Hyper Growth from the frontier
Updated: May 30, 2019
Last week I attended the HyperGrowth conference in San Francisco, organised by VC fund Maven. I am rarely super interested in conferences, but in this case the line up of speakers was made of top notch professionals who had a key role behind the growth of companies like Uber, Instagram, Facebook, Instacar, Dropbox and Linkedin. I am always keen to know what best in class looks like and to find out what's new so the pull to this event was just irresistible: I booked a cheap flight to SF and went.
After all California has always been the frontier for matters regarding Tech and Growth.
I thought I'd share with my network a summary of the conference.
On the morning of the event I got to there early: it was a rainy day but the venue was beautiful and it overlooked the Golden Gate bridge. As I stepped into the building I met James Currier, the founder of VC fund NFX and arguably the biggest expert in the world on network effects. He was extremely friendly and I was glad to hear that he saw some great thought leadership come out of Europe around the topics of platforms and business ecosystems. In particular we were discussing the work of my friend Simone Cicero and the PDT.
James was also the first speaker at the conference and he spoke about speed. He did stress the notion that in a minimum viable product the word "viable" is key and he shared the image below to express the concept.
He then stressed that speed was the only advantage an early stage company had over established businesses, which may sound obvious but we sometimes tend to forget the extent of this truth. His advice was split into four areas.
We are used to go slowly, especially if we have ever worked in a traditional company. Often software development time can go from 2 years to 2 months for a new product, (when no reputational risk is attached to it), and we should be running between 20 and 100 tests a month. The first step is resetting the bar. ultimately "restate hard problems that require a lot of software into a simple problem that requires much less software.
Fear paralyses us and here are his tips on how to overcome it:
· The product is not you, if it fails it's not you failing
· Don't try to get it right the first time: launch-measure-iterate
· if required try behind the scene e.g. test with a different URL
· Experiment mentality, remember that the goal is to learn
· Borrow mentality: copy from others
· Fuck it mentality: work as if you have nothing to lose
Keep contracts simple and generally work with simplicity. Almost anything can be optimised further but those marginal gains are not usually worth the time. Accept standard solutions on areas such as legal contracts, off the shelf software and the likes - focus on what matters.
See what has been done before - it's 2019 not 1999, so most stuff has been tried. Speak to those people, take them out for lunch, learn from them.
The second speaker was Shmuckler - interestingly his advice was almost the opposite. Elliot has worked over the past 11 years across marketing and product for Linkedin, Wealthfront and Instacart. He is someone who knows what he is talking about, the key aspect to consider is the stage of the companies he worked at: generally rather established companies with high growth rate.
His spoke about the value of embracing and understanding change. Specifically understanding what drives change in performance. His formula is:
1. Spot change
2. Understand the mechanism of change
3. Extrapolate and project
Basically if you see growth in one product or market, do not take the data at face value, stop to analyse the results, understand what delivered change, dig into qualitative data if necessary, and once you are confident with the factor that has driven change we can replicate that change and deliver further growth. This exercise can be useful also for understanding drops in performance so things don't happen again.
The third speaker was Darius Contractor, Head of growth at Facebook Messanger.
Considering the size and reach of the product he works on it is no wonder that operations are something close to his heart. He has developed a bespoke approach called Evelyn, (after mathematician Evelyn Boyd Granville).
Evelyn is basically a tool designed to manage the whole Growth process. It ensures everyone is on the same line, it makes the roadmap clear, tracks results, facilitates knowledge sharing and manages stake holders communication. I found this last aspect very interesting. Evelyn effectively manages the P&L of the growth process by tracking estimated engineering costs and projected growth for each project - this in turn facilitates conversations with senior managers. (I understand his tool can be tested by third parties so I encourage to get in touch with him to anyone interested).
Next I had a chat with Brian Rothenberg, until recently VP of Growth at Eventbrite now turned VC investor.
I asked him what he thought were the most important skills for leading a Growth team. In his view, and I tend to agree, it requires someone with experience across marketing and product, very analytical, who is able to think operationally and strategically and with a start-up experience / mentality.
We then spoke about paid vs organic growth. I was glad to hear that most start-ups still rely too much on paid acquisition: in Europe we share the same challenge, but it's good to hear it's not just us. We touched on a number of different organic channels and reached the conclusion that it's about product channel fit - basically understanding what is the channel where a you can have a natural edge and focus on that (I believe for some companies this may not exist on organic channels).
Finally, while speaking with someone else he confirmed once again that Growth Hacking is a process for joining marketing and product together effectively - it isn't a silver bullet type trick. I share this for those who believe the opposite. While some tactics have worked like magic in the past, it is few and far between and are rarely repeatable - beware of people promising the moon with growth hacking.
The next Speaker was Fabian Seelbach, CMO of skincare company Curology.
He covered a range of topics, here are the key takeaways I got:
Foster partnerships and transparency with influencers: share best practices and be clear about performance. This means also predicting a value for each influencer - that allows to have informed commercial conversation and turn down partners when the fee doesn't make sense.
Fabian also explained how in his world Facebook is king and obviously this makes creative assets a huge success factor. However, he added, creative production does not equal performance - it is more the strength and resonance of the message - if the message is targeted and genuine performance will follow. People don't like advert, people like real (this is always good to hear!)
The next up was Dun Wang, Chief Product and Growth Officer at recent unicorn Calm. For those who don't know it, Calm is designed to make people feel better: I love the product.
I think she possibly shared the most interesting story. While analysing time of day usage patterns, they saw a big spike in the morning and one late in the evenings. The Calm product is designed for morning usage so that was normal - the evening usage however was not expected. The team then realised that while the product was great for focusing in the morning, it was used also for relaxing in the evening. This insight led to a whole new area of product development that unlocked huge growth for the company.
I found this particularly exciting as quant analysis led to qual analysis and the insight led to new features being built, not just an A/B test. I think it's important sometimes to highlight how Growth needs to operate strategically and not just tactically in order to achieve maximum value creation.
I also had a chat with Dun and asked her how they manage the qual side. It turns out that her and the whole team invest time in studying psychology and behavioural economics. So while data driven is a second skin for the Growth team, they also gain skills for qualitative analysis and making hypothesis, which can then be backed up by hard numbers.
The next person on stage was Bangaly Kaba, VP of product at Instacart, previously at Instagram. Another subject matter heavyweight.
He spoke about what in his view were the three key levers for sustainable growth:
· Big bets, read product features
He broke down the growth process in a simple and effective way that made it extremely clear.
1. Make sure the product has retention: with no retention there is no product market fit
2. Look at your marginal users and understand what limits the value they are getting from the product, then work on improving this
3. Speak to people in your target market who are not using your product and understand why, then implement strategies to engage them
The above research should be executed using a mix of data science and qualitative research: this allows to understand which features correlate with retention.
The final speaker of the event was Laura Jones, Director of Product Marketing at Uber.
She explained the key role of Product Marketing in delivering the value proposition as when people interact with the product it's the ultimate moment of intent and any slight improvement is tightly correlated to the top line performance.
The other key role of product marketing is in CRM where it can play a dual function:
1. Informing customers of updates and new features to increase the value proposition
2. upselling and cross selling new product and services e.g. uber promoting uber eat or electric scooters
Finally she shared how Uber are also considering the product from the standpoint of the drivers, taking a more inclusive view and an eco-systemic design approach:
I was able to have a chat with her and discuss about international operations, a topic very dear to me, having worked on many EMEA and global projects. She told me how Uber switched from a very local approach to a more centralised one with more knowledge sharing and control.
To conclude, the takeaways from the conference were the following:
· Growth has different structures depending on the size of the company, particularly pre and post product market fit
· Analytics and operations, while they can constantly be improved, need to be very structured and extremely functional for the core of the team
· Qualitative research, user psychology and creative thinking are a critical component of Growth
· To maximise growth the team needs to think beyond A/B testing and segmentation but at areas of new value creation (but just thinking about how the product work, but also at what the product is for customers and non customers)
I also met a number of entrepreneurs with innovative businesses, but that's more relevant for a different post.