The Exchanges

Q So the ones you're bundling with like your courses or your tickets, who's paying for those?

A Uh, I mean, it's, it's, it's in the price of the ticket, so I, I, I wouldn't make my company pay for the, for the book Just give away, but if they're paying, if they're paying 300 dollars for a course, and the book costs 20 bucks, then, then they're getting the book and the course for the 300 dollars. It's a, it's a good deal. And our conference is a thousand dollars. We're bundling a 20 dollar book with a thousand dollar ticket. Now the company's not paying for it. The person's actually buying both the book and the course, and we're just dividing the, you know, the, the, the two pieces or, or the book and the conference.

AI assessment note: “The person's actually buying both the book and the course”

Q Would most folks at Dropbox kind of credit you as being the guy that kind of thought up? I'm asking you to be a little braggadocious for a second, but would they credit you for coming up with this system of giving away free storage to drive the viral coefficient?

A It was, it was a group. Like most things, I don't think it was something, I mean, there was less than 10 of us at the company at the time. I was the only non-engineer at the company, but most of what we did there was really inspired by, uh, what a couple of other companies were doing. So, A friend of mine had tested a double-sided referral program, and it had worked really well at his business. Who's that friend? He's Jamie Siminoff, the guy that runs Ring, the super hot video doorbell company now, but he, uh, you know, prior to that, he had a company called PhoneTag, where he had basically done a ton of testing and, and came up with this double-sided incentive as being really effective, but you know, PayPal did the same thing, and so, You know, in our case, the currency was stored, so it just made sense. So it was really something that three of us said we should do this, and, and basically, uh, you know, pulling the pieces together of how it was done was, was again, an iterative group effort.

AI assessment note: “It was, it was a group. Like most things, I don't think”

Q And, and Sean, for the founder listening right now, trying to figure out this viral coefficient thing, right? They've read, you know, David Scott's blog. They've studied the efficiency. They put it in Excel and it's still not working. What are they missing? Like you mentioned currency, which I think is important, or maybe another word is utility that the product's delivering. Give them advice.

A Yeah, I think the, the, the first part is, um, again, like I think in the case of Dropbox, people credit the referral program as, as being something that drove a lot of the growth. Referrals were strong before the referral program went in place. People love the product. We're spreading the word about the product. So I think it, you can't bandaid kind of a crappy product experience and a, and a crappy product value with a referral program, for example. So that's the first thing is I just make sure it's happening. And then understand what the motivation is for people to do it, and then think about really every step in the process from what's the prompt that gets someone to share, to what's the invitation or the person on the other end seeing. A-B test a ton of variations of that. When they click through, what's the page that they sign up on? How do you give feedback to the person who sent the initial invitation that what they did worked? And each one of those steps is something that can be optimized. And just like any kind of conversion rate optimization, the more you have qualitative and quantitative insights about what's happening, you're going to be more informed in the tests that you're running. And your goal, anytime you're trying to do viral optimization is to get it so that each person is essentially leading to more than one additional person. That's the, that's the point …

AI assessment note: “you can't bandaid kind of a crappy product experience and a, and a crappy product value”

Q Let's do one or two more log me and pretty big company in July, July, July, 27th last year, they, they acquired a Citrix go to meeting division for, I think, you know, 1.8 billion dollars. You worked with them early on. What was their currency?

A Yeah. So, uh, log me in. I worked with five years. I ran marketing there from customer zero through the IPO filing today. It's a five billion dollar company. Natural word of mouth was huge with LogMeIn. So by the time I left LogMeIn, 80% of our users were coming in through word of mouth. And, uh, but we were spending, you know, more than a million dollars a month, three months payback on acquiring customers. But this is where I was saying that value drives word of mouth and word of mouth is really more powerful as a, as an acquisition loop than incentivized referrals. So we spent most of our time at LogMeIn Just making sure when I, when we first tried to grow the business, majority of people who signed up for the product never actually used the product. And so we spent a lot of time understanding why did you sign up and not download the software? Why did you download the software, but never do a remote control session? When we had those insights, we ran a ton of experiments to get more people through. And, uh, and it was really about unlocking acquisition as a channel for Well, I'll give you a specific example there. I initially tried to grow it and couldn't grow more than 10,000 dollars a month. Couldn't spend more than 10,000 dollars a month growing the business because we had such an inefficient funnel. It just, I lost money every time I tried to expand beyond that 10,000. B…

AI assessment note: “Natural word of mouth was huge with LogMeIn.”

Q And this was a, what, what did the service do?

A So it was, it was customer insights. So I'm such, I'm really passionate about figuring out what's going on with customers because they hold the keys to really figuring out your growth in the business. And so, um, we actually acquired that business, um, Uh, I think, 2012, and we acquired it from Kiss Metrics. It was called Kiss Insights at the time. Really, that was kind of this little side business, didn't have much revenue, but I, I liked the product. I'd been an advisor there and actually encouraged them to build it, and when I saw that they weren't doing a whole lot with it, I asked if I could acquire it and, uh, took it over and, and built it up to, to, to millions of dollars in recurring revenue, uh, And, uh, and then we sold it, yeah, a year ago, but it was basically, it's on a website you can target based on specific behavior of a user on a website and understand, like, if they're abandoning a page, you can understand why, why did you decide, just like I was saying with, with LogMeIn, why did you decide to sign up for this software, but not download this software? And, uh, the insights that you can get from those sorts of questions are super powerful in A-B testing and, and trying to improve the customer experience.

AI assessment note: “it's on a website you can target based on specific behavior of a user”

Q Quickly. I want to understand the incentives you use of these different companies. Because a lot of founders, they struggle with is what to give as the incentive to do this. Dropbox, the currency was storage. What was Eventbrite?

A Um, so Eventbrite, again, it, it, Eventbrite actually did not have an incentive. Eventbrite's just a natural, a really natural kind of viral product in itself, that an event organizer sets up an event among their attendees at that event, who then come through the system and buy tickets and, and have a good experience buying those tickets. Someone, someone is going to be a potential event organizer, an existing event organizer, And they're now exposed experientially to, uh, Eventbrite. And so now that when it comes time for them to organize their event, they're much more likely to use Eventbrite. And then increasingly Eventbrite really helps companies sell tickets as well. So over time you, you are going to gravitate, not just to the really convenient experience that Eventbrite offers, but you're going to, uh, actually go to the system that has really good SEO, really good social integration, kind of all of the Pieces that are going to help you sell more, but as an attendee at an event, you see all of those things and your, your likelihood of them becoming an event organizers is quite a bit higher.

AI assessment note: “Eventbrite actually did not have an incentive. Eventbrite's just a natural”

Q this is kind of the, one of those things like social media marketing. There's so much noise in the growth hacking space, right? So your challenge is helping people understand like you're legit, right? You got Ryan holiday with his little, you know, ebook you've got near with a version, you know, hooked. Um, why should people buy this book over those two books or any other growth hacking books?

A I think a lot like Ryan holiday's book was awesome to bring attention to growth hacking and, and to get people talking about it and thinking about it, but there hasn't really been that guidebook for what do you do as a team? And especially for, for bigger companies that want to replicate what Facebook has done and what Uber has done. And some of these, some of these companies that have taken teams across that full customer journey and And are running optimization across that full journey and working all of the levers of growth and the testing process. That stuff is hard. You know, marketing as just an acquisition channel. That's not that hard, but you actually need cultural change, cross-functional coordination and collaboration, and so being able to have a guidebook that shows a company how to latch onto those things, and then ultimately guidance around how to, how to work each of those levers effectively. So we've got, um, you know, the method building the growth team, what, what you need foundationally to be able to drive growth, and then a lot of stuff on just the tactical of how, how to manage different areas of the funnel for growth, but, uh, It's super powerful, but I think people, people need the help, and that's, that's what the book does, and that's what most of the components of my business do.

AI assessment note: “there hasn't really been that guidebook for what do you do as a team”

Q By the way, you said you listen to the show. I always like asking those questions, because you go, okay, Nathan just talked to this guy that's raised a quarter of a billion dollars, but he's divorced with three kids, and he only sleeps four hours a night. Do you really want to replicate that? Do you like those questions or not?

A No, I think it's good to understand, you know, I used to read a bunch of, uh, of, of biographies on really successful people, and I found them really inspiring, but then you read, like, Ted Turner, multiple suicide attempts. I mean, I might be wrong there, so don't, not necessarily fake news, um, but I think I read that he, uh, that he, like, I mean, what you find is that a lot of these guys are kind of miserable once they get to that level of success, and so, um, You know, I, I definitely feel like I could be, I could be more successful in life if that was the only thing that happened, more successful financially. But, um, yeah, I mean, I, I like to get out surfing a couple days a week. I just, you know, the, it's a, it's a marathon and, uh, and quality of life is important. And for me, for me, I, I do this not for money. I do this for, um, I'm just really passionate about it and trying to, trying to figure growth out and being able to work with companies to, um, Figure it out and give them software and give them conferences and give them training and just, you know, kind of collaboratively. We're, we're just so early in figuring out how companies grow. And so it's, uh, I, it's just like a privilege for me to be able to do these things. And of course, when I took in venture capital, that means I have to try to build a big valuable business. But, um, but I think you do that not…

AI assessment note: “I think it's good to understand”