thanks for having me um so today I am
going to be talking about how to go from
zero users to many users um uh I'm just
assuming that you have many great ideas
in your head at this moment and um
you're kind of thinking about what the
next step is so I wrote this up um early
this morning and a lot of this is based
off of mistakes I've made in the past um
so as Sam mentioned I went through YC in
2010 and uh spent a number three years
basically going back and forth pivoting
a bunch of times starting over a bunch
of times um and have learned a lot about
what not to do if I were to start
another startup after homejoy um if that
should ever happen and uh so a lot of it
comes from failure and just telling you
about what you shouldn't do um and kind
of making generalizations of what you
should do from that uh
so just a reminder that this is sort of
you know all advice you should take as
directionally good guidance like it's
all it's like it's kind of in the right
direction but every business is
different you are different I'm not you
and so um just take everything with you
know that in mind um so since this is a
college course you know when you start a
startup you should basically have lots
of time on your hand um to concentrate
on the startup and I'm not saying you
should know quit school or you should
quit work what I'm saying is you should
have a lot of time compressed time in a
in a row um really dedicated to
immersing yourself in the idea and
developing problems or developing the
solutions to the problem you're trying
to solve um so for example if you're in
school you know it's better to have one
or two days straight of per week on
working on your idea versus you know
spending 2 hours here and there every
single day during the course of the week
um it's sort of like I think this is in
class so uh it's sort of like coding
like there's a lot of context switching
and and just being able to really focus
um uh really really focus on immers
yourself is very very important so like
I said I sort of first when I wrote this
up was thinking what
is uh what are what are the things that
most PE some people do or most people do
that um is not the correct way to do a
startup and um sort of the novice
approach I think is what you see here
which is you know I have this really
great idea I don't want to tell anyone
about it I'm going to build build build
build I'm going to maybe tell one or two
people and then I'm going to launch it
on you know I'm going to launch it on
Tech runch or some somewhere like that
um then I'm going to get lots of users
but what really happens is because you
did not get a lot of that feedback and
stuff like that you know maybe you get a
lot of people to your site but um no one
sticks around because you didn't get
that initial user feedback and then you
know if you you know if lucky enough you
have some money in the bank you might go
buy some users but sort of it just
whittles out over time and and you just
give up and it's a sort of a visal cycle
and you know I actually did this once
and I did this while I was in YC and
that was you know like when I went
through YC I didn't even launch a
product like I didn't even launch in
Tech runch which is the thing that you
should definitely do um and and so you
don't want to ever get into that cycle
because uh you'll just end up with
nothing good so the next thing is uh
you know you have an idea and you should
really think about uh what the idea is
really solving like what is the actual
problem and so their problem statement
should you should be able to describe it
in one sentence and then you should
think how does that problem relate to me
am I really passionate about that
problem and then you should think okay
it's a problem I have is it a problem
that other people have and sort of
verify that by you know just going out
and talking to people um one of the
biggest mistakes I've made is you know
we started uh my co-founder and I who is
also my brother he and I started a
company called path jooy in
2019
2010 and our goal was basically to you
know we we had two goals in mind one is
to create a company that made people
really happy and uh and and um create a
company that was very very impactful and
a good proxy for that is to just create
a huge big company and so we thought
okay here's the here's of what we're
going to solve is you know make people
happier and our we first went to the
notion of who are the people that made
people happy and we you know we came up
with life coaches and therapists um so
it seemed kind of obvious to just create
a platform for life coaches and therapis
and what happened as a result though was
that you know when we started using the
product ourselves we we you know we're
not cynical people by any means but life
coaches and therapists are just not
people we would use ourselves um it was
sort of useless to us and so it wasn't
even a problem we had and certainly
wasn't something we're super passionate
about building out yet we spent you know
almost a year trying to do this and so
if you just start you know from T equals
z just like think about this before you
even build any product I think you can
save yourself a lot of headache down the
road um from doing something you don't
want to
do so say you have a problem and you're
able to State it um where do you start
like how do you think of
solutions um so the first thing you
should do is think of what the industry
that you are getting yourself into um
whether it's big whether it's huge you
should really immerse yourself in that
industry and there's a number of ways to
do this one is you know to really become
a cog in that industry for a little bit
and so it might seem a little
counterintuitive to do this because most
people say you know if you really want
to disrupt an industry you should really
not be this you know player in it you
should you know it it you know someone
who's spent 20 or 30 years in an
industry probably does you know sitting
their ways and is just used to the way
things work and really can't think about
what the inefficiencies are the things
that you can quote unquote disrupt but
however as a new like coming into the
industry you really should take you know
one or two months just really
understanding what all the little bits
and pieces of the industry are and how
it works um because it's when you get
into the details that's when you start
seeing things you can exploit things you
can really things that are really really
inefficient and provide you know huge
overhead costs that you can cut down um
and so an example of this is you know
when we start at home joy we we we
decided to go we started with the
cleaning industry and when we started
you know we just were cleaners
ourselves and we started to clean houses
and what we found out really quickly was
that we were very very bad cleaners um
and so as a result you know we said okay
we got to learn more about this and we
went to buy books um and uh we bought
books about how to clean which helped
maybe a little bit we learned a little
bit more about cleaning supplies um but
it's sort of like basketball you know
you you can watch and you can learn or
you can watch and read about basketball
but you're not going to get better at it
if you don't actually you know train and
you know throw throw back basketball
round and throw into the
hoop and so we decided one of us
basically had to go and learn how to
clean and so we went um or get trained
by you know a professional s some sort
of professional training program if that
existed and that meant we actually went
to get a job at a cleaning company
itself and the cool thing was that you
know I learned how to clean um from you
know training for the few weeks that I
was there at the cleaning company but
the even better thing was that I learned
a lot about how a local cleaning company
worked and in that sense you know I
learned why a local cleaning company
could not become huge like homejoy is
today uh and that's because they have
you know they're pretty old school and
they have a lot of things um just just
from anywhere from booking the customer
to um optimizing the cleaner schedules
uh was just done very
inefficiently and so there's so so so so
when you go if you are in a situation
like mine where you know there's a
service there's a service element of it
you should go and do that service
yourself you know if you work if your
thing is related to restaurants you
should become a waiter if if if it's
related to you know painting you know
become a painter and kind of get in the
shoes of your customers um from all
angles of what you're trying to build uh
the other thing is there's also a level
of obsessiveness that you should have
with it too as well like you should you
should be so obsessed to to know like
what everybody in the space is doing and
it's things
like you know running a list of all the
potential competitors or similar types
of companies um Google searching it and
clicking on every single link and
reading every single article from what
from like search result number one to
1000 you know I I found um all potential
competitors big and small and if they're
public I would go read their S1 I would
go I would go read all their quarterly
financials I would you know sit on the
earnings calls
um there's you know most of these you
don't get much out of it but there's
just these golden nuggets that you'll
find once in a while and you you won't
be able to find that unless you actually
go through the work of you know getting
all that information in your
head um so yeah you should become an
expert in the industry um there should
be no doubt uh when you're building this
that that you are the expert so that
people trust you when you're building
this product the second thing is
identifying customer segments so you
know I ideally at the end of the day in
the endgame you've built a product or a
business that everybody in the world is
using uh but realistic like in the
beginning you kind of want to corner off
a certain part of the of a customer base
so that you can really optimize for them
and that's just you know it's just a
matter of focus and a matter of you know
just you know catering towards whether
it's teen girl teenage girls or whether
it's you know soccer moms um you'll just
be able to you know like I said focus a
lot on on their
needs and lastly um before you know
before you even create the product
before you put code down you should
really storyboard out the ideal user
experience of how you're how you're
going to solve the problem um and that
and that's not just meaning you know the
website itself it's meaning you know how
does the customer find out about you you
know whether it's you know it could be
through an ad or through a word of mouth
or whatever so they find out about you
they come to your site they learn more
about you what's all that Tech say what
are you communicating to them to the
actual when they sign up for the product
or they purchased the service what are
they actually getting to after they
finished using the product or act after
they finished using the service what's
you know there's they're sort of like an
evaluation period like they leave a
review or um or or they leave comments
or whatnot and just being able to uh uh
go through that whole flow and and
visualize in your head like just
Envision what the perfect user
experience es um and then put it down on
paper and then put it into code and then
start from there um
so you have all these ideas in your head
Now you kind of know what the core
customer base you want to go after is
and you know like everything about the
industry what do you do next so you
start building your product um and you
know the common phrase that most people
use today is like you should build a
minimal VI the MVP minimal viable
product and I underlined viable because
I think a lot of people skip that part
um and they just go out with a feature
and then the whole user experience in
the very beginning um like is flat so
minimal viable product viable product
pretty much means you know what is the
smallest feature set that you should
build um to solve the problem that
you're trying to
solve and um I think if you go through
the whole storyboard experience you can
kind of figure out that very quickly um
but again you you have to be talking to
users right you have to potential user
you have to be seeing you what is what
exists out there already and what you
should be building to solve their
immediate needs
um and the second thing is before you
put in things in front of a user you
should really have your product a simple
you know product positioning down and
what what I mean by that is that you
know you should be able to go to you
know a person and you should be able to
say Hey you know this does X Y and Z
within a sentence um and and so for
example you know at homejoy we started
off with something actually super
complicated we're like we're an online
platform for Home Services we started
with cleaning and you can choose you
know blah blah blah blah and it just
went off for paragraphs and paragraphs
um when we present we went to you know
potential users to come on our platform
they just get kind of get bored after
the first first first uh first few
sentences and so what we just what we
found out was that you know we we really
needed this oneliner the one liner is
very important and it kind of describes
the functional benefit of of what you do
you know in the future when you're
trying to build a brand or whatnot you
should you should you know be able to
describe you know what are the emotional
benefits and stuff like that but you're
starting with no users you really need
to tell them what they're going to get
out of it so we simply after we changed
our positioning to get your place
cleaned for $20 an hour then everyone
got it um and we were able to get you
know users to users on the door that way
so you have a MVP going out there now
how do you get your first few users to
start trying
it um so your first users should be you
know the obvious people the people that
you're connected with uh you should use
it obviously you and your co-founder
should be using it your Mom and Dad
should be using it your friends and
co-workers should be using it beyond
that um you want to get more user
feedback and so you and I've listed here
of some of the obvious places to go to
and depending on what you're selling you
know you can take your pick of the pick
of the draw here um so online
communities um there's you know on
Hacker News now there's the show hn
that's a great place especially if
you're building tools for developers and
things like that local communities so if
you're building consumer product you
know there are a lot of influential um
local community mailing lists um uh
especially those for you know um parents
um so those are places you might want to
hit up
to uh okay so when you go to uh by the
way homejoy we actually tried all of
these so um we used it oursel that was
fine cuz I mean we were on a cleaner so
that was pretty easy um and then our
parents lived in Milwaukee so we were
based in Mountain View so that didn't
work friends and co-workers are kind of
like in San Francisco and elsewhere um
so we didn't have too many of them use
it so we're actually um ended up in a
dead end of um not being able to
convince many people to use this in the
beginning uh so what we did was because
we're in Mountain View some of you guys
might know on cter Treet they have uh
street fairs there during the
summertime and so we go out and
basically chase down people and try to
get them the book of cleaning and almost
everyone would say no uh until one day
um we just took advantage you know it
was a very hot and humid day and what we
noticed was you know and this is like an
any any fear people you know there might
be arts and crafts and things like that
and random people will you know
gravitate towards that but everybody
gravitates towards the food and drink
area especially on a hot day so what we
did was okay we need to we figured we
need to get in the middle of that and by
getting in the middle of that we just
took water bottles froze them and then
we started handing out free Free bottles
of water that were cold and people just
came to us we I think we basically Guilt
Trip people into booking cleanings um
but the proof in the pudding was that I
figured most of the people were guilt
tripped into doing it but uh when they
went home they didn't cancel on us or
some of them did but uh majority of them
did not and so we felt like I I thought
okay that's good I got to go clean their
houses but uh at least you know there's
something we're actually solving here um
so uh and you know I don't Sugg I think
showing up the fairs or I know another
startup in the last batch I forgot their
name right now but they uh they they
showed up they were selling shipping
type products or trying to replace
shipping products or or the concept of
mailing stuff and so they would show up
to the US postal office and just like
find people who are trying to ship
products and just take them out of line
and try to get them to use your product
and have them ship before him um so you
just have to go to places where people
are going to really show up and you know
your provision rate is going to be
really really below but to go from Z to
1 to 3 to four um these are kind of
things you um might have to
do okay so you got some users using you
now what do you do with all these
users
um customer feedback so one the first
thing you should do is make sure there's
a way for people to contact you so
support homejoy
and uh if you put hook up a phone number
one really good idea is to uh make sure
that uh you have voicemail or something
like that so you don't have to be
picking it up all the time um but in any
case a way for people to get inbound to
get inbound feedback is good but really
what you should be doing is going out to
your users and talking with them you
know get away from your desk and just
get out and do the work it's it seems
like a SLO in it's going be a slog but
this is where you're going to get the
best feedback ever for your product and
this is going to teach you on what
features you need to completely change
get rid of or what features you need to
build and so one way to do this is to
send out surveys you know to get reviews
after they've used the product um this
is okay but generally you know people
are only going to respond if they really
love you or they really hate you and you
never get like the in between um so kind
of get the in when and not get all the
extremes is to go out and actually meet
the person that is using your product
and
um it's not a good idea to you know I've
seen people go out meet the user and
they sit there and it's like a
laboratory and it's it's like an
inquisition almost you're kind of just
like poking and poking and poking them
like why don't you do why didn't you do
that that's not going to give you the
best results what you should really do
is make it into a
conversation get to know them give them
to feel comfortable because you want to
get them at a level where they are they
feel like you know they should be honest
with you to to help you and and and
improve improve things for you so I
found that actually taking people out
for drinks and stuff like that was a
very good way to do that um not sure if
all of you are old enough to do that but
you can take them for coffee um so
another way another thing you should be
tracking is um how are you doing in
general from like the macro perspective
and one way to do that is the best way
to do that is um by tracking customer
retention that is the number of people
that came in the door today how many are
coming back tomorrow the next day and so
on and so forth um usually over time
you're kind of looking at you know
monthly retention so you know people who
came in the door today are they still
using it next month and so on so forth
the problem with that metric is that
it's you know it takes forever to
collect that data and you don't have
sometimes you don't have a month or two
months or three months to you know to to
figure that out so a good leading
indicator is actually um collecting
reviews and ratings like five star four-
star reviews are collecting some notion
of NPS which is net promoter scoar um so
you're basically asking them from a
rating from 0 to 10 um How likely are
they to recommend you to a friend and
calculating the MPS and so over time
what you'll see is as you're building in
new features you should be able to see
that the reviews or the retention is
going up over time which means you're
doing a good job if it's going down
you're doing a bad job um and if it's
kind of staying the same that means you
probably need to go out and figure out
what new things you you you should be
building um the other thing is I'll get
to the qualitative thing um later but
the one thing you should be wary of is
um the honesty curve which
is some people will just lie to you um
so I was going to
just let's just do so I mean this is
like Degrees of Separation from from you
and this is like level of
honesty like so here it's here this is
your
mom this is like your friends are
friends and here's like random
people so I don't know if you can all
see this but um so your mom is going to
be you
know they she should use your product
but she's G to be proud of you anyway um
and so she'll like maybe be honest like
this much and your friends will you know
they'll be pretty honest with you and
give you feedback because they care
about you by the way this is assuming
it's a free product that you're giving
them and then over time like as you get
more and more random these people don't
even know who you are um it doesn't go
like this really but it kind of goes
like this uh where people don't care
about giving you feedback they just like
okay here's a survey type type um and so
you should take this into C
consideration when getting user feedback
now let's say you make you pay it's a
paid product right well let's just do
this in green so the paid you know your
mom is going to be like down here like
she's just going to lie to you and say
you know she's just going to feel sorry
and say this is a great product of
course um but then you kind of it goes
like this right which is to say that you
know your friends are kind of going to
give you the right um they want to
support you and give you the right
feedback but it's actually these random
people out here that you know if if they
if they really don't think what they
paid for was worth it they're going to
really tell you um because you know it's
money out the door and so this is
another way of saying you're going to
get the best feedback like this is
obviously you know down here you're
going to get more feedback um if you
just make someone pay for it so that's
not to say you know you should you know
the first time out make people pay for
it but it's to say that you should very
if you're going to build a product that
you're going to eventually need to you
know they're going to pay for for the
for the software or for the hardware
whatever you should do that get to the
point where you can do that very very
fast um because then that's when you get
the real meaty stuff to help you in the
future of how you can get more paying
users in the
door all right so you're getting a lot
of feedback
and what do you do before you la
officially launch the product um so what
you want to do is you always want to be
building fast right and you want to be
optimizing for this stage of growth that
is you know you you might have 10 users
at this point don't there's no point in
trying to build features for the point
when you have a million users right you
want to optimize for the next stage of
growth which is going to be 10 to 100
users like what are the features you
really need for that and um just go with
that um sometime and in basically on the
slide is just many ways of stating that
notion manual before
automation um one of the things that I
found when building a Marketplace is
that process is very very important um
over time as you scale but you need not
try to automate everything and create
software to just you know you know have
robots just run everything what you
really should do to understand what you
should build is to manually do it
yourself um and and an example of this
is um when we started taking on cleaning
professionals onto our
platform we would have them um app we we
would ask them a bunch of questions um
over the phone and then in person we ask
them a bunch of questions too and then
they would go to a test clean and then
they would you know um get on boarded to
our platform if they were good enough uh
and so this took a doing all the
question askings for that many
candidates you know we had about a a
three to 3 to 5% acceptance rate and so
you can imagine all the people we were
talking to in the beginning of the
funnel that never even made onto the
platform but what happened over time was
that we learned certain questions um
that we were asking uh were that were
indicators of whether they're going to
be a good or bad um performer on the
platform we um through just like data
collection and just you know looking at
looking at everything um we could just
ask on an online form so that's when we
put on put in an online application they
could apply and then we would ask them
maybe several other questions dur the
interperson interview um so
it's if you try to automate things too
fast then you run into this problem
potential problem of you know not being
able to move quickly on trying to
iterate you know with things like
questions on an application and stuff
like that um and this third Point here
is temporary Brokenness is much better
than permanent paralysis uh by that what
I mean is you know Perfection is
irrelevant during the stage um you
should when you get to the next stage of
growth like what you're trying to maybe
perfect in this one stage is probably
going to not matter anyway and so do not
worry about all the edge cases when
you're building something just worry
about the generic case of who your core
user is going to be and then as you get
bigger and bigger and bigger the volume
of those edge cases will increase over
time and you'll want to you know build
for that and lastly Beware of the
Frankenstein approach which is great you
talk to all these users they give you
all these ideas you know the first thing
you're going to want to do is go build
every single one of them and then go
show them the next day and um make them
happier uh you should definitely listen
to user feedback but when someone tells
you to build a feature you shouldn't go
build it right away what you should
really do is you know get to the bottom
of why they're asking you to build a
feature it's usually usually what
they're suggesting is not the best idea
but what they're really suggesting is I
have this other problem that you've
either created for me while using the
product or you know I really need this
problem solved before I'm ever going to
pay to use this product and so figure
that out first instead of piling on a
bunch of features um which then hides
the problem
altogether so you
have uh so so you have a product that
you're ready to ship and um so some
people at this point will continue
building their product and not ship it
at all
and
um I think the whole idea of being
stealth in you know perfecting the
product to to no ends is um is the idea
that you know uh imitation
is um is is cheaper than innovation in
in terms of time and um and money and
capital and so I think everyone should
just always assume in general like
there's going to be if you have a really
good idea no matter when you launch
someone's going to someone's going to be
you know someone's going to fast follow
you and someone's going to execute um as
hard as they possibly can to catch up
with you and so there's no point in
holding out in all that user feed
feedback that you can get by getting a
lot of users um because you feel like
you know you feel paranoid that
someone's going to do this to you um and
I hate to keep harping on it but this is
things I see today with Founders is
something I went through as well um and
I think unless
you're unless you're building something
that requires hundred like tens of
millions of dollars just to start up
there there's really no point in in
waiting around to launch your
product so say you have something that
you feel ready to get lots of users on
um so what do you do at this point so
I'll look at my time um 20 minutes okay
so I will go over um various types of
growths in the next slid um but the one
thing to note here early on when you are
trying to get um when it's just you and
your co-founder and maybe like a couple
other people building um you're not
going to be you know create a team just
for growth it it's going to be one
person and one person only and so you
need to really focus and you need to you
should only you're going to be tempted
to try like five different strategies at
one time but really what you should do
is take one channel and really execute
on it for an entire week and and just
focus on that and then if that works
continue executing on it until it caps
out if it doesn't work then just move on
um by doing
this you will feel more certain that uh
that that that that channel that you
were working on that initial hypothesis
is wrong um you'll be you know then if
you tried only working a third of your
time on it over the course of you know
three or four weeks um so learn one
channel at a time second is always be it
when you find channels that work you
find strategies that work always be
iterating on it you can potentially give
it to some like create a Playbook and
give it to somebody else to iterate on
it um but these channels always change
you know anything from Facebook ads to
you know even Google ads to you know the
uh the the distribution channels um the
the environments that you don't control
change all the time and so you should be
always iterating optimizing for that and
lastly um in the beginning you're
probably not when you see a channel that
fa fails you you know just get rid of it
and go on and move on there's many other
things to try but over time go back to
those channels and um and look at it
again so and what I mean by that is an
example is in the beginning at homejoy
we had no money um so when we try to do
um we try to buy users from um merrymaid
or not from merrymaid that's just an
example of competitor we tried to buy
Google ads um to get users in the door
quickly and what we found was that um
Mary Maids Molly Maids all these other
National companies they have more money
than us they were making a lot more
money on the job than us and so they
were able to pay for users at a much
higher um at a much higher CA a much
higher they were able to acquire them at
a much higher cost than us and so we
couldn't afford that and we had to go to
another Channel which turned out to be
something else um but today you know we
make more money on the job we're much
better at certain things and so we
should probably revisit the idea of
buying Google ads and buy you know going
to the stdm channel um and so what
that's what I mean by that and the key
to all this is creativity uh Performance
Marketing you know or marketing or
growth in general um Can can be very
technical um but it's actually Technical
and you have to be creative because if
if it wasn't if it was really easy and
Bland you know like everyone would be
growing right now um and so you always
have to find like that little thing that
no one else is doing and and and do that
um to the
extreme so there are uh three types of
growth
um when when yeah three types of growth
um sticky viral and pay growth and
hopefully I'll get enough time to talk
about all of this uh so really briefly
sticky growth is trying to get your
existing users to come back and pay you
more or use your more um second is viral
growth so that's when people talk about
you um so you use a product you really
like it then you tell 10 other friends
um they like it that's viral growth and
the third is paid growth so if you
happen to have money in the bank um
you're you're going to be able to
perhaps use part of that money to to to
buy
growth um and the central theme I'm
going to go through is sustainability
there's a lot of um by sustainable
growth I mean you know you're basically
not a leaky bucket money you put in or
time you put in um has a good return on
investment on it so sticky growth is
like I said getting your existing users
to keep buying stuff um
so the only thing that really matters
here is that you deliver a good
experience right um if you deliver a
good experience people are going to keep
wanting to use you if deliver an
addictive experience people are going to
keep wanting to use
you um and the way to measure this and
to really look at this and how you're
doing over time of whether you know you
are providing um good sticky growth is
to look at um the clvs and retention
coord analysis now does anyone not know
what cohort analysis is or should I go
over it okay so I'll go over it okay so
clv is um some people call LTV is called
customer lifetime which is basically the
amount of the net revenue that a
customer brings in the door for you over
a certain amount of period so a 12-month
clv is how much net revenue does a
customer um give you over 12 months and
sometimes people look at 3 months and 6
months and so and so forth um
so so when I say uh cohort basically
what you're looking at
is this is time so let's just call this
yeah time
so this is percent of users coming back
to you so at time zero right a period
zero we're at
100
I'm
100% so so um cohort is is another name
also for like customer segments and
stuff like that so you can like you
might look at the female versus male
cohort um you know people in Atlanta
Georgia versus people in Sacramento
California um but uh the most common one
is by by
month um so
cohort equals month and let's just say
for this exercise we are looking at um
like March of I don't know
2012 so March
2012 100% of people you'll have like
maybe n equals 100 people so 100% of the
people obviously are using your product
because you know that's the definition
now month one month later
um you might have you know the scale is
not right but 50% might come back and so
you come here now in the second month
how many people that came in March come
back in the second month or two months
later and that might be you know down
here and so over time you'll have a
curve that looks like this there's
always some initial drop off you know
the reasons why people don't stay after
the first use is you know it wasn't
worth it um had a bad experience stuff
like that and then over time what you
want
is you want this to flatten out over
time so that your turn basically goes to
0% that means you attrition out less
less and less users over
time and these over here kind of become
your core customers these are ones that
are like sort of staying staying with
you for a long time
and now now cord analysis or you know
using this as a way to show if you have
sticky growth or not is now say you're
say you
know say we're one year later and you've
built a bunch of stuff right you graph
out the same thing and hopefully what
you'll see is that you have a curve like
this that is in the first period even
more people than 50% came back to you
and more and more people are sticking
with you a really bad you know retention
curve looks like this which is like
after the first use they just hate you
so much no like no one even comes back
it's just like zero right and I don't
know what kind of business that is I
mean it's obviously a shitty business
but um like I I can't explain a good
business that has a retention curve like
that um so anyway so over time as you
are thinking of strategies to increase
this curve like keep making it go up and
up and up um uh you want to basically
look at this analysis um over time to
see if if that uh strategy is working
for you okay does that makes sense okay
cool um the second kind of growth is
viral growth and like like sticky growth
you need to also deliver good experience
but on top of that you need to live a
really really good experience like
what's going to make these people shout
out loud on Twitter and Facebook or
whatever and tell all their friends um
and email all their friends and family
members about you you have to really
deliver a good
experience combined with that is you
need to have really good Mechanics for
the referral program itself like you
have a 100 customers who really want to
talk about you now how are they going to
talk about
you so to so in that sense a viral
growth channel the viral growth strategy
is all really about one building good
experience but if you have that it's how
do you build a good referral program and
so I've listed the three main parts of
that one is the customer customer touch
points which is where are people um
learning that they can refer other
people um so that might be just you know
after they book or after they sign up
there is a you know usually you see
these like right after you sign up for
whatever reason most for whatever reason
most people just immediately tell you to
invite all their friends even though
you've never used the product before and
so but that's a customer touch point
it's just right after you sign up a
better one is after they've used the
product after a while and you see that
they're highly engaged then to show them
that link um and get them to send it out
to everyone another one is if you're
doing more of a platform type play like
for home joy we actually go inside the
homes um so another customer touch point
is when the cleaning professional is
inside the home they can have a leave
behind and you know we can show them
something there too as well um so you
wna you want to basically
put the customer touch points and put
the actual um link or whatever it is how
they're going to refer all their friends
at a point in time when they're highly
engaged and you know they're loving you
second is program mechanics and so
that's sort of like you know the most
common thing I've seen is $10 for $10
that is you get $10 if you invite your
friend and they use it and they get $10
and so you should have and so you should
try different types of mechanics in that
sense and try to optimize for you know
whatever works for you you know it could
be 25 for 25 it could be 10 for zero it
could be many many many of these things
and lastly it's you know when the when
your friend clicks on the link when you
you on your referral link when they come
back to the site it's very important to
really optimize that conversion flow of
how they're going to sign up um and so
sometimes you need to just sell them in
a different manner or upsell that their
friend has um has suggested they use
this and so and so forth so all these
combined you need to um really uh play
around with uh with these and different
dimensions and um come with a good
referral program and lastly it's paid
growth so examples of paid growth is is
this right here and these are the most
obvious ones but I'm sure you guys can
think of more um and pay growth is
basically you know you happen to have
money you can spend you might have
credit cards whatever but you can spend
something to get
users um so the correct way to think
about paid growth is that okay you're
going to put money you're going to risk
putting money out there what are you
going to get in return the simple way to
think about it is is your clv your
customer lifetime the amount of money
the net revenue the amount of money that
people you know that your customer
returns back to you is it more than your
CAC and your CAC is an it's an
abbreviation for a customer acquisition
cost um so an example is you know you
pay actually the slide uh the SL the
slide here has an example here so say
you run a bunch of ads these are four
ads over over you know uh 12 months uh
the customer is worth $300 to you each
one of these ads um when you click on it
the CPC is costs this all this you know
cost different types of money and then
when they click on it when they click on
the ad then they have to come to your
site and sign sign up or buy something
and the conversion rates are different
for all these ads um and then you know
the CAC is calculated simply by the CPC
divided by the conversion and so you see
that there's different acquisition costs
for different types of
ads and to determine whether you know
that is a good ad or bad ad you all you
have to do is you know clv minus CAC is
it more than zero um if it's at zero
then you've you know you that's that's
fine but hopefully it's actually more
than zero and so you actually um are
earning a profit on it um so you see
that despite the clvs remaining the same
and the conversions being higher and
lower there's sometimes you know some
ads that might seem good actually don't
seem so good at the end of the day now
the advanced way of looking at it is
this you can look at this for your whole
entire customer base for all you know
aggregating all your customers together
but the advanc the better way of looking
at it is to break it down by customer
segments so you you know um if you have
for example if you're if you're building
a Marketplace I don't know for country
music you know the clvs of someone in
Nashville Tennessee is going to be much
larger than the clvs than U lifetime
value of someone in Czechoslovakia so or
I just assume that's the case anyway uh
so you'll need to you want to make sure
that um when you're buying ads for these
type different types of cohorts or these
types of customer segments that you know
what the differences are um and that you
don't you don't want to mix like
everything together um
so the last point on payback time and
sustainability you know I think a lot of
businesses get in trouble and it turns
into a bad business when they start
spending beyond their means um and um
and it has a lot to do with risk
tolerance or risk you know how much risk
you're willing to take on so when you
look at these
TVs let's just suppose you know you get
a customer for 300 you know a customer
is worth $300 after 12 months that is in
the first month they're worth $100 if
you wait to the end of the 12-month
period Then they give you the the other
$200 but if in the first period you're
actually paying you know $200 for them
then you're in the hole for1 $ until the
end of the 12-month
period and that's when you start getting
into potentially unsustainable growth um
which
is something could happen where you know
at the end of the 12 months they
actually you don't actually get the 20
the the $200 from the customer um and
you end up in a very bad situation and
essentially just at the end of the day
you could be running out of money and
and if you're doing this with credit
cards you will definitely um um uh find
that you're going to have to you know
declare bankruptcy very soon um so again
payback time is very important you know
a safe one to go with is three months if
you have very high risk um if you're a
very risk loving you know maybe 12
months is better um Beyond 12 months is
very is very much an unsafe
territory
okay um how much time do I have uh five
minutes
okay
um so I'll just go into this so the art
of pivoting so a lot of people ask me
you know homejoy went through homejoy in
its current concept is what the was
literally the 13th idea um we fully
built out and try to execute on and try
to get customers for and so a lot of the
questions I get is how did you even like
get to that 13th idea and how did you
decide when to you know move on um and
so the best guidance I can give on that
is to kind of look at these three
criteria which is once you realize you
can't grow or once you
realize you know despite you know
building out all these great features
and talking to all these users none of
them stick or none of them you know you
don't have any good high retaining users
or the economics of the business just
doesn't make sense then once you make
that realization you just need to move
on and I think the trickiest one is
probably the growth one because there's
so many stories out there where a
Founder stuck with the idea and then
after 3 years all of a sudden it started
growing so the trick here is basically
what you really should do it should you
should have a growth plan when you start
out which
is you know you should ideally just have
what is what is the what is an
optimistic but realistic um way to grow
this business
and
so it might look something like this and
this is T and this is um this is number
of
users um so you know in week one you
want you just want one user and week two
you want maybe two users and so and so
forth and you can keep doubling you know
up and
up so in week one you should basically
do as much as possible build where you
have to build to get that one user and
then week two so and so forth you know
you you you build whatever you need to
get two users four users eight users in
the beginning it's it should be fairly
if you have a product that people
actually want you should be able to
maintain this growth curve pretty easily
just by walking around and manually
finding people um it's when you get to
like you need a 100 users a week where
you need some of these more you need
these growth strategies to start working
um and so what I tell people is usually
if you're fully executing
on on your product and and you're really
working really really hard then if you
go three or 4 weeks in a row of no
growth um backwards growth then either
then it's time to maybe consider a pivot
in the sense that not starting over like
completely come with a new idea but
you're probably fundamentally doing
something wrong because in that early
stage of a startup you should always be
growing and so it's not and this is
optimistically what it looks like and
the this is like kind of the growth
curve I set forth and put out when I
started home Joy but really what it
looks like is like
this um and so you want to make sure
that when you're in a lull like over
here that you don't just stop right and
that's why you should wait two to three
weeks um as long as you keep working
hard you'll eventually get back here and
you'll see a trend like this over
time
um cool
so that's
pivoting and um that's it I can take
question questions at this
point one question
yeah one
question so one question online was uh
if you if your users have a product that
they're already somewhat comfortable
with how do you get them to switch to
yours right so there's always a switch
over cost um I'll tell you the example
of homejoy so
homejoy we actually were creating a new
market in the sense that a lot of our
initial users never had cleanings before
so it was pretty simple to get them on
board um and a lot of people who have
cleaners already really trust their
cleaner and they would you know it to to
get them to come and use something else
is actually probably the most difficult
task in the world um and so when you're
when you're building things and trying
to get people to switch over to you what
you really need to do is find the
moments where your product or what
you're offering is much better or very
much differentiated from the existing
solution they have so an example is
someone who had a regular cleaner and
maybe they had a party one day and they
needed the cleaning almost the next day
and becomes homejoy in most of the areas
has next day availability they would
just come to homejoy and use it because
they knew they couldn't get the regular
cleaner and once they start using the
product then that's when they start
realizing the advant the little
advantages of using homejoy which adds
up to a big Advantage so you know a lot
of things are you know realizing that
you know leaving cash at out or leaving
checks was really annoying and so being
able to do online payments was more
convenient being able to book cancel
reschedule you know according to your
own schedule was very convenient um and
so and so forth and so it's just you
know it's really hard to a lot of people
when they build a product they're like
and these 50 things are better than a
little bit better than the existing
solution it's really hard even if the
benefits outweigh the switch over cost
it's really hard to actually tell that
to a user um and try to get them to
aggregate all those you know benefits
over many little things it's better to
just have one or two things that clearly
differentiate yourself from um a product
so thank you very much yeah
[Applause]
cool yeah
okay