Sean Ellis & Pieter Kemps on the Fundamentals of Growth Hacking

Show notes
How experimentation fuels innovation [03:46]
Why fast, custom tests drive better insights [06:56]
On measurement metrics & habit loops [10:12]
Identifying must-have users for true growth [16:59]
Using growth hacking principles for discovery [22:05]
Shared metrics for cross-functional alignment [25:59]
Aligning product messaging with customer intent [30:22]

Transcript 

Pieter Kemps: First of all, Sean, welcome. 

Sean Ellis: Thanks, Pieter.

Pieter: You’ve played a lot of different roles, right, from being a unicorn operator, being a marketer, being an entrepreneur, advising startups in their growth journey, and then obviously, you know, most specifically known for coining the term ‘growth hacking’ and writing a best-selling book about that, which we’ll talk about in detail.

But what’s interesting, and we just chatted about that briefly—before your book, that term meant nothing, and this morning, I did a quick search on LinkedIn and more than 20,000 people identify as growth hackers right now. So good on you for terming that and LinkedIn literally stopped counting. So most likely it’s a lot more people. 

And, one of the main things you’ve done, and where you’ve picked up a lot of the concepts that you talk about is helping to build the initial growth engine for successful companies like Eventbrite and Dropbox. You might have worked quite closely with Sequoia in doing that—both of them are Sequoia companies, all of which have become very successful. So super excited to have you here. And once again, welcome. 

When I got active in the startup space about 15 years ago, there were three main books that I devoured and that everyone was talking about. Steve Blank’s The Four Steps to the Epiphany, Eric Ries’ The Lean Startup, and then Business Model Generation by Alexander Osterwalder and Yves Pigneur. 

But a few years ago, you were on stage with Steve Blank and the moderator led with, “Steve wrote the new Bible on how to do startups and Sean wrote the new Bible on marketing”. And I was like, “Hey, I wonder whether he even agrees with that statement, ‘the new Bible on marketing.’” What do you think of that? 

Sean: Well, it’s interesting… There’s sort of marketing as it’s taught in books, and actually in some senses as it’s taught in books, is actually closer to what I have in mind when I think about marketing, because we talk about the four Ps and product is one of the four Ps. But marketing and the reality of Silicon Valley and the rest of the tech world is that marketing departments and product teams are pretty separated and don’t really coordinate very much. And so, when I think about growth, I actually think product has a much bigger role in growth than even marketing does. Obviously they both play really important roles, but yeah, I definitely… I think it goes beyond what most people think about when they say marketing.

Pieter: Yeah, no, that’s what I thought as well. And so if you think about it, those concepts from The Lean Startup, things like no waterfall, more agile, more experimentation, more testing, you build on some of those ideas, but then you added a lot and focus it on growth, could you briefly share, like, as a concept, what is growth hacking as a methodology? Is it marketing? Is it sales? Is it a product? How do you scope it and explain it as a concept?

Sean: Yeah, so kind of in the simplest terms, I would say, it’s using data and experimentation to acquire, convert, retain, and monetize customers. And so the more testing that you do, the more you’re able to learn what’s effective in driving, not just acquisition, but people who you actually are able to hopefully long term retain and have be valuable customers for you.

Pieter: Gotcha. And so that is the product, but the experimentation might be engineering as well and A/B testing and so it cuts across the product. 

Sean: Right. I mean… I’m really referring to the customer journey part but the teams that play a role in that experimentation are going to include design, data, engineering, product, marketing, and anyone else in the organization who has an interest, sales, customer success, potentially in B2B (business-to-business) environments.

How experimentation fuels innovation [03:46]

Pieter: Hey, and so experimentation is pretty central to that. So when I was at Amazon, Jeff Bezos always talked about the fact that performance of the business is dependent on your rate of innovation. And the only limiting factor there is your rate of experimentation, like, how many tests are you doing? I think from what I’ve seen from your book, you agree with that, but share a bit on why that is so important. And maybe give some examples of where you’ve seen experiments, the type of experiments that cut across these different buckets that you normally see in an organization.

Sean: Yeah, so I think the reason that a high velocity of experimentation is important is that the more experimenting you do, surprisingly, the more humble you become, because you start to realize that you don’t actually know what’s going to work and what’s not going to work. So I think the opposite of experimentation is, it’s just pure execution and an assumption that what you should be working on that’s going to drive an impact. But the truth is that over many years of doing this, my ability to know what’s going to work and what’s not going to work is not very strong. 

And so, you know, just an example for a company that we’re all familiar with, that we talk about actually in the book is Airbnb, where initially one of the big challenges with that business is that somebody might use it and then not need the product again for another year. And so how do you stay top of mind in between that first use and that second use? 

And so, someone came up with the idea that “Let’s make it possible to kind of bookmark properties and dream about travel”, even if you’re not specifically doing travel. And so when they introduced that as a feature, it was actually effective, it got people going and exploring. If I were to go to Bali, where might I stay in Bali? What would be the cool experiences? And people were using it a lot. But when they built it they built it with the standard convention of a star to essentially bookmark a property. And then someone came up with the idea “Let’s use a heart instead of a star.” 

And that would be a classic example of me – over the years, I’ve learned not to roll my eyes, but like, yeah, inside my head, I would probably be doing a hidden eye roll going, “Come on, guys! That’s not going to work.” But in the spirit of experimentation, one of the things that you learn is that you want to focus on some easy experiments to keep that velocity up and changing it from a star to a heart is actually a pretty easy experiment to run. And when they ran that experiment they saw a 30% improvement in the number in engagement with that feature. So the number of people and the frequency with which they engage with that feature itself.

And so that would… You know, I have [worked] so many times across so many companies where there’s experiments that I thought would work and they didn’t. Other experiments where I didn’t think they would work and they did. And so, yeah, that’s the reason you need to run a lot of experiments.

Why fast, custom tests drive better insights [06:56]

Pieter: No, listen, I agree. And one of the things that is interesting though, is you have to set up your organization and your instrumentation to be able to do that. I’ve worked with companies where, for example, we talked about pricing and we say, “Hey, the best thing to see is to test it. Like, can we test elasticity? So how can we see what happens to churn?” And people say, “Well, that takes us six months to test in a mid-market SaaS (software-as-a-service) company where everything is basically done online. And I’m like, “Hey, how can we make sure?” So have you seen companies do well in terms of how they structure and build their platforms, their tech, their product, not just a thinking, but to be able to do these experiments quickly.

Sean: Yeah, I mean, it’s definitely… It starts with the data side. And, you know, historically the data piece was actually pretty hard when I first got started. You know, it was going to be really creative about what are the things I can track and convincing people to track those. Even at Dropbox, it was…we had to custom build all of that tracking. And so I couldn’t even… you can’t drive improvement if you don’t even know the baseline on different data.

But today you’ve got products like Mixpanel or Amplitude that you can essentially plug in a day. And you still need to set them up, right. You still need to be able to say, “What are the questions I’m going to have? Am I tracking the right things to answer those questions?” But yeah, once you have that data in place, then there’s tooling that can help with the kind of surface-level testing. So maybe like an Optimizely or Google Website Optimizer on pages for example. Or the email tools, all the email tools have A/B testing, but a lot of the really impactful experiments tend to be kind of deeper in the product. 

And I’ve increasingly found that, you know, even though we may do the tracking in an amplitude for an A/B test, we’re going to have to custom build those A/B tests.

So most recently I was at a company called Bounce where… Even for me, part of the reason why I go in and continue to do hands-on roles, where I’ll go in for six months and, you know [it is] the typical startup, 12 hours-day, roll up your sleeves and get in there, is that it takes me away from the theory land of these things to the reality of… So when I originally got to Bounce and I’m trying to push certain experiments, I’m getting the same pushback I’m sure a lot of you guys do, which is, “Oh, man! That’s a lot of extra time to set that up as an experiment. We just hired a data scientist. Can’t we just implement it and analyze the data?” 

And so early on, I kind of rolled over and just said, “Sure, that’s fine. Let’s do that.” But I found that probably 80% to 90% of those tests came back as just inconclusive. Talk about wasted time!If everything you’re building is not leading to any learning, that’s a lot more waste than the extra 20% of energy to set it up as an A/B test. And so by the time I left, we were doing an A/B test for just about anything that we could possibly figure out how to set up as an A/B test.

On measurement metrics & habit loops [10:12]

Pieter: Yeah, no, that makes sense. And so what I’m hearing is: measurement is really important. When you talk about Mixpanels and talk about Amplitude, it’s all about measuring. It’s all about measuring against certain metrics. And, you know, I started off talking about some of the books that were very influential in the startup scene as it started to explode about 15 years ago.

One of the things that guys like Dave McClure and many others and yourself, as well talked about is the so-called pirate metrics, right, the AARRR (acquisition, activation, retention, referral, and revenue). Basically, if you think about it, your growth stack, your growth funnel from acquisition to activation to revenue, referral, retention, etc., you talk about a lot about loops, when you talk about those.

So, it’s not just like, “Oh, just measure them”, but think in each of these layers, think carefully about the loops and the flywheels, etc., and so it’s not just measuring as a post hoc, like, after the news, reporting the news, but it’s about “How do I understand these as loops that I can actively influence.” Can you share a bit more about your thinking about that growth cycle overall, but then specifically how you think deeply at these different layers around the loops and how you can activate those?

Sean: Yeah, so I think that there’s a place for funnels and for loops that ultimately you’re getting… One of the biggest opportunities for growth in any company is how can I get someone to an experience where we call it the “aha moment”, where they essentially get to the point where they receive enough value from the product that they want to come back and keep using it, and so that is more of a funnel in that case. 

And the faster you can get them to that great experience, the more likely they’re going to stick around and actually get there and so speed to value is really important. The loops come more into place like, “Okay, now that I’ve gotten them to a great experience, how do I keep them coming back again?” So that’s where an engagement loop would come in, for example. 

And I know Pieter, you spent a lot of time in Singapore, but probably, a lot of the people here in Singapore, one of the best books for engagement loops, I think is Hooked by Nir Eyal. If anyone hasn’t read that book, it’s just such a great book for being able to understand how do you actually build a habit within a product. 

And, so if you essentially think, “Okay, I’m getting them to have this great experience and now I need to remind them…” If we go back to that Airbnb case that I mentioned, I get them to that great experience and they don’t need it again for another six months or a year. It’s gonna be really hard to be top of mind. So most products don’t have the challenge that Airbnb had. 

But I had it at Bounce, for example, so Bounce is a luggage storage app. And so again, the frequency of usage of when you need luggage storages is pretty low and so I think there’s a big challenge there and how do you get people building the habit around it? There’s another loop. And how do I get my existing users bringing in additional users?

So, at Dropbox the first area that I focused on was speed to value and I spent a lot of time optimizing that. But then afterwards almost all of the efforts that myself and the team spent on optimization were on that referral loop, whether it’s natural word-of-mouth, incentivized word-of-mouth, someone sharing a file, what’s the experience for the person on the other end when a file is shared someone being invited to a collaborative folder. 

Pieter: The way I got, let’s say, hooked on Dropbox was not for storing, but with someone sharing a large link. Now, you obviously have a lot of other, you know, things in that space, but back then, sharing a very large file, and then it was like, “Hey, that’s how you sign up. And then you start using it, not just for sharing, but etc. So some of these products have got built-in hooks and certain network effects. Others do not have that intrinsically, and then you need to start consciously looking for them or creating them, right.

Sean: Yeah. But I would also say that’s why there’s not like, you know, one of the most annoying questions that I have from people are, when they haven’t told me anything about their business and they say, “Give me a growth hack”. Like, I don’t know what the opportunity is, what’s broken in your business, what’s not. 

And so, you know, but Dropbox obviously had a huge advantage when it came to driving referrals. Not every business is going to have that. And so, I think sometimes you can be creative about, “How do I add that into the business?” But other times, you know, it’s just you should focus elsewhere. 

And so you have to really understand your business and the opportunities within your business, and sometimes it’s going to be kind of an SEO (search engine optimization) loop. How do I get my existing users to create a bunch of content that then gets indexed by the search engines and that drives a lot more people. And so, I think, you know, if we go back to that basic premise that you mentioned that was really popular at Amazon, you know, more experimentation is a lot better. But then, if you can focus that high velocity experimentation on the best opportunities and you’re not going to understand those best opportunities until you deeply understand the business. And so, it’s very hard to improve something that you don’t understand.

So testing is just a part of the equation, but deeply understanding both from the data side, but also qualitatively, why are people doing the things you want them to do? Why are others not doing those things? And ultimately the more you understand the situation, the more likely you’re going to launch experiments that actually really move the needle.

Pieter: Yeah. Makes sense. And you say, understand the data and understand behavior, basically understanding your customers. And it’s interesting, when you talk about the growth pyramid, you sometimes talk about it, there’s just first as PMF (product-market fit). And then you start stacking the odds. You start going deeper into your customers, etc. 

And it was interesting – we have a lot of very early stage founders on the call today, and some of them have PMF. For many of them, PMF is the main thing that they’re trying to achieve. And so when I read that in your approach, it was like, “Hey, hold on. PMF is for many, not a starting point, an important prerequisite for scaling further,” obviously, but something that it’s still ahead and it sometimes feels to them that you’re talking about understanding your customers and growth hacking after finding PMF, whereas we intuitively say, “Hey, let’s first start and understand your customers and your ICP (ideal customer profile) and apply some of the methodologies from growth hacking to even get some traction and customer love and retention before you can even show PMF. How do you view that in terms of what comes first, what is the prerequisite for what, we’d love to dive deeper… 

Identifying must-have users for true growth [16:59]

Sean: So, there’s a really important point to distinguish here, which is what is the purpose of all of that experimentation? Let’s say you start the experimentation and somehow you end up driving a bunch of signups on your product and you still haven’t validated if anyone cares about the product, if they love your product, if they’re coming back and using it, but you get this chart, starts to look really good and you get excited and you go share that with your investors. And then when the chart flattens out and you say, “Well, we’re not really focused on growth yet. We’re trying to get to product-market fit”. I think that’s where you start to have a bit of a challenge, that you essentially indicated that growth is important by celebrating it. And so, but it wasn’t real growth. It was just like sign-up growth. 

And so, where I’m ultimately going with this is that until you have product-market fit, all of that experimentation is about getting people to experience your product so you can find the ones who truly value what you’ve created. 

And then, once you understand that value on a deep level, it’s about how do I get more and more of the right customers to that experience? 

And so, to me, that’s when you’re in growth mode, but before you’ve validated the value, you’re not in growth mode, you’re in experimentation to get people in the product, so that you can hopefully, kind of crowdsource that must-have value. 

And it’s a very unpredictable timeline to the point where you’re actually growing or not, because you may end up getting a ton of people in there. They play around with it for a while, and then within a couple of months, they all stop using it. That’s definitely not product-market fit. And even if you came up with a great tactic to get a lot of people using the product, you’re likely to go out of business if you try to scale at that point. And so you want at first just a single person who says, “Oh my god, I can’t live without this product”. 

And so, I just got back from my world tour which was probably the biggest surprise from my world tour, you know, I was in places like Singapore and India and probably met some of the people on this call when I was in India. But my biggest surprise is the number of really successful companies that actually latched onto my product-market fit question. That question was way more important than I thought. And I’ll tell you what the question is in a second, but, you know, my first stop was Brazil and a company called Nubank. And even before I went and did a keynote with them, I talked to their head of product and he’s a former Facebook guy and he’s actually based in Silicon Valley, but he’s like, “Man, I got to Nubank and everyone’s talking about the SES. And I finally asked, what the heck is the SES? And they said, “It’s the Sean Ellis Survey.” And so they’d basically built a science out of using this survey to identify who are their must have customers, not just on the initial core product, which was credit cards, but then on every new product they launched, every feature they launched, essentially.

And so the question, so now that I’ve kind of set up the question, the question is basically asking your existing users how would they feel if they could no longer use the product? And so you give them the choice, multiple choice: very disappointed, somewhat disappointed, not disappointed, or not applicable. I’ve already stopped using the product.

And I’m only interested in one of those answers and that’s the “very disappointed” answer. If someone says that I would be “somewhat disappointed”, entrepreneurs often get excited about that, but they’re essentially telling you it’s a “nice to have” and those people are likely to disappear. 

And so this survey, I mean, the other way of looking at product-market fit is looking at retention cohorts and essentially saying, “Okay, who stays long term retained on the product”, but you don’t learn very much by looking at the data. You can maybe study how they use the product, where did they come from? But when you run it as a survey now, you can do: what they were using before, what’s the main benefit they get from the product, if this weren’t available anymore, what would they use instead? 

What I find is that most people answer, “somewhat disappointed”. The reason they’re not saying they’re “very disappointed” is that they know another product that could actually perform the job as well as your product. And so they’re essentially saying you’re a commodity and it’s really hard as an early-stage startup to build success on a commodity business. That’s again a “nice to have” where another product that’s more established could offer that same benefit. 

So that’s the foundation part to me in getting to product-market fit is to find those must-have users and then all the growth stuff is about “How do I build a growth machine that creates more of those must-have users.”

Using growth hacking principles for discovery [22:05]

Pieter: So, one way to look at that is pre-PMF. I can still use the principles from growth hacking, but not to drive growth. But for the discovery. 

Sean:  Exactly. 

Pieter: The discovery of who are my customers? How do they get value? How do the right customers get value for my product? Do I retain them? And once I’ve discovered that and I say, “Hey, I now know who my customers are. I understand their behavior, at least to some extent, I see that they get value and they stay. Now there’s PMF”. Then later on, you continue to use the same principles perhaps, but now geared towards growth and basically scaling it up deeper into those customers. And that’s what you call stacking the odds, right.

Sean: Yeah, so essentially, once you’ve identified that value, that’s where we go, that’s the stacking the odds piece that you’re talking about, which I’ve touched on already. “How do I now front load that value as quickly as possible in the customer experience? So that I can get them there quickly.” 

A company called Lookout where I worked with… I went in and I was committed to a six month kind of growth role with them. I went in and asked that question and it came back that only 7% of users said that they’d be “very disappointed” without the product. And 7% of users, and I’m committed to working with these guys for six months, but I was able to then dig into the answers from those 7%, understand their use case, and they were using the product in a pretty unique way compared to everyone else.

And so, we had two things that we did that basically helped us go from 7% of users, and then the next cohort that we acquired, came in where 40% of users said, they’d be “very disappointed” without the product. And that’s the magic number that I look for to start scaling. And it only took two weeks to make the changes that got us to the 40%. 

And we basically understood what the unique use case was. And the benefit of that use case was that we changed the positioning – which is really fast – how do you change the messaging on the product? And so, on the advertising and the landing page, we essentially highlighted the benefit of that use case, which then kind of creates a filter for people who don’t care about that, who aren’t going to convert, but now only the people who care about that are converting. 

And then the second piece we did was, how do we change the onboarding to very quickly deliver that experience? And so, once we changed the onboarding… so there were four main features in the product. So, as the growth guy in an engineering-founded company, it might be tempting to say, “Okay, get rid of three of them. People don’t value that.” But that would have probably gotten me kicked out of the door pretty quickly there. So instead I said, “We just need to sequence the experience.” So we have to show them the stuff that people end up loving about the product first and then afterwards we can show the other thing. 

So it was kind of, I went there directly after Dropbox and it was something that I learned at Dropbox, the same thing, that if you try to show everything the product does, you often overwhelm people and complexity is often a bigger barrier to adoption, than even price or anything else.

Pieter: No, I hear you, what observation and then one last question and then we go to Q&A, the observation, maybe more for the audience is, we sometimes overcomplicate things and we sometimes throw everything in a kitchen sink at it and think that everything needs to take three months or six months, like, Sean just gave an example of getting some results in two weeks. That’s not always possible, but it’s sometimes the small tweaks, or there’s just a very thoughtful approach to looking at the data that can suddenly move the needle on the companies. And we’ve seen that where some companies brute force their way to PMF or to growth, and some are just very smart in how they set up these experiments, how they observe, how they dare to double click on certain things that often can have outsized impact, which is very interesting.

Shared metrics for cross-functional alignment [25:59] 

Sean, last question for me, perhaps. You know, when people are traditionally schooled, so to speak, and they think about any silos of product and sales and marketing, like, growth hacking clearly is the amalgamation of several of these and combining that towards one single objective, as an activity, or as concepts, that’s, I guess, you’ve talked about it and people will understand to some extent. 

But then how do you build that into your organization? And like, Facebook was the first company to be known for having a growth organization and a growth team. But a lot of founders we work with, like, they’ll ask, like, “Hey, I have a marketing manager and have a sales guy and have a product guy, but actually putting this into action as an organization and structuring it into the way you do things, has not happened that much, at least in this part of the world.” In all honesty, I’ve not seen a lot of folks with like “Oh we have a growth org.” What do you see in the early days, or what do you have as advice for companies in their early days in terms of how they structure their organization and teams to make this possible.

Sean: So yeah, this question is the number one challenge that people have after they read our book. And so, we’ve sold almost a million books and there are not a million companies or a million people that are doing this right. And so what they end up coming up against is, yeah, that maybe the marketing team buys into this kind of test-learn, but you got all these growth levers that sit inside the product team, and that product team is often more focused about the long term roadmap. And they don’t want to kind of do some of these tactical things that help to onboard new users into the product and get them to use it the right way. And so, it’s really hard to do that. 

I think, one of the things that Facebook probably did better than anyone that helped to make that growth team successful was identifying a single shared metric across the whole organization. That was an experience-based metric to get everyone focused on growing it, which is just their daily active user number, knowing that daily active users as a function of new signups, but it’s also a function of how do we get our existing customers coming back on a regular basis. And so, my co-author on the book actually is at Instagram now previously was at Facebook. And he said, they talk about the North Star Metric (NSM) all the time. They actually call it ‘daily active people’, but anyone can key into their browser and see that. So, that’s the first part. 

And so, for everyone on this call, once you’ve identified product-market fit, figuring out a metric that essentially quantifies how much of that value you’re delivering across a growing user base is a really good starting point because now that’s a metric that starts to transcend – just not just the marketing team or not just the product team. 

And then a lot of my focus these days is how do you kick start that process? What I can tell you is that when you’re really small, it’s way easier than when you’re, you know, a hundred thousand person company and so, yeah, take advantage of being really small and get it set up quickly.

The most effective thing that I found is actually, getting the cross-functional leaders in a room for a full day to step out of their day-to-day work and talk about customer impact. And how do we drive customer impact by coming up with that North Star Metric, collaboratively getting on the same page around how the different parts of that business work together to move that metric, where are the opportunities for improvement, how much experimentation we’re going to commit to. I’m doing some, education on the importance of experimentation, but by the time we come out of this all day session, they have essentially identified the best opportunities come up with a lot of experiment ideas against those opportunities and have started that rhythm of weekly meetings where they’re essentially using an agile planning process to process the learning from experiments they run and decide the next set of experiments. 

But it’s a habit that needs to be developed cross-functionally, and so it’s really hard to build that habit.

Pieter: Yeah, that’s exactly what we’re seeing. Thanks so much for that. Folks, any questions? Feel free to unmute and ask directly, or put them in the chat and I’ll ask.

Aligning product messaging with customer intent [30:22]

Pratyusha Vemuri (of RaptorX): Thank you so much, Sean, for a great session. So I just had a question around what was a specific hack other than the messaging that you had like 7% to 40% in a few weeks is a lot of growth, right, so what changed? Was it just the messaging or usage or what exactly was it?

Sean: So yeah, I’ll give you a little bit of background. It’s a product called Lookout. At the time, all these things are now built into mobile phones, but at the time you really didn’t have antivirus built into the phones, you didn’t have firewalls. You didn’t have automatic backup of my data, you didn’t have the… if I lose my phone how do I see it on a map, how do I make it beep and so they basically built all of that functionality. But our survey showed that the people who considered it a must-have are the ones who said they’d be “very disappointed” without it. They were focused on the antivirus and the peace of mind that they had with that.

And so, it was very easy then to essentially position: “Have the peace of mind, that’s it’s free. Why would you not put antivirus on your computer, why wouldn’t you put it on your smartphone?” And then after they sign up, instead of seeing all this other functionality, the first thing they’re doing is setting up the antivirus and getting a message that says you’re now protected from viruses.

So now, using that very agile approach that is both the lean startup approach and the growth hacking approach is that one of the big benefits of this test learn is that they’ve been able to pivot to being a really successful company that now is more a business enterprise where, they’re essentially saying the weakest spot on the network is all these personal devices. And we help to protect those devices. And so now it’s more of an enterprise sale.

And so, the hardest part in a startup is to create something that actually matters for people, and create a benefit that matters. And so I need to be able to convey that benefit to attract the right people. And so that’s part of the messaging. One of the other things that I find really helpful in messaging is a survey question that I ask, “Have you recommended the product?” And when they say, “Yes,” I say, “How did you describe it?” And so that gives me some really good material just to test the descriptive text.

And then the last piece, another question I ask is, “Why did you want this product in the first place?” So that starts to get a little bit more into intent. And so the three elements for messaging that I’m looking at are: the hook, which is around the intent, the promise, and then a description. And I’m fairly flexible on the hook and the description to whatever gets the best response. But I’m very constrained on the promise, because again, the hardest part is creating something that matters in the first place. So I have to make sure that “whatever works best” is setting a promise that actually reflects what the product does, that matters to people.

Pieter: And actually, maybe as a segue to another question that just came in, product maybe being the key driver, but the question was, and this is, by the way, there’s some questions also around like B2B, like growth hacking, B2B versus B2C (business-to-consumer), but the question here is: in consumer tech, is PMF very geared towards simplicity, product working, and then appropriate communication? That simplicity etc or what do you think?

Sean: Yeah, to me again, interestingly, I feel as an entrepreneur-founder, I have not had very much success in creating product-market fit, so it is really, really hard to create product-market fit. So to me that my benefit is to be able to go into a company that’s got some people on the product and help them understand that product-market fit.

And I think the answer to what that product-market fit looks like is actually different in each business. Often it comes down to something that’s super simple, but even like with HubSpot, that I think a big part of their value proposition was that even pretty early on, it was kind of an all in one platform that you could do a lot of things. And so, again, that’s on the B2B side. So, you’re asking about the simplicity of the consumer side. 

I think there’s some patterns there, but I actually think that, it’s better not to ask me that question, but to ask your customers, which ones would care if the product went away, find those ones who’d be very disappointed and dig into why would they be disappointed, what is the benefit that they get from the product? And that’s going to give you much better guidance than anything I say.

One thing you mentioned, there’s a couple of people with the B2B-side, some questions. So I’ll just add a little bit there: I think all of the concepts I’m talking about apply to every business. The only business that doesn’t apply to is the business that’s doing everything perfectly already, which we all know is nonexistent. So it’s about essentially figuring out what are the areas for improvement that actually are going to matter in your business. 

And so in B2B, your ability to drive that improvement is going to probably be different, like how you do that, the amount of time that it takes. You’re going to…if you have a really expensive product, you’re not going to have a lot of data to experiment on. But I even take it back to how I used to present to a lot of banks and I would always get the feedback that we’re in a highly regulated industry. This does not apply to us.

But then I come back to the thing I said earlier about Nubank, instead of focusing on what didn’t apply to them, they found one thing that I talked about and said, “I think we can really make that an important part of our business,” and they’ve done it probably better than any company that I’ve seen before.  

So I think you have to take all of this and say “How can I creatively apply this in my business.” And, you know, but so the guy who I met with in Japan, who I said, he focused on that question as well. But the other thing that he focused on was speed to value. So, again, I think, identify the value of that question and then “How do I quickly deliver that value.” Any company that I go into that’s the first thing I’m working on is, “How do I very quickly deliver the value that makes the product a must-have.”

Pieter: Yeah, time to value and we’ve seen that and we’ve highlighted in some of our sessions as well. We’ve seen companies where, specifically in B2B, you know, it takes three, four weeks. People get buyer remorse. They might not onboard fully versus like… And one of our companies did a lot of experimentation to get that done from three weeks to two days, or even better if your demo is actually…can be tailored so much and has this amazing moment of delight for customers that even there before buying the value they get from it is so huge, and that’s often a massive impact on your conversion in B2B sales.

Sean: Absolutely. I’ll share one more thing. I did a workshop right before the pandemic. And they are already a really successful business, with a thousand people in the company.

And as part of that workshop, I took them through my onboarding experience in the product and I could see all these people, over time, start to just like slide into their seat, just being embarrassed by how many steps I was like, “Guys, okay, raise your hand when you think I’ve gotten to the ‘aha moment’”, and then I’m trying to do this and then I’m trying to do this. And then finally, it’s like this little green thing goes and “you are protected”. And it was like, they literally broke out in applause. And when I connected with the founder six months ago, and so this is many years later, he basically said that reframing of [the fact] we need to understand that value and not just deliver it quickly, but emphasize it, when they got there it was a hugely impactful moment for them. So I think that’s the biggest shortcut.

Pieter: I think many of us go through onboarding experiences where you’re like it feels like the company themselves have never gone through because it’s so obvious how painful it is. 

Sean: And the fact is that they don’t go through it. Everyone says I use my own product, but they go through it once and they just don’t think that they’re not thinking about, “I should go through it once a week.” And so, they feel like they’re plugged-in because they’re going through it that one time, but it continues to change.

And then, almost all of the wasted marketing dollars are happening in that initial user experience of all these people who not only are getting a bad experience and are wasting those marketing dollars, but they’re the ones that are going out and saying, “Don’t waste your time with that product. That product is not good.” And so the more you spend, the more of those detractors you’re building.

Pieter: And the interesting thing, even if people go through it, they go through it as an owner or a product manager and they understand the business, so they know the design choices, it’s easy for them. And so the interesting part is you should go through it as a layman, as a new customer. That’s the hard part. Anyway, we’re running out of time. Sean, thank you so much. 

Sean: You’re welcome. Great to reconnect with a lot of you, and connect with some of you for the first time.

Pieter: All right. Awesome. Thanks everyone for joining. Appreciate it.

This transcript has been edited for clarity.