Podcast Summary
Lessons from the early days of social media growth: Combining art and science in growth strategies and experimentation led to valuable insights during the early days of social media growth.
The early days of social media and viral growth saw the birth of growth teams and the experimentation with various tactics to reach millions of users quickly. Gustav Elstromer and Ed Baker, who have extensive experience in scaling growth teams at companies like Airbnb and Uber, shared their insights from this period during a conversation at the Y Combinator scale up offsite. During this era, platforms like Facebook provided an easy environment for building and testing simple apps, allowing for the discovery of what works and doesn't work through A/B testing. One notable example from this time was the creation of the viral Facebook app, Zodiac Photo Album, which allowed users to create a photo album with one click for each Zodiac sign. However, Facebook eventually changed the rules after discovering this tactic. Overall, the early days of social media growth taught valuable lessons about the importance of combining art and science in growth strategies and the power of experimentation.
Optimizing user experience for social connections led to growth in early mobile apps: Focusing on user experience and social connections were key drivers of growth in the early days of mobile apps
In the early days of social media and mobile apps, growth was a key focus, especially with the emergence of new platforms and features like add books and push notifications. When Ed joined Voxer, a walkie-talkie app, he prioritized optimizing the user experience to show friends upon opening the app, achieved through matching phone numbers and address books. This approach led to a significant increase in user engagement and retention. The success of this strategy was a major factor in Voxer's growth and eventually led to Ed joining Facebook's growth team after the acquisition. Overall, focusing on user experience and social connections were crucial components in driving growth during the early days of mobile apps.
Shifting focus from acquiring to retaining users: At mature companies, growth teams prioritize retaining and engaging existing users, while startups focus on acquiring new ones. Structured teams with product, engineering, analytics, design, and marketing collaborate to optimize for metrics and experimentation.
That the transition from experimenting with growth at a startup to working at a mature company like Facebook involved a shift in focus from acquiring new users to retaining and engaging existing ones. At Facebook, the growth team was structured with all essential functions, including product, engineering, analytics, design, and marketing, working together. This approach was later adopted when starting the growth team at Uber and Airbnb, which applied digital growth technology to traditional businesses. The primary goal was to optimize for metrics and experimentation, a function that was not common in startups at the time. Another significant observation was the emphasis on friending as a key driver of retention and engagement at Facebook, leading to teams focusing on People You May Know and other methods to facilitate connections.
The evolution of growth teams from evangelists to core product team members: Growth teams drive product innovation and optimization by influencing the entire organization with their expertise, using advanced experimentation tools and focusing on optimizing user experience.
The role of growth teams has evolved from being the evangelists of experimentation and data-driven decision making to becoming integrated into the core product teams, influencing the entire organization with their expertise. This shift was evident during the speaker's tenure at Airbnb and Uber. At Airbnb, the presence of experienced growth teams allowed for the easy implementation of advanced experimentation tools and a focus on optimizing the user experience. At Uber, the formation of the growth team in a two-sided marketplace required careful consideration of the North Star metric, ultimately settling on weekly trips as the primary metric to track. The unique challenge of Uber as a real-world company necessitated a more nuanced approach to growth accounting, with a focus on both the supply and demand sides of the marketplace. Overall, the speaker's experiences highlight the importance of growth teams in driving product innovation and optimization in today's data-driven business landscape.
Measuring user behavior in real-world scenarios like Uber presents unique challenges: Invest in paid marketing and integrate it with product and engineering teams to maximize growth potential in real-world businesses like Uber
Measuring and influencing user behavior in real-world scenarios, such as ride-sharing platforms like Uber, presents unique challenges compared to digital platforms like Facebook. While Facebook allows for extensive online tracking and measurement, Uber involves real-world steps like vehicle inspections and app downloads that can't be easily measured online. Additionally, paid acquisition plays a significant role in growing user bases for businesses like Uber and Airbnb, especially in competitive markets, where free growth opportunities may become limited. Companies should invest in paid marketing and integrate it with product and engineering teams to maximize growth potential.
Growing Quickly in a Two-Sided Marketplace: Uber's Complex LTV Calculation: Focus on growing quickly in a two-sided marketplace for efficiencies and increased liquidity, but calculating LTV for riders vs drivers is complex. Excel on a primary platform, consider underpriced channels for growth, invest in engineering, data science, and product, and balance customization with a centralized playbook when expanding cities.
In a two-sided marketplace like Uber, growing quickly can lead to significant efficiencies and increased liquidity, making it beneficial to focus on getting larger as quickly as possible. However, calculating the LTV (Lifetime Value) of a rider versus a driver in such a marketplace can be complex due to the interconnected nature of the platform. Companies that achieve massive growth typically excel on one primary platform, be it search, display, or virality. Currently, there seems to be potential for growth in underpriced channels like Instagram for app install ads. Long-term investment in engineering, data science, and a great product are crucial for success. When expanding city by city, a balance between customization and a centralized playbook is necessary.
Integrating product and operations for global growth: Effective global growth requires a strong integration between product and operations, standardized launch processes, and adaptability to local market needs. Experimentation and iterative learning are essential for success.
Effective growth in a global business requires a strong integration between product and operations teams, as well as the ability to adapt to local market needs. This can be achieved through a dedicated Product Ops team and a standardized playbook for launching in new cities. However, challenges such as language barriers and unique market conditions can necessitate creative solutions, like building a WeChat bot for driver sign-ups in China. Another important factor is identifying and addressing product gaps, such as language translation and local payment mechanisms. A key learning from the speaker's experience is that growth is an iterative process and that experimentation, even when it leads to unexpected results, is essential for success. One example of this was an experiment with a new feature that the team believed would have a significant impact but ultimately did not, and another instance where a seemingly unpromising experiment exceeded expectations.
Testing small tweaks can lead to big impacts: Experimenting with renaming 'invites' to 'announcements' or 'add' instead of 'invite' led to significant increases in virality and user engagement in different contexts. Being open to experimentation and attuned to cultural nuances and user preferences is crucial for growth.
Experimentation and testing small tweaks can lead to significant impacts on user behavior and growth, even if the changes seem insignificant. This was exemplified by Facebook's experience in Japan, where renaming "invites" to "announcements" led to a major increase in virality. Similarly, mobile developers have found that changing the language from "invite" to "add" can result in a higher number of SMS invitations sent out. These findings highlight the importance of being open to experimentation and being attuned to cultural nuances and user preferences. Another key takeaway is that predicting product decisions can be tricky, and disagreements among teams are a natural and expected part of the process. The experiment review sessions, where teams present and discuss their results, provide opportunities for learning and growth. Overall, these insights underscore the importance of being flexible, open-minded, and willing to take risks in order to drive growth and improve user experience.
Balancing new user acquisition and retention in a growing company: Focus on new user acquisition in the initial growth phase, but later prioritize retention and re-engagement to maintain growth. Experiment with solutions to improve user experience and retention, such as providing new drivers with information and support.
Optimizing for a North Star metric in a growing company requires a balance between different sub-metrics, such as new user acquisition, retention, and re-engagement. Early on, focusing on new user acquisition makes sense due to the larger impact it has on the overall growth. However, as the user base grows, retention and re-engagement become increasingly important. Ed, former Growth Lead at Uber, shared his experience of implementing this balance at Uber, where they focused on new user acquisition during the initial growth phase, but later shifted their focus to retention and re-engagement as the user base grew. Ed also shared an example of an experiment they ran to improve retention for new drivers. They noticed that new drivers sometimes had to wait a long time for their first trip request, which could discourage them from continuing to drive. To address this, they experimented with improving the first experience for new drivers, such as providing them with information on where to wait for requests and offering support from experienced drivers. These efforts helped to increase retention and ensure that new drivers had a positive first experience with the platform.
Merging Growth and Marketing Teams for Data-Driven Decision Making: Companies are merging growth and marketing teams to optimize for both engagement and retention through data-driven decision making and cross-functional collaboration.
Companies are moving towards making their entire organization growth-focused, as opposed to having separate growth teams. This shift allows for data-driven decision-making and collaboration between teams, such as product, marketing, and data. Airbnb and Uber are examples of companies that have merged their product and growth teams to optimize for both engagement and retention. When growth and marketing are seen as one, rather than separate and contentious, the entire organization can work towards growth objectives, even in areas like brand and homepage copy. While specific growth hacks from China may not be shareable, the general trend towards data-driven decision-making and cross-functional collaboration is a valuable takeaway for organizations looking to scale their user bases and teams.
