Product is the Ultimate Growth Hack

Kyle Wild, CEO Of Keen IO discusses how to achieve sustainable growth vs "growth hacking".

Transcript

1. (Sustainable Growth vs. “Growth Hacking”) Kyle Wild Cofounder, CEO of Keen IO @dorkitude kyle@keen.io Product is the Ultimate Growth Hack First presented in Tokyo at Growthhackers.jp February 2014 Tuesday, March 11, 14
2. Who’s this guy? Born & raised in a very rural area in the U.S. (this means I grew up almost entirely online) As a child in the 90’s, created and monetized a viral website (Final Fantasy Fever / thefever.com / #2 on Yahoo for “Final Fantasy”) Moved to San Francisco to join Google Analytics in 2007 (I found the real-world home for internet citizens like me!) Left Google and helped build 3 successful viral startups across 5 years Started my own company, Keen IO, in January 2012, and gained significant traction with no marketing budget Instrumental in spreading the “first” viral video in 2000 (All Your Base Are Belong to Us / http://content.time.com/time/magazine/article/0,9171,100525,00.html) Tuesday, March 11, 14
3. Why is this guy talking at us? Simple. I am going to try to convince you not to focus on growth. Tuesday, March 11, 14
4. But growth is a good thing! Why shouldn’t we focus on it? Because the best (or at least the cheapest) way to get growth is by not focusing on it. Okay, starting the actual talk now :) Tuesday, March 11, 14
5. The Five Startup Super-metrics Dave is an investor in my company, so I don’t think he’ll sue me for stealing this. Especially if I include this link: http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version Lifted shamelessly from “Startup Metrics for Pirates” by Dave McClure. Read those slides five times if you haven’t yet! Tuesday, March 11, 14
6. Quiz: Which two metrics below matter the most, when it comes to growth? Tuesday, March 11, 14
7. What most think What secretly matters more Quiz: Which two metrics below matter the most, when it comes to growth? Tuesday, March 11, 14
8. How MOST people think about growth: How many signups & activations have we had? How can we get more signups & activation? Tuesday, March 11, 14
9. How can I Retain an insanely high percentage of my users? How can I get them to Refer their contacts to my product? How they SHOULD think about growth: Tuesday, March 11, 14
10. How can I Retain an insanely high percentage of my users? How can I get them to Refer their contacts to my product? How they SHOULD think about growth: Product-Market Fit Virality Tuesday, March 11, 14
11. Why does virality matter so much? Because it’s scalable. Tuesday, March 11, 14
12. Why does virality matter so much? Because the secret is, this is how good products have always spread. You don’t need a “share” button to be viral, and you don’t need “winback email campaigns” to retain your users. You just need a truly compelling value proposition and a brand that your customers are proud to represent. There’s no “share” button on these viral products: Tuesday, March 11, 14
13. Why does sustainable growth matter? Because MATH! (Specifically, Calculus) If your growth, which is the derivative of customer base, is itself a function of your customer base, your graphs end up looking like this: Tuesday, March 11, 14
14. And that growth curve comes without you having to spend more money. Whereas, if your growth is all based on “hacks”, then your growth is a function of how much effort you can keep putting into these hacks. Sure, you might still end up with a chart like this (for a while): There’s also an emotional toll: You don’t want to be a hackhead. Hackheads for bigger and bigger hits of hack just to make the kind of curve investors like to see. Don’t get addicted to hack. But there’s no leverage: to get exponential results, you will have to spend exponential amounts of effort / cash. Tuesday, March 11, 14
15. Why does sustainable growth matter? (part 2) Because the alternative is to keep raising more and more money and pouring it into the growth machine. Tuesday, March 11, 14
16. Just like these guys did (unsustainable growth tactics = down and to the right) Groupon’s first year public: Zynga’s first year public: Tuesday, March 11, 14
17. Hacky growth tactics with crappy retention and a low net promoter score = graphs that go down and to the right (once investors catch on) (I know Groupon and Zynga were supposedly “viral” products, but there’s a downside to their style of virality: once their products stopped having value to the users, the complaints of those users went viral too!) Tuesday, March 11, 14
18. And even if you’re going to raise money for growth, wouldn’t you rather put that money to work in a more efficient machine? Tuesday, March 11, 14
19. Startups tend to focus on signups & daily/ monthly actives for a variety of reasons • It’s easy to measure • Many investors think this way, so the startups follow suit • Everyone else is doing it! (did you like my pun??) IMO this is actually a very good reason to be suspicious Tuesday, March 11, 14
20. But I’ve done well in my career by focusing on retention and referrals. • Harder to measure, but possible: Measuring retention: - read https://keen.io/blog/47823687779/how-to-do-a-retention-analysis/ Measuring referrals: - add an invitation event to your analytics package - add a “user_referral” source type to your signup events - put these events into your virality funnels - study Net Promoter Score. • The savviest investors will care more about retention than about activations. And you want to take money from the savvy ones, don’t you?! Tuesday, March 11, 14
21. Product Is The Ultimate Growth Hack Tuesday, March 11, 14
22. This Isn’t “Field of Dreams” I’m not saying If You Build It, They Will Come I’m saying something less catchy but more true: If you build something compelling that they really love, they will stick around, and they will invite their friends to do the same. Tuesday, March 11, 14
23. I’m saying something less catchy: Tuesday, March 11, 14
24. If you build it, and it’s something compelling that they really love, they will stick around, and they will invite their friends to do the same. Tuesday, March 11, 14
25. If you don’t know how to build something compelling that customers love, you should probably quit your job and go join someone who does. You’ll learn a lot from them! (and trust me, it’ll be a million times more rewarding than slinging bullshit products all day) Tuesday, March 11, 14
26. The End! If you liked this rant, you should follow me on Twitter at @dorkitude http://twitter.com/dorkitude Tuesday, March 11, 14
27. Some books that have helped me understand growth The Tipping Point by Malcolm Gladwell taught me to think about the different components of viral systems. Groundswell by Charlene Li helped me frame a lot of this stuff in my head. The Ten Faces of Innovation by IDEO and The Design of Everyday Things by Norman are two of the most important books in my life. Go read them now! I’ve also found a lot of value in studying the spread of religious and political propaganda throughout history (and the people who created those messages). A great tactical book on that topic is Words That Work by Frank Luntz. Spent: Sex, Evolution, and Consumer Behavior and The Mating Mind by Geoffrey Miller (thanks @davemcclure for introducing me to these!) Tuesday, March 11, 14
28. Questions? Tuesday, March 11, 14