discuss the importance of going out and actively seeking users, such as by attending local events or fairs. The speaker then talks about the significance of customer feedback, suggesting创业者 should be proactive in reaching out to users, getting to know them, and making their experiences better. They share their own tactics, such as offering free water bottles at a hot street fair to guilt people into booking cleanings, and emphasize the value of honest feedback in improving the product.

20:04

📈 Measuring Growth and Customer Retention

The speaker delves into the importance of tracking customer retention and using it as a measure of product success. They discuss the concept of Net Promoter Score (NPS) and the value of collecting ratings and reviews from users. The speaker also warns of the 'honesty curve,' explaining that the level of honesty in feedback can vary depending on the user's relationship with the company. They suggest that paid users often provide the most honest feedback because they have a financial stake in the product. The speaker also talks about the importance of iterating and optimizing growth strategies, and the need for creativity in finding unique ways to grow the user base.

25:05

🔄 The Art of Pivoting and Deciding When to Move On

The speaker discusses the concept of pivoting, sharing that Homejoy was the thirteenth idea they pursued. They provide criteria for deciding when to pivot, focusing on growth, user retention, and the economic viability of the business. The speaker emphasizes the importance of having a growth plan and being realistic about whether the startup is meeting those expectations. They suggest that if there is no growth or the product is not resonating with users after several weeks of hard work, it may be time to consider a pivot. The speaker also touches on the importance of switch-over costs and how to convince users to switch to a new product by highlighting significant differences and improvements over existing solutions.

Keywords

💡Utilisateurs initiaux

Les utilisateurs initiaux font référence aux premiers clients ou utilisateurs d'un produit ou service, souvent avant que celui-ci ne soit largement connu ou disponible sur le marché. Dans le contexte de la vidéo, l'orateur souligne l'importance de gagner ces premiers utilisateurs pour valider le concept du produit et commencer le cycle de feedback. Il mentionne l'expérience de Homejoy, où ils ont distribué de l'eau froide lors d'une foire pour attirer les premiers clients et tester leur offre.

💡Produit minimum viable (MVP)

Un MVP est la version la plus simplifiée d'un produit qui peut être lancée pour commencer le processus d'apprentissage avec le minimum d'effort. L'objectif est de tester des hypothèses sur le marché avec un investissement minimal en temps et en ressources. Dans la vidéo, l'orateur explique que construire un MVP permet de déterminer rapidement si une idée de produit répond à un besoin réel sans développer des fonctionnalités complexes dès le début.

💡Feedback

Le feedback fait référence aux retours d'informations que les créateurs de produits reçoivent de leurs utilisateurs. C'est un élément essentiel pour améliorer et affiner un produit. Dans la vidéo, il est mentionné que recueillir des retours des utilisateurs, à travers des moyens comme des sondages ou des rencontres directes, est crucial pour comprendre les besoins et les préférences des utilisateurs et ajuster le produit en conséquence.

💡Pivot

Pivoter signifie changer fondamentalement la direction d'une entreprise ou d'un produit suite à l'apprentissage et au feedback des utilisateurs. C'est une stratégie mentionnée dans la vidéo, illustrée par l'expérience de l'orateur avec Homejoy, qui est passée par plusieurs itérations avant de trouver le bon modèle d'affaires.

💡Croissance durable

La croissance durable fait référence à une croissance qui peut être maintenue sur le long terme sans épuiser les ressources nécessaires. Dans la vidéo, il est conseillé de viser une croissance qui n'est pas seulement rapide mais aussi durable, ce qui implique d'éviter les pièges comme le gaspillage des ressources ou le recours excessif à des méthodes non échelonnables.

💡Positionnement du produit

Le positionnement du produit concerne la manière dont un produit est présenté et perçu sur le marché. L'orateur souligne l'importance d'avoir un message clair et concis qui explique la valeur et la fonction du produit, ce qui a été un facteur de succès pour Homejoy en simplifiant leur message pour rendre le service compréhensible et attractif.

💡Segments de clientèle

Les segments de clientèle sont des groupes spécifiques de consommateurs ciblés par une entreprise. L'orateur explique qu'identifier et comprendre ces segments aide à optimiser le produit pour répondre à leurs besoins spécifiques, permettant ainsi de se concentrer sur les utilisateurs les plus susceptibles d'adopter le produit.

💡Rétention des clients

La rétention des clients se réfère à la capacité d'une entreprise à conserver ses clients au fil du temps. C'est un indicateur clé de la satisfaction des clients et de la qualité du produit. Dans la vidéo, il est mentionné que suivre la rétention des clients aide à comprendre l'efficacité des améliorations du produit et des stratégies de croissance.

💡Coûts d'acquisition client (CAC)

Le CAC mesure le coût total pour acquérir un nouveau client, incluant tous les efforts de marketing et de vente. L'orateur met en lumière l'importance de comparer le CAC avec la valeur à vie du client (CLV) pour s'assurer que les dépenses d'acquisition sont rentables.

💡Analyse des cohortes

L'analyse des cohortes est une technique d'analyse qui regroupe les utilisateurs en segments basés sur leur date d'acquisition pour suivre leur comportement au fil du temps. Dans la vidéo, cette technique est utilisée pour illustrer comment les entreprises peuvent observer les tendances de rétention et identifier les améliorations potentielles pour le produit ou service.

Highlights

The importance of having a clear and dedicated time to focus on the startup, emphasizing the need for concentrated effort and immersion in the idea.

The pitfalls of not seeking initial user feedback, leading to a lack of user retention and eventual business failure.

The significance of identifying the actual problem your startup is solving, and ensuring personal passion and relevance to others.

The benefits of immersing oneself in the industry, including learning from direct experience and understanding inefficiencies.

The critical nature of obsessing over industry knowledge, including researching competitors and understanding market dynamics.

The process of identifying customer segments and focusing on their specific needs for product optimization.

The concept of storyboarding the ideal user experience before creating a product, visualizing the entire customer journey.

The strategy of building a minimum viable product (MVP) to solve the core problem with the least amount of features.

The importance of simple product positioning and the ability to communicate the product's value in a concise manner.

Tactics for acquiring first users, including leveraging personal connections and being present in relevant communities.

The value of customer feedback for product improvement, emphasizing direct interaction with users for the most valuable insights.

The concept of tracking customer retention and using it as a leading indicator of product success and areas for improvement.

The strategy of manually performing processes before automating them to understand what should be built for scalability.

The advice against striving for perfection in early stages, focusing on addressing the core user needs and avoiding the 'Frankenstein approach'.

The importance of shipping the product and gaining user feedback, countering the idea of being stealth and perfecting the product indefinitely.

The approach to growth strategies, emphasizing the need to focus on one channel at a time and continuously iterate for sustainability.

The explanation of the three types of growth: sticky, viral, and paid, and the importance of sustainability in each.

The art of pivoting, including recognizing when a startup concept is not growing and the criteria for deciding to move on to a new idea.

Transcripts

>> Thanks for having me.

So today I am going to be talking about how to go

from zero users to many users.

I'm just assuming that you have many great ideas in

your head at this moment and

you're kind of thinking about what the next step is.

So I wrote this up early this morning,

and a lot of this is based off of mistakes I've

made in the past.

So as Sam mentioned, I went through YC in 2010 and

spent a number, three years basically, going back and

forth pivoting a bunch of times,

starting over a bunch of times.

And have learned a lot about what not to do if I

were to start another startup after Homejoy if

that should ever happen.

And so a lot of it comes from failure and

just telling you about what you shouldn't do and kind of

making generalizations of what you should do

from that.

So just a reminder that this is,

sort of, you know, all advice you should take as

directionally good guidance, like if all,

like it's, it's kind of in the right direction.

But every business is different,

you are different, I'm not you, and so

just take everything with, you know, that in mind.

So since this is a college course, you know,

when you start a startup you should basically have lots

of time on your hands to concentrate on the start up.

And I'm not saying you should you know,

quit school or you should quit work.

What I'm saying is you should have a lot of time,

compressed time in a row.

Really dedicated to immersing yourself in

the idea and developing problems, or developing

the solutions to the problem you're trying to solve.

So for example if you're in school, you know,

it's better to have one or

two days straight of per week on working on your idea

versus you know, spending two hours here and there

every single day during the course of the week.

It's sort of like, I think this is an engineering class

so it's sort of like coding.

Like there's a lot of context switching and

just being able to really focus, really, really focus

and immerse yourself is very very important.

So, like I said, I sort of first,

when I wrote this up was thinking what

are things that some people do or most people do that is

not the correct way to do a startup and sort of

the novice approach I think is what you see up here.

Which is, you know, I have this really great idea.

I don't wanna tell anyone about it.

I'm gonna build, build, build, build.

I'm gonna be telling one or

two people and then I'm gonna launch it on,

you know, I'm gonna launch it on TechCrunch or some,

somewhere like that, then I'm gonna get lots of users.

But what really happens is because you did not

get a lot of that feedback and stuff like that,

you know maybe you get a lot of people to your site,

but no one sticks around because you didn't get

that initial user feedback.

And then, you know, if you,

you know, if lucky enough you have some money in

the bank you might go buy some users but sort of,

it just whittles out over time and you just give up.

This is sort of a vicious cycle and

you know, I actually did this once, and

I did this while I was in YC,

and that was you know like, when I went through YC I

didn't even launch a product,

like I didn't even launch in TechCrunch which is a thing

you should definitely do.

And so you don't want to ever get into that

cycle because you'll just end up with nothing good.

So, the next thing is you know, you have an idea and

you should really think about what the idea

is really solving.

Like what is the actual problem?

And so their problem statements you should be

able to describe it in one sentence.

And then you should think,

how does that problem relate to me?

Am I really passionate about that problem?

And then you should think, okay, it's a problem I have,

is it a problem that other people have?

And sort of verify that by, you know, just going out and

talking to people.

One of the biggest mistakes I've made is you know,

we started, my co-founder and I,

who is also my brother, he and

I started a company called Pathjoy in 2009, 2010.

And our goal was basically to you know,

we had two goals in mind one is to create a company that

made people really happy, and create a company that

was very, very impactful, so a good proxy for

that is to just create a huge, big company.

And so we thought, okay,

here's sort of what we're gonna solve is you know,

make people happier, and we first went to the notion of

who are the people that made people happy?

And you know,

we came up with life coaches and therapists.

So it seemed kind of obvious to

just create a platform for life coaches and therapists.

And what happened as a result though was that you

know, when we started using the product ourselves we,

you know, we're not cynical people by any means,

but life coaches and therapists are just not

people we would use ourselves.

It was sort of useless to us.

And so, it wasn't even a problem we had, and

certainly wasn't something we

were super passionate about building out.

Yet we spent, you know,

almost a year trying to do this.

And so, if you just start, you know,

from tegel zero, just like think about this before you

even build any product.

I think you can save yourself a lot of

headache down the road

from doing something you don't wanna do.

So, say you have a problem and you're able to state it.

Where do you start?

Like, how do you think of solutions?

So the first thing you should do is think of

what the industry that you are getting yourself into.

Whether it's big, whether it's huge,

you should really immerse yourself in that industry.

There's a number of ways to do this.

One is, you know, to really become a cog in

that industry for a little bit.

And so it might seem a little counter-intuitive to

do this, because most people say, you know,

if you really wanna disrupt an industry, you

should really not be this, you know, player in it.

You should, you know, someone who spent 20 or

30 years in an industry probably you know, is set in

their ways and is just used to the way things work and

really can't think about what the inefficiencies are

or the things that you can, quote, unquote, disrupt.

But, however as a noob like coming into the industry,

you really should take one or

two months just really understanding what all

the little bits and pieces of the industry are, and how

it works because it's when you get into the details,

that's when you start seeing things you can exploit.

Things you can really, things that are really,

really inefficient and provide you know huge

overhead costs that you can cut down.

And, so an example of this is, you know,

when we start Homejoy and we, we decided to go,

we started with the cleaning industry and when we

started, you know, we just were cleaners ourselves.

And we started to clean houses and

we found out really quickly was that

we were very bad cleaners.

And so as a result, you know, we said, okay, we

got to learn more about this and we went to buy books.

And we bought books about how to clean,

which helped maybe a little bit,

we learned a little bit more about cleaning supplies.

But it's sort of like basketball you know,

you can watch and you can learn,

or you can watch and you can read about basketball, but

you're not gonna get any better at

it if you don't actually you know, train and you know,

throw a basketball around and throw it into the hoop.

And so we decided one of us basically had to go and

learn how to clean.

And so we went or

get trained by you know, a professional, some sort of

a professional training programs that existed.

And that meant, we actually went to get a job at

a cleaning company itself.

And the cool thing was that you know, I learned how to

clean from you know, training for the few weeks

that I was there at the cleaning company.

But the even better thing was that I learned a lot

about how a local cleaning company worked.

And in that sense you know, I learned why a local

cleaning company could not become huge like Homejoy is

today and that's because they have, you know,

they're pretty old school and

they have a lot of things, just from anywhere from

booking the customer to optimizing the cleaner

schedules was just done very inefficiently.

And so there is, so, if you are in a situation like mine

where you know, there's a service element to it,

you should go and do that service yourself.

You know, if your thing is related to restaurants you

should become a waiter it's really to you know,

if it's painting you know become a painter kind of

get in the shoes of your customers from all angles of

what you're trying to build.

The other thing is there's also levels of obsessiveness

that you should have with it too as well.

You should be so obsessed to know what everybody in

the space is doing.

And it's things like, you know,

running a list of all the potential competitors or

similar types of companies, Google searching it, and

clicking on every single link and

reading every single article from like,

search result 1 to 1,000.

You know, I found all potential competitors,

big and small, and

if they're public, I would go read their S1's,

I would go read all their quarterly financials,

I would, you know, sit on the earnings calls.

There's, you know, most of these you don't get much out

of it, but there's just these golden nuggets that

you'll find once in a while and you can't,

you won't be able to find that unless you

actually go through the work of,

you know, getting all that information in your head.

So yeah, you should become an expert in the industry.

There should be no doubt when you're building this

that you are the expert so that people will trust you

when you're building this product.

The second thing is

identifying customer segments.

So you know, ideally at the end of the day,

in the end game, you built a product or

a business that everybody in the world is using.

But realistically in the beginning you kind of

want to corner off a certain part of the customer base so

that you can really optimize for them, and that's just

you know, it's just about a matter of focus and a matter

of you know, just catering towards whether it's

teenage girls or whether it's you know, soccer moms.

You would just be able to you know,

like I said focus a lot on their needs.

And, lastly before before you even create the product,

before you put code down, you should really storyboard

out the ideal user experience of how you're,

how you're gonna solve the problem.

And that, and that's not just meaning, you know,

the web site itself, it's meaning, you know,

how does the customer find out about you.

You know, whether it's, you know,

it could be through an ad or through word of mouth or

whatever, so they find out about you.

They come to your site, they learn more about you, what's

all that text say, what are you communicating to them.

So the actual, when they sign up for the product or

they purchase the service,

what are they actually getting,

to after they finish using the product or

after they finish using the service.

What's you know, there's sort of

like an evaluation period, like they leave a review, or

they leave comments or whatnot, and just being able

to go through that whole flow and visualize in your

head, like just envision what the perfect user

experience is and then put it down on paper and

then put it into code, and then start from there.

So you have all these ideas in your head now,

you kind of know what the core customer base you

want to go after is.

And you know like everything about the industry,

what do you do next?

So you start building your products.

And you know, the common phrase that most people

use these days is you should build a minimum viable,

the MVP, minimum viable product.

And I know I'm viable because I

think a lot of people skip that part,

and they just go out with a feature and then the whole

user experience in the very beginning like is flat.

So the minimum viable product pretty much

means you know,

what is the smallest feature set that you should build

to solve the problem that you're trying to solve.

And I think if you go through the whole storyboard

experience, you can kind of figure that very quickly.

But again you have to be talking to users right,

potential users, you have to be

seeing what exists out there already and what you

should be building to solve their immediate needs.

And the second thing is, before you put

in things in front of a user you should really have your

simple product positioning down.

And what I mean by that is that you know,

you should be able to go to you know a person, and

you should be able to say, hey you know this does x, y,

and z within a sentence.

And so for example you know, at Homejoy we started off

with something actually super complicated.

We're like we're an online platform for home services.

We started with cleaning and you can choose you know,

blah, and it just went off for

paragraphs and paragraphs.

We were present and we want to you

know potential users to come onto our platform.

They just get kinda get bored after that first

few sentences.

And so what we found out was that we really need this one

liner, the one liner is very important an it kinda

describes the functional benefit of what you do,

you know, in the future when your trying to build a brand

you should, you know, be able to describe, you know,

what are emotional benefits and stuff like that.

But, you're starting with new users, you really need

to tell them what they're gonna get out of it.

So we simply, after we changed our positioning to

get your place clean for

$20 an hour, then everyone got it, and we're able to

get you know users to, users in the door that way.

So you have a MVP going out there now how

do you get your first few users to start trying it.

So your first few users should be you know,

the obvious people,

the people that you're connected with.

You should use it obviously, you and

your co-founder should be using it.

Your mom and dad should be using it.

Your friends and co-workers should be using it.

Beyond that you wanna get more user feedback, and

so you, and I've listed here kind of some of

the obvious places to go to.

And depending on what you're selling, you know,

you can take your pick of the, pick of the draw here.

So online communities there's, you know,

on Hacker News now, there's the show HM.

That's a great place especially if

you're building tools for developers and

things like that.

Local communities, so

if you're building consumer product,

you know, there are a lot of influential local community

mailing lists, especially those for you know, parents,

so those are places you might want to head up to.

okay.

So when you go to by the way, home joy,

we actually tried all of these.

So, we use it ourself, that was fine,

I mean we were on a cleaner, so that was pretty easy.

And then our parents lived in Milwaukee and

so we were basically not used to that in the work.

Friends and coworkers are kinda like in

San Francisco and else where, so

we didn't have too many of them use it.

So we actually, if we ended up in a dead end

of, not being about to convince many people to

use this in the beginning.

So what we did was because we are in Mountain View,

some of you might know on Caster Street they have

street fairs there during the summer time.

And so we'd go out and

basically chase down people and

try to get them to book a cleaning.

And almost everyone would say no.

Until one day, we just took advantage.

You know, it was a very hot and humid day.

And what we noticed was, you know, and

this was like any, at any fair people you know,

there might be arts and crafts and things like that.

And random people will you know,

gravitate towards that, but

everybody gravitates towards the food and drink area.

Especially on a hot day.

So what we did was, okay, we figured we need to get in

the middle of that, and by getting in the middle of

that we just took water bottles, froze them and

then we started handing out free bottles of water that

were cold, and people just came to us.

I think we just basically guilt tripped people

into booking cleanings.

But the proof in the pudding was that I figured most of

those people were guilt tripped into doing it,

but, when they went home they didn't cancel on us.

Well, some of them did,

but, a maj, majority of them did not.

And, so, we felt, like, I, I thought, okay,

that's good I gotta go clean their houses, but, at least,

you know, there's something we're actually solving here.

so, and, you know, I don't suggest,

I think showing up the fares, or another start up

in the last batch, I forgot their name right now,

but they, they, they, they showed up,

they, they were selling shipping type products.

Or were trying to replace shipping products or

the content and mailing stuff.

And so they would show up to the U.S. Postal Office and

find people who were trying to ship products.

And just take them out of line.

Try to get them to use your product.

Have them ship it for you.

So, you just have to go to places where people

are going to really show up, and, you know,

your conversion rate is gonna be really, really low,

but to go from zero to one to three to four, these

are the kind of things, you might have to do.

Okay.

So, you got some users using you.

Now what do you do with all these users?

Customer feedback.

So, one, the first thing you should do

is make sure there's a way for people to contact you.

So, [email protected].

Ideally there's a phone number, and if you hook up

a phone number, one really good idea is to, make sure

that, you have voice mail or something like that, so

you don't have to be picking it up all the time.

But in any case, a way for people to get inbound,

to get inbound feedback is good, but really what you

should be doing is going out to your users and

talking with them, you know.

Get away from your desk and

just get out and do the work.

It seems like a slog and it's going to be a slog, but

this is where you're going to get the best feedback

ever for your product.

And this is gonna teach you on what features you need to

completely change, get rid of,

or what features you need to build.

And so, one way to do this is to send out surveys, you

know, to get reviews after they've used the product.

This is okay, but generally, you know, people are only

gonna respond if they really love you or really hate you.

And, you never get like the in between, So kind of

get in between not get all the extremes is to go out

an actually meet the person that is using your product.

And, it's not a good idea to,

you know, I've seen people go out meet the user and

they sit there and it's like a laboratory and

it's like an inquisition almost?

And you're kind of just like poking, and poking, and

poking at them like why'd you do that?

Why'd you do that?

That's not going to give you the best results.

What you should really do is make it into a conversation.

Get to know them, get them to feel comfortable,

because you want to get them at a level where they are,

they feel like, you know,

they should be honest with you to help you an, an,

and improve, improve things for you.

So I found that actually taking people out for

drinks and stuff like that was a very good

way to do that.

I'm not sure if all of you are old enough to do that,

but you can take them for coffee.

So another way,

another thing you should be tracking is.

How are you doing in general,

like from like the macro perspective.

And the best way to do that is by tracking

customer retention.

That is, the number of people that came in the door

today, how many are coming back tomorrow, the next day,

and so on and so forth.

Usually over time you're kinda looking at,

you know, monthly retention so.

You know, people who came in the door today are they

still using it next month and so and so forth.

The problem with that metri,c is that it's you

know, it takes forever to collect that data.

And you don't have,

sometimes you don't have a month or two months or

three months to, you know, to figure that out.

So good leading indicator is actually collecting reviews

and ratings like five star, four star reviews.

Are collecting some notion of

NPS which is Net Promoter Score.

So you're basically asking them

from a rating from zero to ten,

how likely are they to recommend you to a friend.

And calculating the NPS.

And so over time what you'll see is,

as you're building a new feature, is you should be

able to see that the reviews or the retention is going up

over time which means you're doing a good job.

If it's going down,

you're doing a bad job, and if it's kind of staying

the same that means you probably need to go out and

figure out what new things you should be building.

The other thing is,

I'll get to the qualitative thing later, but

the one thing you should be worried of is the honesty

curve, which is some people will just lie to you.

So, I mean, this is

like degrees of separation from you, and

this is like level of honesty.

Like so here it's, here this is your mom.

This is like your friends of friends and

here's like random people.

I don't know if you can all see this but, so

you're mom is going to be you know.

They, she should use your product, but

she's going to be proud of you anyway, and so

she'll maybe be honest like this much.

And your friends will, you know,

they'll be pretty honest with you and

give you feedback because they care about you.

By the way, this is assuming it's

a free product that you're giving them.

>> And.

Then over time, like as you get more and more random,

these people don't even know who you are, it doesn't go

like this really, but it kind of goes like this.

Where people don't care about giving you

feedback they just like okay here's a survey, ta, ta, ta,

tat and so you should take

this into consideration when getting user feedback.

Now let's say you make, you pay.

It's a pay product, right?

Well let's just do this in green.

So, the paid, you know,

your mom is gonna be like down here.

Like, she's just gonna lie to you and say, you know,

she's just gonna feel sorry and

say, this is a great product of course.

But then you, kind of goes like this, right?

Which is to say that your friends are kinda gonna

give you the right, they're, they wanna support you and

give you the right feedback.

But it's actually these random people up here that,

you know, if they,

if they really don't think what they paid for

was worth it, they're gonna really tell you.

Because you know, it's money out the door.

And so, this is another way of saying you're going to

get the best feedback.

Obviously, down here, you're gonna get more feedback

if you just make someone pay for it.

That's not to say you should, you know, and

the first time make out make people pay for it.

That it is to say that you should, if you're going to

build a product that you're going to eventually need to,

you know, they're going to pay for the software or

for the hardware, whatever, you should do that.

Get to the point where you can do that very, very fast.

Because then that's when you get

the real meaty stuff to help you in the future of

how you can get more paying users in the door.

All right so, you're getting a lot of feedback and,

what do you do before you laun,

officially launch the product?

So what you want to do is,

you always want to be building fast, right?

And you want to be optimizing for

this stage of growth.

That is you,

you know, you might have ten users at this point.

Don't, theres no point in trying to build features for

the point when you have a million users.

You want to optimize for the next stage of growth,

which is gonna be ten to a hundred users.

What are features you really need for

that and just go with that.

Some times.

And basically on the slide is just many ways of

stating that notion.

Manual before automation.

One of the things that I found when

building a market place is that process is very,

very important over time as you scale.

But you need not try to automate everything and

create software to just have robots just run everything.

What you should really do to understand what you

should really build, is to manually do it yourself.

And an example of this is when we started taking

on cleaning professionals onto our platform.

We would have them,um,

we would ask them a bunch of questions.

Over the phone and

then in person we ask them a bunch of questions too.

And then they would go to a test clean and

then they would get on boarded to our platform if

they're good enough.

And so this took a lot.

During all this question askings for

that many candidates.

You know, we had about a 3 to 5 % acceptance rate.

And so you can imagine all the people we

were talking to at the beginning of the funnel

that never even made it onto the platform.

But what happened over time was that

we learned certain questions.

That were asking, were, that were

indicators of whether they're gonna be a good, or

a bad, performer on the platform.

We, threw just like data collection and

just you know, looking at, looking at everything,

we could just ask on an online forum.

So that's when we put on, put in online application.

They could apply and then we would ask them maybe several

of the questions during the inter, personal interview.

So it's, if you try to automate things too fast,

then you run into this problem,

potential problem of, you know, not being able to move

quickly on trying to iterate you know with things like

questions on an application and stuff like that.

And the third point here is temporary brokenness is

much better than permanent paralysis.

By that, what I mean is you know

perfection is irrelevant during this stage.

You should, when you get to the next stage of growth,

like what you're trying to maybe perfect in this one

stage, is probably going to not matter anyway, and

so do not worry about all the edge cases when you're

building something.

Just worry about the generic case of who your

core user is gonna be, and then as you get bigger and

bigger, bigger, the volume of

those edge cases will increase over time.

And you'll want to, you know, build for that.

And lastly, beware of the frankenstein approach,

which is great.

You talk to all these users,

they give you all these ideas, you know,

the first thing your gonna wanna do is go build

every single one of them,

and go show them the next day and, make them happier.

You should definitely listen to user feedback but

when someone tells you to build a feature,

you shouldn't go build that right away.

What you should really do is, you know,

get to the bottom of why they are asking you to

build the feature.

It's usually.

Usually what they're suggesting is

not the best idea.

But what they're really suggesting is,

I have this other problem that you either created for

me while using the product.

Or, you know, I really need this problem solved before

I'm ever going to pay to use this product, and so, figure

that out first, instead of piling on a bunch of

features, which then hides the problem altogether.

So, you have, so

you have a product, that you're ready to show, and.

Some people at this point will continue building their

product and not ship it at all.

And, I think the whole idea of being stealth and

perfecting the product to no end is.

Is the idea that, you know, imitation is cheaper

than innovation in terms of time and money and capital.

And so, I think everyone should just always assume in

general like, there's gonna be,

if you have a really good idea.

No matter when you launch.

Someone's gonna, someone's gonna,be you know,

someones gonna fast follow you.

Someone's gonna execute,

as hard as they possible can to catch up with you.

And so, there's not point in holding out on all the user

feed back that you can get by getting a lot of users.

Because you feel like, you know, you feel paranoid that

someones' gonna do this to you.

And I hate to keep harping on it,

but this is things that I see today with founders,

is something I went through as well.

And I think unless you're, unless you're building

something that requires hundr,

like tens of millions of dollars just to start up,

there, there's really no point in,

in waiting around to launch your product.

So say you have something that you feel ready to get

lots of users on.

So what do you do at this point?

So I'll look at my time, so.

>> 20 minutes. >> 20 minutes?

Okay.

So, I will go over,

various types of growths in the next slides.

But the one thing to note here,

early on when you are trying to get,

when it's just you and your co-founder and

maybe, like, a couple other people building, you're not

gonna be a, you know, create a team just for growth.

It, it's gonna be one person and one person only.

And so, you need to really focus and you need to,

you should only, you're gonna be tempted to try like

five different strategies at one time.

But really, what you should do is take one channel and

really execute on it for an entire week,

and, and just focus on that.

And then if that works,

continue executing on it until it caps out.

If it doesn't work, then just move on.

By doing this, you will feel more certain that,

that channel that you were working on,

that initial hypothesis is wrong.

You'll be, then if you tried only working a third of your

time on it over the course of, three or four weeks.

So, learn one channel at a time.

Second is always be, when you find channels that work,

you find strategies that work,

always be iterating on it.

You can potentially give it to some,

like create a playbook and

give it to somebody else to iterate on it.

But these channels always change.

You know, anything from Facebook ads to,

even Google ads, to you know?

But, the distribution channels the environments

that you don't control, change all the time,

and so you should be

always iterating optimizing for that.

And lastly, in the beginning you're probably,

when you see a channel that fails you,

just get rid of it and go on and move on.

There's many other things to try.

But over time,

go back to those channels and look at it again.

And so, what I mean by that is an example is,

in the beginning at Homejoy, we had no money.

When we tried to do, we tried to

buy users from Merry Maid, not from Merry Maids,

that's just an example of a competitor, but.

We tried to buy Google ads to get users in

the door quickly.

And what we found was that Merry Maids,

Molly Maids, all these other national companies,

they had more money than us.

They were making out

a lot more money on the job than us.

And so they were able to pay for users at a much higher

at a much higher, at a much higher,they were able to

acquire them at a much higher cost than us.

And so, we couldn't afford that,

and we had to go to another channel,

which turned out to be something else.

But today we make more money on the job.

We're much better at certain things, and

so we should probably revisit the idea of buying

Google ads and buying, going to the S.D.M. Channel.

And so what that's what I mean by that.

And the key to all this is creativity.

Performance marketing or marketing or

growth in general can be very technical.

But it's actually technical and

you have to be creative because if it wasn't,

if it was really easy and

bland, like everyone would be growing right now.

And so, you always have to find, like,

that little thing that no one else is doing and

do that to the extreme.

So, here are three types of growth

when yeah, three types of growth,

sticky, viral and paid growth and hopefully,

I'll get enough time to talk about all of this.

So really, briefly,

sticky growth is trying to get your existing users to

come back and pay you more or use you more.

Second is viral growth.

So that's when people talk about you.

So, you use a product, you really like it,

then you tell ten other friends.

They like it and that's viral growth.

And the third is paid growth.

So, if you happen to have money in the bank,

you are going to be able to perhaps use part of that

money to buy growth.

And the central theme I'm

gonna go through is sustainability.

There's a lot of, by sustainable growth I mean,

you're basically not a leaky bucket.

Money you put in or

time you put in, has a good return on investment on it.

So, sticky growth is like I said,

getting existing users to keep buying stuff.

So, the only thing that really matters here is that

you deliver a good experience, right?

If you deliver a good experience,

people are gonna keep wanting to use you.

If you deliver an addictive experience,

people are gonna keep wanting to use you.

And the way to measure this and

to really look at this and

how you're doing over time of whether you are providing

good sticky growth is to look at the CLV's and

retention cohort analysis.

Now, does anyone not know what cohort analysis is,

or should I go over it?

>> Yeah.

>> Okay. So I'll go over it.

Okay.

So CLV is some people call it LTV.

It is called customer lifetime,

which is, basically the amount of the net

revenue that a customer brings in the door for

you over a certain amount of period.

So, a 12 month CLV is how much net revenue

does a customer give you over 12 months.

Sometimes people look at three months, six months,

and so on and so forth.

So, when I say cohort, basically,

what you're looking at is, this is time.

So, let's just call this, yeah, time.

So, and this is percent of users coming back to you.

So at time zero, right, a period zero,

we're at a hundred.

I'm using 100%.

So, cohort is another name also for

like customer segments and stuff like that.

So you can,

like, you might look at the female versus male cohort.

People in Atlanta Georgia verses people in

Sacramento California.

But, the most common one is by month.

So, cohort equals month and lets just say for

this exercise, we are looking at like March of,

I don't know, 2012.

So, March 2012, 100% of people, you'll have like,

that means n equals 100 people.

So, 100% of the people, obviously, are using your

product because, that's the definition.

Now, one month later, you might have,

this scale is not right, but

50% might come back and so, you come here.

Now, in the second month, how many people that came in

March, come back two months later?

And that might be down here.

And, so, over time,

you'll have a curve that looks like this.

There's always some initial drop off, you know.

The reasons why people don't stay after their first use

is, it wasn't worth it, had a bad experience,

stuff like that.

And then, over time what you want is, you want this to

flatten out over time, so that your turn basically

goes to 0% that means you attrition out less, and

less users over time.

And these over here, kind of become your core customers,

these are the ones that are like sort of staying

with you for a long time.

And now, court analysis or

using this as a way to show if you have sticky growth or

not is now, say you're, say we're one year later and

you've built a bunch of stuff right?

You graph out the same thing and hopefully what you'll

see is that you have a curve like this.

That is in the first period even more people than

50% came back to you and more and

more people are sticking with you.

A really bad, retention curve looks like this, which

is like, after the first use they just hate you so

much, no, like no one even comes back.

It's just like zero, right.

And, I don't know what kind of business that is.

I mean it's obviously a shitty business, but

like I can't explain a good business that has

a retention curve like that.

So anyway, so over time as you are thinking of

strategies to increase this curve,

like keep making it go up and up and

up, you want to basically look at this analysis,

over time to see if that strategy is working for you.

Okay, does that make sense?

Okay, cool.

The second kind of growth is viral growth and like sticky

growth you need to also deliver a good experience.

But on top of that you need to deliver a really,

really good experience, like, what's going to make

these people shout out loud on Twitter, on Facebook or

whatever and tell all their friends and

email all their friends and family members about you.

You have to really deliver a good experience.

Combined with that is, u need to have really good

mechanics for the referral program itself, like,

you have a hundred customers who really wanna talk

about you now, how are they going to talk about you?

So, in that sense a viral growth,

the viral growth strategy is all really about one

building good experience, but if you have that,

it's how do you build a good referral program.

And so I've listed the three main parts of that.

One is the customer touch points, which is,

where are people,

learning that they can refer other people.

So, that might be just, after they book, or

after they sign up there is a,

usually you see these like, right after you sign up for,

for whatever reason most, for whatever reason most

people just immediately tell you to invite other friends,

even though you've never used the product before.

And so, but that's a customer touch point,

is just right after you sign up.

A better one is after they use the product after

a while, and you see that they're highly engaged,

then to show them that link and

get them to send it out to everyone.

Another one is if

you're doing more of a platform type play like, for

Homejoy we actually go inside their homes.

So now, the customer touch point is when the cleaning

professional is inside the home,

they can have a leave behind,

and, we can show them something there too as well.

so, you wanna basically put the customer touch points

and put the actual, link or whatever it is, how they're

gonna refer all their friends at a point in time

when they're highly engaged and they're loving you.

Second is program mechanics.

And so that's where, like, the most common thing that

I've seen is $10 for $10, that is, you get $10 if you

invite your friend and they use it and they get $10.

And so, you should try different types of

mechanics in that sense and

try to optimize for whatever works for you.

You know, it could be 25 for 25,

it could be ten for zero, it could many of these things.

And lastly it's when the, when your friend clicks on

the link, on your referral link, when they come back to

the site, it's very important to really optimize

that conversion flow of how they're going to sign up.

And so sometimes you need to just sell them in

a different manner, or upsell that their friend has

suggested they use this and so on and so forth.

So, all these combined, you need to really play

around with these on different dimensions and

come up with a good referral program.

And, lastly, it's paid growth, so,

examples of paid growth is this right here.

And these are the most obvious ones, but

I'm sure you guys can think of more.

And paid growth is basically,

you happen to have money, you can spend.

You might have credit cards, whatever, but

you can spend something to get users.

So, the correct way to think about pay to growth is that,

okay you're going to put money.

You're gonna risk putting money out there,

what are you gonna get in return?

The simple way to think about it is, is your CLV,

your customer lifetime, the amount of money,

the net revenue, the amount of money that people,

that your customer returns back to you,

is it more than your CAC?

And your CAC is an abbreviation for

customer acquisition cost.

So, an example is, you pay, actually the slide

here has an example here, so say you run a bunch of ads.

These are four ads.

Over 12 months,

the customer's worth $300 to you.

Each one of these ads, when you click on it,

the CPC costs different types of money.

And then, when they click on the ad, then they have to

come to your site and sign up or buy something, and

the conversion rates are different for all these ads.

And then, the CAC is calculated simply by

the CPC divided by the conversion.

And so, you see that there's

different acquisition costs for different types of ads.

And to determine whether, that is a good ad or

a bad ad, all you have to do is, CLV minus CAC.

Is it more than zero?

If it's at zero then you've, that's fine, but

hopefully it's actually more

than zero until you actually are earning a profit on it.

So, we see that, despite the sales remaining the same and

the conversions being higher and lower,

there's sometimes, some ads that might seem good,

actually don't seem so good at the end of the day.

Now, the advanced way of looking at it is you can

look at this for your whole entire customer base for

aggregating all your customers together.

But the better way of

looking at it is to break it down by customer segments.

So, if you have for example, if you're building

a marketplace, I don't know, for country music,

the CLV's of someone in Nashville Tennessee is going

to be much larger than the CLV's and

latent value of someone in Czechoslovakia.

So, or, I just assume that's the case anyway.

So, you'll need to, you want to make sure that when

you're buying ads for these different types of cohorts,

or these types of customer segments,

that you know what the differences are.

You don't wanna mix like, everything together.

So, the last one on payback time is sustainability.

I think a lot of businesses get in trouble, and

it turns into a bad business when they start

spending beyond their means.

And it has a lot to do with risk tolerance, or

how much risk you're willing to take on.

So, when you look at CLV's of these.

Let's just suppose you get a customer a customer who's

worth $300 after 12 months, that is,

in the first month they're worth $100.

If you wait til the end of the 12 month period,

then they give you the other $200.

But if, in the first period you're actually paying

$200 for them, then you're in the whole for

$100 until the end of the 12 month period.

And that's when you start getting into

potentially unsustainable growth, which is

something could happen where at the end of the 12 months,

you don't actually get the $200 from the customer, and

you end up in a very bad situation and

essentially just at the end of the day,

you could be running out of money.

And if you're doing this with credit cards,

you will definitely find that you're gonna have to,

you know, declare bankruptcy very soon.

So again, payback time is very important, a safe one

to go with is 3 months if you have very high risk,

if you're very risk loving, maybe 12 months is better.

Beyond 12 months is very much an unsafe territory.

How much time do I have?

A minute, okay.

So, I'll just go into this, the art of pivoting.

So a lot of people ask me, Homejoy went through,

Homejoy in its current concept is

literally the thirteenth idea we fully built out and

try and execute on and try to get customers for.

And so, a lot of the questions I get

is how did you even, like, get to that thirteenth idea?

And how'd you decide when to move on.

And so the best guidance I can give on that is,

to kind of look at these three criteria, which is,

once you realize you can't grow, or once you realize,

you are despite building out all these great features and

talking to all these users.

None of them stick, or you don't

have any good high retaining users, or the economics of

the business just doesn't make sense, then once you

make that realization, you just need to move on.

And I think the trickiest one is probably the growth

one, because there's so many stories out there

where the founder stuck with the idea, and then,

after three years, all of a sudden it started growing.

So, the trick here is basically,

what you really should do is,

you should have a growth plan when you start out,

which is you should ideally just have, what is

an optimistic but realistic way to grow this business?

And so, it might look something like this.

And this is T and this is number of users.

So, in week one you want, you just want one user.

In week two you want maybe two users and

so and so forth.

And you can keep doubling up and up.

So, in week one you should basically do

as much as possible,

build whatever you have to build to get that one user.

And then in week two, so on, so forth, you build whatever

you need to get two users, four users, eight users.

In the beginning it should be fairly, if you

have a product that people actually wan,t you should be

able to maintain this growth curve pretty easily just by

walking around and manually finding people.

It's when you get to like, you need 100 users a week,

or you need some of these more,

you need the growth strategies to start working.

And so, what I tell people is usually if you're fully

executing on your product, and you're really

working really, really hard, then, if you go three or

four weeks in a row of no growth, backwards growth,

then either, then it's time to maybe consider a pivot,

in the sense that not starting over, like,

completely come with a new idea.

But you're probably fundamentally doing

something wrong, because, in that early stage of

a start up, you should always be growing.

And, so, it's not.

And this is optimistically what it looks like.

And this is like, kind of the growth curve I set forth

and put out when I started Home Joy.

But really what it looks like is like this.

And so you wanna make sure that when you're in

a low like over here, that you don't just stop, right?

And that's why you should wait two to three weeks,as

long as you keep working hard, you'll eventually get

back here and you'll see a trend like this over time.

Cool, so that's pivoting

and that's it.

I can take questions at this point.

>> Answer one question.

>> Yeah. One question?

>> So one question online was, if your users have a

product that they're already somewhat comfortable with,

how do you get them to switch to your's?

>> Right so, there's a switch over costs.

I'll tell you the example of Homejoy.

So, Homejoy,

we actually were creating a new market in the sense that

a lot of our initial users never had cleaning before.

So, it was pretty simple to get them on board.

And a lot of people who have cleaners already,

really trust their cleaner and they will.

To get them to come and use something else is actually,

probably the most difficult task in the world.

And so, when you're billing things and trying to

get people to switch over to you, what you really need to

do is find the moments where your product or

what your offering is much better or very

much differentiated from the existing solution they have.

So, an example is someone who had a regular cleaner

and maybe they had a party one day and

they needed a cleaning almost the next day.

And because Homejoy,

in most of the areas has next day availability,

they would just come to Homejoy and use it, because

they knew they couldn't get their regular cleaner.

And once they start using the product,

then that's when they start realizing the advantage,

the little advantages of using Homejoy which adds up

to a big advantage.

So, a lot of things are,

realizing that, leaving cash out, or

leaving checks was really annoying, and so billing

through online payments was more convenient.

Being able to book, cancel, and reschedule, according to

your own schedule was very convenient and so

and so forth.

And so, it's just, it's really hard to,

a lot of people when they build the product,

they're like, and these 50 things are better than,

a little bit better than, the existing solution.

It's really hard, even if the benefits outweigh

the switch-over costs.

It's really hard to actually tell that to a user and

try to get them to aggregate all those benefits over many

little things.

It's better to just have one or two things that clearly

differentiate yourself from the product so.

>> Thank you very much.

>> Yeah.

>> That was awesome.

>> Yeah?

Okay.