Podcast Summary
Growth levers: Focusing on a few key growth levers can lead to more effective growth for businesses, as opposed to spreading resources thin and trying to do everything at once.
Focusing on a few key growth levers can make a significant impact on a business, as opposed to spreading resources thin and trying to do everything at once. Matt Lerner, an expert in business growth and author of "Growth Levers," shared his insights from his experiences at PayPal and working with over 200 startups. He emphasized that complexities can hinder growth and that identifying a North Star metric, such as a life-changing impact on customers, can help businesses stay focused. Lerner also shared his background, from working in a lab at an oil refinery to joining and growing with PayPal, becoming a VC, and eventually starting his own business to help other companies find their growth levers. He noted that startups often make preventable mistakes and squander resources by trying to do too much at once. Instead, focusing on a few key areas and scaling those can lead to more effective growth.
Growth levers for startups: Identify and prioritize growth levers, the high-impact areas that contribute to 90% of a startup's growth, to optimize growth strategy and achieve goals efficiently.
For startups looking to grow, it's crucial to identify the 10% of actions that will contribute to 90% of the growth. This concept, known as the 90-10 principle, can be seen in successful startups like Dropbox and Canva, which focused on viral product-led growth and optimized onboarding experiences, respectively. Growth is a cross-functional role that requires a deep understanding of the business and the ability to pull levers across various departments. It's essential for startups, especially those with limited resources, to identify and prioritize growth levers, which are the actions that will have the most significant impact on business growth. These levers could be related to product, marketing, sales, or even compliance and legal matters. By focusing on these high-impact areas, startups can optimize their growth strategy and achieve their goals more efficiently.
Customer Needs Identification: Identifying customer needs and desires through mapping customer journeys and asking questions about goals and motivations can help design effective growth experiments and ultimately, scale a business.
Growth hacking involves identifying customer needs and solutions at the right place and time through a process of mapping customer journeys, filtering ideas, experimenting quickly, and embracing a mindset of learning from mistakes. This approach can help businesses test assumptions and optimize growth strategies effectively. To apply this to a business coaching session, the process would begin with understanding the ideal customer by asking questions about their goals and motivations, rather than focusing on specific demographics. The goal is to identify the underlying needs and desires that drive customers to engage with a product or service and use that knowledge to design growth experiments and ultimately, scale the business.
Ideal customers for YouTube channel and courses: The speaker targets ambitious, goal-oriented individuals who value personal development and aspire to start their own businesses. They prioritize holistic personal growth and are deliberate in their actions. The speaker recognizes the need to offer new ideas to keep engaging his audience and explore alternative revenue streams to grow his business.
To help more people achieve their goals of self-actualization and financial freedom, the speaker identifies his ideal customers for his YouTube channel and courses. These customers are ambitious, goal-oriented individuals who value personal development and aspire to start their own businesses. They are deliberate and care about their overall well-being, including health, relationships, and holistic personal growth. The speaker recognizes that his competitors are anything that helps his customers achieve their goals. He acknowledges that his YouTube videos reach a large audience, and his products have a high level of trust, but he feels that the content may be repetitive and that he needs to come up with new ideas to keep engaging his audience. Additionally, he feels that he is not making enough revenue compared to his peers and is considering different directions for growing his business, such as software, B2B learning and development, B2B agencies, self-paced courses, and membership communities.
Team capabilities: Consider team's strengths and limitations before deciding on projects to pursue. A clear direction is important, but understanding team expertise can prevent frustration and unrealistic goals.
While having a clear direction and focusing on specific goals can help a business grow, it's essential to consider the team's capabilities and expertise before deciding which projects to pursue. The speaker shared his experience of facing frustration within his team due to a lack of clarity on which direction to take their business in. He emphasized the importance of having a good team and the limitations of trying to do everything. The speaker also related to the entrepreneur's dilemma of having numerous ideas presented to them, making it difficult to decide which one to focus on. Brilliant was introduced as a sponsor, offering an engaging and interactive way to learn various skills, including computer science and data analysis, which can help individuals and businesses level up. The speaker also discussed the potential dangers of working backwards from a revenue goal, emphasizing the importance of understanding the business model, customer base, and team capabilities before setting unrealistic targets. In summary, focusing on a clear direction and specific goals is crucial, but it's equally important to consider the team's strengths and limitations before deciding which projects to pursue.
Customer Focus: Deliver value to customers first, maintain clear vision, stay aware of competition, and adapt to changing customer needs to ensure business growth
Regardless of whether a business is a startup or an established enterprise, the focus should be on delivering value to customers first and foremost. Monetization strategies should come secondary. The business model, market, or category may be new or established, but understanding and addressing customer needs is crucial for growth. Startups often face the challenge of figuring out the business model and playbook, while more established businesses may need to adapt to changing customer needs and competition. In both cases, it's essential to keep the content fresh and maintain a clear vision for the business. A potential pitfall is neglecting customer service and taking the customer base for granted. This can lead to a decrease in engagement and sales, as well as negative publicity. It's also important to stay aware of the competitive landscape and adapt to changing market conditions. In the end, a business's success depends on its ability to understand and meet customer needs, and its resilience in the face of challenges and competition.
North Star metric: Identify the single metric that encompasses the entire business and delivers value to customers, from acquisition to monetization and retention.
Measuring and focusing on the value delivered to customers is crucial for business growth. This can be done through various metrics, such as watch time, number of loyal fans, or lives changed. It's essential to identify the North Star metric that encompasses the entire business and delivers value to customers, from acquisition to monetization and retention. The discussion also emphasized the importance of simplicity in understanding and managing a business, especially as it grows in complexity. Breaking down a company into smaller, distinct businesses can help achieve this simplicity, but it may also add complexity at an early stage. Ultimately, the goal is to deliver helpful content to an audience and monetize it, focusing on metrics that directly measure the impact on customers.
Focus and simplicity: Clear vision and unwavering expectation of everyone in the company knowing their job contributes to successful product launches. A clear mission and focus on helping people towards their goals is essential for defining North Star metrics.
Focus and simplicity are key to success, as demonstrated by Apple under Steve Jobs. Apple's ability to launch successful products every year was due to Jobs' clear vision and unwavering expectation that everyone in the company knew exactly what their job was. For a company looking to define its North Star metric, it's essential to have a clear mission and focus on the number of people being helped towards achieving their goals. Metrics like monthly returning viewers could be a reasonable proxy for true fans, but it's important to consider the incentives of appealing to the existing audience versus trying to get new audiences. Engaging, retaining, and monetizing these loyal subscribers or followers are also crucial aspects of a successful business.
YouTube monetization and audience engagement: Focus on delivering valuable content to returning viewers to build a loyal audience, rather than chasing after viral videos or high view counts. Monthly returning viewers could be a better metric for measuring channel success than views.
Engaging viewers is crucial for monetization on YouTube, but it's essential to avoid the pressure of chasing after viral videos or high view counts, focusing instead on delivering valuable content to returning visitors. The speaker emphasized that the goal is to build a loyal audience by providing a consistent stream of content, rather than relying on one viral hit. He also shared his concerns about using views as the North Star metric, as it might lead to a focus on short-term gains rather than long-term audience engagement and retention. The speaker suggested that monthly returning viewers could be a better metric to measure the success of a YouTube channel, as it would reflect the number of people who consistently engage with the content. He also discussed the potential benefits of combining educational and lifestyle content on the main channel to attract and retain a larger audience. The speaker acknowledged that defining the North Star metric for a content business with multiple channels and revenue streams might be challenging, but emphasized the importance of focusing on audience engagement and retention as the primary goals.
Viewer engagement: To turn a viral viewer into a loyal subscriber, creators should focus on encouraging viewer action and providing valuable tools or content that resonates with their needs beyond engaging content.
Viral videos are crucial for channel growth, but turning new subscribers into loyal ones requires more than just engaging content. The key lies in encouraging viewer action and providing valuable tools or content that resonates with their needs. By understanding the experiences that convert a first-time viewer into a regular one, creators can optimize their content strategy and engage their audience more effectively. Additionally, offering a range of topics and formats can help maintain viewer interest and keep existing subscribers engaged. Overall, the process of turning a viral viewer into a loyal subscriber involves identifying the crucial stages of engagement and leveraging various content strategies to maximize viewer retention.
YouTube monetization and audience growth: Creating engaging content and growing a loyal viewer base are crucial for YouTube audience growth and monetization. A catchy title can attract viewers, and positive feedback loops help retain them. Monetization includes providing value through owned products and services, and the number of monthly returning viewers is a key metric leading to various monetization opportunities.
Creating engaging content and growing a loyal viewer base are key to both audience growth and monetization on YouTube. A useful video title can attract viewers, and positive feedback loops, such as increased visibility leading to more viral videos, help retain them. Monetization goes beyond just revenue and includes providing value to customers through owned products and services. The number of monthly returning viewers serves as a North Star metric, leading to monetization through various means like sponsorships, courses, and affiliates. Understanding and optimizing ratios and conversion rates is essential to growing this number.
YouTube channel optimization metrics: Focus on habituation rate to get new viewers to engage with the channel and monetization rate to maximize revenue from returning viewers. Engage with the audience through comments and consider having an email list for reaching new audiences.
Optimizing a YouTube channel involves focusing on key metrics that contribute to the overall success of the channel. The first metric is the habituation rate, which refers to getting new viewers to watch multiple videos and engage with the channel. This can be achieved by giving valuable content away for free, clearly introducing oneself, and asking viewers to watch another video. Another important metric is the monetization rate, which is the revenue generated per monthly returning viewer. This can be influenced by the percentage of monthly returning viewers who are actively monetized versus passively monetized, and the average value of each monetization type. Engagement metrics, such as comments, are also crucial for building a community and retaining viewers. It's important to keep track of these metrics and continuously optimize to increase the overall success of the channel. Additionally, having an email list can be beneficial for reaching new audiences and reducing risks associated with relying solely on YouTube.
Social media priorities: Evaluate each social media project's usefulness, potential for growth, and alignment with the business mission to prioritize and focus on core aspects that drive growth and revenue.
While having a presence on various social media platforms and engaging in side projects can bring value to a business, it's essential to prioritize and focus on the core aspects that drive growth and revenue. The proliferation of "sevens" or lesser-priority projects can lead to complexity, distraction, and inefficiency, making it difficult to manage resources and maintain focus. To avoid this, it's crucial to evaluate each project's usefulness, potential for growth, and alignment with the business's mission. By de-risking and validating assumptions, businesses can make informed decisions about which projects to invest in and which to let go, ensuring they stay focused on their primary objectives.
ROI evaluation for marketing channels: Evaluate potential ROI of marketing channels by considering audience engagement, technological capabilities, financial feasibility, passion project vs growth engine, scalability, synergy, and monetization potential. Continuously reassess and adjust strategies based on data and changing circumstances.
It's essential to evaluate the potential return on investment (ROI) of various marketing channels, such as podcasts, social media platforms, or ads, before committing significant resources. The speaker shared his experience of revamping his podcast and focusing on Instagram as a growth lever for his business. He emphasized asking critical questions like the audience engagement potential, technological capabilities, and financial feasibility before making a decision. The speaker also discussed the importance of considering whether a marketing channel is a passion project or a potential growth engine and evaluating its scalability, synergy with other channels, and monetization potential. Ultimately, it's crucial to continually reassess and adjust marketing strategies based on data and changing circumstances.
Focusing on a few marketing channels: Identify the marketing channels that align best with your business and capabilities, then dedicate all resources to mastering that channel to create better and fresher content for long-term growth
Focusing on a few marketing channels instead of spreading resources thinly across multiple channels can lead to greater success. The speaker suggests that companies should identify which channels align best with their business and capabilities, and then dedicate all their energy to mastering that channel. He uses the example of a YouTube channel, where creating viral videos requires a specific team and process, and adding more people or resources doesn't necessarily lead to more viral content or growth. Instead, it's important to build a core creative organization and process to consistently produce high-quality content for your audience. Ultimately, the goal is to create better and fresher content that resonates with your viewers, which can lead to long-term growth and success.
Repurposing content: Repurposing content across platforms can increase reach and engagement. Understand each platform's unique strengths to maximize synergy and reach.
Repurposing content across different platforms, such as turning podcast interviews into YouTube videos, can lead to increased reach and engagement. This approach allows for the leveraging of expertise from guests and reduces the reliance on providing all insights oneself. Additionally, understanding the unique strengths and audience demographics of each platform, such as LinkedIn and email newsletters, can help maximize synergy and reach. However, it's important to reevaluate past decisions and consider whether the current approach of having a multitude of revenue streams and products is still necessary or if focusing on one core product could lead to greater simplicity and success.
Rate limiting step: Identifying and addressing the rate limiting step in a business can significantly increase its growth and efficiency. In a tech business, this might be the time spent on a YouTube channel, and addressing this bottleneck can unlock major growth.
Identifying and addressing the rate limiting step in your business can significantly increase its growth and efficiency. This concept, known as the theory of constraints, was explained using the example of an oil refinery, where the bottleneck in the system determines its overall throughput. Applying this concept to a tech business, the speaker identified that the rate limiting step for their growth model is the amount of time they have to focus on their YouTube channel. By increasing this time or finding growth channels that don't rely on more filming, they can unlock a major bottleneck and grow the business. The speaker also acknowledged that this issue may stem from a creative process bottleneck or a lack of time for deep work and thinking. By addressing these issues, they can generate more content and ideally, have more time to explore ideas and make YouTube videos, which is the best use of their time.
Embracing experimentation: To grow and evolve their business, the interviewee needs to embrace experimentation, make more mistakes, and better understand their customers' needs and journeys through customer interviews and monetization strategies.
The 15 priorities of the interviewee may be rooted in a deep-seated need for perfection and risk aversion, stemming from their academic background and training as a doctor. To grow and evolve their business, they need to embrace experimentation, make more mistakes, and better understand their customers' needs and journeys. This could involve conducting customer interviews, focusing on increasing monetization per follower rather than acquiring more followers, and developing a clearer sense of the limits of their knowledge. Overall, the interviewee's success so far is impressive, but to continue growing, they must be open to new approaches and ways of learning.
Customer understanding, Business growth: Acknowledging the limits of customer understanding and developing curiosity to learn more can lead to new business opportunities. Diversifying business through separate teams and multiple channels can increase growth potential, but it's risky. A holding company portfolio of small businesses can offer diversification and a balanced lifestyle.
Understanding your customers and their needs is crucial for business growth, but acknowledging the limits of your understanding and developing a curiosity to learn more can lead to new opportunities. The speaker shares his ambition to build a business that is not dependent on his YouTube video output, and suggests dividing his business into separate teams with dedicated growth leaders to experiment with new channels. However, the odds of successfully growing multiple businesses from scratch are low, but having an existing audience and validated products can de-risk the process. The speaker also mentions the potential of a holding company portfolio of small businesses, each generating profits, as a way to diversify and potentially increase overall value. While it may not be a traditional single-purpose company, this model can offer a more balanced lifestyle.
Business growth experiments: Focus on experiments or growth sprints to identify viable channels, save resources, and encourage continuous learning by testing hypotheses, documenting results, and involving the entire team.
For business growth, focusing on experiments or growth sprints involves identifying potential channels, assessing their focus, size, and risk, and then implementing them if they pass these tests. This approach saves resources by eliminating non-viable ideas and encourages continuous learning. The process also includes forming well-defined hypotheses, documenting results, and involving the entire team. While most experiments may fail, the learning gained is invaluable. Matt's advice emphasizes the importance of a counterintuitive, first-principles-based approach to growing a business. For those interested in further exploration, consider checking out related episodes and resources mentioned in the podcast.