---
title: "Lenny's Newsletter — 2020 年合集"
date: "2020-01-01"
source: "Lenny's Newsletter"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>

/www.brainpickings.org/2014/09/01/seneca-on-the-shortness-of-life/)

**If you’re finding this newsletter valuable, consider [sharing it with friends](https://www.lennyrachitsky.com/), or subscribing if you aren’t already.**

Sincerely,

Lenny 👋

---

## [37/61] Flywheels, flywheels, flywheels

*Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a**🔒 subscriber-only edition 🔒**of my newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. Send me your questions and in return, I’ll humbly offer actionable real-talk advice* 🤜🤛

## **Q: My boss wants me to create a “flywheel” for our business. How does one create a flywheel, and do you have any examples of flywheels I can use for inspiration?**

Check this beauty out:

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/30234eb3-c61e-4dbe-8201-969235764182_1024x768.jpeg)

Kidding, but, in fact this image does help convey the concept of a flywheel. You can tell just by looking at it that when this big ole’ wheel starts spinning, with a little help from the steam, it’ll spin faster and faster until this chap makes it around his parents’ backyard model train track.

Now bring that same idea to the business context — instead of steam, **what makes your business grow? Which elements of your business feed off of each other to accelerate growth?** A flywheel is simply a way to describe these ideas visually.

As one example, here’s how Amazon came to see their business — and then how they visualized it as a flywheel:

> “Lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. That allowed Amazon to get more out of fixed costs like the fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. **Feed any part of this flywheel, they reasoned, and it should accelerate the loop.**”
>
> ー Brad Stone, *[The Everything Store](https://www.amazon.com/Everything-Store-Jeff-Bezos-Amazon/dp/0316219282/ref=sr_1_1?ie=UTF8&qid=1462241069&sr=8-1&keywords=the+everything+store)*

![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/54ba6da9-7c79-4290-b0de-65c34df8c128_562x400.png)

Each element of the flywheel (e.g. Selection) drives the next element (e.g. Customer experience), and so improving any of these elements accelerates the flywheel, and thus accelerates growth.

## How to create your own flywheel

#### 1. First, why create a flywheel?

A flywheel is just a tool for you and your team to identify and align on which parts of the business matter most. Of all of the things that you *can* work on, which investments accelerate your flywheel, and which investments don’t matter?

For example, in the case of Amazon, their flywheel makes it clear that growth alone will lead to lower costs over time. Thus, their time is best spent adding sellers and improving the customer experience, vs. directly cutting costs.

Similarly, for Uber, they can look at their flywheel and recognize how important supply will be to their marketplace:

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b410eab2-e4cc-4a3f-a243-cfcfef3dc94e_600x382.jpeg)

#### **2. Start with a list**

How do you begin? I‘d start with a list:

1. What are the core **assets** of your business? e.g. cars, content, hardware devices
2. What are the core **actions** users take? e.g. signing up, inviting friends, purchasing
3. What are the core **needs** of your users? e.g. something to watch, a ride, discounts
4. What are the natural **outputs** of your business? e.g. content, revenue, invention
5. What are the biggest **optimizations** to your business model? e.g. lower costs, better data

Write these out, whatever comes to mind. Don’t overthink it.

You should now have a big list. Nice 👍

Look at this list and find items that *directly drive* another item. See if you can create a loop that connects a handful of these. It’s totally fine if it’s messy and random at first.

As inspiration, look back at our Uber example:

1. More drivers (**asset**) leads to more coverage (**optimization**)
2. More coverage (**optimization**) leads to faster pickups (**need**)
3. Faster pickups (**need**) leads to more riders (**asset**)
4. More coverage also leads to less downtime (**optimization**)
5. And less downtime leads to lower prices (**need**)

Play around with your list and see if anything interesting emerges. [Here’s some inspiration](https://futureblind.com/2019/08/03/advantage-flywheels/) for the types of flywheels you may discover in your business:

![archetypes.jpg](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/72244e3d-7140-4536-ac7b-613e4383f556_3296x2266.jpeg)

#### 3. Alternatively, look at your past successes and failures

Jim Collins wrote [an entire book on flywheels](https://www.amazon.com/Turning-Flywheel-Monograph-Accompany-Great/dp/0062933795), where he shares a different approach for identifying your flywheel. This approach is only really useful for larger organizations that have had the luxury of time, but it’s still informative:

1. Create a list of significant replicable successes your company has achieved
2. Compile a list of failures and disappointments
3. Compare the successes to the disappointments and ask, “What do these successes and disappointments tell us about the possible components of our flywheel?”
4. Using the components you’ve identified (keeping them to four to six), sketch the flywheel
5. If you have more than six components, you’re making it too complicated; consolidate and simplify to capture the essence of the flywheel
6. Test the flywheel against your list of successes and disappointments
7. Test the flywheel against the three circles of your [Hedgehog Concept](https://www.jimcollins.com/concepts/the-hedgehog-concept.html)

To dive deeper, definitely get [the book](https://www.amazon.com/Turning-Flywheel-Monograph-Accompany-Great/dp/0062933795).

#### **4. Don’t overcomplicate it — it’s just a tool**

I was once working on a flywheel with my team and by the time everyone had their say we had a dozen circles, loops within loops, and arrows in every direction. Though accurate, it was no longer useful.

To illustrate the point, here’s a [way-too-complicated-but-accurate](https://innovationtactics.com/netflix-business-model-flywheel-investment-cycle/) Netflix flywheel:

![Netflix-flywheel](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ddac5575-3415-46ce-9760-fdf60562422c_960x540.png)

Here’s a [more simple yet useful Netflix flywheel](https://danco.substack.com/p/netflix-positional-scarcity-and-the):

![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9774862b-ffce-4328-824c-05ac75967bd7_1274x804.png)

A few more examples of simple but effective flywheel diagrams:

**[Intel](https://www.amazon.com/Good-Great-Some-Companies-Others/dp/0066620996/ref=as_li_ss_tl?keywords=good+to+great&qid=1579199478&sr=8-3&linkCode=sl1&tag=lccom01-20&linkId=938dec3c596daeff94d2b9dad3254417&language=en_US)**

![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/02c0b285-8101-4f06-b237-837425cef968_770x588.png)

**[Faire](https://blog.ycombinator.com/reimagining-b2b-commerce-with-faire/)**

![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c1855299-f292-4a90-ace6-f30a301e48ba_1213x744.png)

**[Pinduoduo](https://turner.substack.com/p/pinduoduo-and-vertically-integrated?token=eyJ1c2VyX2lkIjoxODQ5Nzc0LCJwb3N0X2lkIjo4MjAzODMsIl8iOiJPQi9ZbCIsImlhdCI6MTU5Njc2OTY0MiwiZXhwIjoxNTk2NzczMjQyLCJpc3MiOiJwdWItMTY5MDciLCJzdWIiOiJwb3N0LXJlYWN0aW9uIn0.lHvZAMBtda_zfkdTMOJ-N94qzxp-aRKm3YoeFdKGG4s)**

![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d9c5c76f-639e-4b17-8509-1af38335568e_1422x770.png)

**[Opendoor](https://notboring.substack.com/p/knock-knock-whos-there-opendoor):**

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6712e56b-725f-4266-b537-e9aff3940e89_788x400.png)

**[DoorDash](https://www.doordash.com/)**:

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/82f2b398-596d-4db5-b66b-33843a1ed365_783x484.png)

**[Booking.com](https://www.hbs.edu/faculty/Pages/item.aspx?num=55158):**

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ffa33a62-d5d7-4f77-a8e7-d3ddd0eaff25_1462x1256.png)

And finally, I couldn’t NOT include [Disney’s wild-but-incredible flywheel](https://kottke.org/15/06/walt-disneys-corporate-strategy-chart):

![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a1c04460-5893-4305-b18a-4f72cea6486e_1400x1225.png)
> “Examine the flow of information in the graphic. The film studio is at Disney’s core with different platforms in orbit. Films provide material for comic strips that, in turn, promote films. The comics become reprintable material for books. The film studio feeds article content for Walt Disney Magazine, which advertises Disneyland—a sales outlet for merchandise based off films.”
>
> — *[Fast Company](https://www.fastcompany.com/3048046/the-secret-to-walt-disneys-corporate-strategy)*

Don’t be afraid to have some fun.

#### **5. This takes time**

> “In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembes relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.”
>
> ー Jim Collins

Figuring out your flywheel, and getting it moving, take time. Don’t worry if you can’t figure it out, or if you aren’t seeing a flywheel in your business. Oftentimes, leaders only figure out their flywheel after the fact – I doubt Jeff Bezos had this diagram in mind when he started Amazon, and Netflix certainly didn’t (i.e. they had no intention of going digital when they launched).

The exercises of thinking about your business as a flywheel, and thus identifying which elements *most* contribute to its accelerating, will be worth your time. And worst case, you have an excuse to step back and think about the bigger picture with your colleagues.

And finally, if you’ve come across any other great flywheels, or have created one of your own, I’d love to see it! Reply to this email, or post a link in the comments 🙏

[Leave a comment](https://www.lennysnewsletter.com/p/flywheels-flywheels-flywheels-issue/comments)

*Since publishing this post, readers have shared some awesome additional flywheels, which I’ll be adding below.*

[David Perell’s personal flywheel](https://www.perell.com/tweetstorms/my-business-model)

![BM1.jpeg](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5fbc4ef6-0978-47d2-a9e4-97adede0d691_1000x900.jpeg)

[Glassdoor’s content flywheel (created by Kevin Kwok):](https://kwokchain.com/2019/04/09/making-uncommon-knowledge-common/)

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ad214653-f7d1-4421-86eb-6aa9c2ac46a3_1600x1600.png)

[Epic's flywheel (created by Matthew Ball & Jacob Navok)](https://www.matthewball.vc/all/epicprimer1)

![Image from Flywheels, flywheels, flywheels](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ed45c6b6-0103-4f49-9aff-49ed1070d307_1353x1418.png)

### Additional reading

1. [A framework for developing your own flywheel](https://futureblind.com/2019/08/03/advantage-flywheels/)
2. [Turning the Flywheel by Jim Collins](https://www.amazon.com/Turning-Flywheel-Monograph-Accompany-Great-ebook/dp/B07JFT5G7N/ref=as_li_ss_tl?crid=22WLM58KN3U82&keywords=turning+the+flywheel+a+monograph+to+accompany+good+to+great&qid=1577474180&s=digital-text&sprefix=Turning+the+Flywheel%3A+A+M%2Caps%2C208&sr=1-1&linkCode=sl1&tag=lccom01-20&linkId=aec4b59376a89357f70f32dceb944970&language=en_US)
3. [The Flywheel Effect](https://www.jimcollins.com/concepts/the-flywheel.html)
4. [Flywheels And How To Create Content Communities by Andy Johns](https://andyjohns.co/posts/flywheels-and-how-to-create-content-communities)

Till next week!

*Special thanks to the [Compound Writing](https://compoundwriting.com/) members who reviewed this post: [Stew Fortier](https://stewfortier.com), [Tom White](https://Tomwhitenoise.com), [Tyler Wince](https://productsolving.substack.com), and [Nick deWild](https://junglegym.substack.com/). And the flywheel image at the top is from [Birmingham Museums Trust - Birmingham Museums Trust, CC BY-SA 4.0](https://commons.wikimedia.org/w/index.php?curid=39738474)*

## **🔥 Job opportunities**

- **Product**: [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Uptime2020](https://jobs.all-hands.us/companies/uptime2020/jobs/product-manager-2-5943a3d1-9819-417b-aee9-fc6a563b276e)
- **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076601003), [Levels](https://levels.link/growth), [Outschool](https://jobs.lever.co/outschool/4f18d9fe-516b-4285-a5df-357f6cff5b92)
- **Design**: [Cascade](https://www.cascade.io/jobs/analytical-product-designer), [Invest Like The Best](https://investorfieldguide.com/hiring_design/), [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [ResQ](https://hire.withgoogle.com/public/jobs/getresqcom/view/P_AAAAAAJAAAZNCnYKqm8MiR), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Sourcetable](https://sourcetable.com/jobs#contract-designer), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444)
- **Engineering leader**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003), [Snackpass](https://jobs.lever.co/snackpass/00505223-bc85-4c28-8e4b-31217d05c2de)
- **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Runway](https://www.notion.so/A-Product-first-Frontend-Engineer-beae09e5ae034664a38cb26573e8d403), [Transform](https://transformdata.io/careers/)
- **Backend engineer**: [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [Invest Like The Best](https://investorfieldguide.com/hiring_engineer/), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d), [Wren](https://projectwren.com/careers/software-engineer)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c)
- **Sales/BD**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4105169003), [KUDO](https://angel.co/company/kudo-meeting/jobs/649855-vice-president-of-sales), [Swayable](https://angel.co/company/swayable/jobs/808347-director-of-sales)
- **Ops**: [Levels](https://levels.link/ops)
- **Community**: [Outschool](https://jobs.lever.co/outschool/449fa54a-1778-4255-a95d-a65dc28194c7)
- **HR**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4125981003)

## **🧠 Inspiration for the week**

1. **Watch:**[Minto’s Pyramid Principle summarized by Michael Dearing](https://www.heavybit.com/library/video/executive-communication/) — the secret to business communication

![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c29ab94a-58ec-4ea1-bd2d-a57c7d682dfd_1380x728.png)

2. **Learn**: [Videos by Harrison Metal](https://vimeo.com/harrisonmetalshorts) — An incredible collection of short educational videos about pricing, strategy, growth, and much more
3. **Read**: [TikTok and the Sorting Hat](https://www.eugenewei.com/blog/2020/8/3/tiktok-and-the-sorting-hat) by Eugene Wei — read everything Eugene writes

**If you’re finding this newsletter valuable, consider [sharing it with friends](https://www.lennyrachitsky.com/publish/post/https://www.lennyrachitsky.com/?action=share), or subscribing if you aren’t already.**

Sincerely,

Lenny 👋

---

## [38/61] How to increase your product's retention

*Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a**🔒 subscriber-only edition 🔒**of my newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. Send me your questions and in return, I’ll humbly offer actionable real-talk advice* 🤜🤛

## Q: **It'd be great if you can share some advice about increasing retention. Also, please some companies who are doing this very well.**

If you read [my previous post about what good retention looks like](https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29) and came away thinking “On no, my retention is too low! What should I do?” – this post is for you.

Below I’ll share an exhaustive set of strategies to increasing your product’s retention, including dozens of examples from companies big and small. Here’s a preview:

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c41dd98d-2ab1-4e94-bff6-ee3d889228d3_2400x1350.png)

Be warned though — significantly increasing retention is hard.

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/92756a72-4a0a-4293-8aa6-dc29c2167ba9_1082x614.png)

Why is that? Well, because people are busy and don’t want to spend more money. As Marc Andreesen once said, “people’s time is already fully allocated.” This is why most startups fail – they simply don’t end up creating something enough people want badly enough. And if they do happen to find something people sort-of-want, it’s difficult to make them want it significantly more. Nevertheless, this doesn’t mean you shouldn’t try. As [Brian Balfour](https://brianbalfour.com/) pointed out, “if you have poor retention, nothing else matters.” As you’ll see in the examples below, it is certainly possible to increase retention, and when you can pull it off it’s often the biggest lever you have to grow your business. For early-stage companies, *it’s the single most important growth metric to get right.*

So let’s dive in.

# **First, how does one measure retention?**

The easy (but less useful) way to measure retention is by looking at the percentage of active users that are no longer-active a month/week/day later, e.g. “5% of our users churn each month.” Though useful, this approach blends old and new users, and thus hide a key piece of information about the health of your business: how many of your users stick around long-term.

Instead, I suggest looking at what’s called **cohort retention**: **What percentage of new users are still active X months/weeks/days later?** e.g. “30% of users are still active after 3 months.” This allows you to look at the long-term stickiness of your users, vs. just a snapshot of all users in time.

The best way to understand cohort retention is to make a chart like the one below (in this case weekly cohort retention). In this case, only 14% of users who joined the week of May 5th are still active ten weeks later. Not good.

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3050de6e-5634-47e2-accc-9ccfe0c63cb8_1456x1018.png)

With his one chart, you can quickly tell three important things about your business:

1. **Whether your retention is increasing or decreasing over time** — just skim down any column and see if the numbers are trending up to down. In this example, retention is trending down 😭
2. **Whether something went very wrong, or very right, for a cohort** — in this example, something good seems to have happened the week of May 19th, which is worth exploring (and repeating).
3. **Most importantly, whether your retention rate** ***flattens*** — if it flattens, or stops decreasing over time, that means there is a group of users who continue to find value in your product. This is important because it happens to be [the best measure of product-market fit](https://www.lennyrachitsky.com/p/how-to-know-if-youve-got-productmarket).

To make it easier to look for this flattening, you can use a line chart of the same data, with a different line for each cohort (note, this is different data from above):

![retention curve](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9ca377ac-974a-4096-a221-3f7d1dbeccbd_800x567.png)

In this case, the curve flattens at about 10%, which means only 10% of your users stick around long-term. This is generally [a bad retention rate](https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29). But at least it flattens. And if you look at the newer cohorts (the short blue line, and the purple line below it), retention seems to be increasing over time, which is great. Though for some reason, every cohort eventually drops to 10% around the 7-week mark — a mystery for another time.

If you use popular analytics tools like [Amplitude](https://help.amplitude.com/hc/en-us/articles/230543327-Retention-Analysis), [Mixpanel](https://help.mixpanel.com/hc/en-us/articles/115004546883-Retention-Report-Basics), [Google Analytics](https://support.google.com/analytics/answer/6074676?hl=en), or [Mode](https://mode.com/help/articles/cohort-analysis-for-customer-retention-and-churn-rate/), this functionality is built-in and you can get these two charts for free. Otherwise, you can find some plug-and-play templates [here](https://andrewchen.co/the-easiest-spreadsheet-for-churn-mrr-and-cohort-analysis-guest-post/), [here](https://blog.usejournal.com/how-to-perform-cohort-analysis-calculate-customer-ltv-in-excel-80bfed785ec4), or [here](https://docs.google.com/spreadsheets/d/1BWhbks4NhDOAoy3GEosD_PBff5eM5OfUYDcdQggw8ao/edit#gid=0).

Now that you know your retention rate, I’m guessing it’s lower than you’d like. Let’s work on that.

# How does one improve retention?

Coming at this question from first principles, what does it tell you when someone stops using your product? Well, it means that they no longer find enough value in your product. Your task is to change that.

Here are the seven ways increase the rate of new users finding value in your product, and thus increase retention, ranked roughly in order of expected impact:

1. 🛠 **Improve your product —** deliver more value for users
2. 👋 **Improve your onboarding —** connect more users to existing value
3. ⛓ **Make it stickier —** make the value hard to give up
4. ✋ **Catch users before they leave —** give them an excuse to stay
5. ☝️ **Remind users of your value —** deliver value more often
6. 💫 **Bring back users after they’ve gone —** remind them what they’re missing
7. 😬 **Change your users —** target a more suitable audience

Though not totally accurate, here’s a metaphor for what you’re trying to do:

Let get this party started and dig in.

## 1. 🛠 **Improve your product**

This is at the very heart of retention. If you’re just starting out, much of your time should be spent here. “Build something people want”, as they say. Here are a few ways you can increase the value you providing to your users:

#### **1. Solve your customer’s problem significantly better**

Obvious, but important. How might you solve your customer’s problems 10x better? What are your users trying to do that you can make 10x easier? What would a customer’s *ideal* solution look like? Work backward from that.

#### **2. Solve more problems**

How might you expand the breadth of the problem’s your solving for your customers? e.g. Uber launching many types of car services, Instacart adding Walmart, and Instagram adding Stories

#### **3. Make your product cheaper**

How might you increase the ROI of your product?

#### **4. Make it faster and more reliable**

How might you make the user experience act (or feel) significantly better?

#### **5. Wait for network effects to kick-in**

In businesses with network effects, like marketplaces (e.g. Airbnb) and social networks (e.g. Snapchat), the “product” becomes more valuable as more people use it. How might you bootstrap your network to get there more quickly for each user?

#### **6. Wait for the world to change**

Sometimes it’s better to be lucky than good.

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9cb8c486-e710-4de3-8ecf-31cfe921cf10_1028x1092.png)

#### **7. Pivot to solving a different problem**

And finally, you may be better off pivoting to a different solution (or problem) if you can’t budge retention enough.

But note:

> “The standard advice of listening to long-term customers who are already retained, and adding features for them— that doesn’t work. But that’s where most product teams spend their time. In my experience, the real levers to improve retention dramatically are in the experience for new users.”
>
> — Andrew Chen

With that, let’s explore the lever that usually ends up being the most effective: onboarding.

## **2.** 👋Improve your onboarding

As Andrew points out above, and as I’ve myself experienced, you’re more likely to have an impact on retention when improving the new user experience, vs. improving the product. Why? Because, again, it’s very hard to invent (sustainable) new customer value — you’re lucky if you found *one* thing that people like. It’s much easier to get more people to experience the value you’ve already created.

Here are a handful of ways to improve onboarding:

#### 1. Manually onboard new user

Superhuman is famous for [their 1:1 onboarding strategy](https://twitter.com/rahulvohra/status/1159611299740803073?lang=en), but in reality, many companies (particularly B2B) start with a hands-on onboarding. Why? Because it’s a lot easier to get your message across person-to-person vs. through the product. Here’s an example from Airtable:

#### 2. Make sure new users experience your value

How much work, and how long, does it take for new users to experience the value that you provide? What keeps these users motivated to keep going? How could you cut that time down and keep their motivation up, without sacrificing the experience?

> “The first principle we learned at Pinterest is that we should get people to the core product as fast as possible — but not faster.”
>
> — [Casey Winters](https://news.greylock.com/why-onboarding-is-the-most-crucial-part-of-your-growth-strategy-8f9ad3ec8d5e), former head of growth at Pinterest

Some examples:

#### 3. Increase the odds new users have a great time

What are all of the ways that your users set themselves up for failure? How can you proactively help them avoid this?

> “The users of your product don’t want to make choices, especially when they are in the first mile. The default options you provide, like which tab they land on and pre-populating fields with suggested selections, make all the difference in pulling new users through the first mile.”
>
> — [Scott Belsky](https://medium.com/positiveslope/crafting-the-first-mile-of-product-7ed25e8f1027)

A few examples:

#### 4. Get more users through the flow

And finally, you can’t retain users if they don’t make it through your onboarding, so look for ways to reduce friction, reduce distractions, and increase motivation. For example, a  ✨ can go a long way:

## 3. ⛓ Make it stickier

The next most common tactic to increasing retention is make your product hard to give up. Some approaches:

#### 1. Build habits

Give users an extra nudge to revisit the value you’re creating. Long-term though this only works if you are creating real value for people.

#### 2. Create incentives to come back

Amazon Prime and loyalty programs are also great examples of this lever in action because they give your customers an incentive to continue using your product over other options.

#### 3. Sign annual plans

> “One portfolio company spent years trying to improve churn. The most important lever was shifting 70% of new cohorts to annual.”
>
> — Kyle Poyar, VP, Growth at OpenView

#### 4. Deeper integration

The more integrated your product is into a person life, or an organization’s workflow, the harder it is quit. For example, Slack (just try taking it away), AWS (just imagine the switching costs), and WhatsApp (all your friends are there!).

No matter how sticky you make your product though, users will still leave. Next, let’s look at ways to catch them before they do.

## 4. ✋ **Catch users before they leave**

Though often done badly…

…it’s worth spending some time on your de-activation flow. Some users may not actually want to quit forever or have an issue that you can solve before they call it quits. Here are some of the more effective ways to keep your users from leaving.

#### 1. Let users “pause” or “snooze” instead of cancel

One of the more successful experiments we ran at Airbnb to reduce host churn was to give hosts a way to “pause” their listing, instead of removing it. This gave them time to deal with whatever they needed to deal with and then easily come back when they were ready. Here’s another example of this with Hulu:

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/482a0cb8-e729-466c-b9e8-d9c5364493fe_1544x837.png)

#### 2. Give users an incentive to stay

Sometimes a short-term cash crunch is forcing a customer to leave, and a bit of leeway there keeps them as a customer.

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/adb33ae6-3369-4cb8-adac-eb31ecbba62d_1525x869.png)

#### 3. Ask users why they’re leaving, and offer a solution

See if you can address the issue in-line.

![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/252e394e-1df2-4d1f-ab45-e6431f2da052_1610x1248.png)

#### 4. Remind users of the value they’ll lose

There’s a reason your users decided to join — this is a good time to remind them of what they’ll miss. But, be thoughtful in how you approach this. It’s easy to go too far.

[![Facebook's account deactivation confirmation page](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/76cb6de3-d0ac-466d-983a-810a58c9f3bf_1920x1262.jpeg "Facebook's account deactivation confirmation page")](https://pageflows.com/blog/delete-facebook/)

#### 5. Predict churn and try to avoid it

And finally, the holy grail of retention – predicing and avoiding churn. I haven’t personally seen anyone successfully do this in practice, but it’s worth exploring if you can find some strong indicators of dissatisfaction.

[![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a50926cd-7ab2-4182-bcf1-35cc34f43a7a_1024x493.png)](https://blog.chartmogul.com/churn-prediction-machine-part-1/)

## 5. ☝️ **Remind users of your value**

Even when you do provide great value to your users, they may not actually find or remember it. Look for ways to remind them. This can be over email/SMS, in-product, or an occasional call.

Some examples:

## 6. 💫 **Bring back users after they’ve gone**

Though rarely a huge lever, it’s worth thinking about ways to pull back users who at one point found your product interesting. You can do this with ad retargeting, calls, or email/SMS, for example:

## 7. 😬 Change your users

And lastly, an often-overlooked element of retention rate is the quality of the users you’re bringing in. These users can have little-to-no intent to purchase, or can simply be the wrong audience for your product. Shifting either one of these could have a profound impact on your retention rate metric.

For example, paid users (e.g. FB ads) are notoriously the lowest intent traffic. Cutting back on paid traffic will increase your retention. Obviously, this won’t automatically translate to a much healthier business BUT it will impact your economics and thus it’s important to look at.

Along the same lines, you may also find that your early target users/customers just don’t need your product badly enough. It happens. Instead of giving up, zero in on the users who *do* retain. What makes then different? What do they find valuable? How do you go find more of those types of users, and build for them? [This story about Superhuman’s search for PMF](https://firstround.com/review/how-superhuman-built-an-engine-to-find-product-market-fit/) is an excellent example of this in action.

### In summary

I hope the list of seven strategies above gave you some new ideas to improve your own retention rate. Though this is not an easy road, it’s a trek worth taking. For reference, here’s a summary again of the tactics to explore:

[![Image from How to increase your product's retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c6b8786d-c402-43a0-a8b2-003ab14d8185_2400x1350.png)](https://substackcdn.com/image/fetch/$s_!zyiU!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fc6b8786d-c402-43a0-a8b2-003ab14d8185_2400x1350.png)

### Recommended reading

1. [Do You Have Product-Market Fit? It's All About Retention](https://www.youtube.com/watch?v=bpnYFG1-rdk&feature=emb_logo) by Casey Winters
2. [Why Retention Is The Silent Killer](https://www.reforge.com/blog/retention-engagement-growth-silent-killer) by Brian Balfour
3. [What Is Good Retention: An Exhaustive Benchmark Study with Lenny Rachitsky](https://caseyaccidental.com/what-is-good-retention) by Casey Winters
4. [Retention is King](https://andrewchen.co/retention-is-king/) by Jamie Quint
5. [Crafting The First Mile Of Product](https://medium.com/positiveslope/crafting-the-first-mile-of-product-7ed25e8f1027) by Scott Belsky
6. [Why Onboarding is the Most Crucial Part of Your Growth Strategy](https://caseyaccidental.com/startup-onboarding) by Casey Winters
7. [From conversion to retention: industry experts on improving your onboarding](https://www.intercom.com/blog/podcasts/expert-advice-improving-user-onboarding/)

If you’ve found other tactics to be effective in your product or business, I’d love to learn about them. Just leave a comment or reply to this email.

[Leave a comment](https://www.lennysnewsletter.com/p/how-to-increase-your-products-retention/comments)

See you next week!

## **🔥 Job opportunities**

- **Product**: [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Uptime2020](https://jobs.all-hands.us/companies/uptime2020/jobs/product-manager-2-5943a3d1-9819-417b-aee9-fc6a563b276e)
- **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076601003), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Levels](https://levels.link/growth)
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- **Backend engineer**: [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [Invest Like The Best](https://investorfieldguide.com/hiring_engineer/), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d), [Wren](https://projectwren.com/careers/software-engineer)
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- **Ops**: [Levels](https://levels.link/ops)
- **Community**: [Outschool](https://jobs.lever.co/outschool/449fa54a-1778-4255-a95d-a65dc28194c7)
- **Content**: [Levels](https://docs.google.com/document/d/1mk1d389BL8bQExZXxLgj2LX5uvRWy4l5ei0ladQ0Feo/edit)
- **HR**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4125981003)

## **🧠 Inspiration for the week**

1. **Watch:** Try not to smile

[Watch on YouTube](https://www.youtube.com/watch?v=1AnG04qnLqI)

2. **Listen:** [M83's Midnight City, but with Nelson Muntz's laugh from The Simpsons](https://www.youtube.com/watch?v=hzEWGGKmqlA) (via [Kottke](https://kottke.org/))

[Watch on YouTube](https://www.youtube.com/watch?v=hzEWGGKmqlA)

3. **Read**: [Anxiety Is the Dizziness of Freedom](https://onezero.medium.com/anxiety-is-the-dizziness-of-freedom-b5ab45cae2a5) by Ted Chiang — One free chapter from his incredible book [Exhalation](https://www.amazon.com/Exhalation-Stories-Ted-Chiang-ebook/dp/B07GD46PQZ/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=)

**If you’re finding this newsletter valuable, consider [sharing it with friends](https://www.lennyrachitsky.com/), or subscribing if you aren’t already.**

Sincerely,

Lenny 👋

---

## [39/61] How to increase your retention

*Below is a peek at what paid subscribers received this week. If you’d like to read the full post, [consider upgrading](https://www.lennyrachitsky.com/subscribe). Many subscribers expense this newsletter to their team’s learning and development budget, and a growing number of fund are offering it as a value-add to their portfolio companies (just ask!). For everyone else, next week’s post will available to everyone (the free monthly post) and I’m super excited about it, so stay tuned for that!* ❤️

## **Q: It'd be great if you can share some advice about increasing retention. Also, please some companies who are doing this very well.**

If you read [my previous post about what good retention looks like](https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29) and came away thinking “On no, my retention is too low! What should I do?” – this post is for you.

Below I’ll share an exhaustive set of strategies to increasing your product’s retention, including dozens of examples from companies big and small. Here’s a preview:

![Image from How to increase your retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c41dd98d-2ab1-4e94-bff6-ee3d889228d3_2400x1350.png)

Be warned though — significantly increasing retention is hard.

![Image from How to increase your retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/92756a72-4a0a-4293-8aa6-dc29c2167ba9_1082x614.png)

Why is that? Well, because people are busy and don’t want to spend more money. As Marc Andreessen once said, “people’s time is already fully allocated.” This is why most startups fail – they simply don’t end up creating something enough people want badly enough. And if they do happen to find something people sort-of-want, it’s difficult to make them want it significantly more. Nevertheless, this doesn’t mean you shouldn’t try. As [Brian Balfour](https://brianbalfour.com/) pointed out, “if you have poor retention, nothing else matters.” As you’ll see in the examples below, it is certainly possible to increase retention, and when you can pull it off it’s often the biggest lever you have to grow your business. For early-stage companies, *it’s the single most important growth metric to get right.*

So let’s dive in.

# **First, how does one measure retention?**

The easy (but less useful) way to measure retention is by looking at the percentage of active users that are no longer-active a month/week/day later, e.g. “5% of our users churn each month.” Though useful, this approach blends old and new users, and thus hide a key piece of information about the health of your business: how many of your users stick around long-term.

Instead, I suggest looking at what’s called **cohort retention**: **What percentage of new users are still active X months/weeks/days later?** e.g. “30% of users are still active after 3 months.” This allows you to look at the long-term stickiness of your users, vs. just a snapshot of all users in time.

The best way to understand cohort retention is to make a chart like the one below (in this case weekly cohort retention). In this case, only 14% of users who joined the week of May 5th are still active ten weeks later. Not good.

![Image from How to increase your retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3050de6e-5634-47e2-accc-9ccfe0c63cb8_1456x1018.png)

With his one chart, you can quickly tell three important things about your business:

1. **Whether your retention is increasing or decreasing over time** — just skim down any column and see if the numbers are trending up to down. In this example, retention is trending down 😭
2. **Whether something went very wrong, or very right, for a cohort** — in this example, something good seems to have happened the week of May 19th, which is worth exploring (and repeating).
3. **Most importantly, whether your retention rate*****flattens*** — if it flattens, or stops decreasing over time, that means there is a group of users who continue to find value in your product. This is important because it happens to be [the best measure of product-market fit](https://www.lennyrachitsky.com/p/how-to-know-if-youve-got-productmarket).

To make it easier to look for this flattening, you can use a line chart of the same data, with a different line for each cohort (note, this is different data from above):

![retention curve](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9ca377ac-974a-4096-a221-3f7d1dbeccbd_800x567.png)

In this case, the curve flattens at about 10%, which means only 10% of your users stick around long-term. This is generally [a bad retention rate](https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29). But at least it flattens. And if you look at the newer cohorts (the short blue line, and the purple line below it), retention seems to be increasing over time, which is great. Though for some reason, every cohort eventually drops to 10% around the 7-week mark — a mystery for another time.

If you use popular analytics tools like [Amplitude](https://help.amplitude.com/hc/en-us/articles/230543327-Retention-Analysis), [Mixpanel](https://help.mixpanel.com/hc/en-us/articles/115004546883-Retention-Report-Basics), [Google Analytics](https://support.google.com/analytics/answer/6074676?hl=en), or [Mode](https://mode.com/help/articles/cohort-analysis-for-customer-retention-and-churn-rate/), this functionality is built-in and you can get these two charts for free. Otherwise, you can find some plug-and-play templates [here](https://andrewchen.co/the-easiest-spreadsheet-for-churn-mrr-and-cohort-analysis-guest-post/), [here](https://blog.usejournal.com/how-to-perform-cohort-analysis-calculate-customer-ltv-in-excel-80bfed785ec4), or [here](https://docs.google.com/spreadsheets/d/1BWhbks4NhDOAoy3GEosD_PBff5eM5OfUYDcdQggw8ao/edit#gid=0).

Now that you know your retention rate, I’m guessing it’s lower than you’d like. Let’s work on that.

# How does one improve retention?

Coming at this question from first principles, what does it tell you when someone stops using your product? Well, it means that they no longer find enough value in your product. Your task is to change that.

Here are the seven ways increase the rate of new users finding value in your product, and thus increase retention, ranked roughly in order of expected impact:

1. 🛠 **Improve your product —**deliver more value for users
2. 👋 **Improve your onboarding —**connect more users to existing value
3. ⛓ **Make it stickier —**make the value hard to give up
4. ✋ **Catch users before they leave —**give them an excuse to stay
5. ☝️ **Remind users of your value —**deliver value more often
6. 💫 **Bring back users after they’ve gone —**remind them what they’re missing
7. 😬**Change your users —**target a more suitable audience

Though not totally accurate, here’s a metaphor for what you’re trying to do:

Let get this party started and dig in.

## 1. 🛠 **Improve your product**

This is at the very heart of retention. If you’re just starting out, much of your time should be spent here. “Build something people want”, as they say. Here are a few ways you can increase the value you providing to your users:

#### **1. Solve your customer’s problem significantly better**

Obvious, but important. How might you solve your customer’s problems 10x better? What are your users trying to do that you can make 10x easier? What would a customer’s *ideal* solution look like? Work backward from that.

#### **2. Solve more problems**

How might you expand the breadth of the problem’s your solving for your customers? e.g. Uber launching many types of car services, Instacart adding Walmart, and Insagram adding Stories

#### **3. Make your product cheaper**

How might you increase the ROI of your product?

#### **4. Make it faster and more reliable**

How might you make the user experience act (or feel) significantly better?

#### **5. Wait for network effects to kick-in**

In businesses with network effects, like marketplaces (e.g. Airbnb) and social networks (e.g. Snapchat), the “product” becomes more valuable as more people use it. How might you bootstrap your network to get there more quickly for each user?

#### **6. Wait for the world to change**

Sometimes it’s better to be lucky than good.

![Image from How to increase your retention](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9cb8c486-e710-4de3-8ecf-31cfe921cf10_1028x1092.png)

#### **7. Pivot to solving a different problem**

And finally, you may be better off pivoting to a different solution (or problem) if you can’t budge retention enough.

But note:

> “The standard advice of listening to long-term customers who are already retained, and adding features for them— that doesn’t work. But that’s where most product teams spend their time. In my experience, the real levers to improve retention dramatically are in the experience for new users.”
>
> — Andrew Chen

With that, let’s explore the lever that usually ends up being the most effective: onboarding.

## **2.**👋 Improve your onboarding

As Andrew points out above, and as I’ve myself experienced, you’re more likely to have an impact on retention when improving the new user experience, vs. improving the product. Why? Because, again, it’s very hard to invent (sustainable) new customer value — you’re lucky if you found *one* thing that people like. It’s much easier to get more people to experience the value you’ve already created.

Here are a handful of ways to improve onboarding:

#### 1. Manually onboard new user

Superhuman is famous for [their 1:1 onboarding strategy](https://twitter.com/rahulvohra/status/1159611299740803073?lang=en), but in reality, many companies (particularly B2B) start with a hands-on onboarding. Why? Because it’s a lot easier to get your message across person-to-person vs. through the product. Here’s an example from Airtable:

#### **2. Make sure new users experience your value**

How much work, and how long, does it take for new users to experience the value that you provide? What keeps these users motivated to keep going? How could you cut that time down and keep their motivation up, without sacrificing the experience?

> “The first principle we learned at Pinterest is that we should get people to the core product as fast as possible — but not faster.”
>
> — [Casey Winters](https://news.greylock.com/why-onboarding-is-the-most-crucial-part-of-your-growth-strategy-8f9ad3ec8d5e), former head of growth at Pinterest

[Continue reading full post 👉](https://www.lennysnewsletter.com/p/how-to-increase-your-products-retention)

Till next week!

Sincerely,

Lenny 👋

---

## [40/61] A playbook for fundraising

*Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a**free monthly edition**of my weekly newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office.*

*If you’re not a paid subscriber, here’s what you missed this month:*

1. *[How to increase retention](https://www.lennyrachitsky.com/p/how-to-increase-your-retention-issue)*
2. *[Flywheels, flywheels, flywheels](https://www.lennyrachitsky.com/p/flywheels-flywheels-flywheels-issue)*
3. *[Navigating your early career](https://www.lennyrachitsky.com/p/navigating-your-early-career-issue)*

## Q: I raised a small seed round, and I’m now thinking about raising our next round. Do you have any advice for navigating the process?

Whenever I need fundraising advice, there’s one person I immediately go to: [Marc McCabe](https://twitter.com/mccabe?lang=en). Marc is a friend, a former colleague, and a prolific angel investor. He has personally helped dozens of startups raise money (even doing this full-time for a number of years). When I got this question, I went straight to Marc and asked him to do a guest post. Not only did he agree, he ended up putting together the most comprehensive fundraising guide I’ve ever seen, which you’ll find below. Thank you Marc 🙏

If you have any further questions, don’t hesitate to [ping Marc on Twitter](https://twitter.com/mccabe?lang=en).

*P.S. You can hear this post in audio form 👇*

![Image from A playbook for fundraising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/024a1841-c38d-447c-8f10-f0b5f7e7ede2_1456x240.png)

# A Playbook for Fundraising

*By [Marc McCabe](https://twitter.com/mccabe?lang=en)*

![Image from A playbook for fundraising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b73196fa-0f52-4d09-b034-0b984fbcc6e7_550x458.jpeg)

*Image: [Gilbert Garcin](https://www.designboom.com/art/gilbert-garcin-retrospective-at-espace-jacques-villegle/)*

For an early stage founder, fundraising is one of the most nerve-racking parts of the job. It’s incredibly opaque, asymmetrical, and is often the difference between having a company and not. Even the most experienced founder may have only fundraised 5-10 times in their life, while VCs engage in this process daily.

Nonetheless, it’s also a very exciting time for a founder. Very few people ever get the chance to raise millions of dollars from top tier VCs. As a result, I often see founders rush into the process, setting up investor meetings before they’re truly prepared and end up with a bad outcome. This is a missed opportunity because the fundraising process is a great forcing-function for getting you to think deeply about your business and where it’s going.

Over the last decade I have personally helped dozens of companies raise capital, from pre-seed to Series C rounds, and through these experiences I’ve seen a lot of effective, and also counterproductive, fundraising patterns. I shared many of these learnings in [a lengthy podcast interview](https://podcasts.apple.com/gb/podcast/deepdive-into-startup-fundraising-with-marc-mccabe/id1457400066?i=1000447317091) a year ago in, but with a prod from Lenny I felt like now was a good time to revisit this topic.

**This guide is for founders of technology businesses who have raised their seed round, and are thinking forward to their next fundraise**. It’s most relevant for Series A, but a lot of the same concepts apply for seed rounds, Series B and to a certain extent Series C. While most tech businesses can benefit from this guide, there are plenty of exceptions, especially companies with products which take a long time to get to market, and companies raising capital outside the US. Consider yourself caveated.

**Ultimately, fundraising is an exercise in building trust.** Every week we read about new Series A, B and C rounds. We hear about pre-emptive offers and blank check term sheets from prominent investors. All of this can lull us into thinking raising capital is easy. Yet, each partner at a fund generally only makes 1-3 early-stage investments per year, and their career is ultimately staked to how successful these investments are. Each investment is incredibly significant to each fund and in order to convince a fund that you are worthy of that big check, you need them to feel incredibly confident that you will take the money and use it to take your business to a new level, whereby you could raise future funding and ultimately build a huge business. With that in mind, let’s get started with how I like to manage the various steps from thinking about fundraising to closing.

**I typically break up a fundraising process into 4 steps:**

1. Preparation
2. Outreach
3. Navigating the process
4. Partner meetings + closing

Let’s walk through each of these stages one by one.

## Step 1: Preparation

**First, you need to figure out** ***why*** **and** ***when*** **you should raise a round**. Maybe this seems obvious, but rather than looking at new investment as an opportunity, many founders only start fundraising when they are running out of money. VC’s don’t invest because you’re running out of money – they invest because they believe their equity stake will be worth a lot more in the future.

*When* you should raise a Series A round is a blog post unto itself, and I’m not going to go in depth here. The truth is that there isn’t just one factor that will say you’re ready to raise Series A. For example, in SaaS, it’s common that companies that have achieved $1M ARR are told they are ready, but growth rate is a factor as well, and ARR doesn’t always apply for consumer focused businesses.

**Generally the way to think about whether you are ready for a Series A is whether you’ve proven [a credible value hypothesis](https://a16z.com/2017/02/18/12-things-about-product-market-fit/)**. This is a combination of factors including the market you’re attacking, the features you’ve built to exploit the opportunity, and how well your product is finding its fit in the market. I often describe Series A as the “Product-Market Fit Round”: You want to show that you’ve convinced a slice of your market that your product is valuable enough to pay for (or if it’s free, use very regularly), and that this user base is growing. While seed rounds are intended to explore an idea and find some fit in the market, raising a Series A helps you pour more fuel on the fire.

Investors ultimately want to invest in growth. If a company is growing fast relative to its peers, this can make up for lower ARR especially if the business seems defensible and sustainable. It’s often helpful to speak with your seed investors early on about it, especially if they have experience raising capital themselves, to understand what milestones would make most sense to support a new round in the future.

When you think that you’re ready, the first step is to start pulling together your key metrics and wins, such as your growth rates, revenue numbers, customer testimonials, user feedback, and achievements. As mentioned, what makes you ready for Series A varies greatly, so find data points that will get investors excited about your business.

#### **In terms of materials, I advise founders to prepare the following at a minimum:**

1. **A short blurb about your business**, including a couple of headline numbers that indicate the business is doing well
2. **A short teaser deck** (3-7 slides)
3. **A longer presentation deck** (12-15 slides)
4. **A 2-3 year forecast** with assumed fundraise secured
5. **Optional: [Metrics deck](https://www.rippling.com/blog/company-news/rippling-series-a-pitch-deck-and-memo/)** or a data room. Sometimes you will get asked for this at Series A, sometimes not. It helps if you ask your prospective VCs in the first meeting whether they’ll ask for it.

You can find some good references for building pitches [here](https://www.sequoiacap.com/article/writing-a-business-plan/), [here](https://piktochart.com/blog/startup-pitch-decks-what-you-can-learn/) and [here](https://medium.com/@zebulgar/how-to-raise-money-before-launch-a3544ef4dba6).

The key is that your materials tell a compelling story. They need to explain what you’re building, why you’re building it, and how your strategy will capture considerable revenue in the future. The better this story ties everything together, the more your business will seem insightful. Ultimately we’re all human, and strong narratives that help explain the world around us are more compelling than a selection of disparate, albeit impressive, data points.

> “If you can’t tell a credible and compelling story about your vision and how your plans will capitalize on broader societal, market, cultural, economic or other trends, you’re dead in the water. I believe my own secret to fundraising success was that I always spoke to the broader changes I saw happening in the world and my conviction about the opportunities they presented.”
>
> — [Eoghan McCabe](https://www.linkedin.com/in/eoghanmccabe), co-founder Intercom

As an early investor in Intercom, it always impressed me how consistent the narrative stayed from when the company started up until today.

The shorter teaser deck is for sharing over email but be mindful that you don’t want to share everything with VCs ahead of meeting your lead partner. Hence the longer deck for your in-person (or Zoom meetings). Remember, it’s a trust building exercise. In a relationship, trust is built over many interactions over a long period of time. You want to show some positive elements to get investors interested, but leave good content in reserve.

One thing that Covid has changed is that building a relationship with a VC, with fewer in-person meetings, is now harder. Think about this with respect to your materials. To make up for the lack of in-person face time, you need to find more digital approaches to building this relationship than before. [Caitlin Bolnick recently had an excellent thread about this](https://twitter.com/caitlinbolnick1/status/1290375205362098177)  so consider preparing some of the following extra materials:

1. A Loom of your product flow explaining how you made key design decisions and how these relate to the use case or market
2. An appendix of interesting information you yourself have read or viewed that inspired your approach
3. A compilation of customer testimonials

You will need more content than ever to help build a shared belief in what you’re doing and why. **I typically recommend spending at least 4 weeks building the deck and supporting materials.** I find founders realize there are stronger elements they should have included 1-2 weeks into the pitch process. Taking time to get the narrative right and letting your points crystallize will likely result in a stronger deck from the start.

An important component in building this content is a part of the process I like to call **“Hardening the Pitch”**. Typically I recommend founders prepare their materials to about 70% completeness and then test them before going into battle. Put together a coherent story with great supporting data (not necessarily heavily designed). Find 4-6 people in your network, who have either fundraised at Series A for their own startup (ideally in the same or similar space), are friendly investors who know the space (perhaps from your seed investors), or even growth stage investors. Practice your pitch with them. Testing your materials and thesis before you hit the full pitch gauntlet will build your confidence and reps on the pitch. It will also provide you with helpful feedback and, potentially, warm introductions to relevant funds. I’ve seen this be immensely helpful in securing strong investment leads.

> “Fundraising can be a lonely experience, especially as you will want to protect those in the company from the highs and lows during your round. Finding some good external people to lean on for vetting your pitch or providing introductions can really help relieve some of the burden on founders.”
>
> — [Jonathan Golden](https://www.linkedin.com/in/jgolden/), NEA

**I generally think you should plan to spend somewhere between 8-16 weeks working on your fundraise from start to term-sheet**. You’ll be ideally speaking to 50-60 funds for your Series A. Starting early in the year makes sense, but if you’re in July and contemplating raising, it might make sense to wait for late August or early September to begin your outreach to funds. There are a lot of great jokes I could share about VC vacations in August, but the truth is that plenty of VCs work through August. Just maybe not enough to run a tight process with every fund.

Another factor to consider when you go out to raise is runway. Generally **I recommend having at least 8 months of runway when going out to raise**. The most important thing is that your business is showing the signs that you should raise Series A. If you only have 4-6 months of runway, it might make sense to raise a bridge round from inside investors to gain leverage in the fundraising process. You will want to continue to show traction during the fundraising process as often investors ask for updated numbers as you get close to the end and a downturn can shake their confidence. It’s really helpful to think about fundraising at least 12 months before you need it so you can time things well. I pulled together a quick fundraising calendar below to help you think about the overall timing of the different elements of your round.

![Image from A playbook for fundraising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9c45e391-60ea-4a07-949e-5e909cd28a18_1600x621.png)

## Step 2: Outreach

Planning your outreach is probably the most overlooked and tedious part of building a successful process. Your goal at this stage is to build a long list of funds who could lead your round. This means finding not just any funds, but those who have the capital to write a lead check. A lead check is one that can fill the majority of your round. You’ll also then need to identify the partners at these funds who will be interested in what you’re working on, and then find suitable introductions to speak with those partners.

**I recommend putting together a list of 50-60 funds you want to talk to ([here’s a template](https://docs.google.com/spreadsheets/d/14eNxvGZTsBWHdd7uHA49RxkBq67sj07mfLDvsHyk9dg/edit#gid=0))**. With that list, figure out the partner you’d ideally want to work with at the fund, and then comb through your network to identify strong introductions to those partners. Warm introductions can make a huge difference. The best intro comes from a successful founder from within that fund’s existing portfolio. The stronger the referral source, the more interest and excitement that partner will have when meeting you and reviewing your pitch content. If your only point of contact is a principal or associate at a fund then you may want to check in with them ahead of time. Associates and Principles are the eyes and ears of a fund, and can be a good path in, but you should ask them if they have autonomy to make investments or if there’s a partner at the fund they recommend you start building a relationship with.

If you think you might fundraise in the next 6-12 months, and don’t have many good relationships with funds, this is a good time to start having some basic coffee meetings with top tier investors your network can introduce you to. If you’re seeing very strong traction and your value proposition is very clear, you probably won’t need to do these kinds of meetings. However, I have also seen that sometimes starting cold with investors when you begin fundraising isn’t always optimal. You should be cautious about doing too many of these coffee meetings because it’s time consuming and requires preparation, so I usually advise only doing this for top tier funds you want to cultivate a relationship with. You need to think of every investor interaction as something that could influence whether they do or don’t invest in your business, so make sure you prepare. Over the coming months you can continue these initial relationships with updates about your progress and the space you’re in.

What is important though is that you set yourself up well with these funds before you start eventually reaching out for fundraising.

## Step 3: Navigating the process

You now have your pitch materials and your investor list ready. Your ultimate goal is to end up with multiple interested funds who have completed their diligence and want to invest all at the same time.

**You should coordinate your outreach to have first meetings with all of these funds within a 2-3 week period**. Making sure all these first pitches happen in a constrained period of time means you won’t have some VCs getting ahead of the others in terms of information and diligence. Generally I don’t recommend doing more than 4-5 pitches a day and leaving a suitable buffer each side of pitches to restore your energy, give you time to get to your next meeting without stress, and to allow a meeting to go late when they need to. With 50-60 funds, that’s going to take 3 weeks.

At the end of each meeting you should be asking your prospective partner:

1. What kind of diligence do they need to get through to build confidence?
2. What is their next step in moving this process forward?
3. When might that next step happen?
4. What parts of the business resonate with them?

Approach this with the eyes of a project manager. You should be building a calendar and keeping notes for each VC’s progress and feedback, per the [tracker template](https://docs.google.com/spreadsheets/d/14eNxvGZTsBWHdd7uHA49RxkBq67sj07mfLDvsHyk9dg/edit#gid=0), and be in regular contact with each fund you’re speaking to. Having lots of content you can share helps. No one likes sending (or receiving) the “just checking in” email. Compose some interesting emails with relevant content that will help build understanding about what you’re doing and why. Always finish these emails with actions and next steps that can move things forward. It’s important to maintain dialogue and stay top-of-mind with the partner you’re speaking to.

**I’ll restate this because it’s important: try to keep all the funds on similar timelines.** You may end up getting your first term sheet from the fund you are least excited about. If another fund you’re keen on is just starting their diligence you’ll be forced to either reject that better fund, or reject the deal you have on the table. You should think of your role here as creating a market for the equity you’re selling. Don’t create a market of one buyer that was able to get to a decision fastest.

Once you’re through the grueling first pitch phase, you’ll move on to a second pitch, along with customer references, VCs diligencing your data, projections, etc. Once again, focus on coordination. To keep everyone moving, it’s OK to follow-up and share some information a week after your last touch point. If you’re driving everything and there’s seemingly no corresponding interest for a week or two, then better to file that VC in a different bucket and focus on the funds who are reciprocating. If someone says they’re going to follow up then the laws of human decency dictate they should (though that doesn’t always happen when you want it to).

This will be painful, but know that some VCs just won’t be interested in your company or will be too focused on other deals. Some genuinely just won’t understand your business and the opportunity you see. Silence, or outright rejection, are tough pills to swallow for any founder, but this is normal. **Having five VC partners still interested in investing after the diligence phase is a success**. Another way of looking at that is that success normally means failing with 90%+ of the funds on your list. Y Combinator estimates you need to speak to 30 funds to get one term sheet. Still, you need to treat each fund with the respect that shows you believe they might lead your round, while avoiding wasting time with those that clearly show you they won’t. The later the passes come, the harder it’ll be to take, especially considering the time you’ve invested and the optimism you may have built up about their interest. This is unavoidable. Find ways to process and deal with this energy and try not to take it out on the investor in question. I’d genuinely recommend having a close friend/colleague/early investor who ideally understands the process on stand-by either to vent to or to get reassurance. Fundraising is, in the parlance of our times, a total head fuck. Rather than obsessing on the passes, focus on what next steps you can actually take to make progress with other funds.

## Step 4: Partner meetings + closing

If you’ve made it this far, kudos, you’ll need that kind of perseverance to fundraise successfully.

You’ve now built some relationships and some fund partners have genuinely spent a lot of time on your business. Find ways to speak with those partners and show your true ambition and excitement for the deal. You’re possibly going to be working with this partner for years to come and they’re also thinking the same thing. At this point it’s likely that the partner wants to get this deal done but needs to convince their partnership. This is when you get called into partner meetings.

The partner you’ve been working with now generally turns into your co-conspirator. They’ve invested months into this process and want to get the deal over the line. Delian Asparouhov, from Founders Fund, and I recently chatted about this dynamic and I think he summed it up best:

> “The world of venture capital actually closely mimics enterprise sales in this manner. Once your 'inside sponsor' has gotten over the line, then you are actually on the same team. The best founders recognize this and treat me like we're on the same side. We start to talk about how to tailor the deck to the firm, discuss and agree on an exact timeline for a term sheet, and what terms they would happily take.”
>
> — [Delian Asparouhov](https://www.linkedin.com/in/delian-asparouhov-87447742/), Founders Fund

Typically you will get a response one way or another shortly after a partner meeting. If you get a term sheet, congrats! If there are other funds still interested, you can let them know you have a term sheet and that they’ll need to make a decision soon. **Most of the time, I would not recommend sharing which fund offered you the term sheet or what the valuation is. However, transparency can be perceived as a sign of confidence and that you’re ready to accept that term sheet.** If the term sheet is from a top tier fund, this can also have an impact on the VCs still in your process**.** If this term-sheet is not from your first choice fund, asking to speak to references for a fund can buy you some time and give you additional insight on the fund. If you leverage a term-sheet to push another fund to make a decision and they have not completed their diligence, it can force them to pass when they might not otherwise.

VCs don’t like offering term sheets that don’t get accepted – it’s a lot of work for nothing. Sometimes before getting the term sheet, you will get a call from the partner you’ve been speaking with. They’ll often ask you how many other funds are still involved, what you value the business at, and how much equity you’re willing to sell. It’s good to understand some comps and have a range of valuation in mind but don’t feel compelled to give them a low number they can anchor to. I would focus your comps around the top end of your range if you feel compelled to discuss a valuation with your VC partner.

Don’t forget, you’ve built this synchronized process keeping many funds in the loop for a reason. Rather than helping the fund set a valuation (which they probably have a clearer idea of than you), focus the conversation on what you want to raise, reiterate why you need this capital, and potentially identify other terms you may be more sensitive about (e.g. one board seat vs two, option pools, founder stock revesting in later rounds). YC put together a [very nice post on the ideal Series A term-sheet](https://www.ycombinator.com/library/4P-a-standard-and-clean-series-a-term-sheet), but it’s also good to speak with your legal support to get advice on what terms they typically see. Always have your legal team review a term-sheet and walk you through the terms. Your legal team will likely be quite conservative and sensitive to terms which might not really impact you so it’s helpful to ask them clarifying questions like “when will this actually impact me?” to get clearer on what you can stomach and what you want to negotiate.

**Once you receive a term sheet, you are on the clock to accept, negotiate or reject it.** Some VCs are aggressive with this and will only give you 24-48 hours to accept. Others understand you may need more time to gather references for the fund. There’s not a hard and fast rule here but it can be hard to keep a term sheet open for more than 1-2 weeks. When you get the term sheet, you should establish clearly how much time you will need and understand that if you go beyond this deadline, the term sheet could be withdrawn.

Once you’ve signed a term-sheet, some founders are surprised to find out the process isn’t fully over. I advise you to not publicly celebrate a term sheet or necessarily tell anyone in the company outside of the founders. It can take 3-6 weeks from this point to actually get the money in the bank. During this time funds will perform some additional legal diligence, and prepare the stock purchase agreement (which is the more detailed and contractually binding version of the term-sheet). This is a good time to identify who out of your existing investors will be taking their pro-rata (if they have it), or find other value add angels and small investors who might be good fits for supporting you.

Once you sign the stock purchase agreement you can breathe deeply. It’s important to celebrate this achievement. Use this moment to refocus and energize your team for the next stage of your business. But you’ll all too quickly get over this relief once you realize that you now need to grow the company considerably to raise your next round. The hard work of building a business continues.

It's important to state here that I have seen rounds closed in a lot of different ways. There is no one size fits all approach. This guide is intended to offer some structure around the fundraising process and alleviate the uncertainty and anxiety founders experience. If there's one point I hope you take from this guide, in the words of Benjamin Franklin, "By failing to prepare, you are preparing to fail."

If you have questions about it, hit me up on [Twitter](https://twitter.com/mccabe). And lastly, I want to thank [Jonathan Golden](https://twitter.com/jpgg), [Delian Asparouhov](https://twitter.com/zebulgar), [Eoghan McCabe](https://twitter.com/eoghan), [Riley Newman](https://wave.capital/) and of course Lenny Rachitsky for their help reviewing and adding their thoughts to this post.

## **🔥 Job opportunities**

- **Product**: [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager)
- **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076601003), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Levels](https://levels.link/growth)
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- **Backend engineer**: [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [neo.tax](https://angel.co/company/neo-tax/jobs/887778-software-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d), [Wren](https://projectwren.com/careers/software-engineer)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)
- **Sales/BD**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4105169003), [KUDO](https://angel.co/company/kudo-meeting/jobs/649855-vice-president-of-sales), [Swayable](https://angel.co/company/swayable/jobs/808347-director-of-sales)
- **Ops**: [Levels](https://levels.link/ops)
- **Community**: [Outschool](https://jobs.lever.co/outschool/449fa54a-1778-4255-a95d-a65dc28194c7)
- **Content**: [Levels](https://docs.google.com/document/d/1mk1d389BL8bQExZXxLgj2LX5uvRWy4l5ei0ladQ0Feo/edit)
- **HR**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4125981003)

**If you’re finding this newsletter valuable, consider [sharing it with friends](https://www.lennyrachitsky.com/), or subscribing if you aren’t already.**

Sincerely,

Lenny 👋

---

## [41/61] Getting better at product strategy

*Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a**🔒 subscriber-only edition 🔒**of my newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. Send me your questions and in return I’ll humbly offer actionable real-talk advice*🤜🤛

# Q: How do I get better at product strategy?

![Image from Getting better at product strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ee01028f-17de-40e3-8171-32dfb21a3c3f_490x367.gif)

A few years into my time at Airbnb, the founders were becoming increasingly alarmed that a large percentage of booking requests were being rejected (or worse ignored) by hosts. Guests across all demographics, geographies, and languages were putting in their credit card information, ready to book, but instead of a happy confirmation message — were rejected. The reasons for the rejections were generally reasonable (hosts forgot to update their calendar, they didn’t want pets in the home, they needed more lead time, etc.) but for a guest trying out Airbnb for the first time — not a great experience. My team was tasked with addressing this.

We spent many months optimizing the booking flow, focusing on increasing the host acceptance rate — sending more reminders, incentivizing hosts to accept more often and more quickly, and making it easier to complete a booking on both sides. But this only helped a bit.

Eventually, we took a step back and went through a thought exercise: what would the *ideal* guest experience look like? If we were to start over, how would we design the Airbnb booking experience? It was pretty obvious: the experience would be instant! If you could see it, you could book it 🙌 This phrase quickly became our team’s vision.

With this in mind, we crafted a strategy that would transition the Airbnb marketplace from a “request to book” model to an “instant book” model. A world where guests could book available homes instantly.

We already had a feature called “Instant Book”, which when enabled allowed qualified guests to book instantly, so we doubled-down on growing the adoption of this feature. Though only 5% of bookings were “instant” that point, we set an ambitious north-star goal: 100% Instant Book.

To make a long story short, two and a half years later over 80% of bookings were instant. It was a wild success.

Below I’ll share some of the things that I learned from my experience crafting and executing this strategy, along with a ton of pointers to resources and advice to level up your strategic thinking.

Let’s get into it.

### ✨ Strategy

Crafting a strategy is the most fun part of product management. At least for me. You get to be creative, to think long-term, and to flex all of the nooks and crannies in your brain. Being good at strategy is also one of the defining characteristics of a senior Product Manager. For good reason — a well-crafted strategy can change the trajectory of a business, while a bad strategy is a huge waste of time and money.

To develop a winning strategy, you have to get three things right:

1. ☝️ **The actual strategy**
2. 👏 **Articulating the strategy**
3. 🤝 **Acting on the strategy**

Below, I’ll explore each of these steps and share examples from my work on the Instant Book strategy. First, though, let’s take a step back and make sure we’re all on the same page about *strategy.*

#### **What is a strategy?**

A strategy is your plan to win.

#### **Win what?**

Whatever you’re trying to achieve. Normally your company, or team, mission. This could anything from getting humans to Mars to getting more people to tweet.

#### Why do you need a strategy?

1. To create alignment
2. To create clarity
3. To create focus

#### **Where does strategy fit into the planning cycle?**

Once you align on your Mission and Vision you can focus on your Strategy — which then informs the Goals and Roadmap:

Mission → Vision → ***Strategy*** → Goals → Roadmap

1. Mission: What are we trying to achieve?
2. Vision: What does the world look like when we’ve achieved it?
3. **Strategy: How will we achieve it?**
4. Goals: How will we measure our progress towards it?
5. Roadmap: What do we need to build to get there?

It’s not always this sequential, as the Goals often lead to tweaks in the strategy, but this is generally how planning goes. Both your company, and each initiative within your company, should have a clear Mission, Vision, Strategy, and set of Goals. Your Mission and Vision will normally stay stable, while your Strategy, Goals, and Roadmap will likely evolve every planning cycle.

#### **What are some quick examples?**

Here’s how Tesla thinks about it:

- **Company Mission**: Accelerate the world’s transition to sustainable energy
- **Company Vision**: Create the most compelling car company of the 21st century by driving the world's transition to electric vehicles
- **Company Strategy:** (1) Build a sports car, (2) Use that money to build an affordable car, (3) Use that money to build an even more affordable car, (4) While doing above, also provide zero-emission electric power generation options.

Here’s how we thought about it on the Instant Book team:

- **Team Mission**: Make it easy and fun to book a home on Airbnb
- **Team Vision**: If you see it, you can book it
- **Team Strategy**: Transition the Airbnb marketplace from a “Request to Book” model to an “Instant Book” model, by (1) giving hosts all of the tools they need to be successful with Instant Book, (2) incentivizing hosts to enable Instant Book, and (3) encouraging guests to choose Instant Book.

### 🤔 Step 1. Determining your strategy

> “Good strategy … does not pop out of some strategic management tool, matrix, chart, triangle, or fill-in-the-blanks scheme.
>
> Instead, a talented leader identifies the one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action and resources on them.”
>
> — [Richard Rumelt](https://goodbadstrategy.com/), *Good Strategy Bad Strategy*

#### **Qualities of great strategy**

1. **Problem-oriented**: Clearly identifies the problem
2. **Insight-driven**: Rooted in insights, both quantitative and qualitative
3. **Actionable**: Outlines concrete actions/investments that will solve this problem
4. **Focused**: Has a small number of high-leverage bets
5. **Cohesive**: Create a clear path from the problem to the solution

In the case of Instant Book, the first thing we did was to think about carving a path from the problem (i.e. guests are often being rejected) towards our vision (i.e. if you could see it, you could book it). What would it take for us to get from A to B?

Well, for guests to be able to book any home they find, that would mean that every host and every guest was using Instant Book. This formed the first part of our strategy:

1. Increase host adoption of Instant Book
2. Increase guest adoption of Instant Book

We then spent a couple of weeks looking at data, talking to hosts and guests, and having team discussions around how we could best go about increasing adoption on both sides of the marketplace. Based on these insights, we landed on three tracks of work, which became the kernel of our strategy.

1. Give hosts all of the essential tools they needed to be successful with Instant Book
2. Incentivizing hosts to enable Instant Book
3. Encouraging guests to choose Instant Book

Our team then dove into each of these tracks — developing hypotheses, ideating on solutions, and launching dozens of experiments to make steady progress towards our goal. Every quarter or so, we re-evaluated the opportunities, shifted our strategy, and got to work. In the next step, I’ll share how we articulated this strategy.

#### Guides to developing your own strategy

When developing your own product strategy, these are the best three guides I’ve come across:

1. [How to Become a Strategic Leader](https://sloanreview.mit.edu/article/how-to-become-a-strategic-leader/) by Julie Zhuo
2. [Product Strategy – Insights](https://svpg.com/product-strategy-insights/) by Marty Cagan
3. [How to define your product strategy](https://medium.com/@gibsonbiddle/2-the-dhm-model-6ea5dfd80792) by Gibson Biddle

#### Five essential reads that will level up your strategic thinking:

Reading these will be an investment, it’ll pay off. Pick two and read them.

1. [Good Strategy Bad Strategy](https://www.amazon.com/dp/0307886239) by Richard Rumelt
2. [Divinations newsletter](https://divinations.substack.com/) by Nathan Baschez
3. [The Innovator's Dilemma](https://www.amazon.com/Innovators-Dilemma-Revolutionary-Change-Business/dp/0062060244) by Clayton M. Christensen
4. [7 Powers](https://www.amazon.com/7-Powers-Foundations-Business-Strategy/dp/0998116319) by Hamilton Helmer
5. [Good to Great](https://www.amazon.com/Good-Great-Some-Companies-Others/dp/0066620996) by Jim Collins

#### **Broadly, the best way to get better at developing strategy:**

1. Spend time understanding your market (including your competition)
2. Spend time understanding your customers and their needs
3. Spend time crafting and executing strategies — and learn from those experiences
4. Study colleagues who are great strategic thinkers
5. Read about strategy

#### Mind-expanding strategic frameworks to get your brain juices flowing:

1. [Aggregation Theory](https://stratechery.com/concept/aggregation-theory/) by Ben Thompson
2. [Finding Power](https://divinations.substack.com/p/finding-power) by Clay Christensen
3. [Hierarchy of Engagement](https://medium.com/@sarahtavel/the-hierarchy-of-engagement-expanded-648329d60804) by Sarah Tavel
4. [Status as a Service](https://www.eugenewei.com/blog/2019/2/19/status-as-a-service) by Eugene Wei
5. [Four myths of bundling](https://coda.io/d/Four-Myths-of-Bundling_dHY6lD6jWOW/Intro_sup_3#_lufsJ) by Shishir Mehrotra

### 👏 Step 2: **Articulating your strategy**

> “To influence day-to-day activities, strategies need to be simple enough for leaders at every level of the organization to understand, communicate, and remember — a strategy that gathers dust on a shelf is nothing more than an expensive bookend.”
>
> — [MIT Sloan Review](https://sloanreview.mit.edu/article/turning-strategy-into-results/)

Once you have the kernel of a strategy, the next step is to make sure your team and stakeholders actually understand it and buy into it. Even the most genius of strategies will fail if communicated badly.

#### **Qualities of well-articulated strategy**

1. Short
2. Memorable
3. Is explained with framework or a metaphor
4. Leverages the [rule of three](https://en.wikipedia.org/wiki/Rule_of_three_(writing)#:~:text=The%20rule%20of%20three%20is,or%20effective%20than%20other%20numbers.&text=The%20Latin%20phrase%20%22omne%20trium,as%20the%20rule%20of%20three.)
5. Is easy to find (and share)

#### Examples of well-articulated strategies

These are the best public strategy docs I could find. If you’ve seen others, [hit me up](https://twitter.com/lennysan) and I’ll add them.

1. **[Gitlab](https://about.gitlab.com/company/strategy/)** — My favorite. Notice the clear Mission, Vision, and three-part Strategy.
2. **[Tesla](https://archive.is/ypo0q)** — A classic. Notice the narrative style, the detailed identification of the problems, and the very simple four-step ambitious yet clear strategy at the end.
3. **[Salesforce](https://www.salesforce.com/blog/2013/04/how-to-create-alignment-within-your-company.html)** — Simple, but tells you exactly what needs to be done.
4. **[Yahoo’s “Peanut Butter” memo](https://sriramk.com/memos/garlinghouse-peanut-butter.pdf) —** Notice how clearly this identifies the problem, and includes a three-part strategy. Also, it’s clearly memorable since it’s now known as the “peanut butter” memo.

#### Organizing your strategy

To write out a strategy, I usually start with this [company strategy template](https://docs.google.com/document/d/1JI73WrGplrhNE46aLyRD_B74gEynI77EPgXn1ic6WeQ/edit?usp=drive_web&ouid=111613335789441259753) or a [team strategy template](https://docs.google.com/document/d/1RQWuvWDgcAv1ylksFXtiwhuTbHLcL1byIcoXsbCQfic/edit#heading=h.b2dsyhbkdvd1), and then roughly follow [The Minto Pyramid Principle](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr):

1. What is the current situation?
2. What is the complication?
3. What is the solution?
4. How do we achieve this solution?

Let’s look at this through the lens of the Instant Book example:

1. **Current situation**: Guests are coming to Airbnb to book a place to stay, and hosts can accept or reject guests when they request to book their home.
2. **Complication**: A large percentage of guests are having a very bad time using Airbnb because they are being rejected or ignored by hosts.
3. **Solution**: Transition the marketplace to an “Instant Book’ model, by getting every host and guest to use Instant Book.
4. **How do we achieve it:** We invest in three areas:

1. Give hosts all of the essential tools they need to be successful with Instant Book
   2. Incentivize hosts to enable Instant Book
   3. Encourage guests to choose Instant Book

This becomes the root of the strategy document. I then try to develop an underlying framework or metaphor that makes the concept easy to understand. In our work on Instant Book, I initially used the metaphor of a *minefield* to convey the challenges that hosts had with guests instantly booking (“that day is already booked!” or “not another guest with a dog!”).

![Image from Getting better at product strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/19abad22-0a0a-4ead-b74f-8e2c4b348f91_800x395.jpeg)

Later, we shifted to a framework we called the CAN and WANT framework, which created two distinct tracks of work:

1. **Features**: I CAN use Instant Book if these existed
2. **Incentives**: I WANT to use Instant Book if I could

There isn’t anything revolutionary about any of this but the simple act connecting the work items into a framework or metaphor makes a strategy much easier to grok and remember.

[The recent flywheels post](https://www.lennyrachitsky.com/p/flywheels-flywheels-flywheels-issue) may be useful in helping you develop a framework. [This post by the CEO of Coda on diagrams](https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems/great-diagrams-2) is also helpful.

### 🤝 Step 3: **Acting on your strategy**

> “A good strategy is, in the end, a hypothesis about what will work.”
>
> — Michael Porter

After a lot of hard work you now have a well-articulated strategy that your team buys into. Congrats! Now comes the most important part: using the strategy.

Since developing a strategy is normally part of the planning cycle it should automatically inform your immediate goals and roadmap. Great! What trips people up most is what happens to strategies down the road — they are often forgotten, unused, or become inflexible. Some advice:

1. **Remind people over and over**: Don’t expect anyone to remember any part of the strategy. Remind your team, and stakeholders, at every opportunity — every all-hands, every update email, every review meeting.
2. **All prioritization should go through your strategy**: One of the main goals of a strategy is to create focus — to know what NOT to do. Continue to return to it when making prioritization decisions.
3. **Be ready to evolve it:** Sometimes you’ll be wrong, or you’ll learn something new that requires adjusting your plans. Don’t be sad. Learn from it, adjust it, and keep moving forward.

Lastly, as you execute on your strategy, in the back of your mind, always be thinking about how you can refine and strengthen the strategy. What would make it better, stronger, and clearer? A good strategy is never static.

### 🧠 Further study

Hopefully, this post gave you enough to chew on to level up your strategic thinking. Here’s a quick summary, and ways to continue learning:

**The three things you need to get right:**

1. ☝️ The actual strategy
2. 👏 Articulating the strategy
3. 🤝 Acting on the strategy

**Additional recommended reading for those of you who can’t get enough:**

1. [WTF is Strategy?](https://hackernoon.com/wtf-is-a-strategy-bcaa3fda9a31) by Vince Law
2. [Applying Leverage as a Product Manager](https://blackboxofpm.com/applying-leverage-as-a-product-manager-ffad4a99db24) by Brandon Chu
3. [Mission, Strategy, and Tactics](https://boz.com/articles/strategy-tactics.html) by Boz
4. [Eigenquestions: The Art of Framing Problems](https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems) by Shishir Mehrotra
5. [Product Strategy](https://www.reforge.com/product-strategy) by Reforge

**Three things you can do immediately:**

1. Find someone around you who is a great strategic thinker and ask them to help you level up
2. Ask for feedback on your existing (or past) strategies from smart people around you
3. Read at least three of the things I’ve linked to in this post

See you next week!

*Thank you [Sriram Krishnan](https://sriramk.com/) for providing early feedback on this post.*

## **🔥 Job opportunities**

- **Sponsored post of the week**: ✨[Senior Frontend Engineer at BodyBlock AI](https://www.notion.so/Senior-Frontend-Engineer-5e6b0934d24f449c96151cef7c5f468f) ✨
- **Product**: [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager)
- **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076601003), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion)
- **Design**: [Huddle](https://dribbble.com/jobs/49411-Sr-Product-Designer), [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
- **Engineering lead**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003), [Snackpass](https://jobs.lever.co/snackpass/00505223-bc85-4c28-8e4b-31217d05c2de)
- **Frontend engineer**: [BodyBlock AI](https://www.notion.so/Senior-Frontend-Engineer-5e6b0934d24f449c96151cef7c5f468f), [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Runway](https://www.notion.so/A-Product-first-Frontend-Engineer-beae09e5ae034664a38cb26573e8d403), [Transform](https://transformdata.io/careers/)
- **Backend engineer**: [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [neo.tax](https://angel.co/company/neo-tax/jobs/887778-software-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Shuffle](https://www.notion.so/getshuffleapp/Full-Stack-Software-Engineer-Shuffle-e47452551edb42d38ac6cf1cc0f08b1b), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)
- **Community**: [Outschool](https://jobs.lever.co/outschool/449fa54a-1778-4255-a95d-a65dc28194c7)

## **🧠 Inspiration for the week ahead**

1. **Find**: [A non-exhaustive list of Black women angel investors, for those who feel it's hard to find them](https://www.notion.so/A-non-exhaustive-list-of-Black-women-angel-investors-for-those-who-feel-it-s-hard-to-find-them-db2d71d72f444397a4498c24ef7b8e07)
2. **Read**: [Sriram’s list of strategy frameworks](https://sriramk.com/strategy)
3. **Learn**: [How to sell a B2B product](https://calv.info/how-to-sell-b2b) by Calvin French-Owen

**If you’re finding this newsletter valuable, consider [sharing it with friends](https://www.lennyrachitsky.com/), or subscribing if you aren’t already.**

Sincerely,

Lenny 👋

---

## [42/61] When to hire your first product manager

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan), and welcome to a**🔒 subscriber-only edition 🔒**of my newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. Send me your questions and in return I’ll humbly offer actionable real-talk advice 🤜🤛*

# Q: Our startup is growing quickly. When should we hire our first Product Manager?

Some people will have you believe that you don’t ever need a PM.

I disagree. In my experience, good PMs always make product teams better, more productive, and happier. If your team doesn’t like their PM, find a better PM.

[![Image from When to hire your first product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dd598590-5b40-42ae-a90a-79ee80c9ce93_500x282.gif)](https://substackcdn.com/image/fetch/$s_!csE0!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd598590-5b40-42ae-a90a-79ee80c9ce93_500x282.gif)[![Image from When to hire your first product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dc71e2e5-2fd9-49c2-bda0-fb15d02572d4_1186x392.png)](https://twitter.com/mar15sa/status/1301895403152052224)

Here’s the thing: Whether you hire a full-time PM or not, someone on a product team will need to do the jobs of a PM:

[![Image from When to hire your first product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/59d5445d-d072-4dec-8404-36353b9e633f_2400x1350.png)](https://substackcdn.com/image/fetch/$s_!JRXp!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F59d5445d-d072-4dec-8404-36353b9e633f_2400x1350.png)

### The jobs of a product manager:

1. **Shape the product**: Harness insights from customers, stakeholders, and data to prioritize and build a product that will have optimal impact on the business
2. **Ship the product**: Ship high-quality product on time and free of surprises
3. **Synchronize the people**: Align all stakeholders aligned around one vision, strategy, goal, roadmap, and timeline to avoid wasted time and effort

From what I’ve seen, the evolution of the PM function at most companies goes like this:

[![Image from When to hire your first product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f471ebf8-41a6-4fe7-9ca2-8f050fefbddf_2400x250.png)](https://substackcdn.com/image/fetch/$s_!4XoF!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff471ebf8-41a6-4fe7-9ca2-8f050fefbddf_2400x250.png)

If you don’t want to hire a PM yet, the question becomes whether you have the right combination of people to fill these roles. Specifically, are the people *good* at these jobs, and do they *want* to do these jobs? If so, great! If not, you’re better off hiring a full-time PM.

[![Image from When to hire your first product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e6333fe4-794c-4848-bbd6-c23be0c0389e_1180x528.png)](https://twitter.com/eladgil/status/1301895887367495680)

## Signs you may need a full-time product manager

So how do you know if it’s time to hire your first product manager? I believe there are three signs:

1. 🐌**Frequent bottlenecks**
2. ⚔️ **Frequent misalignment**
3. 💡 **A burning need to go deep on a problem (post PMF)**

Let’s look at real-world examples of each.

### **1.** 🐌 **Frequent bottlenecks**

It may be time to hire a full-time PM if: You find that team members (usually engineering and design) are frequently unable to ship because of you.

> “We should have hired a PM sooner at Product Hunt so that I (as CEO) was no longer a bottleneck.”
>
> ー [Ryan Hoover](https://twitter.com/rrhoover)

More of the same from Lyft and others:

### **2.** ⚔️ Frequent misalignment

It may be time for a full-time PM if: You find that team members are frequently out of sync on priorities, timelines, or the problem you’re solving.

> “At Microsoft, Product Management came when there was a realization that developers were writing and rewriting code because ideas had not been thought through and connected across the (even small) team.
>
> The realization came came from a person hired from marketing who created PM for Excel. Prior to that, Bill’s old college roommate (who went on to be a leader in developer evangelism) tried to keep products consistent and aligned.”
>
> ー [Steven Sinofsky](https://twitter.com/stevesi)

Look for mistakes:

Conflict:

And general misalignment:

### **3.** 💡 **A burning need to go deep on a problem (post PMF)**

It may be time to hire a full-time PM if: You’ve [found PMF](https://www.lennyrachitsky.com/p/how-to-know-if-youve-got-productmarket) and you need to get ahead on a key initiative.

> “Once we found some product/market fit, there was a lot of opportunitistic PM work like customer interviews, data exploration, new product/feature research.”
>
> ー [Ryan Hoover](https://twitter.com/rrhoover)

At both Twitter and Snapchat, monetization became a burning need and so they each hired their first PM to lead those efforts, for example at Twitter:

At Zimride, hiring their first PM gave the founders a chance to invent…Lyft:

### But be careful of hiring a PM too late — or too early

As I was putting this post together and collecting stories, I got private messages from both sides of the spectrum — MANY companies who hired PMs too late, and also a few who hired them too early.

**First, the case of too late:**

**And less common, too early:**

> “When do you go from PM Zero to PM One? Many of the founders I’ve worked with are surprised when my recommendation is often **not yet**. Usually I discourage them from hiring until they’ve found product/market fit. But even when you’re hitting your growth phase, the danger of having too many cooks in the kitchen exceeds the cost of being overworked. A starvation diet when it comes to PMs is preferable to being overstuffed.”
>
> — [Ken Norton](https://www.kennorton.com/newsletter/2016-02-12-product-manager-zero.html) (early PM at Google)

## When successful companies hired their first PM

Below is a list of when some of today’s most successful companies hired their first PM. Based on this small sampling, the first PM is generally hired as the 15th - 100th employee, and 2 - 4 years after founding. Note, this doesn’t mean this is the optimal time to hire your first PM — just that that is when these companies chose to do so.

Three factors seem to contribute to waiting longer to hire your first full-time PM:

1. Founders with deep product sense (e.g. Shopify)
2. Building a product that isn’t primarily user-facing (e.g. Stripe)
3. Long early beta period (e.g. Airtable)

*BTW, if you have any other information, or if I got anything wrong, [please tell me](https://twitter.com/lennysan).*

[![Image from When to hire your first product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5b89464-c226-4f49-941d-2084222538a0_842x1126.png)](https://substackcdn.com/image/fetch/$s_!MzXn!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5b89464-c226-4f49-941d-2084222538a0_842x1126.png)

You can find many more examples of when companies hired their first PM [in this Twitter thread](https://twitter.com/lennysan/status/1302988121445789697).

## What to look for in your first product manager

Three of my favorite reads about finding your first product manager:

1. [Product management conversion and training](https://growth.eladgil.com/book/chapter-7-product-management/product-management-conversion-and-training/) by Elad Gil
2. [Hiring your first Product Manager](https://medium.com/@gokulrajaram/the-biggest-mistake-ceos-make-when-looking-for-their-first-product-manager-347aaeb15a75) by Gokul Rajaram
3. [When and How to Make Your First Product Hire](https://medium.com/@jgolden/when-and-how-to-make-your-first-product-hire-809ebce6cda4) by Jonathan Golden

## Tips for being successful as the first product manager

Finally, check out [my previous post on how to be successful as a first product manager](https://www.lennyrachitsky.com/p/joining-as-the-first-product-manager), and if you’re so inclined, [how to get into product management](https://www.lennyrachitsky.com/p/how-to-get-into-product-management).

> **“The amount of ambiguity facing a 1st time PM is tremendous**. Often the founders/execs are still extremely hands on and aren’t comfortable sharing ownership. So there’s a lot of tension. Your job is to bring clarity and focus (i.e. decrease ambiguity) yet stay extremely flexible to changing things all over again every six months. PMs help get ambiguity under control in critical areas + let it exist in others.”
>
> ー [Ben Erez](https://www.linkedin.com/in/benerez/)

That’s it for this week!

*Thank you [Helen Sims](https://www.linkedin.com/in/helensims/), [Dennis Yang](https://www.linkedin.com/in/dennisyang/), and [Dan Hockenmaier](https://www.linkedin.com/in/dan-hock/) your feedback on this post, and to everyone else who contributed tweets, stats, or general feedback <3*

## **🔥 Job opportunities**

- **Sponsored job of the week**: ✨[Senior Frontend Engineer at BodyBlock AI](https://bit.ly/3mnOE8j) ✨
- **Product**: [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
- **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076601003), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion)
- **Design**: [Huddle](https://dribbble.com/jobs/49411-Sr-Product-Designer), [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
- **Engineering lead**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003), [Snackpass](https://jobs.lever.co/snackpass/00505223-bc85-4c28-8e4b-31217d05c2de)
- **Frontend engineer**: [BodyBlock AI](https://www.notion.so/Senior-Frontend-Engineer-5e6b0934d24f449c96151cef7c5f468f), [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Runway](https://www.notion.so/A-Product-first-Frontend-Engineer-beae09e5ae034664a38cb26573e8d403), [Transform](https://transformdata.io/careers/)
- **Backend engineer**: [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [neo.tax](https://angel.co/company/neo-tax/jobs/887778-software-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Shuffle](https://www.notion.so/getshuffleapp/Full-Stack-Software-Engineer-Shuffle-e47452551edb42d38ac6cf1cc0f08b1b), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Read**: [Your startup is a movement](https://sacks.substack.com/p/your-startup-is-a-movement) by David Sacks
2. **Watch**: [The Social Dilemma](https://www.netflix.com/title/81254224) on Netflix
3. **Listen**: [Guy Raz on Tim Ferris — Traits of Successful Entrepreneurs, The Story of ‘How I Built This,’ Overcoming Anxiety and Depression, and More](https://tim.blog/2020/09/10/guy-raz/)

These paid editions are intended for a single recipient, but occasional sharing is totally fine. If you would like to order multiple subscriptions for your team with a group discount (min 5) just reply to this email.

Sincerely,

Lenny 👋

---

## [43/61] Fostering a culture of experimentation

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan), and welcome to a**🔒 subscriber-only edition 🔒**of my newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. Send me your questions and in return, I’ll humbly offer actionable real-talk advice 🤜🤛*

## **Q: My team is placing a much larger focus on experimentation and testing, and I was curious – how did Airbnb build such a strong culture of experimentation and data? Any resources you recommend as we instill this in our team?**

From the outside, Airbnb may look like a design-driven company but much of its success is actually rooted in the strength of its data science team. Airbnb’s tenth employee was a data scientist and today there are nearly 200 data scientists and data engineers informing day-to-day strategy, prioritization, and decision-making.

One of my favorite examples of this in action is the continued lack of a “sort by price” filter (vs. a price range):

[![Image from Fostering a culture of experimentation](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9245bf98-133a-464f-8c7a-1a213e114cd2_1668x1030.png)](https://substackcdn.com/image/fetch/$s_!Ue6M!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9245bf98-133a-464f-8c7a-1a213e114cd2_1668x1030.png)

It feels like an obvious user-experience win: let people sort any way they want! Well, it turns out every time a team attempted to add this feature, conversion plummeted. Why? Because travelers unknowingly end up focusing on listings that are unlikely to work out – homes that are lower-rated and hosts who are less responsive and reject more often. Thus travelers have a bad time and leave forever. Without having data to tell us this was happening, over the years, hundreds of thousands of guests would not have found a place to stay.

Whether your company is just starting out, or you’re attempting to shift the culture of your existing organization, below are the five biggest things Airbnb got right in fostering a culture of experimentation:

1. 🤓 **Hiring** data-minded people early — and often
2. 🔭 **Aligning** around a measurable north-star metric
3. 🔗 **Embedding** data scientists into your teams
4. 💞 **Humanizing** the data
5. 🛠 **Building** tooling that makes it easy to run experiments that you trust

Let’s dive in.

### 1. 🤓 Hire data-minded people early — and often

Everything you’ll read below in large-part trickled down from a decision to hire a data scientist ([Riley Newman](https://www.linkedin.com/in/rileynewman/)) as Airbnb’s 10th employee:

> *“**As an early employee, I was able to build relationships with the people that would go on to lead all sides of Airbnb**. Most days would begin with an analysis of the business as a whole and then I would bounce around Brian and Joe's apartment to share what I was seeing with the rest of the team.*
>
> *This had long term implications for the culture of data at Airbnb. It fostered trust in data as a strategic asset, shaped the way I thought about how data could be used to support all sides of the organization, and how the data science team would need to be built as a result.
>
> You could say that the culture of experimentation - and becoming data-driven more generally - began in that apartment.”*
>
> *ー Riley Newman*

These early relationships showed the rest of the company the value of data and made it easier to increasingly invest in data over time (e.g. hiring, tooling, strategy).

**Takeaway**: If you’re just starting out, consider hiring someone early-on who is full-time focused on data. If you’re at a larger company, get a senior DS into your org’s leadership team.

### 2. 🔭 Align around a measurable north-star metric

The second most impactful shift in Airbnb’s experimentation culture came from aligning around a single quantitative north-star metric: nights booked. Before this, there was no shared understanding of what teams should optimize for and how exeperiments could inform those decisions:

> *“As the company grew, hunger for analysis overwhelmed my team. At the time I chose what we worked on based on what would be most impactful to the business. But how do you compare growth in China against machine learning improvements for our search ranking algorithm?*
>
> ***The CFO was experiencing a similar version of this problem, so we came up with the idea of establishing a north star metric: nights booked. We would use this as a common denominator for projects so we could align on where to prioritize investment.***
>
> *An added (and unexpected) benefit of doing this was it propelled the company's use of experiments. Leaders were suddenly held accountable to measurable results that weren't as obvious for how to hit relative to simply completing tasks. They needed to know why some things worked and others didn't, so they began embracing experiments and analysis. It changed the whole dynamic of our interaction.”*
>
> *— Riley Newman*

Before this alignment, teams were in fact using OKRs and *attempting* to be data-informed, but most of the key results were “Launch X” or “Ship Y.” Not conducive to experimentation and learning.

After this alignment, the leadership teams were able to finally identify the components that impacted this north-star (e.g. supply growth, activation, etc.), map those levers to a hierarchy of team-level KRs, and create clear accountability and direction for every leader.

**Takeaway**: Aligning around a quantifiable north-star metric gives you a foundation from which to build a data-informed, experiment-driven culture. As you start to build this operating muscle, you’ll later want to layer on additional metrics to make sure you are growing in a healthy and sustainable way (e.g. trip quality, second-order effects).

### 3. 🔗 Embed data scientists into your teams

Initially, the Airbnb DS team was centralized and supported ad-hoc initiatives that needed data support. This worked well for a while, but once the DS team got big enough (~25 people), the model transitioned — data scientist began being embedded within product teams. This was transformative:

> *“Experimentation needs to be embraced and evangelized throughout the org. One thing that made this quite easy at Airbnb was the fact that **data scientists were embedded in product teams. Data scientists were not just 'consulted' on product, but data itself became critical to decision-making.***
>
> *Data scientists sat next to PMs and along with the engineers and designers were a critical voice in roadmap planning. I find the strongest teams operate with data at the outset – they don't just call over the data scientist when it's time to do a post-facto analysis of how XYZ experiment went. Some of the best product ideas we came up with on Airbnb's early growth team came from data scientists.*
>
> *At one point the Growth team started bi-weekly experiment reviews where product team members would present on experiments they ran, with a focus on lessons learned, mistakes and next steps. Knowledge sharing was off the charts.”*
>
> *— Lindsay Pettingill, early DS*

This model continues to this day. Most product teams have at least one full-time DS dedicated to their initiative, and there’s a DS at every level of leadership team.

Note, decentralize the DS team is not all upside and not something you should do immediately. While other team members loved this change because they got direct access to a data scientist, it was also painful. There were more errors and less trust across DS sub-teams as they were split up, and teams started to have less trust in analysis coming from outside of their domain. The solution was to bring together data people from around an organization to centralize processes, tooling, and learnings (e.g. a central knowledge repo, metrics repo, and data portal). These efforts went a long way in establishing trust across teams and making the DS team much more productive in a distributed fashion.

**Takeaway**: As you scale, embed dedicated data scientists into your cross-functional product teams, while keeping everyone working from the same playbook.

### 4. 💞 Humanize the data

Some see data as dehumanizing, too narrowly focused, or even dangerous. And it certainly can be. Data doesn't always have the answers and is sometimes unhelpful or imperfect. The most data-savvy people deeply understand this. But you can still be data-informed (using data as an input) without being data-driven (blindly doing whatever the data tells you):

> *“**We made a real effort to characterize data in a human light. I liked to frame data as the voice of our customers**. Early on the founders would meet with guests and hosts to hear what was and wasn't working well. But as the community of guests and hosts scaled alongside our team of employees, it became impossible to maintain that feedback loop. Data is what allows you to hear from your community at scale.”*
>
> *ー Riley Newman*

I find that when you explain experiments and data in this way and demonstrate the practical value of having these facts, every other function becomes obsessed with data (e.g. designers, sales, user researchers). This then allows you to shift conversations and decisions from opinion-based to fact-based.

**Takeaway**: If you find that your team is resistant to data and experiments, help them understand what this data is telling you about your users, and how you plan to use (and not-use) it in your decision making.

### 5. 🛠 Build tooling that made it easy to run experiments that you trust

Even if you get all of the above right but running experiments is hard to do, or teams don’t fully trust the results, it’ll continue to be an uphill battle. At Airbnb, the search experience team (who was running most of the early experiments) became increasingly frustrated with the amount of time it took to run experiments. So they decided to build their own experimentation tooling ([which you can read about here](https://medium.com/airbnb-engineering/experiments-at-airbnb-e2db3abf39e7)). This eventually became the foundation for all experimentation at Airbnb, and now a full-time team is devoted to building, supporting, and growing data-tooling within the org.

If you choose to go down this route, be careful not overbuilding too early though:

> *“When systems are still in flux, you don't want to overinvest in tooling that will become outdated immediately when your data schema gets updated or some other piece of infrastructure changes. However, **it is essential to have a way to rapidly iterate, and that means quick access to experiment results data. So if you need to in the early days, build something simple and scrappy at first, and over time evolve it to support the team's needs.***
>
> *The growth team had one tradition where we did a roundup of experiment results across the team. Someone would get up and explain the experiment setup (e.g., "We showed 50% of users this banner, and 50% saw nothing...") and the audience would vote on which variant won. It shocked everyone that so often, the intuitive variant was not the winner. (Turns out that the banner we showed distracted people from booking, so while banner clicks went up but bookings--our North Star--went down.) Part of a data-driven culture is the humility about not knowing the right answer.”*
>
> *— Rebecca Rosenfelt, early PM and DS*

[![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d28fa7c7-727c-482e-bfa0-d92ebaf07147_1024x424.png "image.png")](https://substackcdn.com/image/fetch/$s_!AeVc!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd28fa7c7-727c-482e-bfa0-d92ebaf07147_1024x424.png)

An important element of this work is making sure that your data foundations are solid — investing time and resources in infrastructure and tooling that establishes a single source of truth for metrics that you can trust. It’s better to operate with intuition than with incorrect data. [James Mayfield](https://www.linkedin.com/in/james-mayfield-15b71354), Director of Product for the Airbnb infra team, wrote [an excellent piece about this topic](https://towardsdatascience.com/an-island-of-truth-practical-data-advice-from-facebook-and-airbnb-a0d9c355e5a0).

**Takeaway:** Make it effortless to run and analyze experiments, and make certain your team trusts the results.

### 🧠 Further study

1. [4 Principles for Making Experimentation Count](https://medium.com/airbnb-engineering/4-principles-for-making-experimentation-count-7a5f1a5268a) by Lindsay Pettingill
2. [At Airbnb, Data Science Belongs Everywhere — Insights from Five Years of Hypergrowth](https://medium.com/airbnb-engineering/at-airbnb-data-science-belongs-everywhere-917250c6beba) by Riley Newman
3. [An island of truth: practical data advice from Facebook and Airbnb](https://towardsdatascience.com/an-island-of-truth-practical-data-advice-from-facebook-and-airbnb-a0d9c355e5a0) by James Mayfield
4. [Experiments at Airbnb](https://medium.com/airbnb-engineering/experiments-at-airbnb-e2db3abf39e7) by Jan Overgoor
5. [Experiment Reporting Framework](https://medium.com/airbnb-engineering/experiment-reporting-framework-4e3fcd29e6c0) by Will Moss
6. [Scaling Airbnb’s Experimentation Platform](https://medium.com/airbnb-engineering/https-medium-com-jonathan-parks-scaling-erf-23fd17c91166) by Jonathan Parks
7. [Data Infrastructure at Airbnb](https://medium.com/airbnb-engineering/data-infrastructure-at-airbnb-8adfb34f169c) by James Mayfield
8. [Growth tech talk](https://airbnb.design/videos/growth-tech-talk/) by Nick Handel

See you next week!

*Thank you [Lindsay Pettingill](https://www.linkedin.com/in/lpettingill/), [Bar Ifrach](https://www.linkedin.com/in/bar-ifrach-71507657), [Rebecca Rosenfelt](https://www.linkedin.com/in/rebeccarosenfelt/), and [Nick Handel](https://www.linkedin.com/in/nicholashandel) for contributing to this post, and a special thank you to [Riley Newman](https://www.linkedin.com/in/rileynewman/) for sharing these stories from the early years (plus for spearheading most of this work at Airbnb early on) 🙏*

## **🔥 Job opportunities**

**Sponsored job of the week**: ✨ [0→1 Product Leader at ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731) ✨

- **Product**: [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
- **Growth**: [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion)
- **Design**: [Huddle](https://dribbble.com/jobs/49411-Sr-Product-Designer), [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
- **Engineering lead**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003), [Snackpass](https://jobs.lever.co/snackpass/00505223-bc85-4c28-8e4b-31217d05c2de)
- **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Runway](https://www.notion.so/A-Product-first-Frontend-Engineer-beae09e5ae034664a38cb26573e8d403), [Transform](https://transformdata.io/careers/)
- **Backend engineer**: [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Remember**: RBG

2. **Dance**: [iLe - Tu Rumba](https://www.youtube.com/watch?v=RTzL-G2kIA8) (via Tim Ferriss)

[Watch on YouTube](https://www.youtube.com/watch?v=RTzL-G2kIA8)
3. **Get feedback**: [Discovery Assist](https://discoveryassist.firstround.com/) — a new offering by [First Round Capital](https://firstround.com/) that gives founders free access to companies to do customer discovery and feedback

These paid editions are intended for a single recipient, but occasional sharing is totally fine. If you would like to order multiple subscriptions for your team with a group discount (min 5) just reply to this email.

Sincerely,

Lenny 👋

---

## [44/61] What it feels like when you've found product-market fit

👋 Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a ✨ **once-a-month-free-edition** ✨ of my newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office.

If you’re not a paid subscriber, here’s what you missed this month:

1. [Getting better at product strategy](https://www.lennyrachitsky.com/p/getting-better-at-product-strategy)
2. [Fostering a culture of experimentation](https://www.lennyrachitsky.com/p/fostering-a-culture-of-experimentation)
3. [When to hire your first product manager](https://www.lennyrachitsky.com/p/when-to-hire-your-first-product-manager)

# Q: How do I know if my product is working? What does it feel like when you’ve found “product-market fit”?

*“When we hit PMF, we started feeling pull for the first time”*

*“Like getting pressed into the back of your seat by a fast car or a plane taking off”*

*“Word of mouth was uncontrollable”*

*“Why won't you take my money???”*

*“Yeah, you really can't miss it”*

This is what you hear from successful founders when you ask them what product-market fit felt like. But is this always what it feels like? I wanted to find out.

**Over the past few months I reached out to founders of the twenty five most iconic companies I could get a hold of and asked them one question**:

> ***When did you first know you found product-market fit?** Whatever that point means to you – was there something you noticed, felt, or experienced where you were like “Damn, I think we got something here!”*

After collecting and reviewing their stories (all of which you’ll find below), one thing became clear: every company *did* have a clear moment where they recognized they had PMF, and many *did* experience a sudden hard-to-miss pull from the market, BUT many companies *did not* see it immediately. For many companies, PMF became clear over time through a series of compounding wins or milestones. Here’s how it broke down across the companies I looked at:

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ddea5493-43b6-4017-93b5-47a3b37e38b6_1766x994.png)

#### **Some of my biggest takeaways from these stories:**

**1. Market “pull” comes in many forms:**

- An inflection in organic growth
- Customers asking to pay for the product before you ask
- Users flip from being excited about what you *have* to mad about what you *don’t have*
- Customers complaining when your site goes down
- People using the product even when it’s broken

**2. About half of these companies found PMF immediately after launch, but half spent months or years iterating to get there**:

- Netflix: 18 months
- Segment: 1.5 years
- Airbnb: 2 years
- PagerDuty: 2 years
- Superhuman: 3 years
- Amplitude: 4 years

Once they got there though, it became obvious.

**3. The intensity of the pull is a factor of the** ***fit*** **(how good your product is at solving the user’s problem) AND** ***initial market size*** **(is it niche or broad)**. Dropbox, Netflix, and Tinder were 10x better products within a huge market —> sudden and broad pull. Instacart, Superhuman, and Substack were 10x better products but for a narrow set of initial customers —> steady and compounding pull.

#### What is Product-Market fit anyway?

I covered this in [a previous post](https://www.lennyrachitsky.com/p/how-to-know-if-youve-got-productmarket), and I want to make clear that getting to a feeling of PMF does not mean you’ll automatically be able to build a successful business. There are three things you have to get right to find **True Product-Market Fit**:

1. **Make a product that people want** — that’s what this post is all about.
2. **Make a profit delivering this product to people at scale** — companies like [Cherry](https://techcrunch.com/2012/12/23/cherry-car-wash-shut-down/), [Luxe](https://www.bizjournals.com/sanfrancisco/news/2017/04/27/valet-startup-luxe-shuts-down-its-door-to-door.html), and [Exec](https://techcrunch.com/2013/09/10/rip-lazy-times/) are valuable cautionary tales.
3. **Find and keep these people, sustainably** — [check out this previous post](https://www.lennyrachitsky.com/p/how-to-know-if-youve-got-productmarket) that covers the quantitative side of PMF, like retention and sales yield.

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d8975379-7419-4366-b1f5-5f074a3a9c21_2400x1350.png)

Of these three milestones though, the most likely to kill your business is the first: not building something people want. And that what this post focuses on — **how do you know when you’ve built something people want**? Below you’ll find stories from twenty-five companies — many of which have never been shared before — revealing the moment they realized they had something special.

Let’s dive in!

*❤️ A HUGE thank you to these generous humans who helped make this post possible: Alex Solomon, Brianne Kimmel, Calvin French-Owen, Chris Best, Cliff Obrecht, Dan Hockenmaier, Drew Houston, Henry Ward, James Beshara, Jason Wang, Jeff Morris Jr., Jeffrey Queisser, Joe Gebbia, Jonathan Badeen, Katie Dill, Keenan Rice, Li Jin, Marc Randolph, Matthias Wagner, Max Mullen, Nikhil Basu Trivedi, Nina Achadjian, Olivier Pomel, Patrick Lightbody, Rahul Vohra, Ryan Graves, Ryan Hoover, Samuel Yam, Sarah Leary, Scott Gorlick, Tai Rattigan, Todd Goldberg, Tom Preston-Werner, and Tomer London ❤️*

## Sign 1: 🔥 Sudden and significant pull from the market

![Dropbox for Business is Coming to Salesforce World Tour! - Salesforce  Australia & NZ Blog](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/616f359c-2191-4289-a42d-80adf532482b_1474x412.jpeg)
> “For me there was a visceral sense of your thing taking on a life of its own and lurching forward, **like getting pressed into the back of your seat by a fast car or a plane taking off**. The most standout moment for me was our demo video hitting the top of Digg (and then Reddit).”
>
> ![image.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4a553e07-1eb0-4466-9806-e3bec9802a27_646x413.png)
>
> ー Drew Houston, CEO and co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8ee5dc69-f6f8-444e-aeb6-74de26e48cc5_418x135.png)
> “With apologies to Justice Potter Stewart, I’ve often felt that Product Market Fit is not unlike hard core pornography: hard to define, but you know it when you see it. **It took us at Netflix 18 months to finally find the repeatable scalable business model that worked**.
>
> As you know, I called my book "That Will Never Work" because everyone I pitched that original idea had that reaction. (Including my wife!). But they were right. The original idea didn’t work. But hundreds of failed experiments later, and after many a sleepless night of worrying, we finally tested the unlikely combination of No Due Dates, No Late Fees, and Subscription that ultimately was the thing that ended up working. And boy did it work. **Within days of testing it we knew we had a winner.**
>
> **Where before we were struggling to get traffic, all of sudden we couldn’t keep up. Our previously prodigious amounts of inventory were suddenly not enough. Engagement soared, churn went dramatically down. Everything started working!**
>
> If there was a moment when Netflix stopped being a start up and became a real company, it was then.”
>
> ー Marc Randolph, first CEO and co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9e84f3c5-f8b3-43c4-913b-19172788cd3b_278x132.png)
> “Uber never really had a product market fit problem — **zero marketing budget and we were growing like a weed. Word of mouth was uncontrollable**, and especially as regulatory heat started it's all anyone could talk about (is how it felt). Marketing was free because media loved the story.”
>
> — Ryan Graves, first CEO, founding team

![Tinder Review September 2020: Are You Ready to Swipe? - DatingScout.com.au](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9d3925d8-6349-4063-802a-3ed038ca3e69_3600x1200.jpeg)
> “Besides any gut feeling or friend input, I’d say we knew **we had PMF towards the end of December 2012 when downloads started to pick up. By early to mid January 2013 those downloads started to skyrocket**.
>
> The rise of Tinder was really fast and there were very, very few changes to the product before it had already taken off. The swipe had been added within weeks of launching in August or September 2012. I think we were working on the 2.0 of the app already before we rose but it wasn’t finished or released until we were already spreading like wildfire.”
>
> ー Jonathan Badeen, co-founder and CSO

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d5f9b73a-d940-4976-b653-bfb9f40474d2_900x280.png)
> “The biggest difference between our ideas pre-PMF vs. when we found **it was this feeling of** ***pull***. Before we had any sort of fit, it always felt like we had to push our ideas on other people. We had to nag people to use the product.
>
> **When we hit PMF, we started feeling 'pull' for the first time**. We solved one problem for people... so they started asking us to solve a second, third, fourth, and fifth. Most of our early product iteration was just responding to customer requests.”
>
> ー Calvin French-Owen, co-founder

![File:Box, Inc. logo.svg - Wikimedia Commons](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3f7bc07f-00ad-4cd0-b100-bfbca3677b29_640x343.png)
> “For us it really felt like Geoffrey Moore's **Inside the Tornado**. Nearly 100% inbound sales because there was sufficient demand to keep the phones ringing.”
>
> ー Jeffrey Queisser, co-founder and SVP of Engineering

![File:Stripe Logo, revised 2016.svg - Wikimedia Commons](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/20e15927-d2af-4707-a238-3eb81068f9a2_1280x537.png)
> “What indicated to us that there was something interesting here was that our friends who were using it asked if they could invite their friends, and those people invited their friends, and it **spread through word of mouth process**.
>
> **We just put up a wait list on our site and demand took off, over a couple months we had a huge wait list. We weren’t expecting it.**”
>
> — Patrick Collison, CEO and co-founder ([source](https://medium.com/notes-essays-cs183c-technology-enabled-blitzscalin/class-11-notes-essay-reid-hoffman-john-lilly-chris-yeh-and-allen-blue-s-cs183c-technology-ebf34cebae26), [source](https://techzinglive.com/page/939/168-tz-interview-patrick-collison-stripe))

![Patreon Png ,HD PNG . (+) Pictures - vhv.rs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/72fca2d4-c92e-419e-aad1-724e9a19c3b0_992x394.png)
> “For Patreon, it was actually right after we launched with Jack's music video on YouTube video and patrons and creators started writing in.
>
> [Watch on YouTube](https://www.youtube.com/watch?v=mZ02alEkbLw)
>
> **I'd never seen that level of passion and immediate resonance**, and our launch was particularly fraught with stress since weeks before all the creators that were asked to launch rejected us. I actually emailed investors right after this, with a now cringey-esque note: ‘If you recall anything about me, I'm not one to exaggerate or overstate things, but based on the results and response thus far, I really think this company is going to be the one.’”
>
> — Samuel Yam, co-founder and CTO
>
> “About six months after we launched we changed our phone provider I think to DialPad or RingCentral. We misconfigured the system and for some reason after it prompted the user to "Press #1 for Sales" and the user pressed the button, it would just hang up on the caller. We didn't know about it for three weeks because we were just trying to fill the non-phone orders.
>
> The way we found out was a prospect was able to contact us through chat support and wrote **"I've been trying to get to your sales people for weeks and you keep hanging up on me!!! Why won't you take my money???" That's what product market fit feels like.**”
>
> ー Henry Ward, CEO and co-founder

![Github Logo Png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/222d8da0-614d-492f-96f3-ea18f955dc65_2000x665.png)
> **“**When we launched our private beta (mostly enthusiasts from the Ruby community) we were offering it for free. **To our surprise, users started writing to us asking ‘Can we pay for this??’ They liked it so much they wanted to pay for it. That was the first sign this was going to work.**
>
> Our early users were individuals from the Ruby community. These people already demonstrated they were willing to operate on the cutting edge, Ruby was really new still in 2009. It was critical that we were embedded in that community before then, I don’t think we’d be able to convince people to try GitHub otherwise.
>
> **After we got traction with individuals we were able to expand into SMBs, and then enterprises.”**
>
> — Tom Preston-Werner, first CEO and co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/284047ac-81c2-41c5-b751-8e3cc5665165_611x180.png)
> “I remember distinctly it was a Friday night. We had been working on the wait list in preparation for our press launch, which would have been, I think, the following Wednesday or Thursday. Everyone goes home, and I wake up Saturday morning, and I open up Google Analytics, and I see something like **600 concurrents on our site**, which nobody knew about at that point. I was just like, ‘What's going on? This is not normal. Something must be wrong. Right?’
>
> **I'm just screenshotting the page; I'm calling my parents saying, "Oh, this is crazy. It might actually be working."** And up until that point, we never really had an idea of what success, at least in the consumer space, was like. That was sort of the first moment where we built something that actually worked.
>
> We ended up getting 10,000 sign-ups that first day, over 50,000 the first week, and almost 1 million in the first year.”
>
> ー Vlad Tenev, CEO and co-founder ([source](https://www.businessinsider.com/robinhood-app-vlad-tenev-founder-free-stock-trading-valuation-2017-7))

## Sign 2: 🎢 Steady and compounding pull from the market

![Substack](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/991df552-deb1-46cb-86bb-2966b04ad503_2303x396.png)
> “Early on I had product-market fit anxiety. Do we have it? How will we know? There isn't really a moment I can point to where that changed. We've just been growing fairly consistently, and gradually the how-do-we-keep-up anxiety got bigger and bigger **until there wasn't time left in the day to worry about whether we had product-market fit.**
>
> We did have retention curves that looked pretty good from early on, especially for paying readers, and writers with paying readers.
>
> ー Chris Best, CEO and co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/06f514e4-7dea-48bc-b1c1-e6d15d0bbb32_512x80.png)
> "**We found pockets of PMF with specific segments of founders, managers, executives and business development professionals**. Once we recognized this, we were able to focus the entire company on serving that narrow segment better than anybody else. It’s a commonly held view that tailoring the product too narrowly to a smaller target market means that growth will hit a ceiling — but I don’t think that’s the case.
>
> ![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f26f716c-714c-4a25-9b43-6c5ffc063e5c_640x360.png)
>
> The biggest specific moment of realizing we had PMF though actually occurred just when I had arrived at a conference. Before I'd left, I'd asked our Head of Growth to update all our analytics.  **What we saw was that every single metric was amazing** — growth, DAU/MAU, PMF score, NPS, virality, CAC payback, CAC:LTV, activation rates, long-term retention rates, and so on. That was when I realized that I could put together a series B deck that would raise an awesome round. And so I did!
>
> Just a month later Superhuman was on the front page of the New York Times, in the Economist, and in the Guardian.”
>
> ー Rahul Vohra, CEO and co-founder

![Instacart | Grocery Delivery or Pickup from Local Stores Near You](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/95b66681-d9a2-467c-b40c-ef4c2ec7a42d_600x120.png)
> “**For Instacart, product-market fit happened across a series of moments.** we found product-market fit very early on with people who wanted groceries delivered as soon as possible and didn’t care which store they came from. **This made us feel like we had achieved product-market fit but it was only with a small sub-segment of customers.**
>
> The average customer wanted to shop from their favorite grocery store. So, we formed partnerships with top retailers. As a result, customers started to seek us out and word of mouth grew. We then signed more partnerships, reached a larger scale with customers, and in turn attracted more partners.
>
> Ultimately we created a marketplace where most customers can shop from their favorite stores, and as a result, customers have a great experience using Instacart and want to share it with their family and friends.
>
> **Initial signs of product-market fit feel a bit like a calm breeze, while true product-market fit feels like a powerful wind at your back, accelerating you forward and compounding over time.**”
>
> ー Max Mullen, co-founder

![File:Nextdoor logo green.svg - Wikipedia](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7cdf0fd5-d84a-446c-8271-cd91ba483488_1200x165.png)
> “I distinctly remember one day when I thought we had reached product-market fit. We only had about ten neighborhoods using Nextdoor at the time. One of our engineers needed to upgrade the database which required taking the service offline for about an hour. As a lean team, he decided to start the migration (and make Nextdoor unavailable) around lunchtime in the middle of the week. We thought no one would notice the downtime since we had less than a few hundred users at the time.
>
> **About ten minutes after taking the servers offline, I started getting emails and phone calls from concerned users. What happened to Nextdoor? One user called me in a panic because she needed to contact a neighbor immediately and the directory on Nextdoor was unavailable**. Another user was worried that the service was suddenly gone and he was trying to organize a neighborhood meeting that night to save a local park. We rushed back from our lunch break to get the servers back online as soon as possible. It was an embarrassing mistake to take the service down mid-day without any advanced notice. But the good news was we had clearly built something that mattered in the lives of users – they noticed within minutes when the service was unavailable.
>
> **If your users are urgently calling and demanding access to your product, you have clearly built something of real value. That’s product-market fit.”**
>
> — Sarah Leary, co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a07ff132-bef6-4a94-8850-0ddfa9e48ac9_608x187.png)
> “**We  didn't have a sudden influx of new users, but from the moment we flipped from closed to open beta, we started seeing a regular influx of sign-ups**, and as we added key features (such as alerting!), we saw them use our product more and more actively. This constant influx of new users has grown ever since then..”
>
> ー Olivier Pomel, CEO and co-founder

![PagerDuty](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0a1b2e23-f8b5-4775-bff8-4492c8efd98f_513x98.png)
> “I can't recall a specific moment in time when it clicked and we said we had product-market fit. Instead, **it was more of a transition where our confidence that we had reached PMF grew over time**.
>
> We launched the beta version of PagerDuty in the summer of 2009 and the paid version in Dec 2009. That early version was very much an MVP oriented around alerting; it didn't even have the concept of incidents and incident tracking where you could track multiple incidents (issues) broken at the same time. We quickly realized that and added the concept of incident tracking in early 2010.
>
> Throughout 2010 and 2011, we saw exponential month over month growth... if I remember correctly >10% month over month growth in 2011. (Keep in mind, that growth was on a small base... I believe we hit $1m in ARR sometime in 2011). **By the middle of 2011, we felt pretty confident we had product-market fit, as we were solving a real hair on fire problem with the platform** (namely, ensure critical issues were handled quickly and no critical issue would fall through the cracks and impact customers and the business for an extended period of time) and seeing that consistent exponential month-over-month growth.”
>
> — Alex Solomon, CTO and co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6d4a83b9-8dc3-40c2-9191-0dc6a039ebc2_450x179.png)
> “We had about 10 customers pre-launch (about 12 months of selling before launching), and we got them all through founder based selling & our networks. So I wouldn't say we had product-market fit yet. **Although we knew something was there, we didn't yet know if this was a mainstream buyer or a niche.**
>
> For a little background, these customers were not your typical analytics software buyer & they weren’t already buying any other analytics tools at the time (data warehouses or BI tools). They were engineers who were stuck doing data projects for the business. They were developers at the core and gravitated to Looker because it was a developer oriented/code-based way to do analytics in the backend, with a frontend that any business user could use.
>
> So over the 5ish months after launch two things happened that created our opportunity to be the next generation BI tool in the market — **our fit happened because the market shifted:**
>
> 1. It turned out that there was a whole new generation of product/data people within companies who, once exposed to Looker, had the same revelations as our early engineering buyers
> 2. AWS launched a new class of data warehousing in the cloud called Redshift. This was the first time data warehouses were easily accessible & consumable, and became AWS's fast growing service ever. From there it was clear that the data landscape was changing we had the perfect fit for it.”
>
> — Keenan Rice, early employee

![Aprio Cloud | Gusto Spotlight](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/34ff6377-6c48-482b-a0d7-af3ab570596b_390x147.png)
> “As a founding team, we are pretty self-critical and tend to focus on how we can improve things for customers, or what's broken and how to fix it. So I think I only realized it 2-3 years after it happened. **In retrospect though, a pretty good sign for PMF was when in spite of the obvious gaps in our marketing, product and care, we saw consistently high NPS (80+), low churn, and record high MoM organic growth.”**
>
> — Tomer London, co-founder

## Sign 3: 🥳 Hitting a meaningful milestone that proves the idea is working

![5 Strategies to Promote Your App](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/600119fa-efc4-4739-99d1-2d5dfb1d7525_2500x585.svg)
> “Traction is one indication of product-market fit but there’s nothing like seeing your product being used in the wild. **I distinctly remember walking into Philz one day overhearing a small group of friends talking about Product Hunt and their upcoming launch. I teared up.** As founders, we spend so much effort building and hoping people love what we’ve created. Seeing a stranger use what we’ve built unprompted might seem trivial but it’s an impactful moment for myself and many others.”
>
> ー Ryan Hoover, CEO and co-founder

![Image from What it feels like when you've found product-market fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a254f251-0ac6-4c5d-9462-922d6e5c712a_498x196.png)
> “**When my mom booked her first Airbnb**, I said to myself, I think we got something here!”
>
> ー Joe Gebbia, co-founder

![caviar logo - The Reward Boss](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a0739ba2-2585-4be5-98cb-19133640d25f_4779x1333.png)
> “**We knew we had product market fit when we had our first large company (Kabam) replace their lunch service** with Caviar for the entire company. That was when we became sustainable and ramen profitable.”
>
> — Jason Wang, first CEO and co-founder

![File:Amplitude logo.svg - Wikimedia Commons](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4380e7c7-1d38-4f0d-b70f-566c9aea132c_5000x1000.png)
> “At Amplitude, Product Market Fit happened when we transitioned from focusing on *Mobile Analytics* to focusing on *Product Analytics* — building analytics for product teams.
>
> It was a pretty nerve wracking experience to shift our sales, marketing, and product strategy to focus on the needs of Product teams — I definitely questioned whether it was a justified risk given the traction we had already been seeing. That year we held our first conference called Amplify, the entire agenda was geared towards Product teams, and so many people showed up we had to open extra sections of the venue and have people standing at the back. >1,000 people from Product teams around the world showed up. **While I was in line to get my pass I heard a whole team from a large bank talking together - someone said ‘I’ve been in Product for 10 years and this is the first time a company has ever focussed on us’.**
>
> **That’s when I knew we’d found PMF.**
>
> ー Tai Rattigan, early employee

![Collaborate & Create Amazing Graphic Design for Free](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/08902b46-51a9-4930-8a61-a32a9edbf640_200x200.png)
> “The moment we thought we might have product market fit was when we saw our designs being published on social media. At the time we had less than 200 templates so we knew what they all looked like. **It was a real ahh-hah moment when we saw that Guy Kawasaki was using Canva to create more engaging social media posts**.”
>
> — Cliff Obrecht, COO and co-founder

Have any other stories of PMF to share? Please post them in the comments! Otherwise, see you next week!

[Leave a comment](https://www.lennysnewsletter.com/p/what-it-feels-like-when-youve-found/comments)

## **🔥 Job opportunities**

- **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [Chime](https://www.chime.com/job-openings/?gh_jid=4778800002), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
- **Growth**: [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion), [Wren](https://projectwren.com/careers/marketing-generalist)
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- **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003), [Chime](https://www.chime.com/job-openings/?gh_jid=4225358002), [Snackpass](https://jobs.lever.co/snackpass/00505223-bc85-4c28-8e4b-31217d05c2de)
- **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Runway](https://www.notion.so/A-Product-first-Frontend-Engineer-beae09e5ae034664a38cb26573e8d403), [Transform](https://transformdata.io/careers/)
- **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

**If you’re finding this newsletter valuable, consider sharing it with friends, or subscribing if you aren’t already.**

Sincerely,

Lenny 👋

---

## [45/61] Top 5 most interesting things about Booking.com's early growth strategy – Issue 46

### ✨ Special edition: This is a companion piece to today’s First Round Review ✨

My friend [Dan Hockenmaier](https://www.linkedin.com/in/dan-hock) and I published an essay on consumer business growth strategy in [today’s First Round Review](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/):

[![Image from Top 5 most interesting things about Booking.com's early growth strategy – Issue](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/40792072-f1f0-4a0f-a788-dce615e3b254_2788x852.png)](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/)

For the piece, I interviewed [Arthur Kosten](https://www.linkedin.com/in/arthurkosten/), CMO of Booking.com from 2003 to 2012. A number of fascinating insights had to be cut from our chat (for brevity’s sake) and instead of leaving them on the cutting-room floor, I’m sharing them in this exclusive companion post. I hope you find this as fascinating as I did.

# An inside look at Booking.com's early growth strategy

[![Image from Top 5 most interesting things about Booking.com's early growth strategy – Issue](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5de2ed5-38eb-43b4-a794-eb12d15d0d39_1714x804.png)](https://skift.com/oral-history-of-booking-acquisition/)

Booking.com has been a fascinating company to watch, particularly for someone working on growth at Airbnb (aka me). Not only did they grow from a tiny startup in the Netherlands to [one of the greatest acquisitions of all time](https://skift.com/oral-history-of-booking-acquisition/), they’ve also always been world-class at one central skill: performance marketing.

**Booking.com (now part of Priceline) has grown to become nearly an $80B business mostly on the back of performance marketing**. They often rank amongst Google’s biggest advertisers, spending somewhere around $4B per year on Adwords, and ~15 years later continue to innovate in the space.

As an outsider, I’ve always wondered how they did this. I was fortunate to get in touch with [Arthur Kosten](https://www.linkedin.com/in/arthurkosten/), Booking’s CMO from 2003 to 2012, who generously agreed to sit down for an interview. Below are my top five favorite insights.

## 🤯 Top 5 most interesting things about Booking.com’s early growth strategy

### 1. The performance marketing team drove the supply strategy

> “**When paid marketing is just a function, optimizing campaigns in a cubicle, it doesn’t inform the rest of the business and the funnel doesn’t work. There just isn’t much you can do to optimize paid ad campaigns.**
>
> Instead, our supply organization was fully aligned behind what the demand was looking for. If we had enough customers coming in on queries that were high intent, we would want to (eventually) be #1 on those keywords. Our goal was to find out why we were losing in the paid ads auction — was a competitor doing something better, or are we missing supply.
>
> **Our process was**: Do we have demand? → Do we have inventory? -> Is it the right inventory? → Do we have availability? -> Do we have conversion?
>
> If we were losing on supply, we figured out what we needed to improve: Different supply? Cheaper supply? Different rank order? Better product content? Availability at other dates? Something else?
>
> **The team never wanted to believe they were losing a keyword because our competitors are being irrational**. You cannot be irrational for too long because it’ll put you out of business. So if someone else was winning, they were doing something else better. Nothing was sacred.”

### 2. The performance marketing team was only two people, even past $100m/year spend

> “It was actually only two guys: one banker and one coder.
>
> Peter (the banker) was extremely competitive. He would scream and shout when he was losing his #1 position. He had a simple success criteria: win the auction for all of the important words, and make money on it.
>
> The coder was very experienced, entrepreneurial, creative and a data geek. With another coder the magic wouldn't have happened. It was the combination of Peter with the coder having excellent data skills (i.e. he built tools for supply to align with the paid search team) that made it work in the beginning.
>
> **I always believed that the secret to our success was that we were not heavily automated for most of our early spend**.
>
> Probably from 2004 to 2010, Peter was leading all of this, doing almost half the spend personally. Our Google rep was shocked that we had just one person running this, and a PhD engineer at Google even tried to replicate his brain, but they couldn’t.
>
> Around 2006, new people joined the team and built new screens and dashboards which informed the supply team's efforts, but **mostly to help Peter spend his time more efficiently**.
>
> This small team continued to run the program even past $100m in spend. Eventually, this team split into two teams: (1) Peter’s team focused on top to mid-tier markets, (2) a high-tech product tech team going after long-tail markets.”

### 3. They obsessed over Product-Channel Fit

> **“People talk about Product-Market Fit. We realized we needed Product-*****Channel*** **Fit. And it became clear Google AdWords was that for us.**
>
> Initially, SEO was the primary growth driver, but eventually, growth started to level off because we were doing some gray-hat stuff and Google started to penalize us. So we began exploring new ways to grow.
>
> At the time, Google was taking off like a rocket ship, and the searchers had so much purchase intent. We thought, if we could get good at Google, we’d do really well. We thought, what if we try AdWords?
>
> In 2004 we started paid search, and in 2008 it was the biggest source of growth.
>
> Critical to getting this Product-Market Fit right was our obsession with conversion improvements and A/B testing. Each A/B test that increased bookings, or monetization, increased the performance of marketing campaigns. Conversion improvements made unviable campaigns viable, improved competitiveness of existing campaigns, and further improved ROI on campaigns where we already were #1 — allowing us to invest those margins in new frontiers for the business.
>
> [![Image from Top 5 most interesting things about Booking.com's early growth strategy – Issue](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ffa33a62-d5d7-4f77-a8e7-d3ddd0eaff25_1462x1256.png)](https://substackcdn.com/image/fetch/$s_!EVKg!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffa33a62-d5d7-4f77-a8e7-d3ddd0eaff25_1462x1256.png)
>
> ###### Source: [HBR](https://www.hbs.edu/faculty/Pages/item.aspx?num=55158)
>
> When I left in 2012, we were running more than 100 concurrent experiments any given time, and incredibly fast paced. Anybody in the product team could still have and idea in the morning and have it running live on customers in the afternoon.
>
> **Think about product-channel fit: How can you create a product / company / organization that the machinery of the org was built to fulfill the needs of the customer from that channel?**”

### 4. They turned disadvantages into advantages

> “**Unlike our competitors (e.g. Expedia, Orbitz), we didn’t have access to chain hotels in big markets, so we focused on long-tail markets early-on.**
>
> We build inventory in secondary and tertiary destinations, where the other players didn’t have hotels. They couldn’t compete with us there so we ended up getting a virtual monopoly.
>
> This also led to our successful landing-page strategy, where we created bounding boxes pulling all of the nearby hotels, along with a map of the area, the POIs, and a search box. We constrain the marketplace and made it look like we had a lot more supply than we did.
>
> We also translated the pages into many languages, with hundreds of translators on the payroll at one point. So in places where we might not be able to compete geographically, we could compete on Japanese, Korean, Russian, Arab, etc queries.
>
> **At this time Expedia was 100x bigger than us, but with this approach we could pretend we were a big company in each of these specific cities, because no one knew we didn't have any supply anywhere else.** When people land on one of our landing pages, they were like wow, so many hotels in this city!”
>
> [![Image from Top 5 most interesting things about Booking.com's early growth strategy – Issue](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d882ee3d-2bed-4a8d-896f-65b66c4d05e1_982x836.jpeg)](https://substackcdn.com/image/fetch/$s_!EUEl!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd882ee3d-2bed-4a8d-896f-65b66c4d05e1_982x836.jpeg)

### 5. They used Google Translate for localization

> “The localization for our ad copy was done by Google translate, even when we got really big. A lot of team members were upset with our ad copy sometimes, so we asked them to give us better copy, which we A/B tested, and the Google translated copy often won. **We would keep what worked regardless of what would be better according to local speakers**.”

For much more from Booking.com, along with insights from Thumbtack and Airbnb, make sure to [read the full First Round Review piece](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/).

Till next week!

*A HUGE thank you to [Arthur Kosten](https://www.linkedin.com/in/arthurkosten/) for being generous with his time and sharing these incredible stories with us 🙏 🙏 🙏*

## **🔥 Job opportunities**

- **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [Chime](https://www.chime.com/job-openings/?gh_jid=4778800002), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
- **Growth**: [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion), [Wren](https://projectwren.com/careers/marketing-generalist)
- **Design**: [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
- **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003), [Chime](https://www.chime.com/job-openings/?gh_jid=4225358002), [Snackpass](https://jobs.lever.co/snackpass/00505223-bc85-4c28-8e4b-31217d05c2de)
- **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Runway](https://www.notion.so/A-Product-first-Frontend-Engineer-beae09e5ae034664a38cb26573e8d403), [Transform](https://transformdata.io/careers/)
- **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
- **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
- **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Read**: [The Observer Effect with Daniel Ek](https://www.theobservereffect.org/daniel.html) by Sriram Krishnan
2. **Listen**: [Marc Andreessen and Dylan Field talking about the future of education](https://a16z.com/2020/09/10/education-myths-monopoly-oligopoly-cartel-costs-past-present-change/)
3. **Watch**: Humanity trying to ride out 2020

These paid editions are intended for a single recipient, but occasional sharing is totally fine. If you would like to order multiple subscriptions for your team with a group discount just reply to this email.

Sincerely,

Lenny 👋

---

## [46/61] Moving from IC product manager to manager of product managers

## **Q: What, in concrete terms, does the jump from Senior PM to manager of PMs look like and how do you set yourself up for that move?**

[![Image from Moving from IC product manager to manager of product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8a55faa2-7e01-4bbc-8f06-7eabb8cc530e_4368x2912.jpeg)](https://unsplash.com/photos/QozzJpFZ2lg)

I moved into a PM manager role about four years into my PM career. There were a lot of surprises in the new role, and I hadso much impostor syndrome, but I never once wanted to go back. Having other amazing PMs doing the work — better than I would — what a dream!

In one sense managing PMs is the same job as an IC PM — marshaling the resources of your team to ship product and deliver business impact. In practice, it’s *completely* different. Instead of working directly on the product, everything now happens indirectly, through your PM team.

As a result, your role is now all about leverage. It’s now about*helping your teams* more effectively marshals their resources to ship product and deliver business impact. To paraphrase, Andy Grove:

> A PM manager’s output = the output of their team + the output of the neighboring teams under their influence

Below, I’ll share the top five things I found most surprising about the switch to managing PMs, advice for setting yourself up for the move, and tips for being successful in the new role. Here’s what we’ll cover:

**Top 5 unexpected jobs of a PM manager:**

1. ✋ Stopping stupid sh\*t from happening
2. 🪓 Unblocking, unblocking, unblocking
3. 🏆 Preserving (and improving) the PM team quality bar
4. 🧐 Preserving (and improving) the product quality bar
5. 🤝 Building a strong and united leadership group

**Top 5 ways to get promoted to PM manager:**

1. 👏 Demonstrate that you can lead people
2. 📈 Demonstrate that you can deliver
3. 🧘‍♀️ Demonstrate that you can handle complexity
4. 👌 Demonstrate that you develop a winning vision and strategy
5. ☝️ Ask for it

**Top 5 tips for being successful as a PM manager:**

1. 🏗 It’s all about increasing the leverage of your team
2. 🤫 It’s more about teaching than doing
3. 😁 There are many ways to do the job
4. 🤝 It’s essential to bring everyone along
5. 🥳 You don’t have to get into management

Let’s dive in.

## Top five unexpected jobs of a PM manager:

#### **1.** ✋ **Your job is to stop stupid sh\*t from happening**

You are now in a higher echelon of influence and visibility. As such, your team (and the company) are relying on you to have an active hand in shaping what gets done. Use this newfound power! When you see stupid sh\*t happening, within your team or anywhere in the company, push back and ask direct questions. You’ll be surprised by how much impact your opinion now has.

#### **2.** 🪓 **Your job is to unblock, unblock, unblock**

How do you help your teams become more effective? Not by doing IC PM work (e.g. roadmapping, creating 1-pagers, running every meeting). Instead, it’s by leveraging your newfound influence and authority to unblock your teams at every level: Short-term (e.g. making sure decisions are made), medium-term (e.g. hiring quickly to fill gaps), and long-term (e.g. aligning everyone around a winning vision and strategy). Anything that slows your team down or leads to wasted work is now your fault.

Every day, you should be asking yourself two questions:

1. What *is* most slowing my teams down right now?
2. What *will* most slow my team down in the next couple of months?

#### **3.** 🏆 **Your job is to preserve (and improve) the PM team** quality bar

At larger companies, you’ll now be included in the performance review and calibration process. This means you’ll have a hand in determining what great performance looks like at every level. The default path is to make everyone feel good by letting OK work slide. The more courageous path is to push everyone around you to keep that bar as high as possible. Rage against the dying of the light.

Ask yourself and your PM team:

1. Are we proud of where our PM team is heading?
2. What are we doing to maintain a high bar?
3. Who are PMs who were prematurely promoted, and what can we learn from this?

#### **4.** 🧐 **Your job is to preserve (and improve) the product quality bar**

Your teammates will now be coming to you for design reviews, strategy feedback, goal setting, etc. The natural tendency will be to make everyone happy by going with the flow — letting good enough work through. Don’t let this happen. You are now the torch-bearer for the quality, ambition, and innovation that happens within your team, (and adjacent teams). Without micromanaging and telling everyone exactly what to do, push your team to think deeper and go further. Ask yourself and your team:

1. What’s one thing we can do to push this just one step further?
2. If we had more time, what would we do differently?
3. How excited are we about this direction?

#### 5. 🤝 Your job is to build a strong and united leadership group

As an IC PM, your team was your cross-functional IC peers (e.g. engineers, designers, DS, researchers, etc). As a manager, your team is now your peer managers (e.g. EM, design manager, DS manager, etc). It’s essential that you work as one unit because your team will be looking to you each of you for a clear direction and confidence. Put just as much, if not more, effort into building a strong relationship with this new team than you did with your IC team. Sit together, have a weekly leads meeting, and constantly be checking in with each other on priorities, blockers, and personnel issues. The more cohesive your leadership team, the more cohesive your entire time will be.

Now, let’s turn our attention to getting promoted to a PM manager.

## **Top 5 ways to get promoted to PM manager**

The best way to get promoted into any role, including a PM manager, is to make it obvious you’d do a great job in that new role. This involves a combination of doing the job before you have the job, demonstrating that you have the necessary skills, and simply asking for it. Below are five areas to focus on.

#### 1. 👏 Demonstrate that you can lead people

PMs are often the de-facto team leader, and PM managers even more so. Demonstrate to your manager that you will be able to lead others effectively as you take on more responsibility and scope. Some ways to demonstrate this:

1. Run a well functioning team
2. Find initiatives within the company to lead, and be successful in doing so
3. Mentor 2-3 junior PMs and demonstrate their growth
4. Successfully present to and get buy-in from senior leadership
5. Take leadership courses

#### 2. 📈 Demonstrate that you can deliver

At the root of PM leadership is delivering impact. You’ll only be promoted if leaders believe they can rely on you to deliver impact at a broader scale. Some ways to demonstrate this:

1. Hit your team goals regularly
2. Deliver on a significant initiative that has meaningful business impact
3. Take on an ambitious project and land it successfully
4. Surface the successes you have
5. Kill your darlings

#### 3. 🧘‍♀️ Demonstrate that you can handle complexity

The more senior you get in an organization, the more responsibility, scope, and complexity you’ll be dealing with. Demonstrate that you can not just handle, but thrive, in complexity. Some ways to demonstrate this:

1. Take on a complex project (or two) and land it successfully
2. Support another PM leader on a complex project, and help them through it
3. Take overly-complex strategy documents and simplify them for others

#### 4. 👌 Demonstrate that you can develop a winning vision and strategy

As you move up the ranks of the PM org, you’ll be spending less time executing and more time developing and aligning around a vision and strategy for your team and product. So spend more time doing this now! Set time aside to get out of the day-to-day and think ahead. Some ways to demonstrate this:

1. [Craft a winning strategy](https://www.lennyrachitsky.com/p/getting-better-at-product-strategy) and get buy-in from leaders
2. [Align around ambitious and clear goals](https://www.lennyrachitsky.com/p/setting-goals-issue-23), and hit them
3. Inspire those around you with your clear and ambitious vision

#### 5. ☝️ Ask for it

Finally, and often forgotten: make sure your manager knows you want to get into management. Do not assume this is assumed. It’s essential that when roles open up leaders not only feel confident you’ll succeed but also know that you want it. Some ways to do this:

1. Bring this up in your performance reviews
2. Bring this up occasionally in 1:1’s
3. Ask your manager to schedule regular career conversations

## Bonus: What’s the one thing you wish you knew when moving from IC to PM manager?

[I asked on Twitter](https://twitter.com/lennysan/status/1312817763774128128) what new PM managers wished they knew when they moved into management. Here are the top five most common pieces of advice:

#### 1. 🏗 It’s all about increasing the leverage of your team

#### **2.** 🤫 **It’s more about teaching than doing**

#### 3. 😁 There are many ways to do the job

#### 4. 🤝 It’s essential to bring everyone along

#### **5.** 🥳 **You don’t have to get into management**

## 🤓 Further study

1. [Crossing the Canyon: Product Manager to Product Leader](https://www.reforge.com/blog/crossing-the-canyon-product-manager-to-product-leader) by Fareed Mosavat & Casey Winters
2. [Applying Leverage as a Product Manager](https://blackboxofpm.com/applying-leverage-as-a-product-manager-ffad4a99db24) by Brandon Chu
3. My favorite books for new PM managers

1. [The Making of a Manager](https://www.amazon.com/Making-Manager-What-Everyone-Looks/dp/0735219567/ref=sr_1_3?crid=3EQRJFF2WFOAY&dchild=1&keywords=making+of+a+manager&qid=1601843586&s=books&sprefix=making+of+a+manager%2Cstripbooks%2C225&sr=1-3) by Julie Zhou
   2. [Quiet Leadership](https://www.amazon.com/Quiet-Leadership-Steps-Transforming-Performance/dp/0060835915/ref=sr_1_2?crid=373XOZP4JJ4YR&dchild=1&keywords=quiet+leadership+by+david+rock&qid=1601843612&s=books&sprefix=quiet+lead%2Cstripbooks%2C221&sr=1-2) by David Rock
   3. [Radical Candor](https://www.amazon.com/Radical-Candor-Kim-Scott/dp/B01KTIEFEE) by Kim Scott
   4. [Drive](https://www.amazon.com/Drive-Surprising-Truth-About-Motivates-ebook/dp/B004P1JDJO/ref=sr_1_1?crid=1ILQNR7RB1FFY&dchild=1&keywords=drive+daniel+pink&qid=1601843740&s=digital-text&sprefix=drive+dan%2Cdigital-text%2C214&sr=1-1) by Dan Pink
   5. [High Output Management](https://www.amazon.com/High-Output-Management-Andrew-Grove/dp/0679762884) by Andy Grove

That’s it for this week!

## **🔥 Job opportunities**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
2. **Growth**: [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion), [Wren](https://projectwren.com/careers/marketing-generalist)
3. **Design**: [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Transform](https://transformdata.io/careers/)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
7. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

3. **Read**: [The GEM Model](https://medium.com/@gibsonbiddle/9-the-gem-model-65c89face5de) by Gibson Biddle

These paid editions are intended for a single recipient, but occasional sharing is totally fine. If you would like to order multiple subscriptions for your team (with a group discount) just reply to this email.

Sincerely,

Lenny 👋

---

## [47/61] The most important bottom-up SaaS metrics to track (and how to best visualize them)

> ## **Q: I’m curious what metrics early-stage bottom-up SaaS startups track and how they visualize these metrics –– especially metrics other than MRR and revenue?**

With so many tools, potential metrics to track, and perspectives on measuring your progress, it’s no surprise founders often struggle to know where to start.

Not having run a SaaS startup myself, I came at this question from a few directions: crowdsourcing the answer, asking my smartest founder friends, and doing a bit of primary research. Below you’ll find answers to the following three questions

1. **🔬 What metrics should early-stage bottom-up SaaS founders focus on?**
2. **🛠 What tools should they use to track their metrics?**
3. **🎨 How does one best visualize and share these metrics?**

I don’t have all of the answers so **I’d love to hear from you**. Is there anything below that looks off or incomplete? I’ll use this post as a living document and update it with anything I learn. Just reply to this email, leave a comment, or [hit me up on Twitter](https://twitter.com/lennysan). I would love to make this the most accurate and actionable list of recommendations for founders of bottom-up SaaS companies.

[Leave a comment](https://www.lennyrachitsky.com/p/the-most-important-bottom-up-saas/comments)

## **🔬 What metrics should early-stage bottom-up SaaS founders focus on?**

Below are the most important metrics ranked in priority order, divided into three buckets: pre-revenue, post-revenue, and additional metrics to track. You don’t need to track all of these immediately — pick a few to start with and add more over time.

##### Pre-revenue:

#### **1. Retention**

- **User retention**: % of new users who are still active 3-6 months later
- **Logo retention:**% of new companies who are still active 3-6 months later
- **[L7/L30 retention](https://a16z.com/2018/08/06/power-user-curve-l30-l7/)**: Number of days that users are active per week/month

#### **2. Virality within an organization**

- **Invite rate:**% of new users who sent at least one invite in the first X days
- **Invite conversion rate:**% of users who receive an invite that sign-up in the next X days
- **Virality factor:**% of new users who have come from an invite

#### 3. Top-of-funnel growth

- **Traffic:**Visits to site/week
- **MoM user growth:**Month over month growth rate in total users
- **Activation**: % new users who “activate”, whatever that means for your product

##### **Post-revenue:**

#### 1. Revenue growth

1. **MRR:**Total and MoM MRR growth
2. **ARR**: Total and MoM ARR growth
3. **New customers**: New customers/week

#### 2. Retention

1. **Customer retention:**% of new paying customers who are still customers 3-6 months later
2. **Net Dollar Retention:**MRR of each cohort at 12 months

#### 3. Monetization

- **Paid company conversion:**% of free companies that convert to paid within X days
- **Payback period**: Average time to pay back CAC
- **Gross margins**: Net sales revenue minus the cost of goods sold

##### Additional metrics to track and have available:

#### 1. Engagement

- DAU/MAU
- Key actions per day/week (e.g. tasks created, pics sent)
- Average time spent/user/day

#### **2. Virality within an organization**

- Invite volume: When an invite was sent, median number of invites sent per user
- Velocity of virality: Median days from 1 —> N seats at a company
- Traction: Number of total companies with at least 3 users signed-up
- Leads: Top domain name with most users (to target outreach)

#### **3. Monetization**

- ARPU: Average revenue per user
- User conversion: % of free users that convert to paid within X days
- [Quick ratio](https://baremetrics.com/academy/saas-quick-ratio): (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR)
- Growth spend efficiency: CAC/LTV
- Speed to next tier: If usage-based pricing, speed to next tier/plan
- Company adoption: Number of users per domain name

#### 4. Funnel conversion

- Landing conversion: % visitors click CTA
- Activation: % visitors who “activate”, whatever that means for your product
- % visitors complete your sign-up flow
- % visitors signup

## **🛠 What tool should founders use to track their metrics AND 🎨 How do I best visualize and share these metrics?**

I put a call out on Twitter asking SaaS founders to share their metrics dashboards:

Below I’ve synthesized the best examples, and grouped them by the tools that these teams use to track these metrics. Surprisingly (though not that surprisingly) Google Sheets was by far the most used tool, followed by Profitwell and Google Data Studio (sitting on top of Google Sheets). If you have any more examples to share, [shoot me a note](https://twitter.com/lennysan)!

#### 1. Google Sheets

Courtesy of [@craigzingerline](https://twitter.com/craigzingerline/status/1312218315423653888?s=20):

[![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/86028c4d-446a-4e74-8295-9d492c391358_1200x874.jpeg "Image")](https://substackcdn.com/image/fetch/$s_!kw4u!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F86028c4d-446a-4e74-8295-9d492c391358_1200x874.jpeg)

Courtesy of [@garrett\_wj](https://twitter.com/garrett_wj/status/1312422060845608966?s=20):

[![Image from The most important bottom-up SaaS metrics to track (and how to best visualize](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/43f69af0-d6cd-414d-a2ca-74bc894389ad_828x852.jpeg)](https://substackcdn.com/image/fetch/$s_!m6k4!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F43f69af0-d6cd-414d-a2ca-74bc894389ad_828x852.jpeg)

[Subscribe to continue reading 👉](https://www.lennyrachitsky.com/subscribe)

---

## [48/61] The most important bottom-up SaaS metrics to track

> ## Q: I’m curious what metrics early-stage bottom-up SaaS startups track and how they visualize these metrics –– especially metrics other than MRR and revenue?

With so many tools, potential metrics to track, and perspectives on measuring your progress, it’s no surprise founders often struggle to know where to start.

Not having run a SaaS startup myself, I came at this question from a few directions: crowdsourcing the answer, asking my smartest founder friends, and doing a bit of primary research. Below you’ll find answers to the following three questions

1. **🔬 What metrics should early-stage bottom-up SaaS founders focus on?**
2. **🛠 What tools should they use to track their metrics?**
3. **🎨 How does one best visualize and share these metrics?**

I don’t have all of the answers so **I’d love to hear from you**. Is there anything below that looks off or incomplete? I’ll use this post as a living document and update it with anything I learn. Just reply to this email, leave a comment, or [hit me up on Twitter](https://twitter.com/lennysan). I would love to make this the most accurate and actionable list of recommendations for founders of bottom-up SaaS companies.

[Leave a comment](https://www.lennysnewsletter.com/p/the-most-important-bottom-up-saas/comments)

## 🔬 What metrics should early-stage bottom-up SaaS founders focus on?

Below are the most important metrics ranked in priority order, divided into three buckets: pre-revenue, post-revenue, and additional metrics to track. You don’t need to track all of these immediately — pick a few to start with and add more over time.

##### Pre-revenue:

#### **1. Retention**

- **User retention**: % of new users who are still active 3-6 months later
- **Logo retention:** % of new companies who are still active 3-6 months later
- **[L7/L30 retention](https://a16z.com/2018/08/06/power-user-curve-l30-l7/)**: Number of days that users are active per week/month

#### **2. Virality within an organization**

- **Invite rate:** % of new users who sent at least one invite in the first X days
- **Invite conversion rate:** % of users who receive an invite that sign-up in the next X days
- **Virality factor:** % of new users who have come from an invite

#### 3. Top-of-funnel growth

- **Traffic:** Visits to site/week
- **MoM user growth:** Month over month growth rate in total users
- **Activation**: % new users who “activate”, whatever that means for your product

##### **Post-revenue:**

#### 1. Revenue growth

1. **MRR:** Total and MoM MRR growth
2. **ARR**: Total and MoM ARR growth
3. **New customers**: New customers/week

#### 2. Retention

1. **Customer retention:** % of new paying customers who are still customers 3-6 months later
2. **Net Dollar Retention:** MRR of each cohort at 12 months

#### 3. Monetization

- **Paid company conversion:** % of free companies that convert to paid within X days
- **Payback period**: Average time to pay back CAC
- **Gross margins**: Net sales revenue minus the cost of goods sold

##### Additional metrics to track and have available:

#### 1. Engagement

- DAU/MAU
- Key actions per day/week (e.g. tasks created, pics sent)
- Average time spent/user/day

#### **2. Virality within an organization**

- Invite volume: When an invite was sent, median number of invites sent per user
- Velocity of virality: Median days from 1 —> N seats at a company
- Traction: Number of total companies with at least 3 users signed-up
- Leads: Top domain name with most users (to target outreach)

#### 3. Monetization

- ARPU: Average revenue per user
- User conversion: % of free users that convert to paid within X days
- [Quick ratio](https://baremetrics.com/academy/saas-quick-ratio): (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR)
- Growth spend efficiency: CAC/LTV
- Speed to next tier: If usage-based pricing, speed to next tier/plan
- Company adoption: Number of users per domain name

#### 4. Funnel conversion

- Landing conversion: % visitors click CTA
- Activation: % visitors who “activate”, whatever that means for your product
- % visitors complete your sign-up flow
- % visitors signup

### 🤓 Further study for later-stage or sales-driven companies

1. [Redpoint SaaS Startup Key Metrics Template](https://tomtunguz.com/saas-startup-metrics-template/)
2. [How David Sacks built the first bottom-up playbook for enterprise](https://wfh.substack.com/p/how-david-sacks-built-the-first-bottom)
3. [Top 5 SaaS Metrics VCs Look At for Series A/B/C](https://blog.publiccomps.com/top-5-saas-metrics/)
4. [8 SaaS Growth Metrics Every Startup Should by Tracking](https://www.growthmentor.com/advice/growth-marketing/saas-growth-metrics/)
5. [What are the 2-3 most important metrics to watch for an early bottom-up B2B SaaS business?](https://twitter.com/lennysan/status/1301957505380048896)

## 🛠 What tool should founders use to track their metrics AND 🎨 How do I best visualize and share these metrics?

I put a call out on Twitter asking SaaS founders to share their metrics dashboards:

Below I’ve synthesized the best examples, and grouped them by the tools that these teams use to track these metrics. Surprisingly (though not that surprisingly) Google Sheets was by far the most used tool, followed by Profitwell and Google Data Studio (sitting on top of Google Sheets). If you have any more examples to share, [shoot me a note](https://twitter.com/lennysan)!

#### 1. Google Sheets

Courtesy of [@craigzingerline](https://twitter.com/craigzingerline/status/1312218315423653888?s=20):

[![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/86028c4d-446a-4e74-8295-9d492c391358_1200x874.jpeg "Image")](https://substackcdn.com/image/fetch/$s_!kw4u!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F86028c4d-446a-4e74-8295-9d492c391358_1200x874.jpeg)

Courtesy of [@garrett\_wj](https://twitter.com/garrett_wj/status/1312422060845608966?s=20):

[![Image from The most important bottom-up SaaS metrics to track](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/43f69af0-d6cd-414d-a2ca-74bc894389ad_828x852.jpeg)](https://substackcdn.com/image/fetch/$s_!m6k4!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F43f69af0-d6cd-414d-a2ca-74bc894389ad_828x852.jpeg)

Courtesy of [@lwcassid](https://twitter.com/lwcassid/status/1312218477629849600?s=20):

[![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/add31c5e-f598-43c1-a8a3-58cf8121de7e_812x398.png "Image")](https://substackcdn.com/image/fetch/$s_!U2ei!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fadd31c5e-f598-43c1-a8a3-58cf8121de7e_812x398.png)

Courtesy of [@rylandking](https://twitter.com/rylandking/status/1312525113561026562?s=20):

[![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/71eb6cf8-361e-444d-abd8-3a3b35cb4a2f_1199x554.jpeg "Image")](https://substackcdn.com/image/fetch/$s_!5GSD!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F71eb6cf8-361e-444d-abd8-3a3b35cb4a2f_1199x554.jpeg)

Courtesy of [@JorecelleDGR](https://twitter.com/JerocelleDGR/status/1315629374691930114?s=20):

#### 2. Profitwell

#### 3. Google Data Studio

#### Other: Mixpanel, Looker, Tableau, Anaplan, Causal, Slack

### 🤓 More examples

1. [Open startups by baremetrics](https://baremetrics.com/open-startups)
2. [Open startups by Postmake](https://postmake.io/open)
3. [Ghost](https://ghost.org/open/)
4. [Buffer](https://buffer.com/revenue)
5. [Gumroad](https://twitter.com/search?q=gumroad+revenue+%28from%3Ashl%29&src=typed_query&f=live)

That’s it for this week! Have any feedback, questions, or additional examples? Leave a comment or reply to this email.

[Leave a comment](https://www.lennysnewsletter.com/p/the-most-important-bottom-up-saas/comments)

## **🔥 Job opportunities**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
2. **Growth**: [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion), [Wren](https://projectwren.com/careers/marketing-generalist)
3. **Design**: [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Transform](https://transformdata.io/careers/)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
7. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Watch**: The making of a mechanical basketball hoop that tracks your ball mid-air, making it impossible not to sink a shot (via [The Viewer](https://theviewer.is/crow-picasso-hoop-water-boots/))

[Watch on YouTube](https://www.youtube.com/watch?v=myO8fxhDRW0)

2. **Listen**: [Cyan Banister on 20VC](https://thetwentyminutevc.com/cyanbanister/)
3. **Read**: [Coming for the Content, Staying for the Community](https://hunterwalk.medium.com/coming-for-the-content-staying-for-the-community-started-with-video-games-or-maybe-religion-5083f3773a2) by Hunter Walk

*These paid editions are intended for a single recipient, but sharing these emails occasionally is totally fine. If you would like to order multiple subscriptions for your team (with a group discount) just reply to this email.*

Sincerely,

Lenny 👋

---

## [49/61] Pricing your SaaS product

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a ✨ **once-a-month-free-edition**✨ of my newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing them out at the office.*

*If you’re not a paid subscriber, here’s what you missed this month:*

1. *[Moving from IC product manager to manager of product managers](https://www.lennyrachitsky.com/p/moving-from-ic-product-manager-to)*
2. *[Top 5 most interesting things about Booking.com's early growth strategy](https://www.lennyrachitsky.com/p/top-5-most-interesting-things-about)*
3. *[The most important bottom-up SaaS metrics to track (and how to best visualize them)](https://www.lennyrachitsky.com/p/the-most-important-bottom-up-saas)*

> ## Q: I'm building a SaaS product and don't know where to start when pricing it. How should I approach my pricing strategy?

When this question came in, I took to Twitter to find the smartest person in the world on SaaS pricing…

Many suggestions came though but one name came up again and again: [@Patticus](https://twitter.com/Patticus), aka Patrick Campbell.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/225c2988-0cd8-431b-b69b-a8e7dd1de832_2400x1350.png)

I cold DM’d Patrick and asked him if he’d be up for writing a guest post. He instantly agreed 🙌🙌🙌

For those that don’t know Patrick, he is CEO of [ProfitWell](https://www.profitwell.com/), and generally regarded guru on anything SaaS. Unrelated to this post, I started using ProfitWell a couple of months back to track my newsletter metrics, and the amount of insight you get into your subscription business is unreal. AND IT’S FREE. If you’re running a SaaS business, definitely [check it out.](https://www.profitwell.com/) This is not a sponsored post — I just love the product.

*🚨 **Bonus**: Patrick Campbell is doing a live AMA at 5pm PT today (10/27) in our subscriber-only Slack group. Ask Patrick any question you have about pricing your product live!*

With that out of the way, let’s dive in!

—

# How to price your SaaS product

*by Patrick Campbell*

Pricing is one of those topics that sits at the nexus of uncomfortable and long-term, which means companies often don’t think about it for far too long. Even when they eventually figure it out, they don’t touch it again for years.

**The most successful companies optimize monetization in some manner every quarter**. You may be thinking, “they change their price every 3 months!?” No, and that's the first lesson of monetization: pricing goes so much further than the actual price. Let me explain.

If we go to a thirty thousand foot view, you have to think about what you're actually doing with pricing. No matter the business you're in — non-profit, retail, SaaS, DTC, B2B, whatever — you've created some sort of value. You attach a unit of measurement to the value you created: your price. Put simply, your price is the exchange rate on the value you're creating in the world.

But price doesn’t live in a vacuum. Everything in your business — from sales and marketing to product and finance — is used to drive someone to buy the product at the price you're offering. Dozens of aspects of your business influence your price, and how effectively it converts customers:

1. **The segment and vertical you are targeting**: You can go upmarket to customers who have higher willingness to pay, shift to a vertical that sees more value in your offering, or even change the ideal customer profile entirely.
2. **Your product, positioning, and packaging**: You can come out with new features, move features to different tiers, pull features out and make them add-ons, change up your value propositions, etc.
3. **Your price**: You can move your price up or down, which will impact conversion obviously, but will also impact the perception of your brand.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/637dba83-56b6-434f-906e-330f363cbde7_1600x900.png)

These are not the only axes when it comes to pricing, but the point is anything that influences the value of your product is involved in pricing and monetization. Cool – I've now given you a college lecture worthy of a tweed blazer, so let's dig into where you should start.

**In the beginning, the actual number you're charging isn't that important.**

There are some exceptions, but for the most part, you should first be figuring out the range you're in: a $10 product, $100 product, $1k product, etc. Don't waste time debating $500 vs. $505, because this doesn't matter as much until you have a stronger foundation beneath you.

What matters much more is two other questions:

1. Your **value metric**
2. Your ideal **customer profiles and segments**

These two elements are the foundation of your monetization and pricing strategy. Let’s explore them individually.

### Step 1: Determine your Value Metric

A “value metric” is essentially what you charge for. For example: per seat, per 1,000 visits, per CPA, per GB used, per transaction, etc. **If you get everything else wrong in pricing, but you get your value metric right, you'll do ok**. It's that important. Partly because it bakes lower churn and higher expansion revenue into your monetization.

Pricing based on a value metric (vs. a tiered monthly fee) is important because it allows you to make sure you're not charging a large customer the same as you'd charge a small customer.

If you remember back to your high school or college economics class, the professor put a point on a demand curve for the perfect price and said “the revenue a firm gets is the area under that point.” The problem here is — what about all that other area under the curve? **You’re missing out on that revenue by charging a flat monthly fee.**

[Image]

“Good, better, best” pricing is a bit more advantageous, because you end up with three points on our trusty demand curve, and thus more revenue potential. You see this in a lot of retail products who are constrained by being physical goods — the car with the basic package vs. the car with the stereo and sunroof vs. the car with everything. In software, it’s thankfully dying out, but you’ll still see it with mass-market products:  Netflix, Adobe Creative Cloud, etc.

[Image]

A value metric however allows you to have essentially infinite price points — maximizing your revenue potential. In practice, you’ll never show infinite price points on your pricing page, sales deck, or mobile conversion page, but you may have a customer come in at a certain level and then grow.

[Image]

Value metrics also bake growth directly into how you charge because as usage or the amount of value received goes up (and those are not the same thing), the customer pays more. If they end up using or consuming less, they pay less (and thus avoid churning). This is why companies using value metrics are typically growing at [double the rate with half the churn and 2x the expansion revenue](https://www.profitwell.com/recur/all/outcome-based-value-metrics-for-growth) when compared to companies that charge a flat fee or where the only difference between their pricing tiers are features.

#### **How to determine your value metric**

To determine your value metric, think about the *ideal essence of value* for your product — what value are you directly providing your customer?

In B2B, it's likely going to be money saved, revenue gained, time saved, etc. In DTC, it may be the joy you bring them, fitness achieved, increased efficiency, etc. Obviously, we can't measure all of these, but if you can, *and* your customer trusts your measurement (meaning you say you saved them $100 and they agree you saved them $100), that’s your value metric.

As an example, the perfect value metric for ProfitWell Retain (our churn recovery product) is how much churn we recover for you. We can measure this, and our customers agree to the measurement, so we can charge on that axis. Other pure value metric products include [MainStreet](https://mainstreet.us/), which handles government paperwork to automatically get you back tax credits — you pay a percentage of the money saved.

Most of you won't have a pure value metric, so the next step is to find a proxy for that metric. Take for example [HubSpot](https://www.hubspot.com/)’s marketing product. Their pure value metric is the amount of revenue their tool drives for your business. This is hard to measure and hard for the customer to agree to in terms of what percentage of credit HubSpot deserves for revenue from a blog post. Proxies for HubSpot are things like the number of contacts, number of visits, number of users, etc.

To find the right proxy metric, you want to come up with 5-10 proxies and then talk to your customers and prospects. You’ll typically find 1-2 of these pricing metrics will be most preferred amongst your target customers. You then want to make sure those 1-2 also make sense from a growth perspective. Your larger customers should be using/getting more of the metric, whereas your smaller customers should be using/getting less of the metric. You also want to make sure the metric encourages retention.

When we look at HubSpot, if they were to primarily price on “number of seats”, folks could share a login and HubSpot wouldn’t make much more money on large customers vs. small. Ironically they wouldn’t get as many people invested into HubSpot, because there’d be friction to adding additional seats. Instead, if they give unlimited seats and price based on “number of contacts” there’s minimal friction to getting as many people into HubSpot as possible to do activities (e.g. blog posts, email campaigns, landing pages, etc.) that then produce contacts.

The result: HubSpot’s marketing product’s value metric is “contacts”, which ensures growth is baked directly into how they make money. The usage drives the metric, which therein drives revenue. Most importantly customers small, medium, and large are all paying at the point they see value and then can grow.

Some other examples:

1. [Wistia](https://wistia.com/) charges by the number of videos or channels you use/have
2. [Zapier](https://zapier.com/) invented the concept of zap (connection of software) and charge based on time to connect
3. [Theater in Barcelona charged based on the number of laughs](https://www.bbc.com/news/technology-29551380)
4. [Husqvarna](https://www.husqvarna.com/) charges based on time for lawn care products vs. making you buy them
5. [Rolls Royce](https://www.rolls-roycemotorcars.com/en_US/home.html) charges per mile for airplane engines. They own the engines on the plane you own and do all the maintenance. Cool model.
6. [Fresh Patch](https://www.freshpatch.com/) charges based on the amount of grass you want per month for your dog — yes they deliver grass to you monthly

As a side note, you should stop pricing based on seats for products where each seat doesn’t provide a unique experience. For instance, in a CRM if I log in to the AE sitting next to me’s account, I can’t really do my work because I’m only seeing their leads and accounts. Conversely, if I log in to our marketing manager’s account in HubSpot, I can do all the work I need. Thus, for the latter, seats is not the right value metric.

Per seat pricing is a relic of the perpetual license era when we couldn’t measure usage or value enough within our products. We’re beyond that point, so use the above as a good litmus test.

### Step 2: Determine your customer profiles and segments

The second key component of your pricing strategy is determining your target segment and ideal customer profile. We've all heard about personas, and you may be rolling your eyes at the concept, but most personas are useless because they aren’t quantitative enough. When used properly, quantified personas and segments are beautiful tools. The information needs to go beyond just cute names like “Startup Steve," with a cute avatar, and cute meetings where people tell you they’re targeting "developers".

To get quantified personas, you need to pull out a spreadsheet. [Here’s a template](https://docs.google.com/spreadsheets/d/1QZ8sNT7aP3TWHDsrK8k1vN_HDohxQUQaPok1BfVh0Uo/edit#gid=0) you can use.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9685a87c-cf8f-4e93-87b4-01428b57641a_2160x966.png)

**1. Columns: Customer profiles you're targeting**

These can take many forms, but the ultimate goal is to be as specific as possible so that you not only know who you’re targeting but how to monetize and retain them. Pragmatically, you typically separate these profiles based on size or role (or both). For example, a marketing automation product may target the following profiles:

1. Marketing leaders (Director and higher) at companies $1M to $10M
2. Marketing leaders (Director and higher) at companies $10.01M to $50M
3. Marketing leaders (Director and higher) at companies $50.01M to $100M

The point is you can’t be everything to all people and you need to understand who you’re targeting in order to make better decisions.

**2. Rows: Characteristics of each profile to help you differentiate between them**

1. Most valued features
2. Least valued features
3. Willingness to pay
4. Lifetime value (LTV)
5. Customer acquisition costs (CAC)
6. …and any other metric or category you think could be useful

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/18f00e45-6136-43d9-935b-5f4edab7c10d_1600x900.png)

If you're just starting out or you don't have some of this data, it’s fine. Still fill it out though with your hypotheses. You know *something* about your customers.

Next, you then need to validate (or invalidate) the most pressing hypothesis in that spreadsheet based on the decisions you’re going to make. If you're going to validate a new feature for a particular segment, then that's where you should start. Price point the biggest question? Start by researching the price point with each of these roles/segments.

If you don't know who your key roles/segments are, there's no way in hell you’ll set up an efficient growth flywheel, let alone an optimized pricing strategy. Personas act as a constitution within your business to centralize your focus and arguments about direction.

If you don't do segment and persona analysis, you better be able to raise a ton of money. I guarantee you there's some persona or segment on some vision document or in that euphoric part of your entrepreneurial brain that is completely wrong for your business. I see it all the time. Even I — someone who thinks about segments and customer research all the time — fall prey to being an absolute idiot with who we should target.

When we built ProfitWell Metrics (our free subscription metrics tool) I thought we were geniuses who were going to be billionaires. Turns out analytics products are terrible. Willingness to pay for them is terrible; retention for them is terrible; NPS is terrible. Everything is just terrible, mainly because customers don't appreciate graphs or at least aren't willing to pay much for them. When we did our research this became obvious and put us 18 months ahead of our competitors, pushing us to change up the positioning of the product to freemium, which has fueled our business ever since (oh and our NPS is 70, because we massively over-deliver a free product better than the paid competition).

Never underestimate the power of focusing on the customer through research. You should never, ever just do what they ask, but you need to be an anthropologist who knows them better than anyone else.

### Step 3: User research + experimentation

Beyond your value metric and core segments, the monetization game becomes extremely tactical and research-based. Figuring out your price point involves researching those segments and then making decisions in the field. Same with discounting, add-on, and packaging strategies. The point: monetization is never finished because it’s the very essence of translating your value into an optimal framework for your target customer segments.

Practically this is why you should be experimenting with your monetization every quarter. Experimentation can get tricky and have a few quirks, but you’ll find it’s similar to most growth frameworks out there (which are all versions of the scientific method).

Here’s a good prioritization list of what you should attack in optimizing your monetization strategy once you have your core segments and value metric figured out:

**Priority 1: Foundational [See above]**

- Core customer segments
- Value metrics

**Priority 2: Core**

- Order of magnitude price point (are you a $10 product vs. a $500 product)
- Positioning and value props
- Packaging

**Priority 3: Optimizations**

- Add-on strategy
- Specific price point (are you a $10 product vs. a $11 product)
- Price localization/internationalization
- Discounting strategy
- Contract Term optimization

**Priority 4: Growth accelerators**

- Freemium
- Market expansion (going up or down market)
- Vertical expansion
- Multi-Product

Your true order of operations with monetization will vary, but for the most part, all companies should work through the foundational and core sections before moving to the optimizations and growth accelerators. If you’re larger or there’s a fire, you may start with an optimization. In fact, this is sometimes a good idea. Something more scoped like “price localization” can help get momentum, be a forcing function to clean up tech and experimentation stacks, and mitigate political conversations. Remember, monetization is something that’s important, uncomfortable, and something you likely don’t know much about, so progress is better than nothing. Start small. You can (and should) always do more.

Well, this is already longer than Lenny wanted, so I’m going to lean into the length with two last thoughts:

1. I’ve included a rapid-fire of data that guides common monetization questions below.
2. If you ever have a question about pricing or subscription benchmarks in general hit me up at [patrick@profitwell.com](mailto:patrick@profitwell.com) or [@Patticus](https://twitter.com/Patticus) on Twitter.

*🚨 **Reminder**: Patrick Campbell is doing a live AMA at 5pm PT 10/27 in our subscriber-only Slack group. Ask Patrick any question you have about pricing your product, live!*

## Rapid-fire bonus advice ⚡

#### **1. You should localize your pricing to the currency and willingness to pay of the prospect's region**

- Revenue per customer is 30% higher when you just use the proper currency symbol
- Having different price points in different regions increases revenue per customer further, and is justified based on different demand environments in different regions

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fdec0d12-32d2-4989-ab3f-f32c25b5b6f3_1600x900.png)

#### **2. Freemium is an acquisition model, not a part of pricing**

- Think of freemium as a premium e-book driving leads, not another pricing tier
- Don't do freemium until you truly understand how to convert leads to customers, because you’ll end up increasing noise or false positives when you’re trying to figure out your segment beachheads. The best folks who deploy free typically don’t implement freemium until 2-3 years into their business. The exceptions to this notion are if you have a very specific need or network effect (eg. marketplaces, social networks, etc.) or if you have a top 50 growth person on your team.
- To be clear, I'm not saying DON’T do freemium. I'm saying it's a scalpel, not a sledgehammer that requires thought. A lot of people end up reading our articles on freemium and end up going, “cool, let’s do freemium and we’ll be a unicorn.” I’m being pragmatic in that you need to realize freemium is fantastic, but doing freemium properly takes a lot of effort and nuance.
- Paid users who convert from free tend to have higher NPS, better retention, and much lower CAC.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d81a5edc-39c1-4a90-a6b9-aee68a7196ac_1600x900.png)

#### **3. Value propositions matter oh so much**

In B2B value propositions can swing willingness to pay ±20%, in DTC it's ±15%

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9970ed19-215b-4020-ba7e-a63d7ba24336_1600x900.png)

#### **4. Don't discount over 20%**

In some verticals discounting over 20% may be fine, but you're likely not in one of them (although you may think you are), but the size of the discount almost perfectly correlates with higher churn. Large discounts get people to convert, but they don't stick around.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/998486db-4588-4ee1-87b4-95891aa9d9c5_1600x900.png)

#### **5. For upgrades to annual discounts don't use percentages and try offers**

Percentages don't work as well as whole dollar amounts for discounts (ie. "1 month" will work better than "X percent off"). Annuals see much lower churn rates.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5d0bce4b-c86f-4462-ab3a-8c2252579a72_1600x900.png)

#### **6. Should you end your price in 9s or 0s? Depends on your price point**

Ending your prices in 9s evokes a discount brand, making the customer feel like they're getting something. Ending in 0 evokes luxury or premium. Studies on this for technology products is inconclusive. We have seen it increase conversion in lower priced products, but retention isn't as good with those customers.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/db2d770b-f7a2-452e-bed3-c14767155c74_1200x675.png)

#### **7. You should experiment with your pricing in some manner every quarter**

This doesn't mean change the price point each quarter, but experiment with something. More changes correlates with increasing revenue per customer. Like all things, focusing on something makes you improve it.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1477c023-7e0e-4ba4-9616-ac6ec421c0ed_1600x900.png)

#### **8. Case studies boost willingness to pay quite a bit**

Social proof is important. Case studies can boost willingness to pay by 10-15% in both B2B and in DTC

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5da2c289-d53e-4b35-9240-e9780ea84b45_1600x900.png)

#### **9. Design helps boost willingness to pay by 20%**

This graph didn't look this way 10 years ago when design didn't do much for willingness to pay. Today, affinity for a company's design can boost willingness to pay considerably.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/774dcd81-48c5-4cdd-b0d4-e271e947a708_1600x900.png)

#### **10. Integrations boost retention and willingness to pay**

The more integrations a customer is using, typically the higher their willingness to pay and the better their retention. I wouldn't charge for the integrations, but I'd use this as a tool to get people hooked in and paying more or buying different add-ons.

![Image from Pricing your SaaS product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fa803e92-2484-4b4a-a993-f30a9e62c847_1600x900.png)

Still here? Ok, I think I've overstayed my welcome at this point. If you ever have any questions about pricing, retention, or subscription benchmarks, [hit me up on Twitter](https://twitter.com/Patticus).

Our growth team would also be upset with me if I didn't point out you can get all of your subscription financial metrics by hooking up your billing system to ProfitWell in two minutes (yes, even with Zuora). We're used by over 20k subscription companies ranging from the Fortune 50 to johnny and jane startups. Oh, and it's free. :)

—

Thank you Patrick for sharing your wisdom 🙏🙏🙏

If you have any questions or further suggestions, leave a comment!

[Leave a comment](https://www.lennyrachitsky.com/p/the-most-important-bottom-up-saas/comments)

## **🔥 Job opportunities**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
2. **Growth**: [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion), [Wren](https://projectwren.com/careers/marketing-generalist)
3. **Design**: [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Cascade](https://www.cascade.io/jobs/front-end-product-engineer), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Transform](https://transformdata.io/careers/)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer)
7. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

*Is there anyone in your life who would benefit from this newsletter or community? Consider giving them a gift subscription* 💞

Sincerely,

Lenny 👋

---

## [50/61] Managing up

> ## Q: I’m finding it tough to work with my manager. Do you have any advice for “managing up”?

Managing up is one of the most essential skills at every level. Even as a CEO. It enables you to be less stressed, do your best work, and get the recognition that you deserve. Below are five tactics I’ve found to be most effective in managing up:

#### **1. 📢 Over-communicate**

Regularly share what you’re doing, what you plan to do, and what you’ve done with your manager. It’s nearly impossible to over-communicate. I suggest sending a simple weekly “State of The Me” email to your boss with (1) your current priorities, (2) things on your mind, and (3) blockers you need help with. Try it for two weeks — it’ll work wonders. Here’s a template you can use:

![Image from Managing up](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2561209b-884e-4159-8ebd-060af4c43c6f_1372x704.png)

You can also highlight material changes to your priorities from the prior week to make it even easier for your manager (h/t to [Nishi Patel](https://www.linkedin.com/in/nishipatel/) for the idea).

#### **2.** 🤐 **Set realistic expectations**

When taking on work, set realistic expectations around time, resources needed, and quality. It may feel good to say yes in the moment, but you’ll pay for it later. Remember, your performance will be judged not just based on the results, but also on how the results compared to your manager’s expectations. Be ambitious, but be realistic.

#### 3. 🔭 Be proactive

Don’t wait for your manager to come to you. Anticipate looming asks, deliverables, and problems. Is yearly planning around the corner? Get started on your strategy now. Is a board meeting approaching? Start gathering data that your manager will ask for. See a potential problem (or opportunity) arising? Develop a plan. You don’t always need to get this right, but spending a bit of time looking around corners is often a high ROI investment.

#### **4. ✍️ Prioritize + communicate**

When asked to take on new work, particularly last-minute, prioritize it amongst your existing priorities and most importantly *share your updated priorities with your manager*. Don’t assume your manager knows what else you’ve got on your plate, or how you’re prioritizing your work. What project will suffer if you take on this new work? Who will be upset? What would *you* recommend? With this updated set of priorities, ask your manager if they agree with how you’re re-prioritizing. If they don’t, partner with them to update your priorities. Otherwise, you’re good to go.

#### 5. 🔥 Do great work

The better you do —> the more your manager will trust you —> the more freedom and influence you will have. If you feel micro-managed, and others around you don’t, it’s likely because you aren’t performing well. Do great work, and life will get better.

Have any other advice? Leave a comment!

[Leave a comment](https://www.lennysnewsletter.com/p/managing-up/comments)

## **🔥 Job opportunities**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Product Hunt](https://www.notion.so/Head-of-Product-Product-Hunt-9d11d30d491a475c970accdb94eadc71)
2. **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Reclaim](https://reclaim.ai/job-growth/), [Shef](https://angel.co/company/shef-1/jobs/883288-head-of-marketplace-expansion), [Wren](https://projectwren.com/careers/marketing-generalist)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Cascade](https://www.cascade.io/jobs/analytical-product-designer), [Pachama](https://jobs.lever.co/pachama/f4f49853-9d59-4dcc-9d0b-143ca63a53d2), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Reclaim](https://reclaim.ai/job-designer/), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **VOTE** (if you’re in the US): [Polling place locator](https://www.vote.org/polling-place-locator/)

2. **Watch**: Line Rider - Waltz No. 2 (via [The Viewer](https://theviewer.is/nostalgia-idiom-space-monster-line/))

[Watch on YouTube](https://www.youtube.com/watch?v=4UI01jKiVRY)

3. **Read**: [Falling in love with problems](https://stationhq.com/blog/falling-in-love-with-problems) by Julien Berthomier

*Have someone in your life who would benefit from this newsletter? Refer them and you both get a free month of the paid newsletter.*

[Refer a friend, give them a free month](https://www.lennyrachitsky.com/account/referrals)

Sincerely,

Lenny 👋

---

## [51/61] Startup PM vs. big company PM

> ## **Q: I’m transitioning from being the first (and only) Product Manager at a small company to being a PM at a big company. How different will the job be?**

I joined Airbnb as one of the first few product managers, and by the time I left there were nearly 200 PMs. Life during those two periods was very different, and it’s even more different if you go from being the *only* PM at a small company to being one of a thousand PMs at a large company. Here’s what to expect:

![Image from Startup PM vs. big company PM](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/25671706-2e0a-4396-a776-a8df43ef7a3c_2360x1668.png)

#### To help you in this transition, I’d suggest doubling-down on these three PM skills:

1. **Communication**: Everything you do as a product manager is done through writing, speaking, and meetings. As [Boz](https://twitter.com/boztank) puts it, “[communication](https://boz.com/articles/communication-is-the-job.html)*[is](https://boz.com/articles/communication-is-the-job.html)*[the job](https://boz.com/articles/communication-is-the-job.html).” It’s very difficult to over-communicate, and you can never be too good at it. Particularly at a big company where you’ll be working with many more (and different types of) people. Recommendations for developing your communication skill, particularly writing:

1. **Emails**: Force yourself to look at every email at least once before you send it. There’s always something you can cut or clarify. [Here’s an email strategy](https://hbr.org/2016/11/how-to-write-email-with-military-precision) I love courtesy of the military.
   2. **Docs**: Always ask for feedback from at least one person before sharing a doc widely. Focus on clean and consistent formatting. Close out comments before sharing with execs. Make it easy to scan. Keep pushing yourself to learn to write better.
   3. **Meetings**: Include the goal of the meeting in your invite, ideally along with an agenda. If you attend a meeting that doesn’t feel productive, call it out. Invite as few people as possible. Leave with clear action items. Follow up over email with the action items and owners. Read [How to Run a Quarterly Product Strategy Meeting](https://medium.com/speroventures/how-to-run-a-quarterly-product-strategy-meeting-a-board-meeting-for-product-3a14c4d53d1b) by [Gibson Biddle](https://medium.com/u/370100ca0fe1).
   4. **Presentations**: Make sure your audience knows the goal of the presentation —  are you looking for a decision or general feedback, or purely sharing information? It’s not as obvious as you think. Get feedback on your presentation; fresh eyes always catch the glaring issues. And keep it short — no one ever wished that presentation went longer. Also, are you sure you need to do a presentation versus an email?
   5. **Storytelling**: This is a meta-skill that will make you better at all of the above. [This](https://speakingsherpa.com/how-to-tell-a-business-story-using-the-mckinsey-situation-complication-resolution-scr-framework/) framework is an excellent tool for laying out your pitch, and a few more helpful guides can be found [here](https://hbr.org/2014/03/the-irresistible-power-of-storytelling-as-a-strategic-business-tool) and [here](https://www.fastcompany.com/40480193/5-ways-charity-water-uses-storytelling-to-inspire-more-giving).
2. **Influence**: The best PMs quickly become the de-facto leaders of their cross-functional teams, not because of any actual authority, but because they help everyone on the team do the best work of their lives. Recommendations for developing your influence skill:

1. Watch successful PMs at your new gig closely — how do they get things done when they don’t actually manage anyone on the team?
   2. Foster a strong team culture. Establish fun rituals, plan outings, and create a lasting identity for your team.
   3. Read [10 Traits of Great PMs](https://medium.com/@noah_weiss/10-traits-of-great-pms-a7776cd3d9cd) by [Noah Weiss](https://medium.com/@noah_weiss)
   4. Read [What distinguishes the Top 1% of product managers from the Top 10%?](https://www.quora.com/What-distinguishes-the-Top-1-of-product-managers-from-the-Top-10/answer/Ian-McAllister?srid=3wR&st=ns) by [Ian McAllister](https://medium.com/@ianmcall)
   5. Read [The Job of Leadership](https://medium.com/@ev/the-job-of-leadership-757e4bc3e539) by [Ev Williams](https://medium.com/@ev)
   6. Read [The Most Underrated Product Management Skill: Influence Without Authority](https://www.sachinrekhi.com/the-most-underrated-product-management-skill-influence-without-authority) by [Sachin Rekhi](https://medium.com/@sachinrekhi)
   7. Read [What Makes a Great Product Manager](https://hackernoon.com/what-makes-a-great-product-manager-3c1d03b90356) by [Lawrence Ripsher](https://medium.com/@ripsher)
   8. Read [Product Management skills NO ONE talks about](https://hackernoon.com/product-management-skills-no-one-talks-about-5d50debfb815) by [Taruna Manchanda](https://medium.com/@Taruna2309)
3. **Data**: Teams generally look to the PM to help them reach decisions. You’ll be making dozens of decisions daily on behalf of the team. Your best friend in making decisions at large companies is a clear set of [principles](https://medium.com/the-mission/this-principle-from-amazon-s-team-will-change-your-life-e8e02220007b) and hard data. The fewer opinions you have to rely on, and the more facts you can lean on, the easier your life will be. Recommendations for developing your data skill:

1. Study how successful companies make decisions through experimentation ([Airbnb](https://medium.com/airbnb-engineering/experiments-at-airbnb-e2db3abf39e7), [Uber](https://eng.uber.com/xp/), [Netflix](https://medium.com/netflix-techblog/its-all-a-bout-testing-the-netflix-experimentation-platform-4e1ca458c15), [Pinterest](https://medium.com/@Pinterest_Engineering/building-pinterests-a-b-testing-platform-ab4934ace9f4)), and find a way to launch an experiment or two where you work today.
   2. Watch successful leaders at your new organization making decisions — how quickly are they making decisions, what do they ask about before making a decision, how do they communicate their reasoning?
   3. Always have a perspective on a decision (your own POV), but also be ready to change your mind given new information.
   4. Read about [Type-1 and Type-2 decisions](https://www.inc.com/jeff-haden/amazon-founder-jeff-bezos-this-is-how-successful-people-make-such-smart-decisions.html)
   5. Read [The Agony and Ecstasy of Building with Data](https://medium.com/the-year-of-the-looking-glass/the-agony-and-ecstasy-of-building-with-data-56215764d67c) by [Julie Zhuo](https://medium.com/@joulee)
   6. Read [Making Good Decisions as a Product Manager](https://blackboxofpm.com/making-good-decisions-as-a-product-manager-c66ddacc9e2b) by [Brandon Chu](https://medium.com/@brandonmchu)
   7. Read [The Art of Decision Making as a Product Manager](https://www.sachinrekhi.com/the-art-of-decision-making-as-a-product-manager) by [Sachin Rekhi](https://medium.com/@sachinrekhi)
   8. Read [Your Job is Not to Make Every Possible Customer Happy](https://thinkgrowth.org/your-job-is-not-to-make-every-possible-customer-happy-f59a59595af) by [Steve Blank](https://medium.com/@sgblank)
   9. Read [Product strategy means saying no](https://www.intercom.com/blog/product-strategy-means-saying-no/) by [Des Traynor](https://medium.com/@destraynor)

#### All that being said, there are also a lot of similarities between the two gigs:

- You’re still be building a product with a team of cross-functional resources
- You still need to get buy-in
- You still need to keep people aligned and excited
- You’re still focused on solving customers/users’ problems
- It’s still hectic and stressful

Thus, you won’t be starting from scratch, and your new team will feed off your startup energy for as long as you can hold on to it ✨

Good luck with this new role, and see you next week!

(BTW, in case you are reading this and are planning to go in the *other* direction, here’s [advice for anyone joining as the first product manager](https://www.lennyrachitsky.com/p/joining-as-the-first-product-manager-7f4))

## **🔥 Job opportunities**

1. **Product**: [Aavia](https://aavia.io/pages/aavia-head-of-product-career), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Roofr](https://jobs.lever.co/Roofr/43f39100-5686-45ff-9cef-b04849e24f13)
2. **Growth**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Reclaim](https://reclaim.ai/job-growth/)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Cascade](https://www.cascade.io/jobs/analytical-product-designer), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Reclaim](https://reclaim.ai/job-designer/), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Coda](https://boards.greenhouse.io/coda/jobs/4473700002), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Watch**: Maverick — A look into how this book took [Noah Kagan](https://okdork.com/youtube)’s (from our very own community!) business from $4m to $30m in revenue

[Watch on YouTube](https://www.youtube.com/watch?v=FyduMeorcKI)

2. **Listen**: [SaaS Growth, Product Management, Retention, Flywheels: Behind the Paywall with Lenny Rachitsky](https://podcasts.apple.com/us/podcast/saas-growth-product-management-retention-flywheels/id1316769266?i=1000497337240) <— I was on a podcast last week
3. **Read**: [Fast growth vs. slow growth](https://twitter.com/dunkhippo33/status/1313265188993294337) by Elizabeth Yin

*Have someone in your life who would benefit from this newsletter? Refer them and you both get a free month of the paid newsletter.*

[Give your friend a free month](https://www.lennyrachitsky.com/account/referrals)

Sincerely,

Lenny 👋

---

## [52/61] Magical growth loops

> ## Q: Can you share examples of companies that found innovative growth loops, like marketplaces convincing their supply to drive their demand, or platforms where demand drove more demand?

This question sent me down a rabbit-hole of research into what I’ll call **magical growth loops: growth loops where most of your new users come directly from existing users**.This includes the “virality” loop (where your users invite other users) but that’s just one of many types of magical loops.

Below, I’ve compiled what I believe is the most comprehensive set of examples of these magical growth loops:

1. Supply driving demand
2. Demand driving supply
3. Demand driving demand (e.g. virality)
4. Supply driving supply

#### What makes these loops “magical”?

Normally, to grow your business, YOU need to go find every new users or customer. For example, if you’re building Google, you need to go tell people about Google and convince them to use Google. Each additional Google user doesn’t directly drive more Google users.

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/917ac5f3-f3fd-4947-ba1f-2f42ab80ed93_2400x1350.png)

However, if you’re building a product like DoorDash, Faire, Substack, Dropbox, Eventbrite, and many of the companies you’ll find below, a very cool thing can happen: your users grow your business for you. THEY recruit your new users. Magical!

Here’s an example from [Cameo](https://www.cameo.com/), a marketplace where fans purchase short videos from celebrities to surprise and delight their friends.

Without a magical growth loop, Cameo would have to go recruit both celebrities AND fans:

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d2e1887d-98e8-4ac5-8403-9b9738fc23f7_2400x1350.png)

Instead, Cameo found that if they recruit celebrities, the celebrities *themselves* bring the fans to the marketplace:

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3b9f3847-6fe3-4bef-9048-160756d8609b_2400x1350.png)

Amazing! With this loop, Cameo can focus most of its efforts into recruiting celebrities, knowing that much of the other side of the marketplace will come along for free.

This is one of 30+ examples you’ll find below which I hope will inspire you and your team to think about whether there’s a latent magical growth loop in your product. Let’s dive in.

## **Type 1: Supply driving demand**

This loop can work for marketplace businesses (i.e. which connect supply with demand) and for platform businesses (i.e. which enable supply to serve demand). The key is that your supply has a clear motivation to bring you demand.

The list below is sorted roughly in order of how impactful these loops were to their respective business.

***(1) Marketplaces:***

#### **[DoorDash](https://www.doordash.com/)**

> 1. DoorDash recruits restaurant
> 2. The restaurant tells their customers about DoorDash so that they can order delivery from them
> 3. Customers signup for DoorDash

*(Also applies to Uber Eats, Caviar, GrubHub, Postmates)*

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c24de615-f021-4c53-a9c3-f2792c424750_2400x1350.png)

#### **[Faire](https://www.faire.com/)**

> 1. Faire recruits vendor, and asks them to upload list of preexisting retailers to avoid paying fees
> 2. Vendor encourages retailers to place orders through Faire, for convenience
> 3. Retailers signs up for Faire and find other great vendors

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5e68f9f1-b740-4cf2-a578-433c2ba3ec95_2400x1350.png)

#### **[Etsy](https://www.etsy.com/)**

> 1. Etsy recruits seller, who puts their items up on Etsy
> 2. Seller explores Etsy to see what else is being sold
> 3. Seller buys from other sellers

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/30896b6e-a5bf-4da6-a3e4-09e2ca8910d1_2400x1350.png)

#### **[Cameo](https://www.cameo.com/)**

> 1. Cameo recruits celebrity
> 2. Celebrity shares their Cameo profile with their fans
> 3. Fans sign up for Cameo and discover other celebrities

#### **[Instacart](https://www.instacart.com/)**

> 1. Instacart recruits grocery store
> 2. Grocery store promotes Instacart to customers for online ordering
> 3. Customers sign up for Instacart and discover other grocery stores

***(2) Platforms:***

#### **[Substack](https://substack.com/)**

> 1. Substack recruits writer
> 2. Writer shares their newsletter with their followers
> 3. Followers sign up for writer’s newsletter

*(Also applies to Twitch, Patreon, OnlyFans)*

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/34a49322-af2e-4e9c-bfee-e6081722e564_2400x1350.png)

#### **[Kickstarter](https://www.kickstarter.com/)**

> 1. Kickstarter recruits creator
> 2. Creator shares project with their friends
> 3. Friend signs up for Kickstarter to support the project

***(3) Somewhere in between:***

#### **[Eventbrite](https://www.eventbrite.com/)**

> 1. Eventbrite recruits event host
> 2. Host creates an event and sends out invites to potential attendee
> 3. Attendees receives invite and discover Eventbrite

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/80d69f65-c514-4712-8419-10964272f387_2400x1350.png)

#### **[Ritual](https://ritual.co/)**

> 1. Ritual recruits restaurant
> 2. Restaurant promotes Ritual to customers, gives them a deal for signing-up at the restaurant
> 3. Customer signs up for Ritual and discovers other restaurants

#### **[Product Hunt](https://www.producthunt.com/)**

> 1. Product Hunt recruits founder
> 2. Founder launches on Product Hunt and shares their page with their users
> 3. Users visit and sign up for Product Hunt

#### **[OpenTable](https://www.opentable.com/)**

> 1. OpenTable recruits restaurant
> 2. Restaurant embeds reservation module on their website
> 3. Customer books through OpenTable and becomes users

## **Type 2: Demand driving supply**

This loop only works for marketplaces. And again, the key is that your demand has clear motivation to invite supply, and again this is sorted roughly in order of how impactful these loops are to the business. There are two ways this loop works, actively and passively.

***(1) Actively: Demand invites supply:***

#### **[Faire](https://www.faire.com/)**

> 1. Faire recruits retailer, who buys an item through Faire and has a good experience
> 2. Retailer encourages their other vendors to list on Faire
> 3. Vendors join and begin selling through Faire

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/69a3c563-ae8f-4968-acce-ae7eda5e21c3_2400x1350.png)

#### **[AngelList syndicates](https://angel.co/)**

> 1. AngelList recruits syndicate lead who posts a deal
> 2. Syndicate lead shares deal with friends
> 3. Friends back syndicate and join AngelList

***(2) Passively: Demand uses the product and signs up to be supply:***

#### **[Uber](https://www.uber.com/) / [Lyft](https://www.lyft.com/)**

> 1. Uber recruits rider
> 2. Rider takes a ride, meets driver, and gets excited about driving
> 3. Rider becomes a driver

#### **[Airbnb](https://www.airbnb.com/)**

> 1. Airbnb recruits guest
> 2. Guest takes a trip, meets a host, and gets excited about hosting
> 3. Guest becomes a host

## **Type 3: Demand driving demand**

This loop is often called “virality*”*, but as you’ll see below this there are many forms of this loop.

***(1) Actively: Demand invites more demand for free (aka virality):***

#### **[Figma](https://figma.com/)**

> 1. Figma recruits employee at a company
> 2. Employee sends invites to co-workers, to share designs
> 3. Co-workers sign up

*(Also applies to Slack, Asana, and other bottom-up SaaS products)*

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/467a4949-81a9-4bb9-b931-d38ed73fadb9_2400x1350.png)
> 1. Snapchat gets user to join
> 2. User invites their friends, to send pics
> 3. Friends join

*(Also applies to Facebook and other social networks)*

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0ee349c5-a4d0-4f7b-9aac-1d4bd1deeb36_2400x1350.png)

#### **[Dropbox](https://www.dropbox.com/h)**

> 1. Dropbox recruits user
> 2. User creates and shares a folder with friend
> 3. Friend signs up for Dropbox to see shared folder

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6dbd4aab-331c-4771-9fec-4efc6da650f5_2400x1350.png)

#### **[Whatsapp](https://www.whatsapp.com/)**

> 1. Whatsapp gets users to join
> 2. User invites their friends, to send them messages
> 3. Friends join

*(also applies to Telegram, Signal, and other messaging apps)*

**(2) Actively: Demand invites more demand for an incentive (aka referral program):**

#### [Dropbox](https://www.dropbox.com/h)

> 1. Dropbox recruits user
> 2. User discovers referral program and sends friend an invite
> 3. Friend signs up for Dropbox, both get a bonus

*(Also applies to Airbnb, Uber, Lyft, and any referral program)*

![Image from Magical growth loops](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/605854e4-7e38-45eb-8f64-cf1f9dc73549_2400x1350.png)

***(3) Passively: New demand discovers the product as a by-product of using it:***

#### **[Zoom](https://zoom.us/)**

> 1. Zoom recruits user
> 2. User sents a meeting invite to co-worker with Zoom link
> 3. Co-worker signs up for Zoom

#### **[PayPal](https://www.paypal.com/us/home)**

> 1. Paypal recruits user
> 2. User sends money to friend
> 3. Friend signs up to accept money

#### **[Intercom](https://www.intercom.com/)**

> 1. Intercom recruits company
> 2. Company integrates Intercom on their website
> 3. Visitors to website see Intercom in action and sign up

#### **[Superhuman](https://superhuman.com/)**

> 1. Superhuman receruits user
> 2. User sends email to friends with Superhuman signature
> 3. Friend sees signature and signs up for Superhuman

#### **[Google Docs](https://www.google.com/docs/about/)**

> 1. Google recruits user
> 2. User creates document and shares it with co-woker
> 3. Co-worker signs up to view it

*(Also applies to Notion, Coda, Miro, and other document collaboration tools)*

#### **[Instagram](https://instagram.com/)**

> 1. Instagram recruits user
> 2. User posts picture on other social networks
> 3. Friends notice Instagram and join

## **Type 4: Supply driving supply**

This final loop can work in marketplaces and platforms and can also happen in two ways, actively and passively.

***(1) Actively: Supply invites potential new supply because of an incentive (aka referral program):***

#### **[Airbnb](https://www.airbnb.com/) (also Uber, Lyft)**

> 1. Airbnb recruits a host
> 2. Host earns of referral program and invites friends to join
> 3. Friends join

***(2) Passively: Users converts to supply as a by-product of seeing the product in action:***

#### **[Typeform](https://www.typeform.com/) (also Survey Money, Mailchimp)**

> 1. Creator sends out a survey
> 2. Receiver takes survey and sees the logo/link
> 3. Receiver creates their own survey

#### **[Eventbrite](https://www.eventbrite.com/)**

> 1. Eventbrite recruits host
> 2. Host sends out invites to potential attendees
> 3. Some attendees learn about Eventbrite and becomes hosts themselves

#### **[Substack](https://substack.com/)**

> 1. Substack receruits writer
> 2. Writer shares their newsletter with potential readers
> 3. Some of these potential readers learn about Substack and get inspired to have their own newsletter

#### **[Facebook Marketplace](https://www.facebook.com/marketplace/)**

> 1. Facebook recruits a seller
> 2. Seller post an item in the marketplace
> 3. Friends see item, learn about Facebook Marketplace, and also post items

#### **[Product Hunt](https://www.producthunt.com/)**

> 1. Founder launches on Product Hunt
> 2. Founder shares Product Hunt with their audience and users
> 3. Some of those users are founders that launch on Product Hunt in the future

As you can see, these “magical” loops are fairly prevalent and can work in many different ways. My hope is that this comprehensive collection gives you and your team fodder for brainstorming ways to find opportunities to create your own magical loop.

If you know of any other examples of these loops in action, please let me know!

[Leave a comment](https://www.lennysnewsletter.com/p/magical-growth-loops/comments)

## **🔥 Job opportunities**

1. **Product**: [Aavia](https://aavia.io/pages/aavia-head-of-product-career), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Papa](https://www.linkedin.com/jobs/view/2220709965/), [Roofr](https://jobs.lever.co/Roofr/43f39100-5686-45ff-9cef-b04849e24f13), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/)
2. **Growth**: [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Cascade](https://www.cascade.io/jobs/analytical-product-designer), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Learn**: [Julian Shapiro](https://twitter.com/Julian) (growth-expert and community member) tracked down ex-LinkedIn employees and Product Hunt experts and got them to share how the LinkedIn and Product Hunt algorithm ranks organic content. He wrote these two amazing guides and is giving our community access:

1. [LinkedIn guide](https://demandcurve.com/playbooks/linkedin-organic) (password = Tokyo)
   2. [Product Hunt guide](https://demandcurve.com/playbooks/product-hunt) (password = Amsterdam)
2. **Watch**: A group of Swedish skiers and snowboarders travel by train and boat from Stockholm, through Russia, to Japan, all in search of deep powder (via [The Viewer](https://theviewer.is/graph-ski-menshevik-origin-stellar/))

1. **Listen:** Miley Cyrus - Midnight (via [Hunter](https://twitter.com/hunterwalk))

[Watch on YouTube](https://www.youtube.com/watch?v=AxZl2cFvjRs)

*Have someone in your life who would benefit from this newsletter? Refer them and you both get a free month of the paid newsletter.*

[Give a free month, get a free month](https://www.lennyrachitsky.com/account/referrals)

Sincerely,

Lenny 👋

---

## [53/61] The Transition: Layering sales onto a bottom-up self-serve product

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a ✨ **once-a-month-free-edition**✨ of my newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing them out at the office.*

*If you’re not a paid subscriber, here’s what you missed this month:*

1. [Magical growth loops](https://www.lennyrachitsky.com/p/magical-growth-loops)
2. [How to manage up](https://www.lennyrachitsky.com/p/managing-up)
3. [Startup PM vs. big company PM](https://www.lennyrachitsky.com/p/product-management-startup-big-company)

> ## Q: I have a self-serve bottom-up SaaS product, and I'm trying to decide if, when, and how I should hire my first full-time salesperson.

One of the most surprising takeaways from [my research into early B2B growth](https://www.lennysnewsletter.com/p/how-todays-fastest-growing-b2b-businesses-b11) was that **100% of the bottom-up B2B companies ended up layering on a sales team**. It’s rarely a question of if — it’s a question of when, and how.

Since I don’t have a lot of depth in sales myself, I went straight to my go-to person for all things sales: [Pete Kazanjy](https://twitter.com/Kazanjy). If you don’t know of Pete, he wrote [THE book on startup sales](https://www.foundingsales.com/), which he recently released as a physical book. This tweet was not an exaggeration:

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7c5ce225-1f4f-47eb-afe6-1da59ed276f5_1190x756.png)

Pete generously agreed to write a guest post, and unsurprisingly, **below you’ll find the most in-depth and tactical guide for adding sales into your org.** Including**:**

1. Should I start with a self-serve product?
2. Should I ever involve salespeople?
3. When should I add a salesperson to the mix?
4. How do I set myself up for success during The Transition?
5. Common pitfalls to avoid

Let’s dive in!

*A bit more about Pete: In addition to authoring [Founding Sales](https://www.foundingsales.com/), Pete Kazanjy is also the founder of [Atrium](https://www.atriumhq.com/), makers of [data-driven management software for sales teams](https://www.atriumhq.com/), and founder of [Modern Sales](https://modernsaleshq.com/) (the world’s largest peer-education community for sales operations and leadership professionals). He previously started and sold TalentBin (a recruiting software startup) to Monster Worldwide. You can find him on [Twitter](https://twitter.com/Kazanjy) and [LinkedIn](https://www.linkedin.com/in/kazanjy/).*

## **The Transition:** Layering Sales onto a Bottom-Up Self-Serve Product

*By Pete Kazanjy*

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/91b85976-c55f-4f8a-9d16-2b3807f40e6a_2150x1171.png)

“Bottom-up” (or “product-led”) B2B growth is a hot topic in early-stage circles these days, and it makes sense why. A self-serve (“easy-in”) entry motion, that’s later combined with a strong direct sales motion, can make for explosive revenue growth as shown by IPO’d exemplars Zoom, Slack, Datadog, and private market dynamos like Airtable, Figma, and others. The combination of bottom-up self-serve plus direct sales can simultaneously lower CACs and power larger contract values (with expansion into enterprise contracts). This would never be possible in a pure self-serve model.

**The crux of this article is that waiting too long to add sales-involvement often leads to a large opportunity cost.** Many successful self-serve applications saw their market position usurped by competitors who adopted a sales-assisted motion and effectively firewalled the self-serve-only products out of lucrative enterprise segments (e.g. Dropbox).

Below, I’ll help you understand if layering in sales is right for your business, when to take the leap, and how to navigate this critical transition successfully:

## First of all, should I even start with a self-serve product?

Self-serve has a lot going for it, but it’s not necessarily a slam dunk decision for every product. Below are four questions to take into consideration before building a self-serve product (many of which can be answered before you launch):

#### **1. Is the product simple enough for self-serve?**

Successful self-service is about allowing a user to get to success and have that “aha” activation moment on their own. So the question that follows from this is how easy is it for users to get to that *aha* moment? Zoom is not complicated. Send someone a link or join someone’s link, and boom, you’re talking to them. Dropbox is pretty straight forward – download this client, and tell it what folders to sync. Airtable is a bit more advanced, but you can start simple, and they’ve invested heavily in a content catalog of templates and recipes to allow for self-served advancement.

Note, “complexity” is audience contingent. Tableau is not an easy product to use by any stretch of the imagination, but it’s self-serviceable by the technical data analysts for whom it was designed, and as such started self-serve with a desktop client download. Similarly, Stripe, Datadog, Twilio, New Relic, and other developer tools have all started self-serve, in that their technical audience has the capacity to self-serve even these more involved products. Some offerings are really just too complex to start self-serve, such as enterprise-grade marketing automation platforms like [Marketo](https://business.adobe.com/products/marketo/adobe-marketo.html),  and software targeting massive financial enterprises like [Blend](https://blend.com/).

#### **2. Is this truly new and differentiated?**

If your offering is truly new and differentiated, self-serve can be fantastic. When [Yesware](https://www.yesware.com/) and [Mixmax](https://www.mixmax.com/) first launched, most organizations didn’t have any sort of sales engagement email offerings for their salespeople. The notion of sending someone a link to a public calendar with which to book time was crazy talk when [Calendly](https://calendly.com/) first launched. Software that proactively monitors your revenue stack’s automations and linkages for errors has never existed, which is why [Sonar](https://seesonar.com/) can be self-serviced by sales and marketing operations staff. Personal business cloud app search has never existed before, and thus there’s no reason for a given user in an organization to not download and give [Command E](https://getcommande.com/) a try.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8bdaeb77-d849-4833-aeb9-3add8098b57c_1017x574.png)

#### **3. Can this co-exist with a (less good) incumbent in a given company’s stack?**

Conversely, if your offering can coexist alongside inferior incumbents, self-serve can also work. Most organizations where Slack was adopted early-on already had Gmail and thus GChat. Organizations that start using [Guru](https://www.getguru.com/) may have antiquated knowledge bases in Sharepoint or in Confluence wikis. This is where my company, [Atrium](https://www.atriumhq.com/) lives. Customers will frequently have legacy analytics infrastructure, like Tableau or Looker, in place, but its complexity underserves the needs of the sales organization, leaving open an opportunity for Atrium to enable data-driven management for sales managers and sales operations staff in a way they’re currently not doing. Tableau and Looker still end up existing in the organization, but for more advanced analytics run by a data or analytics team.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a4948801-3ec0-4078-9e3e-ef583adfe8d8_1017x575.png)

By contrast, an “end to end” offering like a Human Resource Information System (e.g. Workday) or email sending platforms (e.g. Iterable) are not something you have “two of” in an organization. As such, even though [Sapling](https://www.saplinghr.com/) makes delightful modern HRIS software, they don’t have a self-serve offering. [Iterable](https://iterable.com/) makes great, modern customer engagement software, but it’s highly unlikely an organization would run a legacy system like [Responsys](https://www.oracle.com/cx/marketing/campaign-management/) and Iterable side by side. Self-serve would likely not work for them.

#### **4. Will you focus on small organizations?**

If none of the above apply, you can still target smaller orgs that have not yet adopted a legacy provider with a self-service offering. [Stripe](https://stripe.com/) is a great example here. Payments providers already existed when Stripe first came on the scene, so it was less likely for a mature e-commerce provider with an existing payments provider to switch to a new upstart. But because legacy providers were clunky with poorly documented APIs, Stripe was the obvious choice for new internet businesses who didn’t yet have a payments provider.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/57067d98-1583-4066-9827-5d27fffba73e_1012x569.png)

[RevOps](https://www.revops.io/) makes fantastic quoting software for sales organizations that can be self-setup, but there’s no way anyone who already has Salesforce CPQ or Apttus is going to switch over to them. But for a 10 person sales organization that wants to systemize the creation of quotes and sending proposals, the idea of solving that problem in less than 5 minutes (rather than 3 months, like a standard Salesforce CPQ deployment) is really attractive. Which is why self-serve works for RevOps, specifically targeting this down-market segment.

## **Should I** ever involve salespeople?

Once you’ve determined whether self-serve is right for you, growth is going well, and you’re on your merry way (i.e. people are self-serving, getting to “aha”, transacting, and retaining), the next question would be “OK, well, should we get some salespeople involved here?” Well, that depends.

There are two primary reasons to add salespeople to a self-serve commercial motion:

1. To facilitate the **penetration or expansion** of your solution into an organization where it has an initial foothold, and/or
2. To help **raise conversion** rates of your self-serve offer

It turns out, humans are *really*helpful when it comes to smoothing over weird edge cases, communicating complicated concepts, and persuading other people to surmount their inertia and try a new thing. They’re good at, you know, selling! But there’s a downside. Humans are expensive, and can only do so many tasks in a given amount of time - as compared to software which, once written, is really cheap to run, and can be scaled up to do as many tasks as you like.

So the question of “should I add sales to the mix?” is one of “will it help?” and “will the juice be worth the squeeze?”

#### **1. Facilitating the penetration or expansion into an organization**

This is the approach Slack and Zoom’s early sales motions helped with. It *wasn’t* about a salesperson showing up to an organization and saying “Hi, you need intra-organizational communication assistance, you should check out Slack.” Rather, teams within organizations might start using Slack to communicate amongst themselves, and the addition of an “Account Manager” (psssst...it’s a salesperson) helped unify those various pods into a single contract, while potentially adding more pods, was powerful. Similarly, in a more “single-player” offering, like [Command E](https://getcommande.com/), a handful of sales people in a 200 person sales organization might start using it to search their Salesforce opportunities, their Google Docs, and their Gmail, but a “Customer Success Specialist” (psssst...it’s a salesperson) offering to “give a personalized tour to the rest of the sales organization” could also be quite powerful (for expansion).

#### **2. Helping with conversion**

Sometimes even supposedly simplistic offerings can have sharp edges or places where a user can get hung up on their way to an “aha” moment. This is another place where “sales” people can be helpful. I use the quotes because this frequently looks more like support and customer success than it looks like sales, but the goal is the same: get the user to success so they can transact. Much of this will be addressed by product or marketing approaches via programmatic email, in-product guides, and so on, but in cases where you might know it’s ***worth it*** to engage the user to assist with their conversion, having dedicated people to do so can be helpful.

How do you know it’s worth it? Imagine a situation where the average user of your software ends up spending $5,000 a year. And further imagine you know that engaging with a hung, unactivated user doubles the probability they convert to a customer from 10% to 20%. Lastly, you know that the time cost of doing so is a couple of hours, by a staff resource that costs $50 an hour. With those inputs, we’re essentially saying “I can spend $100 in human labor to capture $500 in expected conversion upside.” In this case, it seems it might make sense to have a “sales assist” salesperson.

That said, Snowflake’s probably not going to be sales-assisting every abandoned user who signs up for an account and bails. If you can differentiate between the valuable hung users and everyone else, this can work. For example, if early Slack sees that a Director of IT from, say, Tesla had signed up for a Slack account, and abandoned their instance before inviting anyone else or setting up channels...well, I have a hunch that it might be worth a person’s time to engage with that user, by phone, by email, maybe even by candygram to see if we can get them to success. This is what is often known as a “qualified” or “gold” lead that, in this case, has been generated by your product.

This realm is where my company, [Atrium](https://www.atriumhq.com/), sits. Because it takes less than 90 seconds to sign up and stand up a sales performance analytics harness, we get a lot of people “checking it out.” Because our average sales price is high enough (in the many thousands of dollars), it’s very much worth our while for a salesperson to engage with abandoned users who fit the criteria of a potentially successful customer - which, amongst other reasons, is why we have a sales team full of delightful, helpful humans to do just that. For more on how to differentiate between an ideal customer who’s “worth the time” and those that aren’t, [check out this section of Founding Sales on the topic](https://www.foundingsales.com/4-prospecting#ideal-customer).

The other thing to consider is something I call “commercial conversion”. You might not have issues with users getting to product value, but there could be other barriers to successful conversion. Security audits, sign-off from the procurement team, you name it. This is another reason why having humans involved can be helpful – a head of data infrastructure that wants to take Snowflake off her credit card, and get procurement to start paying via invoicing may need some hand-holding. Providing that can be in your best interest, along with an easy means by which to “Contact Sales” on your home page and in your product to facilitate that.

All that said, you have to make sure the economics pencil out. Humans are not cheap, so you need to make sure that the added human labor costs are worth the enhanced revenue upside. **Generally speaking, you want to see a salesperson delivering 4x their fully loaded cost in incremental revenue**. So make sure to do the math on how many of these unique potential transactions (“opportunities” in sales speak) a given sales rep can handle in a given time period and what the value output might be.

For example, let’s say it takes on average two 30-minute meetings per opportunity (both wins and losses), a rep can have 20 of these meetings a week, thus 80 per month, giving you a 40 opportunity “budget” per rep per month. Let’s say this capacity costs us, say, $10k in salary expense and commission for a junior AE - meaning a cost of $250 per opportunity managed. If we get $5k out of each successfully won opportunity, and win 25% of those engaged - well, that’s 10 wins out of 40 monthly attempts, for $50k of revenue, on a sales rep cost of $10k. Not bad! We should test this out! You can use [this rudimentary SaaS Sales Staffing Model](https://docs.google.com/spreadsheets/d/16NBOjE9Hpm4uexjslpYVDmidp3fIpDwmR3zRKieFgKM/edit#gid=0) to play around with what this could look like for your offering.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/36b41e6c-cc5f-4579-bf8f-6c38c68edb4f_1600x982.png)

You have to at least have a credible hypothesis that this could commercially work for your offering before engaging wholeheartedly in the effort (or, testing it, meaningfully.). By contrast, if you do the above math and it feels more like you’d be getting $20k of bookings out of a $10k of rep costs...sales assistance may not be in the cards for you. Unless you can raise your prices, lower the costs of your reps, raise your win rates, or substantially increase the number of opportunities a given rep can handle in a time period.

Some organizations push the envelope here by locating lower-end salespeople offshore. Take [KeepTruckin](https://keeptruckin.com/), makers of Fleet Management Software. They have an expansive SMB sales team in Pakistan, where the cost of a salesperson is much, much lower than in the United States, who are charged with handling smaller opportunities from US-based mom and pop trucking companies with one, two, or three trucks (KeepTruckin’ also has a US-based sales team in Nashville for managing larger prospects). They get the benefit of higher human-assisted conversion while keeping their costs lower.

## **When should I** add a salesperson to the mix?

Assuming that you’ve decided you meet the criteria above, and believe you will benefit from involving people in your sales motion, the next question becomes *when* to start doing so.

The good news is there are pretty helpful signals to indicate that now is a good time to start. **First, make sure that you have a “Contact Us” or “Contact Sales” call to action on your home page** in a place that wouldn't distract the user from self-sign up, but at least discoverable enough such that if someone was looking for it, they could easily find it.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1bac4f87-cf88-4a47-818d-c3e44e39a5a0_1600x772.png)

This is how you’ll start to see if you get inbound requests asking for help with “commercial conversion.” Like “Hey, finance would like us to put this on an invoicing relationship” or “What’s your SOC 2 situation?” or “We have a couple of different teams that we need to consolidate into one billing relationship.” As you start seeing more of these come in, maybe one or two a week, now’s probably the time to dedicate someone to handling those – a salesperson!

Now, obviously one or two inquiries a week isn’t exactly a full-time job, but it’s an indication that there are likely recurring needs like this in your existing customer base. For each user who raises their hand for help, there are probably ten other users who have the same pain point. So once you have that person in seat, handling those inbound inquiries, they can also start going *outbound* (“warm outbound”, versus pure cold outbound) into the customer base to determine if they can proactively help with some of these issues (and, perhaps, expand your offering within the customer’s account).

**Having someone handling these requests is almost a two-for-one: Inbound inquiries help indicate that you need someone helping with commercial transactions, and their extra bandwidth (to start) can be used to start proactively engaging customers where your solution has an initial foothold to further penetrate the organization**. For example, if [Command E](https://getcommande.com/) is seeing that a handful of salespeople are using the tool in a 200 person sales org, and then proactively engaging with those users (plus others) to see if they can do some personalized demonstration could help the rest of the sales org.

The second case for involving sales – raising conversion rates for accounts that are “worth it” – is a little trickier. If you’re like [RevOps](https://www.revops.io/), and the cost of the software is such that it’s worth engaging pretty much any qualified user signup that abandoned, well, you would start doing this from day one. If you’re more in the realm of a Snowflake, Datadog, Mixmax, and others, where you can have individuals signing up for $99 a month, who would happy to stay at that level forever, mixed in with people signing up who may be starting at $99 a month but could represent an organization who could scale up to tens of thousands of dollars a month, well, we have to figure out a way of differentiating between these groups.

The good news is that you may already be getting low-tech indications that there could be a place for sales via the “Contact Us” information above. If Lockheed, Boeing, and General Motors all have registered a Contact Us request...well, that’s probably a good bet that Airbus, Ford, and Tesla have started a signup flow and abandoned. If this is the case, it’s probably time for us to get more proactive about knowing when a highly qualified lead comes through signup. I talk about this in the [Early Inbound Marketing](https://www.foundingsales.com/6-inbound-marketing) chapter of Founding Sales. There are a few ways to approach this. One way is to **add some fields to your initial signup form that helps characterize the potential value of an account**. For example, Snowflake asks for a user’s Title and Company name on signup, which can be used to make a judgment about the potential value of the user signing up (“Software Engineer” vs. “Director of Data Infrastructure'').

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a178d558-a5ff-4535-b18a-a64453252531_1068x790.png)

Datadog, on the other hand, doesn’t ask for the user’s title, but does ask for a Company name, and also ask for a Phone number - even though it’s not required (some people want you to call them! I promise!).

With this information in hand, we can do some smart things. Even something as basic as pinging an internal email listserv or Slack channel with new signups, so a person can see them makes a big difference. Later, you can get more advanced with programmatically sorting new signups based on observable factors (title, company size) and behavioral factors (if they completed the signup or abandoned it) to quickly differentiate between needles and haystack, and focus in on the needles - the “Directors of Data Infrastructure” from Tesla, while letting the lower value intensity signups be handled by our “tech touch” maturation efforts (emails, in-app messaging, etc.).

The even more advanced version of the above is using form enrichment from providers like [Clearbit](https://clearbit.com/) to match a signup email to a composite profile associated with that email address, and thereby potentially not have to ask, or, allow us to add additional information (e.g., company size) without having to extend our form, and thereby injure our conversion rates.

## How do I set myself up for success during the transition?

Once you’ve decided the time is right to add salespeople to assist your self-serve product, there are a few key items to ensure you get it right. First, figure out if the initial focus of this salesperson will be:

1. “Scooping up” pods of successfully activated customers in large organizations and facilitating **expansion** in those accounts, OR
2. Helping with the **conversion** of unactivated customers.

Your initial focus is likely determined by the same information that told you it was time to start involving sales. If you’re, say, [Zapier](https://zapier.com/), and you keep seeing duplicate instances showing up in larger organizations, you might focus on the “scooping up and expanding” motion. Alternatively, if you’re [Datadog](https://www.datadoghq.com/), and you see registrations from really compelling logos showing up in the signup logs, but never turning on data flows, you might focus on the “help with conversion” motion. This isn’t to say that you can’t have both motions concurrently, but given that you should be approaching this as an experiment to start, better to focus on one, get that right to start, before moving on to validate the other.

#### **First, do it yourself**

One key part of starting things off right is to prototype this sales motion yourself, as the founder or product manager. This is something I talk about quite a bit in my [book on sales for founders](https://www.foundingsales.com/). **As a foremost expert in the problem space you’re addressing, you’re best positioned to have the first few dozen of these sales conversations**. In part, this is because you know way more about the market and the product than any salesperson you will hire, and secondarily, as you start adding a human element to your sales motion, you will invariably quickly discover new product requirements. Given that product requirement gathering is typically best done by a business founder initially, or someone who works on the product like a product manager, it’s best to have those people having these initial conversations. Later on, these sales tasks will be handed to a specially hired salesperson but usually only after the initial motion has been at least roughed out.

#### **Provide data insights for sales**

The next thing you’ll need is the insights to do sales well. Which means at least basic analytics. If you’re focusing on “scooping up pods” and expanding into organizations, then analytics or alerting that notifies you, proactively, to the fact that a larger organization has multiple successful instances of your offering deployed will be key. Note there are two things here - one is being able to see where there are multiple instances, and the second is the ability to see success, as indicated by heavy usage and feature adoption.

Similarly, understanding which of your successfully deployed customers are situated in much larger organizations could be fertile ground for expansion and thus help you prioritize which of these pods you’d like to go after first. Sometimes this can be intrinsic to your product. Most users of [Command E](https://getcommande.com/) sign-in with Google Apps to allow the product to index their GDrive and Gmail. What’s neat is that with this API access, Command E can also query how large that user’s larger organization is. Bigger organizations mean potentially more Command E users, and thus perhaps a juicy target to engage for expansion. When someone turns on [Sonar](https://seesonar.com/) to instrument their Salesforce instance, Sonar can quickly see how many total users are in that Salesforce instance, how many of them have admin rights (typically correlated with the number of eventual Sonar users), and how many tricky automations are already built in that Salesforce instance, which is correlated to the amount of value Sonar offers to a customer.

If you can’t get this data intrinsically from your product, then it’s definitely worthwhile to do some basic enrichment work via APIs like Clearbit. First, consider removing the ability for a user to sign up with a personal email address (or, at least making it non-default and higher friction) to help with your enrichment efforts. Even just having eyes on a domain can help you prioritize which accounts would be best to engage with. Second, enrichment providers can give you the size of the organization that a given user is associated with in their database. Bigger organizations are typically better when it comes to proliferating a successfully “landed” self-serve customer to “expand” more broadly in the account.

The key insights needed for the “conversion assist” sales motion are a bit more involved. In this case, it will be important to understand not just the potential total value of an account as signup (using methods described above), but also the persona of the user signing up. This can be as easy as adding a “Title” required field to your signup form. Understanding when you have an inbound lead who potentially represents substantial purchasing authority is a powerful thing.

As an example when I was researching this piece, I was rather surprised that New Relic’s signup page doesn’t provide them with additional information as to “how valuable” the person signing up might be. Whereas Snowflake’s (as shown above) certainly does in the form of the “title” field.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ef9fca4c-a053-4aef-a836-5bf9c4b8ef70_1030x660.png)

Enrichment providers can help here too, by passing back a current title for a given email address if you get a hit. Usually, it’s better to just ask for it, even if you’re afraid it’ll reduce signup conversion.

Next, understanding how “activated” users are helps with both the “pod scooping and expansion” case and also the “conversion assist” case. How activated a user gets can show which potential users might need intervention (again, based on their potential value to your organization - large accounts and valuable title), and also where you have pods of highly activated users in larger accounts to prioritize.

You likely already have existing indicators of activation with respect to your product - how far someone got through signup, how many features they are using, and how frequently they’re using those features. Now we need to get that information into the hands of the people who will be prioritizing which hung users, or which pods of activated users to engage.

At Atrium we use software called [Census](https://getcensus.com/) to help us pipe user activation data into our CRM (Salesforce) such that sales staff can easily consume this information and act accordingly. We’re pretty far down this process, but to start you could use any of your existing product analytics for this – whether that’s Amplitude, Pendo, Mixpanel, Heap, etc. Think for a second about what that reporting would look like: new users in some trailing time period, their activation status, per user, their “account desirability” information, their “user desirability” information (e.g., title), and their contact information. Also, all accounts, grouped by domain (ideally) in order to easily show which organizations have meaningful pockets of activation in them. Ideally, you pipe that information into a go-to-market system like your CRM or marketing automation platform and can start doing business logic against it (to protect engineering resources for product work), but giving your salespeople logins to your product analytics tool can be ok to start. We just want to get it somewhere where the person working on this initial sales motion can consume it, maybe lightly manipulate it, and definitely act on it.

**As an example of where you can eventually end up, this is what a Salesforce contact object page looks like at Atrium**, as a result of about a year of tuning and additions as we got more sophisticated on user activation instrumentation. But even just starting with the last login and total pageviews or actions on a given time interval can be a great start.

![Image from The Transition: Layering sales onto a bottom-up self-serve product](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7514265c-44aa-48bc-abe8-a7cfd1f646de_835x1047.png)

The same approach applies to alerting. You can push alerts into an email listserve or Slack channel based on certain desirability criteria (“Badass account signed up and didn’t activate!” vs. “Badass account reached awesome activation threshold!” vs. “Account reached critical mass of multiple activated users!”). At Atrium we have email alerting on initial user signup that fires an email to a list-serve and a lead to Salesforce, both of which feature user name, email address, company name, title, size of account (after user sign in with Salesforce we can interrogate the size of their Salesforce user table, which correlates to magnitude of the account), and how far through initial activation they got.

Similarly, we have alerting set up using workflow rules and triggers in Salesforce to send pertinent alerting to relevant listserves when users get beyond certain thresholds of activation (“OMG, this user has hit X threshold of feature breadth use and Y threshold of page views in the trailing Z period.”) Once alerted, sales staff use this information to engage the user as relevant (“Wow, it’s time to buy!” or “Wow, you have a bunch of folks getting a ton of value out of this. Let’s roll you all into the same account, eh?”)

#### **Is it working?**

Lastly, since the initial involvement of humans in your commercial motion is an experiment until you’ve validated it’s working, you’ll want to set yourself up to be able to understand just that: is it working? There’s a lot more on this topic in the section from [Founding Sales on “Early CRM”](https://www.foundingsales.com/5-outreach?rq=early+CRM), but at minimum, you’ll want some sort of system by which to record the number and state of these early sales conversations. This is typically a CRM of some sort, but even something as basic as Airtable can work. The reason you want to do this is to not just help yourself keep all these parallel conversations straight (in sales, [you have to record everything](https://www.foundingsales.com/1-mindset-changes#record)), but also to score the results of your efforts: are we actually getting expansions done? Are we actually getting highly valuable accounts converted? How many of these conversations are we having? What proportion are we winning? More on this in the “[Sales Performance Instrumentation](https://www.foundingsales.com/10-early-sales-management#sales-performance-instrumentation)” section of Founding Sales, but you want to make sure you’re capturing enough information so you can be honest with yourself as to how it’s actually going.

## **Common pitfalls** to avoid

Regardless of how well you set yourself up for success, there are a number of pitfalls you’ll want to avoid.

#### **1. Having someone else do sales**

One of the things I passionately believe is that **founders should be their own first salesperson**. [Founding Sales](https://www.foundingsales.com/) was written based on this belief – to make it way easier for founders (or product managers) to do so. Assigning this task to someone else is fraught with downsides, as they won’t have the same product acumen as the founder by which to have productive sales conversations, they won’t be good at product requirements collection as new features crop up needed to facilitate larger contracts, and so on. Yes, it’s a lot of work, but it’s worth it for it to be you, at least to start. Also, you have a huge advantage – you’re the founder/product manager. That’s really cool to users. They want to talk to ***you***. When the Command E founders reached out to my sales reps, they thought it was the raddest thing ever - “The *founder* of Command E, this product I totally love, wants to talk to little old *me*?!”

#### **2. Not starting**

A variant of the above is having indications that sales involvement in your growth strategy would make sense, but kicking the can down the road because you’re afraid of it. **Selling is not magic, it’s not rocket science, and anyone can learn to do it**. Don’t psych yourself out that it’s a huge lift. Adding sales involvement to your commercial motion is no different than adding new features to your product – you can start with a minimum viable approach to experiment, and start iterating yourself towards success. But you do have to start.

#### **3. Going top-down**

There will likely be a point in the future when a “top-down” motion – where a salesperson starts engaging at the top of an organization with no existing user relationship with your product – will make sense to add your growth motion. Now is not that time. **Your current strength and asset is that you have a self-serve product that users love**. A top-down motion will mean interacting with decision-makers who are so far removed from the day to day work your product facilitates, they will have far less understanding of why it’s helpful and valuable. Moreover, they’ll likely have all sorts of conceived product requirements that don’t matter a lick to your users but will gate any sort of commercial progression, typically based on advanced features that incumbents have. Slack and Zoom currently have enterprise account executives talking “digital transformation” with CIOs of massive companies where not a single person uses the product. Now is not the time to do that for your offering.

#### **4. Not allocating product resources**

You might think that adding direct sales to a self-serve commercial motion is just about adding people to the mix. It turns out that what actually happens is you start adding incremental “users” to the mix too – they just aren’t end-users. These incremental user personas will have different needs than your existing users, and some of those needs will require new features to satisfy. **It will be important to allocate engineering resources to address these needs, otherwise, you may find that your direct sales efforts will be less successful**. Moreover, some of these features will be wholly unsexy - like Single Sign-On support, or security credentialing, like SOC 2 or ISO 27001, and more. But these features will end up being important, as their absence will block the sales-assisted use cases you’re seeking to unlock – whether that’s “account merge”, to allow the rolling up of a bunch of disparate self-serve users in an overarching company, or “conversion assist”, where your lack of security credentialing means that a large, prestigious, and commercially attractive account won’t start sending data to your offering.

#### ***5. Lenny likes lists of 5***

This is here because Lenny said I should always have either three things or five things in a list 😆

Once you have started and are on your way, you’ll eventually want to hand sales off to a dedicated resource. The hiring and management of dedicated salespeople to continue the beginnings of this “sales-assist” motion is beyond the scope of this article, but the chapters on [sales hiring](https://www.foundingsales.com/11-sales-hiring), [sales onboarding](https://www.foundingsales.com/12-onboarding-training), and [early sales management chapters](https://www.foundingsales.com/10-early-sales-management) of Founding Sales tackle these topics in-depth.

## In summary

**Layering a rigorous direct sales motion on top of an existing, successful self-serve commercial motion can hypercharge what is already a successful self-serve business.** Similarly, foregoing a direct sales motion can leave important parts of the competitive landscape open for other players to eat your lunch. Adding sales to your existing self-serve approach isn’t for every case - but if it is, it can be a huge advantage. The good news is doing so shouldn’t be mysterious, and the guidance above should get you started on your journey. If you want to get deeper into the nuts and bolts of selling, my book on [startup sales](https://www.foundingsales.com/), Founding Sales will be a great resource for you. Happy hunting!

[Leave a comment](https://www.lennyrachitsky.com/p/managing-up/comments)

## **🔥 Job opportunities**

1. **Product**: [Aavia](https://aavia.io/pages/aavia-head-of-product-career), [ClassDojo](https://boards.greenhouse.io/classdojo/jobs/2075731), [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Papa](https://www.linkedin.com/jobs/view/2220709965/), [Roofr](https://jobs.lever.co/Roofr/43f39100-5686-45ff-9cef-b04849e24f13), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/)
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8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

*Is there someone in your life who would benefit from this newsletter? Consider giving them a gift subscription* 💖

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Sincerely,
Lenny 👋

---

## [54/61] When NOT to run an experiment – Issue 54

> ## Q: Should I always run an experiment when I make a change to my product? If not, when should I not?

If you work at a large company, every change you make is likely run as an experiment – partly because you need to demonstrate your impact, and partly because even small changes can have large unintended consequences.

If you work at a small startup, nothing is run as an experiment because there just isn’t enough data.

So this question is really for people who work at companies in that in-between phase. Which happens to be most companies.

Let’s first talk about why experiments are valuable, the downside of running experiments, and finally when to NOT run an experiment.

### Why run an experiment at all?

It’s easy to take this for granted, but the fact that you can know the precise impact of your changes is…incredible. Who outside of the software space is able to tell if a change they made in language, color, or user experience is definitively helping or hurting their business? It’s amazing.

More broadly, the benefits of running your changes as an experiment are many:

1. **Learning**: Experiments help you learn about your users
2. **Deciding**: Experiments tell you if your change had the intended consequence
3. **Avoiding**: Experiments catch unintended consequences
4. **Quantifying**: Experiments precisely quantify the impact of your changes (and your team)
5. **Aligning**: Experiment settle subjective debates

### What are the downsides of running an experiment?

Experiments also certainly have downsides:

1. **Time**: Experiments take time to set up and run
2. **False confidence**: Experiments can create false confidence based on misinterpreted results
3. **Short-term thinking**: Experiments can push you to think short-term
4. **Narrow-thinking**: Experiments disincentivize taking bets that are hard to measure
5. **Bad product**: Experiments can introduce awkward user-experiences or legal risk

### When should you NOT run an experiment?

In spite of the downsides, I’m a big fan of experiments and generally default to running every change through an experiment. But, there are three cases where you should probably skip the experiment and just ship the change:

#### **1. It’ll take too long to get actionable results**

This is by far the main reason to skip running an experiment, and in my experience still far too underappreciated. Until you are at significant scale, experiments probably aren’t even worth thinking about. Particularly on features buried within your product.

Let’s take an example: Say you wanted to measure the conversion impact of a copy change on the last step of your sign-up flow, which is currently converting at 10%.

> **Question:** How many users would need to go through this step in order for you to notice a 5% change in conversion?

It turns out you’d need *over 60,000 unique users* (per variation!) before you could draw a confident conclusion. That’s 120,000 users going through the flow before you can move on. For most startups, that ends up being far too long.

You can run this math yourself using this excellent [sample size calculator from Optimizely](https://www.optimizely.com/sample-size-calculator/), or [this one from Evan Williams](https://www.evanmiller.org/ab-testing/sample-size.html).

![Image from When NOT to run an experiment – Issue 54](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/763227f6-e383-464e-b2a4-8ddad794414b_1678x1144.png)

Furthermore, if you are looking to see the impact on your brand, network effects, long-term retention, or anything else that takes months/years to notice, you also shouldn’t wait for an experiment to run its course before making a call. Consider just launching it and keeping a small holdout to measure the long-term impact.

One lever you *can* play with to reduce the experiment time is the level of confidence required in the final result. When you’re moving fast and are feel OK about shipping slightly negative experiments occasionally, lowering your confidence interval to something like 85% (h/t [Yair Livne](https://www.linkedin.com/in/yairlivne/) for the advice) isn’t a terrible idea. Then, as you scale up and the stakes increase, you can increase the confidence interval.

**Question to ask yourself**: How long do you expect your experiment to take before you have conclusive results? Is waiting that long for this change worth it?*

#### **2. The downside risk of the change is low (and the effort is high)**

The second most common reason to skip running an experiment is a low risk/reward ratio. Before running an experiment, answer these questions:

1. Is your change a best practice and already worked well for others? (e.g. moving buttons above the fold, fewer steps in a flow, making your pitch clearer, etc.)
2. Will you be able to detect significant negative impact in other ways? (e.g. before/after data, CX)
3. What’s the most negative impact you’ve ever seen from an experiment like this?
4. What will you concretely do with experiment results once you have them?
5. What’s been the typical time for your team to set-up and analyze experiments?

Now you need to make a decision:

> **What’s the bigger risk:** Making this change without an experiment, or taking your team’s time from higher-impact work?

If you can run experiments quickly and easily (e.g. a few hours), this decision is generally easy: run the experiment. If running experiments is a pain in the butt, and the changes are relatively benign, you can probably skip the experiment. If it’s somewhere in between, it’s a judgment call, but I personally default to running an experiment.

You may notice that the key variable in this formula is the time it takes to run and analyze experiments. The easier that process is, the more often you’ll end up running experiments, and the more you’ll learn. So if anything, spend time making that process easier.

**Question to ask yourself**: What if you skipped running an experiment or two and instead invested that time into a better experimentation framework?*

#### **3. You’re launching something completely new**

This bucket almost goes without saying, but to run an experiment you need a control to compare your change against. If you’re launching a brand new independent product, or pivoting the product, you likely have nothing to compare this new product against (other than it *not* existing). In this case, you’re better off just setting independent success criteria (e.g. a specific retention rate, or a new user signup threshold), vs. coming up with an awkward experiment. This is especially true if going back to the previous product is out of the question and your own path forward is through.

As your company grows, and your individual impact is judged based on quantifiable results from experiments, skipping experiments becomes tougher. That’s normal. Still, no matter what stage your company is at, I hope these examples give your team some direction the next time you face this question.

If you’ve found other good reasons to skip running an experiment, share your thoughts in the comments 👇

[Leave a comment](https://www.lennysnewsletter.com/p/not-running-an-experiment/comments)

## 🧠 Further study

1. [Please, please don’t A/B test that](https://medium.com/@talraviv/please-please-dont-a-b-test-that-980a9630e4fb) (written by our very own community member [Tal Raviv](https://www.linkedin.com/in/talsraviv/?originalSubdomain=il)!)
2. [The hypothesis prioritization canvas](https://jeffgothelf.com/blog/the-hypothesis-prioritization-canvas/)
3. [Optimizely's sample size calculator](https://www.optimizely.com/sample-size-calculator/)
4. [Evan’s sample side calulator](https://www.evanmiller.org/ab-testing/sample-size.html)
5. [Fostering a culture of experimentation](https://www.lennyrachitsky.com/p/fostering-a-culture-of-experimentation)
6. [A/B Testing — The Advanced Guide](https://www.julian.com/guide/growth/ab-testing)

See you next week!

## **🧠 Inspiration for the week ahead**

1. **Read**: [How to think for yourself](https://www.paulgraham.com/think.html), by Paul Graham
2. **Watch**: [Super Practical Guide to Color Theory, Color Models and Perfect Color Palettes](https://www.youtube.com/watch?v=GyVMoejbGFg)

[Watch on YouTube](https://www.youtube.com/watch?v=GyVMoejbGFg)

3. **Behold**: 🤯

## **🔥 Job opportunities**

1. **Product**: [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Instrumentl](https://angel.co/company/instrumentl/jobs/975735-head-of-growth), [Levels](https://levels.link/growth), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Cascade](https://www.cascade.io/jobs/analytical-product-designer), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

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Sincerely,

Lenny 👋

---

## [55/61] SEO keywords, career ladders, backlog tools, copywriting, OnlyFans, AMA with Pete Kazanjy and much more

*👋 Hello and welcome to this week’s edition of ✨ **Community Wisdom** ✨ — a weekly email highlighting the most helpful advice from our subscriber Slack community. As always, a b​i​g thank you to [Kiyani](https://www.linkedin.com/in/kiyanibamba?originalSubdomain=ca) for pulling this email together.*

#### 💥 Top threads this week

1. SEO keyword prioritization
2. Career ladders for PMs
3. Backlog tools
4. Tools for scheduling user interviews
5. Building an “idea-repository”

#### 🤓 Top reads and listens

1. Improving your copywriting
2. OnlyFans and the creator economy
3. Measuring SaaS Engagement

#### **🎤 AMA with** Pete Kazanjy (about sales)

1. Learning how to do sales
2. Managing lead flow
3. Sales as an introvert
4. Self-serve product experience
5. Frameworks for doing large enterprise sales

# **💥 Top threads this week**

### 1. SEO keyword prioritization

> **Q: We've started in SEO and it’s been one month now, but we are facing some friction on prioritizing keywords. Our keyword prioritization process currently looks like this:**
>
> 1. **Gathered thousands of keywords based on important keyword seeds to our business.**
> 2. **Populated these lists with data on search volume, search difficulty and CPC (as a proxy for high commercial intent).**
> 3. **Prioritize keywords.**
> 4. **Build content on those keywords.**
>
> **The problem is in step 3: which parameter (volume, CPC, difficulty) should we give more importance in T0 since we are justing starting (have a low domain score) and need to convert ASAP? Is there any way of quantitavely prioritize these keywords?**
>
> **– [Caique Carvalho](https://www.linkedin.com/in/caique-carvalho-b39295106/)**

**[Nima Gardideh](https://twitter.com/ngardideh)**: One tactic I've seen is using AdWords first and then looking at conversion rates to prioritize the keywords for SEO. i.e. if you have 50 keywords: pay for the clicks first and see which ones bring in high-quality customers. Then go build search optimized pages to capture the traffic without having to pay for it.

**[Chris Toy](https://twitter.com/christoy)**: Fix domain authority as the priority. The rest is a multiple on zero until you do. If you don’t fix domain auth, you can only target extremely niche or uncompetitive keywords.

**[Yair](https://www.linkedin.com/in/yairlivne/)**: One other comment is that framing SEO as something that can convert immediately is fundamentally off. It takes at least 6 months to start seeing payoffs, and the right mindset here is long term.

**[Jeff](https://twitter.com/jfedor)**: What are the best ways to increase Domain Authority?

**Katie Mitchell:** Quality backlinks and making sure your site runs fast, etc.

**[Yair](https://www.linkedin.com/in/yairlivne/)**: Also being strong in a domain of knowledge, not just a lot of mediocre content across domains.

**[Brian Ta](https://twitter.com/fanfavorite_bta)** : I’m going to run counter to everyone here:

- Domain authority isn’t a good use of your time to focus on. You’ll build it over time. Also worth noting that the number you see for domain authority is a made-up metric number that ahrefs or whatever tool you’re using calculated.
- Forget backlinks. I’ve worked with a number of sites, and I’ve never seen a positive correlation between backlinks and an increase in organic traffic *that can be attributed directly to backlinks*. Focus on your content.
- I’ve seen SEO pay off in a month. If it doesn’t pay off in 3 months, then it’s worth revisiting your strategy.
- I’ve always run keywords by the eye test. If the other content on the page looks bad and you can create something better, then go for it.
- If I was really pushed, I’d target for under 1000 first, once you prove it out, you can target the higher volume keywords.
- Generally, the lower volume/longer tail keywords will lead to high conversions because the user is further down the funnel. (“flower shop” versus “where to buy flowers in Burbank”)
- High-quality content is what’s going to make you win. Most other things are secondary.
- Make sure your site has its SEO foundations set.

**[Chris Toy](https://twitter.com/christoy)**: I think good content is table-stakes – bad content gets you nowhere. Domain authority isn’t and is often overlooked, which is why I think peeps are focused on it. If you want SEO to be your backbone with results early enough to affect an early-stage startup (as it sounded like this was) then domain authority is probably going to be your issue. If you’re a high-growth startup with traffic coming from other places then yes you can afford to wait.

I have seen grey/black hat backlinking attributed to SEO gains consistently over the last decade, was the original “hack”. But agree with the rest @Brian Ta!

**[Brian Ta](https://twitter.com/fanfavorite_bta)**: I’ve helped a number of startups go from 0 to 100k a month with low 20s in their domain authority. I’ll have to respectfully disagree with you on needing to focus on domain authority.  Domain authority is the result of creating good content, getting traffic, and accruing links over time. Domain authority is a magic number that some engineer or SEO dreamed up of. It’s not the number that Google sees your site on. Optimizing for DA is optimizing for this magic number.

What’s always worked is: good content and a good SEO strategy.On backlinks:
I haven’t seen any startup or company that’s invested in a backlink strategy that could be directly attributed to their growth in SEO. I’ve seen many attempt it, and none of them have worked. If someone wants to attempt to do black hat link building, it \_might\_ work until the time bomb ticks down and Google hands you down a manual penalty.

I have quite a few clients that go the link building route, after we get their site to an acceptable state. 4 months later, without fail, they come back and say it was a waste of time and they didn’t see any measurable uptick in traffic.

**[Chris Toy](https://twitter.com/christoy)**: @Brian Ta I think what we’re all saying is SEO is a lot of work and you have to do all of it. Good content to build DA over time is still DA, and you can’t just do DA with garbage content. It’s not a single variable thing.

**[Brian Ta](https://twitter.com/fanfavorite_bta)**: Closing the loop. I’m talking to Chris on DMs but wanted to surface part of the convo.

I'm going to push a little further on getting links. How many times have you done link building on an article and it hasn't worked? Would the content perform the same if you hadn't gotten links to it? I find that a lot of people will look at the number of backlinks a website has, see that they get a lot of traffic, and make the conclusion that backlinks help with more traffic. I’ve seen lots of websites where they’ve invested in tons of backlinks and gotten no return on it. The way that SEO case studies are broken down lends itself to survivorship bias. No one is breaking down how a no-name website didn’t achieve SEO. There aren’t companies bragging about how their SEO strategy didn’t pan out and that backlinks didn’t work. We usually see a company that has a lot of SEO success, and automatically assume that everything they did contributed to that success.

What makes teasing apart backlink impact difficult, is that most companies are working on both backlinks and other large SEO fixes at the same time. What’s to say the big impact isn’t from the normal SEO stuff that you did and the links haven’t had much, if any, impact? You could make the argument that it’s the other way around, SEO fixes did nothing and backlinks did all of the work, but I’ve run enough SEO experiments to know that basic fixes for sure have an outsized impact.

Anyway, those are my thoughts on backlinks and how they relate to SEO. It’s nice to have when you get it, don’t spend extra energy to build it out. You have a finite amount of time to spend on SEO, I’d much rather spend it on content creation than backlinks.

### 2. Care**er ladders for PMs**

> **Q: Anybody have any great examples of a career ladder/lattice for the various levels of product manager? e.g. Junior, Intermediate, Senior, Lead, etc. Shreyas’ mind map is a great start in defining the skill categories but I’m curious if there’s anything out there that outlines the expected level of competency in each category as you progress.**
>
> **– [Wayne Vernon](https://twitter.com/wplusv)**

**[Wayne Vernon](https://twitter.com/wplusv):** Mind map in question

![Image from SEO keywords, career ladders, backlog tools, copywriting, OnlyFans, AMA with](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0e4e3e49-4cd6-423f-bf26-6e0af1e41db2_1483x836.jpeg)

**[Ben Ritchie](https://www.linkedin.com/in/benritchie1/)**: I really like Ravi Mehta's product competency approach. He introduces his framework here but the full guide has a rubric for the skill level at each seniority: [What’s Your Shape? A Product Manager’s Guide to Growing Yourself and Your Team](https://www.ravi-mehta.com/product-manager-roles/)

**[Amit](https://www.linkedin.com/in/amitjklein/)**: I've used this in the past as a starting point for self-assessments for PMs:  [Product Manager Skills by Seniority Level — A Deep Breakdown](https://medium.com/agileinsider/product-manager-skills-by-seniority-level-a-deep-breakdown-cd0690f76d10)

**Lenny Rachitsky**: Here are a bunch I’ve found ([from this older post](https://www.lennyrachitsky.com/p/weekly-questions-motivating-engineers)):

1. [Intercom](https://blog.intercomassets.com/blog/wp-content/uploads/2019/05/Intercom-PM-job-ladder-Logo.pdf)
2. [Oscar](https://www.linkedin.com/pulse/deep-dive-product-management-leveling-oscar-sara-wajnberg/)
3. [Gusto](https://engineering.gusto.com/a-framework-to-help-product-managers-achieve-their-potential-2/)
4. [XO Group](https://medium.com/pminsider/product-manager-skills-by-seniority-level-a-deep-breakdown-cd0690f76d10)
5. [Gitlab](https://about.gitlab.com/handbook/product/#product-management-career-development-framework)

**[Archisman Das](https://twitter.com/archismandas)**: There is a great write up by Sachin Rekhi on this. You can find it here - [Product Management Career Ladders at 8 Top Technology Firms](https://www.sachinrekhi.com/product-management-career-ladders-at-8-top-technology-firms)**.**

I also did this exercise for my time a while back and you can find it here. Although, I'm planning to revisit it again and looking forward to inputs on this thread.

![Image from SEO keywords, career ladders, backlog tools, copywriting, OnlyFans, AMA with](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bf4fa8d3-fb2f-499e-a458-651f2d65b70e_1834x1156.png)

### 3. Backlog tools

> **Q: Who here has discovered a way of organizing their backlog that they’re pretty happy with? We're migrating ours to Asana, and starting fresh! Curious what kinds of mental models or frameworks folks here have found success with**
>
> **– [Kali Borkoski](https://www.linkedin.com/in/kali-borkoski-998082171/)**

**[Wayne Vernon](https://twitter.com/wplusv)**: At a super high level, my backlog goals are:

1. Development work only that is in a workable stage, i.e. can be picked up a ran with by a dev based on the information in the ticket
2. If it’s dev work but *not* ready to be worked on, consider setting up an Icebox so your team can ignore it but you don’t lose it
3. If it’s not dev work but an idea, feature request, etc. instead, it should live somewhere other than your backlog. Plus, schedule intentional time to groom your backlog.

I used to try to do this as part of other ceremonies but it never really worked out. Now I have 30 minutes every 2 weeks where myself, my leads, and QA sort the backlog by last activity and work through closing, updating, etc. as many tickets as possible. It’s infrequent and short enough to not be painful but enough to slowly chip away at all the noise.

**[Kali Borkoski](https://www.linkedin.com/in/kali-borkoski-998082171/)**: Thank you, @Wayne Vernon! What do you do with the tickets that fall in bucket #3?

**[Wayne Vernon](https://twitter.com/wplusv)**: I personally maintain my own list in a doc (Confluence for us) that I prioritize and add context to. There are definitely better ways to do this, e.g. most product management tools handle feature ideas and requests more natively. Really depends on your “customer” and how visible you need to make these things. For me, I’m not super worried about it so a doc works fine.

**[Yair](https://www.linkedin.com/in/yairlivne/)**: At Quora we use Asana for tracking backlogs. Each team has its own backlog "project" where tasks are tracked. Teams usually have some cadence where the PMs/eng managers might go through the backlog tasks, reprioritize / potentially delete some / potentially just crank a few out. This is particularly useful ahead of weeks where we focus on product/tech debt and there's time to plow through a bunch of these.

**[Kali Borkoski](https://www.linkedin.com/in/kali-borkoski-998082171/)**: @Yair, Thank you! What are the fields you've added to that Asana board? (Priority, effort, etc?)

**[Yair](https://www.linkedin.com/in/yairlivne/)**: This was team-by-team, but I do think almost everyone has priorities, as well as topical tags.

**[Karri Saarinen](https://twitter.com/karrisaarinen)**: We are makers of [Linear](https://linear.app/). Our framework is that you add all the new work to the backlog which means that’s only an idea but not committed work yet. Then you can have priorities or a few different categories like icebox, backlog, next that categorize generally how relevant this work is. Then for each cycle (sprint) we just select the work from the backlog to be worked on next.

Overall we don’t worry or groom the backlog too much, we just add stuff and then in the cycle planning select what is relevant to work on next. So backlog is the dump of all the possible work we could do, and cycles define what we actually do. With that thinking you don’t need spent time organizing everything perfectly in the backlog, especially because most of it doesn’t ever get done.

We also have a feature that autocloses issues after x months so the backlogs don’t get infinite. If an issue or bug doesn’t get done in 6mo, it likely never gets done and if it’s important, it will surface again.

**Gaurav Chandrashekar**: @Wayne, don't you have backlog grooming as part of the sprint ceremonies?

**[Wayne Vernon](https://twitter.com/wplusv)**: @Gaurav, we follow a fairly casual implementation of agile at our org that is closer to Kanban than anything. Some like to have the “backlog groom” and pre-planning for the next sprint(s) be one and the same. Some alternate these week to week. I’ve personally had better luck setting aside completely separate time where we do nothing but try to revise/expand/close/prioritize old tickets in the backlog.TLDR: I’m not an agile expert or advocate. I generally take a high-context approach where I do what I feel will get the best results from the team and product I’m working with at the time. And I’m fortunate to work in an org that supports this approach.

### 4. Tools for scheduling user interviews

> **Q: Who has a tool they like for scheduling/coordinating user interviews? We're looking at UserTesting but would love alternatives.**
>
> **– [Josh](https://twitter.com/herzigma)**

**[Manuel Bruschi](https://twitter.com/ttrauser)**: We use Calendly as a team with a round-robin assignment.

**Tanmayi Sai**: I use this **[Lookback](https://lookback.io/)** after switching over from User Interviews. It's also good for unmoderated tests**.**

**Scott Stenback**: Hi Josh - I know a founder who is building a new product around improving the scheduling experience. Let me know if you'd like a connection: <https://www.buildbetter.app/>

### 5. Building an **“idea-repository”**

> **Q: Does anyone have a cool template for an “idea-repository”? I’m rotating to a new team and after talking with the UX teams I’ll be working with, they mentioned sometimes the ideas they propose in the projects get lost. I’m looking for some template or dynamic to tease this out. Something simple and clean that would allow everyone to express their view. I’m extremely interested in the ideas that come from UX teams.**
>
> **–**[Franco](https://www.linkedin.com/in/frandangelo/)

**[Josh](https://twitter.com/herzigma)**: What tools do you use to capture ideas from other stakeholders, like user requests or executive requests? If you have a tool like that, then that's one good place.

If your only tool (i.e., a tool that gets used and worked actively and on a daily basis) is your backlog tool (like Jira) then I'd schedule a couple of hours for brainstorming and prioritizing meeting. The diverge/converge framework from design sprints is pretty good for this. And then just prioritize their feedback for the backlog.

Is this with the team you're rotating off or rotating on to? Either way might be nice to have the other PM (who you're replacing or who is replacing you) participate.

**Sebastian Leon**: Agreed with Josh, integrating idea-collection into an existing workflow is key!

Ultimately, you need a list that anyone can add to, with 2 items per idea: 1) quick description, 2) link to doc with more context (optional). This can be done in Jira, Google Spreadsheets, Notion, etc. Anytime someone brings up an idea, ask them to add it to the list.

For item 2), ask your team to fill out one of these templates ([link](https://www.lennyrachitsky.com/p/my-favorite-templates-issue-37)). It’s actually pretty nice when backlog items are developed and matured over time, so that once it makes sense to prioritize it, a lot of the product thinking & interesting decisions have already been done**.**

# **🤓 Top reads and listens**

### 1. Improving your copywriting

**[Henrique Cruz](http:/twitter.com/HenrM_Cruz)**:

- Book: [On Writing Well](https://www.amazon.com/dp/B0090RVGW0/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1), timeless advice about writing William Zinsser. [Short review of the book](https://www.betaglyph.com/on-writing-well/).
- Tips from Amazon:

![Image from SEO keywords, career ladders, backlog tools, copywriting, OnlyFans, AMA with](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ae068e3d-940f-4c37-8d4d-a32b2da86152_800x1034.jpeg)

**[Saushank](https://www.linkedin.com/in/saushank/)**: [Nobody wants to read your ebook](https://www.amazon.in/Nobody-Wants-Read-Your-Sh-ebook/dp/B01GZ1TJBI). Also, this course was quite good: [Copywriting For Beginners: How To Write Web Copy That Sells Without Being Cheesy](https://www.skillshare.com/classes/Copywriting-For-Beginners-How-To-Write-Web-Copy-That-Sells-Without-Being-Cheesy/627184083?via=user-profile).

**[Ben Ritchie](https://www.linkedin.com/in/benritchie1/)**: It's not a book but two things that might help:

1. First one is that the messaging is far more important than the exact wording so map out the benefits across multiple levels of abstraction and figure out the right level to speak to each audience with e.g.
   Analytics tool has better automation functionality -> You can finish all of your reporting faster -> You can spend more time on more strategic tasks.
2. The second thing is this podcast episode which is really good at exploring the different ways to add emotional hooks to the same offer: [Episode 33: The Ad Grid: How to Build Campaigns that Convert and Scale - DigitalMarketer](https://www.digitalmarketer.com/podcast/perpetual-traffic/the-ad-grid/)

### 2. OnlyFans and the creator economy

**[Jayme](https://twitter.com/jaymehoffman)**: Awesome thread on OnlyFans and creator economy from @Peter Yang

### 3. Measuring SaaS Engagement

**[Joe Magee](https://twitter.com/KJMagee)**: Great piece for Saas founders out there on how to think about “engagement” in a bottoms-up GTM: **[Measuring SaaS Engagement](https://sacks.substack.com/p/measuring-saas-engagement).**

# **🎤 AMA with** Pete Kazanjy (about sales)

### 1. **Learning how to do sales**

> **Q: Maybe not such a good question... Have you read Demand Side Sales? If so curious what you think. If not, it’s basically Jobs To Be Done product theory applied to sales. I’d like to understand how people (you) educate themselves around sales, because like product management, you can’t really “go to school for it”**
>
> **– [David Krell](https://www.linkedin.com/in/david-m-krell-508a3331/)**

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: I haven't read Demand Side sales, but sounds great! You're right that there isn't a "sales degree" per se, and that's in part what makes it challenging to learn later in your career, as most of the knowledge is learned via apprenticeship.

I learned a lot via First Round's Network, which was an early peer education community, which inspired me to create Modern Sales (<https://modernsaleshq.com/>) which is the sales operations and leadership community my company, Atrium, runs. 20k people. But peer education is key.

And then lastly ongoing learning of course is important. This is why I wrote Founding Sales - to reduce the learning curve: <https://www.foundingsales.com/>. Other great books are:

- Cracking the Sales Management Code
- The Transparency Sale
- The Challenger Sale
- To Sell Is Human
- Persuasion by Robert Cialdini

### 2. Managing lead flow

> **Q: What systems \ process have you seen best for managing lead flow? Lot’s of clients signup, some should have sale engage. What is the best systems for pushing the right leads over to Sales?**
>
> **– [Ali Javid](https://twitter.com/meetalijavid)**

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: Depends on the volume, but check out this chapter on "Inbound Marketing" from **[Chapter 6 - Early Inbound Marketing: Inbound Lead Capture & Response - Startup Inbound Basics — Founding Sales](https://www.foundingsales.com/6-inbound-marketing)**

The first step is to have a mechanism by which to capture signups and hand raising. Having a "Contact Sales" button on the home page, even if it's a bootie mailto: link is important, but the more sophisticated version is to have a lead form that flows into your CRM. For Self-Serve, we talked about this a LOT in the post I wrote for Lenny's newsletter, but getting signup data into a CRM in some capacity, usually via a syncing tool like Census (Segment => Redshift / Snowflake => Hubspot CRM / Salesforce etc.) is powerful. You want to get the leads into a place where a human can prioritize them/triage/act.

### 3. Sales as an introvert

> **Q: I’ve always felt like folks who are good at sales are extroverted… do you know of more introverted people doing well in sales also? If so, what helps them succeed and there are any “classic introvert” traits that are actually an advantage?**
>
> **– [Kara Skrip](https://www.linkedin.com/in/karaskrip/)**

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: Definitely. I talk about this some in this deck, starting at this slide:  [Founder Led Selling Maturity Stages - Founding Sales.](https://docs.google.com/presentation/d/1pcSy-zV-776abGmZ8WJ7bGeXcHQAxscdypGdrUz28_c/edit#slide=id.g168e5f5d53_0_14) In short, yeah, you can see why someone who's extroverted would take more naturally to a task that requires to talk to lots of people they don't know.

That said, the way I like to describe "modern salespeople" is as "consultants who happen to have a predisposition to one particular solution (theirs)".

So analysis, writing, math, logic, argumentation, etc. all really becomes key there. And being good at those things is way more important than just being "fun." But getting good at / comfortable with selling behaviors does indeed require work, and you just build those muscles over time through lots of repetition.

More here: [Chapter 1 - Mindset Changes: Startup Sales Mindset Changes — Founding Sales](https://www.foundingsales.com/1-mindset-changes)

**[Kara Skrip](https://www.linkedin.com/in/karaskrip/)**: Yeah I can see the "doing your homework" or prep portion of the job being really good for introverts

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: "Doing your homework" (pre-call planning, proposal creation, etc.) is where a huge amount of the work is done.

### 4. Self-serve product experience

> **Q: Hi Pete - in your post you talked about “is the product simple enough for self-serve?” - how do you differentiate between “not an easy product to use” versus a product that is just poorly designed? My gut is complexity of product does not necessarily = poor user experience. Can you talk a bit about this? Thank you in advance!**
>
> **– Anonymous**

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: This is really more of a product question, really, but I think that there's a linear relationship between the complexity of a problem being solved and the complexity of an associated solution. With great product and engineering effort you can of course abstract that away with elegance and simplicity, but the more complicated the problem, probably the more engineering and product effort to do so. So I think the point here is that you should be mindful of this, and be honest when looking at your activation metrics to see if you are indeed getting there with self-serve - and if not...maybe it needs more human earlier.

### 5. Frameworks for doing large enterprise sales

> **Q: Hi Pete - are there any frameworks / processes that you recommend for doing large enterprise sales i.e. complex, lots of stakeholders, very intensive but large ACV? For example, does value based selling really work where you try and break down the solution into granular cost saving or revenue generating items to discuss with prospects.**
>
> **– [Nawaz Imam](https://twitter.com/nazking15)**

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: @Nawaz, are you talking about top-down enterprise selling?

**[Nawaz Imam](https://twitter.com/nazking15)**: I'm guessing it could either be top down or bottom up depending on the type of organisation? Seems most likely to be top down though.

**[Pete Kazanjy](https://www.linkedin.com/in/kazanjy/)**: For those larger orgs, being crisper about deal modeling, using a methodology like MEDDIC, for example, can be helpful: [Close more deals with the MEDDIC sales process](https://www.lucidchart.com/blog/close-more-deals-with-meddic-sales-process#:~:text=MEDDIC%20is%20an%20acronym%20that,customer%20into%20your%20sales%20funnel).

That’s it for this week 👋

*If there’s anyone in your life who would benefit from this newsletter or community, consider giving them a​ ​g​i​f​t subscription*💞

Sincerely,

Kiyani and Lenny 👋

---

## [56/61] Generating buzz

*Below is a peek at this week’s 🔒 **subscriber-only** 🔒 post. [Subscribe](https://www.lennyrachitsky.com/subscribe?coupon=dac5b98c) to read the full post.*

> ## **Q: I’m planning to launch my product soon, and wondering how companies generate buzz when they launch?**

Here’s the hard truth: No one cares about your new product.

As Marc Andreessen said, “everyone’s time is already allocated.” With [hundreds of products](https://www.producthunt.com/) launching each day and endless ads clamoring for our attention, how do you get over the event horizon of attention? Easy: **DO SOMETHING REMARKABLE.**

> “Remarkable is a really cool word, because we think it just means neat, but it also means **worth making a remark about.**”
>
> ー Seth Godin

Your goal is to create *something worth remarking about*. Something people will stop and pay attention to, and *have* to share with their friends. Seth Godin explores this idea further (starting at 6:58):

[Watch on YouTube](https://www.youtube.com/watch?v=xBIVlM435Zg)

Great, be remarkable. Thanks, Lenny! How the hell do you do that? Well, I’ve got some answers. I spent the past few weeks collecting and categorizing the buzziest launches I could find. **Below, you’ll find the ten most common strategies for launching*****something worth remarking about*** (including 49 real-life examples).

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ff8bd15f-c93c-409b-9119-ab0e5c6c13f8_2400x1350.png)

I hope the examples below inspire you and your team to create something remarkable ✨

Let’s dive in.

## **1. Release a remarkable video**

1. **[Poo Pourii](https://www.youtube.com/watch?v=ZKLnhuzh9uY)**

[Watch on YouTube](https://www.youtube.com/watch?v=ZKLnhuzh9uY)

2. **[Descript](https://www.youtube.com/watch?v=Bl9wqNe5J8U)**

[Watch on YouTube](https://www.youtube.com/watch?v=Bl9wqNe5J8U)

3. **[Dollar Shave Club](https://www.youtube.com/watch?v=ZUG9qYTJMsI)**

[Watch on YouTube](https://www.youtube.com/watch?v=ZUG9qYTJMsI)

## **2. Create a remarkable product demo**

4. **[mmhmm](https://t.co/V3YVgj3kTB?amp=1)**

[Watch on YouTube](https://www.youtube.com/watch?v=c8KhKBLoSMk)

5. **[Dropbox](https://www.youtube.com/watch?v=7QmCUDHpNzE)**

[Watch on YouTube](https://www.youtube.com/watch?v=7QmCUDHpNzE)

6. **[Mailbox](https://www.theverge.com/2012/12/13/3759494/mailbox-for-iphone-email-app)**

[Watch on YouTube](https://www.youtube.com/watch?v=_Us1Ws4i14c)

## **3. Offer a remarkable value prop**

7. **[Robinhood](https://news.ycombinator.com/item?id=6906146)**: “$0 commission stock brokerage”
8. **[Dropbox](https://news.ycombinator.com/item?id=8863)**: “Throw away your USB drive”
9. **[Gmail](https://googlepress.blogspot.com/2004/04/google-gets-message-launches-gmail.html)**: “Free email with 1GB of storage”
10. **[Netflix](https://medium.com/better-marketing/how-netflix-destroyed-blockbuster-in-just-6-years-4c5c3006fe3e)**: “No Due Dates, No Late Fees”
11. **[Warby Parker](https://www.inc.com/magazine/201505/graham-winfrey/neil-blumenthal-icons-of-entrepreneurship.html)**: “Try on five pairs of frames at home for free before buying any”
12. **[Spotify](https://web.archive.org/web/20110614213044/https://www.spotify.com/int/)**: “All of the world’s music – for free”
13. **[Coin](https://gigaom.com/2013/11/14/meet-coin-a-startup-creating-a-universal-credit-card/)**: “Replace eight of your credit cards with just one”
14. **[Eero](https://web.archive.org/web/20150228021831/https://www.eero.com/)**: "Finally, WiFi that works”

## **4. Execute a remarkable offline stunt**

15. **[Half.com](https://www.wired.com/1999/12/welcome-to-half-com-oregon/)** renamed a town in Oregon to “Half.com” for a year

![What Ever Happened to Half.com, Oregon?: Design Observer](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7ef6fe5d-b50a-47a8-90bc-d789b1db973f_500x374.jpeg)

16. **[Salesforce](https://www.businessinsider.com/marc-benioff-salesforcecom-chief-has-pulled-some-crazy-stunts-2012-3)** hired fake protesters, commandeered all the taxis at a rival’s event and used them to deliver a 45-minute pitch, etc.

![Salesforce logo fake picket](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/df69759f-9f6c-44dc-8856-75cda0634596_400x298.jpeg)

17. **[WePay](https://techcrunch.com/2010/10/26/wepay-ice-paypal/amp/)** dropped 600 pounds of ice in front of PayPal’s conference

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/739f2353-ac89-429a-9617-d3f3ee15929e_629x841.png)

18. **[Snapchat](https://www.theverge.com/2016/11/10/13584488/snapchat-snap-inc-spectacles-vending-machine-snapbot-available)** dropped off strange vending machines at random locations in LA with a limited number of Spectacles

![Snapbot](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e74ad690-0795-499c-9896-7bd869d64218_700x381.png)

19. **[Tommee Tippee](https://www.adweek.com/creativity/baby-brand-tommee-tippee-made-baby-wipes-reams-actual-parenting-advice-166428/)** turned parenting help books into limited-edition baby wipes.

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/99772841-abd9-4ab0-9319-0133a9218755_1273x714.png)

## **5. Start a remarkable controversy**

20. **[Yo](https://www.businessinsider.com/everyone-is-going-crazy-over-yo-app-2014-6)**: An app that only lets you send “Yo” to your friends raises $1m
21. **[Quibi](https://www.theverge.com/2020/3/4/21165312/quibi-funding-investors-jeffrey-katzenberg-launch-date-price)**: Celebrity founders raise ~$2B for a pre-product video platform
22. **[Hey.com](https://twitter.com/dhh/status/1272968382329942017?lang=en)**: Public figure calling out Apple for their App Store fees
23. **[Stolen](https://techcrunch.com/2016/01/14/buzzy-social-app-stolen-shuts-down-amidst-concerns-from-users/)**: An app that lets you “buy” your friends on Twitter
24. **[Zillow](https://money.cnn.com/2006/02/08/real_estate/money_zillow/)**: Zestimates telling you the value of your home

## **6. Offer a remarkable giveaway**

25. **[Push for Pizza](https://observer.com/2015/10/a-pizza-lamborghini-is-giving-away-scholarships-at-these-70-colleges-this-fall/)**: One lucky winner at each school will win a pizza scholarship, AKA free pizza for an entire semester, delivered by a Lamborghizza.

![At Brown University (Photo: Push for Pizza)](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/07b8d1be-de15-48a2-aa21-9c1f66b7fe26_825x550.jpeg)

26. **[Fast](https://twitter.com/fast/status/1301220870183104514)**: $5 hoodies

![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8790fbb2-7bcd-4f44-a34b-60ad38932d8a_510x680.jpeg)

*Sadly, this is the end of the preview* 😭 *If you’d like to keep reading, consider becoming a subscriber 👇*

[Subscribe now, save $40](https://www.lennyrachitsky.com/subscribe?coupon=dac5b98c)

Otherwise, see you in a couple of weeks with an epic (publicly available) post!

---

## [57/61] Generating buzz

> ## Q: I’m planning to launch my product soon, and wondering how companies generate buzz when they launch?

Here’s the hard truth: No one cares about your new product.

As Marc Andreessen said, “everyone’s time is already allocated.” With [hundreds of products](https://www.producthunt.com/) launching each day and endless ads clamoring for our attention, how do you get over the event horizon of attention? Easy: **DO SOMETHING REMARKABLE.**

> “Remarkable is a really cool word, because we think it just means neat, but it also means **worth making a remark about.**”
>
> ー Seth Godin

Your goal is to create *something* *worth remarking about*. Something people will stop and pay attention to, and *have* to share with their friends. Seth Godin explores this idea further (starting at 6:58m):

[Watch on YouTube](https://www.youtube.com/watch?v=xBIVlM435Zg)

Great, be remarkable. Thanks, Lenny! How the hell do you do that? Well, I’ve got some answers. I spent the past few weeks collecting and categorizing the buzziest launches I could find. **Below, you’ll find the ten most common strategies for launching** ***something worth remarking about*** (including 49 real-life examples).

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ff8bd15f-c93c-409b-9119-ab0e5c6c13f8_2400x1350.png)

I hope the examples below inspire you and your team to create something remarkable ✨

Let’s dive in.

## **1. Release a remarkable video**

1. **[Poo Pourii](https://www.youtube.com/watch?v=ZKLnhuzh9uY)**

[Watch on YouTube](https://www.youtube.com/watch?v=ZKLnhuzh9uY)

2. **[Descript](https://www.youtube.com/watch?v=Bl9wqNe5J8U)**

[Watch on YouTube](https://www.youtube.com/watch?v=Bl9wqNe5J8U)

3. **[Dollar Shave Club](https://www.youtube.com/watch?v=ZUG9qYTJMsI)**

[Watch on YouTube](https://www.youtube.com/watch?v=ZUG9qYTJMsI)

## **2. Create a remarkable product demo**

4. **[mmhmm](https://t.co/V3YVgj3kTB?amp=1)**

[Watch on YouTube](https://www.youtube.com/watch?v=c8KhKBLoSMk)

5. **[Dropbox](https://www.youtube.com/watch?v=7QmCUDHpNzE)**

[Watch on YouTube](https://www.youtube.com/watch?v=7QmCUDHpNzE)

6. **[Mailbox](https://www.theverge.com/2012/12/13/3759494/mailbox-for-iphone-email-app)**

[Watch on YouTube](https://www.youtube.com/watch?v=_Us1Ws4i14c)

## **3. Offer a remarkable value prop**

7. **[Robinhood](https://news.ycombinator.com/item?id=6906146)**: “$0 commission stock brokerage”
8. **[Dropbox](https://news.ycombinator.com/item?id=8863)**: “Throw away your USB drive”
9. **[Gmail](https://googlepress.blogspot.com/2004/04/google-gets-message-launches-gmail.html)**: “Free email with 1GB of storage”
10. **[Netflix](https://medium.com/better-marketing/how-netflix-destroyed-blockbuster-in-just-6-years-4c5c3006fe3e)**: “No Due Dates, No Late Fees”
11. **[Warby Parker](https://www.inc.com/magazine/201505/graham-winfrey/neil-blumenthal-icons-of-entrepreneurship.html)**: “Try on five pairs of frames at home for free before buying any”
12. **[Spotify](https://web.archive.org/web/20110614213044/https://www.spotify.com/int/)**: “All of the world’s music – for free”
13. **[Coin](https://gigaom.com/2013/11/14/meet-coin-a-startup-creating-a-universal-credit-card/)**: “Replace eight of your credit cards with just one”
14. **[Eero](https://web.archive.org/web/20150228021831/https://www.eero.com/)**: "Finally, WiFi that works”

## **4. Execute a remarkable offline stunt**

15. **[Half.com](https://www.wired.com/1999/12/welcome-to-half-com-oregon/)** renamed a town in Oregon to “Half.com” for a year

![What Ever Happened to Half.com, Oregon?: Design Observer](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7ef6fe5d-b50a-47a8-90bc-d789b1db973f_500x374.jpeg)

16. **[Salesforce](https://www.businessinsider.com/marc-benioff-salesforcecom-chief-has-pulled-some-crazy-stunts-2012-3)** hired fake protesters, commandeered all the taxis at a rival’s event and used them to deliver a 45-minute pitch, etc.

![Salesforce logo fake picket](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/df69759f-9f6c-44dc-8856-75cda0634596_400x298.jpeg)

17. **[WePay](https://techcrunch.com/2010/10/26/wepay-ice-paypal/amp/)** dropped 600 pounds of ice in front of PayPal’s conference

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/739f2353-ac89-429a-9617-d3f3ee15929e_629x841.png)

18. **[Snapchat](https://www.theverge.com/2016/11/10/13584488/snapchat-snap-inc-spectacles-vending-machine-snapbot-available)** dropped off strange vending machines at random locations in LA with a limited number of Spectacles

![Snapbot](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e74ad690-0795-499c-9896-7bd869d64218_700x381.png)

19. **[Tommee Tippee](https://www.adweek.com/creativity/baby-brand-tommee-tippee-made-baby-wipes-reams-actual-parenting-advice-166428/)** turned parenting help books into limited-edition baby wipes.

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/99772841-abd9-4ab0-9319-0133a9218755_1273x714.png)

## **5. Start a remarkable controversy**

20. **[Yo](https://www.businessinsider.com/everyone-is-going-crazy-over-yo-app-2014-6)**: An app that only lets you send “Yo” to your friends raises $1m
21. **[Quibi](https://www.theverge.com/2020/3/4/21165312/quibi-funding-investors-jeffrey-katzenberg-launch-date-price)**: Celebrity founders raise ~$2B for a pre-product video platform
22. **[Hey.com](https://twitter.com/dhh/status/1272968382329942017?lang=en)**: Public figure calling out Apple for their App Store fees
23. **[Stolen](https://techcrunch.com/2016/01/14/buzzy-social-app-stolen-shuts-down-amidst-concerns-from-users/)**: An app that lets you “buy” your friends on Twitter
24. **[Zillow](https://money.cnn.com/2006/02/08/real_estate/money_zillow/)**: Zestimates telling you the value of your home

## **6. Offer a remarkable giveaway**

25. **[Push for Pizza](https://observer.com/2015/10/a-pizza-lamborghini-is-giving-away-scholarships-at-these-70-colleges-this-fall/)**: One lucky winner at each school will win a pizza scholarship, AKA free pizza for an entire semester, delivered by a Lamborghizza.

![At Brown University (Photo: Push for Pizza)](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/07b8d1be-de15-48a2-aa21-9c1f66b7fe26_825x550.jpeg)

26. **[Fast](https://twitter.com/fast/status/1301220870183104514)**: $5 hoodies

![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8790fbb2-7bcd-4f44-a34b-60ad38932d8a_510x680.jpeg)

27. **[Uniswap](https://cointelegraph.com/news/13-000-defi-users-have-already-claimed-uniswap-s-new-uni-token)**: Free token distribution.

## **7.** Include a r**emarkable viral mechanic**

28. **[Jet.com](https://www.bizjournals.com/newyork/blog/techflash/2015/01/jet-com-gets-a-big-following-with-equity-giveaway.html)** gave away 100,000 shares of stock options to the person who referred the most signups [*Led to acquiring 350,000 users ahead of launch*]
29. **[Dropbox](https://viral-loops.com/blog/dropbox-grew-3900-simple-referral-program/)** gave free storage for you and any friend you refer [*Contributed to growth from 100k to 4m users in 15 months*]
30. **[Harry’s](https://tim.blog/2014/07/21/harrys-prelaunchr-email/)** gave users had the opportunity to earn free products by sharing an invite with friends. The more friends who signed up using your unique referral link, the bigger the prize you earned. [*Led to capturing 100,000 emails in one week*]

![Image from Generating buzz](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b16c8b7a-a518-4410-a8c4-f3cf2c9b4998_1130x645.png)

31. **[Robinhood](https://viral-loops.com/blog/robinhood-referral-got-1-million-users/)** gave users priority access by referring their friends (along with a remarkable value prop, see above). [*Led to 1 million users before launch*]

![robinhood referral](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8d44f58b-3e3c-44a8-b6ec-6d61a5418314_521x572.jpeg)

32. **[Ritual](https://chicagoonthecheap.com/ritual-eats-week/#:~:text=In%20order%20to%20be%20eligible,New%20users%20are%20automatically%20eligible.)** gave you $1 lunch (max 4 items) for referring a friend. [“*At one point seemingly EVERYONE in the city was in a land grab to refer their friends.*”]

## **8.** Get a remarkable **hard-to-get product to be shared by influencers or press**

33. **[Hey.com](https://Hey.com)**: Promoted by [DHH](https://twitter.com/dhh) (~400k Twitter followers), while being invite-only [*Lead to 180k people waitlist*]
34. **[Superhuman](https://druriley.com/superhuman-marketing-playbook-9-strategies-19-examples/#0-scarcity-marketing):** Used by an increasing number of tech influencers (which you can see in email signatures), while being invite-only [*Led to 275k people waitlist*]
35. **[Clubhouse](https://twitter.com/blakeir/status/1257906709877702658)**: Mentioned by an increasing number of tech influencers (which you see on Twitter), while being invite-only
36. **[ThirdLove](https://people.com/style/thirdlove-extended-bra-launch-waitlist/):** Launched with press and influencer marketing [*Led to 1.3 million people waitlist*]
37. **[OnePlus One](https://thenextweb.com/market-intelligence/2015/03/17/how-oneplus-ones-marketing-made-it-the-most-desirable-phone-in-the-world/):** A cheap smartphone that you could only get by invitation [*Led to selling over 1.5 million units in 12 months*]
38. **[Mailbox](https://www.fastcompany.com/1671952/the-ux-thinking-behind-mailboxs-800000-person-waiting-list):** Known founder launches a slick new product, while having a visible waitlist [*Led to 800k people waitlist*]

![How the biggest consumer apps got their first 1,000 users - Issue 25](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f335e676-762c-4149-b547-a5917c070dde_635x300.jpeg)

## 9. Carry out a remarkable pre-launch tease

39. **[👁️👄👁️](https://twitter.com/itiseyemoutheye/status/1276729816469975040)** : It is what it is [*Led to 20,000 email signups and $200,000 for charity*]
40. **[Chobani](https://shanebarker.com/blog/product-launch-marketing-ideas/#14_Use_Visual_Countdowns_on_Social_Media):** Every day counted down (using different fruit to represent the number of days remaining) to a mysterious announcement — turned out to be new flavors

![Chobani Instagram profile product launch marketing ideas](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/072ac7c1-e31c-48fe-a188-04f2ab8e69b5_824x524.jpeg)

41. **[Segway](https://abcnews.go.com/GMA/story?id=126341&page=1)**: “After nearly a year of speculation, Dean Kamen's mysterious machine — IT — was revealed on ABCNEWS' Good Morning America.”

![Segway intro on Good Morning America Dec 3, 2001 - YouTube](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/daad5500-4d90-4382-ad46-478316dc45e9_640x480.jpeg)

## **10.** Be remarkably **everywhere**

42. **[Toucan](https://twitter.com/search?q=%40jointoucan+word+until%3A2020-08-18+since%3A2020-08-16&src=typed_query)**: The founders got their investors and friends to “claim” a word and Tweet about it. [*Led to 100% month of month growth*]

43. **[Venmo](https://neilshah.com/downloads/venmo-lucas-case-study.pdf)**: Mysterious “Lucas uses Venmo” posters all over the NYC subway system. [*Led to a 40% increase in daily signups*]

![Lucas Talks To Fast Company: Reviled Venmo Subway Ads Explained](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dd4b5099-68ee-4749-b225-76b1a1098bd7_596x387.jpeg)

44. **[Twitter (and Foursquare) at SXSW](https://techcrunch.com/2011/01/04/twitter-foursquare-sxsw/)**: They set up a tweet visualization screens and negotiated with the conference to put them in the main hallways in the Austin Convention Center.

![6 Startup Success Stories From SXSW](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d115b2b2-b755-4a7b-aa52-b94855a99802_500x375.jpeg)

## Notable mention: Remarkable ongoing drum-beat of buzz

45. **[MSCHF](https://mschf.xyz/)**
46. **[Levels](https://twitter.com/search?q=%40levels&src=typed_query)**
47. **[Stir](https://twitter.com/search?q=%40stir+drop&src=typed_query)**
48. **[Fast](https://twitter.com/search?q=%40domm&src=typed_query)**
49. **[Lambda School](https://twitter.com/search?q=%40austen+lambda&src=typed_query)**

Have other examples to share? Leave a comment👇

[Leave a comment](https://www.lennysnewsletter.com/p/creating-buzz-at-launch/comments)

See you next week!

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## **🔥 Job opportunities**

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2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Levels](https://levels.link/growth), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/)
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6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Afrikrea](https://weworkremotely.com/remote-jobs/afrikrea-senior-rails-developer), [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

*Have someone in your life who would benefit from this newsletter? Feel free to forward this to them, or better yet, give them a gift subscription* 💖

Sincerely,

Lenny 👋

---

## [58/61] Ideal sprint length, designer vs. PM roles, running PM team meetings, running post-mortems, best product/executive coaches, and much more

*👋 Hello and welcome to this week’s edition of ✨**Community Wisdom** ✨ — a weekly email highlighting the most helpful advice from our subscriber Slack community. As always, a b​i​g thank you to [Kiyani](https://www.linkedin.com/in/kiyanibamba?originalSubdomain=ca) for pulling this email together.*

#### 💥 Top threads this week

1. Ideal sprint lengths
2. Where a PM’s job ends and the product designer’s begins
3. Running a PM team meeting
4. Running a leadership team meetings
5. Running a post-mortem
6. Great product/executive coaches

#### 🤓 Top reads and listens

1. Setting up a sales team
2. Lessons for early-stage founders
3. Stripe: Platform of Platforms
4. On product discovery
5. Takeaways from *Are Your Lights On*?

Let’s dive in!

# 💥 Top threads this week

### 1. Ideal sprint lengths

> **Q: Hi all. I'm curious, what cadence do you use for sprints in a startup of 2-3 people? Does 2 weeks make sense or do you go for a shorter cycle?**
>
> **– Soumya Santhanakrishnan**

**[Wayne Vernon](https://twitter.com/wplusv)**: It depends! I’ve worked with 1 and 2-week iterations, though never at a 2-3 person scale, so take this with a grain of salt.

The big question is: What does a sprint mean to you?

Is this just for planning? Agile ceremonies? Are you releasing based on sprints?

My gut says that this ultimately won’t matter at your scale, since with a smaller team the overhead introduced by running shorter iterations is more or less negligible.

But ignoring your specific situation, I hear “one-week sprints” and think “more meetings to stay aligned”, and more meetings are usually bandaids rather than a proper solution.

My short answer is: I’d stick to two weeks because there are better ways to stay on track that doesn’t introduce more overhead.

**[Aadil Maan](https://twitter.com/aadilmaan)**: @Wayne Vernon literally read my mind. Love this stance. Moneyball.

I would go further and suggest that at this scale, perhaps you shouldn't worry about sprints at all. Just focus on continuously shipping features out when you feel like you have something. It sounds wrong but Teams don't realize that 2wk sprints aren't just 2wks of coding, there is a lot of planning and administrative work that needs to happen to get those sprints to sing.

At Google, I saw teams ship/sprints daily, 2wks, 6wk, quarter. Android is sometimes multiple quarters to a year.

**Soumya Santhanakrishnan**: That's super helpful, thank you! I'm leaning towards not even thinking in terms of sprints. At [www.souffle.club](https://www.souffle.club) we’re building a fun Q&A space for the most insightful takes on tech topics. So we end up launching questions every 3 days. Given that timeline, my co-founder and I have been talking about how we should just have a priority for a day and ship ASAP. and if it takes >=3 days then flag and talk about it.

**[Tyler Wince](https://productsolving.com)**: FWIW, we ditched Scrum in our 20 person engineering team (3-4 engineers per product team) and just do Kanban now. Everyone is more aligned, attends fewer meetings, and we have more flexibility than we ever did doing Scrum.

**[Josh](https://twitter.com/herzigma)**: We're also in the process of ditching formal 2-week sprints and moving to Kanban. Also about 20 engineers so keeping up regular rituals of prioritizing, grooming, standups and retros. Also very interested in trying 6-week sprints, mainly as a tool for more clearly involving engineering in discovery and design.

I rarely find 2-week sprints the right cadence.

**[Aadil Maan](https://twitter.com/aadilmaan)**: This thread is magical because engineering teams often equate being agile to 2wk sprints and hearing many of you are ditching it.

So, I actively participated in switching the Google Dart team from quarter shipping to 6wk shipping. There is something goldilocks about 6wks. The first 2wks can give engineers a green field to really dig deep and get dirty with the details, draw plans and then mad dash 4wks to the finish line. I advocate a modified sprint of 8wks. 6wks of engineering with 2wks of testing and converging the work done in the 6wks.

My experience has taught me that Any feature work more than 4wks in estimate needs more grooming.

**[Josh](https://twitter.com/herzigma)**: @Aadil Maan I'd love to hear more about 6-week sprints - fell in love with that unicorn after reading [Shape Up: Stop Running in Circles and Ship Work that Matters](https://basecamp.com/shapeup) and am still hoping to experience it in the wild.

**[Aadil Maan](https://twitter.com/aadilmaan)**: I have lived with 6wks and it’s the magical number. iOS and macOS are developed over 4 back to back sprints 8wks in size. 6wks of development with 2wks of convergence during which no feature work happens, it’s all testing and fixing the work we did in the 6wks. Dart moved away from quarter because it’s easy to drift while 6wks is enough to stay focused and do complex work.

I would love to chat more if you want and I really want to hear about your experience with 6wks. Basecamp, although it gets crap sometimes for their work stances, have some really awesome nuggets. I have read every book they have shipped and each is a fascinating read.

**Scott Stenback**: For those of you using Kanban, I was inspired by [Lean from the Trenches](https://www.oreilly.com/library/view/lean-from-the/9781941222935/) a few years ago and created the version below for one of my teams.

The On Deck column was populated with cards from the four columns directly to the left.  From there it was the standard left to right flow until Done.

We bent Jira to get it usable for remote but in reality, it was always meant to be on a wall with post-it notes and painter’s tape.

![Image from Ideal sprint length, designer vs. PM roles, running PM team meetings, running](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8c0153d7-1f06-4c64-9fe1-c63621636619_716x94.png)

**[Wayne Vernon](https://twitter.com/wplusv)**: Amazing conversation! I’m really happy to see more people moving away from what’s “normal” and to what works best for *their* situation.

Agile is a collection of tools in your toolbox, not a single hammer. Pick and choose the pieces you need to maximize the likelihood of success for your org, product, and team.

**Zachary Cohn**: At 2-3 people, I’d ditch more formal agile and use either an agile ban or a full-on kanban approach. This tends to work well for maximum throughput, which as a 2-3 person team should be your goal. (throughput being defined loosely - engineering, product validation, user research, etc).

Things move too fast at that stage to wait until the end of the sprint to change direction.

### 2. Where a PM’s job ends and the product designer’s begins

> **Q:  On your teams, where does a product manager’s job ‘end’ and where does the product designer ‘begin’?**
>
> **– [Tal Raviv](https://www.linkedin.com/in/talsraviv/)**

**[Josh](https://twitter.com/herzigma)**: I'm no longer allowed to use Figma.

More seriously, we work side by side, we're both heavily focused on discovering and designing just different focus areas. My observation is that if Product isn't butting heads with Product Design (and product marketing and even engineering) then something's not right. And in this case, the butting heads when you're in a group and see a piece of litter on the ground, and you all bend down to pick it up and bump heads...the leaning in kind.

**[Jeff](https://twitter.com/jfedor)**: I like to think of it as co-design. Product brings the context of the problem we're solving and why it matters. Together with Design and Eng, a range of solutions are explored. Eng provides options that are feasible (based on whatever constraints), Design owns the experience of that solution.

For me, Product owns customer discovery and I think it's powerful for Design to own product discovery. But wherever we can, we (Design, Eng, & Product) all ride shotgun on those sessions. Conversations and iterations get us to the solution.

But like @Josh I'm not in Figma to do anything other than comment.

**[Wayne Vernon](https://twitter.com/wplusv)**: Varies quite a bit with the experience, skillset, and interests of the product designer. As well as with the product and the type of design work it demands. And with the scale of your org.

On bigger products or products that are more technical (e.g. less hands-on design to be done), I’ve found senior product designers are often happy to spill over into user and market research, which is fine by me.

But like everybody else – I never touch design!

**[Archisman Das](https://twitter.com/archismandas)**: Jeff has articulated it really well. I think the job doesn't end, but the roles that PM and Design/Engineering play reverses depending upon the stage you are in. During the Customer Discovery, Design and Engineering play the role of the checker and it is the PM's responsibility to prove that it is the most important problem/opportunity that the team should pursue now. Once that's done, in Product Discovery stage Design and Engineering comes up with the solution and the PM evaluates if it is the best way to deliver value to their customers.

Now, this is an ideal scenario and the reality varies based upon the maturity and strength of the team members.

**Zachary Cohn**: I'm actively hiring a product designer right now with the express goal of kicking me out of Adobe XD. I think at one point in an informational interview I said “Please stop me.”

### 3. Running a PM team meeting

> **Q: I'd love to learn more about how other teams run PM meetings. We run a weekly PM meeting to increase transparency of efforts and information.**
>
> **Currently our format is this:**
>
> - **General announcements - General updates: Company direction, new company-level decisions, etc.**
> - **Follow ups from last MTG**
> - **Recent / Upcoming launches - Celebrate launches + raise awareness for implications to other parts of product**
> - **New efforts / Updates to existing efforts - New efforts or direction for visibility to other PMs. No need to list every single project - just ones beneficial for other PMs.**
> - **Helpful reads / info - Slack threads that provide context and info, or good reads for PMs**
> - **Other random things**
> - **Todos**
>
> **I'd love to hear about other agenda items that have been beneficial in increasing the output of PMs ;- ) Thanks!**
>
> **– [Tank](https://www.linkedin.com/in/takehiro-tank-mori-a3083487/)**

**[Alex Dou](https://www.linkedin.com/in/alexdou/)**: I have a manager friend who has instituted “BB Time” (BB in honor of Brené Brown). The purpose of this time is to be vulnerable and let down the mien/mask of “everything is going smoothly”.

Our PM team has a section carved out for “what feels hard [harder than it should be]?” The purpose of this section is to discuss sticking points up and down the stack: troubleshooting comms with Team X; doing a teardown of a PRD that has raised unexpected questions and gotten “stuck”; trying on versions of a Vision/Strategy.

I think the correct cadence is ~1/week, and even though these might come up in 1:1s (which hopefully you are doing weekly!) I think it’s worth having this crosstalk with other PMs.

**[Tank](https://www.linkedin.com/in/takehiro-tank-mori-a3083487/)**: Nice, thanks @Alex! How long are the meetings btw? I'm also curious to hear what the outcomes of those discussions are -- does it result in senior PMs mentoring more junior PMs or has it been more of a flat discussion?

**[Josh](https://twitter.com/herzigma)**: @Alex that's a great model. One (similar) thing I did was start by opening it up for anyone to speak. It gave me a chance to model open listening and we could all practice responding without judgment. It built great trust. @Michael Kellar - keep me honest - what worked well and what should we have done better.

**[Amit](https://www.linkedin.com/in/amitjklein/)**: Are you talking about a cross-functional PM meeting (many PMs?) or a weekly product team meeting led by PM (with eng/design/etc...)?

**[Tank](https://www.linkedin.com/in/takehiro-tank-mori-a3083487/)**: A cross-functional PM meeting with many PMs.

**[Amit](https://www.linkedin.com/in/amitjklein/)**: For business as usual meetings (no major changes upcoming). One way we've done this in the past is a monthly meeting where we:

- Review of top-level company goals and how we are doing against them
- Each PM goes around and shows their key KPI(s), experiments run/lessons learned/upcoming launches (5 min each)
- One PM is the guest speaker and presents a challenge they are facing or a key decision they need to make for feedback and we deep dive.

We had separate product review meetings (each PM had one weekly) with product leadership that was approval focused (and any PM could attend most usually did to listen in).

**[Michael Kellar](https://linkedin.com/in/michael-kellar)**: I think these are awesome opportunities both for cross-functional sharing, as you referenced, but also team building/trust. As @Josh said, one of the best things he accomplished for us, was building a team that really trusted one another, we had that mystical psychological safety and it was huge.

The biggest thing I took away was that making sure you take the time to encourage everyone in the room to participate (or sometimes just wait/let them come to the team), meant we all had a voice, and knew we had each other’s best interests in mind.

**[Tank](https://www.linkedin.com/in/takehiro-tank-mori-a3083487/)**: Nice, that's a great point actually. Our team hasn't really talked too much about establishing psychological safety, but I definitely feel that that is important for a product team.

(I think it's often a challenge since a lot of times product managers are siloed in their own domain).

**[Jonah](https://app.slack.com/team/U01GA3RA69F)**: PMing requires strong writing. We've allocated part of our weekly meeting to review a team member's product brief and provide immediate feedback. It has very quickly elevated everyone's clarity in their writing. A secondary benefit has been streamlining our team communications.

**[Alex Dou](https://www.linkedin.com/in/alexdou/)**: @Tank meetings were short. This “what’s hard” line item was budgeted with maybe ~5-10 minutes, with an option (as always) to spin off into a separate thread to avoid ballooning this meeting

I can also speak to some of the outcomes I perceived:

- Blockers are identified early and loudly - this was during our PM staff meetings, so it was a kind of [Chatham House Rules](https://en.wikipedia.org/wiki/Chatham_House_Rule#:~:text=Since%20its%20most%20recent%20refinement,other%20participant%2C%20may%20be%20revealed.) space where we could share hardships without worrying about negative reactions. As you might imagine, this helped us decrease wasted cycles, come up with better answers/approaches earlier, etc
- Stronger team self-worth/self-esteem - I oftentimes feel pressure to “know everything” (as an aside, one of the things I think is hard about PM is an implicit pressure/assumption to always “be the guy/gal” nb. this is a specific manifestation of the [Spotlight Effect](https://en.wikipedia.org/wiki/Spotlight_effect)). However, when you only see yourself struggling against something—as we all do in our lives—and everybody else dutifully “knowing everything”, you start to think that you’re the problem. This really helps fight against that
- Increased *espirit de corps* - this is closest to what you were talking about. It was a good opportunity for spontaneous brainstorming and mentorship (not just Srs mentoring Jrs, but also folks with [differently spikey radar charts](https://www.ravi-mehta.com/product-manager-roles/) mentoring others).

And @Josh, I love that. I think this is one of those tricky things where it has to be modeled by the team lead, otherwise, it’s *just* on this side of “too weird”. But it really helps Team Leads/Heads of/VPs by fostering that psychological safety that other folks have mentioned already. In the Rands manifesto, this is also an underutilized source of [Critically Fresh information](https://randsinrepose.com/archives/the-signal-network/)

@Michael Kellar, something you mentioned really piqued my side hobby interest in group psychology and its overlap with meeting facilitation. Do you remember the first time Josh brought this practice to the table? Do you remember your reaction?

**[Tank](https://www.linkedin.com/in/takehiro-tank-mori-a3083487/)**: These are all great resources, thanks @Alex Dou!

Do you remember the first time Josh brought this practice to the table? Do you remember your reaction?

**[Michael Kellar](https://linkedin.com/in/michael-kellar)**: I do not recall the first time, but I’d also say it was a practice that changed as the team grew. In the beginning we were very small, just a few people, so I think it was almost an entirely informal meeting, and then as we got bigger, it became a more intentional practice that we appreciated and made sure to maintain.

### 4. Running a leadership team meeting

> **Q: We are looking to run better Leadership Team meetings. Right now it feels more like a read-out/progress report rather than a strategic touchpoint. I am looking to get inspiration/advice:**
>
> - **What do you believe the purpose of a Leadership meeting is?**
> - **How often do you have them? And how long are they?**
> - **What is the agenda? How much is communicating plans vs. discussion on bigger problems? Is the meeting used to keep people accountable or do you have other avenues for that?**
> - **How do you set the agenda?**
> - **Who is represented?**
> - **Do you communicate minutes/decisions with the rest of the organization?**
>
> **– [Ben Kaye](https://www.linkedin.com/in/benkaye/)**

**[Aishwarya](https://www.linkedin.com/in/aishwaryab)**: We went through a bit of this in late 2019. As a leadership team, you want to typically have 2 “types” of meetings:

- **Tactical**: Mainly for quick decisions/progress on key events that have been decided, icebergs that may have been spotted. These are typically weekly.
- **Strategic**: These are again broken into 2 types based on how you run the business. In our case, we have a Monthly Strategic which focuses on pillars that are 1-2 quarter focussed. The other kind is more for Yearly planning activities - what does success look like for next year, what are priorities, headcount management, budget planning etc.

Once this was established, some of the questions you ask above - e.g. communicating plans vs discussions/debates fall into their own cadence. E.g. is it a pricing/packaging decision that will affect GTM motions - that’s more suited for a monthly, is it an a/b test on onboarding that. just launched - thats a quick tactical update.

**Brian Clare**: We follow the entrepreneurial operating system from the book Traction by Gino Wickman. Works well. Keeps tasks aligned and people accountable. Aligns to quarterly and annual goals (or rocks as they call it)

**Soumya Santhanakrishnan**: We did a thing where we took all the progress report stuff out. It's sent on slack every week in a document format and people can ask questions/comment in the doc. The time with leaders in a room is precious, so there'd be one person who's running the meeting who'd decide on 1-2 topics for us to discuss and unblock. Found it to be much more powerful.

**Rohit Gupta**: [Flows.co](https://flows.co/) helps you run well-managed meetings and stick to agendas and is currently on LTD -[Flows - Reinvent Your Meetings details](https://pitchground.com/products/flows)

**[Zainab Ghadiyali](https://zainabghadiyali.substack.com/)**: The number one goal for a leadership meeting is alignment. Everyone in that group needs to be in lockstep - it is very easy to get misaligned very quickly.

- Have them as often as needed to make decisions and align on strategy
- Always keep an agenda of the top 1-3 things you need to make decisions. Have more than 3? Schedule another meeting
- Everyone in the team gets to bring in a topic for decision
- Every function
- Yes! But filtered version. The company doesn’t have all the context so just sharing notes without context can be confusing for your employees

### 5. Running a post-mortem

> **Q: Can anyone recommend any articles or just advice in general on how to run a really great post-launch post-mortem for a product?**
>
> **– [Adam](https://www.linkedin.com/in/aorshan/)**

**[Tal Raviv](https://www.linkedin.com/in/talsraviv/)**: Great question!

The best sessions I’ve seen have given people ample time to think - that means either ask them a few days before to fill things out in a spreadsheet or silent time during the retro to do just that - I’ve seen both, probably depends on the magnitude of what you’re looking back on (a sprint vs. a major launch)

The other principles I’ve seen important have been psychological safety and withholding blame, and creating an atmosphere where talking about a mistake or failure is not seen as political or personal (a good measure is how defensive people get or open they are to talk about something).

This is hard. Would love to see what others have to say!

**[Wayne Vernon](https://twitter.com/wplusv)**: As @Tal Raviv suggested, I’d try to offload some of the thinking and brainstorming as homework.

I’ve had luck with doing a pre-meeting survey, distilling the responses down to 3 key themes, and then focusing the discussion on only those themes.

Trying to cover everything gets out of hand fast and you’ll end up talking about so much that it will be impossible to make any meaningful change.

**[Walter Budzian](https://linkedin.com/in/walterbudzian)**: I’ll piggyback on what Tal is saying about creating a blameless culture. A great piece to read on this is “The Blame Bias” chapter from a book called Primed to Perform.

To have a high-performing culture where people can do their best work it’s important to examine the root cause of failure in a *system* not failures in people. It’s not easy - we have a bias to hate the players instead of the game.

The authors illustrate this in a variety of social experiments. A big piece of the puzzle is that a leader's preconceived notions are going to impact outcomes. If, as a leader, you come to the table assuming you have a team that is making mistakes, the team actually performs worse. Conversely, when you have expectations that you have a high performing team with positive intent and you look to the systemic cause of issues, teams perform better.

So, in running those post-mortems, come to the table with high expectations of a team trying to do their best work and collaborate to look at what systems/processes can be improved.

Much more detail in that book, which is my number one recommended read for anyone in management or leadership positions.

**Rachel Horowitz**: Agree on all of the above! The other thing that I've found helpful is to circulate a doc with the key dates and events and milestones beforehand so everyone is on the same page about the who and what and can focus on the how and why without getting derailed where different people had different recollections of the facts

**[Nishi Patel](https://www.linkedin.com/in/nishipatel/)**: Agree as well on all of the above. We’ve created retro playbooks in the past to help drive the concept of it being blameless and to help foster a psychologically safe environment. I don’t have the playbook on hand, but here’s one that we based it off of: [How to Run an Agile Retrospective Meeting with Examples](https://www.atlassian.com/team-playbook/plays/retrospective). We also used [stickies.io](https://stickies.io/) for remote retros and it worked great.

**[Adam](https://www.linkedin.com/in/aorshan/)**: Thanks so much, everyone! A few of you mentioned circulating materials beforehand. Are there any particular questions or jump-off points you’ve found to be particularly effective when included in the pre-meeting email?

**[Tal Raviv](https://www.linkedin.com/in/talsraviv/)**: One tiny tactical thing that helps me is to say the quote “A bad system will beat a good person every time” (attributed to Edward Deming) and emphasize we’re here to fix the system.

### 6. Great product/executive coaches

> **Q: Has anyone here worked with a great product/executive coach that they’d recommend to work with a VP of Product at a startup?**
>
> **– Anonymous**

**[Adam Waxman](https://twitter.com/ajwaxman)**: I’ve had a great experience with Donna Lichaw: [Donna Lichaw — Leadership and Executive Coaching](https://www.donnalichaw.com/)

**Jacob Sussman**: I have a call with [Leah Feuer](https://www.leahfeuer.com/) next week - she previously worked as a head of product / product advisor before focusing on coaching.

**Julia Lipton**: As promised, [here's the list](https://airtable.com/shrJgawZtGQBv7Xb1/tblKZKSYaUcbbY7UP). Feedback welcome! For context, this list is shared with VCs, founders, and friends. Feel free to share it publicly! Also "feature requests" welcome!

You can also [nominate a coach](https://airtable.com/shr1HSVTdFDonR75g). It should take less than 1 min. The fields are optional, the only info I really need are their skills, your vouch, and your email. The rest I can pull.

# 🤓 Top reads and listens

### 1. Setting up a sales team

**[Josh](https://twitter.com/herzigma)**: Another great one from David Sacks: **[Simple Math to Set Up a Sales Team](https://sacks.substack.com/p/simple-math-to-set-up-a-sales-team)**.

### 2. Lessons for early-stage founders

**[Tal Raviv](https://www.linkedin.com/in/talsraviv/)**: Founder of Segment on simple lessons - I feel these apply to product teams just as much as a startup [Lessons for early stage founders](https://calv.info/early-stage-lessons)

### 3. Stripe: Platform of Platforms

**[Yaakov Cohney](https://twitter.com/YaakovCohney)**: Every Stripe product announcement is incredible on its own, but today's Stripe Capital launch is one that I am sure will lead to many more 'How Can I Invest in Stripe" requests. Anyway, the associated Stratechery is like the perfect wine pairing and one of the best ones I have ever read: [Stripe: Platform of Platforms – Stratechery by Ben Thompson](https://stratechery.com/2020/stripe-platform-of-platforms/).

### 4. On product discovery

**[Jeff](https://twitter.com/jfedor)**: Simple approach to how and why product discovery is a critical Product Org skillset [A 4-step guide for day-to-day product discovery](https://sophiahoefling.medium.com/a-4-step-guide-for-day-to-day-product-discovery-3dc7e0b9cfb)

### 5. Takeaways from *Are Your Lights On*?

**[Wayne Vernon](https://twitter.com/wplusv)**: Wrote a [Twitter thread](https://twitter.com/wplusv/status/1334270158412673026?s=21) with my takeaways from *Are Your Lights On?,* inspired by @Shreyas Doshi. Until I saw @Lenny Rachitsky’s and @Shreyas Doshi’s threads, I had never appreciated the potential of Twitter as a publishing platform.

I’m mostly sharing so I can say: **Wow, this is harder than it looks!**

If you *haven’t* tried writing a Twitter thread, I highly recommend you give it a shot. It might seem silly at first but the inherent constraints of the medium force you to edit, optimize, and proofread every word (or character!). It’s a great way to not only challenge your writing skills, but to organize your thoughts.

Tiago Forte’s [progressive summarization](https://fortelabs.co/blog/progressive-summarization-a-practical-technique-for-designing-discoverable-notes/) technique is a great tool for capturing, filtering, and writing about what you read.

That’s it for this week 👋

*If there’s anyone in your life who would benefit from this newsletter or community, consider giving them a​ ​g​i​f​t subscription*💞

Sincerely,

Kiyani and Lenny 👋

---

## [59/61] How to run SEO experiments

> ## **Q: How do I run experiments with SEO?**

Experimentation and SEO have been a hot topic with readers lately, so let’s spend one more week on it. If you look [into how companies grow](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/), SEO is the primary growth engine for a large percentage of today’s biggest and fastest-growing companies (e.g. Pinterest, Thumbtack, Expedia, Wayfair, Canva, Glassdoor, etc):

![Image from How to run SEO experiments](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/47014f97-f468-4f85-907a-03c0160a3a78_1003x572.png)

And it makes sense — SEO is one of the few remaining “free” growth channels, and still somewhat mysterious. If you can make it work, it’s a superpower.

Unfortunately, relying on SEO has a major downside: it’s challenging to run experiments. How does one A/B test the impact of your changes on Google’s crawling of your site? Tough.

But good news! Returning guest author [Brian Ta](https://twitter.com/fanfavorite_bta) generously offered to tackle this question for us this week. Brian led SEO efforts at five different companies, including Airbnb, Strava, and now AngelList, and [his previous post about Winning at SEO](https://www.lennyrachitsky.com/p/crafting-an-seo-strategy-issue-34) was one of my most popular posts. As always with these guest posts, I learned a ton from Brian and I’m excited to share this knowledge-bomb with you.

Below, Brian teaches us about:

1. **Setting up** an SEO experimentation framework
2. **Knowing** what to measure with SEO experiments
3. **Running** an SEO experiment
4. **Limitations** with SEO experiments
5. **A walk-through of a real-life** SEO experiment
6. **His most impactful** SEO experiments
7. **Recommended reading** for further study

Let’s dive in!

## Running SEO Experiments

*by Brian Ta*

![Image from How to run SEO experiments](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b0f2d437-89d3-44c7-bd04-e6e7d2ea224b_2400x1350.png)

I get asked about SEO experimentation **a lot.** It’s probably the second-most asked question I get right after “how do I rank number 1 for my company name?” Surprisingly, there aren’t many resources that actually explain how to run experiments with SEO. In this post, I’m going to share how I’ve run SEO experiments at Airbnb, AngelList, and Strava.

First, I’ll make a couple of assumptions about your business:

1. **You’re familiar with SEO:** I’ll be talking about how to set up your experiments, and so assume some foundational knowledge of SEO.
2. **Organic traffic is already one of the main drivers of your business:** SEO experimentation is not intended to help you learn whether you *should* pursue SEO.
3. **You have thousands of pages:** This advice will be targeted at companies that are already doing SEO at scale, and have thousands of programmatically generated pages. This is not meant to help you experiment on your blog posts. You could*,* but I’ve never used this approach for that.

### **1. How do I set up an SEO experimentation framework?**

SEO experiments are fundamentally different from typical A/B experiments. The majority of experiments at most tech companies are tested on the user-level – control and treatment groups are bucketed at the *user*. For example, if you’re running an experiment that changes the color of the purchase button from green to blue, a user will always get a consistent experience of either a green or blue button each time they visit the site.

When you’re running an SEO experiment **you’re testing on the page level**. Thus, you need to have an experimentation system that can do your bucketing on the page level. Why is that? Because every time Google visits the site, it’ll count as a different user and get re-assigned to treatment or control. So if you're running an experiment that adds a piece of content on the page, Google may get a different experience every single time it crawls the page, and won’t be able to get a good read on your site. As a result, you won’t know what effect your change has on Google. The only user that you’re designing for is Google, so it’s essential that you give Google a consistent experience when it crawls your site.

### **2. Do I have to build an experimentation framework myself?**

I’d highly recommend doing so. Why?

1. As far as I’m aware, **bucketing by the page-level isn’t possible** on any of the major experimentation platforms, such as Optimizely. So you can’t really hack this together with existing solutions.
2. I’ve asked around my SEO network, and **there were very few people who run SEO experiments**, and those who do, all roll out their own frameworks. There was no one in my network that had any experience with a 3rd party out-of-the-box SEO experimentation framework.

I’ll go over how to build it yourself, plus I’ve linked to a couple of blogs at the end of the post that go into more detail. It’s worth noting that building out an SEO experimentation framework isn’t a trivial task and that in 95% of cases, I recommend most startups avoid doing so. I go over this later on in this post.

### **3. What kind of SEO experiments can I run?**

Anything your heart desires, as long as it’s an *on-page* change and the effects are limited to only one page. If you want to test your title tags, meta descriptions, or image alt tags – run wild. However, if you want to measure the effectiveness of internal linking, that’s an entirely different beast.

It’s different because your framework will be measuring *changes to individual pages* in the treatment group, and not the pages being linked to. The pages in treatment (the ones that include the new links) will not get more traffic because the new links are there — other pages outside the experiment will.

How do you measure the effects of internal linking? Our solution at Airbnb was to get the best data scientist in the entire company to do a manual analysis for us. We could have built something to do this, but it was pretty expensive (engineering-wise) for us to do, and has limited uses.

tl;dr this is likely not something you’ll build for a while, so start with on-page testing.

### **4. What should I measure with SEO experiments?**

Organic traffic. Nothing else.

You’ll likely want to measure other things experimentally, but unfortunately, it will not work:

- **Keyword rankings**: Rankings change daily. You also don’t have visibility into all of the keywords that you’re ranking for. In addition, rankings also change based on your location. Whatever tool you’re using to get your ranking for a keyword isn’t going to be accurate enough for you to conclude your experiment.
- **Average ranking**: I assume you’re getting this from Google Search Console. That data is heavily sampled, and not something that I’d even consider to determine the success of an experiment. You also have the added complication of this number being heavily skewed the more pages that you have. More pages equate to more potential (low-quality) keywords that you can rank for (probably terribly). That’s just the nature of the beast. You don’t have control over the exact keywords that you’re driving.
- **Search Engine Result Page Clicks**: I assume that you’re also getting this data from Google Search Console. This data is *heavily* sampled, and while it’s useful for directionality, it is not data that you can base the success of an experiment on.
- **Conversions**: Why? You’re testing SEO changes, not user experience changes. You shouldset this up as a counter metric to make sure you’re not tanking your conversion rate, but this is not a success criteria.

![Image from How to run SEO experiments](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d4472d90-d162-4758-a8a9-8c64f3ec8d8a_930x634.png)

Your single source of truth is incoming organic traffic. Anything else is unreliable. **If more people are coming into your site through organic traffic, then your experiment was a success.** All of the other metrics mentioned above (except for conversions) lead to increased organic traffic anyway, so why wouldn’t you just focus on organic traffic?

### **5. How do I run an SEO experiment?**

Disclaimer: This is a way to get you pointed in generally the right direction and will probably work best for smaller startups. If you have an analyst or a data scientist, I'd encourage you to work with them to figure out what’ll work best in your specific situation. At the end of this post, I’ve also included a few additional reads that go even deeper.

#### 1. You’ll first need the ability to do a couple of things

- **The ability to bucket your treatment and control on the page level:** You can bucket treatment/control by taking a hash of the canonical URL, or if your site is small enough manually bucketing it yourself by picking the URLs you want in control/treatment. As far as I’m aware, there are no out-of-the-box solutions that will allow you to do this. You will need to build this out yourself.
- **The ability to track incoming organic traffic to your website**: This is more than just looking at Google Analytics. You’ll need this data to be as accurate as possible since this will be what you look at to measure the success of the experiment. At Airbnb and Strava, we had a visitors table that logged every incoming visit and what their referral was. This was the data used to determine the success of SEO experiments. **Platforms like Google Analytics are sampled, and will not be an effective method of tracking organic visitors.**

#### 2. Second, design and roll out your experiment to the pages in the treatment group

- Bucket treatment/control pages
- Run one experiment at a time (unless you have tons of traffic)
- Roll out your experiment to your entire website. Do not roll out the experiment only for mobile web or desktop. While Google primarily crawls the web with their mobile crawler, you’ll want a consistent experience for all versions of Googlebot. This assures that any possible version of Googlebot that crawls your page sees the experiment and makes the necessary adjustments.

#### 3. Let the experiment run for 2-4 weeks

- You’ll want to let the experiment run for a while so that Google can discover the changes, and make the necessary adjustments
- SEO experiments take more time than A/B tests to show impact

#### 4. Run an analysis on the expected difference in organic traffic

- Compare the expected change in traffic if you hadn’t run the experiment against the difference that you see now that you’ve made the change
- Since you bucketed your control and treatment randomly, you could end up with one bucket receiving more traffic than the other (e.g. in Airbnb’s case, one bucket might have more large cities than the other). By measuring the difference in difference, you’re accounting for the imbalance in traffic and measuring the impact independent of the raw traffic count.
- Remember to pull out bot traffic from your data source. You can do this by excluding traffic with user agents of well-known bots (e.g. Googlebot, Bingbot, Duckduckgo, etc).

#### 5. You can conclude the experiment after it has run for more than two weeks and the results are statistically significant.

![Image from How to run SEO experiments](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/16435111-5378-4c97-9501-fd66d0bf5ff0_1358x758.png)

### **6. Let’s design and run an SEO experiment!**

For this exercise, let’s pretend that we’re a Growth Product Manager at Figma on the Community team, and we want to grow the organic traffic coming into the [Community pages](https://www.figma.com/community).

![Image from How to run SEO experiments](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d1144248-21ca-4a18-981d-ac8f34cc59eb_1017x727.png)

From looking at their [Community File page](https://www.figma.com/community/file/858143367356468985), I can see that they constructed their title tags with the following structure:

> {name of file | description of file that gets truncated}

This isn’t a bad way to be constructing it, but maybe we could do something better.

*Note: There are quite a few things wrong with their pages on the SEO-side, but we’ll pretend they aren’t there for the sake of this example.*

#### **1. Design the experiment**

**Current title tag:** `{name of file | description of file that gets truncated with HTML(?!)}`

> *<title>Figma - iOS & iPadOS 14 UI Kit for Figma | <p>Excited to share the latest iOS &amp; iPadOS 14 UI Kit for Figma!</p><p><br></p><p>---</p><p><...</title>*

**Desired title tag:** `{name of file | tags}`

> *<title>Figma - iOS & iPadOS 14 UI Kit for Figma | 14, alert, apple, dark, emoji, ios, iphone, kit, light</title>*

**Reasoning**: The way that Figma constructs title tags is actually a bit funny. Since the title tag is truncated, there's a good chance you cut off keywords and content before they even appear there. The current implementation isn't bad, but since files do have tags associated with them, using the tags is probably a better solution. What is bad about the title tags is that some of them have HTML injected into them.

#### 2. Roll out your experiment to the pages in the treatment group

We’ll do a straight A/B test with 50/50 treatment versus control to ALL Community File pages.

#### 3. Wait patiently

Title tag experiments are usually pretty impactful. I’d probably wait two weeks before running an analysis.

#### 4. Run your analysis

We’ll look at the expected difference in traffic if you hadn’t run the experiment (control group) and compare it against the difference that you see now that you’ve made the change (treatment). I’ll work with a data scientist to make sure that we’re pulling data from our visitors table.

#### 5. Launch

If results are positive and are statistically significant, I’d launch to 100%. If it’s neutral, or inconclusive after a month, you can use your own judgment on whether or not you want to launch it.

#### 6. Iterate

Document your learnings, and start thinking about other experiments you can do.

Would it make a difference if we only added the most popular tags to the title tag? What about if we put both the tags and description in there?

### **7. What are the limitations of SEO experiments?**

Two things: The amount of traffic you have, and the number of pages you have.

- **Traffic:** If you don’t have a consistently high amount of traffic to your website, running SEO experiments will be quite tough. You’ll have a hard time trying to figure out what’s working, and what’s spiky traffic. As a general rule, **you’ll want at least 5,000 organic visitors a day** to the page type that you want to run the experiment on.
- **Number of pages:** The number of pages that you have will limit the number of experiments you could run at a time. At Airbnb, we were able to run *maybe* 5 experiments at a time, while at Strava, we were limited to only one at a time.

It’s important to note that you’ll need to be careful about the types of pages you test on and the amount of traffic they get. We ran an SEO test at Strava on our user-profiles and had to dump out a bunch of bad data because we had profile pages that got marginally more traffic, which ended up skewing traffic numbers.

### **8. Should I build an experimentation framework?**

This is the million-dollar question. My recommendation to 95% of startups is that it’s not worth your time to create. These experimentation frameworks are generally useful in two scenarios:

1. When you’re actually in the optimization part of your SEO strategy. Most companies/websites aren’t even close to this part yet. The large majority of companies are still in the “build” phase of their strategy.
2. If leadership wants to account for every single feature you build/implement and the success of your team is tied to being able to incrementally prove out these changes/wins.

Most of the startups I talk to are just starting to spin up their SEO strategy. They don’t know what type of pages they’re going to create, they don’t know if their current pages are built correctly, they lack internal linking, they don’t have half-decent title tags….the list goes on. Experimentation frameworks are meant to be used for you to learn and optimize, and if your SEO product isn’t in a space to optimize, you’re just slowing yourself down. Don’t waste precious time trying to validate foundational SEO features.

Once you know that SEO is a core part of your strategy, and you have a set of pages that are performing really well, then you can put in time and effort to create an experimentation framework and try to perfect your pages.

### **9. What were the most impactful SEO experiments I’ve run?**

**In aggregate, title tag experiments led to a 15-20% increase in traffic at Airbnb**. Being able to continuously run title tag experiments is one of the top reasons to invest in creating an SEO framework. A minor title tag change resulted in the most impactful SEO experiment ever run at Airbnb.

Here are some tips and things to keep in mind when trying to come up with title tag experiments:

1. Can you leverage structured content to provide more consistent title tags?
2. How do you provide more context to Google?
3. What information are people looking for when they’re searching for your high-performance keywords?
4. People really like clicking on numbers

In the Figma example above, we ran a title tag experiment that provides more context to Google about what the page is, and uses high-quality structured content to do so.

**Content always drives more traffic.** There’s a good reason why SEO landing pages always have a ton of content and text on them, that’s because there’s a very strong correlation between the amount of unique, high-quality content on your page, and the amount of incoming organic traffic. Every time we added more content to our Airbnb landing pages, it always led to more incoming traffic. The most impactful *single* experiment we ever ran at Strava increased the amount of traffic to our pages by 20%, and the only thing that we did was add more routes to our “Where to run in {city} pages.”

Things to keep in mind when you’re experimenting with content:

- How do I leverage existing content that I already have, and repackage it to be useful on my landing page?
- Can I remove low-quality pieces of content on your page, and replace them with something that’s of higher quality. For example, remove low word count reviews from your page, and replace them with keyword-dense, lengthy, high-quality reviews

**In aggregate, meta description experimentation led to a 6% increase in traffic at Airbnb.** While meta descriptions don’t have a direct impact on your ranking, it does have an effect on your CTR on the search engine result pages. Being able to optimize and tweak your meta descriptions to make it more attractive to click on, will lead to a higher CTR, which leads to more traffic, which leads to higher rankings.

### 🧠 **Further study**

1. [Jeff Chang’s Growth Blog](https://www.growthengblog.com/blog/2018/4/15/scaling-new-growth-opportunities-series-seo-basics): Jeff is one of the original growth engineers at Pinterest and was the Growth Tech Lead there. Airbnb’s experimentation framework is heavily borrowed from Pinterest. This is an extremely simple version of an SEO experimentation framework and may be your best option to roll something out quickly.
2. [Airbnb SEO Data Scientist Blog](https://medium.com/airbnb-engineering/experimentation-measurement-for-search-engine-optimization-b64136629760): This is written by our data scientist on the SEO team, Brian de Luna, who was absolutely amazing.
3. [Pinterest Engineering Blog](https://medium.com/pinterest-engineering/demystifying-seo-with-experiments-a183b325cf4c): An original blog post from Pinterest about their SEO experimentation framework. Airbnb’s experimentation framework is heavily borrowed from this, with our data scientists and engineers walking over to the Pinterest office for knowledge sharing.

*You can follow Brian on [Twitter](https://twitter.com/fanfavorite_bta) and [LinkedIn](https://www.linkedin.com/in/brianta626/).*

That’s it for this week! Have anything to add? Leave a comment 👇

[Leave a comment](https://www.lennyrachitsky.com/p/managing-up/comments)

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5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

## **🧠 Inspiration for the week ahead**

1. **Listen**: [Does Advertising Actually Work?](https://freakonomics.com/podcast/advertising-part-1/), by Freakonomics podcast
2. **Read**: [The Unusual Signs of a Billion Dollar Company](https://www.nfx.com/post/unusual-signs-billion-dollar-companies/), by Elad Gil
3. **Learn**: How to give product feedback

#### **How would you rate this week's newsletter? 🤔**

[Great](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4Hp2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1) • [Good](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4vX2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1) • [Meh](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4kr2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1)

*Have someone in your life who would benefit from this newsletter? Feel free to forward this to them, or better yet, give them a gift subscription* 💖

Sincerely,

Lenny 👋

---

## [60/61] A comprehensive survey of Product Management

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan) and welcome to a ✨ **once-a-month-free-edition**✨ of my newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office.*

*If you’re not a paid subscriber, here’s what you missed this month:*

1. *[Ten ways to generate buzz for your product](https://www.lennyrachitsky.com/p/creating-buzz-at-launch-preview)*
2. *[How to run SEO experiments](https://www.lennyrachitsky.com/p/seo-experimentation)*
3. *[When NOT to run an experiment](https://www.lennyrachitsky.com/p/not-running-an-experiment)*

> ## Q: What is the product manager role like at different companies?

What skills do companies look for in a PM? What do PMs need to get right to get promoted? How much influence do PMs have at different companies? There’s surprisingly little information out there about the differences in the PM role across the industry.

Today, I’m sharing findings from a survey I’ve been running over the past month, with nearly 1,000 responses from over 600 companies. Below, you’ll find:

1. Which skills matter most when hiring PMs
2. What PMs have to get most right to get promoted
3. How much influence PMs have
4. Which companies prioritize Heart vs. Head vs. Hands
5. Takeaways, and links to dig deeper

*A big thank you to [PMHQ](https://productmanagerhq.com/), [Sriram Krishnan](https://twitter.com/sriramk), [Hiten Shah](https://twitter.com/hnshah), [Josh Elman](https://twitter.com/joshelman), [Ian McAllister](https://twitter.com/ianmcall) for helping amplify this survey to get more responses, and to [Tal Raviv](https://www.linkedin.com/in/talsraviv/?originalSubdomain=il), [Manik Gupta](https://www.linkedin.com/in/manikg), [Helen Sims](https://www.linkedin.com/in/helensims), [AJ Frank](https://www.linkedin.com/in/ajfrank/), [Matthias Wagner](https://www.linkedin.com/in/matthias-wagner-5220b047/), [Kara Skrip](https://www.linkedin.com/in/karaskrip/), [Sean Lynch](https://www.linkedin.com/in/seanplynch/), [Peter Sauer](https://www.linkedin.com/in/petesauer/), and [Kiyani Bamba](https://www.linkedin.com/in/kiyanibamba/) for feedback on the survey and post.*

**A few quick disclaimers:**

1. I’m no survey expert. I may have gotten something wrong. Please forgive me if so, and please give me feedback.
2. 85% of the responders were product managers (as planned), so assume bias from that perspective.
3. When I mention specific companies below, I made sure to have at least two data points from that company.

Let’s dive in!

## Who took the survey

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/248d2fc3-c0e9-4264-92d8-2e0520a6e447_2000x1266.png)![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/094b4bba-2f46-4c73-8adf-3e00675a1ece_2000x1749.png)![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8fa457b9-db26-438d-a429-88b20e801f53_2000x1392.png)

## Being a Product Manager

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cf1e593c-cf7e-4ec4-9dc9-b0a4988e92a2_2000x1433.png)
> **Takeaways**:
>
> 1. **Most frequently valued**: Communication, execution, product sense
> 2. **Least frequently valued**: Design/UX, empathy, raw intelligence

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a540c078-53e6-4d0e-b893-b097c28256be_2000x2042.png)
> **Takeaways**:
>
> 1. Companies who spike on Communication: **HubSpot, Salesforce**
> 2. Companies who spike on Execution: **Salesforce, Tesla, VMware**
> 3. Companies who spike on Product sense: **Asana, Flipkart, Intercom, Netflix, ServiceNow, WhatsApp**
> 4. Companies who spike on Strategic thinking: **Coinbase, Stripe, Zillow**
> 5. Companies who spike on Collaboration: **Atlassian, Box, ServiceNow, Spotify, Twitter**
> 6. Companies who spike on Data acumen: **Quora, Reddit, Zynga**
> 7. Companies who spike on Technical background: **Oracle, Stripe**
> 8. Companies who spike on Raw intelligence: **Coinbase, Robinhood**
> 9. Companies who spike on Empathy: **HubSpot, Intercom**
> 10. Companies who spike on Design/UX: **WhatsApp**

## Getting promoted

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/74ce70b3-5879-4081-93e0-3f210c1f8332_1996x1290.png)
> **Takeaways**:
>
> 1. Showing significant impact on the business — by far the most common thing to get right
> 2. Unlike the mini-CEO label PMs often get, in reality they must keep their external stakeholders onboard to be successful
> 3. Keeping their team and manager happy — less of a priority at most companies, but as you’ll see below, very important at some

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/80eb5c80-9e83-4195-bd3a-2376381d383d_2002x2682.png)
> **Takeaways**:
>
> 1. Companies who prioritize Showing significant business impact: **Atlassian, Capital One, Coinbase, Expedia, HubSpot, Netflix, Square, Wayfair, Yelp, YouTube, Zillow**
> 2. Companies who prioritize Keeping stakeholders onboard: **Atlassian, Booking, IBM, VMware, Wayfair, Zillow**
> 3. Companies who prioritize Hitting goals: **Airbnb, Reddit, Yelp, Zynga**
> 4. Companies who prioritize Shipping great product: **Adobe, Hubspot, Intercom, Robinhood, Stripe, WhatsApp**
> 5. Companies who prioritize Making their manager happy: **Apple, IBM, Oracle**
> 6. Companies who prioritize Keeping their team happy: **Intercom, Quora, Visa**

## Influence

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f8c5c2b1-1bec-4c47-97d7-f5823ac25ca9_2000x1363.png)
> **Takeaways**:
>
> 1. According to responders (mostly PMs), PMs have more influence than other functions at over 80% of companies
> 2. Similarly, PMs have “a lot more” influence at ~50% of companies
> 3. Almost no companies have PMs with a lot *less* influence than other functions

*Looking at this same data but excluding responses from product managers (e.g. only looking at responses from engineers, designers, CEOs, etc.), the story shifts a bit:*

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4c3c9c1b-6f38-462f-bc79-484c05d3c76d_2000x1408.png)
> **Takeaways**:
>
> 1. From this perspective, we find that PMs have more influence than other functions at only 70% of companies (vs. 80% above). Clearly, PMs believe they have more influence than their teammates think they do.
> 2. However, most of the variance comes from the number of responders who believe PMs run the show — ~13% when looking at all responses, but only ~6% when PM responses are excluded.
> 3. In both cases, roughly the same percentage of companies have PMs with slightly more, or a lot more, influence (~65%).

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e4a2909a-426a-459c-8bc0-b9151cc9a25a_2002x1035.png)
> **Takeaways**:
>
> 1. **The spectrum varies widely**: from Zynga where PMs run the show, to Apple where PMs have the least influence
> 2. **Noteworthy companies where PMs have a lot more influence**: YouTube, LinkedIn, Twitter, Uber, Robinhood, Lyft, Coinbase, Asana, Airbnb
> 3. **Noteworthy companies where PMs have relatively less influence**: Apple, Oracle, Stripe, Tesla

## Heart vs. Hands vs. Head

It's often said that companies are defined by how they index on Heart (e.g. empathy, culture) vs. Hands (e.g. execution) vs. Head (e.g. intelligence). When describing PMs at your company, how would you stack rank the importance of Heart, Hands, and Head?

![Image from A comprehensive survey of Product Management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5d347488-07b9-4504-95bb-43f2dcc8b720_2000x1103.png)
> **Takeaways**:
>
> 1. Companies who spike on **Heart**: Asana, Spotify, WhatsApp
> 2. Companies who spike on **Hands**: Flipkart, Okta, PayPal, Quora, Tesla, Wayfair, Yelp
> 3. Companies who spike on **Head**: Coinbase, Uber, YouTube, Zynga

## What’s next

This is the first time I’ve conducted a survey like this. Depending on how it’s received, I hope to run it again sometime in the future. If you have any feedback on the results, the analysis, or the way it was run, I’d love to hear it. Please leave your feedback here.

And lastly, if you see any other interesting takeaways when looking at this data, please leave a comment 👇

[Leave a comment](https://www.lennysnewsletter.com/p/product-management-survey/comments)

See you next week!

## **🔥 Job opportunities**

**✨** Sponsored job of the week: **[Product Manager at UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003) ✨**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Levels](https://levels.link/growth), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Cascade](https://www.cascade.io/jobs/analytical-product-designer), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04), [Tome](https://www.linkedin.com/jobs/view/2323962506/)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Sourcetable](https://sourcetable.com/jobs#backend-engineer), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4188468003), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44), [Vori](https://www.notion.so/Mobile-Engineer-Vori-c5ceccd966a04c8aa9e970f0355ca13c)

#### **How would you rate this week's newsletter? 🤔**

[Great](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4Hp2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1) • [Good](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4vX2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1) • [Meh](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4kr2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1)

If you’d like to receive this newsletter weekly, consider subscribing 👇

Sincerely,
Lenny 👋

---

## [61/61] 2020 Year in Review – Issue 58

I started this newsletter a year and a half ago, as an experiment.

![Image from 2020 Year in Review – Issue 58](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/572504b3-f0f4-4d01-b548-b1c29b4438f7_1186x692.png)

At the beginning of this year, six months into the experiment, I had 6,000 subscribers, a couple dozen posts, and no real plan for where all of this was going. I still thought I wanted to start a company, and this newsletter was still a distracting side-project. As the year progressed though, the picture became clearer.

Today, with nearly 45,000 subscribers, over ~3,000 paid subscribers, a Slack community of over 2,500 helpful-smart-driven people, and ~100 posts, I’ve never been clearer on what I should be doing: this.

![Image from 2020 Year in Review – Issue 58](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cb0eb167-1e70-47f1-ad15-e7d799f0632e_1546x1038.png)

To all of you who subscribe, share, ask questions, and share words of encouragement: THANK YOU. I could not be more grateful to you for allowing me to do this work 💖

Here’s what we accomplished this year:

1. **At least one post every single week of the year** (64 in total)
2. **700% YoY growth** in subscribers, sitting somewhere in the top 15 most popular Substack newsletters
3. **Launched a paid plan**, which went from zero to over 3,000 subscribers in ~6 months
4. **Launched the private Slack community**, which continues to be one of my proudest achievements with this whole endeavor
5. **Added a second weekly email**, which highlights the best advice from the community itself, curated by [Kiyani](https://www.linkedin.com/in/kiyanibamba/)

What you can expect in the coming year**:**

1. **More in-depth deep dives**, including a “grand unified theory of growth”
2. **A live online course** for new product managers
3. **A personally curated guide** of the best resources for anything product, growth, startups, working with humans, or anything else that stresses you out at the office
4. **More investment in the community**, including a regular cadence of fireside chats with the most interesting people in growth, product, and startups
5. **And generally, more of the same:** actionable and concrete advice delivered to you weekly

I can’t wait to get started.

To leave you with something concretely valuable this week, I’ve collected the most popular posts (and tweets) from this year, along with a fun bonus. Enjoy, and see you in 2021!

## Most popular posts this year

**Growth**

1. [How the biggest consumer apps got their first 1,000 users](https://www.lennyrachitsky.com/p/how-the-biggest-consumer-apps-got)
2. [How today's fastest-growing B2B businesses found their first 10 customers](https://www.lennyrachitsky.com/p/how-todays-fastest-growing-b2b-businesses)
3. [What is good retention](https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29)
4. [Strategy and tactics for increasing conversion](https://www.lennyrachitsky.com/p/this-week-21-strategy-and-tactics)
5. [Magical growth loops](https://www.lennyrachitsky.com/p/magical-growth-loops)

**Product Management**

1. [My favorite product management templates](https://www.lennyrachitsky.com/p/my-favorite-templates-issue-37)
2. [A comprehensive survey of Product Management](https://www.lennyrachitsky.com/p/product-management-survey)
3. [Getting better at product strategy](https://www.lennyrachitsky.com/p/getting-better-at-product-strategy)
4. [Flywheels, flywheels, flywheels](https://www.lennyrachitsky.com/p/flywheels-flywheels-flywheels-issue)
5. [Managing up](https://www.lennyrachitsky.com/p/managing-up)

**Building a company**

1. [How to price your SaaS product](https://www.lennyrachitsky.com/p/saas-pricing-strategy)
2. [A playbook for fundraising](https://www.lennyrachitsky.com/p/a-playbook-for-fundraising)
3. [What it feels like when you've found product-market fit](https://www.lennyrachitsky.com/p/what-it-feels-like-when-youve-found)
4. [How to know if you've got product-market fit](https://www.lennyrachitsky.com/p/how-to-know-if-youve-got-productmarket)
5. [The Transition: Layering sales onto a bottom-up self-serve product](https://www.lennyrachitsky.com/p/sales-bottom-up)

## Most popular tweets this year

## Bonus: My favorite mother-in-law’s takeaways

For those of you who don't follow me on Twitter and have no idea what I’m talking about, I gave my mother-in-law a free subscription to my newsletter, and ever since she’s replied to every single issue with her insightful and heart-warming takeaways. Here are some of my favorites:

Thank you again so much for your support, and see you next year ✨

## **🔥 Job opportunities**

**✨**Sponsored job of the week: **[Product Manager at UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003) ✨**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4124465003), [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [KUDO](https://angel.co/company/kudo-meeting/jobs/913705-product-manager), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Levels](https://levels.link/growth), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Office Hours](https://docs.google.com/document/d/1_aHEl08ahc6NjOhwmi9GQlNv8CvlOwf8hL-FyCrmAes/edit), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Stytch](https://jobs.lever.co/stytch/675e6a11-5a33-41bc-9315-5a3ca141d444), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Engineering manager**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4076598003)
5. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04), [Tome](https://www.linkedin.com/jobs/view/2323962506/)
6. **Backend engineer**: [Coda](https://boards.greenhouse.io/coda/jobs/4489268002), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Cascade](https://www.cascade.io/jobs/full-stack-product-engineer), [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Primer](https://www.notion.so/Senior-Software-Engineer-Full-stack-web-San-Francisco-CA-3a0af35008104def82836a5b9a5a88e1), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)
8. **iOS engineer**: [Pairplay](https://www.notion.so/Lead-iOS-Developer-ba18577b6ba44ad68e45b8e7a957353c), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)

#### **How would you rate this week's newsletter? 🤔**

[Great](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4Hp2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1) • [Good](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4vX2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1) • [Meh](https://t.sidekickopen82.com/s1t/c/5/f18dQhb0S7kF8cV_VXW1CdjwB59hl3kW7_k2847sD3qkVNxJHk1CX2ZcW2bzNJl8lkfc1101?te=W3R5hFj4cm2zwW4cQKtC3KcLnYW4hLZp03ZVbTxW1JB0ML1--tKxW20ZTw51-YpBFW1W_jBk1ZmvHBW21j9tt1-_j_TW1Vnkcj1V3fMvw1V21pC4kr2&si=7000000001348012&pi=6174bab6-7009-4402-a497-3d6f867fbea1)

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Sincerely,

Lenny 👋

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