Hey, everybody. It's our former co founder partner, Village Global, a network driven Vetra firm. And this is metre stories, a podcast covering topics relating to tech business with world leading experts. Everybody welcome to another episode of venture stories by Village Global here today with two very special guests Jeff Chang, Growth engineering lead Pinterest and Active Angel Investor and freed most of that E i r reforge and director of product at Slack Fareed. Jeff, welcome to the podcast. Thanks for having

me. Thanks for having me.

Awesome. We're gonna do a deep dive on growth. So by way of introduction, you have been doing growth for for a long time now, how have you seen sort of the science or the industry of growth evolved in the last year, five years, even decades since you guys that you guys were doing it and go first on that one, I think, in the earliest date. You know, when I first heard about growth, it was in the early days of social networking. I think we're really when the term really started to first come out and start to be start to become more comment. And really, it was a result of the fact that we saw some really substantial changes in terms of the way that consumer products, especially online consumer products, came to market around.

Vier ality around, used around email around new channels and those kinds of things. I think early on a lot of this. The way I described that era was like the secret magic era of growth in a lot of ways. Ah, lot of the earliest practitioners of growth tried to keep as much of what they were learning to themselves because there were these, like angles and tricks and sort of like dark, not dark patterns but dark magic, about how you could drive growth on some of those early social networks from fans, Friendster, the Facebook toe even tagged and linked in and all of those things. A lot of those different companies that started figured out, and also in social gaming, which is where I got my start with Zynga and building on top of these on top of those social platforms that were also growing. I think the biggest thing that's changed is, at least in my perspective,

one we're seeing growth become a name that's used but Also, a set of practice is used across almost every kind of online product, in particular from D two c e commerce type things all the way to B two B software like slack or even more enter for court enterprise software. So the name has started to become used in a lot of different ways that some has muddied its meaning. So that's I think the bad thing is that it's not clear what it means anymore. And second, though, I think what we're seeing is an evolution towards growth and growth practices, data driven product management and the and those kinds of things growth is changing. To become more like traditional product management of product manager, Traditional product development and marketing are becoming more like growth as the data and sort of creative sides of this clod. Yeah, well free

set a lot, and I would be with pretty much everything, he said. So not

too much the ad upon

a let's just say that, um, I think before the teams that are working on growth were all you're a lot smaller than in general that teams working on growth now as kind of freedom mention so Azizullah iced teams have been allots. Been a smarter now versus before in terms like Bring on what metrics actually matter. Bring out what grow channels work because before everyone was trying pretty much everything to try to get that response, but now has a lot more data. No one knows what kind of works father companies, so there's kind of these. Do you grow channels that are kind of the foundations that it companies in general used to start out with that it is a lot more commonality beacon companies, whereas before I felt like work cos we're kind of trying to afford their own path and grow and grow way

totally, I want to sort of zoom out. You know, in the last few years, everyone became obsessed with with product market fit. Once, once we discovered the term. That's what everyone was focused on on achieving. And then we had different people to find it in different ways or didn't define it. What are sort of the right ways are not right ways if they can about product market. Jeff, what You've written a bit about this, and it's not a lot about what you take. The first step. How do you know? What is

it? Yeah, so I think time apart might affect you first. Like to find it because I think it has a lot of different definitions. Like what is kind of even the point of being how far apart if it I would say first we use in understanding that the point of part market, if it is to figure out what is it worth it to start working more and more on acquisition channels? Because it's not worth working on my position channels unless your product is at a certain point. So in other words, if you have part of one, if it is like going up, is your public good enough where you've been so investing more activist channels? So then, then how do you find? How do you find the point in which supporting is good enough where it's worth? Investing in? That is kind of difficulty, and there's obviously a lot of different metrics,

like nps. How disappointed users be if the user about it like retention and they are kind of trying to gauge the same holiday was busy like how it's the users love your product. The users of your product enough where by applying with strategies, even grow a really large user base is kind of the premise of partner fit. And I think, like, obviously there's no perfect metric and I'll be Menchaca's country measure this kind of same thing. How much do you just love your product and all women like MPs measures that what users be disappointed they can use it measures that and use your attention. If you just actually use your product and then come back later, use it again, obviously. But just that me personally, I like the retention metric as have my favorite metrics to measure product work if it because for a few reasons, Number one is like a requirement for almost every successful company. Every successful company has really great retention. Pretty much,

very few exceptions to that. A member to its It's a measure of everyone who's the product. Not just a few. Certain if you survey based metrics like nps O R. How this point, if you will be if they can get you only getting a sample of the people who actually respond to the survey said against some survey vice, and you don't get the full you later so on and also in growth. We haven't really good understanding right now, like what good retention looks like for different types of companies. So I feel like it's a really useful metric for determining how much people actually live

in. You're a fan of cohort models, a za wayto measure. Pretension. What? That

eso Yeah, I think a lot of companies measure revision The incorrect way, which is? You never want to mix old users with new users, because when you look a protection of old users, a lot of people users who have lower intent already turned out. So you're basically looking at high intent users. So the retention of going for old users and then you're mixed retention rate would just be how many you users first on the old user to your XY combining. So that's why mixed retention rates don't really make sense. You always have to look at our attention on a Cold War basis, which is taking a group of users food joined at around the same time, and they get pretty much around the same user experience when they do it.

I totally agree that retention is the most important metric Andi retention is important, but I I think it's also important to ask yourself the question. Is this product growing on its own? I think that while they're sort of product market fit, there's the early days. Should I really be investing in growth is really the question that I think a lot of founders air trying to answer and a lot of companies were trying to answer. And the easiest way to answer that is sort of ah backwards question, which is, Are you growing already and why are you growing already? I think it is the combination of your engagement, your attention and your word of mouth acquisition. Are people talking about it just enough that the number of people coming back to your product month over month is growing on its own, and the total number of people actively using your product or revenue or whatever the baseline most important metric is for your business? I don't know whether his consumer enterprise is growing on its own at a clip that you feel like has some energy and momentum to it on. The reason for that is because I think great products like have a foundational engine that's working where all the little pieces and the foundation, like the core of that is built by your product. Your it's your product,

your early positioning and how all the pieces fit together. And that sort of hard to measure. It's sort of like at the end of the day, is it Working is the question that you're trying to answer. The reason I think it's important. Oh, wait until that point before you really invest in traditional sort of next step. You know, one and growth type Mott things is that I do believe that most of your levers have some baseline, that you can move up or down with things like optimization and experimentation and growth type strategies, but that the foundational sort of like where it fits in the market and where you are banded in terms of like strata of retention, engagement, etcetera is sort of defined by the product itself. There are things you can do to go to, like pull through the cycle to the next step, but I think for the next stage,

which is what I would call the acceleration stage where you're taking is this a product and accelerating its adoption. You know, the levers air. There's not, like step function impact that you could make sometimes. And so you have to be growing. You have to build on some momentum. So, yeah, I think the other thing about product market fit that's interesting is I think we've actually over indexed on it pretty dramatically in terms of how we talk about product development in particular. And then we've also talked a lot about growth. But I think that it's important to know that there are first off. This is something I've taken from some of the work I've done a re forage, and working with Brian about four and others is this idea of the other fits. So I think there's product market fit. There's also product market channel fit like How do you attract customers?

Where did they come from? I don't think you can slap any channel on the any product. What works or if Super viral product is or a consumer product is going to be very different than another price offer product, and finding that market channel fit is almost like the most important next step when you're trying to build the business, right? And then the last one, I would add. And I think about this a lot because I've worked a lot on subscription and Freemium type businesses is what I would call product business model. So how well does the way you charge, or how you make money or what your revenue engine looks like? Match the customers that you have So the market What? How did they like to pay for things? How do they think about the value that you're on? It provides, But also the product itself is freemium. A good fit?

Is trial. A good fit? Is this paper seed or paper usage type product? Is this an ad driven product? That those questions and your answers to them are dependent on the product and also the product business model fit? There's obviously, of course, so each pair of these is important. I think what you do we've talked so much about the earliest date is getting product market fit. We talk a lot about like growth tactics. How do I drive acquisition? But I think these other two fits are also super important to think about and are really like your most important second and third step is you're trying to build a product and take it to market. Yeah, and it is about even further for people who are, you know, further down from the funnel and say,

Hey, okay, now I'm better sense product work if it is. But how do I get it? What sort of the framework do you have? You lean start up with sort of involved for a while? What's your sort of take on that burst? Any sort of alternative framework or method for think about, you know, you didn't get in. To be honest, the please. I think product market fit in a lot of ways is magic on is like early founder stuff. I mean, there are things we do when we build new features, build new products,

but often we're talking to an existing market. We're talking to our existing customers. How do we build in the future it and take the market? And obviously it's been a long time since I've worked on the true 01 1st time product market problem, and what's weird is you have two variables like not just what's the product? Who is it right for? I think that adds a lot of complexity and creates a lot of art to it. I think my main piece of pieces of advice are trying to find the narrowest definition of market that you can find that you believe actually scales into something meaningful, not in terms of. There are a lot of those kinds of people. I think that's where people running the mistake. There are enough of those kinds of people to get some early signal. But you can see a path to how you grow that market step by step over time. That makes sense. That would be my main piece of advice is, is a lot of products trying to go too broad,

too early and have a hard time being something valuable to anybody in particular. But I spent most of my career helping founder scale the products that already have product market fit, so I can't claim to be an expert on that. Jeff probably has a better perspective. Having done a lot more early stage investing.

Yeah, yeah, I agree. I agree, actually, with three words, like it's kind like magic where it's it's just seeing badly growth. People have figured out how to grow products which already have part of Cardiff. It like that famous, have given it, but by as far apart if it is probably grow oval with with the right expertise. But like going making a product that has far Cardiff is still kind of like a black box like magical kind of thing that people have not been able to replicate. If you think about it like a lot of the biggest companies the world, like the Facebook ago, they must a lot of products that also don't have a great product market fit. Um, and that's not due to poor execution.

It's just it's just hard to figure out what users, actually what? So my advice here to founders usually is the is kind of like take more shots on goal in terms of, like, just know that in reality, the majority of products that people build don't have product market fit and is really easy to kind of tell when they don't have probably benefit if, like, for example, the retention is not good. If so, if people start using upon it and they never in a very few of them come back in time, then It's really easy to tell that they don't have artworks it. So being able to kind of notice this early on and figure out like what is the next day we try what we learn. What do we learn from this? What do we think the user want and what do they actually want? And what we build that actually addresses what they actually want is kind of my advice here and not so you have the In the beginning, I just tried it just trying to be really, really about Is there actually a product market fit? And don't be afraid to pick a bit based on your learnings and kind of take more shots on goal,

although I would. I like I think of it as a hierarchy, like where should you be static and rigid? Where should you be flexible? And I think great teams are generally like let's go from most rigid to most flexible, like mission and vision for your company, like, what change do we want to bring in the world? I think great organizations are pretty like, focused and singularly focused on what that is. Of course, there are examples of like Instagram and other companies like that have these hard pivot Slack is actually a great example of a hard pivot where the strategy or mission or the are sorry. The mission or vision really, really changed. I think those are rare, and I think those examples are are dangerous extra peak in most cases, I think the next step below that which is the strap like what I would call strategy.

How are we going to achieve that mission? Should be, you know, relatively static in terms of what is it we're trying to do what it would look like, What are the most important building blocks? I would answer that with what problem we saw it trying to solve and in what order? I think you can move those pieces around, but you should be very careful about that because distraction is the enemy, right? And then on tactics features an individual user. Behavior is like, How are people actually doing this? Are we write about the hypotheses that we've made? Are the things were building actually working? That's where you want to be, like the most honest meaning and by honest I mean most reactive to feedback and most willing to change,

but it's sort of hierarchical. I like to think of it as like, Okay, what are we learning about this specific thing we built? Is it the right thing? Did it solve a problem or not? Be super flexibly there. Are we solving the right problem? It should take a couple of nose on the first piano layer to get to a know there and then shift. And then are we attacking the right vision at all? Is there a market here, period? Honestly, I think most companies shouldn't ever change that are, at least by some definition of that, because that's what everybody heart came on to do.

That's what everybody, like, joined your company to be a part of. That's the way your motivating people to do, like, heroic work. So, uh, I would be most careful about vision changes, though. Of course, I've worked for a company that did like the hardest pivot of all time and was successful with it. So you know, it depends. Do as I say. Not what I dio you mentioned Product Channel fit.

How should founders be thinking about developing that? Yeah, So I think you have to start again with a strategy like I think great plans are built by having like, a clear picture of what you believe your loops are right, like from growth, like, what are you going to be? The most valuable loops that we're gonna build. We're gonna build calm, pounding, meaningful, nonlinear impact over time. And that's where I would focus your time and effort. And honestly, these days there's so many products in market and so many successful companies that you can kind of look at for inspiration, that I think there are that it's usually best to find one or two that you want to experiment or play around with and really start to build.

So meaning is S CEO or content the kind of thing. What are the ingredients that would make that a valuable channel for me is paid social or paid search like something that could work for me? Are there any analog in the market that my work is virology? Riel And I think really like trying to find some early signals either from you know, similar companies or based on a qualitative analysis of what your product is and what it does and then leaving into those is the best way to get started there. Jeff, what do you What do you think?

Yeah, I mean, I think you said like most of what's to be said about there being a part of channel fit, At least on the consumer side, the two most popular was popular channels that are big, big meeting They can actually bring you like thousands. Tens of thousands of users a day are CEO and referrals. And as freeze that, like, is pretty much like I always like. Can you actually generate unique user generated content? Yes or no? And if it's a yes that you have product market fit apart, Channel fit for a CEO and for pearls is can you offer an incentive that people actually want and watch the invite their friends in order to get? And the answer is yes. Then you have referrals on a channel. Of course,

there's different levels of other channel fit, like some referral systems work better than others. Some s CEOs systems were better than others, but if you are, see if you say you're a product market fit. If you also have parted channel fit with with Siona froze. That's me. That's way better than just then. Just honey.

Yeah, I think some of these again. Why? I thought I mentioned earlier, like all this has to be built on word of mouth in some respects. Because a lot of these things are really accelerators of the core word of mouth type loop, right. Like I love this product. I love about it. Enough to tell somebody else referrals become can be an engine. On top of that, there are some products that are more attuned to it. Like you get really in product value for an invite. Right? Facebook is the canonical example of that or a slack, for instance, like I need to actually communicate with other people.

The more people I'm communicating with, the better, like internal network of fact I get. But then for an instant car referrals, really an accelerator oven, existing word of mouth, right. I'm gonna give you 10 bucks to get a free delivery and, uh, discount on your grocery purchase. That's just accelerating behavior. Hopefully that I already have. Which is telling you how cool insta cart is. And certain ones are better fits for others. I think it's hard to do incentivized referrals. Like the insert card program,

for instance, for BTB Products because, like, is saving my employer 50 bucks like, really something that I care about that much. Would it really changed my behavior? I don't know. Right there are. I want to get into metrics. Metrics that matter, Metrics. That don't matter. Maybe you could start with you in a bit about it. And you look like one thing you talked about it read about his LTV and cactus Aren't two things we should think about. What? You should go through some metrics that we should pay attention to it. Some that we should.

Why not? Yeah, eso. It was totally stage dependent. For example, lt being hat. If you're a late stage start from your public update, you must. They tend to do it. If you're early stage and you spend like $100 on eight, probably shouldn't they didn't do it. So it's everything to stay suspended. I guess we can focus the discussion on around seed stage companies because that's where most of us look at improve investment. Retention is obviously really important as a mentor before, because this is a good indicator of artwork fit metrics that don't matter. Like I was like, Oh,

TV Cat. Let's say you spend like, $1000 or even $10,000 acquiring customers early on as a C stays company. If you scale that, spend Teoh $100,000 then your pack will be completely different. And also like now, versus a year from now you know TV you will be very different because the public will be very different. So that's why I don't think I'll TV and Calf are are both metrics that are really important cause they're just changed too much a year from now will be way different than what they are now, so they're not really indicative of kind of the future growth potential. Other ghost metrics that I don't think about it as much in the beginning out saying quantity metrics matter less than all of the metrics. For example, quantity metrics are like, Do you have 1000 or 10,000 M au vs quality metrics are things like retention is a quality metric. For example, do you have, like,

50% long term protection or 10%? Long term attention matters a lot more in the beginning than if you have 10001st 1000 other really other quality metrics are like, um, like ratio metrics, like a down mel can sometimes be important for certain companies. For example, in your view to be company and you're a project management tool that someone should be using every single day to get value from it, then you're down mouth should be pretty good. Of course, for those kind of quality metrics, it's less like you can't just compare our every single company because of different comes at different use cases. Some use cases, you know, interviews as often. So you have less down now is another good quality metric, just like a lot of quality measure more ratio metrics then,

like econometrics. So really ways kind of figure out in the beginning is not how many users you have, but really, we're trying for us. Do I have a product that is so good that people were willing to pay for it? People are willing to pay more for over time. People are willing to come back every single day to use it if needed. Yes, those kind of quality metrics. I think are less, much more part in the beginning. That on it,

Yeah, I think, like someone of is, I think there are what I'm looking for when I talk to early stage companies, if they have any metrics at all, is some sign of stickiness. Products that people use more than once are orders of magnitude more valuable than products that people use once and are done with? So and what are those things? So that's Step 12 is also like from is actually a little more call today for me is, Does that founder or that founding team have some nuanced or sophisticated view about what they're measuring and how they're thinking about it, even if they're not measuring it, and why they believe that's the right way to think about. The problem is one that I'm always looking for is like as a sign of if this person will be able to scale into the role of a leader and thinking in a growth perspective over time, so have they thought about what the frequent the correct frequency of use it like what their natural frequency of usage for their product is, how they want to measure retention what they how they think about where they are today and whether it's good enough or not. Sometimes I get a lot of feedback. You know,

great feedback. Just having that conversation with folks and understanding where they think about it. In the second. I think, Is there some sign that there's a business? Here s Oh, that's willingness to pay. Is there some sign of willingness to pay? Sometimes that's a conversion rate. I would love to see that if your business is already there. But I think there are other ways qualitative measures of that or known business models that can apply. And then in a business that has really world components, I think you know economics and, like, what is your cost to deliver a unit of value? And how does that compare to the the P price people are paying for?

It has become more and more important over time. I think the days of ah running at negative unit economics with the hope that you'll figure it out later are mostly over. Were probably already over, but they're definitely over now. Um, those air, really the three key things, the one thing that would add on the LTV question is one Yeah, like I always skipped that sign for a seat that I mean it

just like I was getting

it almost never means anything at Actually, The only time I don't skip it is when it looks bad, like, really, like bad, and they're calling it good and that to me again, this is like trying to get signals for the depth of understanding that a founder has bigger business. I think it probably hurts you more than it helps you, because if it's really, really good, that's often a sign that you like. You have a rabid early user base. Of course, your numbers look good, right? Like they should look. They should look amazing,

right? But the Kochs side, like the acquisition costs like who knows? Like the fantasy that, like prices go down as you scale, is like generally not true, like you end up paying more for customer and plus one than you did for customer and for almost all in, you know, So like, uh, I think that you have to. There's a lot of magical thinking that comes in there. The only thing I would say that I it's ah shift that I would love to see more founders take, especially those that are driving high paid loops like they're using paid advertising as a driver of sales. Do you see type companies have this dynamic? Some enterprise software companies you know,

those kinds of things is a bigger focus on payback periods than on LTV and a customer acquisition costs, meaning how quickly. If I spend a dollar on advertising, how quickly do I get it back? And not just revenue but, like, uh, contribution larger? And the reason for that is is it's hard to build. Compounding growth on a paid channel without a ton of money was Bet Square without a ton of money. Unless you have fast payback periods, because what you're really trying to ask yourself is, Can I reinvest these dollars in the more growth? And if it takes you a year or two to get those dollars back, then you're counting on someone investor and outside markets, um,

debt to give you money toe grow, because once you baseline, you add 1000 installs a week. You can never stop doing 1000 souls a week. Let's be honest, especially for a venture backed business, So you need to figure out how to turn that 1000 until 1111 100 to 1200. And some of that's gonna be driven by retention. Some of that's gonna be driven by referrals and vier ality. And I see on the other dynamics, there you have it paid. Advertising is a driver. You better have. You got, the faster you pay back, period,

the better you could do that and scale it without outside investment. What's the right framework for evaluating pay back period for different types of businesses? Or our founder should be thinking about investors. Should be should be thinking about yes. So I like to think about it as like, what is the cost to acquire a customer, and then how you know, how quickly can I get that back? And that could be a lot of things. It's not just paid advertising. It could be for an enterprise company. What does it cost to set them up and get going with the implementation costs? Was the sales cost the other? You know, it's all of the cost to get a customer to like, successful so say,

like activation or roughly. And then there's sort of a margin question, which is like, What's my ongoing costume investment to keep this person going right? I would say in the earliest is being Lots of people are super sophisticated about this, But I think you can kind of like put your finger in the air and try to, like, come up with big buckets because what you're looking for is like I would say, like rough scales. So I get it back in a month, 1/4 a year forever on the earliest days, leave the like, you know, per channel like highly sensitive measurement stuff to the late stage pros. I would say early on it's just like bigger than a breadbox smaller than a breadbox, I think is really what I would be looking for.

Yeah, I don't view it that, like, um, business the rules down my, your founders is it should be very obvious that you're getting paid back very quick within a month, like you should have to, like, do very complex math. It just be like, Oh, you're spending like $1000 it's very obvious that because it was like I mean paid generate over $1000 in a month. So it's very obvious. Dies Pretty is fairly quick and quick, meaning like in like the one that put two months range, not like in a six month bridge.

And so when? When investors ask founders for LTV CAC or even thoughts of what it should be, is that just totally the wrong question? And if so, how do you respond to them? Let them know that. Or are there things that they should be doing early to give some signal for

later? Yeah. I mean, like, if I were a founder and like, first of all, a lot of starts shouldn't be doing that much paid in the beginning anyway, just because they don't have them back also like our founder, I probably wouldn't be doing that paid in the beginning so there wouldn't be in, like an lt be impacted that, like, if I had to answer its don't ask me what my LTV at WAAS for LTV, I would probably say, like based on the data we have like we know the X Month. LTV is around this around this much. But like past X minds like, let's say,

that it has only been launched by three months. It's really not worth the time to predict what six months, LTV told my LTV is and tell us. I would say something like that because it's a great member was unpredictable. And no one knows what the right number is. Even if you have all data in the world and Number two with the numbers now is different in a number of total months from now. So it's kind of not a useful metric on then cat, I mean free kind of explain. Yeah, like and plus your next dollar you add will be the next customer that you had to pay. It will be more expensive than before, so that's why I like I like you bought me a free. We completely ignore LDD duck cover sports.

Let's say our a bold founder. I was feeling pretty good about myself in my business. I wanted to push back on that question. I would say I think too, one of two different things, I would say, Hey, I don't think we have enough data to understand our current payback period, so I think that's not the right question to answer ask right now, but let's reason about bottoms up. What? This thing could look like that scale and why. I believe this is the right out, like, likely lifetime value number for this company. So if it's like a freemium business, I'd say,

Like, you know, we believe we can convert. Activate 40% of our sign ups. Roughly 25% of those they're gonna maintain his active customers. And we think we can have half of those be paid because Freemium business model these are It comes with an average of 15 seeds at this price. That's gonna look like this much revenue per year. And I think, you know, I don't know as well as you want. You know? What are you seeing for cops in terms of acquiring customers that look like this in the market like that kind of thing? Does that seem reasonable to you? That's question One way you could answer it. The second is I would push that I would reverse it and say something like, I think the question you're really asking is fundamental,

which is how is this business gonna grow? I think that's really what people are asking when they ask things like khaki melting, you ratios because they're asking, Can you spend money to make money? Can you build a flywheel of growth here or not? And I would answer that with Here are the ways we believe we can grow efficiently over time. So, like if I were not stored Butterfield but like if I were him in 2014 I'd say, You know, we are building an incredibly viral, internally viral product it supports. We are starting to see a lot of community's growing slack and amazing word of mouth. And we believe that we can accelerate that into low cost acquisition and a bottoms up adoption model that will see it into all the enterprises in the world so that we're selling not cold, like traditional enterprise sales in the active users inside of the engineering teams inside of the world's largest companies. And we know that there's an opportunity for growth. The numbers are obvious,

something like or I would say, you know, we're building marketplace, we have were our supply side is generating all kinds of great content that we believe it can be indexed. We're already seeing some early stages with that here. We think that over time that will drive low cost acquisition because people are look at how many people are searching for these terms or, you know, 40% of our customers today are inviting. We believe that we can scale that into an acquisition channel. I think that question you're really trying to answer is like How are we going to grow? Totally. Let's tradition a little bit into acquisition channels and you started build that What sort of the right way to think about it? What's what's not right with, you know, mistakes that people make. When I think about it, Maybe Jeff. Let's

start with U. S. 00 R. Four items through channels, I would say a unique kind of bucket damage to different buckets. There's short term and long term channels. So let's say let's see your consumer start up right and so that was arrested for that's pupils coming. Channels that work that scale real bait for some companies are frozen s CEO, and the thing is at least a start. We can't just 100% work on this eo because fine, if it if it works, it'll work a year out from now on will be will be too late. So that's why when I have us starts work, let's say they do have, um you see, uh, you see,

so they should work on this, you know, like the way to think about is like, five years from now, if I want is coming to be successful CEO musically big. And so now I don't need to work 100% on it, But maybe I spend 10% of my time and just about the basics. So I recommend a lot of like, set and forget, honest. Tried to use that literally take the cylinders like I don't like three days to to do. And they just sat it and forget it for six for six months And now kind of Peter basted start going s CEO and then or girls froze. You probably can invest more on early on and have it be worth it, because it will be back pretty immediately, because if you're already are getting users and you make your froze channel better than those users regenerate more users. And so I think it's just you have to take bets.

That makes sense, given where you are in your company and you have to do a mix of short term things like things that maybe don't scale and long term things, things that do skill. Um, so that's kind of advice. I get coming about going after this town's

Yeah, I think a little bit about which of these channels require substantial. Like what? I would call what we call minimum scope. Like, what's the level of fire you need for it to actually start burning and and think about return on time spent the number one enemy first started this time. Dollars is important, too, but like you know, you have a certain amount of time Runway and how can you get returns over the timeframe that's most valuable to you. So, like if you have, you know, 12 months runway and six months to your next fundraising, that it's, you know, what are the investments you could make that get the best returns over the next six months?

And is there anything we have to do to make the next six months great, too? I think is one framing that I like to use for thinking about time, investment and where to spend where to spend energy. I think the other question is like What things do you need tohave evidence of strong feces on versus actual like numbers going up on and making sure you're making that symbol sides of the coin for that on the B two B side. I think it's interesting that the same kind of rules if I there's etc. Others content strategies, etcetera Aziz. But I think there is a question of, you know, is this the kind of thing you're selling into a decision maker like an individual person who then is going to scale the product out inside the organization? Or is it a more like bottoms up type product where one on one part of the organization is gonna adopt it usually somewhat organically, usually for free, and then Seve usage inside of the rest of the organization and have you align your How do you make sure that your acquisition channel like makes sense with that? I think you know there are a lot of great outbound list type strategies where you can actually start to build the sales team early and start reaching out to people we need to be solving sort of a known problem toe unknown buyer inside of an organization for that toe work for some of these more developer productivity remote productivity type tools that we're seeing. I think they look a lot more like consumer products. They need to be able to drive like early person to person breath and acquisition channels that seat across the organization versus like, cell in.

Yeah, there's add on to read. I have so far for baby like there's there's been demonstrated their sales and there's bonds of both. What I actually see a lot of is usually honors over index into one or the other, whereas they should be working at least maybe like 75% in one and 25% the other vics. So this coming like, oh, we have to go with bombs of both. So we just won't do sales, And I think that's have ah mistake or they say, Oh, well, you know, we're gonna only focus on sales and we won't start investing in our bonds of built until, like three years later, which I also think the mistake those bombs go takes a long time to wrap up. So is that the penalty company. Your mix will be differently sometimes should work Warren sales and something we should work more bombs of both, but I would say most for most companies that give it its like you need to do a mix of

Yeah, and there's awesome feedback loops that come out of that, too. If you have ah, great, like self serve bottoms up type engine and B two b company. You start layering in sales. One. You now have a human being doing customer research with all of your best customers automatically, because that's that person's job. Not necessarily to sell it cold, but to, like understand how that person, how those people are using the product and they can bring that intelligence back to your product. And growth teams understand what's working, how they position internally, because often there are people in that company doing the selling for you,

and you want to know what that information is on the other side. If you have, like more of a sales top down approach, you can you know building good bottoms up type product or self service type product can help you lower your implementation costs, get to market. Earlier a tractor, wider range of customers. And so there's this bi directionality there that I think is not as obvious as it seems Up front. I think we're hope, thankfully, moving past the mythology of the no sales and a price offer company, and that I think what existed in the early 20 tens, where it was like then you don't need sales. It's all non incremental. It's bullshit, Paula.

I think we're kind of past that. But I think what's it's been really interesting to think about the intersections of those two things and how the information moving back and forth can be incredibly valuable for profitable that Are there other advice or zooming out or common advice that you find yourself giving our common misconceptions? You find yourself correcting among your service seed stage Founders are gonna be suit. You see stage founders either in and consumer or enterprise that we haven't talked about. One of the things I talked to. A lot of people who think like the way they're going to do growth is like have 100 50 different ideas about the different channels that we can go after in the ways that we can drive growth and I love the energy is great and it's really important to be experimental. But great companies are built on 123 channels, usually Mike, and one of them is primary. And then there are other ones that are added as like accelerators. That's not true forever. You hit these, you know, invisible Assam totes, and you hit the ceilings in your growth and you have to find new ways and you want to be out ahead of those. Which is why I believe it's important to look at multiple things.

But the idea that you're going to kind of like hand hack your way. Teoh. You know, early growth it like you can do a little, but that that's gonna be sustaining for you. I think there's a mistake. I think it's usually better to focus on the core things that are going to be the most important and ignore after the first month how I got to 10,000 users in a daze type posts in the world like that's that's all. Like the hacky shit is good, but you should only use it if you need to get to a minimum threshold in order for the business toward that stuff only works in these, like marketplace type businesses or network effect businesses. We need a little bit of heat and it doesn't matter how you get the heat. The engine works after that. Otherwise, like work on your sustained long term growth strategy is in a focused and thoughtful and strategically minded way.

Yeah, I think we talked along mission sectors actually in in this podcast, but me one other is just a single month over month growth. I think a lot starts, Uh, tryingto trying to go on which I don't think Is that great? As I said before, I think you're trying to figure out if the product you're building something people want And so you want all the metrics month over month. Both is a corny metric and which is one problem with another problem with? It is like when you're going from 10 years to 20 users in a month, 100% much, we're going to go there. That's obviously not sustainable. So, like if you say you want to go like 100% month over month for like, three months like RC, it will look good in the beginning.

We use in the beginning, but it'll be hard later on. And mother love the planning growth only really happens when you have a few things in place for when you have a retentive product. So the further so users that you got previously aren't turning and you don't replace them. And also you have. You have, ah, channels that actually scale so that, like every present with referrals, when you have more users, you have more users inviting more use. So that's that's how you actually get compounding a month over, Month wrote. So it's really it's really rare to see a startup that just like I mean, Monta maybe yearly will come out of, like,

pretty consistently but Montoro monthly rent. Very rarely there'll be ups and downs, and that's totally high. So I'll send the beginning for stars like don't focus on that month over month overgrowth and like, which also might force it over index on acquisition when you should be focusing on building great products. Instead, you should focus on building a product that users actually why I'm trying to like, understand, user through, like talking to users, notably looking into user metrics to see like is due did actually say they like it and do their actions match what they say And using that kind of build like a really excellent product before you even worry about like Do you have 1000 m au what? You have 10,000? May you because yeah, I think it is not. You're early on. Any numbers aren't indicative of your being

want, Like biggest problems with this month over month target metric. Thing is, Ah, I don't know if you've ever heard of. I think it's good hearts, LA is that Ah, Once a measure becomes a target, it ceases to be a good measure. The focus on it has led people to do unnatural things to drive it. I think I said at the beginning, like natural organic growth is a great sign that you have a good product market fit and it is. But I think a lot of what you're seeing is people sort of like doing very one off unnatural things to drive that metric to like. And it's hard now to tell the difference between like riel mo mentum and fake momentum lasting mo mentum versus like temporary momentum so I think it's more. It's like it was good until everybody thought about it. But it's tough being good. Uh, it So if you were running, why see you would scrap the 10% week over week growth.

Oh, yeah. So totally. I mean, obviously, I'm way less qualified than every partner. Am I See you. But I always I'm good friends with a who Stop by y se. Tell him Oh, you should have your startups folks on retention. And if they haven't tension metrics put it on there like them with the index. That would be really useful to me as an investor. Way more pointed me. Then if you have 100 or 1000 U, yeah, so you focus on like, yeah, building a really great product before you can focus on growing

that But then you won't have a graph that's all the way up into the right and raised 15 foot supposed today What I would just shift my I mean, I think that's a great metric for people who are passed some threshold. I think you're seeing more Y C companies into the program later with, like some early product market fan there really there, like figure out how they're going to accelerate the business and driving fundraise, and I think there's some. There's a lot of value to that when you have the the signs of product market fit already. What you're trying to show is that enough people care about this product for me to build a business. Maybe then, but I would sub segment a little bit and maybe focus that on the people who are like coming with something more established in the 10 to 12 weeks is more about, like, making a case than it is for long term growth. Then it is like figuring out what that product is.

Yeah, it is what it is more impressive. When is going from like 1000 to like 2000 then going from 10 to 20 or 102

100? Yeah, or 5 to 8. Like these, the the shirt telltale sign is the percentage with no numbers, like I've basically just being with us. Yeah,

I always look again. We always just look for the wrong number of players ourselves. Yeah,

that wrong number growth. It is very hard to think hundreds of people. It is you know, like or even thousands. Ideally, you need to be maybe hundreds of paying customers. That's where I'm like. OK, that's hard to fake. Like somebody actually cares about this thing. Totally 10 minutes. I want to give me a three a couple topics. One is building and building a growth team. S. Fareed. When's the right time to build a growth? Seen What kind of people should I hire?

How do I know would start books? So I think we talked about a bunch like, What are the ingredients of a company and that's ready for one? I think that we've covered that already, like, do your product market fit. Is there some organic growth already? Do I have a strong thesis about where are my strongest growth engine will be in the long run, and what do I can I start to thinking about how to invest in that? I think that's one of the most important things is early on. That's still a hypothesis. It's not a known known. I think people run into mistakes when they hire, like an S e o expert to run growth early on, right or someone with really, really deep and narrow knowledge in a single area.

No matter what your have offices is, you gotta leave some room for flexibility and a little bit of explore traces. What I'm looking for for an early growth leader is like, obviously an analytical mindset. Creativity, meaning like they think on their feet and are able to think through different, different forms that might work. And I would say the last ingredient for me is like a depth of carrying about the business as a whole rather than just there like narrow line of focus or the individual playbook that they had at the last place that they have. Think you need to build a flexible team that's willing to try, like again be flexible on the tactics and consistent on strategy. Tough interview floor. But I think like ambitious, hard working analytical tend to be the things that I'm looking for. I would start small so from a team perspective, wanted to peek 2 to 3 people, maybe 1/2 a designer and a lead like some sort of product manager, slash marketing lead to drive the initiatives and sort of help shepherd the ideas. But I would say start small because you wanna be a flexible as possible in process. That's from the product perspective at lease.

Yeah, I know those grants or not much that review

we're not technically like. Are there any foundation Do you think are important? A Have before you started girth practice.

Not too much like eyes, actually. Easier for I feel like it's easier for a growth team to operate earlier on. Then later. Not Not that, because you don't. But you don't want toe gloating too early, because on beginning, I was just kind of happy away. You could make changes really quickly without, um, much friction. You've been like that was gonna push back on big changes. So I was actually kind of easier that way. So nothing, really. From my perspective, this is a kind of easier and beginning can move past

it. Yeah, I would only add one languages that, um, the analytical foundations for your company are sort of written in the first year or two. Um, I have found that in my experience, it is very hard undo, like the analytical foundations, the tracking, the measurement, the started, the most kinds of things as you get later and later stage. Like analytics, debt is like technical depth, maybe even worse. So I would say that early team should maybe spend some time and energy getting your tracking and metrics and key details The most important pieces right early on,

just so you don't end up with a giant mess later. I mean, I've I've had a some of my jobs, like a year of just like trying a reason with the data to figure out, like what's working, what's not working rewrite at all. To be consistent, there's some you can get in some really bad habits.

Actually, what prime more important than the timing that I think about it is actually just getting the right person because the number of people who have let's say, like, five years of experience in growth is a lot last. The number of startups there are so just even being able to hire someone good is actually one by one. The biggest blockers. How did you hire someone good for your early like, Yeah, you should definitely take them, cause opportunity doesn't come very often. But if not, then maybe you maybe don't have to rush into it, cause that's freaks and a lot of the foundations aren't set in the very beginning. I don't really hard to do, so yeah, waiting for the right person is is report.

Jeff, could you give us a couple of minutes or maybe one each? I know we were up in summarizing on on S CEO and referrals What, you know, mistake that people make or what's the most important thing to think about? For other?

Yes, For SDO it's like if you have, if you're a content big content and have a content based service and you have a Web presence like you have to win S e 02 kind of women also like if you're in travel when you kind of have to win SDO to win. So that's just kind of minds that you need to have around and see what it is that important. But that doesn't mean you should spend 100% of your time on it. In the beginning, it takes a long kind of so this warehouse aecio referrals for almost like work for most services where there's an incentive, like there's a dollar value inventive and it's pretty much works for it's work for a lot of companies, basically, so it's kind of a low risk channel. The tackle. And so that's why it's one of the first times that I recommend for a lot of stars because it is relatively the rest. Like, you know, it's it's gonna work if people actually want that center. So, yeah, it's a good first how to

do Jeff free. Uh, guys, thank you so much for a couple of the podcast. You want to learn more about your your work or upcoming work? Any Any plugs that you wanna leave us with? Yeah. Following on Twitter. If they are 33 d

I suppose to go thoughts on Twitter. Jeff Chain 30. I was have a blood. I usually write longer by post growth inch block dot com

And get these guys under cap table. If you can. You would be lucky on that is certainly lucky Eso Jeff freed. Thank you guys. So much for coming podcast. Thank you. Thank you. If you're in early stage entrepreneur, we'd love to hear from you.