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the only thing that's worse than a channel or a tactic that you tried not working the only thing that's worse than that is when you didn't give it the appropriate shot right and and you prematurely or erroneously concluded
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that it doesn't work and it's remarkable how often you find that to be the case when i talk to companies oh youtube we tried it it doesn't work okay can i see what you've tried and then you look at her you're like oh this thing was not designed to to even have
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have it have a shot networking from the get-go yuri timmon is a full-time advisor to companies looking to figure out their growth strategy and he's worked with companies like canva airtable otter whimsical hymns flow health and a dozen
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others i know a number of founders who have worked with yuri and they all tell me that he transformed how they think about their growth before becoming an advisor he spent nine years at grammarly where he led growth and marketing and helped turn it into
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the household name that it is today in our chat we get incredibly tactical about all of the ways that you can grow your product including when and how to invest in virality seo and paid growth what's changing across each of those channels and the most common failure
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modes for b2c startups this is the most tactical and actionable conversation i have had yet on how to grow your product particularly a subscription product and i'm really excited for you to hear it with that i bring you yuri timmin
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hey ashley head of marketing at flat file how many b2b sas companies would you estimate need to import csv files from their customers at least 40 and how many of them screw that up and what happens when they do well based on our data about a third of
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people will consider switching to another company after just one bad experience during onboarding so if your csv importer doesn't work right which is super common considering customer files are chock full of unexpected data and formatting they'll
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leave i am zero percent surprised to hear that i've consistently seen that improving onboarding is one of the highest leverage opportunities for both sign-up conversion and increasing long-term retention getting people to your aha moment more
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quickly and reliably is so incredibly important totally it's incredible to see how our customers like square spotify and zora are able to grow their businesses on top of flat file it's because flawless data onboarding acts like a catalyst to get them and
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their customers where they need to go faster if you'd like to learn more or get started check out flat file and flat file dot com slash lenny this episode is brought to you by modern treasury modern treasury is a next generation operating system for moving
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and tracking money they're modernizing the developer tools and financial processes for companies managing complex payment flows think digital wallets via crypto on-ramps ride-sharing marketplaces instant lending and more
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they work with high-growth companies like gusto pipe classpass and marquetta modern treasury's robust apis allow engineering to build payment flows right into your product while finance can monitor and improve everything through a sleek and modern web dashboard
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enabling real-time payments automatic reconciliation continuous accounting and compliance solutions modern treasury's platform is used to reconcile over 3 billion dollars per month they're one of the hottest young fintech startups on
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the market today having raised funding from top firms like benchmark altimeter svp capital salesforce ventures and y combinator check them out at moderntreasury.com [Music] yuri welcome to the podcast thanks for
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having me now this is this is great it's uh it's even better for me all right all right so i'm going to give a quick bio let me know if i missed anything really important you were head of growth at grammarly you spent nine years there kind of doing all
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the things that helped turn that company into the killer product that it is today you left that i think a couple years ago now you're advising companies mostly full-time i think mostly on growth strategy and i think mostly consumer
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startups is that about right a couple of super critical corrections number one it was only eight and a half years ago okay usually people round those up i'm impressed that you uh you get active i figured eight and a half is um long enough so i i mean yeah i i i'm not
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sure i wanna run that i know but i'm kidding obviously uh yeah i mean that's largely it i mean you know grammarly was a hell of a run and trying to take a step back from that and that stepping back has kind of taken on a life of its own
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uh you know vis-a-vis advising how many companies have you worked with at this point advised and what are some examples just like companies people would know it's now been about uh i guess two years and three months since you know my last day
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of grammarly in an operating capacity i've probably worked with maybe 15 companies in the last you know two and a little bit of years obviously not all at once right it's usually four to five at any given point in time but some of the ones that i've been
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really that i've really lucked out with in terms of i mean in terms of getting aligned with you know companies like canva uh air table hims and hers in the personal care space there is otter dot ai who else flow health uh you know the
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world's most downloaded period tracker i use that for my wife it's handy good good yeah um yeah i was trying to uh to get my wife to try it out but i've been unsuccessful you're failing in your group she was like are you trying to push me
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to having a third kid i was like no no i swear this is just just product testing clever so i've had casey winners on this podcast and elena verna it's kind of like the three of you that it feels like have worked with the most companies as advisors and i don't know if there's
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some kind of contest you all have or anything but do you think about that at all is there anyone else out there that you think is in this in the running okay i mean first of all uh just being mentioned in the same breath as those two
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is an accolade in it of itself i mean um i i look up to both of them they've gone first uh i also i credit a lot of my uh a lot of like getting started to both of them because they've been very generous with their time when i was just kind of considering advising
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especially in case if they listen to this huge shout out to both of them but casey especially he's such a mensch when it comes to just being generous with his time so no there is no competition but had there been one i suspect i'd be in lead right now
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because i've done it i've done it in a shorter period of time i i'm much newer to advising than both of those but no i have a ton of vibration respect both of them they're you know phenomenal what they do and i learned a ton from them i
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love that the acceleration is fastest wow sweet so we're going to talk a lot about consumer growth strategies and your experience working with companies and a bunch of insights and things you've learned from working with companies before we get there just one
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quick question and you're advising i'm curious how many companies do you work with at once normally yeah so i've played around with different quantities so a couple of things so you mentioned you alluded to earlier that i advise
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full time what i'll say is that mostly the only thing that i do right now professionally is advising but it's not quite full time i hard count my week at about three to three and a half days a week worth of work which is a personal choice
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and so that is a hard constraint that i'm working with and within that constraint i also feel like for me to do my best work and the work that i also enjoy the most and find the most fulfilling four to five companies is probably the max
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um if i try to go beyond that the overhead that it creates in terms of the cost of context switching uh just becomes uh overwhelming and i feel like i'm not you know showing up as best as i can with each individual company as a early plug or anti-plug
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depending on how you answer this are you looking for more companies to work with right now or you just like don't even try i am so at capacity right now i'm so at capacity right now um i've also just been you know i've been
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very fortunate to always be at capacity but i think you know for every four to five companies that i'm working with you know think of it as a concentric circles right there are another maybe ten to a dozen companies that we're actively exploring if we want to
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work together in the future and then there is another concentric circles of maybe 30 plus companies that i'm just friends with so i'll take the plug uh i'm always up for meeting um you know austin fowler's working on important problems
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cool while we're in the plug i guess how do people find you online what's your like twitter i mean honestly probably probably through through lenny's podcast that's one but um you know honestly linkedin is really the only place i i'm
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pretty low-key otherwise okay great that was a lot of meta stuff so let's get into some meat stuff here so you talk to a lot of consumer startups you help them figure out how to grow how to evolve their product something i'm always curious about and i
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love your thoughts on is when you look at a consumer startup i imagine there's a few archetypes of how they grow and i'm curious if that's a mental model you use when you're like oh i see company x they're probably going to grow this way and here's what
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they should focus on how do you see that great question i think there are a couple of ways to to answer that my sweet spot is subscription properties and it's not just consumer right i do work with a lot of bdp companies it's just not most of them but what they all
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have in common is they lean into consumerized type of growth loops and raw emotions right so they're very kind of self-serving nature or have meaningful self-serve engines so if i think about subscription companies i
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think there are you know probably a couple of uh uh buckets that i see them falling into right if you were able to nail your unit economics and you have really strong consumer ltvs think grammarly think canva the single player ltvs for those companies
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uh are very very high they're kind of like average smb ltvs for b2b companies what's like a number there just for folks to have a little context i'm not a liberty to get to those but but but we're talking like in the hundreds of dollars
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most consumer subscription companies uh that are like five to seven dollars a month their ltds typically capped out at like 50 to 60 bucks right and so if you have really healthy ltds and that usually means that you're attracting a prosumer buyer so they may
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be single player but they're using it for work right and so maybe they're expensing it or just the perceived value so much higher that they're willing to bear that you know 120 130 a year uh subscription if i'm seeing things like that and i'm
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seeing that you're converting you know seven like five plus percent of your free users to a paid subscriber then there is a big opportunity to play date right and lean into kind of paid paid growth loops and paid acquisition loops
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there is another art archetype which is um you know if there are network effects for instance you don't find it as much with kind of like you know single player consumer subscription subscription companies but obviously you know social
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media consumer companies there may be a strong referral angle viral loop angle uh if the utility increases the utility of the product increases the more users are using it another archetype i see are companies that can lead into seo very heavily especially if there is like a
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long tail programmatic angle take canva for instance right uh their biggest uh initial growth loop and i think this is public knowledge uh was their long tail seo strategy uh where you know any kind of design project that you could think of uh
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uh you know you would search for you know designing it's kind of like two categories of keywords make keywords and template keywords right so if you're searching for a template of any kind a web invitation yadda they had incredibly strong seo and they were just
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capitalizing on all that long tail uh traffic not not every product is gonna lend itself to that but i always look for that early on because that can become that can just you can build incredible mode with that kind of strategy that makes sense
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there's kind of like these three engines that you can tap into and i imagine the preference would be word-of-mouth virality and then if that isn't going to work seo and if that doesn't work paid maybe just to kind of simplify it for
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listeners what are kind of signals you can go after virality and invest in that and think that that could work because every founder would be like yes yes morality that's how i'm gonna grow yeah so well yeah i mean honestly the
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first thing you look for is that is there inherent product network effects it's something that it's either there or it isn't from inception from my experience i think it's it's very difficult to manufacture i mean you'd always started with knight uh it's
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very it's very hard to manufacture uh you know product network effects if they aren't there from the get-go right so you know like airbnb from your days obviously you know marketplace very strong product network effect dynamics
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uh you think of you know collaboration tools um airtable monday.com uh whimsical um we both know very strong inherent product network effects contrast out with a company like grammar it just wasn't there it's not an inherently multiplayer task uh you know constructed
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communication and so you can try to engineer that but from my experience it is a it is a it's a it's an uphill battle so if you have inherent product network effects that's when i think layering on referral loops and viral loops
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right you think about what dropbox has done around uh you know file sharing like that's an iconic example then it's really powerful i think that there is another case where referral buyer looks could work even when there aren't in here network effects if you have a
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really beloved product beloved brand there's a company out of uh australia that i that i have opportunity to invest it called leica they do like fresh dog food uh subscriptions and uh incredibly beloved brand a premium product and so
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they they're able to lean into uh you know kind of a give one get one referrals even though there isn't an error you know product network effects they're still able to kind of generate meaningful results off of uh an incentivized referral program we need to
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talk about network effects what is that what does that mean to you how would you kind of define that briefly yeah yeah to me i mean honestly i had to find it in a i think probably a pretty quintessential way which is for every individual user the utility
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that they derive from the product increases the more uh the more users there are on the platform the expanded version of that is you know in the case of marketplaces it may not be the bore users uh broadly speaking but the more users in
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the markets that you care about right in the case of collaboration tools it's not the more users in abstract terms it's the more users within your team the more users within your company right that correlates with your uh kind
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of the rise in your utility curve awesome so if you have network effects aka if the product becomes more useful with more people or there's amazing word of mouth already or there's collaboration probably a good sign that you could lean
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into virality yeah maybe referrals what about seo oh that's a good one it's a very it's a very timely question because i'm actually in a process of we're helping a couple of a couple of uh of my companies figure out if it's the right time to invest in seo so i've
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been sort of at the forefront of taking like exploratory meetings with agencies and and seo consultants and things like that i mean i would say the first thing to trigger i mean there are a couple of pillars right because obviously we all know that
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seo has a different um a different uh return horizon than say paid acquisition right it's longer out it's maybe six months it's the earliest you can see results and even then it's gonna be a small trickle that compounds over time if you're
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successful right or you may spend three to six months leaning into an seo strategy and then realize that it's not gonna back out typically at least in in historically a company probably isn't like series b before it starts feeling like it passed the luxury
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of making these kind of medium to long-term investments but i think that's shifting right now but that's maybe a topic for later or even for another pod but a lot of the strategies that i think were reserved for like series b
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are are trickling down to series a companies because they have to diversify away from paid but maybe more on that later so i think i said you know with seo it's like the first pillar i'm gonna say is do you have a unique angle when you take a look at the seo
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landscape today uh you look at editorial uh landscape which is thick to look like how to searches uh and and who are the players there and what type of information is being offered do you have something unique to contribute to that conversation another
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thing that's you know if i have to do like a like an audit checklist the other thing is like do you have a unique programmatic angle right like for instance like cam but did that with templates you know who else is programmatic uh you
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know zillow rested like obviously all the real estate right that's like really strong say here right so do you have a programmatic angle and then understanding the competitive landscape or the other one is do you have a unique data angle
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so for instance a company uh i i work with called monarch mining which is in the personal finance management space think of it as like you know a new and improved version of mint there is a lot of uh you know users are connecting accounts and and and you kind
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of have a sense of spending patterns and things like that clearly there is a unique unique data and so it's a question of can you turn it into some kind of valuable organic search experience i won't go into into too much detail in terms of what
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we're thinking of there but that's another checkbox if you can check two of two of three of those boxes right as like a back of the envelope framework you may be in good shape and then it's a question of like how can you lower the
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cost of experimentation seo as much as possible i think as a rule of thumb like if you can time boxing to three months like what can i do that at the end of three months i know like is this likely to work or not awesome couple follow-up questions
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absolutely one is seo feels like this dark art where you need some seo wizard to come help you through this yeah uh do you suggest companies find somebody or work with an agency or something else like what's your general feeling on dnc versus some other route i
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think seo is pretty specialized skill set there are some basic principles that always hold right like best content wins right and don't do don't do like shady backlinking right and make sure that you're on page uh seo is good and your pages are easily
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crawlable but you know i feel like everybody knows that and and where the winners are determined are between the lines better is that a sports analogy maybe maybe maybe between the lines i don't know where that comes from
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what i mean is that there is a lot a lot of more nuanced seo um developments and gambles where i think is where the opportunity really lies to differentiate yourself and that requires keeping up with the latest algorithm
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changes it's very hard to do that unless you are specializing in the art right or the black magic of seo and so that's why i think getting an outside resource at least for like an audit is really helpful now whether it's a boutique agency or you know a solo
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consultant i think that's that's more circumstantial but i found like you know at least with the companies that i've worked with if we wanted to quickly vet the seo opportunity like i can do it in a very kind of amateur at an amateur level right just like plug things into
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like similar web and and trying to figure out the opportunities there but you can get these relatively inexpensive audits done from companies that that you can then choose do i hire them to help with my seo or not but i think that audit is
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usually a very good use of time because they have templates so what they can turn but they can turn around you know for 5 to 10k would take you many many human hours to try to pull together yourself awesome are there agencies that you want to name that
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people can go check out or would you prefer just trying to keep it from having what plug right i think one of the most innovative disciplined first principles seo thinkers and i've met is ethan smith from graphite it's not for everyone it's a pretty
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high-end seo shop so i would i wouldn't send the series a company there but ethan also produces a lot of resources and what they've been focusing on at graphite lately has been actually automating a lot of their work and and turning it into sounds
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so i don't know how far along they are but you could probably already get you know into some of their betas on some of the tools that they're offering sweet i'm gonna try to get ethan on this podcast yeah yeah i've seen his stuff
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and it's awesome yeah he's a math scientist when it comes to seo yeah we need we need those we need mad scientists on the ship right okay so we've talked about reality talked about seo paid i imagine that's pretty
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straightforward if your ltvs are high enough and you can pay back ads on those then that's where you go i imagine everyone can try it it doesn't work for everyone what if yeah anything you want to add there i mean there's a lot there's a lot that i
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mean i don't know how deep you want to go down the page rabbit hole because it's changing it's probably the most affected growth bucket in light of you know the market turbulence uh you know the the denture sentiment shifting i've seen paint acquisition
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strategies and budgets they are at the brunt of that fallout um and so the question is you know where do you want to go there that's yeah that's a really good topic i was saving that for later but let's chat about it right now yeah and i imagine
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part of this is apple's tracking changes too so i guess my big question is like is paid still lucrative and a good path for many companies is like 50 of the time less effective how do you how do you see that shifting recently and how should people
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think about paid in the consumer subscription startup well i think in the short term um let's break it down into phases i think in the short term paid acquisition and just paid media dollars are contracted and we're seeing it already
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right with uh metas advertising revenue snaps advertising revenue right there's clearly a global contraction happening to paid media budgets a big part of it is because all of a sudden the definition of efficient acquisition and good payback windows is
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shifting right so if before for a consumer subscription company you know 12 month payback was decent now it's like you better pay back your paid media in six months or less that's the sentiment so you know the obvious reaction is like anything
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that's north of six months or well north of six months we're cutting that and so there's that that there is just less tolerance for ambiguity and attribution right when it's like when the sentiment is like let's grow at any you know grow
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at all costs if you can't attribute things perfectly that's okay now it's like you know especially with venture back companies you have to have your two plus years of runway manage your burn a lot more diligently now and so whatever you can't attribute
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sales to like that shit's gotta go i don't know if we can curse on the pot or not i'm fully available well i've been holding back for the last 30 minutes no i'm kidding let loose all right i'm not kid friendly but nobody's cursed yet this could be
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okay all right all right um uh but anyways yeah so so i think there is a short a short-term contraction however that opens up an opportunity for smart kind of attribution investments so you're seeing an emergence of some interesting attribution related
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attribution incrementality related products a couple that i personally started exploring and looking into and then you just see a lot more heads of growth heads of user acquisition thinking about attribution in building their attribution stacks
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and so i think that once we settle into some kind of new normal which is going to be a combination of just better attribution uh attribution stack on average for companies combined with just a level of acceptance that attribution will never be as good
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as it maybe once was we're gonna probably get you know hit like come out of that and and you'll see paid budgets start making their way back but even right now during contraction there are going to be some winners the companies that have strong cash
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positions had strong unit economics strong pay back periods already right grammarly canva to name two that i know personally a couple of others or many others probably they're gonna be winners because all of a sudden if previously
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they were competing with companies who were nowhere as efficient as them but for whatever reason had the green light to keep spending right now all of those are going to pull back their budgets and so those that have been disciplined
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have the instrumentation to track things better than that than average they're going to benefit from you know decrease competition on app platforms decreasing cpms etc so they're going to be winners that's for sure wow i haven't heard this perspective so
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interesting that the fact that it's gotten harder it's creating new opportunities for companies to do it better and more intelligently you said you mentioned a couple tools products that you found to be potentially helpful in this is there anything you could
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mention there yeah yeah i mentioned a couple that i've kind of connected with in the last couple of months so uh the referral media mix modeling is making a comeback which is you know something that kind of got popularized in in the med kind of
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advertising era of the 50s right pre-digital um and that's how people that that was basically the methodology i can't each of the specifics there the science is a little bit you know i'm out of depth there but it was basically um
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you know a way to you use some data to determine a budget allocation across channels right at the time was probably you know newspapers and and billboards etc it was leveraging data to some extent you would probably were doing it maybe on a quarterly basis
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and then you would only update it every quarter there was no way with media big slaughter there was no way to adjust budget like in quarter right because you weren't getting the data feedback loop that frequently but media mixed marketing is not making a comeback
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because there are so many offline channels that are part of folks channel portfolio today and then plus a lot of the online channels are becoming less trackable right meta for instance right with the ios 14 shift and so media makes
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funding is making a comeback and the company that's leading the charge of bringing the media mix modeling methodology of like the traditional advertising era and ushering it into the digital world is a company called the recast recast for recast yeah so i've
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heard really good things i haven't tried them with any of my companies yet but there are a couple a couple that i'm on the horizon hopefully just to double click there for a moment uh is that still useful if you're not doing tv and
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other forms of advertising i think it's still you're just yeah i think it's useful if you're spending a considerable amount was considerable essay north of 100 000 a month on paid media and if you have some level of channel complexity so you're not just
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on google or a facebook but maybe you're on three plus um you know the uh channels then i think it still makes sense the other ones in the incrementality space they have very different methodologies you know actually because at the end of
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the day this might be obvious to folks but maybe some will find value click based attribution right or the digital attribution we were all fawning over cookie based and and click based and url parameter based attribution it never demonstrated a causal relationship
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between our media spend and business results it was only good for correlative insights right and and the only way to determine causality is through like real you know controlled experiments randomized control experiments through
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incrementality testing which is typically really hard to do cleanly and also companies have always been often been wary about doing it because you have to like turn off a channel potentially in a key demo and you're like yeah like the benefit is
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the learning of whether it's actually incremental but the cost or the sales that i will lose today but the only way to really know how how effective your paint media is is through ongoing incrementality testing so there are two companies that are
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addressing that two that i i'm excited about one is measured can be found at measure.call amazing domain name amazing domain name go go then and then the other one is incremental but in incremental outcome no no vowels except
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except the last a between the t and the l excellent great job so many free plugs today yeah i love it it's great this is what people need right they're just like okay what do i actually do and so the more it's clear what to actually try and how
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to solve these problems the more people can actually make make change i had a couple questions here that i wanted to follow up on one is founders might be listening to this and they're like amazing okay we're gonna grow there's three ways to grow let's do
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it all let's get someone on seo let's get jane on paid let's get fred on uh virality there you go uh so in your experience is it smart to focus on one and then expand down the road or try them all see which one works best how do you advise
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companies think about these options i would say focus paired with rapid iterations right with limited resources naturally you have to practice some form of essentialism and and ruthless prioritization but at the same time the clock is always ticking
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right you have burn there is a finite number of tries that you have at finding what works right what's gonna help you unlock the next level of growth right get to the next funding round right extend your runway and so i think either one taking to an extreme
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focus or trying multiple things is not a good thing right and just because it's not obvious right if you focus on one thing and it ends up being the wrong thing you've wasted really valuable time and now you have you know so much less time
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left to find something that does work spreading yourself very thin oftentimes you know the early stage companies it's one person who's in charge of all of growth but they also have some other kind of responsibilities like maybe ops
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and customer success right if you get them to try like five different things they may not try them fully eat anyone individually fully enough right because i like to say the only thing that's worse than a channel or a tactic that you
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tried not working the only thing that's worse than that is when you didn't give it the appropriate shot right and and you prematurely or erroneously concluded that it doesn't work and it's remarkable how often you find that to be the case when i talk to companies oh youtube
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we tried it it doesn't work uh okay can i see what you've tried and then you look at her you're like oh this thing was not designed to to even have us have it have a shot not working from the get-go so to answer your question i think it's focus
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with some guardrails so that you know exactly when it's time to move on to the next thing this episode is brought to you by epo epo is a next generation a b testing platform built by airbnb alums for modern growth teams companies like
35:00
netlify contentful and cameo rely on apple to power their experiments wherever you work running experiments is increasingly essential but there are no commercial tools that integrate with a modern grow team stack this leads to wasted time building internal tools or
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36:00
velocity this might be too hard to answer in a chat like this but you have any guidance for how to know when you've gone far enough i imagine there's a lot of nuance in detail there is there anything that you could share love the question it's very thought
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provoking i think with some tactics and some channels you can fairly objectively create some test guardrails where it's like if it's youtube we know kind of like minimum number of impressions that you gotta get you know try two to three creative
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angles here's the click-through rate range that you're looking for like you know if you if you're getting in within these ranges on these kpis keep going if you don't abandon i think it's important to also know that abandonment doesn't mean we
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will never revisit it again right it just means that because every time you're evaluating right the concept of sunk costs right so you have these periodic i think periods of revaluation where it's like okay did we did we try enough what is
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and this is more art than science frankly it's like what's the incremental lift for us as a team to to try to experiment with the next phase of this channel or this tactic and what is the opportunity cost of that right what are the other high profile
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things that we could be trying i know you know you were right and safe this probably too hard to answer in this format but i would break things down maybe into two types like there there are some channels or tactics where
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you can objectively figure out like some guardrails for when you know uh it's showing problems or not because you can pull benchmarks on like good click-through rates and things like that right then there are other tactics where you
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just have to exercise more judgment outside the benchmarks yeah yeah that was that was actually really valuable and a very challenging question to try to summarize quickly so thank you one more quick question along these lines so you talked about these three
38:05
broad ways companies grow oftentimes a couple of them work something i've seen and i'm curious if you agree usually one is like 80 of your growth and then you layer on a couple more to optimize is that what you see uh yes i think companies that
38:21
we know and admire and reference in case studies or in podcasts such as this one from the outside looking in you oftentimes assume that it's a highly diversified growth engine i have to say it's often not the case definitely the 820 applies there's
38:46
usually some kind of strat this is a kind of strategy that's working overwhelmingly well and there is a scramble internally to minimize reliance on that one thing and on the discover slash on the log the next step function the next growth
39:09
horizon right in the case of grammarly it was performance marketing kind of over reliance and performance marketing during you know part of the company's life cycle and so it was like okay this thing is working it's efficient so you don't want
39:26
to stop pouring fire on it but you're also thinking you know months and years ahead you know what kind of risk does it open you up to and so there's a scramble to fight and gravely it's been successful there you know with canberra it was the
39:40
seo lego right so for them that was working really well which is more defensible than paid right that sort of like long tail programmatic seo angle but look you're always susceptible to google algorithm updates right and so how do you risk yourself from
39:57
that but to your point yes and i think that surprising thing to people probably is that it's also the case with some later stage companies it's not just early stage companies that are kind of like one trick ponies sometimes it's later stage companies as
40:10
well but this makes me think about is there's kind of these three phases to growth there's the kickstart phase where you're just doing a bunch of stuff trying to get things moving then there's that you discover your first main growth
40:21
engine and then there's layer on additional engines because you want to diversify yep and one interesting what i believe is an interesting uh period and a lot of it is gut feel right and i try to recognize like i encounter sometimes
40:35
early stage compass when one thing is working well and they're already worried about over reliance and i and they're starting to talk about diversification and i commit all the times i see showing up in their oprs i call this no no too early like i'm glad that
40:54
you're such a former thinker put all of your energy like sure this one tactic is accounting for say 80 plus percent of your user acquisition but your user acquisition is still small right it's like don't don't get distracted with diversification we'll get there lean
41:11
more into this hit these growth rates like stand this up build this into a real strategic advantage this thing that's working so i actually have to talk them out focusing on diversification too early contrast out with some later stage
41:23
companies for whom that who are you know at scale i don't know 50 plus millionaire are 90 plus percent reliant on a single acquisition channel which is just you know mired with risk and diversification is a blind spot for them and then with those i have to be
41:39
like hey doll here's a risk that you're carrying right let's start carving out bandwidth resources to try to go into you know go and explore these other channels and tactics that's such an important point it reminds me casey has this
41:52
hilarious line that he uses that the money's always in the banana stand or there's more always more money in the banana stand for marista development that basically your growth is probably going to come from the same place that's
42:02
already come from and that you shouldn't take never granted and you should put most of your efforts into continuing to optimize that versus being distracted by oh let's do seo now i see that argument for sure so you mentioned at this point about how later stage growth
42:16
strategies are starting to move earlier into growth strategy planning i'd love to hear more on that yeah let me let me expand on that in the world that we lived in in the last 18 months or let's say let's say up until say three to five months ago
42:32
right uh we were living in a world where funding was abundant and plentiful startups were conditioned to think that they can raise twice a year right valuations were quit tupling within a year right like you raised in january and then you you raised in like november and
42:50
your valuation 5x and so companies were coming off of these like ridiculous series a's of like you know 15 to 25 million dollar ace and they were like we got to grow as quickly as possible what can we activate to give us immediate return and the answer is
43:11
almost always paid that's what's going to give you especially if you think you're going to you want to go back to raising uh you know less than 12 months later that forces you to focus on very kind of short-term tactics short payoff
43:27
tactics and so things like seo there was no there was no room for to think about that for early-stage companies because like payoff is gonna cost like you know maybe in like 12 months in terms of meaningful payoff we care about getting to the next round
43:42
and maximizing our valuation between now and then seo is for the grown-up companies right when we're that we can think about it and they were getting this reinforcement from everywhere from peers from vcs it's like it's growth growth growth right
43:59
the growth of any us i think what happened now and we'll see where things stabilize because i think we're still in the midst of a little bit of a of chaos what's happening now is the same dc's right are saying okay it's now survival
44:17
you have to extend your runway minimize burn you know hibernate if you have to and all of a sudden growth whether explicitly or you know via inference becomes kind of a secondary objective especially for all these companies that are far from being
44:32
cash flow positive right they have to figure out how to stay alive but not have to go back to the market and be sort of a victim of shitty terms and so i i feel this is me extrapolating because venture capitalists didn't
44:47
actually tell me this but i'm extrapolating that growth is a secondary objective now it's really focusing on sustainability through economics except you run away control your destiny getting to default live right and all of a sudden it's like okay
45:03
plus paid is a lot less attractive now can't afford to be acquiring users at like lte cap one to one right like that's that's that's now a no-no and so seo is now becoming more attractive because you you're like once you got your burn under control
45:21
and you're thinking okay we saved all this money by reducing our paid budget we're cutting it entirely like how do we put some of those resources back to work but all of a sudden seo starts looking a lot more lucrative because it's almost
45:36
like you you took the urgency of like grow at any cost in the next six months you took that out of the equation so now it's like we're in a position where we're gonna you know we don't have to go back to raising you know 12 you know 18 24 months we
45:51
have you know 18 24 months worth of runway and now companies are starting to think more in terms of you know building more sort of sustainable and defensible growth initiatives fascinating and as much as people may want to do seo like we talked about
46:06
earlier it doesn't mean they will be able to pull it off right because there's these things that have to be true for your type of company and yes yeah going back to point you made earlier about paid being a really interesting opportunity right now
46:16
because it's become harder would you say generally you're kind of like pro try paid go paid in this time because i'm finding a lot of startups are like oh we can't do paid anymore we're trying all these other approaches to grow is that like alpha
46:30
right now start thinking about paid in a creative way and maybe this is going to be a huge advantage so there are two pieces to do paid i mean i'm oversimplifying but i think people will hopefully appreciate those the
46:41
oversimplification number one because it actually like drives drives returns at efficient unit economics whatever that may mean for your company your business your industry the other way to do it is because it's a very quick way to get learnings
46:57
on messaging and positioning on designs on features you're thinking of launching etc right it's hard to get faster learnings at scale right then like ap testing headlines google search or whatever i think the problem that i find is when a company
47:14
can't tell me which camper in right or whether you try to say that they're in both but really it's like okay you're you're funneling 100k a month it's like super inefficient and they're not even like running experiments that should get the learnings
47:31
i can assess a company right even if i don't download the industry as well based on like just seeing their funnel performance right their conversion rates their retention curves their ltds understanding their churn i could say whether they stand the chance
47:46
at making pain work as a former strategy right so not just a learning mechanism not just kind of a feedback engine but actually a uh you know like a profitable at delivery acquisition channel or strategy and if i see that there that that
48:02
they're not there right because the funnel doesn't convert well the users don't retain the ltds are too low then i say hey it's not it's not time for paid maybe card on a little bit of budget if you want to quickly test you know
48:15
positioning and and things like that but it's just it's just too soon but if instead i encounter a company that's really healthy conversion rates strong ltds i do a little bit of competitive research and i can see where the opportunities are which channels are
48:29
less saturated than others then i may say hey it's worth it it's worth a go and also just seeing the bigger picture of their financial health how much runway do you have right what is your what does your monthly burden look like right because paid like cash going out
48:44
the door yeah and it will return hopefully at some point might be six months might be a year and so that's a real constraint you mentioned onboarding and funnel conversion two questions there one do you have kind of a heuristic of like
48:56
here's good for conversion rates is there something that you think about there that you could share or is it very case dependent i think it's case dependent but uh yeah it is it's not even case dependent it's category dependent right so it's
49:09
not that every company is it's so case but it's like we got to know about what buckets we're talking about right i will say that let's say we talk about prosumer freemiums allah graham really ala campbell whimsical video things like that yeah i could
49:30
probably call i can confidently say like a healthy you know website visit to a free user a free account creation conversion rate it's probably like you got 20 to 35 range from landing on the site to signing up from landing on site
49:46
to like a free user scale earlier stage if you have really strong product market fit with some kind of small audience segment that conversion can be 40 to 50 but as you go broader it will probably asymptote at like 25 30 percent what about like a conversion you know
50:05
from a if you're a freemium from like a free user to a uh billion account or a paying account i think anything under five percent is not gonna it's not gonna work long term regardless of how big your top of funnel is like you may get the software but
50:25
like for you to remain an independent company continuously growing um you know pre-ipo i don't think it's gonna happen it's gotta be north of five percent ideally like north of seven percent wow super handy on the onboarding point
50:42
what's your thoughts on investing in onboarding and that part of the flow like how often is that a fruitful area of investment almost always um a lot of my work in in is in that sort of a grow zoomer space so the products tend to be more complex
51:02
right air table whimsical canva video right there's like they're very robust products and so it's very easy to get lost in their editors right and i think what all those companies are trying to do for their respective verticals and use cases
51:25
is they're trying to democratize access to you know things that previously you have to rely on professionals for right maybe you know in the case of your team but it's your engineers right in the case of pm but it is you know professional graphic designers
51:48
uh in the case of nvidia it's professional video editors so we're trying to democratize access but they're also trying to make the products robust enough to be comparable to a professional grade quality and it's a very difficult place to play
52:05
it right it's like how do you make it simple enough where you know a non-professional can use it but robust enough where they go and say oh yeah this is as good as if i want to hire a professional fill in the blank and that's where onboarding sorry for
52:21
the long-winded answer that's where off-boarding is really really important because there's such a huge difference between landing someone on that initial editor page being airtable camera having them you know left to their own devices
52:37
versus getting as much information or as much relevant information up front and then customizing that landing experience for them so that if they're there to do x and we know x y z about them we're able to guide them and not expose them to the robustness of
52:57
the product all at once so the short answer is almost all the time onboarding is a big opportunity awesome that's what i was expecting to hear to give folks some context what's kind of an order magnitude that you've seen
53:10
improvement on onboarding and maybe impact on a company improving onboarding earlier stage companies where you know you still haven't really approached the local maximum and you haven't haven't experimented with a ton of things i mean you can
53:24
2 to 4x activation rates easily through onboarding i think later stage companies like you know maybe series be it beyond i think you can still probably get to 20 to 30 percent lift and activations it depends on how many low low fruit
53:44
are left to tackle that makes sense yeah tldr on boarding there's always money in the onboarding banana stand on that kind of same idea do you have a general feeling of like investments in this stuff often pays off and helps you grow and is often higher
54:01
roi and investments in bucket b are rarely successful what would those two buckets be so thinking of investments wrong right not not not just monetarily yeah yeah time time and resources yeah i mean i would say that getting to know your customer
54:18
always pays off so it's you know user interviews and getting to know your market right your customers and your prospects always pays off customer research inside surveying interviewing you know panels uh incredibly useful and i found it to
54:38
be very especially early stages the amount of clarity and momentum that it can create inside of a you know seed series a of the series b company when you first do some a proper research push the way it can galvanize the team and give them focus and clarity and
54:58
purpose is remarkable so that always pays off what doesn't pay off i mean i think i think over reliance on paid it comes to bite shoe in in in the rear end i think when i think about tracking and attribution i think it's a question of like
55:16
the right level of investment at the right stage rarely do companies get it right they usually fall into one of two buckets where they under invest in attribution and they are now you know their budgets are high that they're they they have a broad
55:33
channel portfolio and they have a hard time figuring out what's working what isn't and they just get into this inertia it's like well overall the company's been growing and it's it's been growing roughly over the same time that we've been increasing
55:47
our spend we're scared to break it so we're just gonna keep spending right and so or companies that read horror stories about other companies overspending they sometimes try to invest in attribution too much believe it or not where
56:04
they're trying to get everything perfect and scientifically pure but what they don't realize is that the payoff may not always be there and so how do i fit this into your question of i think i think attribution tracking attribution incrementality
56:23
is definitely a worthwhile investment arena but it could both be a good or a bad date depending on the level so you got to make sure the love investment is appropriate for your stage what you stand to gain from it awesome
56:36
you're such a good interviewee that you come back to the question i promise that's great okay one last question before we get to our very exciting lightning round i'd love you to get your thoughts on advertising on tick tock and youtube and
56:51
broadly is there any other tactics avenues that you think are kind of underutilized or emerging that folks should be thinking about so tick tock like definitely one thing i'll say about tick tock is i'm seeing it come out more and more as a channel that works well
57:06
and sometimes even the most efficient channel most efficient digital channel for some brands but i think that the thing about tiktok that oftentimes i was surprised about is you often hear oh tick tock that's for the 15 to 22 year olds
57:23
right i'm yeah i'm down with my my gens gen z right and uh oh my my audience is different so i'm just gonna ignore the champ tick tock has so many users and it's still so relatively unsaturated with advertisers that like your audience is on that on
57:43
there like you'd be surprised like you know i've worked with brands that you know their core demo is like 40 plus married you know making 200k plus in in household annual income and you wouldn't think that that demo is on tick tock and it is
58:01
that's that's that's what about tick tock other other channels i mean i think out of home is still not getting enough love podcasts okay uh yup yup sponsor this one there we go you heard it from your direct direct mail what has happened
58:20
they've gotten better with attribution because before a lot of them a lot of those channels were written off as sort of like look at this is just too hard in there and attribution is so good and reliable on digital right so that that gap that canyon that
58:38
existed in attribution capabilities of online and offline deterred a lot of people from offline today offline has gotten better and actually as positioning themselves as being able to do attribution but also online attribution has deteriorated so all of a
58:54
sudden that argument kind of slimmed out a little bit and i'm seeing offline get a lot more traction and and podcasts especially are actually very very performant uh for a lot of a lot of brands yeah those those are a couple of things
59:10
that come to mind those are great happy to hear the podcast piece excellent and then i actually i am an investor in a startup that did a big at-home campaign and they just told me that it was like a ten to one positive roi on the deals that they got out of it so
59:26
i've been seeing that too and that's such a good point that the measurement and attribution on online has come down where it maybe makes more sense to try stuff like that amazing all right are you ready for our very exciting lightning round i'm gonna
59:40
ask you five questions i think and then just yeah let's go through a quick let's do it let's do it okay what are two or three books that you recommend most to other people oh that's something that i think is very wrong to recency bias
59:56
right it's like what are some of the books you've read recently that you've enjoyed but i would say there are a couple of books that stuck with me over the years i think on the business side we're like on the business side productivity side
1:00:09
it's a book called essentialism i forget the author's name i think his last name is mccown or something and it's basically the book about cutting out the noise and finding a singular focus and doing that really well it's a book
1:00:24
that i that that was a game changer for me at grammarly being sort of new in my career having really aggressive goals not being scared to say no taking on a lot just feel it thinking like well i'm only working 12 hours a day there's 12
1:00:40
more left i could just you know like like i can i can do it and then when you when you end up stepping into a leadership role which happened for me i mean it happened prior to grounded but really i was able to kind of grow into that role grammarly that book was it was
1:00:55
incredible and i and i used it a lot i pretty much got copies for everybody on the team like 40 plus people and uh so that that is a book i swear by um i read a lot outside of like work and business so i don't know if it's appropriate but i'll say that if the
1:01:11
freckles a man search for meaning it's just a remarkable memoir on you know perseverance and uh i think the biggest takeaway is you can't control what's happening around you that you can control your reaction to it and then i'd say a book
1:01:26
that i read recently because i was very you know uh affected by the russian invasion of ukraine i'm originally from ukraine i believe you are as well um so it hit very close to home and there have been a lot of references drawn between like the president
1:01:45
zelinski and his response in this war and winston churchill's response in 1941 when you know hitler started marching through europe and so i read a book called i think the splendid and the vile by eric larson yeah i read i read that i
1:02:03
read there did you also read it since the invasion no it's before that but uh i totally get that now reading it right now because i've been following the conflict uh very closely but for people who haven't followed the conflict or maybe
1:02:16
have only followed you know the russian you know the the war kind of in a cursory way you can put what's happening into historical context remarks are doing well uh so i feel like that book accomplishes two things number one it's like you learned something
1:02:30
about you know not so distant history that maybe you didn't know which was about you know great britain's and winston churchill's kind of courageous response in the face of you know um hitler's invasion of europe but you also can draw so many parallels to what's
1:02:45
happening today and hopefully hopefully that helps us understand what's at stake not to end on two grandiose of a note we'll go less grandiose quickly but i will add one thing that stood out in that book that is also true in ukraine
1:03:02
is how during the firebombing of the of of britain people are just like going out every day going to clubs still having that i know living their life and same thing even today ukraine is not just but but you know it's it's very
1:03:16
light i love that okay we'll move on to less yeah less serious stuff maybe uh what a transition to what's your favorite other podcast honestly there's only one other podcast that i'll listen to right now because i've just been so consumed like
1:03:32
i listen to a lot of like live streams and read a lot about the conflict which has taken me which is taking up so much of my like headspace that's not work related but i would say the all-in-one i feel like it's like a cool it's a cool way for me to just catch up on
1:03:47
everything that's going on through through their unique filter that's probably the old cool yeah i learned a lot yeah i learned a lot from that one there's so much drama on that show okay great favorite recent movie or tv show anything stand
1:03:59
out so that's another thing i've been like like since february right like i've watched like nothing like my netflix skew just keeps growing because they keep emailing me saying this new season is out i'm like oh yeah i used to like that show let me add it
1:04:14
to the cube i mean recently i had some down time the kids were with grandma so i watched hustle with adam sandler i loved that so good yeah it was good it was it's very light let's it's not like a movie is going to make you think a lot but it was like
1:04:29
just good old entertainment yeah i like that i like that summary yeah so delightful maybe one more question uh who else in the industry do you most respect as a thought leader maybe someone people may not know or if anyone else comes to mind yeah
1:04:43
that's a very good question so i would say you know first off i i do believe that some of the brightest minds honestly in any craft are people that you never hear because you know it takes a certain personality energy uh and probably a lot of other
1:05:03
circumstances right to invest more and invest in your personal brand right and also it's very hard to do that while still staying relevant as a practitioner i mean i think if i think about myself two years ago before you know starting advising
1:05:21
i was just kind of living in my grammarly cave and i felt like i was probably at the top of my craft but you know i didn't have time to pick my head up and or or maybe not even just tie but i didn't know where to start to pick my head up and and do something
1:05:35
like this i would say some people that i mean i mentioned ethan in terms of seo seo and just organic growth loops and you know content as a growth engine he is you know uh best in class who else okay so mark fisk he shows up in the reforged chats a lot
1:05:56
he was leading growth and marketing at credit karma for a while and right now he's he's an investor i think at hrg capital but he is a really really strong thought leader on all things performance marketing attribution
1:06:11
you know and just kind of paid acquisition at large those are two people that i make sure i and there are others of course but those are two who i make sure i stay in touch with at least on four-day basis because any cows on catch-up just yield so many
1:06:24
nuggets amazing where can folks find you online if they want to reach out learn more and how can listeners be useful to you honestly i don't have a very strong online presence i would say linkedin is probably the only place where i
1:06:39
keep things more recent so folks can find me there they can also find me inside of lenny's newsletter i do i do i do make an appearance there once in a while and and on that's odd sure um how can folks be helpful to me honestly
1:06:56
promote the out of lenny's newsletter and let his spot and you know if you're building awesome things come talk to me i always carve out some amount of time in my life just you know for non-commercial things right just to have conversations with
1:07:12
founders and spend 30 minutes with them on the phone expecting nothing in return and maybe you know save them some time from making some of the mistakes that i've made and help help help direct them on a more awful path so it's kind of that's about it amazing
1:07:28
yuri you are awesome thank you so much for making the time to do this i learned a ton i can't wait to get this episode out there's just so much meat to this thing dude this was good i feel like i feel like my nervousness was unfounded this
1:07:39
was super organic you are just as welcoming as as you are outside of the pod so yeah thanks for having me thanks yuri thank you so much for listening if you found this valuable you can subscribe to the show on apple podcast spotify or
1:07:57
your favorite podcast app also please consider giving us a rating or leaving a review as that really helps other listeners find the podcast you can find all past episodes or learn more about the show at lennyspodcast.com see you in the next episode