exciting welcome to another week of startup school I'm joined this week by Gustav you want to tell us a little bit about yourself maybe your background sure so I work here at YC as a partner I've been here for two and half years before that I had most of my growth and
products at Airbnb where I spent almost five years from the growth team that's a park manager and spend time on different companies before that we're working on growth as well so I feel like I've seen seeing something really good stuff it
Evan B and some really hard stuff that other companies and those that's my letting come from good stuff also delivers several lectures to the YC core participants during the bash on growth and it's kind of the main person that that our founders turn to to ask
questions so you've got the right person in the room today we're gonna take questions from the start school forum we're gonna take some from Twitter and YouTube comments if we have time but we've got some from the forum already so let's let's jump right in
so : from my education Club asks we're building a peer-to-peer lending platform Christophe you were talking the video about starting to get paying customers as soon as possible and not to use paid growth until you have paying customers
how does this work for social network platforms or platforms with network effects so historically if you look in the last ten years many of the social products were actually based on advertising so the way that you way make money would not be to charge users but
to charge advertisers debt to advertise to them what that led to is this idea that you should not try to monetize early you just try to grow grow grow and that's sort of how many of the early products Twitter Facebook LinkedIn and many others so we know snapchat that's
how they grew in the early days sorry so they were getting users on the they were getting users to use the product and then monetizing them once they correct and nearly all of them were growing without using paid marketing so they're
all growing through viral invites or word of mouth or LinkedIn use the hell're email use the email and SEO is the way the lien linking grows so basically two primary chance to LinkedIn group will be those two and I would say for products that have a kind of a
network effect where for every usually get gets on the product the product is better it really matters to get to that first million a couple million users so LinkedIn in the early days was useless unless you had some co-workers everybody connect it's just hard to build a new
advertising that's how they like make money so correct so the business model for companies either you're charging users or advertising or some other business model and they're just a lot fewer companies today they get started using advertising as a business model
the main reason is is extremely hard to compete with Google and Facebook they are the best advertising platforms and it's really it's difficult it's not like competing with TV or newspapers anymore you're competing with two really great
companies so most companies probably shouldn't be going after that business model which means they're going after a different bismallah most likely charging your users in some way and if you're going to charge your users I guess which would be a good
example something that's like a relatively new business model that involved after the ad driven kind of placement there they enable creators to actually charge money to like streamers to actually charge money to people who are consuming it and they earn you know
percentage of the the transactions right so let's go back to the question how does have an ROI calculation that means you you know how much money you make back from every user you acquire with paid marketing or you don't if you do
know how much money making back you can scale paid growth as long as you're making enough money back to pay back the money you've paid on on the marketing if you don't know how much money you're making back you can't really grow on paid growth and everything you do any
good but you just spend all your money everything is just like an experiment but it's a very time box than a limited experiment because is just not a sustainable growth and no one's gonna want to fund you unless they see you extremely clear path ahead gonna make
money and people often have this misconception that oh I just grow with paid growth and then in the future I'll come up with without I'm going to make money I don't believe that's going to work and I think that's if this sort of failure mode for
startups these days next up Michelle from critique match asks is it good to focus on growth as much as possible before implementing a monetization model that might hurt growth so a my face station model the horth growth doesn't seem like a very
good monetization model to begin with obviously you are going to want to align the way that people get value from your product and the way that people pay for your product if you're paying for say unlocking features then that's not like the best model it'd be better if you pay
for something that actually is very aligned with repeat usage or a retention of your product what are some examples like companies that we've seen recently that have kind of implemented paid monetization in still a company that needs to grow it it's like not at scale
yes I think the truth to here is like let's take the athletic as an example the Atletico is a is a YC funded company they're doing really well they are building an app for local news and the app has a subscription feature where you
really can't use the app and read this news from 150 journalists in the US unless you pay them every month and the truth for mobile apps and for many other companies that are trying to grow is that paid growth is every year becoming
a more and more important part of the growth mix of growth the composition of how you're gonna grow back in the days and people would look down and paper--the and say that's a negative way of growing or that's not a good way of growing and they would usually say that
because it's sort of like there's you think that the product is not good enough yeah but the truth is that if you look on the two platforms through which most of our tension is is at Google and Facebook they have shifted their tactics
dramatically in the last five years and and it was very hard to get free growth and paid on facebook it's it's if you look on searching Google the first four or five listings gonna be paid ads so so what those pathways doing is they're trying to monetize your usage which
means that's a SM as a founder of a new company you should lean into that and try to figure out how can I grow sustainably the problem with doing that is sort of like Yaga and a ping thanks for every news that you get to these two platforms but the reality is
the some of the platforms that we know about a big portion of the earth are coming from these two platforms Instagram Facebook Google are a core component of the growth if you look on something like Airbnb search marketing through Google it was
always very critical to our growth strategy and is extremely core to many other travel companies so increase the paid links and that's what they're doing every year so to grow organically on crook on Google is getting different more difficult as well so back to the
question like the monetization model that you implement can't really hurt your growth and it should be there early so you can optimize it and then you use that monetization to grow otherwise is going to be difficult to say like it's
going difficult to grow organically from the beginning like you can do that to a certain level but I would argue that there are certain there's certainly a set of ways to do paid growth sustainably but that it requires you to make money I'll kind of synthesize a
couple things that gostop said here so by putting in a paid model early you're beginning to get knowledge about what you're like conversion funnel costs and so if you know how much money you're gonna make per user on your site that gives you the ability to experiment more
effectively with paid marketing yeah because you know how much money you're gonna earn on the other side if you don't have that then as gustave said you're just running these experiments that don't you that that don't really have like viable outcomes like you can't
actually benefit once you learn how much it costs like the athletic as an example I don't know how much to charge per month let's say that charge $15 a month for their subscription for local sports if you live in Toronto and followed the
Toronto Maple Leafs you might be targeted with an ad on Facebook saying download the Alethia apps app and get local news from independent journalists on their app for $15 a month because they know what the conversion rate is for for that click that comes from
Facebook and they know how much each click is roughly worth they can actually scale up paid marketing and do it pretty effectively just an example but this is how many companies today are growing this ties in pretty well to the next question
Suren from Ivanka asks what tools or software have contributed to most of the success as a product growth leader like what the serums that you use Liebchen lead Automation so every company and every category companies have a different set
of tools so if you consumer company or a SAS company or hardware company you gonna use different tools to measure that the product I would say at the very basics you wouldn't know what's going on and knowing what's going on for most companies me means having some kind of
event analytics so expand amplitude or segments or some combination of those or heap those are all good tools that you can use for the very basic stuff in the sense how many people are coming in I mean what are they doing when they come
in how they flowing through my product if their core flows in your product like an example of the Atlantic what is the onboarding a sign up flow what's the payment conversion flow what is they returning user metrics like those tools will solve all that for you
and at the minimum those are the things that you need Google Analytics is typically not enough for most companies like it will be good for Google specific stuff but I would recommend something like amplitude or mix panel you can use
segment two to integrate those two and then that's kind of like a baseline like it's hard to find a company that shouldn't have what they're building SAS whether you're building it like enterprise whether you're building like even software that you're individually
like onboarding the first few users you do want to have that baseline analytics that you can always reference yeah and then depending on this and this goes from day one you you be this you're put in from day one then depending on the stage of the company you use different
tools so like you're not gonna do automated sales tools until you were at the stage where you can automate sales in the beginning most of times you're going to be doing things that don't scale and I recommend you to read that Paul Graham article and how do you do
that you're not going to solve your sales problem you from your computer necessarily if that makes sense you're trying to find a customer and fail customers but over time as you're step building things out you can start to
sort of like build use tools to build these for P to build things that you do but most people that are asking for these tools in the very beginning I probably not thinking about right they should probably just go out of the office and meet their first 50 or 100
customers and get to know them more than trying to interact with them through a tool like here's an example I was talking to a founder of Y she found the other day and they were asking about how to automate email system I was like how many emails
are you sending out or who's the target for these emails and they were like oh well it's actually otherwise he founders and I said whoa like that is totally not the right direction to go at the beginning when you're forming like an individual when you're selling just send
the email from your own account like think about it this way you get a lot of email the ones that you respond to are probably from your friends or family or other cult co-workers and they look like real email like just text so it turns out that those actually have a much
higher conversion rate especially in the early days as you're like forming these one-on-one connections yeah another good example is customer service so so anyone is trying to build out a send desk or some kind of forum with from the beginning aren't attempting to
learn enough from the users so ask the founder of a company I would want to receive all the emails from all my customers directed into my email inbox and I want to reply with my name so that they feel surprised that they're hearing
from the founder of the company that is like I can do that and there's a great story from ABB here Joe and Brian actually their cell phone numbers of what they shared for the first couple hundred hosts and they've kept calling him for years and they and this than Joe
didn't change his numbers so like his numbers out there and that was not negative that's a really positive thing he learned so much English shape with these hosts over over over the both of those years so as a first time founder like as a founder getting started you
don't really want a lot of systems besides tracking how your activity on the product is happening to you interact with your customers you want to just do it directly so that leads into the next question quite well I come from haystack
asks customers often have a pain but they don't know how to solve it this results in pretty vague feedback how do you take feedback and iterate on product so a common question it with a common way to do use of research just ask
extremely open-ended questions and and and not interrupt them too much and not make a lot of assumptions so so one thing we said it would ever be when we were launching a new product so we would take that product either on a laptop or on a phone and we just walk down
in our office and we would show that the screens to random people to sat down there and be like just tell me what you think this is wait your colleagues are just two random people two random people like in the lobby or in the lobby our
product wasn't meant to be for the mainstream so everybody should be able to understand it and your post coming into the you know everybody and then we just just slide through the screenshots of the things that we're trying to build and you spent like what you think is
this what you think this means like what do you think student product feedback yes and like if they didn't get it like if you ask 10 people and most didn't get it it wasn't self I mean you're not gonna be there looking over the shoulder with
any of the customers they're just gonna be their own on their own alone so so if most people out of a group of 10 random random people aren't getting it it's not good enough it's not like sort of like obvious enough how the product works and the other thing that we did there's two
other things we sometimes would use something about use of testing calm I don't know actually not sure if I'll recommend them anymore but but at the time they were they were good enough for the problem we're solving you do the same thing we would ask users to do
something very simple in the Airbnb app and then you are you suggesting a calm you would some random person would would get paid to do that task and then record themselves as to doing it and then speak up and say what they're doing and it's
like this and then you move a little watch i opening I watch 10 of these videos and people are pulling their hairs the designers are the probable and engineers are pulling their hair because they can't believe what people can't get
what they're doing but the truth is that most people don't understand most products and if you come in with the assumptions in these meetings it's not gonna work so you have to like just let it out there and learn from that so to play on this we're not one of the things
that I've found is like we always talk about data we talk about this like you know track get get your analytics set up and track all this data but often times like a founders confronted with like well what do I do I have all this data so I think
what you mentioned is actually one way to cut through that so if the data shows that you're having this problem or if you're having this conversion one of the ways that you can get like a solid answer is to spin up one of these user
testing yeah like ten minutes thirty minutes and ask the person like just ask five people to go through the pain point yeah like I my hunch is that most of like most you don't have to ask housing people to get that anything it's like you used to
be searched every used to say ten people was good enough to get like a guidance unlike is good or bad and because they could be you're big enough big enough sample could be your site can be a friends I think the key thing is did not give guidance not don't tell so like
what you're supposed to do just tell them either goal or just ask them to speak up when they're going through the flow and I think from my experience that makes you want to standardize things that make you want to use extremely clear language like people try to be
smart about language in their app and clever about how do you market the product is those things tend to go extremely wrong and like what you really want to do is just use kind of user interface language like what happens here click on this button what happens
here that's my experience of how you make something people actually understand how to use the next one is a question that a bunch of you asked how do you grow a multi-sided market place and retain users on that market place so I think there's many things in this
question I get this question a lot so I can talk about it I'm gonna talk about exactly how I would kickstart a new marketplace today and then why people I think ask this question might not be exactly what I'm going to talk about so
look about it a second a first if I was trying to marketplace today I would try to build up the supply first and I would build up the supply sort of artificially to the level a small number of supply artificially to a level where it would reflect what the idea by I haven't have
the product so let's take an uber or lyft first example if I would launch uber lyft today in a new city I would find 10 drivers it could be friends I would make sure that they are driving we're lifting a brick for the next four or five days and
then I would go out it get the friends that yeah they're just gonna drive that committing to drive for all that time I basically have now artificially created this like 10 day or something of 10 drivers who's going to be on the streets
and then I'll go and get the demand afterwards so we actually have an example from one of the companies it's called a plea yeah it's an online marketplace that lets founders test out their experiments with their target with target audiences to validate their
assumptions which is almost exactly like we were talking about yeah so the person is asking like how do we how do we get this marketplace going yeah so if I would build rebuilding that that idea I would get 10 really good people there
are my friends maybe you have to pay them maybe you don't maybe they're willing to sit through X number of these or sessions I mean you must have a lot of friends who are founders as well right yeah get them to volunteer a little bit of time but don't go out and
get like strangers for the supply yeah like validate that there's the man before you go and figure out how to get the supply and then have them subdue it and so see what the man feedback from the demand you've got this like early supply so you've got your friends all
volunteering their time on this market let's talk about like how do you I mean the level of quality so in the earlier surviving B we actually allowed to supply like listings to sign up without a user photo without a photo of the house like how crazy is that like that
was a dumb as that he ever but it took us a while to figure out that was a really dumb idea what you really want of course is like cual can't list unless you have quality you can't be an uber driver unless you have a nice car or you're a safe driver and I think this is
one of the things that you can do now when you before you have scale so you can actually curate this initial list I'd like your 10 friends you don't make them build the profile like let them let build the profile for them post it like
just do everything and once you've demanded you once once you valid is this applies in this case of goober or in this case of the use of testing com if it got unto people on the demand side you do it again like if I use uber and
had a good experience chances are I do it again in the next 10 days and if I had a good experience and he's up to you to define what good experiences in how you're clearly supplying if I do it again that's a really good sign the people are voluntarily coming back and
either doing this experimentation side or the uber a second time it's like on this experimentation question so you're building a marketplace you you've got your 10 or 15 friends like that you're kind of coercing into being those early
people and now you're going out onto the supply side and you're admitting it sorry yeah yeah the man side exactly so like you've got the first people that are coming in the door saying like hey could you test out this feature how do you how do you retain them like how do
you get them to come back so I would always ask people that come in like what was the experience like can the review the site or just like get some like like a phone yeah yeah quality of feedback from from these people of whether they had a good a good about
experience it's sometimes hard to get quality feedback from people had a bad experience because they tend to like just not care and sending the surveys for people have retained that are sort of churned users is always tricky but it's very very important because you
want to understand why people didn't find that a good experience and if they didn't have a good experience you need to work with a demand and tried to understand what about the idea you had in your head for the supplies not correct it's like debugging the
debugging the marketplace yes one of the things that I've seen founders like benefit a lot from is asking for phone number during the signup flow especially during the early days so that if something does go wrong or if you want to add they actually have a great
experience you can like physically like you could phone them up and get an answer like emails sometimes like it's easy to push off it's easy to blow that off for like a weekend you might be like in the dark but this person had a great
experience but I can't get them on the phone alright I can't I can't get word back and used like a what loan once you've gone through this phase and like now demand really wants what you're offering now you have to figure out the price like literally what is the
mandible in to pay for that quality supply and that is the thing you is not a straightforward either like in the case of this experiment like getting a friends to do reviewing experiments or ideas the friends might not be willing to do that at the price that I'm willing
to pay so as you suggesting a calm I think I pay them forty five dollars per test I'm going to assume that twenty dollars maybe it went made it the ways to that person that was reviewing me I think some people want to do that I don't see
how everyone I'm gonna do that for twenty dollars you know so I think this really depends on sort of like this is what really what you trying to figure out and most of us would rent out our home for some price maybe we're not all of us will do it for the current market
price so like that's why I mean not everybody the world isn't there be hosts for example and your pricing is kind of part part of your product market fit journey like you'll be experimenting and adjusting that as you as you tune it
right next up Daniel from story low asks a pretty tactical question they makes custom photography easy and affordable so he's asking can you outline the pros and cons of incentivized growth example like Airbnb the invite a friend for 25 bucks or uber uber is subsidized rides
great so I spent a lot of time on this and I worked on the referral program for most of the time I was there being be a grow a significant portion of the growth and from my experience referral programs have a couple criteria to make them work
well the first one they're the products that already have word-of-mouth they already have people tell their friends about it so they're not private practice in that in essence they also sometime require a friend the product is radical
enough that their friend can really help convince me about using the product so great examples here are uber or Airbnb and some of the things that are just new that I might not trust without without a friend telling me about it so you're just just a dive in so you're
saying like the products we're having another friend recommend it actually makes the new customer more likely to buy or that the problem gets better if the if your friends are on it as well maybe I wouldn't trust the product maybe
I wouldn't trust the idea unless a friend recommended this to me so I wouldn't trust and that's why you might put in a referral program like think of this like the current the ever beat today and the uber of today are very different than the first month of those
two product most people would be alike scared of those two ideas the first time they heard about it and it's only until the minute it gets into the mainstream where you now get comfortable for everyone to do to do it in that early days if the idea is that
radical having a friend convince you that that is not scary is one of them is a really good fundamental foundation for a good referral program because we're afros optimally they do is they just like push them over the edge a little bit to do it and that pushes the person
they receive the referral over the edge to actually provide the product and it doesn't a couple percentages on each side and that could really matter so what's interesting is that you haven't mentioned the actual savings or the percent off like that is almost not it's
just really part of yeah so that the money is important but that the money could not just be added to any product like I think it does matter that the product kind of requires this in some sense and then the second thing is that the
plugs to have a regularly active user base so what I mean by that like probably only used once in your lifetime referrals are like less likely to work well because you only have one chance to get someone to actually tell their friends versus every time I use lyft or
uber I get reminded that I could give my friends $25 yeah is actually there is some conversion every single time I do that and for a baby for example after you made a booking we have two left over you with a 2x4 best places to ask someone to in my friend Kevin B and I
think we had a 20% of click-through rate on both those places so 20% of everyone who David review or made a booking actually went into the referral fro and half of them I think ended up sending invites so that was pretty effective but
people weren't coming back to him and B regularly in a way that they were willing to be interrupted right you only do like an Airbnb if you're if you're staying you only do it once a year or once sponsors people travel here and then the reason I mentioned this is
because most people they don't think about this where do I get notified or kind of interrupted about the referral program they just put like I'll just put it in the menu I put in their settings menu but they're not coming back to Airbnb people don't like yeah the
dimetric that you want to track to figure this out is percent of weekly active users to see the link for a full program and if you do track their metric and you look at the people do your settings page no one's gonna go to your settings page
if you put in the menu people are typically in an interaction of doing something else so you can't put it in like in the in the sort of like the workflow that the users going through because they don't want to really they don't really want to be interrupted when
they're doing what they're doing so that's the first couple things the second thing is like referrals is paid marketing in the sense that you need to be able to make the money back to be giving away so a lot of people get excited by this idea of referrals but
they're not making enough money on the backend to actually make it work so they're like maybe they make $10 per users the truth is that most Americans don't care to take any action for five dollars because he's five dollars in each side people just don't care about
it so then you need to have some minimum number and I think that I'm just like $15 or more that you need to be able to give away otherwise people just aren't gonna care of everybody's not gonna work well I think there and be your froat
program right now is $55 tutors here in the US they or something to this to the sender those are meaningful numbers and that can be ten percent fifty percent of your trip as you travel for the first time so it can be really really impactful we saw
there B is that this doesn't matter next question is from Justin at lose looks around looks my co friend and I have built lounge looks lounge looks provides online tools to home based beauty and grooming professionals to help them grow
and manage their clientele so all of their customer acquisition right now comes from outrage cold emails DMS on Instagram and it's working they don't feel like it's scalable especially if they want to grow faster at what point do they need to be honest with
themselves and figure out like what the scalable growth channel is here and how long can they stay on this kind of direct method great question when you switch to scaling scaling growth channels the truth is they're only a couple really scaling growth
channels in the world paid marketing i'm the different type a marketing SEO word of mouth sales viral growth and maybe it one or more like there's not that many others so first you think of like which of these channels actually fit my
product well and so this is like in the in the talk that I gave there's on YouTube I have a slide that I borrowed from another another person that is sort of like a court here and how you figure out which which of these categories is my part fit into I think what you
describing here is probably a product that on the demand side fits well into marketing because of the level of targeting that you can do and it seems like lunch looks have revenue and that revenue can be used to pay for that paid marketing the challenge with paid
marketing is that you don't want to reacquire users so in the case of every me for example go matter that that example we wouldn't want to go to and get pay for you to click on our Google ad every time you make a booking we only want to do that the first time so after
that we want you to install there be apps and next time you do a search for for travel you do in our app most companies you think about this that way in that the first time you might be acquiring user through paid marketing but you don't want to do that
concurrently because he adds a lot of risk to to your sort of girl strategy much better if you would then if you basically have some natural entry point that it use are gonna open that could be an app it could be some email or it's just some way that
I'm not going to have you have to pay for we acquire that user so in this case I think the marking is probably the most likely place referrals might be the second most likely and the good news is if you are earning money you can begin to like experiment with those because
you know how much the customer is worth after you you know close them cool next up is your experience this is a max from Malo in your experience especially at Airbnb what are some of the key products sales activities that you did to reduce
lead time and to what extent did lead time matter I think but I think lead time would be like how long it takes to close a sale oh it's a neighbor B's case this is not super poseable except for on the consumer and the consumer side
travel the truth is that we are all as consumer pretty susceptible to things like exclusivity scarcity organ C messages like that and now is those are in some cases dark patterns and dark pants what I mean by that it's like they're just messing with our minds but
actually not really any any bat value like the urgency thing yeah yeah but like what we did to MB the way we thought about that is like this Eustace staff has information so let's say you do a search on San Francisco and there's only 40% of the listings left
we should tell you that because that gives you a real sense of urgency that you need to book soon because if you if you are booking some of the last 10% then you might not get a good deal like it might be a pretty bad deal because all the good ones already booked by said
what everyone else and everyone is rational so our view was to surface these these tactics urgency scarcity exclusivity sort of like in an in an informal way and not in in a way that kind of like overpowering overbearing and so like mess with your head another
example is what we call a unique find or rare find so if you found a listing we would literally tell you this listen is usually it is a rare find and that's just or like that's a positive signal about the listing instead of saying like it's on a
sold-out or something yeah something like that that's a really I like that I've seen the verify of the rare find and it's the truth is that their work extremely well because as users we react well to those messages that's the reality would I
prefer that didn't work well well I think you just need to think hard about what is the perception of the tactics that you use as you're trying to get people to do what you're doing and all all the commerce i'ts for consumers have some level of these tactics but you need
to just make sure that they are user friendly and they're not just there is messing with your psychology of that actually kind of giving you some real value yeah we got a question from the YouTube comments mo asked how would you implement a referral program in b2b
where business can refer another business for a bonus this is a good question so it's complicated a couple of couple cents so our first would be to be an example that would be if I work for a SAS service and I get finer dollars tour
for another customers through that service the thing that they think about first is what is the likeliness that I know other people in my role that we buy to the service so let's say the SAS service is it's a payroll software what's the likeliness that I know other
people work in HR and other companies that would be bio so the payroll software in the founder community probably fairly true but in the larger mainstream were like less likely so now there are exceptions and there are certainly cases what this could work
there are some legal implications like you can't give someone a thousand bucks to then put in your pocket and then refer and then sort like convince the company my company to start using software and I put the money in the pocket that I think that's basically
bribery so there are legal problems with doing this I don't know exactly where the line is drawn there now I think you should well that only really said like gussto has a thing that's Gusto's a payroll software they have a very
prominent like refer someone else and you get five hundred bucks cash yeah so I think I think the case with this works really well is for exam owner like founder own own businesses so like small businesses it's very often that person therefore is also the owner
of the business and I don't think there's an illegal problems if I and where that would make a meaningful amount like five hundred bucks to a beauty salon that's wrecking ball businesses and I refer you a payroll software and you get a few more dollars
off your payroll software yeah you're the owner of the business that makes a ton of sense because it goes back into the yeah and I think I think for small business does these works really well for larger ones I think this gets really complicated but I think for small
businesses it's not a bad idea at all but I think the other thing that I would say is they're like helping people there are ways that you can be smart about who might like helping people like for example you can use Google Apps and they
go with Google contacts to so like fan people IDs in people's head of who might need the software so I think probably two to long everything to go into right now but I think there are things that you can do to just like at least plant
the idea in the head of like who else do you know that runs payroll or who else do you know that needs this type of specific sass offer and people always do and you can do it during your customer interviews because as you're talking to them or when you're onboarding them you
can always like if they if they express interest if they're if they're excited but the product people like do you think your friends might be interested like who are they tell me about their businesses sometimes their roles are more fluid so example recruiting people
are more likely to move between companies and recruiting roles in my experience are very good at sharing software and tools between they're having different companies I've got a question from Erica at Kiefer labs how do you reach out and educate people on
the amazing benefits of your product and the utmost solution it provides if you have an unfamiliar product and name like probiotic kefir how do you break the wall and scale it seems like a general question what do you think Eric I think
that I mean I would take this question about like branding how do you how do you as a start-up founder like there's two types of products there's one where you need to educate the market and teach people about like this new product or new category and then there's other one
where you're you're building a competing product to it an existing incumbent and you have to price it or market it accordingly I would say that this question is more route like how do you how do you build like enthusiasm for something that's
completely new I think it's different in consumer as for b2b I think for b2b what I would start with is two things I would first show them the product so like I've learned this in working with a bunch of YC companies that it can really help just including a screenshot or a video
what the practice trying to explain this new idea for someone the south of an existing public is not a new problem you have typically can be much harder than to just show them the product so we found that in b2b SAS companies he's
like hi including screenshot or a video how it works which is tough to do because oftentimes when people include screenshots they're like I'm the entire product yes you need to have like screech I need to be able to specific thing that people will recognize and be
like a-ha that's the thing that I can't see myself using this yes yes so like I can't think of a million things here and the second thing on the b2b side is just include social proof so a lot of people are afraid of trying new things unless
there's someone that they trust have tried it so like would you try this new payroll software No would you try the new Paris off that ambien Dropbox is using yes and kind of to tie this back to your point about referrals this is where the referral program kicks in
because if you're selling something that's actually kind of new but you have a trusted friend who's the one who's like introducing the product you will talk about like soil and for example so like I think you're selling a kefir I
think it's like yogurt right so Solon was a product that was like pretty new like people eat food but they definitely didn't need Soylent and so at the beginning they they had this entire community where people like participated on this forum and they would talk about
it and I'm sure that those people were the ones who were telling the first other new users that they should try this thing called Soylent yeah I think consumer products tempting if they are new enough they tend to so like have
were mouth built into them if they don't that's the problem and the category but this is difficult I think it's a very private product it's like private products that are brand new it's just like they're just it's an example like stuff that I just put in used in my
bathroom they don't talk to other people about like like like hips or something yeah we're not necessarily gonna be like rebroadcasting that you're like a hair loss hair loss products like those things are typically not things that just let itself to well for these these
conversations it's interesting they flipped it on his head they actually like brought it into the conversation a little bit so that might have been a smart move yeah and then it was one more point on that question the second thing is like I
would for this question try to get some brand Association in the sense like try to get written up in some make papers since we're like some some authoritative but of media that you know about and then include so likely those two that it
like if there's a new product and never heard of but if you have trans written about it like I'm certainly gonna increase my like they don't have to write about your specific product they just have to write about this category and so if you can like attach yourself
to a category that's on the rise that would help I wouldn't go extremely far to get get this down but I would say that for something brand new I never heard of having some level of social proof from some you know it does help next question
is how do you balance growth against the backlog of cosmetic quality of life bugs and tickets it's a false false question as I started founder you always have to do everything and then like it's really hard to say oh well I see you have allowed me to work on growth so don't
have to work on quality yeah or vice versa like that is not sort of like how you think you think about these these so there's attention to it right there's always attention but there's never gonna be a black-and-white situation they are
tightly coupled and if you have bad quality of product you're not gonna get growth and if you have lots of bug buds and tickets people are gonna turn and you're not gonna get growth because like having retained users is typically what gives you a growth I think the most
important thing that I would advise this founder of missus like truly try to understand what drives growth and what drives retention or white what drives to churn like what make people unhappiness not these new product what people makes
people happy to use your product I'll give you an idea what people actually care about in your product and and from that point like once you have that information this question gets easier to answer another question from the YouTube stream would you recommend SEO for
early-stage startups so SEO is interesting as CEO is sort of like still a very big channel because most people in the world still use Google to answer most questions that are not daily questions and the questions that we asked to will are changing every year so
so this year we might ask the question like who is and then like a politician name that we didn't ask a year ago so like the search volume and then a key where star goes into Google actually changes quite a bit or what is Soylent you might have not asked that five years
ago so for that perspective like if you can capture the keywords of something new it's possible that this can work really well for you if the question is what should I do in Paris you're not gonna be able to rank for that most likely
because there are five other companies there there have a lot of companies and a hundred people team working that trying to rank for that specific question so think about the question of trying to rank for and how new are they then new where they are the chance the
bigger the chance you can actually succeed if these are established questions to people asking for years like what is a good mortgage like you're not gonna be able to rank for that because it's so competitive I'll take you years of things that you might not
even control to be able to do that so we met first question like like like is this something is good to think about it around the idea of a question that people are asking know it give me any kind of keywords but like the words that
people put into Google are the ones that you should yeah you should think through the second thing is is there's two ways to really grow SEO want us to write a lot of good high-quality content they get ranked then the second thing is to
do something that's automated where you have a lot of content that sort like automatically created so everybody is more than latter so a B would have lots of landing pages for different cities were there different listings or even just different listings some of them sell for
waste who would organize those listing that's more automatic automatically created versus many startups in the other day so it would just write really good content so maybe in the case of hair-loss you would literally write super high quality unique content about
that those questions and you just always start with the keywords itself so so before you try to figure out so like in this apostle figure yes it was a good idea you want to go to Google you want to use a tool called the Keyword planner
and search for those keywords and see how much traffic they get if they get a lot of in social media marketing channels these days they keep they seem to keep changing Facebook Instagram snapchat tick-tock where would you put your focus this is probably that where
I'm the least expert and maybe one of the reasonably exclusive because they do change so often so it's really hard to keep track on one end I would say quite fake when they run into companies who are successful at getting say influencer marketing or some snapchat filter or
something in that world working I'm very rarely running to companies to said we made that work and now we're a light out of known users because these tactics tend to be quickly saturated and the companies that you're building on top
tend to be not in favor of giving with free traffic they want to charge for that traffic so they don't really typically allow you to do some hack for too long and then they tend to remove it and if you compare for example Instagram with previous platforms the inscribe
doesn't really allow links why because they don't want spam and they don't want people to sort of like hijack the the the app for a bunch of commercial messages they want the commercial messages as they exist inside ads that just that payload money that are the
money so the one channel in social media marketing that does work is to buy ads from them that is a truly scalable channel and tick tock for example I believe was one of the biggest advertisers on Facebook and Instagram the year before 2018 or 2019 but they
literally just bought ads spent a billion and then other people will discover it they'll come in either at people who discovered or the platform itself will make that getting harder next question is from Jose at arcade quickly or could take up to a year how
would you measure retention for a service that could take a long time if you have dropouts is an indication that people don't like the product so I would start by having probably two metrics the first motor would be dropouts and the
second metric would be some metrics that predicts dropouts so my guess that the people that would drop out whether people that didn't take the course anymore if you find that that's there's a strong correlation between people to stop taking your course then
drop out then you can actually start measuring that first metric like our people stopped taking the course because most likely to lead to a drop off drop out so I think I would just sort of like try to figure out what's the predictiveness of someone stop using a
service and everybody for example if someone left a one-star you highly predictive of someone not looking again so we should definitely try to avoid people having 1 1 1 star review experience or people never searching on the side for another year after their
first booking is also quite predictable of them not looking again so there are these kind of like predictive metrics so to speak that can predict either the next big good behavior or select bad for you so that would be my recommendation
try to figure out what predicts people drop me up Michael from high low high low is building a platform where users share the high and low points of their workday anonymously with their team leaders he asks should you say yes to everything for example we had a company data
company of 100 and 150 employees approached them and want to implement us even at the MVP stage he thinks that if he says yes is no idea what they're going to do in terms of actually handling that so if you have demand for your product it's a great time I think
to just ask for a price and see the what they willing to pay yeah if they're willing to pay 50 bucks a month per employee or 20 bucks a month per employee he's like sure because if you don't do that it sounds like a great
first customer if they're not willing to pay now they might not willing to actually use it like they're not that much buying from the company to actually care about what you're building and it might this idea sounds new and interesting but new enough that I
suspect a lot of people they hear about this idea I would say that sounds interesting I think I want to try that try it but they didn't say I would try that for 50 bucks a month for one of your contract for mine please yeah I would be I would be surprising to say
that right away so in this scenario I think you really need to figure out like what is their value and this might take some time to figure out what the value you can charge for your spot but the good news is is it sounds like people are excited and they're
that they're excited and trying even an MVP and you really want to get that like the danger here would be taking this as positive feedback and then going and continuing to build your product without interacting with the customer so the
right move I think is what what Gustav said is to go back to them and say would you actually like be a paid customer of this early MVP product if they say yes then I mean you just got your first customer if they say no you'll figure out what is the Delta between what your
MVP is and what they would be willing to pay you for oh sorry oh oh there we go okay this is a question from Twitter where to turi Airbnb for luggage sharing the concept of luggage sharing is quite novel in India and the market is hugely untapped how do we scale our product or
concept to a larger audience and with investors it's a great question I actually use my first like like a sharing app last year no way what is your use case my use case was I just checked out my everybody in in and we were saying in Harlem and
we're going to Penn Station to the train to DC and I didn't want to carry my bag around for a couple months a couple couple hours yeah and that's natural hotels will do this for you everybody's does not do this for you if you have a
checkout at 11 a.m. so the rest of the day you kind of have to carry your luggage around so there's a clear need now there isn't actually great product for this they're a bunch of products and I try to couple them but there's no one that is exactly what I want so what I
would do here is I would build an app an app allows you to a once someone have found you through Google which is the most likely place you'll find this install the app and keep the app on the phone the app is gonna be the thing that I remember next time I need this I just
go to the app and it automatically opens the app in the map and see whatever I have it in the area where I type in an address the second thing is you wanna make sure you have some level of trust so the one thing experienced storing my
luggage actually just or mileage in a restaurant sort of at the side and it felt like if they weren't looking around some of them come in to grab my luggage and I didn't feel safe that was gonna be my computer the second thing is like it
you really think you to build in sound level of guidance to the stood locations and some level maybe a guarantee that you can offer that makes me trust that my luggage is safe this the third thing is like you don't need to figure out how can I put this in
front of people every single time they check out there there baby you can try to talk to everybody but this is development team it will be hard if you're small startup they might not care about you unless you have thousands of locations around the world well this
is possible but it would be a pretty good idea to integrate that so like after you made a book and just like you have rental cars it's time to hotel booking cetera but you could also do that without actually talking to Airbnb you could talk to Airbnb hosts directly
so every Airbnb host sends a little pre formatted email with every - every time someone checks it has like the address how to get there and like how to get there from the airport you could maybe convince some of them to include a little line in it saying and then
absolutely and the good idea the cool cool thing with this idea is you can start just like everybody start you start in the big cities so there's a lot of like they do a lot of New York London like all the places where people did a
lot of travelers here where you definitely need to consider your luggage and and I think again think of the cities to where you walk a lot probably LA it wouldn't be the best place because I can bring I'm not gonna walk around the lake as much as I will do somewhere
else start with cities we can you need to walk a lot get a bunch of places that you can sort of luggage that are all around the city but specifically where people are gonna go next so in that is like the airport or that is the train
station or whatever the people are going next that's where probably I'm gonna pick up my leg like a job afterwards that's the innovation I haven't seen yet here is sort of like I open the app I push a button and within 10 minutes someone comes and pick up a language mmm
that is the information I was hoping for I would have paid like 15 20 bucks just have someone get my luggage which makes sense like you could piece that together using on demand lightly yeah like uber you order an uber and take my luggage
you heard it here first good and then drive my luggage to where I'm gonna pick it up I would pay 20 bucks you know I have to dry my my luggage around all day but no one was offering that did that does not exist as far as I know but I think that would be pretty good idea I
don't even store it in like a restaurant you can stores on the back you want to hear this cool thing so in in Japan you can actually drop your luggage off at any 7-eleven and have it sent through like some sort of network to their hotel
that you're gonna be at it's like a very cool system believe that once people have dust this there's once they'll do it forever so once you've realized that this was a easiest way to care about like a shoe at the day yeah people do it forever so I
certainly think there's more to explore here and I think there will be a company a shopping shopping like absolutely yeah even like the luggage like the Mike sent back to home country there's all kinds of innovation you can do here but the companies that exist today are very
small they are not even apps that use websites that did the work it was very cheap they actually used hotels to some extent could tell us one additional revenue now that everybody's going but there was nothing that was like there's
no plan that I know of so I think there's certainly an opportunity for someone to build this company and and you just have to figure out how much people are going to pay but I believe people probably to pay twenty thirty dollars just to do this over a day next
question we'll get through a couple more Joseph from Metro push Metro push is an application that sends push push notifications from public service broadcasters to their customers they decided to offer their product with one year free before an ad-free subscription
and they think it's a pretty good deal are they hurting themselves by offering a free trial and only relying on ads for revenue yes I don't think you need to offer your product for a year for free I think you can offer a longest that would
make sense to me would be two weeks or a month that would be the longest type of because what are you really looking for is someone to start using your product build some basic like basically onboard themself and try to figure out what the
progress and so is it do I find valuable maybe I again take the out the atletico I assign it to the Atlantic I've read four articles about Toronto my believes and I'm like laughs this is a great great app like that's all you need to know about how the app works you don't
need to use that for free for another month I think at that point you'll want to start you want to get someone to pay so I think that's probably mistake to do it for a whole year the revenue you'll make from advertising versus revenue
make from from subscriber is going to be at whatever like 10 to 20 X difference so you're gonna make a lot more money from subscribers even though they'd be a lot fewer subscribers and yet advertisers it's just very difficult term and like a generic and based platform
they're using some kind of admah tour today and make a lot of money like because the the CPM they cut the the earnings are just not there you were going to make from a very active product summer between zero and fifty cents a month at the most probably less than
that and that's with like engagement of multiple minutes per day oh yeah for sure so so most likely talking about a couple of cents to ten cents per user per month which is like just not worth it like if that's like one one dollar a year just can nothing you can you can
you can't acquire new customers for that you can't service them there's no customer support you can't buy content it's a basically having engineering ad ad networks today doesn't build sustainable company and I don't think investors would only fund you if that's
what you're serious about to monetize upon good news is that users consumers are getting more comfortable with micro transactions paying for subscriptions like for example we have a company called sub stack that went through YC about a year ago they enable anyone to
start a female newsletter that you can actually charge money for I think this was somewhat of like a revolutionary concept a year ago like who would pay for an email subscription and it turns out a lot of people are because they get
this reliable content kind of on a regular basis from a high cult high quality writer and they feel good because even the person that's writing it is like earning you know a good wage and it fundamentally solves a societal problem in that now the business models
in line with the actual users of the product and they're not in conflict which always I mean not just Facebook but even the newspapers have some of those joke those challenges absolutely next up is from marina from growth channel we want to hear more about user
generated growth strategies that can be applied to b2b SAS companies okay so the way that you would win as a b2b company today is to make a new product maybe solves an existing need and then just apply them like the very best consumer
grade growth skills to that that that's product because movie people they're competing with aren't gonna do that they're gonna do a very traditional stuff case studies like old-school marketing interests are going to big events they're not gonna do invite flows
they're not and do super targeted and Facebook they're not gonna do a lot of things that they're not a great referral program and not gonna build these things into the product so so if I would try to grow inside a company I would connect
with the Google I would try to figure out if I can get hold of the email I just spoke from some of the employees I would pick out the emails from the co-workers like based on the domain so maybe like my camera comm would be the domain that like look-alike audiences
from know I'm inside a company okay inside a company how to grow between companies I think it's a little trickier let's see you example the idea that we had question was should they be looking at over yeah let's live rallies yeah morality
there's there's certainly gonna be intercompany virality let's say collaboration on document they are also rally that goes asset of that so some documents are by nature or something you collaborate with the broader world world
with so if I would say air table I will I will look I will try to figure out what are the most viral documents exist today in the world for example the Burning Man packing list is one spreadsheet I remember being very viral it was like 10,000 people and tens
of thousand all I can give her she is a good one specially we just went around was like it's way packed but it pretty mad I would replicate that on air table and I would think of all the other viral documents that are just getting mass
distribution and I would just see if I can do the same and what's in fact like that's that's an enterprise like SAS product where you pay like there's it if you if you win the customer they're paying like 25 bucks a month or something like that I would just like
make it viral I would also make it embeddable that would take the air table table and be like can you embed that on your website and so that everyone comes there and trying to do something specific I actually see that air table that's how I reached like the broader market how did
reach between companies I think is a little trickier because like you should think hard about what do I do that relates to other employees and other companies let's look at slack yeah so like slack has the ability for you to add an employee at another
company into your slack room without them having like their own slack and just like you give them what an account that opens into what that's a great method if you could do something like that that's really good so I think he like
for virality always thinking think about what is them sort of like what's the piece of content that I'm actually collaborating on versus or like okay I'm just like figure out a way to invite a lot of people like I think that's less exciting so I build it into the product
rather than just the referral strategy so you like it like in the Google Docs you can just like at someone and they can give a comment in your document you can have anybody in your email address book that's pretty viral thing just have to think about like what Google Docs can
I do that for and then growing inside companies I think you really want to find a way to utilize the address book of your Google s asset you Google Apps account I think that's that's gonna be the core way to do it it's like often get their contact and
then yeah give them all accounts well you want to figure out like so like what what you should share to these other emails and like what what does an employee benefit from sharing and that could be different things for different products the second thing is you want to
make every document very easily copyable there's a YC company be funded that creates and a link basis so like you can take any any link and then you can say air slash and then anything and then you can basically share their own the office
and then that company offers that service but that links becomes sort of like physically viral because they know that air slash something that's going going yeah there's a company but basically like there's a physical biology to to to that idea inside a
company for example cool well that's it for today thanks very much because thought there's a lot of actionable advice that we got in there and yeah we'll join you we'll be back next week for another live stream thank you so much thanks