
51 segments available
Brian Balfour is the founder of Reforge, the former VP of Growth at HubSpot, and a student (and teacher) of product growth. Brian has studied every major platform shift—from Facebook to Apple to Google—and he’s spotted a pattern that’s about to repeat with ChatGPT. *In this conversation, you’ll learn:* 1. The 4-step cycle every platform follows (and why ChatGPT just entered step 2) 2. Why ChatGPT’s platform launch could be bigger than Facebook’s early platform 3. The exact signals that ChatGPT will launch a third-party platform within six months 4. Why you have six months (not years) to make your platform bet 5. Why companies that don’t integrate with ChatGPT will lose to competitors that do 6. How Zynga grew to $1B by betting on Facebook’s platform early (before it was obvious) 7. Why so few companies are actually doing what they need to be doing right now *Brought to you by:* DX—The developer intelligence platform designed by leading researchers: http://getdx.com/lenny Basecamp—The famously straightforward project management system from 37signals: https://www.basecamp.com/lenny Miro—A collaborative visual platform where your best work comes to life: https://miro.com/lenny *Transcript:* https://www.lennysnewsletter.com/p/why-chatgpt-will-be-the-next-big-growth-channel-brian-balfour *My biggest takeaways (for paid newsletter subscribers):* https://www.lennysnewsletter.com/i/170294620/my-biggest-takeaways-from-this-conversation *Where to find Brian Balfour:* • X: https://twitter.com/bbalfour • LinkedIn: https://www.linkedin.com/in/bbalfour/ • Website: https://brianbalfour.com/ • Substack: https://blog.brianbalfour.com/ • Podcast: https://www.reforge.com/podcast/unsolicited-feedback *Where to find Lenny:* • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ *In this episode, we cover:* (00:00) Welcome back, Brian! (04:13) The changing landscape of product growth (05:09) The importance of distribution (08:14) The role of new distribution platforms (09:45) The four-step cycle of distribution platforms (17:38) Examples of platform cycles (30:01) The rise of ChatGPT (44:47) The future of AI agents (46:01) Preferred partners and platform credibility (47:18) Monetization mechanisms and free tiers (48:14) Betting strategies for startups (01:04:34) Adopting AI tools: challenges and strategies (01:08:41) The importance of hard constraints (01:14:23) Effective AI adoption in companies (01:19:05) Lightning round and final thoughts *Referenced:* • The Next Great Distribution Shift: https://blog.brianbalfour.com/p/the-next-great-distribution-shift • Brian Balfour: 10 lessons on career, growth, and life: https://www.lennysnewsletter.com/p/brian-balfour-10-lessons-on-career • This Week #9: Breaking into growth, leading with influence, and (not) stepping on toes: https://www.lennysnewsletter.com/p/this-week-9-breaking-into-growth • Distribution vs. Innovation: https://a16z.com/distribution-vs-innovation/ • On Platform Shifts and AI: https://caseyaccidental.com/on-platform-shifts-and-ai/ • How to sell your ideas and rise within your company | Casey Winters, Eventbrite: https://www.lennysnewsletter.com/p/how-to-sell-your-ideas-and-rise-within • Thinking beyond frameworks | Casey Winters (Pinterest, Eventbrite, Airbnb, Tinder, Canva, Reddit, Grubhub): https://www.lennysnewsletter.com/p/thinking-beyond-frameworks-casey • ChatGPT: https://chatgpt.com/ • Claude: https://claude.ai/ • Gemini: https://gemini.google.com/ • Vine: https://en.wikipedia.org/wiki/Vine_(service) • Periscope: https://en.wikipedia.org/wiki/Periscope_(service) • Myspace: https://en.wikipedia.org/wiki/Myspace • Friendster: https://en.wikipedia.org/wiki/Friendster • AltaVista: https://en.wikipedia.org/wiki/AltaVista • Lycos: https://www.lycos.com/ • HubSpot: https://www.hubspot.com/ • Zynga: https://www.zynga.com/ • TBPN: https://www.tbpn.com/ • Deedy Das on LinkedIn: https://www.linkedin.com/in/debarghyadas/ • ChatGPT’s product retention curves are a product manager's wet dream: https://www.linkedin.com/posts/debarghyadas_chatgpts-product-retention-curves-are-a-activity-7338384752393035776-ice1/ • Windsurf: https://windsurf.com/ • Building a magical AI code editor used by over 1 million developers in four months: The untold story of Windsurf | Varun Mohan (co-founder and CEO): https://www.lennysnewsletter.com/p/the-untold-story-of-windsurf-varun-mohan ...References continued at: https://www.lennysnewsletter.com/p/why-chatgpt-will-be-the-next-big-growth-channel-brian-balfour _Production and marketing by https://penname.co/._ _For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com._ Lenny may be an investor in the companies discussed.
Brian Balfour discusses the current challenges in traditional distribution channels like SEO and word of mouth, predicting that ChatGPT will emerge as a new distribution platform. He emphasizes the urgency for companies to adapt quickly to this shift, as competitors will seize the opportunity to meet changing customer expectations.
"Everyone's always complaining SEO is dead. It can't grow. Word of mouth is so hard. All of the ingredients for new distribution platform are essentially happening. My prediction the new distribution p..."
Balfour highlights the critical timing for startups to capitalize on emerging distribution platforms. He reflects on the historical context of distribution channels and stresses that building a great product is necessary but not sufficient for success. The conversation underscores the need for startups to focus on distribution strategies to achieve escape velocity before incumbents can react.
"company, you place multiple bets. For startups, it's a totally different ballgame. You have to choose one and go all in. Think about companies like Zinga that grew on Facebook and then became massive ..."
In this segment, Brian Balfour introduces the four-step cycle that new distribution platforms typically follow. He explains the significance of recognizing these steps to navigate the competitive landscape effectively. This framework is essential for startups aiming to leverage new opportunities in the market.
"centered most likely around Chat GBT. It is really rare for a new growth channel to open up. It's been a long time since the last one appeared. And the people who recognize this and hop on it early ar..."
Balfour elaborates on the conditions necessary for a new distribution platform to emerge, emphasizing the consensus around the potential of AI technologies like ChatGPT. He discusses the competitive dynamics among major players and the implications for startups looking to establish themselves in this evolving landscape.
"recommend you listen to this full conversation and discuss the ramifications with your team. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTu..."
Brian Balfour explains how startups are often quicker to adapt to new distribution platforms compared to incumbents. He discusses the historical context of technology shifts and distribution changes, highlighting the importance of being early adopters in order to gain a competitive edge.
"you Brian Balffor. Today's episode is brought to you by DX, the developer intelligence platform designed by leading researchers. To thrive in the AI era, organizations need to adapt quickly. But many ..."
Brian Balfour outlines the four-step cycle that platforms typically follow, starting with market conditions and moving through the establishment of a moat, the opening of the platform, and finally the closing for control and monetization. He emphasizes the competitive nature of the market and the importance of identifying a defensible position.
"Okay, excellent foreshadowing. Uh I completely agree. If it's anything, it would be chat GPT at this point. Let's get into it. What are the what are the cycles that uh platforms generally follow? Yeah..."
In this segment, Balfour discusses the initial conditions of the market, referred to as step zero, where consensus exists about a new category, such as AI platforms like ChatGPT. He explains the fierce competition among major players and the stakes involved in establishing dominance in the market.
"that's step zero step one is then um these players somebody essentially identifies whatever the moat is the thing that is going to help build them defensibility and help them hit escape velocity and b..."
Balfour elaborates on step one of the platform cycle, where companies identify their unique moat to achieve escape velocity. He discusses the necessity of collaboration with third-party developers and content creators to enhance the platform's value and engagement, highlighting the importance of building defensibility.
"like they close it down by doing one of two by one of a few things. They either shut it down entirely, two, they develop their own firstparty applications to absorb the the highest use cases, or three..."
In this segment, Balfour explains step three, where platforms begin to lock down their ecosystems for monetization and control. He provides historical examples, such as Facebook's evolution, illustrating how platforms gradually restrict access and shift towards paid mechanisms, impacting third-party developers.
"they went to third party developers and they said okay we've created this canvas and they used to call it the canvas and they were like you could put anything in the canvas that you want an app a game..."
Balfour discusses the competitive dynamics that drive platforms to evolve their strategies, emphasizing that while these changes may seem self-serving, they are often necessary for growth and sustainability. He highlights the dual pressures of competition and the need for continuous growth in a capitalistic environment.
"right? If if we go through it, right? So just before you get other examples, just something I'll highlight here. One is the mode they identified in theory was the friend graph. I imagine just like onc..."
In this segment, Balfour shares various examples of platforms that have undergone similar cycles, including Google and LinkedIn. He illustrates how these platforms initially incentivized developers and users but later restricted access to maximize monetization, reinforcing the cyclical nature of platform dynamics.
"the you just need to know how to play the game. That that's competition. That's business. They're playing you. So you need to play them. like that like that that might be a little a little sadistic or..."
Balfour concludes by discussing the potential for ChatGPT to enter a new phase in its platform cycle. He warns startups and companies about the risks of not adapting to these changes and the importance of recognizing the opportunities that arise during the initial open phases of platform growth.
"amount of time to play the game. Okay. And the big aha here is yes, this will end maybe not great for you, but there's this magical period when they're open to customers and users where you can grow l..."
In this segment, Balfour elaborates on the challenges of predicting the final stages of a distribution cycle. He emphasizes the need for startups to be proactive rather than reactive, highlighting the importance of anticipating market shifts and adapting strategies accordingly. The discussion includes insights on how companies can position themselves for success in a competitive landscape.
"can even see this with like chat GPT as an example right uh they just launched these like deep research connectors um one of them was my former company HubSpot and you know if you sat inside HubSpot a..."
Balfour introduces the potential growth opportunities presented by ChatGPT, suggesting that the platform is entering a critical phase where early adopters can benefit significantly. He draws parallels to past successes, like Zynga's rise on Facebook, and emphasizes the importance of recognizing and acting on these emerging opportunities in the AI landscape.
"that. Cool. So what you're saying is not only is there going to be this big opportunity to grow. If you don't take advantage of it, somebody in your space will. So it's not only there's an opportunity..."
This segment focuses on the competitive advantages of platforms like ChatGPT, particularly in terms of context and memory. Balfour discusses how these elements contribute to user retention and engagement, making ChatGPT a strong contender in the AI space. He compares it to historical examples of successful platforms that prioritized user experience and context.
"So, look like like let's go through this cycle. We right now we're in that competitive environment like we said like all those players we talked about chatbt Claude Gemini all these folks they're they..."
Balfour shares insights on the importance of retention and engagement over sheer distribution numbers, referencing historical examples like Google and Facebook. He discusses how platforms with better user retention tend to succeed in the long run, reinforcing the idea that ChatGPT's focus on user experience could lead to its dominance in the market.
"one of those another one of those loops. And so if you look at who's farthest on this, it definitely is um chat GPT, right? Like they were kind of the first ones to memory. They've been investing a lo..."
In this segment, Balfour outlines the indicators that suggest ChatGPT is preparing to launch a third-party platform. He discusses hiring trends and partnerships that signal a shift towards broader integration and usage, emphasizing the potential for significant growth as the platform evolves to meet diverse user needs.
"see the effects of of memory and and they have the very elusive smile curve, right? The ones that you just like and the only other times I've seen, you know, all of those dynamics very few times in my..."
Balfour compares ChatGPT to its competitors, particularly Claude and Gemini, highlighting ChatGPT's superior user engagement and retention metrics. He argues that these factors will influence developers' choices on where to invest their resources, positioning ChatGPT as a leader in the AI space.
"we're going to go through the steps of we're going to go through the steps of the cycle and you can already see this right like uh you know they're starting to form preferred partnerships right with u..."
Balfour speculates on the potential of Apple and Google as competitors in the AI landscape. He discusses their unique advantages, such as data access and distribution channels, while also noting their challenges in execution. This segment highlights the competitive dynamics at play as various tech giants vie for dominance in the AI market.
"prediction is on chat GPT. And um in in the blog post that I wrote about this, I actually then played my own devil's advocate and said, "Okay, here are some reasons why it might not be a chat chat GPT..."
In this final segment, Balfour discusses the emergence of smaller platforms and niche markets within the AI ecosystem. He emphasizes that these platforms will follow similar cycles as larger ones, creating opportunities for innovation and growth. The discussion includes examples of platforms like Udemy and their strategies for monetization and user engagement.
"the distribution points of search and Chrome and Android and and those types of pieces. But um and a lot of people point to them, but my experience with all of their products is uh like going back to ..."
Brian Balfour discusses the emergence of smaller platforms within the AI landscape, drawing parallels to existing platforms like LinkedIn and Udemy. He highlights how these platforms follow a similar growth cycle and emphasizes the importance of niche distribution channels in the evolving AI ecosystem.
"actually doing super well just in a different use case. Yeah, I'm glad you mentioned this because this brings up something that uh we skipped which is uh there are smaller platforms that have existed ..."
Balfour explains the monetization opportunities presented by AI agents, emphasizing outcome-based pricing models. He discusses how businesses can charge based on the value generated by these agents, and the implications of competition on pricing strategies in the AI market.
"play in for um some some products. Um there's all sorts of it feels like everybody has the same strategy at this point as everybody wants to launch an agent platform. I imagine some of these other hor..."
In this segment, Balfour predicts the future of AI agent platforms, discussing the need for specific use cases and the challenges of general-purpose tools. He outlines the expected developments in ChatGPT's platform and the importance of establishing credibility through partnerships.
"right now. Also love cloud. So I think what so the key point here you're making is that there's almost a number of distribution channels emerging many of them will be niche. So I think of LinkedIn if ..."
Balfour shares insights on how startups should navigate the rapidly evolving AI market. He emphasizes the importance of making strategic bets and the differences in approach for late-stage companies versus startups, highlighting the need for focused strategies.
"and come into and then you have like whole all like the disruption theory kind of playing out as well. And so um obviously depends on like the infrastructure cost and compute costs to to to run these ..."
Brian Balfour discusses the critical timing for integrating with AI platforms like ChatGPT. He emphasizes the need for companies to act quickly to avoid being left behind, as the AI landscape is evolving rapidly and opportunities are emerging.
"when the opportunity appears and what do you predict as of the day we're recording? What do you predict will be the next couple things that open that chatbt and let's just focus on that releases to st..."
In this segment, Balfour elaborates on the strategic decisions startups must make regarding AI integration. He compares the betting strategies of startups and established companies, stressing the need for startups to commit fully to one approach to maximize their chances of success.
"um successfully and there's two reasons for this right users struggle with horizontal tools they can do everything and that's exactly why they struggle to adopt and so they typically need more specifi..."
Balfour discusses how data collection and user feedback can create a competitive advantage for AI platforms. He highlights the importance of building a moat around data to sustain pricing power and ensure long-term success in the AI market.
"that's one version of it. Um the other version of it is just like the replacement to search. Um there will probably be uh you can also see them starting to make more moves here which is uh like deeper..."
Brian Balfour outlines the upcoming shifts in the AI platform landscape, including the introduction of preferred partners and new monetization mechanisms. He emphasizes the need for companies to adapt quickly to these changes to remain competitive.
"next the next steps that we'll see now that's what I think for JTPT I think the thing that we should talk about is like um essentially what I would advise folks especially startups is you're placing b..."
In this engaging analogy, Balfour compares the current AI landscape to a casino, where companies must strategically place their bets. He discusses the importance of making informed decisions based on market positioning and the potential risks and rewards involved.
"winner, right? So like that's just right like you you had to have iOS as part of your betting strategy in order to win. So everybody right now like you're probably at the cycle and trying to figure ou..."
Balfour summarizes the key takeaways for founders and product teams regarding AI integration. He stresses the importance of engaging with AI platforms and making focused bets to ensure competitive advantage in the rapidly evolving market.
"I love this analogy. Okay. So just to be crystal clear about what listeners should do, what founders should do, product team should do. The advice here essentially is uh integrate with and chat GPT, m..."
Brian Balfour discusses the contrasting perceptions of AI in the workplace, highlighting a Miro survey that shows 76% of people believe AI can enhance their roles. He introduces Miro's innovation workspace, which integrates AI to help teams transform ideas into actionable outcomes, emphasizing the importance of collaboration between AI and human potential.
"headlines are scaring us about all the ways that AI is coming for our jobs creating a lot of anxiety and fear. But a recent survey from Miro tells a different story. 76% of people believe that AI can ..."
Balfour reflects on his experience at HubSpot, discussing the strategic necessity for companies to integrate with emerging platforms like ChatGPT. He emphasizes the importance of being early in adopting new technologies and understanding the exit strategies that come with these integrations, using HubSpot as a case study for proactive growth.
"That's mirror.comlenny. So you were head of growth at at HubSpot for a long time. So and you gave that as an example, HubSpot. Why would they integrate? Why would they give away all their data so that..."
In this segment, Balfour shares insights on how startups can disrupt established companies by identifying and leveraging new distribution channels before incumbents can react. He references a quote about startups winning by finding distribution channels early, illustrating the potential for innovation in the AI landscape.
"for them. So going back to that amazing quote that you shared at the beginning of the conversation by I think it was Alex Rampaul. Yeah. Of that startups win by finding a distribution channel before t..."
Balfour provides advice on how companies should evaluate new distribution platforms. He outlines key criteria such as user retention, monetization potential, and understanding the value exchange offered by these platforms, stressing the importance of strategic decision-making in a rapidly evolving market.
"The when I started when you entered, it felt too late. Yes. It always feels too late, I think, to people that join like Silicon Valley or sorry, Mark Andre has this famous quote. He's like, I came to ..."
This segment focuses on the challenges and strategies for companies looking to adopt AI tools effectively. Balfour discusses the need for companies to be agile and ready to pivot their strategies as new platforms emerge, emphasizing the importance of being prepared to capitalize on opportunities quickly.
"platform. What would your advice be for them to decide where to where to place their bets? Yeah. So I think this is a great question because once again, you know, put my personal prediction aside for ..."
Balfour explores the concept of building businesses on top of AI platforms, likening it to creating a 'GPT wrapper.' He discusses the importance of establishing a defensible position and long-term value while leveraging AI technologies, encouraging entrepreneurs to think strategically about their business models.
"they giving you to incentivize you to develop on their platform and uh and like all these platforms are a bit of a it's a bit of a game of whoever understands the rules and how to arbitrage the rules ..."
In this segment, Balfour shares insights about Reforge's evolution from educational content to developing AI-driven products for product teams. He highlights the differences in how companies adopt AI tools and the significant gains seen by those who effectively implement these technologies, providing a roadmap for others to follow.
"Yeah. To use that euphemism. Yeah. Um so say someone is sitting there today. Is there anything they can do to start making a bet? Is it simply creating an MCP that allows LMS to suck in your data? Is ..."
In this segment, Balfour explains how defining hard constraints can significantly impact AI adoption within companies. He provides examples of organizations that have successfully implemented strict benchmarks to encourage AI integration, highlighting the necessity of making tough decisions during transformation. Balfour discusses the different groups within companies during this transition and the importance of aligning the entire organization around a unified culture of AI adoption.
"So that's kind of been our our journey. And so we've seen inside companies that are going through this transformation from two perspectives. One is obviously selling in that tools, but the other persp..."
Brian Balfour elaborates on the cultural shifts required for successful AI adoption in organizations. He stresses that a significant portion of employees must align with new operational principles for transformation to be effective. Balfour discusses the challenges of managing employees who resist change and the strategies companies can employ to ensure a cohesive cultural transition towards AI integration.
"think the most impactful thing um that you can do is form really hard constraints So what what you there there's other parts is like okay you want to communicate this you want to establish an owner of..."
Balfour highlights the disconnect between CEOs and the actual AI adoption occurring within their companies. He shares anecdotes illustrating how executives may be unaware of the challenges faced by teams on the ground. This segment emphasizes the importance of CEOs engaging with their teams to understand the realities of AI integration and the necessity of measuring adoption and usage effectively.
"hardest decision is going to come down to exiting people. So in every transformation what we see is essentially three groups of folks. You see your uh we call them the catalysts the people kind of lea..."
In this segment, Balfour discusses the concept of bottlenecks in the AI adoption process. He explains how various factors, such as legal and procurement hurdles, can slow down the implementation of AI tools. Balfour emphasizes the need for organizations to identify and address these bottlenecks to facilitate smoother transitions and enhance productivity across teams.
"completely different culture. Cultures thrive on density, right? And that's why they're sometimes the best ones feel like cults, you know? Um and and so as a result from that perspective it's like hey..."
Brian Balfour reflects on the current landscape of AI adoption, describing it as both exciting and exhausting. He discusses the rapid changes and the need for organizations to adapt to new methodologies. This segment captures the essence of navigating the complexities of AI integration while maintaining a focus on productivity and efficiency.
"tons of executives. The story we hear from the end users, the PMs, the ine all that kind of stuff that we talked to kind of using all this stuff. One of the main questions we ask them is uh you know i..."
The conversation shifts to a lightning round where Brian Balfour answers rapid-fire questions. He shares insights on his reading habits, favorite content, and the impact of parenting on his philosophy, setting the stage for a more personal discussion.
"the road. Yeah. Oh my god. Okay, Brian, is there anything else before we get to a very exciting? That's it. Let's do lightning rounds. Yeah. Ding, ding, ding. All right, Brian, I've got five questions..."
Brian shares his current reading habits, mentioning that he hasn't finished a book since having his second child. He highlights useful newsletters and podcasts that keep him informed about market trends, emphasizing the importance of continuous learning in a fast-paced environment.
"Let's do it. Okay. What are two or three books that you find yourself recommending most to other people? My my god honest answer is that I have not had time to finish an entire book since I had my sec..."
Brian discusses a reading tip from Brian Johnson about reading before bed to improve sleep quality. He reflects on how this practice affects retention and shares his approach to reading fiction for relaxation, tying it back to the importance of creating positive habits.
"give one more shout out to a different podcast which is from uh uh from two guys at Spark Capital. Nibil Hyatt, which I know from my early Boston days, and uh Frasier, I'm sorry, I'm blanking on the l..."
Brian reflects on his recent rewatch of 'Silicon Valley,' connecting its themes to his own startup experiences. He also mentions a light-hearted show featuring Owen Wilson, highlighting the balance between entertainment and personal connection in media consumption.
"there. Yeah, they're talking about rewards and creating behavior change. Yeah, exactly. And the reason to do it is his whole thing is you want to get to low resting heart rate and that helps lower you..."
Brian shares his excitement about his new workspace setup, featuring a super wide curved monitor and a standing desk. He emphasizes the importance of a comfortable and efficient workspace for productivity, providing a practical tip for listeners looking to enhance their work environment.
"show. I've been seeing that on my Apple TV. Maybe I should check it out. Good tip. Do you have a favorite product you've recently discovered that you really love? It could be a gadget. It could be a a..."
Brian discusses his life motto inspired by the 'man in the arena' quote, emphasizing the value of being actively engaged in one's work and the importance of resilience in the face of challenges. He reflects on his journey at Reforge and the lessons learned through various experiences.
"tip. And the and the current monitor. Very cool. Okay, two more questions. Do you have a life motto that you often come back to and find useful in work or in life? Something you share with folks, some..."
Brian shares his parenting philosophy focused on fostering independence in children. He discusses the importance of allowing kids to make decisions and learn from consequences, illustrating how this approach prepares them for adulthood and self-sufficiency.
"Final question. Brian, you don't know this, but your parenting advice on Adam Fisherman's podcast really impacted my parenting philosophy, specifically this line you had about independence. Oh, and I'..."
In the closing segment, Brian provides information on where listeners can find him and his work, including Reforge and his new writing on Substack. He invites listeners to engage with his content and highlights a podcast he co-hosts, emphasizing the value of community and feedback.
"Thank you for sharing that. I know I didn't tell you that I was going to ask you about this. So that was a beautiful way. Yeah, I didn't know where I I couldn't remember that whole podcast, so I had n..."
The episode concludes with a call to action for listeners to subscribe and leave reviews. Brian expresses gratitude for the conversation and encourages ongoing engagement with the podcast, reinforcing the importance of community in the growth journey.
"place. But uh those are the two major pieces. Last but not least is that um as I mentioned Ped Mosavat uh who I used to work with, he used to Slack, we just have we have this fun podcast. The two of u..."