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What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters

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What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters

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I receive a lot of questions about growth teams. Naturally, there is a lot of confusion. Is this marketing being re-branded? Who does this team report to? What is the goal of it? What do they actually work on? When do I start a growth team for my business?

The purpose of growth is to scale the usage of a product that has product-market fit. You do this by building a playbook on how to scale the usage of a product. A playbook can also be called a growth model or a loop.

The first question you should ask before asking about growth is if you have product-market fit?

I receive a lot of questions about growth teams. Naturally, there is a lot of confusion. Is this marketing being re-branded? Who does this team report to? What is the goal of it? What do they actually work on? When do I start a growth team for my business?

The purpose of growth is to scale the usage of a product that has product-market fit. You do this by building a playbook on how to scale the usage of a product. A playbook can also be called a growth model or a loop.

The first question you should ask before asking about growth is if you have product-market fit?

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What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters

  1. 1. What are Growth Teams For and What Do They Do? Casey Winters Growth Advisor in Residence @Greylock Former Growth Lead @Pinterest Former First Marketer @Grubhub Former Marketer @Apartments.com @Homefinder Casey Winters | @onecaseman | caseyaccidental.com
  2. 2. Scale usage of a product which has product market fit. You do this by building a playbook on how to scale the usage of this product. The purpose of “growth”
  3. 3. How you might know? You have customers that are actively using your product and would be pissed if it went away. You know your customers, you know your market, and your primary challenge is how do I get more of these customers? Product Market Fit Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  4. 4. Key Action: what indicated the user received value Designated Frequency: how often we expect the user to receive value Measuring Retention What do you need to know? Casey Winters | @onecaseman | caseyaccidental.com
  5. 5. Key Action: identify best unit of value Designated Frequency: Frequency of offline analog Measuring Retention What do you need to know? Casey Winters | @onecaseman | caseyaccidental.com
  6. 6. Key Action: Saving Offline Analog: Magazines Designated Frequency: Monthly (at first) Measuring Retention Pinterest Example Casey Winters | @onecaseman | caseyaccidental.com
  7. 7. Key Action: Ordering Food Online Offline Analog: Ordering Food by Phone Designated Frequency: Monthly Measuring Retention Grubhub Example Casey Winters | @onecaseman | caseyaccidental.com
  8. 8. Product Market Fit How you might know? Your retention curve (of usage, not revenue) flattens somewhere. This means that for some customers, you have product market fit. You just want to grow the volume of those customers now. Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  9. 9. Product Market Fit Can you grow a business with that retention? The ability to acquire users at less than the amount of money you make from that curve represents true product-market fit. If you’re not making any money, that means you need to be able to grow the size of the cohort without spending any money. Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  10. 10. Product Market Fit Can you grow a business with that retention? If you are making money, it’s growing the cohort size with a cost per acquisition less than the revenue per user of those users over a time frame you can predict well Three months for early stage Six months for mid stage One year for late stage Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  11. 11. Product Market Fit Can you grow a business with that retention? If you can’t grow cohort size with where your cohort flattens, you are not at product- market fit and need to improve where the cohort flattens Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  12. 12. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  13. 13. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  14. 14. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  15. 15. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  16. 16. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. “A cleaning company charges north of $85 for a 2.5-hour house cleaning, but to rope in as many new customers as possible, it offers the service for a promotional price of $19. Guess what happens when the introductory deal is used up?” What Really Killed Homejoy? It Couldn't Hold On To Its Customers (Forbes) Casey Winters | @onecaseman | caseyaccidental.com
  17. 17. Why Growth? Why not just marketing or product? Casey Winters | @onecaseman | caseyaccidental.com
  18. 18. Why Growth? Three ways to grow your product. Phase I: “Free”, Measurable, Scalable (Growth Product) Phase II: Paid, Measurable, Scalable (Performance Marketing) Phase III: Paid, Non-Measurable, Non-Scalable (Brand Marketing) Casey Winters | @onecaseman | caseyaccidental.com
  19. 19. Why Growth? Startup growth is different from marketing. The first stage requires working with the product. Marketing teams (usually) don’t have access or expertise to that part of your organization. Casey Winters | @onecaseman | caseyaccidental.com
  20. 20. Why Growth? Startup growth is different from traditional marketing. Awareness Interest Evaluation Commitment Use Casey Winters | @onecaseman | caseyaccidental.com
  21. 21. Why Growth? Startup growth is different from traditional marketing. Loving Product Trying Product Tried Product Need Product Fit Core Audience General Awareness Casey Winters | @onecaseman | caseyaccidental.com
  22. 22. Startup growth is different from traditional marketing. Why Growth? Loving Product Trying Product Tried Product Need Product Fit Core Audience General Awareness Product, Referrals Product, Conversion, NUX Notifications, Retargeting Paid and Organic Search Targeted Advertising e.g. Facebook Brand Marketing Casey Winters | @onecaseman | caseyaccidental.com
  23. 23. Why Growth? Most product teams are built to create value or improve value provided to customers. Growth is connecting more people to the existing value of a product. Startup growth is different from traditional product. Casey Winters | @onecaseman | caseyaccidental.com
  24. 24. How do I start a Growth team? Where do the people come from? What do they do? Casey Winters | @onecaseman | caseyaccidental.com
  25. 25. How do I start a Growth team? Where do the people come from? What do they do? So how do growth teams start? Typically, they find one problem that could help drive growth that has been neglected at the company, so it’s easy to own. Prioritize problems based on high impact, low effort, high chance of success, and ideally short iteration cycles. Analyze the data to figure out where the problems are. Run experiments. Some examples: Logged out experience, Emails/Notifications, Referrals, SEO, Onboarding flow Casey Winters | @onecaseman | caseyaccidental.com
  26. 26. How do I start a Growth team? Where do the people come from? What do they do? What does team structure look like? Required: Dedicated engineer and designer Nice to have: PM and analyst/data scientist The team has to sit together, not with other people of the same function Casey Winters | @onecaseman | caseyaccidental.com
  27. 27. How do I start working on growth? What’s our first problem to solve? After that, you have to analyze the data... Pinterest example: ● Millions of visits a month from Google to board pages ● A conversion rate of less than 1% ● All previous conversion work had been focused on the homepage, which was receiving a lot less traffic than these board pages ● So let’s set a goal of increasing that rate by 15% Casey Winters | @onecaseman | caseyaccidental.com
  28. 28. Conversion Optimization Project Gift Wrap • Recently ran an experiment making a new page available to search engines, which decreased signups • As we analyzed the experiment, we saw the reason was because when people clicked on these links from other pages, they were blocked and asked to sign up, and they did. Casey Winters | @onecaseman | caseyaccidental.com
  29. 29. Conversion Optimization Project Gift Wrap • We let users scroll infinitely on these board pages, but only showed 25 Pins to search engines • For simplicity, we decided to make the same rule for users as search engines Casey Winters | @onecaseman | caseyaccidental.com
  30. 30. The results? • 50% improvement in conversion rate • No decrease in search engine traffic • No decrease in activation rate (at least at first) Conversion Optimization Project Gift Wrap Casey Winters | @onecaseman | caseyaccidental.com
  31. 31. What else do growth teams work on? Examples from all parts of the funnel. Casey Winters | @onecaseman | caseyaccidental.com
  32. 32. Product Retention Reducing Friction > Adding Features Casey Winters | @onecaseman | caseyaccidental.com Retention comes from a maniacal focus on improving the core product.
  33. 33. So how do you improve the core product? People + metrics. Data (what people do) Qualitative research (why they do it) Casey Winters | @onecaseman | caseyaccidental.com
  34. 34. Remove barriers to higher retention Grubhub example ● Low restaurant variety ● High minimums and fees Casey Winters | @onecaseman | caseyaccidental.com
  35. 35. Get to product value as fast as possible. But not faster. Casey Winters | @onecaseman | caseyaccidental.com +
  36. 36. Reduce friction that distracts from product value. Get rid of non-critical elements for new users. Casey Winters | @onecaseman | caseyaccidental.com
  37. 37. Don’t be afraid to educate contextually. A design with education is better than a design that doesn’t educate. Casey Winters | @onecaseman | caseyaccidental.com
  38. 38. Referrals and Virality Have engaged users drive new users or growth inside organizations ● This requires people to share and to want to share ● Need a strong value proposition for sharing. ○ Uber: money ○ Dropbox: better product experience (solo) ○ Snapchat: better product experience (friends) ○ Medium: vanity or emotion ○ GoFundMe: cause Casey Winters | @onecaseman | caseyaccidental.com
  39. 39. Search Engine Optimization Authority and Relevance Authority - Market Launches example Relevance - Landing pages Casey Winters | @onecaseman | caseyaccidental.com
  40. 40. Search Engine Optimization SEO friendly landing pages Casey Winters | @onecaseman | caseyaccidental.com
  41. 41. Paid Acquisition Google, Facebook, and more. Oh my! ● By far the fastest way to get people to try your product ● It’s a drug that’s easy to get addicted to, and scaling via paid is not a very defensible strategy unless you get to best in the world at it ● Very expensive at scale, so need to understand arbitrage ● CPA < LTV (set lifetimes conservatively and measure them by cohort and channel) ● Everything (and I mean everything) is trackable ● Efficient frontier is real ● Adwords (if there is existing demand) and Facebook Lookalikes are best way to get started ● Retargeting is effective, but hard to measure correctly Casey Winters | @onecaseman | caseyaccidental.com
  42. 42. • Right content i.e. it reinforces value of product • Right time • Right amount Emails and Notifications Start messaging like a personal assistant Casey Winters | @onecaseman | caseyaccidental.com
  43. 43. • Test manually, then automate and personalize • Subject lines and calls to action matter; design doesn't as much • Run emails/notifications as AB experiments to see lift in usage + lift in unsubscribes/app deletions • Measure impact of unsubscribe/deletions on usage Focus on testing and personalization. Start messaging like a personal assistant Casey Winters | @onecaseman | caseyaccidental.com
  44. 44. Loyalty and Engagement Programs Engagement tactics • These need to be profit drivers, not cost centers. • The exception: Unless they build a moat (which is more rare than most operators would like to believe). Casey Winters | @onecaseman | caseyaccidental.com
  45. 45. Loyalty and Engagement Programs Examples ● Apartments.com was definitely infrequent, non-loyal. ● For Grubhub, we had to figure out biggest opportunity ● Yummy Rummy Casey Winters | @onecaseman | caseyaccidental.com

Notes de l'éditeur

  • It’s tough to know, and I’ll point out some examples of people that thought they were there and weren’t, and what happens when you make that mistake.

    The short answer is: you have customers or users that are actively using your product and would be pissed if it went away. Sean Ellis, who was the first marketer at Dropbox has said 40% of your customers/users should feel that way. I’m not going to argue with him, but I do think marketplaces are more nuanced. So, I’d say the demand side should be 40%, but not necessarily the supply side. It really depends on who the supply side is.

    But really how you know you’re in growth mode and not searching for product/market fit is when what keeps you up at night is “these customers/users we have are awesome. I just don’t know how to get more of them.”

    If you’re not here, you should pretty much ignore the rest of this presentation and go back to working on your product to get some happy customers/users.
  • It’s tough to know, and I’ll point out some examples of people that thought they were there and weren’t, and what happens when you make that mistake.

    The short answer is: you have customers or users that are actively using your product and would be pissed if it went away. Sean Ellis, who was the first marketer at Dropbox has said 40% of your customers/users should feel that way. I’m not going to argue with him, but I do think marketplaces are more nuanced. So, I’d say the demand side should be 40%, but not necessarily the supply side. It really depends on who the supply side is.

    But really how you know you’re in growth mode and not searching for product/market fit is when what keeps you up at night is “these customers/users we have are awesome. I just don’t know how to get more of them.”

    If you’re not here, you should pretty much ignore the rest of this presentation and go back to working on your product to get some happy customers/users.
  • It’s tough to know, and I’ll point out some examples of people that thought they were there and weren’t, and what happens when you make that mistake.

    The short answer is: you have customers or users that are actively using your product and would be pissed if it went away. Sean Ellis, who was the first marketer at Dropbox has said 40% of your customers/users should feel that way. I’m not going to argue with him, but I do think marketplaces are more nuanced. So, I’d say the demand side should be 40%, but not necessarily the supply side. It really depends on who the supply side is.

    But really how you know you’re in growth mode and not searching for product/market fit is when what keeps you up at night is “these customers/users we have are awesome. I just don’t know how to get more of them.”

    If you’re not here, you should pretty much ignore the rest of this presentation and go back to working on your product to get some happy customers/users.
  • It’s tough to know, and I’ll point out some examples of people that thought they were there and weren’t, and what happens when you make that mistake.

    The short answer is: you have customers or users that are actively using your product and would be pissed if it went away. Sean Ellis, who was the first marketer at Dropbox has said 40% of your customers/users should feel that way. I’m not going to argue with him, but I do think marketplaces are more nuanced. So, I’d say the demand side should be 40%, but not necessarily the supply side. It really depends on who the supply side is.

    But really how you know you’re in growth mode and not searching for product/market fit is when what keeps you up at night is “these customers/users we have are awesome. I just don’t know how to get more of them.”

    If you’re not here, you should pretty much ignore the rest of this presentation and go back to working on your product to get some happy customers/users.
  • It’s tough to know, and I’ll point out some examples of people that thought they were there and weren’t, and what happens when you make that mistake.

    The short answer is: you have customers or users that are actively using your product and would be pissed if it went away. Sean Ellis, who was the first marketer at Dropbox has said 40% of your customers/users should feel that way. I’m not going to argue with him, but I do think marketplaces are more nuanced. So, I’d say the demand side should be 40%, but not necessarily the supply side. It really depends on who the supply side is.

    But really how you know you’re in growth mode and not searching for product/market fit is when what keeps you up at night is “these customers/users we have are awesome. I just don’t know how to get more of them.”

    If you’re not here, you should pretty much ignore the rest of this presentation and go back to working on your product to get some happy customers/users.
  • The more technical way to answer this is to do a cohort analysis. In a cohort analysis, you have a group of users that sign up in a certain time frame. You track how many keep using your product over time. In almost every company, there will be a huge drop off at the start. you should always try to improve that, but it is fairly natural. What you care more about to answer the PMF question is does the graph flatten or go to zero. If it flattens, that means a part of that cohort found value enough to keep coming back.
  • I like to go further than this and say that the ability to acquire users at less than the amount of money you make from this curve that still represent the curve is true product-market fit. So, if you're not making any money like Pinterest in 2012, that answer is spending zero money. If you are making money, it is a cost per acquisition that is less than revenue per user of those users over a time frame you can predict well. Three months is a good time frame for early stage startups, six months for mid, and one year for late.

    If you can’t grow cohort size with where your cohort flattens, you are not at product-market fit and need to improve where the cohort flattens.

    I’ll point out some examples of people that thought they were at product market fit and weren’t, and what happens when you make that mistake.
  • I like to go further than this and say that the ability to acquire users at less than the amount of money you make from this curve that still represent the curve is true product-market fit. So, if you're not making any money like Pinterest in 2012, that answer is spending zero money. If you are making money, it is a cost per acquisition that is less than revenue per user of those users over a time frame you can predict well. Three months is a good time frame for early stage startups, six months for mid, and one year for late.

    If you can’t grow cohort size with where your cohort flattens, you are not at product-market fit and need to improve where the cohort flattens.

    I’ll point out some examples of people that thought they were at product market fit and weren’t, and what happens when you make that mistake.
  • I like to go further than this and say that the ability to acquire users at less than the amount of money you make from this curve that still represent the curve is true product-market fit. So, if you're not making any money like Pinterest in 2012, that answer is spending zero money. If you are making money, it is a cost per acquisition that is less than revenue per user of those users over a time frame you can predict well. Three months is a good time frame for early stage startups, six months for mid, and one year for late.

    If you can’t grow cohort size with where your cohort flattens, you are not at product-market fit and need to improve where the cohort flattens.

    I’ll point out some examples of people that thought they were at product market fit and weren’t, and what happens when you make that mistake.
  • Let’s look at some examples.
  • Anyone remember Homejoy? It was an on demand cleaning service. In 2013, Paul Graham tweeted this about Homejoy’s revenue growth.
  • So investors gave them a lot of money to expand into other cities, other countries, and other services.
  • And 20 months later they shut down. Revenue growth is not product market fit. User growth is not product market fit. Getting to #1 in the app store is not product market fit. Profitable retention is product market fit.
  • So why growth teams? Why not marketing teams? Marketers used to be responsible for getting customers, and product teams responsible for making a product that is a good experience for them. What changed?
  • What changed is the realization of what drives customers to a product.

    Now, there are three main ways to try to grow a startup. The first phase focuses on free, measurable and scalable methods, and for many businesses is by far the most fruitful. It is entirely product or engineering driven. That is why I use free in quotes as our salaries are not cheap. We typically call this growth. The second phase is also measurable and scalable, but requires significant advertising budgets. We call this performance marketing. The third is not measurable or scalable and requires significant advertising budgets, and this is typically called brand marketing.
    Now, these are three phases or priorities of growing a startup, but they do not need to be entirely serial in nature as this graph shows.
  • You can probably see the issue. The marketing teams at startups didn’t have access or the expertise to change the product to drive growth, which is usally the biggest lever. They knew SEO or referrals or landing page optimization was important, but couldn’t never get the product teams to prioritize it. Trying to allocate engineers to marketers entirely was seen as a demotion by engineers, and then they were being ordered around by people who had less product management skills. So marketers retreated into things they could control, like performance marketing, PR, content, etc.

    So at Grubhub, we just didn’t have a product team for a long time. We had project managers, but project prioritization was handled by marketing in combination with the founders. Not ideal.
  • So, back to growth. Why is it different from marketing? Well, a traditional marketing funnel looks something like this. You start by making people aware of your product, some people get interested in it, some actually evaluate it, some commit to trying it, and then use it. But this is too expensive for startups, and isn’t even the most effective way to go about growing a business. This is based on "making people want things" instead of "making things people want". Startups should focus on the latter.
  • When you do that, you can invert that funnel and be much more effective. Start with your initial users who love the product, then improve the experience for those trying the product for the first time, then work on those who tried the product, then go after people you know need the product, then target people who fit the core audience, then finally go after general awareness.
  • So, translated into tactics, that's core product improvement plus viral loops for those loving the product, that's core product improvements, plus conversion optimization, plus user education/onboarding for those trying the product, that's notifications or retargeting for those who tried the product, that's search for those who need the product, that's targeted advertising e.g. Facebook for those who fit the core audience, and brand marketing/PR for general awareness.
  • So why growth teams? Why not marketing teams? Marketers used to be responsible for getting customers, and product teams responsible for making a product that is a good experience for them. What changed?
  • So how do growth team starts? Well the first phase of a growth team is about focusing on one problem. This is important because with a small group, you can’t solve every issues. You’ll spread yourself too thin. The goal is to learn fast in one area and make an impact. You also want to make it an area that’s been neglected by the company, so you are not fighting ownership issues with other teams.

    You also want to make it an easy problem to make traction on. Why? Because your team is new and needs wins under its belt to know a) they’re working on the right problem, b) they can be successful in their new roles and c) the company can trust them to be successful. The last thing you want to do is take over something hard and with long cycles and not make much progress after three months. The people on the team will think they made a mistake joining it, and they won’t have built up trust with the rest of the company.

    Then you analyze the data to find out where the issue is, brainstorm a bunch of ways to improve this problem and run experiments. It’s important to be impact driven and not idea driven. Many experiments will fail, and it’s about what you learn from them, rather than getting attached to an idea.

    Some examples of where to start, in order of what usually fits this critieria the best:
    The logged out experinece, so things like landing page optimization or conversion optimization
    Emails and notifications
    Referrals

    Things that are a bit harder to start on are SEO and onboarding because they have longer iteration cycles. It takes a while to see impact on SEO at first and onboarding flows typically take a month or so to get enough data.
  • A growth team usually starts small, maybe as small as just an engineer and a designer. You generally want a PM or an analyst/data scientist as well, but sometimes the engineer or PM can play that role too early on. They need to be dedicated. I’ve heard a lot teams do a rotational engineer or designer. That’s not good. You want someone to stay on the problem and build up expertise quickly.

    The team also has to sit together, not with their functional group. The collaboration is where the magic happens, and you want to facilitate that as much as possible.
  • So how do you pick that problem? Well, you have to analyze the data. I spent my first month at Pinterest just digging into our SQL tables trying to build a an understanding of where the opportunities were. Here’s what I found. We had millions of visits a month from Google to our board pages. They were converting into signups at less than 1%. All previous conversion work had been focused on the home page, which was actually receiving way less traffic. Running experiments on these pages could get statistically significant data very quickly due to the traffic volume. So, even though I wasn’t in charge of conversion, I kicked off a project to improve conversion rate from Google instead of drive more traffic from it. Set a goal of 15% improvement.
  • So, what do we do to improve this? We looked at other data to help us guide what we might want to do. We had recently run an experiment making a new page available to search engines that used to be blocked. This experiment actually decreased signups. As we dug in to find out why, we realized it’s because while we blocked these pages to users without accounts, we still linked to them a lot. So when non-users visited them, they were asked to sign up, and did. So, we thought, let’s use this same modal somewhere on our board pages. We eventually decided to use it when you click on a Pin you see on a board, like this.
  • Another insight we had was that while we allow users to scroll infinitely on these pages without accounts, we were stopping the search engine after 25 Pins. We just decide to do that for users as well and then ask them to sign up when they reached the 25th Pin.
  • So we run the experiment, and the combined variant blocking Pins and stopping scrolling after 25 Pins had a 50% improvement in conversion rate without affecting traffic from Google or activation rate down the funnel.

    Simple experiment, big win, builds respect that you can move important metrics for the company.
  • So why growth teams? Why not marketing teams? Marketers used to be responsible for getting customers, and product teams responsible for making a product that is a good experience for them. What changed?
  • This is a graph of conversion rate by number of restaurants shown on a search in Boston. It’s very old at this point, but we saw was that there is an inflection point in conversion rate when you pass 55 restaurants. Essentially, what we need to do was show people more restaurants than they thought existed, and with more variety than they thought possible, and conversion rate doubled, and retention increased.

    We asked people why they didn’t use Grubhub more often, and they would say “it’s expensive.” We thought that was weird because Grubhub was free to consumers. What they meant was that the restaurants had high minimums and fees for delivery. So we worked with restaurants to try lowering their minimums and fees to see if increases volume would make up for the lower margin per order. It did, and we used that as testimonials to get other restaurants to do so.
  • At Pinterest, we did qualitative research, and we saw new users getting lost. The point of Pinterest is to see content on topics you care about you didn’t know existed. But people were distracted by search, what boards were, who added the content, etc. So we just removed all of that from the initial product for new users, which allowed users to focus on the content they were showing them. This increased activation rates dramatically.

    When we did this research internationally, we saw people were not excited by seeing American content, and “Pin It” didn’t translate well. So we localized feed recommendations and changed “Pin It” to the local word for Save, abd activation rate doubled in international markets.
  • Referrals is all about creating a viral loop. You generally need to have a strong reason to get people to share, generally money or an improved product for them or status. So, if you bring one person to your site, and they invite two people, if everyone of those people invites two more people, you have a self-sustaining viral loop. This rarely happens. But, your viral factor is likely going to be less than one, but not insignificant.

    Everlane is a lesser known example. Everlane is an online retailer of their own branded clothing. They created an invite system where if you invited  someone who signed up, you got early access, but if you invited 15 people who signed up, you got one of their shirts. And if you invited 50 people who signed up, you got free shipping for life. They had 100,000 sign-ups pre-launch from this by optimizing not for every person to invite a friend or two, but for a select few influencers to invite dozen up to even thousands.

  • SEO is really about two things. Authority and relevance. Authority is mainly generated by the quantity and quality of external links to your page and domain. Relevance is about whether the keywords people are searching for are prevalent on your page. So, how do you generate authority? Ideally, you attract links naturally. That's what Pinterest does. But if that doesn't happen, you can manufacture links. In GrubHub's case, we would email news sites and blogs letting them know we'd launched in their city, and provided a link that if you used it, would give $10 off that first order After a month, that link redirected to our landing page for the city.
    For relevance, at both Pinterest and GrubHub we did the same thing. We took all of our content, and we made targeted keyword landing pages from them. So, at GrubHub, we had all these local restaurants, and we could create new pages for them for any geo or cuisine combination, so "nob hill chinese delivery". At Pinterest, users did this themselves by organizing Pins into boards on different topics. But a board was one person's opinion on what was relevant, whereas Pinterest had all this data on what the most relevant Pins were already. So, we created our own topic pages that organized the best Pins on each topic, like woodworking.
    Also, we had a problem where we have over 60 billion Pins, many of them copies of each other. But while they're copies, they aren't described the same way. Search engines have trouble telling what our content is since it's mostly images, so we aggregated all of those descriptions for the same image on one page.
  • At Pinterest, users did this themselves by organizing Pins into boards on different topics. But a board was one person's opinion on what was relevant, whereas Pinterest had all this data on what the most relevant Pins were already. So, we created our own topic pages that organized the best Pins on each topic, like James Turrell. And both search engines and users responded well. More traffic, and better conversion on the pages. Now 20% of Pinterest’s traffic from Google goes to these pages, and they have the highest conversion of any page type into signup.
  • All right let’s talk email. Emails are a key driver of retention. They won’t solve your retention problem, but they will certainly help if you do them right. At every company I have been at, people hated email and didn’t want to send them to their customers. When they finally did, they saw lifts. You are not your customer. You get more email than they do. Emails help them if they’re connected to the core value of why they use your product. At Pinterest, I made this mistake. I set up campaigns with emails that explained all of the things Pinterest could do. People don’t care about what Pinterest can do. They care about seeing cool content related to their interests. So we replaced those emails with popular content in topics of interest for each user, and our retention increased.
  • So, if you’re starting emails, you want to try to do some things manually to see what works. When I started at Grubhub, they weren’t sending any email, so I emailed the entire user base asking what they wanted to hear about from us. They said new restaurants to order from and new deals. We didn’t have many deals, so I started manually curating new restaurants once a week by city to prove it was valuable. Once it was driving thousands of orders, we started a personalized program for each person’s address with multiple email types that rotated over time.

    The goal is to get a problem that sends like emails not like a marketing interrupting you, but like a personal assistant making your life easier. When do most people think about ordering food? 4PM. So that’s when Grubhub sends suggestions.

    Subject lines: they matter. One of our engineers tested 4,500 variants of subject lines for our emails. Hundreds of thousands of additonal WAUs resulted from this. Some emails’ open rates went up 40%. We did a major redesign of our emails before this project, and no metrics moved meaningfully.
  • The biggest misconception of loyalty programs is that they are actually rewards for customers. They are there to increase the profits made by the company. Now, what’s important to realize about engagement programs is you have to know what behavior you’re trying to change. I group customers into four buckets, and see what the biggest opportunity is for the business. For frequent but non-loyal users, you have to figure out a way to incentivize the usage they are doing not on your platform to come to your platform. For infrequent, but loyal users, you need to incentivize additional use cases for them with your product. For customers that are infrequent and non-loyal, that’s a bigger issue. You usually need to create additional products, services, use cases, and incentives.

    At GrubHub, our biggest opportunity was here. People ordered delivery frequently, but not always with us.
  • So, Apartments.com was definitely in the infrequent, non-loyal segment. People look for apartments a max of once a year. That’s very infrequent. So, when they do a search again, they usually forget how they found the last. What Craigslist did is provide that kind of value in tons of other areas so people used it regularly. That meant when they needed a new apartment, it was already top of mind. So, all we could do at Apartments.com was build in some moving services and some get to know your new neighborhood services through partners. We tried to create an apartment living section, but it was not that important a need.

    For GrubHub, we needed to learn which segment to focus on. So we surveyed users to understand their loyalty, and data mined our user base to understand frequency. Once we had an understanding that we were frequent, non-loyal, we had to understand the use cases that people used delivery, but not Grubhub. Once we talked to a bunch of users, we got some major reasons. Then we surveyed our non-loyal users again to get statistical representation of what biggest reason for ordering delivery, but not using Grubhub was. Was it a product issue, a coverage issue, or just habit. It was just habit.

    We thought we could change habits, but the unit economics of loyalty programs suck for marketplaces. When someone spends $30 with Grubhub, Grubhub doesn’t make $30; it makes $3-5. So you model out what you can spend and how much you can influence. In our case, traditional models didn’t work. 25 orders would get you a free drink. Not great. So we got more creative. We made it a game you played on every three orders with a 25% chance of winning and a variable reward. You generally want to shift to variable rewards in engagement programs instead of static awards, because people become accustomed to static rewards, so they cease to influence behavior. You should get a lawyer if you do this, as there are so many weird gotchas. Like having to post a bond for each state, like being classified as a sweepstakes, which means you need post bonds for each state you operate in, you can’t AB test, and you need to be able to play without purchase.

    So at GrubHub, we were classified as a sweepstakes, so we couldn’t AB test. So we could either do it in one state and not another, or pulse it, like the McDonald’s monopoly game. We chose the latter.

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