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  • >> 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, support@homejoy.com.

  • 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.

>> Thanks for having me.

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A2 初級

講義4 - プロダクトの構築、ユーザーとの対話、そして成長(アドラ・チャン (Lecture 4 - Building Product, Talking to Users, and Growing (Adora Cheung))

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    Steven Wu に公開 2021 年 01 月 14 日
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