---
title: "Lenny's Newsletter — 2021 年合集"
date: "2021-01-01"
source: "Lenny's Newsletter"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>


# Lenny's Newsletter - 2021 (61 issues)

This file contains 61 articles/episodes.

---

## [1/61] The most important consumer subscription metrics to track

> ## Q: I read your post about [the most important bottom-up SaaS metrics to track](https://www.lennyrachitsky.com/p/the-most-important-bottom-up-saas), and I was wondering – do you have the same kind of advice but for a consumer subscription business?

Whether you’re in B2B or B2C, subscription businesses are so hot right now. And it makes sense — recurring revenue is hard to beat. Instead of starting from $0 each month, you start each month essentially at the peak of your previous revenue.

![Image from The most important consumer subscription metrics to track](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bf09c953-aadb-4339-b268-f1780984499b_2332x1166.png)

B2C subscription businesses come in many shapes and sizes, but you can roughly break them down into three categories: Content, Software, and Physical Goods.

![Image from The most important consumer subscription metrics to track](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fd93beb0-ff08-4e3e-b7f4-81ed959c56af_2048x1024.png)

What they all have in common is that a regular person (not a business) decides to pay a monthly fee for access to something — content, software, or something they receive in the mail. And when it works, it works very well:

- Netflix: $230b
- Spotify: $60b
- Stitch Fix: $6b
- Duolingo: $2.4b
- Calm: $2b
- Strava: $1.5b
- Ipsy: $1b+
- Masterclass: $800m

Now, to answer your question, to succeed, a consumer subscription business needs to nail six things:

1. 📈 **Acquire new users** sustainably
2. 🤯 Get enough new users to **quickly experience your value [***Most important for Software]*
3. 😍 Make sure enough users **continue to find value [***Most important for Content]*
4. 🤑 Make sure enough users **decide to pay**
5. 💸 Make sure enough users **continue to pay**
6. 🚚 Be able to **deliver the product/service profitably [***Most important for Physical Goods]*

Below, you’ll find tall of the most important metrics to watch and optimize across these six buckets, but if you want the short answer on metrics to track, here’s where I’d start:

#### Software subscription businesses:

1. **Activation rate**: The *percentage* of free/trial users who **hit a valuable milestone** in the first X days after signing up (e.g. meditate, watch a show, listen to a song, find a match, sync a folder, etc.)
2. **Intensity of engagement:** [L7/L30](https://a16z.com/2018/08/06/power-user-curve-l30-l7/)
3. **Conversion from free to paid**: The *percentage* of free users who convert from free/trial to a paid subscription X weeks after signing up
4. **Cohort retention**: The percentage of paid users who are still paying 1 month and 1 year later

#### **Content subscription businesses**:

1. **Cohort engagement**: The *percentage* of users who are **still doing something valuable** (e.g. meditating, watching, listening, learning, matching, etc.) X weeks after signing up
2. **Conversion from free/trial to paid**: The *percentage* of free users who convert from free/trial to paid X weeks after signing up
3. **Cohort retention**: The percentage of paid users who are still paying 1 month and 1 year later

#### Physical goods subscription businesses:

1. **Second-order retention**: The *percentage* of users who don't cancel after their first order
2. **Contribution margin**: Incremental profit earned for each unit sold, subtracting all variable costs from a product’s price
3. **Cohort retention**: The percentage of paid users who are still paying 1 month and 1 year later

Have any suggestions, ideas, or questions? Leave a comment👇

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

Hungry for more? Keep reading.

# The most important consumer subscription metrics to track

#### **1.** 📈 **Can you acquire new users sustainably?**

- **Free user growth**: MoM growth in free/trial users [*Over 20% is great*]
- **Payback period**: How long it takes to recover the cost of acquiring a new customer from their subscription revenue [*Under 6 months is great*]
- **Virality**: The average number of new users an existing user drives [*Over 1.0 is great*]
- **ROAS**: [Return on advertising spend](https://www.bigcommerce.com/ecommerce-answers/what-is-roas-calculating-return-on-ad-spend/), by channel [*Over 4:1 is great*]

#### **2.** 🤯 **Do new users experience your value?**

- **Activation rate**: The *percentage* of free/trial users who **hit a valuable milestone** in the first X days (e.g. meditate, watch a show, found a match, synced a folder, etc.) [*[Benchmarks](https://discover.mixpanel.com/rs/461-OYV-624/images/2019-Mixpanel-Product-Benchmarks-Report.pdf)*]
- **Total number of activated users**: The *total number* of free/trial users who have **hit a valuable milestone** (e.g. meditate once, watch a show, listen to a song, match with a user, sync a folder, etc.) in the past X weeks

#### 3**.** 😍 **Do users continue to find value?**

- **Monthly (or weekly) active users**: The *total number* of users who **have done something valuable** (e.g. did a mediation, watched a show, took a lesson, had a match, etc.) in the past X weeks
- **Cohort engagement**: The *percentage* of users who are **still doing something valuable** (e.g. meditating, watching, listening, learning, matching, etc.) X weeks after signing up
- **Intensity of engagement:** [L7/L30](https://a16z.com/2018/08/06/power-user-curve-l30-l7/) for software, time spent for content

#### **4.** 🤑 **Do your users decide to pay?**

- **Cohort conversion from free to paid**: The *percentage* of free users who convert from free/trial to paid X weeks after signing up, broken out by monthly and annual [*[Benchmarks](https://adachen.com/freemium-and-free-trial-conversion-benchmarks-9fab38d096da?gi=f9cb3789537d), [Benchmarks](https://medium.com/parsa-vc/consumer-subscription-kpi-benchmarks-retention-engagement-and-conversion-rates-9ac13b57c3d3)*]
- **Revenue growth**: MoM growth in new purchase revenue (i.e. revenue from first-time purchasers)
- **Velocity**: Median time to convert from free to paid
- **Length**: Split between monthly and annual subscriptions

#### **5.** 💸 **Do paying users continue to pay?**

- **Cohort retention**: The percentage of paid users who are still paying X months later [*[Over 70% at 6 months is great](https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29)*]
- **Second-order retention**: The percentage of users who don’t cancel after their first experience
- **Subscriber growth:** MoM growth in new subscribers [*Over 20% is great*]
- **Resurrection**: The percentage of churned users who re-subscribe

#### 6. 🚚 Can you deliver the product/service profitably?

- **Gross margins per order**: Net sales revenue minus the cost of goods sold
- **Contribution margin**: Incremental profit earned for each unit sold, subtracting all variable costs from a product's price
- **Contact rate:** Percentage of all users who contact support at least once
- **ARPU:** The average dollar amount you’re collecting from a customer

## 🤓 Further study

1. [10 Factors To Consider When Evaluating Consumer Subscriptions](https://nbt.substack.com/p/10-factors-to-consider-when-evaluating) by Nikhil Basu Trivedi
2. [Hierarchy of Engagement](https://sarahtavel.medium.com/the-hierarchy-of-engagement-expanded-648329d60804) by Sarah Tavel
3. [Consumer Subscription Software Insights](https://cdn2.hubspot.net/hubfs/4119751/GPB%20Research%20Reports/GP%20Bullhound%20-%20Consumer%20Subscription%20Software%20Update%20-%20Aug%202019.pdf) by GP. Bullhound
4. [The Internet Subscription Startup is Winning](https://tomtunguz.com/consumer-subscription-services/) by Tomasz Tunguz
5. [Twitter thread on this topic](https://twitter.com/lennysan/status/1343730958013501441)

See you next week!

*Thank you to Adam Fishman, Mike Duboe, Yuriy Timen, and Sriram Krishnan for feedback on this post.*

## **🔥 Job opportunities**

**✨**Sponsored job of the week: **[Senior Director of Product at Plume](https://www.linkedin.com/jobs/view/2344670919/?trackingId=YHvRTxoetClV7013SkxEAQ%3D%3D) ✨**

1. **Product**: [Descript](https://jobs.lever.co/descript-2/08f9b563-c3e6-49a4-be07-82fafc1868af), [Kudo](https://kudo.bamboohr.com/jobs/view.php?id=32), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Plume](https://www.linkedin.com/jobs/view/2344670919/?trackingId=YHvRTxoetClV7013SkxEAQ%3D%3D), [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), [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), [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**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [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), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
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)

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

1. **Watch**: Enormous xylophone in the woods of Kyushu

1. **Listen**: [Growth and Go-To-Market with Brian Balfour and Pascal Levy-Garboua](https://podcasts.apple.com/us/podcast/growth-go-to-market-brian-balfour-pascal-levy-garboua/id1316769266?i=1000501725550)
2. **Read**: [Meet the unicorn founder that braved war zones and missed meetings to make his mark on the startup world](https://fortune.com/2020/11/19/calendly-founder-tope-awotona-startup-unicorn/)

#### **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 email to them, or better yet, give them a gift subscription*💖

Sincerely,

Lenny 👋

---

## [2/61] Increasing team velocity

> ## Q: I’m constantly feeling like my team is moving too slowly. How can I help my team move faster?

As a founder, a PM, and even as an engineer, I ALWAYS wished we could move faster. This feeling never went away, and it won’t for you. Especially as your company grows.

Though speed shouldn’t be your number one priority (vs. say impact, or picking the right problems to tackle), it is highly correlated with success. Especially in the early stages of company building.

So how do you help your team move faster? I spoke to a number of founders, reflected on my own experience, and [took this question to Twitter](https://twitter.com/lennysan/status/1339738147949662208). Below, you’ll find twelve concrete ways to increase your team’s velocity, including dozens of examples from founders and product leaders. Here’s a handy summary:

![Image from Increasing team velocity](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8b0bc019-0cc9-4de8-922d-ec269f325afb_2400x1350.png)

My advice is to review this list with your leadership team, pick 1-2 strategies, and spend the next month/quarter putting them into action. See if this makes a dent. If they do, great! If not, try something else next month/quarter. Keep experimenting.

Let’s dive in.

# Ways increase your team’s velocity

#### 1. 🔎 Narrow your team’s focus

The fewer things you focus on, the better those remaining things will go. I’ve seen this work miracles time, and time again.

#### 2. 🛡 Protect deep work time

“To produce at your peak level you need to work for extended periods with full concentration on a single task free from distraction.” — Cal Newport

#### 3. 🤝 Sync more regularly to align on priorities and unblock blockers

The faster you need to go, the more regularly you should be syncing. Keep these meetings short, focused, and decision-oriented.

#### 4. 👎 Fire underperformers

Sometimes the hardest thing is the right thing.

#### 5. 🗣 Encourage more communication between team members

Get cross-functional team members talking directly, especially when they’re blocked or confused about something. A quick call/DM can save days of wasted time.

#### 6. ✍️ Facilitate async communication

For non-timely questions, avoid distracting team members by making it easy (and normal) to communicate asynchronously.

#### 7. 👀 Loop engineers (and other team members) in earlier

The more your team knows about the why and what, and feels the customer’s pain points, the more motivated, pro-active, and creative they’ll be. Also, they’ll lose less information in translation.

#### 8. 💪 Empower your cross-functional teams

Form cross-functional teams, with all of the resources necessary to ship, and [empower them to drive outcomes](https://svpg.com/product-vs-feature-teams/).

#### 9. 🤲 Nurture psychological safety

“After years of research, Google discovered the secret weapon to building a great team was creating a sense of psychological safety.” — [Inc](https://www.inc.com/justin-bariso/after-years-of-research-google-discovered-secret-weapon-to-building-a-great-team-its-a-lesson-in-emotional-intelligence.html)

#### 10. 🤝 Align on what success for the team means

Teams rowing in the same direction move faster.

#### 11. 🤔 Anticipate risks and edge-cases

A bit more planning up-front can save you a lot of pain later.

#### 12. 🔁 Switch your product development process

Experimenting with new product development processes can often uncover better ways of working.

#### 13. 👩‍💻 Optimize your code review process

Talk to your engineers about opportunities to speed up their review, approval, and deployment process.

#### 14. ⚙️ Invest in unit testing

The more confidence engineers have in their code working, the faster they’ll be able to make changes and ship.

#### 15. 🥇 Hire more people

Sometimes the answer is simple: more (great) people.

Have you found anything else to significantly increase your team’s velocity? Please share in the comments 👇

[Leave a comment](https://www.lennysnewsletter.com/p/increasing-velocity-issue-61/comments)

See you next week!

## **🔥 Job opportunities**

**✨**Sponsored job of the week: **[Senior Lead Engineer at Prisma](https://www.notion.so/joinprisma/Senior-lead-engineer-21f1e14d37564050999fb66f3e5376eb) ✨**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4313154003), [Kudo](https://kudo.bamboohr.com/jobs/view.php?id=32), [Hipcamp](https://jobs.lever.co/hipcamp/d04821c3-fb9a-4d3f-9a7a-1b75deacc09f), [Plume](https://www.linkedin.com/jobs/view/2344670919/?trackingId=YHvRTxoetClV7013SkxEAQ%3D%3D), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/)
2. **Growth**: [Alloy](https://apply.workable.com/alloy-automation/j/A0909506B0/), [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Coda](https://boards.greenhouse.io/coda/jobs/4794809002), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Alloy](https://apply.workable.com/alloy-automation/j/27639ECE80/), [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), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4), [Sunroom](https://jobs.wrkhq.com/sunroom/17233)
8. **iOS engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)

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

1. **Watch**: Get better at copywriting by (community member) Harry Dry

2. **Subscribe**: [50 Days of Writing](https://ageofleverage.com/50-days-of-writing) by David Perell
3. **Calculate**: [SaaS LTV calculator](https://docs.google.com/spreadsheets/d/1NfN_uC4CztZETNd1ki3jweYSC7Rn0s2B7QUPssbfh5Y/edit#gid=1822114652) by Christoph Janz

#### **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 email to them, or better yet, give them a gift subscription*💖

Sincerely,

Lenny 👋

---

## [3/61] Should I become a product manager

> ## Q: I'm considering venturing into product management after being a software engineer for 3 years. Primarily, because I feel I would enjoy it more (based on my perception at least). What are some markers I should look for?

I switched from engineering to product about ten years into my engineering career, and looking back it was one of the best decisions of my life.

Though I loved programming, frankly, I was a mediocre engineer. I got my work done, but I knew I was never going to be an amazing engineer. Especially when I compared myself to many engineers I knew. I also often found myself doing (and enjoying) the PM’y work on teams I was on. At one point our head of product pulled me aside and said: “Do you want to be a product manager? You should be a product manager.”

It was a difficult decision at the time. Changing career paths, particularly into a career full of soft-skills which I was uncertain I’d be any good at, while also letting my very-concrete-and-highly-valued coding skills atrophy (which they definitely did) was frightening. Initially I pushed for a hybrid PM+engineer role (why choose, I’ll do both!), but quickly learned that as a company grows, you need to fit into an org bucket. And so I chose product management.

I still miss a lot about being an engineer (e.g. the immediate feedback, the satisfaction of building, getting into flow states – not a thing when you’re a PM), but, again, it was one of the best decisions of my life. I love being at the center of the action, talking to customers, thinking about the bigger picture, rallying the team, and working with tons of different types of people. It’s not for everyone, but it was right for me.

To help you in your decision-making process, let’s first make sure you understand what you actually do day-to-day as a PM, and then I’ll share my advice for thinking through your decision.

### What you spend your time doing as a product manager

![Image from Should I become a product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/49b1bea7-35e2-440c-aa08-93272dd55981_1200x675.png)

As a product manager, your days are made up of three types of work:

#### **1. Shaping the product**

1. Talking to customers, understanding their needs and pain points
2. Talking to internal stakeholders, understanding what’s important to them
3. Reviewing the latest data and user research, crafting new questions to answer through data and research
4. Running brainstorms to capture new ideas
5. Doing competitive analysis
6. Giving design/UX feedback
7. Developing a strategy and vision for your product
8. Writing and reviewing 1-Pagers/PRDs

#### **2. Shipping the product**

1. Helping estimate timelines and set deadlines
2. Aligning the team around timelines
3. Checking-in with team members to understand what’s behind, and ahead of, schedule
4. Helping make tradeoff decisions, when planning and later when behind schedule
5. Unblocking your team members by helping decisions get made, getting everyone the resources they need, and making sure each team member is clear on their priorities
6. Doing quality assurance, catching and reporting bugs
7. Coordinating a launch plan

#### **3. Synchronizing the people**

1. Aligning your team around a single set of priorities
2. Aligning your team around a clear strategy and vision
3. Aligning your team around goals and KPIs
4. Getting (and maintaining) buy-in on your priorities, strategy, and vision from external stakeholders
5. Communicating project status to your team, to external stakeholders, and to the company at large
6. Building relationships with team members and stakeholders
7. Organizing reviews, check-ins, and all-hands

This sounds like fun to you, then product management is probably right for you. Let’s delve deeper.

### Should you pursue product management (as an engineer)

Ask yourself these questions to see which bucket you fall into more.

#### **Pursue product manager if:**

1. You’re more excited about solving business challenges (e.g. strategy, growth, positioning), and customer challenges, than technical challenges
2. You often have strong opinions about the user experience
3. Teammates often agree with your product feedback
4. You enjoy being at the center of the action, vs. on your own, heads-down working
5. You could see yourself being happy never coding professionally again
6. You look forward to collaborating with non-engineer stakeholders
7. You feel like you’re a mediocre engineer, and aren’t motivated to put in the time to become significantly better

#### **Don’t pursue product manager if:**

1. You expect to finally run the show — most of your time will be spent aligning engineers like yourself, along with designers, researchers, execs, etc.
2. You think it’ll be an easier career path — there are far fewer PM roles than engineering roles
3. You can’t imagine not coding — once you’re a PM you’ll only have time to code on nights and weekends
4. You’d fail the [marshmallow test](https://en.wikipedia.org/wiki/Stanford_marshmallow_experiment) — as a PM, you need to be good at finding your joy in long-term outcomes
5. You expect to make more money — PMs and engineers make about the same amount of money

**Three final pieces of advice:**

1. Shadow a PM for a day. See what the job is really like.
2. Don’t rush into it. You’re only three years into your career, and having deeper engineering experience will only help you in the PM role.
3. Finally, if you’re feeling the pull to try product management, and you have the opportunity, I’d go for it. It’s not a one-way door, and having a chance to get into product management is a rare thing.

Good luck, and let me know how it goes!

### 🧠 Further study

1. [How To Get Into Product Management (And Thrive)](https://www.lennyrachitsky.com/p/how-to-get-into-product-management)
2. [A Product Manager’s Guide to Growing Yourself and Your Team](https://www.ravi-mehta.com/product-manager-roles/)
3. [When to hire your first product manager](https://www.lennyrachitsky.com/p/when-to-hire-your-first-product-manager)

See you next week!

## **🔥 Job opportunities**

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

1. **Watch**: When a costumed person destroys the drums At children’s music concert

[Watch on YouTube](https://www.youtube.com/watch?v=QZShA_a-5r8)

2. **Read**: The story behind AWS

3. **Listen**: [Andy Rachleff on management theory, Reed Hastings’ genius, lessons from passing on Netflix & more](https://podcasts.apple.com/us/podcast/this-week-in-startups-audio/id315114957?i=1000504431501)

#### **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 email to them, or better yet, give them a gift subscription*💖

Sincerely,

Lenny 👋

---

## [4/61] Positioning

*👋 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. *[15 ways to increase your team’s velocity](https://www.lennyrachitsky.com/p/increasing-velocity-issue-61)*
2. *[The most important consumer subscription metrics to track](https://www.lennyrachitsky.com/p/the-most-important-consumer-subscription)*
3. *[Should you become a product manager?](https://www.lennysnewsletter.com/p/become-a-product-manager)*

> ## Q: I keep hearing that I need to improve my product’s positioning, but I’m not sure what that means and how to do this. Where do I start?

When I think positioning, I immediately think of one person: [April Dunford](https://twitter.com/aprildunford). April is the author of the best-selling book *[Obviously Awesome](https://www.amazon.com/Obviously-Awesome-Product-Positioning-Customers/dp/1999023005/)*, which to me is the definitive book on positioning, and spends her days working with companies of all shapes and sizes helping them nail their positioning.

When I received this question, I cold-DM’d April to see if she’d be interested in tackling it, and thankfully she agreed 🎉

Below, you’ll find what I believe is the most succinct and practical guide to nailing your product’s positioning. Let’s dive in!

*For more from April, check out her [Twitter](https://twitter.com/aprildunford), [website](https://www.aprildunford.com/), and [book](https://www.amazon.com/Obviously-Awesome-Product-Positioning-Customers/dp/1999023005/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=).*

# A quickstart guide to positioning

by [April Dunford](https://twitter.com/aprildunford)

![Image from Positioning](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2b74e4ff-5023-4068-9ef7-ea7bf0713ea8_5467x3657.jpeg)

My first job out of school 20 years ago was as a product marketer at a startup. I was assigned to work on a product that had been conceived as a “Microsoft Access killer” that supported SQL and could run on people’s desktops. Back then, SQL databases only ran on big servers. But after a significant marketing effort, we had barely sold 200 copies. We knew it was time to wind it down, but before we did, we decided to check in with buyers to see how upset they would be when we did. Being the new gal, I got the job to make the calls.

The first 20 conversations I had were exactly the same:

> ***Me:** Hi, I’m calling to find out how you’re using our product.*
>
> ***Customer:** Sorry, lady, we don’t have that.*
>
> ***Me:** Um, well, my records show you paid $100 for it on Jan 22nd?*
>
> ***Customer:** Oh,* that *thing—yeah, we tried it, we don’t use it now.*

Our decision to kill the product was going to be easy.

But then I did call 21. “Your product made me the hero of the sales team!” the customer shouted. At his company, sales folks traveled to their customer, took orders on paper, and then returned to the office to enter them in the order system. Orders were often incomplete or full of errors. Our product was installed on laptops with the order system, allowing sales to take orders in the field and then sync with the SQL database back in the office. “We’re doubling sales! That SQL feature was a game changer for us!” he raved. I thanked him and carried on with my calls.

I had 20 more conversations with 20 more customers who barely remembered purchasing before I hit another fan of the product. His story was similar—he used our product on mobile devices for field service agents who could update their system in the field, then sync with the database at headquarters. “We’ve increased service capacity by 60%. Your product is a game changer!” he said.

In the end, I talked to 100 customers: 94 didn’t even know they had it, 6 had transformed their business with it. We didn’t exactly have product-market fit [in the Sean Ellis sense](https://pmfsurvey.com/).

I relayed my findings back to the exec team. Instead of killing the product straight away, they decided to take a shot at repositioning our “Microsoft Access killer” as an “**embeddable database for mobile devices**.” The product took off.

A year of massive growth later, we were acquired by a big database company, where the product spawned a product family that generated hundreds of millions in revenue. Over 20 years later, this “failed” product [still runs](https://www.sap.com/products/sql-anywhere.html) on mobile devices all over the world.

### **Positioning isn’t new—but it’s deeply misunderstood**

This experience sparked my lifelong obsession with positioning. How could we have known in advance that our product was simply mispositioned? Was there a way for us to figure out what really set our product apart, what our value for customers really was, and what customers we should be targeting?

Positioning is not as well understood as you might think. If I put a dozen senior marketers in a room together and asked them to define positioning, I’d get a dozen different answers. When I talk about positioning at conferences, I sometimes start by defining what positioning is *not*: Positioning is not equivalent to messaging. It isn’t a tagline. It’s not your [brand story](https://www.aprildunford.com/post/storytelling-vs-positioning), nor is it your vision or your “why.” It is not, as one CEO attempted to convince me, “everything you marketers cook up over there.”

So what is it, and, more importantly, how do we *do* it?

### **Defining positioning**

Here’s how I define positioning:

> **‍“Positioning defines how your product is a leader at delivering something that a well-defined set of customers cares a lot about.”**

Yeah, that sounds a bit complex, but positioning is made up of a distinct set of components. Those components and their relationship to each other is where the magic happens. We will get to that in a minute.

### **Positioning as context setting**

Positioning is like [context setting](https://www.aprildunford.com/post/how-to-transform-your-product-by-giving-it-context) for products. It’s a bit like the opening scene of a movie. The opening scene gets us oriented. It answers the big questions: Where are we? What year is this? What’s happening? How should I feel? Who are these people? Once we have established some context, we can settle in and pay attention to the story’s finer details.

Let’s take the opening scene of *Apocalypse Now*. We see a grove of peaceful palm trees swaying the breeze and maybe you’re thinking, “Hey, maybe it’s not apocalypse right now,” but then you notice some smoke and a helicopter quickly flies past. Suddenly the palm trees burst into flames as Jim Morrison screams, “This is the end, my friend!”

![Image from Positioning](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/96da736e-421d-40ef-9e4c-f60615895aef_478x200.gif)

We realize we are in the middle of the Vietnam War and it’s the apocalypse right now alright. Then slowly, the scene shifts and we see Martin Sheen’s face. He’s drinking and smoking, his hotel room is a total mess, and he’s clearly in psychological distress. He walks over to the window and we get the first line of dialogue in the movie: “Saigon. Shit. I’m still only in Saigon. Every time I think I’m gonna wake up back in the jungle.”

We are exactly 4 minutes and 45 seconds into the movie, but we know a lot about what’s happening. We are in the middle of the Vietnam War, and in Saigon specifically. Our lead character has been there before and has some pretty bad PTSD as a result. We also get the tone of the movie and we know it’s going to be an intense couple of hours. The opening scene positions the movie by answering our big questions about who, what, where, and why so that we can settle in and focus on the details of the story within that context.

**Similarly, positioning your product in a market orients the customers and conveys a lot of valuable information.** Your positioning context sets off a really powerful set of assumptions about who your product competes with, what features your product should have, who the product is intended for, and even things like what the product should cost.

Suppose I pitch you my product, and all I tell you is that it’s a “CRM” and that’s it. What assumptions would you make about my product before I got to page two of my pitch? You would assume my competition is Salesforce—they are the leader in that market. You would assume I sell to the head of sales. You would assume my product has a set of features—tracking deals and accounts, for example. You would even make pricing assumptions. Salesforce is the leader in the market, so you would assume my product costs less than that.

> #### **Good positioning sets off a set of assumptions about my product that are true. Bad positioning sets off a set of assumptions about my product that aren’t true—leaving your sales and marketing teams to do the work of undoing the damage your positioning has already done.**

If I were to tell you my product was “email,” you would have a very different set of assumptions than if I positioned it as “chat.” There is a large overlap in features between the two, but as buyers, we expect email to filter spam, allow us to organize and store conversations, and integrate with a calendar. Our expectations for chat are different. We expect instant delivery, a way to see if someone has received or viewed our message, etc. A new product could be positioned in either market, but great chat is lousy email and vice versa. **A shift in positioning can completely transform how we perceive a product and can mean the difference between success and failure.**

### **A positioning statement can’t help you**

So if positioning is so important, how do we do it? Let’s start with what not to do.

For many people, positioning was taught to them in school using the “positioning statement.” It’s a sort of Mad Libs fill-in-the-blanks exercise. The blanks are things like market category, value, competitors, etc. Typically it looks something like this:

![Image from Positioning](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b4cc5dc0-db9c-49e1-a6db-bf61bdcfcde0_1830x566.png)

**‍I believe this exercise is not only pointless but potentially dangerous**. The exercise assumes that there is only one answer for each of the blanks and you simply “know” what it is. However, most products could easily be positioned in multiple different market categories, with different competitors, providing a different value for different kinds of customers. How would this exercise help me understand that my “Microsoft Access killer” was really an “embeddable database for mobile devices?” The answer is that it would not.

### **The 5 components of positioning**

So how do we find the best positioning for our offerings? This question vexed me as a marketing executive across seven successful startups (and the six big companies that acquired them). I read books! I took courses! Everyone agreed that positioning was the marketing bedrock we built our entire go-to-market strategy around, and yet there didn’t seem to be a methodology for actually getting it done. I decided to figure it out.

I started with an engineering mindset. I decided we could break positioning up into its component pieces, find the best answer for each piece, bring the pieces back together, and voilà—great positioning.

Breaking positioning up isn’t hard, because we generally agree on the components. These are, in essence, the blanks in the positioning statement. The components are:

> 1. **Competitive alternatives**
> 2. **Differentiated “features” or “capabilities”**
> 3. **Value for customers**
> 4. **Target customer segmentation**
> 5. **Market category**

Easy. Now all we have to do is figure out how to get the best answer for each component. Here’s where things get a little tricky.

### **Each component depends on the others**

If you look at the pieces, you quickly understand that each component has a relationship with the others. For example, the unique value that you can provide to customers is completely dependent on your differentiated features. Your differentiated features are only “differentiated” when you compare them to competitive alternatives. Your best-fit target customers are customers who really care a lot about your unique value. And lastly, your best market category is the context you position your product in such that your unique value is obvious to your target customers. So if every piece has a relationship to every other piece, where do we start?

For two years, I didn’t think there was a starting point. I attempted to find the best positioning for my products by picking an arbitrary starting point (for example, differentiated features) and then working my way through the others to get a “candidate positioning.” I would then test it on prospects, and if it worked, we ran with it. If it didn’t, I tossed it out and repeated the process to get another candidate to test.

The drawback to this method are obvious to anyone who’s worked at a startup: it just took too long! While I was out testing candidate after candidate, the sales, marketing, and product teams were stuck in a holding pattern waiting.

### **A customer-centric methodology**

Eventually, Clayton Christensen solved this problem for me. I was reading everything I could get my hands on about the Jobs to Be Done theory, and I had the realization that the starting point had to be competitive alternatives. If it wasn’t, what we ended up with was positioning that sounded good in the office but didn’t work with customers because it wasn’t differentiated. The flow has to look like this:

![Image from Positioning](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dc597ea0-acf1-4a8b-b18e-30c59d2f9616_1593x912.png)

We start with **competitive alternatives**, or what customers would do if our solution didn’t exist. Once we have that, we can ask ourselves, “What do we have that the alternatives do not?” That gives us a list of differentiated features or **key unique attributes**. We can then go down that list and ask ourselves, “*So what* for customers?” Put another way, what is the **value** those capabilities enable for our buyers? Once we understand what our differentiated value is, then we can move to customer segmentation, or who the **customers who care** a lot about our value are. There is likely a wide range of buyers who care about that value, but certain customers care a lot more than others. What are the characteristics of a customer that makes them care a lot about your differentiated value? That gives us an idea of who our best-fit customers are. Lastly, we move to market category. Our best market category is the context we position our product in such that our value is obvious to our target customers. Put another way, it is the definition of the **market we intend to win**.

**An example: Janna Systems**

Let’s walk through an example of how this works. Early in my career, I ran marketing for a company that positioned its product as an enterprise CRM. This was ages ago when Salesforce was still focused on SMBs, and the gorilla in the enterprise CRM market at the time was Siebel Systems. Unsurprisingly, every time we got a meeting with a customer we got the question, “So how are you better than Siebel?” That was a bad question for us because, by almost every measure, they were better than we were. They had 8,000 employees and we had a couple dozen. They had $2 billion in revenue; we did less than $2 million. They had 400 customers and we had 6. We did, however, have two differentiators.

The first was a feature that they couldn’t match. Specifically, we could model relationships in a different way. Most CRMs model the relationship between people and an organization. Our CRM let you model relationships between people, independent of their organization. An example would be that we could show that two people sat on a board together even though they work for separate companies. No CRM then (or even today, for that matter) could do that. The problem was that, for the most part, we didn’t do a good job of articulating the value of that. We showed the feature in every demo, and when customers asked us what they would do with that feature, our reply was “Anything you want!”

Coming back to the process I laid out in the previous section—our competitor was obvious; it was Siebel. Our differentiator was the ability to model relationships in a different way. What we hadn’t figured out was what the value of that feature was and what types of customers cared a lot about it.

Eventually, we landed a deal with an investment bank. Working with that customer helped us understand that the value of our feature was that companies could get insight into interpersonal relationships, which sales teams could use to start new sales conversations and understand who might have influence over a deal in process. For companies that relied heavily on personal relationships (e.g. investment banking, private client services), our product was a game changer.

Going back to the positioning process, we could now fill in **value** and **customers who care**. This was super-important for our go-to-market strategy. We shifted our sales and marketing efforts to selling to investment banks, where we had a distinct advantage over Siebel.

Lastly, we decided to make a change to the market category. Clearly, we couldn’t win Enterprise CRM, but we could win CRM for Investment Banks. Positioning ourselves that way helped banks find us and helped us clearly differentiate from Siebel. This shift in positioning allowed us to grow very quickly over the next 18 months, from under $2M to close to $80M. Our plan was to shift the positioning to CRM for Financial Services as we expanded to retail banks and insurance companies. We didn’t get the chance to test that positioning evolution, however—Siebel acquired us for $1.3B.

### **Common mistakes**

Once you understand the flow conceptually, it’s pretty easy. But that doesn’t mean there aren’t a lot of ways you can mess this process up. Here are the three most common traps:

**Trap 1: Defining competitive alternatives as any possible competitor**

The most common mistake I see startups make is in how they define the competitive alternatives in the first step. A better way to think about competitive alternatives is to ask yourself, “What would a customer do if your offering didn’t exist?” Sometimes the answer to that question is “Do nothing.” What that really means is the customer would stick with their current way of solving the problem. That could mean using a spreadsheet, using a manual process, or hiring an intern to do it. In enterprise software, we typically lose 25% of deals to “no decision.” Your positioning needs to position you against the status quo if you want to convince customers to act.

**Trap 2: Creating “phantom competitors”**

Next, I see companies listing what I would call “phantom competitors” in step 1. [Phantom competitors](https://twitter.com/aprildunford/status/1334143529573081089?s=20) are companies that theoretically could compete with you; you just never actually see them or lose to them in deals. Until you do, you are watering down your positioning by trying to position against them. Step 1 in the positioning process is to identify what your customers see as alternatives. This isn’t a test of your internet research skills, and just because a company could compete with you doesn’t mean they ever will. The product team might want to keep an eye on them as a future competitive threat, and if you do start to see them in deals, you can adjust your positioning at that time. Until then, you will weaken your positioning by trying to position against competitors your customers never even consider.

**Trap 3: Assuming that you have to create a new market category to grow**

When selecting a market category, you can either choose to position your product in an existing market category or attempt to create a new category in customers’ minds and then position your product as the leader in it.

The first option allows you to use what customers already know and understand about a market to help them understand what your product is and what makes it uniquely special. If I tell you my product is an “embeddable database for mobile devices,” you have the benefit of understanding what a database is. “Embeddable” and “for mobile devices” narrows down the field of alternatives to a market niche where this product is not only different from the leaders in the more generic “database” market category, but much better for a particular kind of buyer.

Creating a new market category, on the other hand, is where you invent a new frame of reference for customers. The obvious downside to this strategy is that you first have to make the category mean something in the customer’s mind before it can serve as a meaningful context. So instead of being an “embeddable database for mobile devices,” you choose to be a fluflommer. Yep, a fluflommer. Customers have no idea what that is because you’ve just invented it, so be prepared to spend a significant amount of time and effort making that term mean what you want it to mean.

There is an assumption that the payoff for creating a new market category is that you will dominate the market as it grows. [In my book](https://www.amazon.com/Obviously-Awesome-Product-Positioning-Customers/dp/1999023005/), I tell the story of Eloqua and how founder Mark Organ created the Marketing Automation category and did exactly that.

> #### Unfortunately, history teaches us that companies that create market categories often lose in the long run to companies that gained a market foothold after the hard work of creating the category was already done.

This is why we use Google and not Ask Jeeves. This is why we use Facebook and not Myspace. In fact, 90% of tech companies that have gone public over the past five years have been positioned in existing markets rather than creating new ones. Many of the examples of category creators started out positioning themselves in existing markets before they later stretched the boundaries of that category. Salesforce was a niche play in the CRM space until it had hundreds of millions of revenue. Gainsight was in the survey software market until it had hundreds of millions of revenue. It’s much more common for startups to start out positioning themselves in an existing category until they have the money and momentum required to re-draw the lines around that category.

### **Positioning—you’ve got this!**

Positioning is a misunderstood concept, but I believe that if you master it, it can be the most powerful strategic tool you have at your disposal. If you are interested in learning more, I go deeper on this topic in my [book](https://www.amazon.com/Obviously-Awesome-Product-Positioning-Customers/dp/1999023005/), and I’ve got a set of [templates](https://www.aprildunford.com/obviously-awesome) to go with it that you might find helpful.

## **🔥 Job opening of the week: Airtable**

> **✨ Airtable is hiring for a [Full-Stack Engineer](https://grnh.se/0725e0b52us) and an [Engineering Manager](https://grnh.se/402aac172us)** ✨

**Additional opportunities:**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4313154003), [Kudo](https://kudo.bamboohr.com/jobs/view.php?id=32), [Plume](https://www.linkedin.com/jobs/view/2344670919/?trackingId=YHvRTxoetClV7013SkxEAQ%3D%3D), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003)
2. **Growth**: [Alloy](https://apply.workable.com/alloy-automation/j/A0909506B0/), [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Lead-Designer-14ceaa685100486b824665e1320fc9af), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Alloy](https://apply.workable.com/alloy-automation/j/27639ECE80/), [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), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4), [Sunroom](https://jobs.wrkhq.com/sunroom/17233)
8. **iOS engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)

**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 👋

---

## [5/61] How to increase virality

> # **Q: Is it possible to increase the virality of my product? If so, how?**

Before I answer your question, first, make sure you *should* be investing in virality.

![Just because you can, doesn't mean you should – Jenn Burke](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6b647322-4603-4a41-8513-b4c6c45e41fb_620x337.jpeg)

You should only invest in virality if you are confident that virality will be your primary growth engine for your product. As opposed to (1) performance marketing, (2) content, or (3) sales. [As I’ve written about previously](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/), most companies find the vast majority of their growth from just one of those four growth engines, and until you’ve scaled your core engine, time spent optimizing a secondary or tertiary engine is rarely time well spent.

## How do you know if your product is well-suited for virality?

Here’s a simple heuristic that’ll tell you which of the four core growth engines to focus on:

> **Virality is a natural fit for your product if:**
>
> - Your product is better with friends or colleagues (e.g. Snapchat, Slack)
> - The product is innately fun or rewarding to share (e.g. travel photos, homes for sale, incidents nearby)
> - Your product is remarkable — something worth remarking about.

> **Performance Marketing is a natural fit for your product if:**
>
> - You generate revenue directly from new users (e.g. purchasing a product, subscribing to a service), which you can then use to fund more marketing
> - Customers are *not* naturally going to be looking for your product, and thus you have to come to them (e.g. a new DTC brand)

> **Content is a natural fit for your product if:**
>
> - Your users naturally generate public content (e.g. reviews or answers to questions) when using your product, which you can use to attract new users
> - You have a lot of unique data (e.g. restaurants in Seattle, plumbers in Phoenix), which you can turn into rich auto-generated pages

> **Sales is a natural fit for your product:**
>
> - Customers have high average order values and high LTV
> - Your product requires hand-holding to be successful with

If your product isn’t a natural fit for virality, you are likely better off doubling-down on the engine that is a more natural fit, especially early-on.

You can read more about this concept of “growth engines” in [a recent post I co-authored for Reforge](https://www.reforge.com/blog/racecar-growth-framework) and [this First Round piece](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/).

## What is “virality”, anyway?

Virality is simply *growth that stems from your existing users*. Each user brings in on average more than one additional user (directly or indirectly) and thus creates exponential growth.

![Viral Marketing | Codify Automotive](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9fbc72cc-2f51-4248-8204-41f13d29bceb_600x312.png)

To put it another way, the fuel for your future growth is existing users (vs. money, or content). Classic examples of products that grew primarily through virality are Facebook (inviting friends), Tinder (word-of-mouth), and Dropbox (incentives).

Virality of often measured by something called the “[K-factor](https://en.wikipedia.org/wiki/K-factor_(marketing))” which is a fancy term for measuring the number of *new* users that each *existing* user drives:

> *i = number of invites sent by each customer
> c = percent conversion of each invite
> **k = i \* c***

Note, there’s one additional implicit variable in this formula: the number of active users. Your active users are the fuel for the viral growth engine (i.e. they send the invites), which will become important when we look at increasing virality later.

## What are the different types of virality?

When you think virality, you probably think about getting asked to invite your friends, like Snapchat. But the concept of virality is broader. Any mechanic that gets your existing users to bring in new users is a form of virality. There are three forms of virality, with 2-3 versions of each, for a total of seven types of virality:

#### **1. Word-of-mouth virality: Hearing about it from friends or colleagues**

1. **Offline**: While chatting with a friend or colleague (e.g. Airbnb)
2. **Online**: Seeing it mentioned on social media (e.g. Clubhouse)

#### **2. Invitation virality: Being actively invited by friends or colleagues**

3. **Social/Collaboration**: To connect with friends or colleague (e.g. WhatsApp, Figma)
4. **Incentivized**: Because one or both sides will benefit (e.g. Pinduoduo)
5. **Utility**: To accomplish something on-off with friends or colleague (e.g. Calendly)

#### **3. Experiential virality: Seeing the product in action**

6. **Passively**: Seeing the product as you go about your day (e.g. Citizen)
7. **Actively**: Being sent a piece of content from the product, which leads you to the product (e.g. TikTok)

![Image from How to increase virality](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c1b44cff-f5ad-4c50-9fba-e9e72b3a5834_2048x1250.png)

## How do you increase your product’s virality?

Now we get to the heart of your question: increasing your product’s virality. Thinking back to our formula above, you have three levers at your disposal:

1. **Increasing sharing rate**: More word-of-mouth, invitations, or experiential serendipity
2. **Increasing conversion rate**: Getting new users through your funnel at a higher rate
3. **Increasing engaged users**: Getting more users, and re-engage existing users

Of these three, the first bucket is the most interesting, so let’s focus there.

### Strategy #1: Get your users to share your product more often

In order to get your users to share your product more often, I’ve found six distinct strategies:

1. Nurture organic word-of-mouth
2. Incentivize word-of-mouth and inviting
3. Make the product better when more friends or colleagues use it
4. Make the product \*only\* useful when using it with friends or colleagues
5. Generate content that users want to share with friends
6. Increase experiential serendipity

Let’s explore each of these tactics one-by-one.

#### **1.** Nurture organic word-of-mouth

**Examples of word-of-mouth virality:**

1. [Tinder](https://tinder.com/): Users tell their friends about Tinder after finding great single people on it
2. [Airbnb](https://www.airbnb.com/): Guests share their travel stories/pictures, mention they stayed in an Airbnb
3. [Zillow](https://www.zillow.com/): Homeowners tell their homeowner friends that you can track the price of your home on the site for free
4. [Clubhouse](https://www.joinclubhouse.com/): Users [constantly posting](https://twitter.com/search?q=clubhouse&src=typed_query) about what they heard in a room
5. [Levels](https://www.levelshealth.com/): Customers [constantly posting](https://twitter.com/search?q=%40levels&src=typed_query) about what they learned about their body

**To optimize organic word-of-mouth virality:**

Word-of-mouth is primarily driven by remarkable experiences (an experience worth remarking about), so start there.

1. How might you create a remarkable experience for your users?
2. How might you get non-users with a large following to experience your remarkable product? e.g. free accounts for influencers
3. How might you make your users feel special or high-status by showing off they have the product? e.g. waitlists, invites
4. How might you make it easier for your users to spread the word? e.g. share buttons, easy to find links
5. How might you simply ask people to spread the word? e.g. try adding copy to the product

#### **2. Incentivize** word-of-mouth and inviting

**Examples of incentivized word-of-mouth and/or invites:**

1. [Pinduoduo](https://en.pinduoduo.com/): The more friends you invite, the higher the discount
2. [Uber](https://uber.com/), [Lyft](https://www.lyft.com/), [Airbnb](https://www.airbnb.com/): Free credits for referring new users
3. [Robinhood](https://robinhood.com/us/en/): Move up the waitlist by inviting friends
4. [Dropbox](https://www.dropbox.com/h): Free storage space for you and your friend
5. [PayPal](https://www.paypal.com/): Free money for inviting new users

**To optimize incentives virality:**

People respond to incentives — what’s it in for them to spread the good word about your product?

1. How might you create a selfish incentive for users to bring in new users? e.g. free money, free storage
2. How might you create an altruistic incentive for users bringing in new users? e.g. save your friend money
3. How might you create FOMO which motivated users to send invites? e.g. a limited number of invites like Gmail, Clubhouse, Spotify, Superhuman, OnePlus
4. How might you increase an existing incentive? e.g. double your existing bonus
5. How might you surface your existing incentives more prominently? e.g. a large banner, more entry points
6. How might you make it easier for your users to know *who* to invite? e.g. import contact list, connect to Twitter to find friends

#### 3. Make the product better when more friends or colleagues use it

**Examples of products that are better with more friends/colleagues**

1. [Slack](https://slack.com/), [Figma](https://www.figma.com/files/recent), [Datadog](https://www.datadoghq.com/): Colleagues invite colleagues to get work done
2. [Snapchat](https://www.snapchat.com/), [WhatsApp](https://www.whatsapp.com/), [Signal](https://signal.org/en/): Friends invite friends to communicate in this new way
3. [Facebook](https://www.facebook.com/), [LinkedIn](https://www.linkedin.com/), [Instagram](https://instagram.com/): Friends invite friends to share content
4. [Venmo](https://venmo.com/), [Paypal](https://paypal.com/), [Cash app](https://cash.app/): Friends invite friends to be able to send/get money
5. [Reclaim](https://reclaim.ai/), [Clockwise](https://www.getclockwise.com/): Colleagues invite colleagues to optimize their calendars.
6. [Airbnb](https://www.airbnb.com/): Allowing you to add guests to an itinerary so that they can all see the details.

**To optimize product experience with friends/colleagues virality:**

This is the most classic way to create viral growth and is hard to engineer after the fact. But there are certainly ways to optimize it.

1. How might you make the user’s life easier if their friends or colleagues were also using it? e.g. easier to share content, a secure communication channel
2. How might you make the user’s life more enjoyable if their friends or colleagues were also using it? e.g. fun way to share content
3. How might you remind the user about the benefits of their friends/colleagues being users? e.g. show missing friends/colleagues
4. How might you make it easier to invite friends? e.g. import contact list, collect to LDAP
5. How might you make it easier to figure out who to invite? e.g. smart sorting of potential friends

#### 4. Make the product \*only\* useful when using it with friends or colleagues

**Examples of products that are only useful with friends/colleagues**

1. [Calendly](https://calendly.com/)
2. [Zoom](https://zoom.us/)
3. [Google Hangouts](https://hangouts.google.com/)
4. [DocuSign](https://www.docusign.com/)
5. [Clerky](https://www.clerky.com/)

**To optimize a multi-player product virality:**

This includes products that are utilitarian, and is even harder to engineer after the fact. But it is worth thinking about this when you’re in the idea stage.

1. How might you make a single-player product multi-player?
2. How might you better promote your product to the receiving user?
3. How might you make it easier for new users to try out your product?

#### 5. Generate content that users want to share with friends

**Examples**:

1. [TikTok](https://www.tiktok.com/) videos (with a watermark or link to TikTok)
2. [Instagram](https://www.instagram.com/?hl=en) photos, hosted on Instagram
3. [YouTube](https://www.youtube.com/) videos, hosted on YouTube
4. [Pinterest](https://pinterest.com/) boards, hosted on Pinterest
5. [Spotify Wrapped,](https://open.spotify.com/genre/2020-page?locale=en) pointing to Spotify
6. [Reface](https://apps.apple.com/us/app/reface-face-swap-videos/id1488782587), with a watermark
7. [Airbnb](https://www.airbnb.com/) listing, pointing to Airbnb

**To optimize content-driven virality:**

This form of virality comes from content generated through the product, which your users can’t help but share with their friends.

1. How might you enable your users to create remarkable content, e.g. TikTok creator tools
2. How might you create remarkable content for your users yourself, e.g. Spotify Wrapped
3. How might you make it easier to share the content you already have, e.g. share buttons, [Twitch clips](https://twitter.com/williamwaiwong/status/1350187418960293889?s=20), Spotify Wrapped adding a "share to Instagram Story" feature
4. How might you make it clearer where the content came from, e.g. adding a watermark or a link back
5. How might you make your content available publicly, e.g. FB making posts public by default

#### 6. Increase experiential serendipity

**Examples of products that grow through experiential serendipity:**

1. [Citizen](https://citizen.com/): A notification comes up about something happening nearby, which you show your friends.
2. [Hotmail](https://outlook.live.com/owa/), [iPhone](https://apps.apple.com/us/app/mail/id1108187098), [Superhuman](https://superhuman.com/): A signature in the emails, e.g. “sent by iPhone“
3. [Tinder](https://tinder.com/): A match appears while you’re hanging out, and you ask your friends for their opinion.
4. [Netflix](https://www.netflix.com/): You and your friends watch a show together at someone’s house.
5. [Uber](https://uber.com/), [Lyft](https://www.lyft.com/): Sending your friends your ETA in-app, and Lyft pink mustaches.
6. [Spotify](https://www.spotify.com/us/): Sharing “What I'm listening to” to your Facebook feed
7. [Dropbox](https://www.dropbox.com/h): Making it easy to share a URL to a local file

**To optimize experiential serendipity virality:**

This form of virality is when people see the product in action during the normal course of events.

1. How might you publicly show that a friend or colleague is using the product? e.g. inline signature block, pink mustaches
2. How might you allow users to share interesting information from the app? e.g. their location
3. How might you send interesting push notifications during the day?
4. How might you make your product bring people together in the real world?

### Strategy #2: Increase conversion rate

To explore increasing conversion of your invited potential users, [check out this previous post](https://www.lennyrachitsky.com/p/this-week-21-strategy-and-tactics) that dives deep into all of the ways to increase conversion.

What you want to focus on here is the funnel of a (1) mention or invite being sent —> (2) all the way to that receiving user sharing their own invite or mention.

### Strategy #3: **Increase engaged users**

One final strategy for increasing viral growth is to increase the number of engaged users — users who in turn will bring in new users. You’re essentially putting more fuel on the fire.

**Examples of increasing user engagement**:

1. [Facebook’s People You May Know](https://marker.medium.com/the-untold-history-of-facebooks-most-controversial-growth-tool-2ea3bfeaaa66), which increased the engagement of both users
2. [Facebook letting you to tag friends in photos](https://www.facebook.com/help/227499947267037), which pulled those friends back into Facebook
3. [TikTok duets feature](https://newsroom.tiktok.com/en-us/feature-highlight-new-layouts-for-duet#:~:text=Find%20a%20video%20you'd,preferred%20layout%2C%20and%20start%20recording!), making it easier to create multi-player content
4. [Venmo social feed](https://venmo.com/), keeping users checking the app
5. Stories, across Snapchat, Instagram, Twitter, etc.

Those are all of the ways that I’ve discovered to increase virality. If you have any other interesting or novel strategies or examples in mind, please share in the comments 👇

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

## 🧠 Further study

1. [A Customer Acquisition Playbook for Consumer Startups](https://firstround.com/review/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups/)
2. [The Racecar Growth Framework](https://www.reforge.com/blog/racecar-growth-framework)
3. [The Five Types of Virality](https://news.greylock.com/the-five-types-of-virality-8ba42051928d)
4. [Generating Buzz](https://www.lennysnewsletter.com/p/creating-buzz-at-launch)
5. [My tweet thread asking about virality](https://twitter.com/lennysan/status/1350142883634978816)

## **🔥 Job opening of the week**

> **[Senior/Group Product Manager at Earnin](https://www.earnin.com/jobs?gh_jid=2267207)**
>
> [Earnin](https://www.earnin.com/jobs?gh_jid=2267207) is fighting unfairness in the financial system by helping 100M+ people, who live paycheck to paycheck, get paid every day and save money in a fun and rewarding way. All this without any mandatory fees or hidden costs, people tip Earnin what they think is fair for the use of the service.

**Additional opportunities:**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4313154003), [Kudo](https://kudo.bamboohr.com/jobs/view.php?id=32), [Prenda](https://apply.workable.com/prenda/j/63270A44BB/), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Lead-Designer-14ceaa685100486b824665e1320fc9af), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Alloy](https://apply.workable.com/alloy-automation/j/27639ECE80/), [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), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4), [Sunroom](https://jobs.wrkhq.com/sunroom/17233)
8. **iOS engineer**: [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)

*Have someone in your life who would benefit from this newsletter? Feel free to forward this email to them, or better yet, give them a gift subscription*💖

Sincerely,

Lenny 👋

---

## [6/61] Becoming a senior Product Manager

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan), and welcome to a*🔓 ***free bonus edition*** 🔓*of my weekly newsletter. I decided to make this issue available to everyone, so enjoy!*

*If you’re a paid subscriber, 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: What does it take to become a “senior” Product Manager?

The PM career is unnecessarily shrouded in mystery. We all know you start as an individual contributor, and eventually, you can become a CPO or a VP of Product. But what happens in the middle? The answer is that you go through three milestones:

1. You become a “senior” IC PM (*the focus of this post*)
2. You become a manager of PMs, usually called a Group PM, or Product Lead
3. You become a manager of PM managers, usually called a Director

In my experience, of these three milestones, it takes the longest to progress through the first milestone, going from an entry-level PM to a senior PM. I’d guess that the median amount of time is 3 years, followed by 1-2 years to become a manager of PMs, and another 2-3 to become a Director.

Thus, if you can accelerate getting to Senior PM, you’ll have the most impact on accelerating your overall PM career. To help you down this journey, I asked [Jackie Bavaro](https://twitter.com/jackiebo) (author of [Cracking the PM Interview](https://www.amazon.com/Cracking-PM-Interview-Product-Technology-ebook-dp-B00ISYMUR6/dp/B00ISYMUR6/ref=mt_other?_encoding=UTF8&me=&qid=1612654916), and just-released-last-week [Cracking the PM Career](https://amzn.to/3nEiox9)) to share her wisdom on the topic with us. Jackie’s been knee-deep in research on the product management career path over the past couple of years (for her new book), so I couldn’t think of a better person to tackle this topic.

Below you’ll find the best framing I’ve come across for what to focus on to level up into a Senior PM, including templates and tactical advice. I’m excited to share it with you all. Let’s dive in.

## Becoming a senior Product Manager

*by [Jackie Bavaro](https://twitter.com/jackiebo)*

![Image from Becoming a senior Product Manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c66bd7bc-d901-4ddf-9f91-61c65da26c11_4000x2666.jpeg)

As an early-career PM, it can be hard to understand what it takes to become a “senior” PM, and how to get there. That’s because senior PMs don’t actually need to be much better than a regular PM at the kind of work a regular PM does. The biggest differences are behind the scenes.

Here’s an example, based on an interview question you’ll probably recognize:

> *A PM designs an alarm clock for the blind. They interview customers, test prototypes, and work closely with marketing to successfully launch the new product.*
>
> *A senior PM discovers the market opportunity for more accessible alarm clocks while speaking to customers and partners during their day-to-day work. They create a strategic plan to win the market, analyze which audience to address first, and convince executives to spin up a new team. Then, they interview customers, test prototypes, and work closely with marketing to successfully launch the new product.*

Teammates of the senior PM might not see any of that strategic planning. If they only look at specs and product choices, they might not understand why that person got the promotion.

**The three most important differentiators of senior PMs are:**

1. Strategy
2. Autonomy
3. Nuance

Let’s explore each of these skills.

### Strategy

> **A senior PM is responsible for developing and evangelizing a strategy that leads to meaningful customer and business success**.

They paint a picture of an inspiring future and figure out the best path to get there. They ensure that people understand the strategy and agree with it. They advocate for the resources they need, convincing executives to spin up the necessary teams.

Newer PMs tend to prioritize work based on how much incremental value it adds to the product, while senior PMs prioritize work based on how much it moves the product towards the long term vision. For example, the top requested feature might be great for delighting the current customer base, but it could be more strategic to focus on features that expand the customer base.

By focusing on strategy, senior PMs are able to reliably deliver great products that make a big impact for customers and the business.

The first step down this path is to **make space for strategic work**. You don’t need a promotion to start creating strategies – go ahead and make a proposal for what your team should work on next.

If you keep your eyes open for strategic insights during your day-to-day work, it often doesn’t take much time to get started on a strategy. Block off half a day and pretend you’re attending a (zoom) wedding if you need to. If you really can’t find the time because your engineering team needs you that much, you’ll need to first level up your core PM skills so that the day-to-day work goes faster.

**There are three parts to a strategy: (1) vision, (2) strategic framework, and (3) roadmap**. You can get started with whichever one calls to you:

To get started with a **vision**, sketch out a storyboard of your future customers using your future product and highlight how much better their lives are compared to the status quo. I like to model my product vision after an infomercial, spending a while to explain just how painful things are today. Make sure to include a few strategic insights or bets so that the vision feels believable.

> *Ouch! I stepped on a lego brick. It’s so hard to get kids to clean up their toys. I hate being the mean mom who’s always telling them to clean up. Imagine a future where cleaning up toys is a game and your kids race to be the fastest!*

To get started with a **strategic framework**, write down your target market, their pain points, and the strategic bets or differentiators that you believe will win that market. Write down some alternative approaches and lay out your frameworks for why you believe your approach is better.

> *With the growing trend of positive parenting, parents are looking for ways to inspire good behavior in their children without resorting to punishments. We should enter this market with a fun game that solves one of the top pain points (putting away toys, picky eating, staying in bed at bedtime), and expand into the other pain points over time. By launching a game (instead of a tool or a book), we expand the market beyond parents to anyone who wants to buy the child a gift.*

To get started with the **roadmap**, write down a rough plan for the next few year’s worth of work, ideally grouped into strategic themes. Once you have the roadmap, imagine someone asking "why?" about each part of it. Your answers to that question will form the beginning of your strategic framework.

> *This quarter: launch cleaning game. Next quarter: launch picky food game. Next half: launch 2 more games. Next year: start licensing new games to expand faster.*

Your strategy doesn’t have to be perfect! Your plan will change as you learn new information, but starting with a strategy helps you make better moves now. Block off the time to create a strategy now!

### Autonomy

> **Senior PMs are able to run a team independently**.

Great senior PMs ask for lots of input and advice, but they *could* keep their team running, work with stakeholders, resolve conflicts, and ship successful products without needing their manager to guide them. They know when to question the direction they were handed, rather than seeing it as a fixed variable.

Autonomy isn’t just about being capable, it’s also about earning the trust to be *allowed* to work independently. That takes proactive communication and building a track record of successful launches.

Ironically, if you have a high level of autonomy it can be harder to earn trust. When you’re working independently, your manager won’t see all of the great decisions you make and the tough challenges you overcome. You’ll need to intentionally share your work with your manager.

A lot can go astray when you try to share your work with your manager. You might sound too self-promotional, they might think you’re stuck and asking for advice, they might be frustrated that you’re *not* asking for advice.

Luckily, there’s a template that helps avoid all these problems:

> 1. *Hi manager, let me tell you about a challenge I ran into \_\_\_\_\_\_*
> 2. *Here’s how I’m thinking of handling it (or did handle it) \_\_\_\_\_\_*
> 3. *Any thoughts?*

This format lets you show off the challenge you faced and how you handled it, while also making an opening for feedback. If your solution was good, your manager can tell you, "Great work!" If there’s room for improvement, proactively asking for feedback at least demonstrates that you can be trusted to ask for input when you need it.

Try to use this template the next time you want to share your progress or ask your manager for advice.

### Nuance

> **The more senior you get, the more you’ll be faced with decisions where the right answer is “it depends.”**

Senior PMs recognize these decisions and reason through them in a structured way. They can grapple with complex tradeoffs and ambiguous situations. They don’t fall back on rigid frameworks. They understand the goals and constraints of departments across the company and don't erroneously assume that their own team's goals are more important than those of any other team.

This doesn’t mean that it takes a senior PM days to make each decision. Due to their product expertise and rich mental models, they can lay out their thought process in minutes. Given an ambiguous problem area, they can rapidly pick out the most important problems to solve (and drive the work through to tangible impact).

As a corollary to working on these nuanced problems, senior PMs also are expected to engage in constructive discussions with leaders at the company. They can effectively explain the nuance in the situation and the tradeoffs. They can defend their recommendation without becoming defensive.

As you work on developing your nuanced thinking, the best guides are your teammates and stakeholders. Take their concerns seriously and look for the hidden complexity. What are the circumstances in which they’d be right? What information might they have that causes them to come to a different conclusion?

As an example, imagine you’re launching a new feature and the head of customer support complains that it can’t be controlled by her team’s operational scripts. Instead of brushing her off and saying you'll update the scripts after launch, ask questions until you understand why she cares. You might learn that without the scripts it takes customer support representatives longer to answer tickets, which means customers will have a lower satisfaction rating, which correlates with them canceling their subscription. Once you see the broader implications, you might decide it's better to delay the launch until the scripts are updated.

To practice this skill, when you make a decision, find nuances where a different decision would be better. Write out, “It depends. If X, then A is the best choice. If Y, then B is the best choice. I think this situation is X, so A.” While it's helpful to explore "it depends," only share that longer answer if it's actually helpful. You don't want to annoy your teammates.

#### In summary, start these three things today:

1. Block off the time on your calendar to focus on strategy
2. Use the autonomy template in your next meeting with your manager
3. Look for the “it depends” answer to practice on

By working on strategy, autonomy, and nuance, you can level up your skills, expand your impact, and hopefully get promoted to senior PM!

In our new book ***[Cracking the PM Career](https://amzn.to/3nEiox9)***, Gayle and I go into even more detail on the senior PM role and what it means to be strategic.  If you have more thoughts or questions, the best way to reach me is [@jackiebo](https://twitter.com/jackiebo) on Twitter.

*Thanks, Jackie!*

## **🔥 Job opening of the week: Bubble**

> **[Growth Manager - Acquisition](https://bubble.io/job?jid=4592582002%2C)**
>
> We're looking for a senior growth marketer to help us scale our paid channels at Bubble. We've seen promising results and want to double down on this.

**Additional opportunities:**

1. **Product**: [Cerebral](https://boards.greenhouse.io/cerebral/jobs/4313154003), [Kudo](https://kudo.bamboohr.com/jobs/view.php?id=32), [Plume](https://www.linkedin.com/jobs/view/2389567233/?trackingId=KJBHkPnMP%2FFrI5SgShG5IQ%3D%3D), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Transform](https://transformdata.io/careers/), [UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Lead-Designer-14ceaa685100486b824665e1320fc9af), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Alloy](https://apply.workable.com/alloy-automation/j/27639ECE80/), [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), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4), [Sunroom](https://jobs.wrkhq.com/sunroom/17233)
8. **iOS engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)

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

1. **Watch**: [Kurt Vonnegut on how to write a short story](https://www.youtube.com/watch?v=nmVcIhnvSx8)

[Watch on YouTube](https://www.youtube.com/watch?v=nmVcIhnvSx8)

2. **Watch**: [Home Movie: The Princess Bride](https://kottke.org/21/02/home-movie-the-princess-bride) (via [Kottke](https://kottke.org/21/02/home-movie-the-princess-bride))

[Watch on YouTube](https://www.youtube.com/watch?v=lR8pA_WV9QI)

3. **Read**: [Frameworks](https://docs.google.com/document/d/1-UiEeoiV0xBFVZgid63FRaph03OCmHzyEExubn63j0U/edit) by [Chris Paik](https://twitter.com/cpaik)

#### **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 email to them, or better yet, give them a gift subscription*💖

Sincerely,

Lenny 👋

---

## [7/61] Li Jin launches Atelier Ventures, her debut fund to invest in the passion economy

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan), and welcome to a* **✨ special 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. Enjoy this week’s special edition, and next week we’ll be back to our regularly scheduled programming.*

In 2019, while still working at a16z, Li Jin wrote a provocative essay titled “[The Passion Economy and the Future of Work](https://a16z.com/2019/10/08/passion-economy/).” In it, she defined and highlighted an emerging trend she called the “passion economy” wherein people “build audiences at scale and turn their passions into livelihoods.” Her claim was that new digital platforms and marketplaces will have a profound impact in enabling people to connect to consumers and monetize their skills and interests, and would in turn open up entirely new types of jobs in the future. I, along with a growing contingent of people, am living proof of this trend coming to fruition.

The first sentence in her 2019 essay included what, at the time, was a shocking stat:

> #### The top-earning writer on the paid newsletter platform Substack earns more than $500,000 a year from reader subscriptions.

Just over one and a half years in, I now earn more than this with my humble newsletter. I didn’t realize it at the time, but Li predicted and paved the way for my new career.

Over the past year, I’ve been fortunate to get to work with Li on a number of projects, and when I learned she was raising a fund focused on the passion economy, I asked her how I could help. Realizing that I’m living proof of her thesis, we thought there was no better place for her to announce her new fund. So here we are!

#### **I’m excited to announce Li Jin’s debut fund: Atelier Ventures, a $13 million fund to support the passion economy.**

[Atelier](https://www.atelierventures.co/) is focused on companies that support a “human-centered vision of the future of work,” says Li, including platforms that broaden access to new forms of work, lower the barriers to entrepreneurship, and democratize the means of production and distribution. Typical check sizes will range from $100,000 to $300,000. Although the fund is just being announced, Li has already made several investments, including in Substack, Stir, Geneva, Streamloots, Descript, and Dumpling.

![Image from Li Jin launches Atelier Ventures, her debut fund to invest in the passion](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8fb2cb1b-e4e0-4382-9007-9c0cacecffbc_1600x900.png)

With Atelier, Li joins a rarified group of female fund managers who have set up their own firms, and an even smaller cohort of fund managers who have launched new funds entirely during COVID, all over Zoom.

Oversubscribed beyond her initial target of $10 million, her LPs include Andrew Chen and Alex Rampell from Andreessen Horowitz; Adam D’Angelo (Quora); Automattic; Jack Conte and Sam Yam (Patreon); author Adam Davidson; Parcast founder Max Cutler; Hunter Walk (Homebrew); David Sacks (Craft Ventures); Om Malik (True Ventures); Gina Bianchini (Mighty Networks); Kevin Lin (Twitch); Eugene Wei; multiple a16z portfolio company founders; and a number of venture funds including Bain Capital Ventures and Draper Esprit.

It’s clear what Atelier’s differentiation is, even in a crowded venture capital landscape. Li is now widely considered to be the godmother of the passion economy, with incisive writing and thinking that sway the strategies of all sorts of businesses, from startups to public companies. She has been [credited](https://twitter.com/web/status/1353077556849868806) with the current fervor around the creator economy and reviving interest in consumer social. With a solo GP fund, she is also now living her own thesis that power is shifting from institutions to individuals.

Beyond just talking and writing about the passion economy, she is also an active participant in it, with creative side projects including a [podcast](https://pod.link/1527481453); newsletters ([free](https://li.substack.com) and [paid](https://every.to/means-of-creation)); [founder community](https://www.atelierventures.co/passion-economy-pals); [Side Hustle Stack](https://sidehustlestack.co), a resource for finding flexible work; and an upcoming cohort-based [course](https://creatoreconomycourse.com) about the creator economy. These projects and the fund are mutually reinforcing, aiding her companies to sharpen their strategies, leverage new distribution channels, and get in front of creators and users.

I sat down (virtually) with Li to learn about her plans for the fund, her latest thinking around the passion economy, and what it’s like to raise a fund completely over Zoom. I hope you enjoy this conversation as much as I did.

## Interview with Li Jin, founder of Atelier Ventures

### **What’s the story behind the name “Atelier”?**

“Atelier” is French for an artist’s studio or workshop. I was deliberate in choosing a name that reflected my background as an artist ([li-jin.co/art](https://li-jin.co/art)) and that also felt more feminine and distinct from most VC names. An atelier is where artists create, and I wanted to honor the creative process that founders go through when taking something that had previously only existed in their imaginations and translating it to reality.

![Image from Li Jin launches Atelier Ventures, her debut fund to invest in the passion](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0185cd5a-3798-4cfb-9878-32626288cc2b_739x554.jpeg)

### **Why start a fund? Aren’t there enough seed funds out there?**

There are indeed a lot of seed funds out there! But I did an experiment last year (pre-covid): I went to Stanford’s campus and polled students on, if they were starting a company today, which venture firm would they want to raise from? Surprisingly, most students couldn’t name *any* early-stage funds. That tells me that despite the proliferation of new funds, there’s an opportunity to build a firm that rises to the top of founders’ minds when they think of starting a company in a particular category, and that has a clear mission and worldview.

> #### My fund’s raison d’etre is to rebuild the middle class and create more opportunities for earning money, in ways that are non-exploitative and give people a path to upward mobility.

I elaborated on these ideas in a December [essay](https://hbr.org/2020/12/the-creator-economy-needs-a-middle-class) in *Harvard Business Review*. Why do we build and invest in technology? Technology platforms result in productivity growth and value creation, but it’s up to all of us (societally, and as investors and builders) to determine how that value is distributed to its members. Through this fund, I want to pull the world in a more egalitarian direction. That’s accomplished by supporting platforms that empower the long-tail of creators; showcase talent, knowledge, and skill (however niche they may be); and give consumers more accessible services and products. This isn’t just an investing thesis; this is my life’s mission and is desperately what I want to see in this world.

I also plan to do things differently! I’m compiling a [database](https://airtable.com/shrL2zwMQm48oBloQ) of creators — including YouTube and TikTok creators — who are interested in working with startups, either for content partnerships or angel investing. Something I’d also like to do in the future is to incubate startups in the passion economy, where Atelier will co-found businesses with founders in various areas of opportunity. Lots of talented founders come to me to validate ideas — I’d love to provide more hands-on help throughout the process.

> *“I couldn’t imagine building Stir without having Li on the team. She isn’t just an investor—she lives and breathes the creator space through her own actions, giving her a level of insight and empathy that is unparalleled. Founders who are building in this space should take every effort to have her on their side.”*
>
> *— Joe Albanese, CEO of Stir*

### **You raised your fund entirely during COVID. What was that like?**

It was not easy — I’m not going to sugarcoat it. I left my last job at a16z in May and fundraised during the height of COVID. There was still a chill in the market, and many VCs and mentors told me that it would be next to impossible to fundraise for a new fund. I got a lot of “no’s” and “We’d love to support you, but we’re conserving liquidity because of COVID.”

But due to some combination of naivete, self-confidence, or insanity, I just kept going. I just believed *so damn much* in the passion economy and that the world needed this firm to exist to push forward an entirely new economic movement.

I’m grateful that I started the fund when I did — it gave me so much founder empathy for what they have to go through to get something off the ground, especially when the odds are stacked against them. Many of my LPs were folks who gave me a chance without ever meeting me in person, and I’m eternally grateful for that.

> *“As a player in the passion economy, we have a secret weapon: a ‘teammate’ with exposure to everything happening, the intelligence to turn it into insights, and the authenticity to influence and guide others. That secret weapon is Li.”*
>
> *— Dan Liu, CEO of Luma*

### **Back in 2019, you first coined the term “passion economy,” and now, there are hundreds (maybe thousands?) of companies in the space. What do you look for when looking to invest in passion economy companies?**

Since I wrote my original blog post, COVID has accelerated a lot of change in work and catalyzed a ton of entrepreneurship and digitization of previously-offline businesses. That’s all very much in-line with the thesis of the passion economy: people being able to monetize individuality and non-commoditized skills at scale, supported by digital platforms. It’s great to see the proliferation of new companies that are supporting economic empowerment in various ways, whether it’s simplifying the creation process for something, enabling individuals to build and reach an audience, or creating a platform for specific types of work.

There are a few characteristics I look for in startups, though of course, this is more art than science at the earlier stages:

1. **Largely, it’s a people bet**. Specific traits that I really value are resilience and grit (when they’re facing a million obstacles, will they keep going?), a propensity for action, and how deeply they’ve thought about the market. Did they take the time to learn the history of prior startups and understand the competitive landscape and market dynamics? In the creator space, founder-market fit is really important. The first users/customers typically come from relationships, so founders that have faced challenges first-hand or have built tremendous customer empathy often have an unfair advantage in engendering trust and support.
2. **The company broadens access to a new type of work or makes it way easier to do an existing job that had previously been gatekept**. I believe there are many types of differentiated skills and knowledge that can be productized and monetized in ways that perhaps we can’t even yet imagine.
3. **I’m drawn to markets that may appear small at first glance, but that can actually be expanded.** I think the creator space is emerging and nascent, and TAM analysis can [belie the actual size of markets](https://li.substack.com/p/four-implications-of-disruption-theory). New models are re-configuring existing value chains and cost structures, and for disruptive innovations, the potential market among non-consumers usually exceeds what is already being consumed.

> *“Working with Li is like adding a growth, content distribution, and brand expert to your team. Li has been instrumental in our journey getting from our seed to Series A.”*
>
> *— Ben Huffman, CEO of Contra*

### **How many billion-dollar businesses do you think there will be in this space?**

A lot! People tend to conflate the passion economy with the creator economy, but the passion economy isn’t an industry vertical — it’s an entirely new economic movement that empowers individuals over institutions. We’re seeing that decentralization of power playing out across industries, whether it’s education, media, or money.

For work, people are going [direct-to-consumer](https://li.substack.com/p/unbundling-work-from-employment) in offering services and products and monetizing individuality at scale, supported by digital platforms. That’s clearly not limited to social media influencers, but encompasses chefs, teachers, fitness instructors, musicians, really every industry!

There are companies that I’ve invested in that people are usually surprised to hear fit within the passion economy: CopyAI is an AI copywriter that helps marketers, entrepreneurs, and salespeople to write better copy. Dumpling is a platform helping solopreneurs to start and run their own grocery delivery businesses. These are businesses that don’t fit the image that usually comes to mind when people think of “creators,” but are nevertheless empowering entrepreneurship in various ways.

> *“Most investors can help you with hiring, operating, etc. Li has the ability to truly empower and challenge your vision, in terms of what you want to achieve as a company. That’s an amazing strength that no other investor has in this category.”*
>
> *— Alberto Martínez Guerrero, CEO of Streamloots*

### **What’s the biggest difference between working at a firm like a16z, and having your own fund?**

It’s akin to the difference between being an employee vs. being a founder of a company; or being employed by a media company vs. being a solo creator. It’s a completely different level of autonomy, freedom, and ownership.

I used to work at a firm with 200 employees, ranging from marketing to investor relations to portfolio support, and so I had the luxury of being able to focus just on new investments. Now, I do everything myself — from LP relationships to pitches to portfolio support to marketing. It’s a tremendous exercise in time management, planning, and prioritization.

But at the same time, it’s so gratifying to see every facet of the venture business and to build this firm from scratch. I feel very lucky to be able to do what I’m doing. I also want to give a shoutout to my research analyst Lila Shroff, who is currently on a gap year from Stanford, who has been a lifesaver. And though I’m a sole GP, I definitely don’t operate on my own: there’s a tight-knit group of angels who constantly talk to each other, in addition to LPs who act as my sounding boards and founders who support me in sourcing deals, providing emotional support, etc. I often cite a phrase from *Free Agent Nation* by Daniel Pink that really describes my life: “Free agents may be bowling alone, but they’re not going it alone.”

### **If someone is considering taking the leap into a “passion economy” life, what advice do you have for them?**

I encourage folks to first start with side hustles before graduating to a full hustle, to both discover whether the work is something they enjoy, and to build their confidence in their skills. Passion economy life is akin to being an entrepreneur: it’s more uncomfortable in many ways vs. a traditional job that has a stable paycheck and a built-in support system. It’s certainly not for everyone, but for the right person, at the right time in their lives, it can be an incredible option.

Also, check out [Side Hustle Stack](https://sidehustlestack.co/), a website that I built with Lila Shroff and Brandon Handoko to help folks find flexible, platform-based work. Flexible work is way more than just gig work now, and there are so many platforms that are helping people to monetize different skills or interests they have.

### **What should we expect to see unfold in the next few years in the passion economy? Give us your vision of the future.**

I think about this constantly! A few predictions:

1. **What kids do for fun today will become the new creator professions of the future**. I think back on my own childhood: the activities that gave me the most joy (but which adults thought were a waste of time) were blogging on platforms like Livejournal and Xanga, painting and making crafts, reading and writing fanfiction, and talking to friends that I had met through online forums. All of those activities now are monetizable through the passion economy. Kids are perhaps the most attuned to creativity and play, so I look to them as an indicator of where the future of work lies.
2. **Education changes dramatically to equip creators rather than training employees for traditional jobs.** There’s a dearth of creator-focused education today, and many creators tell me they’re figuring things out as they go through trial-and-error. Various programs are moving to fill this gap, like YouTube Creator Academy and independent, creator-led courses. I’d love to see more startups playing in this space and bridging the education gap through mentorship and content.
3. **Some form of [Universal Creative Income](https://li.substack.com/p/building-the-middle-class-of-the) (UCI) will become prevalent across social platforms** as the arms race to attract creators heats up. Platforms will compete with each other on the basis of their total “comp package” for creators, which will include a financial component.
4. **More financing options emerge to help creators invest in their businesses**, and for investors/supporters to share in the upside of creators’ success. I’m also really inspired by new crypto business models like what [Mirror](https://mirror.xyz/) (a decentralized blogging platform) enables, which align the interests of creators, audiences, and platforms.
5. **There will be new models that provide an option between being an employee and being a solo creator**. We’re already seeing this with [Forbes](https://www.axios.com/forbes-paid-newsletter-subscriptions-ab423ae1-0b90-4863-acad-40a373adce80.html) and [Every](https://every.to), where writers get support, community, and downside protection from the company, but also retain more ownership and upside. I think this model will spread to other creator verticals and increase the total population who can participate in the passion economy.

I could go on forever because I really believe the passion economy is going to transform so much of life and society. Founders should reach out to me if they want to discuss any of these ideas in more detail!

*Thanks, Li!*

#### **Getting in touch with Li and** Atelier Ventures

- Follow [Atelier](https://twitter.com/atelierventures) and [Li](https://twitter.com/ljin18) on Twitter
- Atelier’s website: [atelierventures.co](https://www.atelierventures.co/)
- Li’s newsletter: [li.substack.com](https://li.substack.com/)
- Side Hustle Stack: [sidehustlestack.co](https://sidehustlestack.co/)
- Li’s art portfolio: [li-jin.co/art](https://li-jin.co/art/)
- Entrepreneurs: [li@atelierventures.co](mailto:li@atelierventures.co)

Sincerely,

Lenny 👋

---

## [8/61] Examples of great job postings

> ## Q: I need to write a job description for the first time and I’m looking for inspiration. Every job description I read is so boring. Have you seen any that stand out?

Founders often say that hiring is their #1 job, but it’s rare that you find a founder who spends as much time on their job postings as they do on, say, their product’s sign-up flow. This feels like a missed opportunity.

Job postings that stand out drive more applications, better applicants, and strengthen your company’s brand. I have zero data to back this up, but I’m certain it’s true. You don’t have many opportunities to break through the noise, and considering the meh’ness of most job postings, putting extra effort into creating a remarkable (i.e. worth remarking about) job posting is a high ROI investment.

Below I’ve collected the best job postings I’ve come across, with notes on why I love them. My hope is that these examples inspire you to level up your own job postings.

If you’ve come across other great examples (including your own!), I’d love to see them. Please share them in the comments 👇

[Leave a comment](https://www.lennysnewsletter.com/p/examples-of-great-job-postings/comments)

### 1. Superhuman ([link](https://superhuman.com/roles?gh_jid=2444377))

![Image from Examples of great job postings](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/40786970-3144-4156-8c6b-0ab6f9d0cd7f_1530x1458.png)

**What I love about this:**

1. Kicks off with a compelling and succinct (just five lines) explanation of the product
2. A clear sense of what the company values — frequent uses of words like “craft”, “impact”, “customers”, “delight”, “deeply understand”
3. Evidence to back up the bold claims, with links to a [wall of love](https://twitter.com/SuperhumanCo/timelines/911278863216340992), [founder’s writing](https://www.linkedin.com/pulse/goodbye-mr-iwata-rahul-vohra/), and [their investors’ perspective](https://superhuman.com/roles?gh_jid=2444377)
4. “Create massive impact” and “Do the best work of your life” — who wouldn’t want that
5. Playfulness and warmth through the use of emojis, language, and non-standard formatting

### 2. Basecamp ([link](https://m.signalvnoise.com/basecamp-is-hiring-a-head-of-marketing/))

![Image from Examples of great job postings](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/639ff792-4f26-424a-adce-b560846dab6a_1530x1414.png)

**What I love about this:**

1. Tells a (great) story
2. Helps you viscerally understand the need for this role
3. The role is explained without using a bulleted list
4. A clear sense of who this role is for, and who it *isn’t* for
5. Transparency — salary, link to the employee handbook

### 3. DelightChat ([link](https://www.notion.so/Are-you-a-Senior-Backend-Engineer-04a9f65a1ae14605a8485b4acad55a4d))

![Image from Examples of great job postings](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0063abfd-7ae8-4aa0-ad69-cc17da374c06_1530x1404.png)

**What I love about this:**

1. Recognizes and reflects the reader’s reality right in the first line
2. A screenshot of the product
3. Humor and personality throughout — conversational language, emojis, color, jokes
4. Non-boiler-plate values and culture, which quickly tell you if it’s a fit for you
5. Step-by-step details on the interview process

### 4. Mighty ([link](https://www.notion.so/Mighty-is-hiring-945d3168d3e34a37883ca4d823ed734f))

![Image from Examples of great job postings](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/43fdaf4b-f4da-4f60-841a-ad4ed8b8db23_1530x1424.png)

**What I love about this:**

1. A succinct and compelling explanation of the product right at the top
2. An immediate sense of the large impact you can have
3. Instead of telling you what they’re looking for, describes what the current team is already like
4. Specific examples of cool technical work
5. An in-depth FAQ covering every question you may have, with lots of transparency

### 5. Levels ([link](https://www.notion.so/Join-Levels-Remote-Head-of-Marketing-Growth-6e64dba240404eaea9160a48f1c5f24f))

![Image from Examples of great job postings](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0b7bbbbc-a29c-4a8a-8c02-7b9fae38e00b_1584x1458.png)

**What I love about this:**

1. A two-sentence tl;dr summarizing the company, role, and opportunity
2. You quickly understand why this product (and company) is important
3. A clear sense of what the role is
4. “Why you may NOT be excited about us”
5. Details on the interview process

### **Honorable mentions:**

A few more excellent job descriptions to inspire you:

- [Growth at Amie](https://www.notion.so/Growth-Memo-93c8bfda5dab4148b0606d527fda848a)
- [Cowpoke/Intern at Lowercase Capital](https://lowercasecapital.com/2010/10/10/ranchhands/)
- [Huntsville, Alabama, Police Department](https://www.ere.net/if-all-else-fails-dress-up-as-a-dinosaur-and-recruit/)
- [Airbnb job posting on Quora in 2010](https://www.quora.com/What-start-ups-are-hiring-in-San-Francisco/answer/Michael-Schaecher?ch=10&share=9f8c0eaf&srid=hR7)
- [Jr. Conversion Copywriter at Conversion Crimes](https://conversioncrimes.com/careers/jr-conversion-copywriter/)

And of course, the classic:

![Holy Trinity CE Primary School - Men Wanted!](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0b37cd9e-925f-4695-9a28-6a198f88a471_370x290.png)

### **Takeaways and inspiration for your job postings:**

1. How might you describe your product and business in just a couple of sentences, while making it more compelling?
2. How might you communicate your company’s culture and values without simply itemizing your culture and values?
3. How might you make it apparent who this role is for, and NOT for?
4. How might you use screenshots or videos to show, not tell?
5. How might do something totally different?

Have examples of other great job descriptions? Please share 👇

[Leave a comment](https://www.lennysnewsletter.com/p/examples-of-great-job-postings/comments)

That’s it for this week! May you have a productive and fulfilling week 👋

## **🔥 Job opening of the week:** [Lead Product Manager at Nacelle](https://boards.greenhouse.io/nacelle/jobs/4309224003?gh_src=9e3265023us)

> **Join one of the fastest-growing SaaS start-ups — Nacelle is looking for hardworking and intelligent people who have a passion for headless commerce.**

[Learn more about Nacelle](https://boards.greenhouse.io/nacelle/jobs/4309224003?gh_src=9e3265023us)

**Additional opportunities:**

1. **Product**: [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Transform](https://transformdata.io/careers/), [UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Prenda](https://apply.workable.com/prenda/j/AC98C5FDFB/), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Lead-Designer-14ceaa685100486b824665e1320fc9af), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Alloy](https://apply.workable.com/alloy-automation/j/27639ECE80/), [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), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4), [Sunroom](https://jobs.wrkhq.com/sunroom/17233)
8. **Mobile engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Roo](https://www.linkedin.com/jobs/view/2402709626/), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)

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

1. **Watch**: [Tadpoles: The Big Little Migration](https://kottke.org/21/02/tadpoles-the-big-little-migration)

[Watch on YouTube](https://www.youtube.com/watch?v=5S-lZtE1J6M)
2. **Listen**: [Katie Haun on the Dark Web, Gangs, Investigating Bitcoin, and The New Magic of “Nifties” (NFTs)](https://podcasts.apple.com/us/podcast/499-katie-haun-on-dark-web-gangs-investigating-bitcoin/id863897795?i=1000509727539) by Tim Ferriss
3. **Read**: [American Idle](https://www.eugenewei.com/blog/2021/2/15/american-idle) by Eugene Wei

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

Sincerely,

Lenny 👋

---

## [9/61] Content-driven growth

*👋 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. *[How to increase your product’s virality](https://www.lennysnewsletter.com/p/increasing-virality)*
2. *[Becoming a senior product manager](https://www.lennysnewsletter.com/p/senior-product-manager)*
3. *[Examples of great job descriptions](https://www.lennysnewsletter.com/p/examples-of-great-job-postings)*

> ## Q: Which startups are best at content-driven growth, and what can I learn from them?

This question got me thinking—what are all the ways that content can drive growth? There’s obviously SEO. There are also viral blog posts, user-generated content (UGC), editorially produced blog posts, data-generated pages, and so on. What other strategies are there, and how do they all fit together?

Here’s my best attempt at mapping out the landscape of content-driven growth:

![Image from Content-driven growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d72a4061-7c9a-4262-8cb6-ae7c6e106ab6_2048x1024.png)

Where you sit on this 2x2 is based on what you’re optimizing for (SEO vs. virality) and who’s generating the content (users vs. employees).

#### **I posit that there are five unique content-driven growth strategies:**

![Image from Content-driven growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7c5d01ff-4dd0-4b85-ba95-bda9e7aac9d7_2048x1024.png)

Let’s break this down:

1. **User-Generated SEO-Optimized (UGSO):** Your users generate public content that Google finds and surfaces in organic search. This primarily drives the growth of companies like **[Quora](https://www.quora.com/How-do-I-become-a-product-manager-2), [Glassdoor](https://www.glassdoor.com/Job/san-diego-entry-level-jobs-SRCH_IL.0,9_IC1147311_KO10,21.htm),** and **[Reddit](https://www.reddit.com/r/personalfinance/comments/8hnkfs/i_need_a_basic_tutorial_for_how_to_buy_stocks/).**
2. **Editorially generated SEO-optimized (EGSO):** Employees (or contractors) of the company create content with the goal of ranking higher for certain keywords. This primarily drives the growth of companies like **[Ahrefs](https://ahrefs.com/blog/most-visited-websites/)**, **[Slidebean](https://youtu.be/p9YUjzmiiSk)**,and **[HubSpot](https://blog.hubspot.com/service/customer-segmentation)**.
3. **Data-generated SEO-optimized (DGSO):** This strategy is the combination of UGC and Editorial—your company auto-magically generates thousands of individual pages off your UGC and proprietary data. This primarily drives the growth of companies like **[Thumbtack](https://www.thumbtack.com/mo/kansas-city/electricians/)**, **[Zapier](https://zapier.com/apps/google-sheets/integrations/slack)**, **[Tripadvisor](https://www.tripadvisor.com/Restaurants-g187791-Rome_Lazio.html)**, **[Yelp](https://www.yelp.com/search?cflt=plumbing&find_loc=Kansas+City%2C+MO)**, **and [Grubhub](https://www.grubhub.com/delivery/fl-miami)**.
4. **User-generated virality-optimized (UGVO):** UGC leads to users sharing that content with their friends, which then pulls those friends into the product. **TikTok** is the ultimate example of this (users sharing watermarked videos with each other), as is the **[Reface app](https://hey.reface.ai/)**. The edges of this zone include Airbnb listings (that users share with each other) and Zillow’s Zestimate (which homeowners pass around).
5. **Editorially generated virality-optimized (EGVO)**: Employees/founders make one-off viral content—also known as thought leadership or brand building: content that the founder/company creates with the goal of having that content spread through word of mouth. This includes **Spotify Unwrapped**, along with virality-oriented creators like **[Mr. Beast](https://www.youtube.com/channel/UCX6OQ3DkcsbYNE6H8uQQuVA)**, **[Stir](https://www.tubefilter.com/2021/01/25/stir-collab-party-creators/)**[’s one-off drops](https://www.tubefilter.com/2021/01/25/stir-collab-party-creators/), and **[Superhuman’s](https://qz.com/626349/rip-mailbox-or-founders-how-to-stop-worrying-and-love-being-acquired/)** [early blog posts](https://qz.com/626349/rip-mailbox-or-founders-how-to-stop-worrying-and-love-being-acquired/).

In previous posts, we’ve explored the top-left quadrant ([data and user-generated SEO](https://www.lennyrachitsky.com/p/crafting-an-seo-strategy-issue-34)), and the bottom half ([viral growth strategies](https://www.lennysnewsletter.com/p/increasing-virality)), so in this post I’d like to zero in on the less explored top-right quadrant, **editorially generated SEO-optimized (EGSO)**:

![Image from Content-driven growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bfdcf754-87e8-4801-abb4-f6a114462d81_2048x1024.png)

[I asked Twitter](https://twitter.com/lennysan/status/1348764224739164160) which companies do this type of content-driven growth best, and four companies came up over and over: **Slidebean**, **Ahrefs**, **Intercom**,and **HubSpot**.

![Image from Content-driven growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7c035ae8-13b5-4682-81fc-e0f582f554d5_2048x1024.png)

(Also Webflow, but we’ll get to that later.)

I reached out to the founders and/or heads of content at each of these companies and asked them if they’d be willing to share their lessons. They all very generously agreed 🙌

Below you’ll find their answers to the following questions:

1. What convinced them to put resources behind creating content?
2. What kind of resources did they put into content initially?
3. What do the content team and resources look like now?
4. How do they operationalize the content creation?
5. What advice would they give companies pursuing content-driven growth now?

*A* huge *thank-you to [Caya](https://twitter.com/cayahere) (Slidebean), [Tim Soulo](https://twitter.com/timsoulo) (Ahrefs), [Kieran Flanagan](https://www.linkedin.com/in/kieranjflanagan) (HubSpot), [John Collins](https://twitter.com/jaycee001) (Intercom), and [Mischa Vaughn](https://www.linkedin.com/in/mischavn/) for sharing these insights with the world.*

***Note:** Intercom and Webflow don’t fit squarely into this EGSO category (they aren’t primarily SEO-driven), but I decided to include them in this post anyway because their perspectives are instructive.*

### High-level takeaways:

1. **Start small:** Start scrappy and play around with platform, topic, and style until you find something that works.
2. **Align on a clear goal:** Is your goal to bring SEO traffic, to drive virality, to build your brand, or to enable sales? Make sure you’re clear on this.
3. **Hunt for opportunity:** Research topics where searchers are underserved, and create content that delivers compelling, valuable, and differentiated value to those searchers.
4. **Give the reins to someone who cares:** The best content will be produced by people who truly care about the product/business/topic—normally, the founders or a passionate full-time employee.
5. **Think long-term:** Make sure there’s a clear path to this investment making a significant dent in your growth. Is the upside even worth it?
6. **Build a dedicated team:** Eventually you’ll need at least five people dedicated to this effort, even more if you’re doing video.
7. **Be patient:** It took years for each company chronicled below to see significant payoff.

Any other takeaways as you read this post? I’d love to hear them 👇

[Leave a comment](https://www.lennysnewsletter.com/p/content-driven-growth-strategy/comments)

#### Fun stats:

**[Ahrefs](https://ahrefs.com/blog/):** Have published 300+ posts with 1.5M visits/month. Most popular content:

- [Top 100 Most Visited Websites by Search Traffic (2021)](https://ahrefs.com/blog/most-visited-websites/)
- [Affiliate Marketing for Beginners: 7 Steps to Success](https://ahrefs.com/blog/affiliate-marketing/)
- [Top Google Searches (2021)](https://ahrefs.com/blog/top-google-searches/)

**[Slidebean](https://slidebean.com/):** Have published 250+ videos with 160K visits/month. Most popular content:

- [Boosted Boards: from flight risk to $70 million failure](https://youtu.be/jxPDeFT4oTE)
- [Zoom company story: How Eric Yuan defeated Skype](https://youtu.be/p9YUjzmiiSk)
- [How Spotify beat Apple at their own game](https://youtu.be/IZnTp_iCrRY)

**[Intercom](https://www.intercom.com/):** Have published 870 posts and 262 podcasts, with 100K+ visits/month and 75K+ listeners/month, respectively. Most popular content:

- [RICE: Simple prioritization for product managers](https://www.intercom.com/blog/rice-simple-prioritization-for-product-managers/)
- [Design workshops that work: how to get better at brainstorming](https://www.intercom.com/blog/running-design-workshops/)
- [What is a product manager and what do they do?](https://www.intercom.com/blog/qa-what-does-a-product-manager-do/)

**[HubSpot](https://www.hubspot.com/):** In HubSpot’s early days, 30% or more of their customers came from demand generated by their blog posts. Also, if you look at their web traffic (organic, direct, referral), it’s bigger than a lot of other online business publications, like TechCrunch, etc. It’s why they always think of their competition for online attention as other media outlets vs. other SaaS brands.

Let’s dive in.

### **1. What convinced you to put resources behind creating content?**

**Slidebean:**

> “We noticed that the traffic coming from the ‘pitch deck’ keyword on SEM was clearly our best type of lead. We doubled down, and very quickly we maxed out the SEM keyword and were already the first result across our target geos. **The problem was, of course, SEM traffic is expensive, and not enough (only about 5% of searches)**. **So we started focusing on SEO, around startup-related keywords.** This was the first major marketing breakthrough for the company.
>
> That year, we produced a lot of content (~150 articles) and, after a few months, managed to get to 3-5 SERP rankings for most of the keywords we had focused on.
>
> For the next two years, that traffic drove our growth. Eventually, though, we realized that getting to 1-2 rank was probably not going to happen regardless of how many articles we published, so **we figured we had to find ‘the next’ search engine: YouTube.**
>
> Our first strategy on YouTube was SEO: creating videos that answer questions people are looking for (i.e. ‘pitch deck’).
>
> Once we built an audience, we produce content focused on the YouTube algorithm: focused on high CTRs, high watch time, topics that appeal to broad audiences and sharing. The thing with sharing is that we have little control on that decision.
>
> I spoke about that here:

[Watch on YouTube](https://www.youtube.com/watch?v=_3_aAxneu2w)

**HubSpot:**

> “HubSpot started publishing before they even had a product to sell.
>
> At that time, [co-founder] Dharmesh [Shah] had been creating content and building a community through OnStartups. Through that site’s success, both Dharmesh and [co-founder] Brian [Halligan] saw how much of an audience you could grow to your content if it provided value. It’s how inbound marketing came to be—**create assets of value for your audience vs. pay money to interrupt them via traditional advertising**.
>
> HubSpot grew through inbound marketing, creating things of value for our audience. There are two parts to our media strategy:
>
> 1. **Content to educate.** People find this content through search, typically a blog post. Some of those people sign up to get a more comprehensive piece of content—e-book, template, course.
> 2. **Content to influence.** We create original stories for our audience around business trends, stories, and case studies featuring successful companies. These are across channels like video and podcasts. Our goal is to get a large audience for these stories.”

**Ahrefs:**

> “I’m not sure that this was a single well-thought-out decision to start producing content and allocate a certain amount of resources there. If I remember correctly, **the process of ramping up our content operations was very gradual**.
>
> When I joined Ahrefs back in 2015, I inherited their already existing blog, which wasn’t too popular back in the day, even though they had a team of outsourced writers and published content a few times per week.
>
> And because I always thought of myself as a ‘blogger’ and ‘content marketer,’ I naturally started looking into ways we could make our blog better.
>
> And then it just kept escalating :)”

**Intercom:**

> “For the four co-founders, Intercom was not their first startup. They had come up through the Web 2.0 era, so blogging and sharing lessons learned was just part of their DNA, particularly for Eoghan [McCabe] and Des [Traynor]. They were regularly sharing opinionated takes on what they had learned building software products and growing Intercom and other businesses. When I joined to establish a formal content team, about 2.5 years after Intercom was founded, they had built up a sizable reputation and audience with that strategy. Des wrote the first ~100 posts.
>
> **We** **initially focused on high-quality editorial content as a way to stand out from the SEO-driven approach** which was the norm at the time. People were happy to promote and share that kind of content, and on the flip side the customers who came to us through the blog and podcast spent more and hung around for longer, as they bought into the product and business philosophy we shared through our content. We gate some content as a way to generate leads, but we always make sure it’s a fair value exchange, i.e. for sharing your email you’re going to get a book that teaches you something meaningful about customer support and is well-written and -designed.
>
> **More recently we’ve been focused on enablement**—making sure that the kind of content you see on the blog or hear on the podcast is available in the formats that are needed by our sales team and other marketing functions like account-based marketing and paid acquisition.”

### **2. What kind of resources did you put into content initially?**

**Intercom:**

> “For the first year, I was the entire team (some of the engineers used to jokingly call me ‘team blog’), but I had a lot of support from our brand design team, and **everyone at the company was incentivized to create content**—whether that was writing blog posts, speaking at events, hosting podcasts, etc. We didn’t pay people or anything, but by, e.g., **adding content creation to personal and team goals**, it was clear it was part of your job as a product manager/designer/engineer and benefited you in terms of career growth. So while I was the only person with ‘content’ in my job title, we invested significant time and resources into it.”

**Slidebean:**

> “**The first YouTube videos were edited by me**, so they only cost a bit of time. We were lucky to have a couple of people on the team who had a background in video production, so we all carved out some time to experiment. This made video experiments very cheap. **For the first year or so, our videos sucked**, and they didn’t get any traffic at all, but we didn’t suffer because we had spent very little money to produce them. This allowed us to do a trial-error game with YouTube for over 18 months until we *finally* found the format that worked.”

### **3. What do the content team and resources look like now?**

**Ahrefs:**

> “Initially I had some budget to find proper talent to create content for our blog, plus I could ‘distract’ our designers to make the pages of our blog look better.
>
> I can’t recall any tipping points when we decided to double down on our content marketing. We were moving in small steps and gradually improved things here and there.”

**HubSpot:**

> “HubSpot’s marketing strategy was ‘inbound marketing,’ so all early hires focused on creating some form of content—blogs, social posts, webinars, etc.”

### **4. What do the content team and resources look like now?**

**Slidebean:**

> “Our YouTube team goes like this:
>
> - Content/Strategy Manager: me
> - 1 Lead Digital Animator, 2 Jr. Animators—all full-time
> - 2x screenwriters, who mostly take care of the research pieces (Company Forensics)
> - Community Manager in charge of engaging with the YouTube audience and publishing the videos
>
> We are publishing a video this week on how much we spent on video production—it came to ~$125K for 2020.”

**HubSpot:**

> “We’re very ambitious about having a real media company within HubSpot. Inbound/media has always been how we’ve differentiated ourselves from most other SaaS brands.
>
> We’re so serious about this, [we bought a media company](https://blog.hubspot.com/marketing/why-hubspot-is-acquiring-the-hustle).
>
> We break our media out across teams who educate and teams who build influence. We have teams for:
>
> - **HubSpot’s Blogs** (a mix of education and influence)
> - **HubSpot Content Offers** (e-books, templates, courses)
> - **HubSpot Stories** (original stories featuring business trends, case studies, and in-depth breakdowns of successful companies)
> - **HubSpot YouTube** (a mix of education and influence)
> - **HubSpot Audio** (podcasts, Clubhouse)
> - **Daily Newsletter** (run by The Hustle)
> - **Trends** (premium content subscription run by The Hustle)
> - **Distribution** (to ensure we have the right promotion plan for the above assets).”

**Intercom:**

> “We’re a team of 10 based in Dublin, Ireland (with three additional positions opening this quarter).
>
> There’s three pillars, or sub-teams, within the team:
>
> 1. The Audiences pillar think about who we’re actually selling our products to, which is mostly customer support and customer success leaders these days. Their job is to create great top-of-funnel content that will attract that audience but also to really understand where they get their information from, what conferences they attend, who are they influenced by, etc.
> 2. The Enablement pillar are focused on taking that content and reworking it for the needs of sales and other marketing teams, e.g. taking a research report we’ve commissioned and turning it into slides that account execs can use in pitch decks. Enablement also looks after all our customer evidence—from the full-blown customer stories we publish on the website to securing permission for logo usage in our other marketing materials.
> 3. The Channels pillar are the specialist functions that work across both audiences and enablements—right now that’s SEO and our podcast.”

**Ahrefs:**

> “We have [Josh](https://twitter.com/JoshuaCHardwick), who is in charge of our blog content, and two in-house marketers who are creating content together with Josh: [SQ](https://twitter.com/siquanong) and [Michal](https://twitter.com/michalpecanek).
>
> [Patrick](https://twitter.com/patrickstox) is responsible for slightly more technical content on our blog, but he does it part-time, since he also belongs to our product team and his feedback is needed there too.
>
> We also have [Sam](https://twitter.com/samsgoh), who is in charge of our video content.
>
> He has three people helping him with video production.
>
> And we have one graphic designer, who takes care of all the needs of our marketing team.”

### 5. How do you operationalize the content creation?

**HubSpot:**

> “We’ve created a pretty great model around how SEO-orientated content works.
>
> We have full-time analysts that help us build quarterly editorial calendars across all blogs. Those editorial calendars include a mix of search-first posts and posts focused on garnering influence.
>
> We know how much net new search traffic is available for new editorial calendars, so we know roughly how much net new traffic we can expect to acquire. Think of this as a quarterly TAM, so we know if/when we’re running out of net new traffic we can acquire on certain content topics.
>
> We also have a team that gets notified about posts that are falling in traffic and then optimizes them to improve their traffic and conversions.”

**Slidebean:**

> “These days, we use [this tool](https://slidebean.com/youtube-suggest-a-video) to decide what videos to make. I partially summarized how we got started and how we operate today in these two YouTube videos:”

[Watch on YouTube](https://www.youtube.com/watch?v=viyKWTfT-g4)[Watch on YouTube](https://www.youtube.com/watch?v=8tvLKfH6qsw)

### 6. What advice would you give companies pursuing content-driven growth?

**Ahrefs:**

> “I would advise them to **contemplate the difference between ‘viral content’ and ‘SEO content’** and decide which type would work better for them.
>
> In my opinion, SEO content is a lot easier than viral content. And the primary reason for that is finding topics to write about. With SEO content, you find your topics via keyword research, where the popularity of Google searches helps you decide what to write about, while with viral content, you don’t have such a straightforward source of content ideas, and your success largely depends on your creativity and ability to come up with unique ideas that would resonate with your industry.”

**HubSpot:**

> “A company early in their growth, looking at our media group above, might feel a little defeated: ‘How can I ever compete with that?’
>
> HubSpot started with a blog, and that was our core focus for a long time—years. We invested in new channels as we mastered existing ones.
>
> **There is always room to be better or different. You need to decide on the media channel that best maps to your audience and then work on your ‘better or different.’**
>
> **The thing brands need to realize is they’re not only competing with direct competitors. They’re competing with every tweet, post, podcast that is vying for some of their audience’s precious time.**
>
> You need to publish media that is great. Good no longer gets you results.
>
> **I would also be intentional about the goals you want your media efforts to serve. Most companies I speak with initially care about how media can drive demand for their products or services. But they’re unsure of how to quantify what impact it could have.**
>
> For example, if you want to generate demand through blogging, most of it will come via search. You can do a rough model to see how much search traffic is available for topics you’ll cover and, using rough conversion rates, what’s the TAM of demand for those topics.
>
> Being intentional about the goals ensures everyone is aligned on the purpose of the different media you’ll create. Maybe you want a podcast with a large following to help influence your audience. Maybe you want a successful blog because you think it can equate to 20% of the demand you need to generate for your product or service. And so on.
>
> Once you’ve decided on those goals, invest in being great at one thing, mastering it, being better or different, and then continuing to build upon that success with new channels.”

**Intercom:**

> “**Content marketing initiatives don’t generate returns as quickly as other forms of marketing**, so be sure to hold your nerve. But once you start to see an audience engage with a particular format or channel, double down on it quickly. And don’t be afraid to focus on that particular medium rather than trying to do everything at once, i.e. if you’ve started to have some success with a podcast, don’t suddenly start to try spinning up a YouTube channel. As I like to say, content is a supertanker, not a speedboat.”

**Slidebean:**

> “**Video content is expensive and a long-term bet!** It will take months to create an audience, and that means dozens of videos. If you have to hire someone for the production, it will be an expensive bet and one that few companies will be able to afford. Even if you’re doing it internally/yourself, it’s going to take away a big chunk of your time. Most startups need customers faster, in a way they can more directly control for scale, and YouTube is not ideal for that.
>
> When it’s working, it’s a real beauty. We’ve seen people engage and recall our brand better than ever (look at what happened with [your tweet](https://twitter.com/lennysan/status/1348764224739164160), which drove ~5K visits to our website—*thanks*!). That power of a **brand** is something that we hadn’t really seen with our own eyes until now, and we probably should have focused on it a lot sooner.”

*Thanks, [Caya](https://twitter.com/cayahere) (Slidebean), [Tim Soulo](https://twitter.com/timsoulo) (Ahrefs), [Kieran Flanagan](https://www.linkedin.com/in/kieranjflanagan) (HubSpot), and [John Collins](https://twitter.com/jaycee001) (Intercom)* 🙏

### 🎁 Bonus: How Webflow uses video content to increase new-user activation

The four companies we looked at above use content with primarily one goal: to drive top-of-funnel traffic. Webflow does this too; however, even more interestingly, they use content in a very different way: to increase new-user success. They create [compelling videos](https://university.webflow.com/courses/the-freelancers-journey) to help users be successful with Webflow. For example:

[Watch on YouTube](https://www.youtube.com/watch?v=FC72-AA-1Kg)

What’s interesting about this strategy is that, unlike SEO-based growth, any (B2B) company can leverage video to increase activation or conversion. There’s a lot to learn from Webflow’s success with video content.

To learn about Webflow’s approach, I got in touch with [Mischa Vaughn](https://www.linkedin.com/in/mischavn/), the director of content and communications at Webflow, who very generously agreed to share lessons on behalf of the education team at Webflow. Thanks, Mischa and the education team!

#### Q: Why did Webflow invest in content so early?

> “Webflow’s visual interface gives designers the same control over the same exact CSS properties used by Apple, Google, Stripe, etc. It’s no watered-down interface. We know that.
>
> Thus we made a big investment into our content when we created Webflow University, to help designers of all skill levels learn to use our powerful platform for free.”

#### Q: What inspired you to invest in video specifically?

> “Video was always a high priority for Webflow. Even on the day we launched, one of the founders created a full-site build walkthrough that was crucial in onboarding customers. But one day in 2016, **a passionate member of our community posted [his own tutorial video](https://forum.webflow.com/t/video-thoughts-on-larger-breakpoints-in-webflow-sunglasses/36504)** that was at a much higher production caliber, and we immediately knew from the community’s positive reaction that this was a direction we needed to adopt. Eventually we hired this person to lead our education team.
>
> Webflow University’s course structure creates a natural progression to becoming more and more of an expert in using Webflow.”

#### Q: What was the video content team like initially?

> “One person (a power user) was hired to run education, and video was always part of it. It was one person full-time, but he also worked closely with a few other folks in support to write documentation and guides.”

#### Q: What impact have these courses had on growth?

> “The people who enroll in our courses are *much* more likely to become subscribers to the service. New courses help us find new people and help them take on specific use cases or introduce them to new features.”
>
> We’ve also made sure our non-tutorial content features inspirational examples of the product and helpful advice and resources for designers (our target audience). We keep our social channels fun and engaging, with the idea of presenting the brand as a friend you want to hang around. This mix of value and an engaging tone has helped make a compelling case for the millions of people who use Webflow.”

#### Q: What does the content team look like now?

> “Since 2016, we devoted a substantial budget and headcount to our education efforts. This includes building out a devoted team, modern camera and recording equipment, a soundproof studio, and custom music and animation.
>
> Our education team features a mix of producers, editors, and designers.
>
> Our content marketing team works with a mix of freelancers and agencies, and we have plans to double this team’s headcount in the coming year.”

#### **Q: Any advice for companies thinking about pursuing this?**

> “If you’re going to invest in content, especially video, **you need a devoted team with a clear charter**. Find someone to lead this team, build a distinct vision and voice, and give them plenty of support.”

Thank you, [Mischa](https://www.linkedin.com/in/mischavn/)!

And thank you to everyone else who contributed to this post: [Caya](https://twitter.com/cayahere) (Slidebean), [Tim Soulo](https://twitter.com/timsoulo) (Ahrefs), [Kieran Flanagan](https://www.linkedin.com/in/kieranjflanagan) (HubSpot), [John Collins](https://twitter.com/jaycee001) (Intercom), [Peter Kazanjy](https://www.linkedin.com/in/kazanjy/), [Jiaona Zhang (JZ)](https://www.linkedin.com/in/jiaona/), and [Brian Ta](https://www.linkedin.com/in/brianta626/).

That’s it for this week! Have a productive and fulfilling week 🙏

## **🔥 Job opening of the week:** [Product Manager at Forward](https://jobs.lever.co/goforward/1a29023e-97d0-4904-90f7-3ddceff8aea1?lever-source=ForwardJobsLP)

> Forward is building the world's most advanced healthcare platform by combining hardware, software, and doctors under one roof to make high-quality healthcare available to all.
>
> [Learn more about this role](https://jobs.lever.co/goforward/1a29023e-97d0-4904-90f7-3ddceff8aea1?lever-source=ForwardJobsLP)

**Additional opportunities:**

1. **Product**: [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Transform](https://transformdata.io/careers/), [UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Lead-Designer-14ceaa685100486b824665e1320fc9af), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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), [Point380](https://www.linkedin.com/jobs/view/2415394722/?capColoOverride=true), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
7. **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), [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
8. **Mobile engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
9. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

Sincerely,

Lenny 👋

---

## [10/61] What's in your software stack — Product, Design, Analytics, DS, Research, and more

> ## Q: What software do startups find most essential? What should I check out as I’m building my company?

With so many products [launching each and every day](https://www.producthunt.com/), it’s tough to know what to pay attention to, and what you can safely ignore. Especially at a nascent startup, where you can’t afford to waste time (and money) on unnecessary products.

To answer this question, over the past few months I’ve been methodically polling Twitter, to find out what software product teams use to do their job. Below, you’ll find (non-scientific but illuminating) answers to the following questions:

1. What’s in your **analytics** stack?
2. What’s in your **product management** stack?
3. What’s in your **design** stack?
4. What’s in your **user research** stack?
5. What’s in your **data science** stack?
6. What software did you **buy or set-up in your first couple of months** of starting a company?
7. What software do you **spend the most money on** each month?

As you read through the results below, focus on two things: what’s today’s go-to product (i.e. the safe bet), and who are the up-and-comers that are worth checking out (i.e. the early-adopter bet). If you’re reading this and feel like anything is obviously missing or off, please leave a comment 👇

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

*Disclaimer: Obviously since these results are based on informal Twitter polls, they are not necessarily representative of the broader startup ecosystem. Caveat emptor. Also, if your startup didn’t get a lot of mentions and that makes you sad, just remember this is a random Twitter poll and doesn’t mean anything in the scheme of things 🙏*

## [What’s in your analytics stack?](https://twitter.com/lennysan/status/1331381900343083008)

- **Most common**: Google Analytics, Segment, Amplitude, Mixpanel, BigQuery
- **Up-and-comers**: Avo, Plausible
- **A typical stack**: Segment + GA/Amplitude/Mixpanel + BigQuery/Snowflake + dbt + Fivetran
- **Surprises**: Google having four products on this list

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5a7078f7-f22a-45ed-bd0c-bc431be3f2ea_2088x1514.png)

## [What’s in your product management stack?](https://twitter.com/lennysan/status/1334535368457166853)

- **Most common**: Slack, Jira, Notion, Figma, Google Docs/Sheets, Miro, Confluence
- **Up-and-comers**: Productboard, Whimsical, Roam, Linear, ClickUp
- **A typical stack**: Slack/Teams + Jira/Trello/Productboard/Asana + Notion/GDocs + Google Sheets + Figma
- **Surprises**: Slack being the most mentioned, Miro/Notion/Confluence placing so high, Google having seven products in the list, and Microsoft five

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/019aca5c-990c-4add-8054-f8db33119dcb_1200x2234.png)

## [What’s in your design stack?](https://twitter.com/lennysan/status/1333573527497297920)

- **Most common:** Figma, Notion, Sketch, Adobe XD, Webflow, Whimsical
- **Up-and-comers**: Miro, Origami, Excalidraw
- **Typical stack:** Figma/Sketch/Adobe XD + Notion + Whimsical/Miro
- **Surprises:** How far ahead Figma is at this point, that Whimsical got more mentions than Miro, that Webflow had so many mentions, and that Notion continues to come up in these stacks

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2cf3c385-8401-4343-9ad8-89e3e73ee4eb_2246x1320.png)

## [What’s in your user research stack?](https://twitter.com/lennysan/status/1368599844466552837)

- **Most common**: Zoom, Calendly, Miro, G-Suite, Typeform
- **Up-and-comers**: Dovetail, EnjoyHQ
- **Typical stack:** Zoom + Calendly + Airtable + Typeform/SurveyMonkey/Qualtrics + Notion + Dovetail/EnjoyHQ + GA/Fullstory/Hotjar + Lookback/UserTesting
- **Surprises:** How often Miro/Airtable/Notion were mentioned, that Zoom and Calendly were the top two (but it makes sense when you consider the logistical element of doing user research), and the sheer number of tools available

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d393a88c-fed4-4bc4-853b-ebf8fbd9ab44_1288x1484.png)

## [What’s in your data science stack?](https://twitter.com/lennysan/status/1337444672600297472)

- **Most common**: Jupyter, Pandas, Google Cloud, Python, Rstudio, Visual Studio Code
- **Up-and-comers**: *None as far as I can tell*
- **Typical stack and Surprises:** *I’m not familiar enough with this stack, judge for yourself!*

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b8b2f832-c504-4cf3-a3df-65c9b2bf678e_1730x1466.png)

## [What software did you buy or set-up in your first couple of months of starting a company?](https://twitter.com/lennysan/status/1334163067622416384)

- **Most common**: Slack, G-Suite, GitHub, Notion, Figma, Zapier, Quickbooks
- **Surprises**: Slack being so far ahead as number one, Zapier coming up so often, and how often Webflow, Calendly, Airtable, Heroku, and Canva came up

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b42f6c95-408c-47b7-b4aa-48452db8d388_1136x1420.png)

## [What software do you spend the most money on each month?](https://twitter.com/lennysan/status/1334951860193648648?s=21)

- **Most common**: Intercom, AWS, G-Suite, Slack, Zapier
- **Surprises**: Intercom being so far ahead, and Zapier and Heroku seeing so many mentions

![Image from What's in your software stack — Product, Design, Analytics, DS, Research, and](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7f016a5a-32f6-4623-80ea-a8d006dea24b_1200x1792.png)

Any other takeaways, thoughts, or questions? Leave a comment!

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

Have a productive and fulfilling week 🙏

## **🔥 Job opening of the week:**[Software Engineer at Ladders](https://jobs.lever.co/ladders/f70450cf-8b30-4947-a7c6-dc13ae7e10c3)

> Ladders is a leader in high-end careers, targeting $100K+ jobs to over 8 million professionals across the US and Canada, and successfully turning dream jobs into destinations for over 15 years. Our mission is to Lead the Leaders — helping those who run teams, communities, and companies to continue planning ahead while thinking big.
>
> [Apply](https://jobs.lever.co/ladders/f70450cf-8b30-4947-a7c6-dc13ae7e10c3)

**Additional opportunities:**

1. **Product**: [Clearbanc](https://www.linkedin.com/jobs/view/2438839063), [Decent](https://decent.breezy.hr/p/a976bf37026c-product-lead), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Transform](https://transformdata.io/careers/), [UserLeap](https://boards.greenhouse.io/userleap/jobs/4279026003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [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), [Point380](https://www.linkedin.com/jobs/view/2415394722/?capColoOverride=true), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
6. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
7. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Emporii](https://www.notion.so/emporii/Senior-Full-Stack-Engineer-5a149801dcfa4ce89a43ccdc19857daa), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
8. **Mobile engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
9. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

1. **Watch**: One way to make a fried egg

2. **Subscribe**: [Drawling Links](https://drawinglinks.substack.com/) by Edith Zimmerman
3. **Read:** [Content Triangle of BS](https://www.weskao.com/blog/content-triangle-of-bs-how-to-make-your-cohort-based-course-more-rigorous) by Wes Kao

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

Sincerely,

Lenny 👋

---

## [11/61] Defending your big bets

> ## Q: I work at a big company and my team and I keep trying to launch a “big bet” project (one with a lot of upside but that’ll take a while to build), and our resources keep getting pulled away. Any advice for maintaining support for a big bet?

I like to think of a “big bet” project like a highly-experimental new weapon that you’re trying to smuggle to the front. There are forces at play that want this project squashed, and if you charge ahead without the proper support or make any missteps, you’ll get discovered and taken out.

![Image from Defending your big bets](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ee784fc8-ff01-4122-ad7d-0b2726269dee_425x228.gif)

The solution is to create “cover fire.”

![Image from Defending your big bets](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/068bcb72-6b9d-4e17-9a89-f3e82539555c_478x200.gif)

You do this by consistently shipping small but consistent wins: moving your KPIs, hitting goals, and showing progress. With this cover in place, you’ll be able to smuggle the big bet through and emerge on the other side with a game-changing new product.

I’ve done this time and again, and I’ve found this strategy to be the only way to consistently maintain the buy-in and resources necessary to work on a long-term project at larger companies, on most teams.

Tactically, my rule of thumb is to spend 80% of my team’s time on short-term low-risk incremental wins, and 20% on high-risk, long-term bets. This way, we can continue to move our KPIs while bringing our big bet alongside. Here’s how that might look on a roadmap:

![Image from Defending your big bets](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/68ce757d-e4fe-4d01-b247-8087645e0e68_953x315.png)

This doesn’t need to be nefarious or secretive — in fact, I recommend you share this strategy with your manager. The whole idea is that your team doesn’t go for long periods of time without showing any impact on the business (which your manager will also appreciate).

Why does this work? If you *only* work on long-term big bets, without showing any direct impact on the business, it’s difficult for leaders (and people in general) to give you the benefit of the doubt indefinitely. Resources are scarce, and there are always going to be higher-urgency and more-important needs. By showing steady success, you:

1. Don’t give anyone a reason to mess with your team
2. Build trust in your team’s ability to execute
3. Earn the right to take bigger bets

Even you do have the trust and cover of the current leaders, people and priorities change. When there are new fires, people will come looking for non-essential projects in progress to pull resources from. If your project hasn’t shown any concrete benefits for a while, and the upside is uncertain, it’ll be easy picking.

![Image from Defending your big bets](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/13ad2133-fc79-411f-949b-f8588235bdcd_200x227.gif)

*Note: This advice applies mostly to larger companies, and to the average team. Some teams are top-down designated to work on long-term high-risk projects, in which case this is less likely to be an issue. Similarly, at early-stage startups, most everything you work on is a high-risk long-term big bet. If this isn’t an issue for you, don’t sweat it.*

## Bonus advice for helping your big bet see the light of day

[While working on this post, I put a call out on Twitter](https://twitter.com/lennysan/status/1363549295815835656) asking PMs, founders, and leaders what has worked best for them to allow their “big bets” to survive to launch. Here are my favorites additional pieces of advice from people who’ve been in the thick of it:

#### **“Keep it small/avoid too much attention until ready.”**

— [Sriram Krishnan](https://twitter.com/sriramk/status/1363561158955790336), PM ex-Twitter, Snap, FB, Microsoft

#### “Code wins. Demo end-to-end prototype that works for some critical path. At this stage lots can be smoke & mirror though have (good) answers when asked about it Have clear next steps that also might "work" for that demo.”

— [Jason Warner,](https://twitter.com/jasoncwarner/status/1363570831012454401) CTO GitHub

#### “[Create a] small hungry entrepreneurial team. Clear mandate. Independent operations. Carved out headcount.”

— [Tomer London](https://twitter.com/tomerlondon/status/1363551076788568066), co-founder Gusto

#### “Make sure the proposing happens \*before\* quarterly planning & the bet is set to launch\*after\* at least one quarter has completed. This allows time for all the annoying but essential bits like stakeholder management, adequate resourcing, relentless comms, change management, etc.”

— [Zoelle Egner](https://twitter.com/zoelle/status/1363550791659790336), ex-marketing at Airtable, Box

#### **“Keep the emphasis on the** ***why*** **all along.”**

— [Anand Chandrasekaran](https://twitter.com/anandc/status/1363559445628821504), EVP Product Management at Five9

#### “[Bring] an appetite for disruptive ideas, a little bit of funding (seed), some healthy skepticism to motivate the team (expectation was most things we try would fail) and some air cover to prove out product-market fit.”

— [Robleh Jama](https://twitter.com/robjama/status/1363562057573015553), Director of Product at Shopify

#### “Culture. It’s all culture first, execution second. Laying the groundwork, helping drive coalition, ensuring we had the right behaviors to adopt the new ‘thing’.”

— [Ben Perreau](https://twitter.com/perreau/status/1363550352650330112), Principal, SYPartners

Don’t miss [the full thread](https://twitter.com/lennysan/status/1363549295815835656) for much more great advice.

## 📚 Additional reading

1. [Rock, Pebble, and Sand Product and Portfolio Management](https://dragonboat.io/rock-pebbles-and-sand-product-and-portfolio-management/) by Becky Flint
2. [Why you need to innovate on three horizons](https://versionone.vc/need-innovate-three-horizons/) by Boris Wertz
3. [Thinking in Bets](https://www.amazon.com/dp/B074DG9LQF/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1) by Annie Duke
4. [Why The Impact Effort Prioritization Matrix Doesn’t Work](https://itamargilad.com/why-impact-effort-prioritization-doesnt-work/) by Itamar Gilad
5. [Ruthless Prioritization](https://blackboxofpm.com/ruthless-prioritization-e4256e3520a9) by Brandon Chu

Have a productive and fulfilling week 🙏

## **🔥 Job opening of the week:**[Senior Product Manager at ResearchGate](https://www.researchgate.net/careers/senior-product-manager-m-f-d-b4ddc0a7-9f17-4109-83c0-b88d82d0daa8)

> ResearchGate are currently looking for a senior product leader who is interested in leading a high-output process to deliver exceptional products.
>
> [Learn more](https://www.researchgate.net/careers/senior-product-manager-m-f-d-b4ddc0a7-9f17-4109-83c0-b88d82d0daa8)

**Additional opportunities:**

1. **Product**: [Clearbanc](https://www.linkedin.com/jobs/view/2438839063), [Decent](https://decent.breezy.hr/p/a976bf37026c-product-lead), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Transform](https://transformdata.io/careers/), [Twine](https://docs.google.com/document/d/1VUHSTVfk2HyVfzcryXBGcpgUHrVGCddy1tGvMjGEHao/edit), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4217915003?gh_jid=4217915003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
5. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
6. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Emporii](https://www.notion.so/emporii/Senior-Full-Stack-Engineer-5a149801dcfa4ce89a43ccdc19857daa), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
7. **Mobile engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
8. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

1. **Watch**: Teamwork

2. **Read**: [Diagnose with data, treat with design](https://twitter.com/joulee/status/1367875690939346949?s=21) by Julie Zhou

3. **Write:** [Seven tactical copywriting tips](https://ckarchive.com/b/38uphkhg4m0d) from Harry Dry

![CTA handled](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/556ad82b-b721-484c-93b2-852de6661885_1000x459.png)

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

Sincerely,

Lenny 👋

---

## [12/61] The PM 🤝 Design Partnership

*👋 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.*

**This week’s newsletter is brought to you by…**

![Image from The PM 🤝 Design Partnership](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7707dc53-4ae8-4de2-9156-0c498e8725b8_1600x400.png)

The Browser is one of my most favorite newsletters. Why? Because every issue brings me joy. How rare is that. I even broke my rule of avoiding sponsorships because I love The Browser so much. Inside each issue, you’ll find a hand-picked selection of the most interesting, best-written, and most get-your-brain-juices-flowing articles on the Internet. Even if you just read the capsule summaries of each selection, your day will be brighter.

Special offer for subscribers of this newsletter: **Try an entire month for free, no subscription needed!** Click the button below to claim this offer.

[Get one month of The Browser free](https://thebrowser.com/lenny/?via=lenny)

> ## Q: I’m having a hard time working with the designer on my team. Do you have any advice for working with designers?

When I think about a designer who embodies ideal collaboration and thoughtful partnership with product management, I think of my former colleague [Katie Dill](https://twitter.com/lil_dill?lang=en). Katie and I worked together at Airbnb where she led much of the product design team. Katie then went on to lead design at Lyft, and last month took on the Head of Design role at Stripe.

I asked Katie for advice on this question, and instead of just sharing a tip or two, she offered to write up an entire guest post sharing specific advice from her experience working with hundreds of PMs. Below you’ll find Katie’s top five tips for building a powerful PM + Design partnership, including:

1. **Trust the designer’s expertise**
2. **Be the conductor**
3. **Include designers early**
4. **Invest in even the smallest of north stars**
5. **Create shared goals**

I learned a ton from Katie’s perspective, and I know you will too. Let’s dive in!

*For more from Katie, you [can find her on Twitter](https://twitter.com/lil_dill?lang=en).*

# The PM 🤝 Design Partnership

*by Katie Dill*

![Image from The PM 🤝 Design Partnership](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ab7ae3aa-1728-47ce-a85c-e5275f2e09ba_4898x3265.jpeg)

Ask a Product Designer what their job is and what you'll hear is likely very close to what a Product Manager (PM) would say about their job: *to know what customers need and to deliver it in the form of products that drive the business.* This overlap between PMs and designers is a benefit—it means we all want the same thing. But, we often have very different approaches to achieving these goals, which can lead to friction in our collaboration. However, when we embrace our different methods and styles, great things happen! By combining forces—like the Avengers!—we can build much better products.

**Below is a quick cheat-sheet for PMs on how to effectively work with designers.** By understanding how each other ticks, we can collaborate in more effective ways—leveraging both our differences and similarities—and turn one plus one into three.

Let’s start with a quick reminder of why designers work differently than PMs. While designers come in many different shapes and sizes (e.g., graphic, UX/UI, industrial, service, etc.), *generally* speaking, all good designers are creative, humanistic, sense-makers, and storytellers. Designers interrogate the present and imagine the future as we aim to create something that is useful, usable, and desirable. These skills are important to your company and are instrumental in driving conversion, loyalty, and efficiency in your business.

Alas, these skills require special conditions to exist, some of which conflict with the default way of doing business. For example, how often are you talking about your customer’s emotions in your QBR? It’s easy to say design and user experience matter, but if you don’t invest in creating the conditions for design to thrive, chances are it won’t.

**So what can you do to build a stronger relationship with design? My 5 top tips:**

1. **Trust the designer’s expertise**
2. **Be the conductor**
3. **Include designers early**
4. **Invest in even the smallest of north stars**
5. **Create shared goals**

### **Tip #1: Trust the designer’s expertise**

Creative work is very different from analytical work. It’s non-linear and its value is often difficult to measure. While it’s always good to discuss timelines, goals and expectations, be sure to **trust in the designer to know what it takes to do their work well.**

While there are many efforts that are straightforward and do not require reinvention (e.g., industry best practices for a “contact us” page may be just fine ), creative work may surprise you with the time it takes. When something is designed well it often feels simple and obvious. However, the process to get there requires user research, exploration, and a good deal of failure to land on the right answer. Moreover, this time needs to be high quality—uninterrupted—to allow for focus and flow. As Paul Graham notes in his [post](https://www.paulgraham.com/makersschedule.html) on Maker vs Manager's schedules, “when you're operating on the maker's schedule, meetings are a disaster. A single meeting can blow a whole afternoon, by breaking it into two pieces each too small to do anything hard in.” **Designers and other makers on your team require this meeting-free time to get into a creative flow and create.** Frankly, you need more of this time, too!

I guarantee there will be times when you and your design partner disagree about something, and they’re not going to be able to validate their opinion (at least not right away). Prototypes and qualitative research can help de-risk decisions. But some design choices are simply a matter of taste. Assuming your company hired well and you’re working with a skilled designer who is well-informed about the user, the problem and goals, you should defer to them in their area of expertise: the user experience.

### **Tip #2: Be the conductor**

If you didn’t know it already, the team is looking at you (the PM) to set up the foundation for collaboration. Great PMs are known for their ability to clarify the context—defining problems, goals, and constraints—and tying it all back to the business. In addition, a great PM is a powerful facilitator that can drive communication and collaboration in and outside of the team. It reminds me of a conductor in an orchestra. The conductor doesn’t play all the instruments, but they have a grasp of what the different players contribute and they help coordinate them such that the ensemble is harmonious.

**The best way to coordinate the team and set your design partner(s) up for success is to ensure alignment on the problems to be solved, the mission, and the goals**. You have the opportunity to do this in a way that allows the various experts on the team to leverage their own superpowers. Bobby Rasmusson says this well…

![Image from The PM 🤝 Design Partnership](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3831053a-0373-4db3-9c27-d75d16eeee82_1198x336.png)

### **Tip #3: Include designers early**

While conducting, it’s important to include folks from the beginning so that you and the team can benefit from their expertise throughout the product development process. When resources are tight, a waterfall approach (ie., work moves assembly-line style from one person/discipline to the next) is tempting but has hidden pitfalls. You’ll get richer solutions, more quickly, if you include your expert partners early.

Doug Collins, a design manager from Western Union states this well...

![Image from The PM 🤝 Design Partnership](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/547cdbb9-81e3-461a-9c68-f29af896b5c6_1182x280.png)

There are three major reasons why including designers early can help the organization save time and money:

1. Designers inform the conversation with a salient voice of the user
2. Designers catalyze the conversation and drive innovative thinking with creative ideas, visual storytelling and prototypes
3. Designers gain greater context, develop a keener intuition for what’s best and are able to drive higher quality execution faster

I know it can be hard to add yet another person to the room, but the benefit outweighs the risk. A good example is during planning. I have known plenty of PMs that were eager to rush ahead with a list of features they thought the team should build. However, I have seen these same PMs sing a very different tune after including designers in the planning process. They gained a skillful facilitator, a user-advocate, and a powerful storyteller. Conversations were richer and ideas were more thoughtful. And the designers always got invited back.

### **Tip #4: Invest in even the smallest of north stars**

I have seen PMs get really worried about "north star" work, fearing that it's superfluous, taking the team's precious time away from completing the obvious and urgent work. All that can be true, but it doesn't have to be.

A north star is a picture of your future product. It can be low or high fidelity. It can be all-encompassing of the different stages of the user journey, or it can be focused on a particular aspect of the product. **A north star is a guiding light that helps align a team on the plan for the product, showing how the pieces will fit together.** Without it, you're liable to miss the opportunity to innovate, are likely to neglect the long-term, and are probably turning your product into a disjointed Frankenstein lacking consistency.

We used north stars at Lyft for everything from small improvements to a complete transformation of the rider experience. Lyft started with rideshare, but over time added additional forms of transportation to its app: trains, buses, bikes, scooters, rental cars. This was a big change. To help us do it right—and not cobble things together—we had a multidisciplinary team of designers, engineers, and PMs creating a north star for how the app should be with all the forms of transportation included. The north star covered more than we could do in the short term, but it made it clearer what steps should be taken next so that we’d be headed in the right direction in the long term.

You and your design partner can make sure it's not a waste of time by putting some constraints around the effort as you visualize the destination. Variables to consider:

1. Scope - how much of the product experience to include in the vision? *A single screen can be envisioned in a day, whereas a new product can take months.*
2. Fidelity *-* how robust should this north star be? *Consider the audience and how the story will best be understood: in words, in a journey map (like a comic strip), wireframes, or full-fledge prototype.*
3. Time horizon - how far out into the future are you planning for? *Near-term vision work will include more knowns and be quicker to create, but doesn’t afford you much runway.*
4. Buy-in - who do you need to involve to inform and evangelize the work? *Feedback cycles take time but are critical when different parties need to be aligned.*

There are no simple answers to these questions. **It essentially comes down to how complex is the problem your team is trying to solve?** If it's simple, minor, and easily changeable you can likely get away with a short whiteboarding exercise to give everyone clarity. However, if the problem you're solving is complex (e.g., new product, or product overhaul), more formal vision work with ample time and fidelity is essential to bring stakeholders together and provide clarity in the long-term.

For Lyft to reimagine the rider app in a high-fidelity prototype, it took ~6 months with bi-weekly exec reviews. Whereas a vision exercise for the sign-up flow in sketch-form took less than a week. Again, the best move here is to discuss the timeline and goals with your design partner.

The best part about a north star is that once the team has clarity on the long-term vision, you can usually break it into incremental steps that are easier to roll-out and measure than the whole kit-and-caboodle. The design work for the near-term will now be much stronger because not only will it account for today’s constraints but future plans as well.

### **Tip #5: Create shared goals**

There's a dangerous tendency for both designers and PMs to talk about "design goals" as distinct from "business goals." This phrasing undermines the importance of the “design goals” and suggests that designers aren't concerned with what drives the business. **Some of the things people call design goals are consistency, usability, accessibility, and delight. Guess what. All of these things drive use, conversion, and loyalty.** All things that are critical to the success of the business.

What's going on here is a difference in the level of zoom. For example, consistency of the system is a sub-goal of usability which is a sub-goal of conversion. By talking about how these sub-goals relate to each other and play off each other, you and your team can better define, prioritize and sequence shared goals. This is not only essential to align and focus the team but to ensure everyone is motivated by knowing how their priorities connect to the goals of the team.

Where this can get challenging is when the designer says, “We need to update the buttons so they’re consistent,” and the PM says, “We don’t have time to do it. It’s not as important as these other things right now.” They’re both potentially correct and perhaps the consistency work will need to wait, but ignoring this work just because its impact is indirect or even immeasurable is not an option. The details are notoriously easy to ignore, however when you think about a product that feels high-quality, trustworthy, and simple you’ll see strong attention to detail. While a user is not going to take the time to report a lack of consistency in the button types, and may not abandon your product right away, these gaps will start to make them wonder about where else you fail—Safety? Security?

Lean on your design partner to help determine the importance of and sequencing of user experience improvements. Many companies set aside time every quarter and/or require a percentage of the roadmap be devoted to the user experience improvements that contribute indirectly to the bottom line. This is certainly better than nothing, but the more you can get it right the first time, the better!

—

Many of the above recommendations are good business for any multi-disciplinary team. Collaboration requires empathy, transparency, and respect. The most important thing you can do is have a conversation about how you will work together and check-in with each other frequently. Recognizing our similarities, as well as our differences, makes for a really powerful combination when respected and managed well.

**Lastly, one important recommendation….  stop saying “my designer.”** This phrase sets up a false and unuseful hierarchy. While a subtle change, the phrase “my design partner” makes a world of difference that sounds far more inclusive and better enables collaboration.

Good luck and happy collaborating!

*Special thanks to Lenny, Vanessa Cho, and Liv Jenks for editing help. And thank you all for your terrific responses to my [question on twitter.](https://twitter.com/lil_dill/status/1348701440689143811?s=20)*

## **🔥 Job opening of the week:**[Director of Product at Berbix](https://jobs.lever.co/berbix/fbac5a65-6ade-4030-9ad9-b58ee0430e3f)

> *Berbix is hiring a Director of Product to lead our product team and set our product direction in service of transforming identity online.*
>
> [Learn more](https://jobs.lever.co/berbix/fbac5a65-6ade-4030-9ad9-b58ee0430e3f)

**Additional opportunities:**

1. **Product**: [Clearbanc](https://www.linkedin.com/jobs/view/2438839063), [Decent](https://decent.breezy.hr/p/a976bf37026c-product-lead), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Transform](https://transformdata.io/careers/), [Twine](https://docs.google.com/document/d/1VUHSTVfk2HyVfzcryXBGcpgUHrVGCddy1tGvMjGEHao/edit), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4356451003?gh_jid=4356451003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
5. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4204786003?gh_jid=4204786003)
6. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Emporii](https://www.notion.so/emporii/Senior-Full-Stack-Engineer-5a149801dcfa4ce89a43ccdc19857daa), [Icebreaker](https://icebreaker.video/product-engineer), [Iggy](https://www.notion.so/askiggy/Full-Stack-Engineer-IggyAPI-5a8c1825028e421b9587538718f370b4), [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4222865003?gh_jid=4222865003)
7. **Mobile engineer**: [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
8. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

Sincerely,

Lenny 👋

---

## [13/61] The Minto Pyramid Principle and the SCR Framework

> ## Q: My manager recommended I learn the “Pyramid Principle.” I tried to look into it, but I don’t really understand it, or how to apply it in my job. What am I missing?

Imagine this scenario: You’re going about your day, reviewing the latest experiment results and checking in on your upcoming launch plans when you get a DM from your boss. She tells you that she just booked you a meeting with the CEO to present your product strategy for next quarter, TOMORROW.

Even though you have fairly good idea of what you want to build, you haven’t even started writing down your proposal, or are anywhere near having a compelling narrative that will persuade your CEO.

What do you do?

Enter, Barbara Minto.

![Harrison Metal - Chat with Barbara Minto](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3ba7ba13-dc69-4b20-accb-6d1e55c19377_1024x598.jpeg)

### The Minto Pyramid Principle

The Minto Pyramid Principle came out of a frustration Barbara had while working at McKinsey (where she spent ten years, as *the very first* female management consultant). While at McKinsey, she noticed that people were awful at crafting persuasive arguments. They didn’t know how to structure their arguments, and they spent too much time upfront building up their case with data and facts. By the time they got to their final recommendation, the audience had already tuned out or been distracted by the details.

What Barbara realized is that unlike a movie, where you want to build tension and wait until the very end for the big reveal…

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2dae6ddd-373c-491c-b94d-2425e524fcb3_480x270.gif)

…in a business context you should do exactly the opposite: give away the punchline.

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4fb8ae8f-a62b-46b7-9d1b-e66ec1fbae1f_480x257.gif)

Your colleagues aren’t looking to be entertained. They are busy. They want to get sh\*t done. The solution: Start with the answer.

This is what is known Minto Pyramid Principle:

1. Start with the recommendation/answer/ask upfront
2. Back up that recommendation with a handful of supporting arguments
3. Back up each of those supporting arguments up with data

And guess what? This ends up looking like a pyramid:

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/17d07007-8a40-492c-8af0-58ca9ed3baab_2048x1024.png)

Unlike what many of us are naturally drawn to — the upside-down-pyramid:

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0414c409-7e7b-4a5d-a604-205757dce4a3_2048x1024.png)

Why do we naturally present in this backwards, less impactful, way? That’s how we came to this conclusion ourselves: information —> conclusions —> recommendation. It’s not surprising that we assume others need to go through this very same journey to be convinced. But effective presenting and effective learning work differently. As Barbara says, **“you think from the bottom up, but you present from the top-down.”** Save your audience time and effort by just telling them what you’ve concluded.

Let’s look at an example of this in action. Say you want to convince the manager that you need to devote the next sprint to fixing bugs:

#### **Before Minto**

> *Hey manager,*
>
> *I’m getting concerned about our bug count. Look at this chart below of our growth bug growth over time, how many bugs we’ve been fixing, and where our bug count is projected to be next year.*
>
> *We’re also hearing from CX and our research team that customers are starting to churn because of our bugs, and you can even see in this chart how our churn rate increase seems to be correlated with our bug count increase.*
>
> *Finally, there’s evidence to show that bugs are starting to hurt brand perception, as you can see in these tweets, these stories from sales, and this complaint from our biggest customer.*
>
> *I recommend we devote our next sprint to fixing bugs. Let me know what you think.*

#### **After Minto**

> *Hey manager,*
>
> *I recommend we devote our next sprint to fixing bugs. Here’s why:*
>
> 1. ***Our bug count is growing faster than we’re able to fix them***
>
>    1. *Look at this chart showing bug growth over time*
>    2. *Look at how many bugs we’ve been able to fix over the same time*
>    3. *Look at where we expect our bug count to be in the next year*
> 2. ***Bugs are leading to customer churn***
>
>    1. *Here’s data from CX*
>    2. *Here’s a story from a customer interview*
>    3. *Here’s churn mapped alongside bug count*
> 3. ***Bugs are leading to a hit on brand perception***
>
>    1. *Here’s are some tweets from users*
>    2. *Here’s a complaint one of our top customers sent us*
>    3. *Here’s what our sales team is telling us about our decline in closing deals*
>
> *Let me know what you think.*

As a manager, which email would you prefer to receive? Trick question. The second email is certainly more persuasive and will get a quicker response (i.e. definitely go that route), but you probably don’t want to email your manager an ask this abrupt, without any additional context. That’s where the SCR framework comes in.

### The SCR Framework

Think about the traditional story arc. Every movie, every book, essentially every story you’ve ever heard follows this arc:

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ef319e67-4cd3-4ce6-bc8e-f3ed90a5d565_1310x790.png)

For example, The Avengers: Endgame

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/af84375e-6100-40c5-9d2b-fa003bb1a85f_1850x1050.png)

If you simplify this further, there are three parts to every narrative: Situation, Complication, Resolution.

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fb84e5e7-2041-4b3d-bae8-25d46b31b378_1322x822.png)

1. **Situation:** What is the state of affairs today. Facts, data, and unambiguous background.
2. **Complication**: What has changed that requires action. What is the problem?
3. **Resolution**: What we need to do to resolve this complication.

Thus, when crafting an argument, first share the Situation, then the share the Complications, and then share your proposed Resolution. That’s the SCR framework! It’s a deceivingly simple-but-powerful way to structure your narrative, and can be applied to emails, strategy docs, presentations, etc. Once you learn it, you’ll start seeing it everywhere. Go back to the top of this post and see if you notice this in action 😉

Below I’ll share a few templates that leverage this framework, but first, let’s bring these two frameworks together: Use the The Minto Pyramid to lay out your proposed **Resolution,** like so**:**

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7636ea5f-f415-455f-b262-05d14c7cabca_1334x804.png)

1. **Situation:** What is the state of affairs today?
2. **Complication**: What has changed that requires action?
3. **Resolution**: Minto Pyramid-style: answer-first followed by supporting arguments.

Coming back to our email example, here’s how our email could look leveraging the SCR + Minto Pyramid framework (with labels just for reference):

> *Hey manager,*
>
> *As you know, we’ve generally had a good handle on bugs. Our bug count has been steady over the last ew months, and we’ve had a good system to keep our teams fixing bugs while shipping new product. **[Situation]***
>
> *Recently however, we’ve seen a large spike in bugs, and it’s beginning to significantly impact our bottom-line. **[Complication]***
>
> *I recommend we devote our next sprint to fixing bugs. Here’s why **[Resolution]**:*
>
> 1. ***Our bug count is growing faster than we’re able to fix them***
>
>    1. *Look at this chart showing bug growth over time*
>    2. *Look at how many bugs we’ve been able to fix over the same time*
>    3. *Look at where we expect our bug count to be in the next year*
> 2. ***Bugs are leading to customer churn***
>
>    1. *Here’s data from CX*
>    2. *Here’s a story from a customer interview*
>    3. *Here’s churn mapped alongside bug count*
> 3. ***Bugs are leading to a hit on brand perception***
>
>    1. *Here’s are some tweets from users*
>    2. *Here’s a complaint one of our top customers sent us*
>    3. *Here’s what our sales team is telling us about ability to close*
>
> *Let me know what you think!*

Similarly, when crafting your product strategy, [my favorite product 1-Pager template](https://docs.google.com/document/d/1541V32QgSwyCFWxtiMIThn-6n-2s7fVWztEWVa970uo/edit) follows the SCR format fairly directly (Situation = Description, Complication = Problem, and Resolution = What):

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dbc2d72a-bd0c-49bc-8189-68eedd2a2aae_1090x834.png)

As does [my favorite strategy template](https://docs.google.com/document/d/1JI73WrGplrhNE46aLyRD_B74gEynI77EPgXn1ic6WeQ/edit) (you can think of your Mission and Vision as your *Situation*, the *Complication* is implied in that you haven’t yet achieved your Vision, and your Strategy and Strategic Pillars are your *Resolution*):

![Image from The Minto Pyramid Principle and the SCR Framework](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e74b235f-dc14-489e-bfa5-d65a71ad359b_1382x1170.png)

Again, once you learn this, you’ll start seeing it everywhere.

### Using this framework in your work:

1. **Crafting**: Whenever you are putting together a proposal or asking for something (e.g. you have 24 hours to draft your strategy, or you’re emailing your manager for more resources), open up a new document and start with this structure:

1. **Situation:** *What is the state of affairs today? What are the facts that everyone will agree with?*
   2. **Complication**: *What has changed that requires action?*
   3. **Resolution**: *What do you recommend we do to resolve this complication? Minto Pyramid-style: answer-first followed by supporting arguments.*
2. **Listening**: When listening to a presentation, say a design review or a strategy proposal, encourage the speaker to present in an SCR flow. Suggest they first share the context on where things stand today (i.e. the Situation), then the Complication (i.e. “What problem are we solving?”), and then get right to the recommendation before sharing all of the supporting arguments.
3. **Templates**: Leverage this [1-Pager template](https://docs.google.com/document/d/1541V32QgSwyCFWxtiMIThn-6n-2s7fVWztEWVa970uo/edit) and [Company strategy template](https://docs.google.com/document/d/1JI73WrGplrhNE46aLyRD_B74gEynI77EPgXn1ic6WeQ/edit) (which build on the SCR format) vs. starting with a blank page.

#### A few final points:

1. **A common tweak of the SCR format is to move the Resolution to the top**, i.e. Resolution-Situation-Complication. This works best when your audience doesn’t need convincing and is ready to hear your recommendation immediately.
2. **Unlike a story, in a business context you’ll want to spend a limited amount of time on the S and C**, so that you can get to the Resolution as quickly as possible (per our point above about work colleagues not looking to be entertained but instead informed). Thus, your work documents and presentations should have relatively short Situation and Complication sections.
3. **You may hear the SCR framework also called SCQR, SCQA, or SCA**. They’re all the same thing, just using different words, and IMHO, SCR is the simplest version of them all.

### 📚 Further study

1. Watch Barbara Minto herself explain this concept — even just the the first 5 minutes are worth watching (1980 video production FTW!)

[Watch on YouTube](https://www.youtube.com/watch?v=hqRfeFODXo4)

1. Check out these two excellent videos by Harrison Metal: [Thank you, Barbara Minto](https://vimeo.com/305393045) and [Executive Communication](https://www.heavybit.com/library/video/executive-communication/)
2. Read [How to Tell a Business Story Using the McKinsey Situation-Complication-Resolution (SCR) Framework](https://speakingsherpa.com/how-to-tell-a-business-story-using-the-mckinsey-situation-complication-resolution-scr-framework/)
3. Read [How to do consulting presentations](https://www.elc-columbia.org/uploads/3/9/7/2/39724566/how_to_do_consulting_presentations__elc_.pdf)
4. Read [How to write emails with military precision](https://hbr.org/2016/11/how-to-write-email-with-military-precision)

Have a productive and fulfilling week 🙏

## **🔥 Job opening of the week:**[Director of Product at Berbix](https://jobs.lever.co/berbix/fbac5a65-6ade-4030-9ad9-b58ee0430e3f)

> *Berbix is hiring a Director of Product to lead our product team and set our product direction in service of transforming identity online.*
>
> [Learn more](https://jobs.lever.co/berbix/fbac5a65-6ade-4030-9ad9-b58ee0430e3f)

**Additional opportunities:**

1. **Product**: [Decent](https://decent.breezy.hr/p/a976bf37026c-product-lead), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Twine](https://docs.google.com/document/d/1VUHSTVfk2HyVfzcryXBGcpgUHrVGCddy1tGvMjGEHao/edit), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4217915003?gh_jid=4217915003)
2. **Growth**: [BasisOne](https://www.basisone.com/careers/growth-strategy-lead), [Offsyte](https://www.notion.so/Growth-Marketing-Manager-3fbc68b7dcc2411c857a2753bd4e70f7), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Eppo](https://www.notion.so/Eppo-Founding-Designer-57b62fbe7832400396ee7dbfd9889c0e), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04), [Sourcetable](https://www.sourcetable.com/jobs#senior-frontend-engineer)
5. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Eppo](https://www.notion.so/Eppo-Founding-Data-Engineer-45533e4fc79c4c4d97b8302c051243bc), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
6. **Fullstack engineer**: [Centered](https://www.notion.so/Software-Developer-e7cad269968e4d5aaeb1f6da9e282626), [Emporii](https://www.notion.so/emporii/Senior-Full-Stack-Engineer-5a149801dcfa4ce89a43ccdc19857daa), [Icebreaker](https://icebreaker.video/product-engineer), [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpas](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d)s, [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
7. **Mobile engineer**: [Nocap](https://www.notion.so/nocapnotion/Software-Engineer-iOS-058677353900453ca6b60c62445ac3a0), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
8. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

1. **Watch**: A Suez Canal sea shanty

1. **Remember:** [Founding a startup that actually works is like...](https://twitter.com/garrytan/status/1376598052044111872) via Garry Tan

1. **Read**: [The Marketplace 100](https://a16z.com/marketplace-100/) by a16z

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

Sincerely,

Lenny 👋

---

## [14/61] Choosing a take rate

> ## Q: I’m building a marketplace and I’m struggling to pick my take rate. How do I decide what % to charge?

First, some context. There are essentially four revenue models to pick from when building a business:

1. **Subscription**: Charge your customer a recurring monthly/yearly fee for your product/service (e.g. SaaS, Stitch Fix, Netflix)
2. **Advertising**: Charge a 3rd party for your users viewing/clicking an ad (e.g. Buzzfeed, Twitter, TV)
3. **One-time purchase**: Charge your customer once for a specific product/service (e.g. DTC, annual contracts, IRL commerce)
4. **Taking a cut of each transaction**: Charge your customers a fee for each transaction you enable (e.g. Airbnb, Substack, Apple)

You can combine these models (e.g. Shopify charges a subscription fee + a transaction fee, NY Times has subscriptions + ads), but if your product enables money exchange between two parties you fit squarely into the fourth bucket: taking a cut of each transaction. Which means you’ll need to decide what fee — also known as “take rate” — to charge your customers. To help you figure this out, we’re going to look at:

1. The take rates of 35+ companies
2. The Take Rate Formula
3. A guide to choosing your own take rate
4. How to increase your take rate
5. How to lower your take rate

Let’s get to it!

## 1. Take rates across the industry today

![Image from Choosing a take rate](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0cb7b6f7-ca57-4dea-9d6d-793525b28ee6_1456x3033.png)

*([Click here to check out the detailed spreadsheet](https://docs.google.com/spreadsheets/d/1VD_cb65dgIQr1bz33G1cGA5knDSz4S5yEQTSxyQOSlU/edit#gid=0))*

**If you look at the list above, two major takeaways emerge:**

1. There is a relatively clear distinction between “platform” businesses (which make it easier for you to run your business, like Patreon and Substack), and Marketplaces (which also bring you new business, like Doordash and Cameo). Platforms generally charge 5 - 15% and Marketplaces generally charge 10 - 50%.
2. More broadly, differences in take rates are primarily driven by three factors: (1) whether you can drive new demand, (2) how much convenience you provide the seller, and (3) the level of competition in the market.

With this in mind, let’s help you determine your initial take rate.

### 2. The Take Rate Formula

If you boil it all down:

> #### **Take rate = Convenience + Demand - Competition**

- **Convenience**: How much easier you make it to run your customer’s business (more is good)
- **Demand**: How much valuable demand you can drive to the customer (more is good)
- **Competition**: How competitive your market is (less is good)

#### For example:

- **Gumroad (8.50%)**: High convenience + Little demand gen - Medium competition
- **StockX (~11%)**: High convenience + High demand gen - Medium competition
- **Substack (~13%)**: Very high convenience + Little demand gen - Medium competition
- **Airbnb (15%)**: High convenience + Very high demand gen - High competition
- **OnlyFans (20%)**: Very high convenience + Little demand gen - Very low competition
- **Cameo (25%)**: High convenience + Very high demand gen - Very low competition
- **Twitch (50%)**: Very high convenience + Very high demand gen - Very low competition

### 3. Choosing your take rate

A back-of-the-envelope guide to help you land on an initial take rate:

**Step 1: Are you a “platform” or a “marketplace”?**

- Marketplace (i.e. will drive demand): Start with 20%
- Platform (i.e. won’t drive demand): Start with 10%

**Step 2: Evaluate the level of Convenience your product provides**

- Free money (e.g. Shutterstock): Add 50-60%
- Makes running your business possible (e.g. Apple, Twitch): Add 15-20%
- Makes running your business significantly easier (e.g. Onlyfans, Toptal, Uber): Add 10-15%

**Step 3: Evaluate the level of Competition in your market**

- Very competitive (e.g. Etsy, GOAT, Lyft): Subtract 5-10%
- Somewhat competitive (e.g. Airbnb, Rover): Subtract 2-5%
- There is competition (e.g. Twitch): Add 5-10%

Add these up and that gives you a starting point for your take rate.

**Important**: This number will not be set in stone. Every company that has a take rate eventually begins to tweak their fees in order to maximize revenue. Once you have this initial number in mind you now have a base to start experimenting with.

### 4. How to increase your take rate

Say you’ve already set a take rate and you want to increase it. Coming back to our formula, you have three options:

**1. Increase the convenience**

- Provide additional features and services (e.g. insurance, integrations, team accounts)
- Do more of the heavy lifting (e.g. delivery, course creation, account manager)
- Make it easier to get paid (e.g. accept online payments, early payouts)

**2. Improve the demand**

- Bring in more demand (e.g. Grubhub)
- Bring in better demand (e.g. StockX, Toptal)
- Unlock a whole new revenue stream (e.g. Cameo, Twitch, Rover)

**3. Reduce competition**: Tough one.

### 5. Should you lower your take rate?

I can’t write a post about take rates without referencing [Bill Gurley’s seminal piece on take rates](https://abovethecrowd.com/2013/04/18/a-rake-too-far-optimal-platformpricing-strategy/), in which he argues that you are often better off *lowering* your take rate:

> “It may seem tautological that a higher rake is always better – that charging more would be better than charging less. But in fact, the opposite may often be true. The most dangerous strategy for any platform company is to price too high – to charge a greedy and overzealous rake that could serve to undermine the whole point of having a platform in the first place.”
>
> — Bill Gurley

Gurley’s primary argument, which I agree with, is that in a winner-take-all market, higher fees mean higher friction for customers and more opportunity for competitors to win business away from you. As Jeff Bezos says, “your margin is my opportunity.” Lower fees can give you both a short-term and lasting edge.

**Ways to decrease your take rate:**

1. Add a monthly subscription fee (e.g. [Shopify](https://www.shopify.com/pricing), [Gumroad](https://gumroad.com/features/pricing))
2. Create tiers with lower fees for fewer services (e.g. [Patreon](https://www.patreon.com/product/pricing), [Uber Eats](https://restaurants.ubereats.com/us/en/pricing/))
3. Give discounts for higher volume (e.g. [Upwork scales from 20% to 5%](https://support.upwork.com/hc/en-us/articles/211062538-Freelancer-Service-Fees), [StockX cuts fees as you sell more](https://help.stockx.com/s/article/What-are-StockX-selling-fees?language=en_US))
4. Increase competition
5. Just lower it

### Bonus: What surprised me about the take rates

Coming back to [the list of take rates](https://docs.google.com/spreadsheets/d/1VD_cb65dgIQr1bz33G1cGA5knDSz4S5yEQTSxyQOSlU/edit#gid=0), what stood out to me:

1. OnlyFans (a platform that doesn’t bring any demand) is able to charge 20% (a rate normally reserved for marketplaces). This is probably because they solve a *major* pain point for their creators (e.g. accepting payment for sex work), and there isn’t much competition out there.
2. Etsy’s fees are at the low end of the spectrum for a marketplace (e.g. even lower than Substack, which doesn’t drive demand). This is probably because of heavy competition with Amazon.
3. Toptal is able to charge close to 40% as a labor marketplace. This is likely due to how much time and effort the platform saves both supply and demand.
4. Twitch takes 50%. This likely speaks to the quality of the product and the significant network effects.
5. Shutterstock and Getty images take up to 85%. This is likely due to how little work there is to get paid once you’ve uploaded your photos.
6. Cameo has the opportunity to charge a higher take rate, since as far as I can tell there is no competition for their supply.
7. Companies like Upwork, Patreon, StockX, Doordash, Uber Eats, and Grubhub take advantage of The Take Rate Formula by offering different take rates for more or less Convenience and Demand. For example:

![Image from Choosing a take rate](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/386a85e0-c059-4c04-83a0-b3d1a77042ce_2366x1182.png)

![Image from Choosing a take rate](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/81752c56-e9e1-42bc-842b-9f837170b627_1866x1352.png)

And finally…

## 📚 Further study

- [A Rake Too Far](https://abovethecrowd.com/2013/04/18/a-rake-too-far-optimal-platformpricing-strategy/) by Bill Gurley
- [How to set pricing in your marketplace](https://www.sharetribe.com/academy/how-to-set-pricing-in-your-marketplace/) by Juho Makkonen
- [My running collection of take rates](https://docs.google.com/spreadsheets/d/1VD_cb65dgIQr1bz33G1cGA5knDSz4S5yEQTSxyQOSlU/edit#gid=0)

Have a productive and fulfilling week 🙏

## **🔥 Job opening of the week:**[Lead Product Manager at Quartzy](https://jobs.lever.co/quartzy/2b7342f1-9382-40f3-a119-2a7a90237020?lever-origin=applied&lever-source%5B%5D=Lenny%27s)

> *Quartzy is in hyper-growth mode and our SaaS platform has an exciting roadmap for 2021! If you're interested in building technologies that help research labs handle, order and optimize their resources daily, take a look at this role.*
>
> [Learn more](https://jobs.lever.co/quartzy/2b7342f1-9382-40f3-a119-2a7a90237020?lever-origin=applied&lever-source%5B%5D=Lenny%27s)

**Additional opportunities:**

1. **Product**: [AbstractOps](https://work.abstractops.com/3003f61f65d44cfdbebfdd01677f1adb), [Decent](https://decent.breezy.hr/p/a976bf37026c-product-lead), [Goldcast](https://boards.greenhouse.io/goldcast/jobs/4009779004), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Twine](https://docs.google.com/document/d/1VUHSTVfk2HyVfzcryXBGcpgUHrVGCddy1tGvMjGEHao/edit), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4217915003?gh_jid=4217915003)
2. **Growth**: [Offsyte](https://www.notion.so/Growth-Marketing-Manager-3fbc68b7dcc2411c857a2753bd4e70f7), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Eppo](https://www.notion.so/Eppo-Founding-Designer-57b62fbe7832400396ee7dbfd9889c0e), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
5. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Eppo](https://www.notion.so/Eppo-Founding-Data-Engineer-45533e4fc79c4c4d97b8302c051243bc), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
6. **Fullstack engineer**: [Icebreaker](https://icebreaker.video/product-engineer), [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d), [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
7. **Mobile engineer**: [Nocap](https://www.notion.so/nocapnotion/Software-Engineer-iOS-058677353900453ca6b60c62445ac3a0), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
8. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

1. **Watch**: Living on a Prayer + park

2. **Listen**: A 5m documentary about a rainy afternoon in Japan (via [Edith Zimmerman](https://drawinglinks.substack.com/))

[Watch on YouTube](https://www.youtube.com/watch?v=i5SLi-GZ0Z4)

3. **Read**: [Marketplace Supply Strategy: Comprehensive, Exclusive, or Curated](https://a16z.com/2021/03/31/marketplace-supply-strategy/) by Casey Winters and Anne Lewandowski

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

Sincerely,

Lenny 👋

---

## [15/61] Why marketplaces fail

> ## Q: I’m building a marketplace and wondering what is most likely to kill my business. What should I be watching out for?

Marketplace businesses are HARD. You could argue they are 2x as hard as a non-marketplace because you have to find Product/Market TWICE, for your supply AND for your demand. If you’re the founder of a marketplace business, you probably feel that’s closer to 200x as hard 🥴

At the same time, there’s nothing magical about marketplaces. They work for the same reasons any startup works—delivering something people want. And they fail mostly for the same reasons—not delivering something people want, profitably, before they run out of money.

In a [past post](https://www.lennysnewsletter.com/p/evaluating-a-marketplace-business), I shared my framework for evaluating marketplace ideas, but in this post, I’m going zero in on your specific question: **why do marketplaces fail?**

Though marketplaces, like any startup, fail for a combination of reasons, there does generally seem to be *one fatal issue* that kills a marketplace. Below, I’ll share the five most common reasons marketplaces fail, along with tons of examples of marketplaces that experienced that issue most acutely.

![Image from Why marketplaces fail](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0205a3ca-8644-49ff-9de3-302b0feea6c4_2048x1024.png)

Note: While this post shares the downfall of many marketplaces, I want to express my utmost respect for anyone who ever attempts to build a marketplace startup—or any startup. The startup journey is unbelievably hard, and my goal with this post is to help you avoid unnecessary pain. Marketplace founders: I salute you.

![Image from Why marketplaces fail](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/65fb83b1-0312-4497-af0b-37da224a232b_356x200.gif)

# Why marketplaces fail

### Reason 1. Lack of demand-side PMF: Not enough **customers badly need what you’re selling**

This is by far the most common reason startups fail, marketplace or not. No matter how clever your marketplace model, you’re in trouble if there isn’t a big hungry market looking for what you’re selling.

Broadly, when going up against a non-marketplace alternative, you have three ways to win on the demand side:

1. **Deliver a much cheaper product**, thanks to your inventory-less model and economies of scale (e.g. Doordash, Instacart, Amazon, ThredUp)
2. **Deliver a much better product,** thanks to exclusive new supply that you create (e.g. Airbnb, Cameo, Rover, Hipcamp, Outschool, SpotHero)
3. **Deliver a much better experience,** thanks to aggregating previously disaggregated supply, which makes it much easier to trust and transact(e.g. GOAT, Lyft/Uber, Faire, Thumbtack, OfferUp)

Let’s look at a few examples of marketplaces that couldn’t get there.

#### Sharingear: Rent musical instrument from other people

![Image from Why marketplaces fail](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a3ed8bc8-1700-4471-ae91-dd65bc8ec332_1436x738.png)
> Every musician I was in dialogue with, all said “what a great idea” or “this is exactly what we need” but at the end of the day, **no one really did need such a service**, because every musician is struggling for survival and no one has ever any money, as even the established artists are saving every hard earned penny. ([source](https://medium.com/@mirceagabrieleftemie/the-highs-and-lows-of-entrepreneurship-5e786cac9d59))

#### Neighborrow: Rent tools and appliances from your neighbors

![neigh*borrow (@neighborrow) | Twitter](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/07e9c9f8-0196-4e63-926a-7b690bdcd949_400x400.jpeg)
> The problem was people liked the idea of our idea, not our solution. Journalists flocked to write about us, but they never signed up for the service. Gatekeepers of Internet contests and startup events wanted us there, but didn’t use it. Even the users who wrote us emails saying how we were awesome (I got emails like that every week) didn’t make an effort to lead their communities to neighborrow. **We were great in theory but not in practice.** ([source](https://pando.com/2013/03/16/what-can-be-learned-when-sharing-leads-to-failing/))

#### Kitchensurfing: A professional chef in your kitchen

![Kitchensurfing — Emilia Naberezny](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c07c390e-942e-4eae-b478-8e7aff67f3b9_1000x710.gif)
> “The startup had originally allowed customers to book chefs days in advance for at-home dinner parties, but last year moved to an on-demand model. **Neither version of the service, though, produced enough demand** to be sustainable for a venture-backed business.” ([source](https://www.bizjournals.com/newyork/news/2016/04/18/on-demand-chef-service-kitchensurfing-shuts-down.html#:~:text=Kitchensurfing%2C%20a%20venture%2Dcapital%20backed,after%20four%20years%20in%20business.&text=%E2%80%9CWe%20are%20unfortunately%20ending%20service,operations%20after%20April%2015%2C%202016.))

**Additional examples**: [Zimride](https://techcrunch.com/2014/08/29/6000-words-about-a-pink-mustache/), [Design Inc](https://hackernoon.com/the-success-and-failure-of-design-inc-99c07a93c8eb), [Mapudo](https://medium.com/swlh/why-mapudo-failed-5f3519f1b277) (B2B), [Wydr](https://entrackr.com/2018/11/wholesale-marketplace-wydr-shutdown/) (B2B)

### Reason 2. **Lack of supply-side PMF: Not enough of your potential supply gets meaningful value from your marketplace**

What *most* differentiates marketplaces from non-marketplaces is the fact that you don’t own the supply. Your supply is independent, and technically also your customer. In order to attract and keep your supply, you have two options:

1. **Create new revenue opportunities for people** (e.g. Airbnb, Outschool, Cameo)
2. **Add incremental revenue to existing businesses** (e.g. Doordash, Thumbtack, Snackpass)

Let’s look at a few examples of marketplaces that couldn’t get there.

#### **Prim**: Laundry on demand

![Prim: Anatomy of a folded startup | Laundry delivery, Start up, Laundry  pick up](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/456d0773-31f4-4cd0-a47d-a9665b80ccfe_620x348.jpeg)
> While laundromats were initially receptive to working with Wu and Cao, what the two didn’t count on was the partnership eventually going sour. **Laundromat owners eventually saw Prim as siphoning possible incremental revenues from their own in-house delivery services**, especially once Prim began offering same-day delivery. During Prim’s short lifespan, it churned through at least three laundromats. ([source](https://fortune.com/2014/01/22/prim-anatomy-of-a-folded-startup/))

#### Exec: Errands on demand

![Instant Errand Assistants : exec](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/24a3541f-2306-4262-b381-ca5a94c88336_600x336.jpeg)
> Turnover of errand runners was very high. **Most competent people are not looking for part-time work.** The exception to this are people looking for supplemental income, but those people have full-time jobs which conflicted with our high demand periods: mid-morning of the workweek, Monday — Friday. Hiring new errand runners was expensive, and it was difficult to get them to stick around when we couldn’t guarantee work. ([source](https://justinkan.com/what-i-learned-about-online-to-offline-dd38ab40f3eb))

#### HelloParking: Parking on demand

![11 Uber for X Startups that Failed - are you making the same Mistakes? -  JungleWorks](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2bcc45b0-a555-41bb-a65e-51ebe3ba90aa_338x139.png)
> **There are more folks hunting for parking spaces than exist parking space owners who are willing to share**. This is the problem we weren’t able to solve, and a problem that still exists today for folks taking their own stab at the driveway sharing business. ([source](https://medium.com/10-thousand-ways-to-fail/helloparking-a-look-back-and-a-new-perspective-3b334ebcd06))

**Additional examples**: [ShipItWise](https://medium.com/shipitwise/goodbye-for-now-shipitwise-is-shutting-down-ae5a4bdf1550)

### Reason 3. Lack of liquidity: You’re unable to reliably match supply and demand

The most fundamental job of a marketplace is to efficiently match supply with demand. If you can’t do this reliably (i.e. fill-rate) or quickly (i.e. time-to-match), you’ll fail. Below are examples of marketplaces that weren’t able to get enough liquid to build a viable marketplace.

#### Threadflip: P2P women's apparel

![RIP Threadflip | TechCrunch](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2f62c4b5-8fc9-41b1-838f-bc188a2552ce_730x409.png)
> At Threadflip we focused on the mid-tier of design (Michael Kors for example was our most popular brand). While liquidity with anything Michael Kors was high, the number of unique items we had listed was low. **We had a supply imbalance and our search-to-fill was poor**. ([source](https://twitter.com/ai/status/1349786585999441920))

#### Prefer: Book services via referrals from friends

![Image from Why marketplaces fail](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3d30a6d7-47ca-4b31-8ef5-55318e82d0d8_1600x999.png)
> Traditional marketplace building starts with liquidity. Can you gather enough “supply” and “demand” to ensure that buyers and sellers are able to find each other and be satisfied with little effort? For this reason, most marketplaces start with a narrow (vertical) focus on specific services, whether it be massage therapists, drivers, or babysitters. If you can build enough supply while also pacing the demand — all while keeping the cost of acquiring both sides in check with some form of viral loop — you can achieve the elusive “flywheel” that has unleashed some of the greatest marketplaces of our time. But for a referral marketplace like Prefer that would require Soloists to bring their own clients onto the platform (and for clients to keep coming back for new services), the team knew that we needed to take a horizontal approach instead. After all, why would massage therapists introduce a network of other massage therapists to their own clients? So we needed to accommodate many forms of Soloists from day one. As the saying goes, “when you try to do something for everyone, you don’t get it right for any one. ([source](https://medium.com/positiveslope/prefer-postmortem-6-lessons-learned-from-building-an-independent-pro-network-17f398da002))

#### Zaarly: Reverse Craiglist

![Zaarly Reviews - 4 Reviews of Zaarly.com | Sitejabber](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/94802b8d-1f41-4558-8026-894ff987c0aa_1031x449.jpeg)
> Certainty, Trust, & Quality. These three things are the pillars that I have come to believe are needed to make any marketplace work. We did a pretty solid job out of the gate with trust and quality, but a pure 'request model' lacks sorely when it comes to Certainty. The analogy I use is that, in a vacuum of brand trust (which a startup doesn't have) or guaranteed supply (which we didn't have early on), a pure request model is **akin to going fishing in a black water pond. You don't know what kind of fish are there, you don't know IF there are fish there, and you certainly don't know what kind of bait to use**. So, why fish there? There are a handful of ways to deal with that... you can guarantee supply for certain things, you can suggest things that you know you have good supply for (giving the illusion of certainty), or you can show off the supply that you have (which is what we chose to do). ([source](https://www.quora.com/Zaarly-company-1/Why-did-Zaarly-pivot))

**Additional examples**: [Varagesale](https://betakit.com/varagesale-fails-to-monetize-in-time-acquired-by-verticalscope/), [LetGo](https://techcrunch.com/2020/08/31/offerup-and-letgo-combine-marketplaces-post-acquisition/)

### Reason 4. Bad **unit economics**: You’re unable to make a profit delivering a competitive price to customers while retaining supply

Rooted in the challenge of offering better/cheaper products to customers is both (1) making sure your supply earns enough to make it worth their while, and (2) at the same time extracting enough value to build a profitable business. As Justin Khan learned when building Exec (after Justin.TV), “unit economics matter a lot more [for marketplaces] than in pure software businesses.”

Let’s look at a few examples of companies who couldn’t find a path to making the economics of their marketplace work before running out of money.

#### Shyp: Shipping on demand

![Shyp will save you a trip to the post office - Coordinate° - Marketing and  Public Relations](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8cddb5ad-2b1c-4777-8038-da9a7703335c_800x460.jpeg)
> For all that was going right, there were underlying problems with Shyp’s operating model. **A flat fee for pickup and packaging proved a challenge given the wide variance in size of packages** that people were sending. In response, the company introduced fees for packaging and shipping that could vary based upon the size of the item being packaged. And while probably prudent for the company, it likely diminished the value of the service in the eyes of customers. ([source](https://www.forbes.com/sites/maryjuetten/2019/01/24/failed-startups-shyp/?sh=f82881a72b93))

#### Luxe: Valet parking anywhere in the city

![Valets On Demand: Can Luxe Solve Our Parking Mess?](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ee18d6f0-85ea-4c68-bc87-153e606e53dc_960x506.jpeg)
> By ferrying cars from popular areas to underused parking lots, Luxe’s founders argued that they had discovered a loose thread in the city’s parking knot. It wasn’t simply more convenient — at $5 an hour, with a maximum of $15 for the day — Luxe was also significantly cheaper than just about any other way to park.
> **Things have since changed, and not for the better. Luxe is less reliable, and prices have gone way up. Where I park in San Francisco, Luxe now often charges close to $30 a day, a rate that exceeds those of local lots**, especially when you include the app’s suggested tips for valets. ([source](https://www.nytimes.com/2016/03/24/technology/the-uber-model-it-turns-out-doesnt-translate.html))

#### Cherry: The carwash that comes to you for $29

![Photo of Cherry - San Francisco, CA, United States](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1da00190-50d2-42c2-be50-3b9f0681c55d_1000x666.jpeg)
> To maximize revenue in the Bay Area, where they started, Cherry would have had to either begin to upsell other car-related services to be delivered at the time of a car wash and/or to maximize the number of bookings made through its service.
>
> Venture-scale businesses need to have tremendous leverage in their revenue models. [This] requires the organization of excess labor supply, training that labor, and supplying it with materials and/or information in order to carry out the mission. Each step between point-of-sale and point-of-completion **puts more and more pressure on the model and most likely compresses any margin**. ([source](https://techcrunch.com/2013/01/13/iterations-lessons-we-can-draw-from-cherry/))

#### Homejoy: Home cleaning on demand

![As independent contractors, Homejoy's cleaners couldn't be trained -- which led to spotty service quality and poor customer retention. (Courtesy Homejoy)](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cd74cc30-361f-48de-ad24-cf898540405d_960x640.jpeg)
> A cleaning company charges north of $85 for a 2.5-hour house cleaning, but to rope in as many new customers as possible, it [offers the service](https://plus.google.com/+Dealgrove/posts/622oDsFrL32) for a promotional price of $19. Guess what happens when the introductory deal is used up? **You don't need an MBA to solve this riddle**. The customer never books again -- and that's the problem that plagued Homejoy, the cleaning services marketplace startup that was, for a while, a Silicon Valley darling before it said Friday it was shutting down. ([source](https://www.forbes.com/sites/ellenhuet/2015/07/23/what-really-killed-homejoy-it-couldnt-hold-onto-its-customers/?sh=ede08fb18741))

**Additional examples**: [Omni](https://techcrunch.com/2019/11/25/omni-shuts-down/), [Kitchit](https://techcrunch.com/2016/04/28/on-demand-private-chef-startup-kitchit-shuts-down/), [Prim](https://fortune.com/2014/01/22/prim-anatomy-of-a-folded-startup/), [Washio](https://www.latimes.com/business/la-fi-washio-startup-20160830-snap-story.html), [Exec](https://justinkan.com/what-i-learned-about-online-to-offline-dd38ab40f3eb), [Move Loot](https://www.businessinsider.com/moveloot-shuts-down-2016-6), [99 Dresses](https://www.failory.com/cemetery/99dresses#:~:text=99dresses%20was%20established%20by%20the,of%20the%20app%20in%202014.), [Dinner Lab](https://www.forbes.com/sites/forbestreptalks/2016/05/24/how-dinner-lab-blew-through-10-million-on-a-failed-restaurant-startup/?sh=21a3906dc64a), [Commerce One](https://www.cnet.com/news/commerce-one-melting-down/) (B2B)

### 5. Scaling too fast: **You scale quickly without maintaining a consistently great experience**

Scaling too fast can kill any startup’s ability to deliver a great experience, but marketplaces feel this challenge most acutely because they don’t have total control over their supply. Initially, these challenges can be easy to overcome, but as you scale and bring on lots of new supply, it becomes incredibly challenging.

Below are examples of startups who most struggled maintaining a consistently high-quality experience as they scaled, and failed as a result.

#### Handy: Home cleaning on demand

![Handy - Home Services on Demand - YouTube](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/21b2b5a5-bde4-40f1-b191-d95e4a94c781_1280x720.jpeg)
> Successful onboarding plummeted more than 40 percent. **Handy had to cancel thousands of bookings as demand outstripped the supply of available pros**. Customer complaints skyrocketed. It was a grim replay of an episode from a year earlier when the company had moved all of its customers onto recurring-service plans without providing easy ways to opt out--while simultaneously shutting down its telephone complaint line. For Hanrahan and Dua, this debacle was just one more stumble on the long, unfamiliar, and painful path from growth to profitability. ([source](https://www.inc.com/magazine/201611/jeff-bercovici/from-pivot-to-profit.html))

#### Fab: Flash sales

![Flash Sales Site Fab.com Raises $8 Million to Be a Step Up From Etsy -  Tricia Duryee - Commerce - AllThingsD](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f36e3de4-bdee-4926-8ca4-f734cffcf1f7_722x469.png)
> “When you look at Fab's decision to go to Europe, we were still nascent in the US," said one former Fab employee. "We had our ducks in a row, but not everything figured out. We couldn't afford to send anyone from the US there because we were trying to keep our heads above water here. Two years later would have been a more natural place to make those investments in [Europe].” **The expansion caused Fab to lose its competitive edge.** ([source](https://www.businessinsider.com/how-billion-dollar-startup-fab-died-2015-2))

#### Laurel & Wolf: Online interior design

![The bizarre unraveling of Laurel & Wolf](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b7c03180-480c-4f4f-b204-6f8b8789c485_800x535.png)
> Even though Laurel & Wolf generally maintained a positive, marketable image, beginning the summer of 2018, the company’s reviews on sites like Yelp were populated with an influx of mainly one-star rants. **Most of the reviewers complained that furniture and other items that they had ordered through the platform either arrived broken or were never delivered**. Some clients also complained of having received substandard services and never receiving refunds that they claimed for. As a result of the poor publicity, a majority of Laurel & Wolf’s designers left the platform. ([source](https://businessofhome.com/articles/the-unraveling-of-laurel-wolf))

**Additional examples**: [Groupon](https://www.businessinsider.com/lessons-from-groupons-business-model-2013-3), [Fad](https://www.businessinsider.com/how-billion-dollar-startup-fab-died-2015-2), [Wimdu](https://www.eu-startups.com/2019/07/imitation-simply-wasnt-enough-a-wimdu-post-mortem/#:~:text=The%20merger%20came%20with%20speculation,and%20failed%20to%20secure%20more.&text=Wimdu's%20official%20statement%20said%20it,employees%20in%20Berlin%20and%20Lisbon.), [OLX](https://en.wikipedia.org/wiki/OLX#History), [Etsy](https://www.businessinsider.com/this-is-why-etsy-is-failing-2015-6) (which they recovered from)

### Other reasons your marketplace may fail

For completeness, a few other (but less common) causes of marketplace failure to watch out for:

1. **Disintermediation**: Your supply and demand don’t have a great reason to stay on-platform (e.g. [Tutorspree](https://pando.com/2013/09/08/after-difficult-fundraise-yc-alum-tutorspree-shuts-down/))
2. **Multi-tenanting**: Too much of your supply is present on other competing marketplaces, making your marketplace less valuable to demand.
3. **Lack of fragmentation on both sides**: Do both sides actually need you to help them find each other? Particularly common in B2B marketplaces, where there are fewer players.
4. **Too small a market**: There just aren’t enough people or businesses in the world who need what you’re selling, which leads to your growth plateauing.
5. **Bad execution**: Focusing on the wrong side of the marketplace for too long, not finding a scalable way to grow supply and demand, blowing through cash, etc. (e.g. [Beepi](https://www.forbes.com/sites/maryjuetten/2019/01/15/failed-startups-beepi/?sh=463c18b62e57))

## Bonus: How marketplaces win

How marketplaces beat non-marketplace alternatives:

#### Demand

1. **Deliver a much cheaper product**, thanks to your inventory-less model and economies of scale (e.g. Doordash, Instacart, Amazon, ThredUp)
2. **Deliver a much better product,** thanks to exclusive new supply that you create (e.g. Airbnb, Cameo, Rover, Hipcamp, Outschool, SpotHero)
3. **Deliver a much better experience,** thanks to aggregating previously disaggregated supply, which makes it much easier to trust and transact(e.g. GOAT, Lyft/Uber, Faire, Thumbtack, OfferUp)

#### Supply

1. **Create new revenue opportunities** for people (e.g. Airbnb, Outschool, Cameo)
2. **Add incremental revenue** to existing businesses (e.g. Doordash, Thumbtack, Snackpass)

## 📚 Further study

- [Evaluating a marketplace idea](https://www.lennysnewsletter.com/p/evaluating-a-marketplace-business)
- [Four Paths to Marketplace Success](https://a16z.com/2020/02/20/marketplace-engagement/) by D'Arcy Coolican
- [Marketplace Supply Strategy: Comprehensive, Exclusive, or Curated](https://a16z.com/2021/03/31/marketplace-supply-strategy/) by Casey Winters and Anne Lewandowski
- [The a16z Marketplace 100](https://a16z.com/marketplace-100/)
- [A tweet thread with more failed marketplaces](https://twitter.com/lennysan/status/1381651907375112198)

Have a productive and fulfilling week 🙏

*Thank you to [Mike Ghaffary](https://www.linkedin.com/in/mikeghaffary) and [Mike Duboe](https://www.linkedin.com/in/mikeduboe) for offering valuable feedback on this post.*

## **🔥 Job opening of the week:**[Growth Product Engineer at Dover](https://www.dover.com/open-roles/growth-product-engineer)

> *Dover is looking for our first Growth Product Engineer to design and build out our free product suite used by thousands of founders and hiring managers.*
>
> [Learn more](https://www.dover.com/open-roles/growth-product-engineer)

**Additional opportunities:**

1. **Product**: [AbstractOps](https://work.abstractops.com/3003f61f65d44cfdbebfdd01677f1adb), [Decent](https://decent.breezy.hr/p/a976bf37026c-product-lead), [Goldcast](https://boards.greenhouse.io/goldcast/jobs/4009779004), [Rocketplace](https://jobs.ashbyhq.com/Rocketplace/11bc424f-e80f-4bab-aa96-517c01a6d511), [Twine](https://docs.google.com/document/d/1VUHSTVfk2HyVfzcryXBGcpgUHrVGCddy1tGvMjGEHao/edit), [Wrapbook](https://boards.greenhouse.io/wrapbook/jobs/4217915003?gh_jid=4217915003)
2. **Growth**: [Offsyte](https://www.notion.so/Growth-Marketing-Manager-3fbc68b7dcc2411c857a2753bd4e70f7), [SpaceX Starlink](https://boards.greenhouse.io/spacex/jobs/5032353002?gh_jid=5032353002&gh_src=seekorswimcom)
3. **Design**: [Ashby](https://jobs.ashbyhq.com/ashby/145ff46b-1441-4773-bcd3-c8c90baa598a), [Berbix](https://jobs.lever.co/berbix/ba8af3cd-d797-492b-9849-13b37df0f6b2), [Eppo](https://www.notion.so/Eppo-Founding-Designer-57b62fbe7832400396ee7dbfd9889c0e), [Instrumentl](https://angel.co/company/instrumentl/jobs/1175906-lead-product-designer-remote), [Office Hours](https://jobs.lever.co/office-hours/13d73541-b5b7-405a-9ad8-1d3f0edf9c92), [Primer](https://www.notion.so/Designer-San-Francisco-CA-327a70b082714933aef3c58ef63b54ab), [Runway](https://www.notion.so/A-Product-Designer-baa24543701f472bb291d4429812064a), [Watershed](https://www.notion.so/Designer-Watershed-7cb7bf8bd750432399d36e83e4e32391)
4. **Frontend engineer**: [Levels](https://www.notion.so/levelshealth/Join-Levels-Remote-Developer-58454f0db7e3466692f7b75db6237ddf), [Practice](https://www.notion.so/Front-end-Developer-929e1933b9b4432a851043adbb7bff04)
5. **Backend engineer**: [Driveway](https://www.notion.so/Driveway-Senior-Engineer-758d5ce4ce764f9ea920c5728ee136f3), [Eppo](https://www.notion.so/Eppo-Founding-Data-Engineer-45533e4fc79c4c4d97b8302c051243bc), [Pogo](https://www.notion.so/Senior-Software-Engineer-Backend-6d954206f00b446289f18bf51960ca34), [Reclaim](https://reclaim.ai/job-site-reliability-engineer/), [Transform](https://transformdata.io/careers/)
6. **Fullstack engineer**: [Mem](https://get.mem.ai/careers#product-engineer), [Runway](https://www.notion.so/A-Product-first-Full-stack-Engineer-5e056689b68048aeb1ccfea6ac73eb9e), [Snackpass](https://jobs.lever.co/snackpass/7c3bb72b-70d3-45ca-9dea-eea57ed5333d), [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/senior-full-stack-developer_paris_SORAR_Y1eay7e), [Stytch](https://jobs.lever.co/stytch/00c92a1b-36c2-46f6-8af1-885a6bbd6bd4)
7. **Mobile engineer**: [Nocap](https://www.notion.so/nocapnotion/Software-Engineer-iOS-058677353900453ca6b60c62445ac3a0), [Primer](https://www.notion.so/Senior-Software-Engineer-iOS-San-Francisco-CA-87f0fd3ee3dc4c3f8d0419c07fcdd434), [Stytch](https://jobs.lever.co/stytch/d3bf3860-4aaa-4a23-8e28-dad20957be44)
8. **Game economy designer**: [Sorare](https://www.welcometothejungle.com/fr/companies/sorare/jobs/game-economy-designer_paris_SORAR_kYW8MjK)

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

1. **Watch**: Monkey MindPong by Neuralink

[Watch on YouTube](https://www.youtube.com/watch?v=rsCul1sp4hQ)
2. **Feel**: Sometimes you just need a hug

3. **Read**: [Return/Hybrid/Remote](https://avc.com/2021/03/return-hybrid-remote/) by Fred Wilson

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

Sincerely,

Lenny 👋

---

## [16/61] On taking time off

*👋 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.*

> ## Q: **I’ve always wanted to take extended time off from work – a sabbatical – but have never mustered up the courage to do so. Is it a good idea? How do I get the most out of my time off, and what pitfalls should I avoid?**

I took a sabbatical while at Airbnb and it was one of the most transformative experiences of my life. I wouldn’t be doing this newsletter if not for that experience.

![Image from On taking time off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e00f4337-2f57-4d72-99bb-0df779595c5c_1080x809.jpeg)

I took three months off (after seven long years), and did all the cliche things—traveling, reading, a 10-day silent meditation retreat. Also a lot of days of nothing at all. I had every intention to come back to work after it was over, but by the end of it, it was crystal clear to me that I was ready to move on to a new adventure. I vividly remember checking my email about halfway through the sabbatical and distinctly feeling my heart dropping. My heart was no longer in the work. I didn’t yet know what I wanted to do next, but I knew it was time to shake things up.

After leaving, I planned to take 6 months to explore and tinker. That turned into a year, and that turned into the newsletter that you’re now reading. There is a 0% chance this newsletter would have emerged if not for the space that this time off created—the space to tinker, to research, and to write. [To chase my happy](https://youtu.be/nTQWtJVlJhk?t=51).

Though this worked out well in the end, I frequently wished I had a guide to help me make the most of my time off. And I’m not alone—my friends and former colleagues often ask me for advice about taking time off and I have nowhere to point them to. I’ve also noticed a big uptick in questions and discussions about sabbaticals in our subscriber Slack group. This may have something to do with the intensity of the past year 😭

Thus, I’ve decided to devote an entire issue to the topic of sabbaticals, and I couldn’t imagine a better person to help us all learn about taking time off effectively than DJ DiDonna, founder of [The Sabbatical Project](https://www.thesabbaticalproject.org/). I was introduced to DJ by my friend [Nick Soman](https://twitter.com/nicksoman?lang=en) (thanks Nick!), and after chatting with DJ it was clear that he had a lot to teach us. With that, I bring you DJ’s amazing guest post on Time (Off) Well Spent. Enjoy 🙏

*For more from DJ, you can [help his research](https://www.thesabbaticalproject.org/research1), share your own sabbatical story, and get notified when DJ’s upcoming book comes out. DJ also takes on a limited number of clients for sabbatical coaching—email him [here](mailto:dj@thesabbaticalproject.org).*

## Sabbaticals: Time (Off) Well Spent

*by DJ DiDonna*

![Image from On taking time off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f4dc10d7-9337-4930-8ec8-891ccc8995e2_6074x4480.jpeg)
> **Q: I’ve always wanted to take extended time off from work – a sabbatical – but have never mustered up the courage to do so. Is it a good idea? How do I get the most out of my time off, and what pitfalls should I avoid?**

First, you’re on the right track—I’ve interviewed more than 250 people from all walks of life, and I’ve never spoken to anyone who regretted taking time off. (And this includes people who got divorced while on sabbatical as well as those who spent most of their time off caring for a dying loved one.)

> **Instead, people call their time off transformational, life-changing, and one of the best decisions of their lives.**

This near-universal reaction is what spurred me to transition from a [fintech founder](https://www.nytimes.com/2013/12/31/business/credit-scores-from-a-test-not-a-history.html) to starting a research and advocacy organization on extended leave: [The Sabbatical Project.](https://thesabbaticalproject.com/) Our academic [research](https://www.thesabbaticalproject.org/research1) suggests that sabbaticals are a “peak life experience,” right up there with having a baby, getting married, and other life-defining moments.

![Image from On taking time off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/919a1dc4-fb61-4164-9a1a-4388787d9162_1000x590.jpeg)

BUT, considering how bad we are at taking time off from work in general\*, there are two lessons to learn about how to best take advantage of such a unique and powerful opportunity:

1. **Take enough time off**
2. **(Actually) disconnect**

After going into detail about what these lessons mean for your future sabbatical, I’ll also address three common questions prospective sabbatical-takers have for me:

1. **Is it okay to work while on sabbatical?**
2. **How will it impact my career?**
3. **What if I have a partner and/or kids?**

Let’s dive in.

### 1. Long enough to “be”

One of the most common questions I get is: “What’s the minimum amount of time I could take off to get the benefits of a sabbatical?”

> **The short answer is: Two to three months minimum, six-ish months ideally, and up to twelve is great.**

The shorter answer is: *sigh*. I get this question a lot, and I understand where it’s coming from, especially for those who take time off (and work) like Americans. But...

A sabbatical is not something you *do*, which can be optimized to do more efficiently. Instead, think of it as a space where you can *be*. It takes a while—a lot longer than you’d think—to disentangle yourself from your work identity. Just think about how long it can take some evenings after work to transition from executive to mom, from boss to creative hobbyist, or from product manager to loving partner.

Most people in our study described needing at least six weeks(!) just to lose the anxiety around tasks piling up, phantom phone alerts, and old responsibilities that were no longer theirs. Take this quote from a US Treasury employee on a sanctioned six-month leave of absence**:**

> *“I finished work on a Friday, and was on a plane on Monday, so it really was a seamless transition, work-wise. But it was surprisingly hard to get into the hang of being ‘off’; It felt weird to not have to check my emails every single day. I think that first month was about just understanding that work was no longer my life anymore, and I had to re-learn what my life meant outside of work. Like who I was, and what my purpose is without work giving me that purpose. Especially coming from a job that really had a mission.”*

Why does it take so much time? In our study, we found that sabbaticals create a safe, “liminal space” for transitioning across identities. This “identity workspace”—think of it like a yoga room or dojo for your personal development—allows us to reflect upon, and experiment with, our lives. For example, one of our interviewees spent several months working at an ecolodge in Hawaii to see if that was an attractive pre-retirement goal (it wasn’t).

![Image from On taking time off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2b5b64b1-963b-4a71-95b2-3b5ef7dfa92b_534x540.jpeg)

All of this to say: don’t short circuit your ability to fully rest, recover and experiment. Assign a block of time during which you will give yourself permission to be “off” from routine life. And yes, if you’re taking a sabbatical between jobs, commit to abstaining from job-searching. Opportunities will be there when you return and you’ll have a better story to tell if you give yourself time to do it right! Take this former attorney’s story:

> *“I was willing to relocate to a place where I didn't have any connections, and I was willing to start a brand new program without the requisite background in academia. I was willing to work with different communities I never really identified with. These are all things that I probably would've been too scared to do before taking the sabbatical...I no longer feel the same pressure to do things the way that other people have done them.”*

### 2. Cut loose

The reason that most successful sabbaticals include traveling at the start is because it’s the easiest (and most symbolic) way to disconnect from normal life. Take this nonprofit executives experience:

> *"I had to quit the job and leave the state in order for me to feel like it was no longer a part of my life. It's formal separation, a ceremonial separation. The reason I like traveling is the only constant is you. You end up in all these different cities and people, cultures and sites and smells. After a couple weeks, you are now you again. You're no longer the personality that your friends helped kind of maintain. You're a little bit more natural."*

Our research suggests that two other activities can be just as crucial for disconnecting—and therefore making the most of your time off: somatic activities and time in nature.

Somatic activities are simply those which [utilize your body.](https://www.nytimes.com/2009/05/24/magazine/24labor-t.html) Getting out of your head [heals you](https://hbr.org/2005/11/are-you-working-too-hard) and stimulates your creativity. Whether it’s yoga teacher training or ceramics class, [find a way to reconnect](https://www.npr.org/templates/story/story.php?storyId=106513632) your disembodied “knowledge worker” self with your flesh and bones. I remodeled my kitchen by myself, and rebuilt a deck with my cousin. It was horrible. It was also great!

![Image from On taking time off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4f99816b-9d4c-47f0-b188-0d970b306605_1276x851.jpeg)

Time in nature by itself has been shown to have transformative effects on mood, creativity, and fulfillment. Combine this with the extended time and space that sabbaticals offer, and getting outdoors accomplishes several things at once: it activates your body, forces isolation from regular life, and provides a chance to conquer hard-won physical goals.

Unfortunately, traveling by itself no longer ensures disconnection. Global connectivity means that you need strong boundaries around what kind of communication you receive—and when—you’ll have access to it. Uninstall those apps, and set up email auto-responses! But while you’re disconnecting digitally, make time and space for connecting in-person; strengthening relationships with loved ones stands out as a highlight for most sabbatical-takers. Your newfound time-wealth will enable you to fit into the tight schedules of all those whose schedules never seem to overlap.

—

It can be very difficult to fit a sabbatical into life, but our research suggests it’s more than worth the effort to do so. Too often, the events that spur us to reflect or grow or transform are negative—most sabbaticals are catalyzed by events such as the death of a loved one, burnout, or a toxic work environment. Take control of some of the things which profoundly shape your life by exploring yourself, the world, and those who mean everything to you by taking extended leave at points in your career. Time off is time well spent!

**Have a sabbatical story to tell? Tell yours here. Or [get in touch](https://www.thesabbaticalproject.org/contact-1) to be connected to other sabbatical-takers (or those in the planning stages) or to get guidance and coaching from myself or someone on the team.**

*\* Especially Americans, who despite having the fewest vacation days of any developed country, still leave a few days of PTO on the table annually.*

## Sabbatical FAQ

#### ***Q: Is it okay to work while on sabbatical?***

A: Yes, it’s okay to work, just don’t *Work*. Doing anything that resembles your current job will make it more difficult to reap the benefits of time off. Even if it’s “just a few hours consulting.” Those hours will expand to fill more time, prevent you from spur-of-the-moment planning, and in general, defeat the purpose of disconnecting from your work identity. If your “work” is experimenting with a new thing altogether, like being a [photographer](https://www.thesabbaticalproject.org/stories/marielena), or [sound healer,](https://www.thesabbaticalproject.org/stories/zhalisa) or trying to [cram as many national parks in 60 days off as possible](https://www.thesabbaticalproject.org/stories/justin), by all means, knock yourself out. Just be careful when using your time off to start a company…

![Image from On taking time off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4af1d14d-a004-4a48-868c-df023f7b889c_1600x1202.jpeg)

#### **Q: I have a partner and/or kids - is it worth the effort? How should we do it?**

A: Without question, some of the most inspiring stories in our research came from people traveling with [their children](https://www.thesabbaticalproject.org/stories/justin) (see picture above) or [partners](https://www.thesabbaticalproject.org/stories/natasha). It’s obviously much more logistically difficult to do so, and a takeaway from the interviews on those traveling with partners is to ensure that you carve out some time apart to tackle personal goals (and to give each other a bit of space). Remember, just because you can’t go on sabbatical next month, doesn’t mean you can’t ever do it; many of our interviewees spent years saving up and planning for their time off.

#### **Q: How should I structure my time off?**

A: It depends. Not only is everyone different, the needs for—and roles of—a sabbatical change over time. (I identify seven lifestage-based sabbaticals in my upcoming book.) In general, I’d recommend breaking up your sabbatical into three stages:

1. Disconnection
2. Exploration
3. Integration

As I mentioned above, plan on giving yourself upwards of six weeks to heal and disconnect—the more burned out you feel, the longer it will likely take. Physical activities, sojourns into nature, visiting loved ones will help.

Next, explore what Elizabeth Gilbert calls [your curiosities](https://onbeing.org/programs/elizabeth-gilbert-choosing-curiosity-over-fear-may2018/). Try not to put pressure on yourself to find the “next big thing,” or to double down on something that sounds cool or will impress other people; instead ask yourself what questions you’ve wanted to explore, and work them into your plans. One interviewee left his green energy job to explore civic tech in Estonia. An edtech pioneer spent three weeks deep-diving about octopuses and animal consciousness on a lark. (Pun not intended.)

Finally, give time to integrate your learnings. This includes journaling, reading, and planning how to map your learnings into the next phase of your life and career. It’s best to do this somewhat isolated from others, if only for a weekend. But it’s not a one-and-done operation; your learnings will pop up gradually over time—keep that journal handy.

#### **Q: What will future employers think about my time off? Won’t it make it harder to get a job?**

A: Most sabbatical-takers actually use the story of their time-off as a differentiator in the interview process. [One of our interviewees](https://www.thesabbaticalproject.org/stories/paul) talked about how he was able to break away from the “boring consultant” stereotype by talking about traveling to countries on the US State Department’s do not travel list. A question to ask yourself is: if an employer looked down on you for taking time off to do something that’s important to you, would you *really* want to work for them?

#### **Q: As an employer, when should I allow my employees to take a sabbatical? I fear that people don’t often come back, or they come back and soon quit.**

Great question! Stay tuned for next week’s post where I’ll drive deep on this topic.

*Thanks DJ! [Learn more about The Sabbatical Project](https://www.thesabbaticalproject.org/) and get notified when DJ’s upcoming book comes out.*

*Have a fulfilling and productive week 🙏*

## **🔥 Job opening of the week:**[Growth Product Engineer at Dover](https://www.dover.com/open-roles/growth-product-engineer)

> *Dover is looking for our first Growth Product Engineer to design and build out our free product suite used by thousands of founders and hiring managers.*
>
> [Learn more](https://www.dover.com/open-roles/growth-product-engineer)

*Note: Going forward this section will feature roles from [my new job board](https://lennysnewsletter.com/jobs). If you’re hiring, don’t miss it.*

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

Sincerely,

Lenny 👋

---

## [17/61] Three myths about sabbatical programs

> ## Q: I read your post last week about sabbaticals, and as a manager, I’m definitely worried about giving people many months off. How do you structure a sabbatical program to make them work for both the person and the company?

After [last week’s post on taking time off](https://www.lennysnewsletter.com/p/sabbatical-time-off) a number of managers and founders like yourself emailed me asking this question, equal parts worried and curious. Taking time off as an employee is amazing, but as a leader, with responsibilities and deadlines, giving people large chunks of time off is…worrisome.

So before we move on from this topic, I’m excited to bring back [DJ DiDonna](https://www.linkedin.com/in/ddidonna/) (for our first-ever encore performance!) to help you think through your own sabbatical program design. Below, DJ shares his research into the three most common myths about sabbatical programs:

1. Everyone will leave
2. The company will fall apart without the person
3. People don’t really need a sabbatical - they’re fine!

I hope you find this as fascinating as I did.

*[Sign up for DJs newsletter here](https://thesabbaticalproject.us20.list-manage.com/subscribe?u=9e6339439cb1353c8d0ee53de&id=25d5b9fb84), and if you’d like to work with DJ on your sabbatical program, he takes on a limited number of clients for sabbatical program advisory. He can be reached at [dj@thesabbaticalproject.org](mailto:dj@thesabbaticalproject.org). If you can’t get enough of this topic, I’m hosting a fireside chat with DJ this coming Thursday at 9am PT, exclusively for paid newsletter subscribers. [Sign up here.](https://lu.ma/lennysfireside-DJ)*

## 3 Myths of Corporate Sabbatical Policies

*by DJ DiDonna*

![Image from Three myths about sabbatical programs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6aa9800b-2f88-4032-9365-34b48422d02a_1165x1082.png)

Even before the pandemic turned workup to eleven, you’ve likely been hearing more and more about sabbaticals. Nearly one in seven companies in the US now provide extended leave to their employees, and the practice has become prevalent in the employee benefits arms race for top talent.

Yet most managers and leaders, like yourself, struggle to imagine how they could possibly give their employees sabbaticals. If you’re a CEO/manager/leader/IC/investor, you’re probably stuck thinking one of three self-defeating myths about sabbaticals:

1. ...if I give my team a sabbatical policy, they’ll all leave!
2. ...if I took one myself, the company would fall apart!
3. ...I don’t need to take one anyway!

If you believe the prevailing narrative about how to succeed in business, these objections make sense. We lionize leaders like Elon Musk and Jack Dorsey who run multiple companies simultaneously, and we scoff at the ever-shrinking French workweek.

Yet we must also acknowledge that Scandinavian economies, with their world-leading paid parental leave and August off, [somehow outperform most developed economies on happiness](https://economics.mit.edu/files/5726) *[and](https://economics.mit.edu/files/5726)* [GDP per capita](https://economics.mit.edu/files/5726). Or that Israelis, who ritually travel for a year after mandatory military service, manage to [raise more VC dollars per capita](https://www.theatlantic.com/business/archive/2012/08/its-not-just-the-culture-stupid-4-reasons-why-israels-economy-is-so-strong/260610/) than any society on Earth. Or that entrepreneurs like Steve Jobs and Marc Benioff both [hatched their biggest ideas on sabbatical](https://hrmasia.com/did-a-sabbatical-help-build-a-us140-billion-company/).

In my prior life, as a [venture-backed fintech entrepreneur](https://www.nytimes.com/2013/12/31/business/credit-scores-from-a-test-not-a-history.html), I learned some of these lessons the hard way. After seven hard-charging years selling to multinational banks, living in emerging markets, and managing teams across a dozen countries, I found myself burned out, and yearning to try new things. I took a sabbatical, it transformed me deeply, and I set out to research the impact of sabbaticals on individuals and organizations.

What we’ve found at [the Sabbatical Project](https://www.thesabbaticalproject.org/) upends the traditional narrative about work and time off. Dozens of conversations with business leaders, ranging from law to consulting, fintech to nonprofit, and spanning from early to twilight career stages, have revealed very different stories than those that we’re used to hearing.

Here’s what we found about the three most common objections that we business leaders tell ourselves about sabbaticals.

—

### Myth #1: Everyone will leave!

**Our findings: Actually, if you do it right, they’ll stay longer**

![Image from Three myths about sabbatical programs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9feebd3b-9b72-48ed-bbd7-50401abaf6ca_1600x1066.jpeg)

First, let’s address the elephant in the room: inevitably, if you give your employees enough time and space, *some* will use that time to do some thinking which will result in leaving your company.

Uber notoriously backtracked on its sabbatical policy because too many people set off and never came back. However, this was during the darkest (and near-final) months of Travis K’s reign at the company, when turnover was at an all-time high regardless. Was the sabbatical policy a cause or a symptom of the underlying problem? In retrospect, it was a canary in the coal mine about how their workers were showing up on the job; savvy leaders can use these signs to determine the true engagement and feelings of their employees?

Our research found that companies that offer a sabbatical policy not only retain their talent—80% of employees return—their people return [more loyal, more creative, and more personally fulfilled](https://www.thesabbaticalproject.org/research1). If 1 in 5 employees departing after their departure sounds like a lot, consider that the [average tenure at some of the most venerable tech companies is less than three years](https://www.inc.com/business-insider/tech-companies-employee-turnover-average-tenure-silicon-valley.html). By the time they’ve reached enough tenure to merit a sabbatical, you’ve already nearly doubled their expected seniority. (Assuming a sabbatical policy in year 5 or thereabouts.)

Designing a sabbatical policy to harness these results depends on your objectives. If you’re trying to reduce turnover, it’s helpful to split out retention into two distinct groups based on tenure: Cycle 1 and Cycle 2.

**Cycle 1: Retaining your employees through their first inklings to leave**

This could be your high-performing mid-twenties junior staff, attracted to shiny objects like pay raises, titles, and something new. Professional services firms like McKinsey, Bain, and BCG depend on waves of newly minted graduates churning out after a few years, mostly to get their MBAs\*. Due to the high cost of recruiting and training new hires, [these firms offer “externships''](https://socialimpactatbain.com/our-people.html) to extend their average tenure. Externships are usually partially paid multi-month opportunities at approved nonprofits. This gives your employees permission to grow and learn and experiment, but with lucrative strings luring them back to work.

Another good example is social impact investment firm [Endeavor](https://endeavor.org/), which offers its employees “sabbaticals” where they get to live and work from one of their investees’ offices in a different country. At the end of the day, they’re still working almost at capacity, but to the employee, it feels like a breath of fresh air and a personal growth opportunity.

**Cycle 2: Retention in service of keeping your employees for the long haul**

Investment advisory firm [Brighton Jones](https://www.brightonjones.com/) offers a fully-paid 6 month sabbatical for all employees after their tenth year of employment. Ten years is a long time to wait for a sabbatical, but founder and CEO Jon Jones feels it aligns with the company’s goals and mission. He’s not interested in retaining someone a couple of years out of college. Instead, he wants to reward those who establish long-standing relationships with their clients, while also establishing a long-term track record of success in the company.

The US Treasury also offers an extended leave without pay (LWOP) to its employees after seven years of service. While it’s unpaid, employees do retain benefits and their tenure clock—crucial for calculating retirement benefits and pay raises for government workers—remains in motion.

**Final thought: sometimes turnover isn’t such a bad thing**

After decades as a leading Venture Capital firm, [Summit Partners established a sabbatical policy precisely to give its founding (read: zombie) partners an opportunity to step away](https://www.alumni.hbs.edu/careers/blog/post/making-sabbaticals-mainstream-series-marty). After having some time away from the office, all three partners left, and the policy remains in place to this day, working double-duty as a popular recruiting tool for Summit.

**Action items:**

1. Determine your priorities, and design your sabbatical policy(ies) accordingly. To retain staff through Cycle 1, design a shorter sabbatical (~3+ months) within the first ~4 years of their employment. If you’re trying to attract and retain staff for a decade or more (Cycle 2), aim for longer cycles between sabbatical eligibility: ~7+ years.
2. Think critically about what message your sabbatical policy is sending and who will actually take it. If it’s unpaid, it may not be accessible to the lower-earners in your company, or those with many dependents, sending a strong signal about who the policy was designed for in the first place  See [my previous post for the components of a successful sabbatical](https://www.lennysnewsletter.com/p/sabbatical-time-off).

### Myth #2: The company will fall apart without me!

**Our findings: You’ll be surprised what people can only learn in your absence**

*Case study: the African Leadership Academy, Johannesburg, South Africa*

![Image from Three myths about sabbatical programs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0a7daa96-fe33-4e4d-b0f7-d9b51b961f54_1245x829.png)

In the year leading up to its tenth-year anniversary celebration—arguably its most important fundraising event since its inception—Chris Bradford, the African Leadership Academy’s founder and CEO gave himself a sabbatical. Though his team had assured him they’d be able to handle the school in his absence, it wasn’t until he’d returned that it became clear how important it was that he’d left.

Over the course of a few months, many things that Chris had previously (micro) managed went fine—some even better than before. Junior members of his team took advantage of career-expanding growth opportunities. Leaders emerged from unexpected places. But Chris also returned to a deep and widening financial crisis: donations in advance of their fundraising event had slowed to a crawl. It was nothing short of an emergency. Prior to leaving, it was clear how important Chris was as the key external face of the organization, but the degree to which the school relied singularly on his involvement wasn’t just inconvenient—it presented an existential risk.

After righting the ship, Chris worked with the board to debrief the performance of the school in his absence. His sabbatical revealed previously unforeseen deficiencies, opportunities for advancement for his staff, and the need to proactively plan for his eventual departure in the next strategic plan. It also gave Chris, a notorious workaholic, a much-needed break to invest in his relationship, explore the best practices of other schools around the world, and contemplate his future.

—

As a founder, I took away two lessons from Chris’s sabbatical experience. The fundraising crisis Chris returned to was clearly made worse in the short term by his departure. But it was also clear that the problem had been lurking just beneath the surface all along; **wouldn’t you rather proactively root out your company’s skeletons?** Upon his return, ALA focused on developing fundraising tactics that didn’t require his presence or initiative going forward.

**Great companies must be great at change**. Like it or not, [no one stays at their company forever](https://hbr.org/2021/05/the-high-cost-of-poor-succession-planning). Successfully offloading and onboarding responsibilities should be honed like a competitive advantage, not felt like a five-alarm fire every time it happens. Sabbaticals can help to clarify roles, identify talent, and transition responsibilities in a transparent and predictable manner.

**Action items:**

1. If you’re a leader: introduce (or find an advocate on the board for) a sabbatical policy for your leadership team. Try to balance the needs of your direct supports with the importance of leading by example in taking time off (see: Myth #3 below).
2. Make a plan to cycle your leadership out on sabbatical, with enough buffer time built in to properly prepare the organization, as well as integration time upon their return to digest learnings before returning to business-as-usual.

### Myth #3: I don’t even need a sabbatical - I’m fine!

**Our findings: Even if you’re right (you’re not), your employees need you to take it**

*Case Study: Choice Lunch, Bay Area, California*

![Image from Three myths about sabbatical programs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ba747c2d-403c-4f05-b7a0-7992b0afdaeb_1600x1202.jpeg)

Sixteen years into his journey as CEO of Choice Lunch, Justin’s wife Allison approached him with a wild idea: what if we took off work for the summer with the kids and tried to visit as many national parks as possible? His company, which prepared and delivered organic lunches to school districts across California, had grown consistently over time. Though he didn’t feel like he needed to take time off, he trusted his management team to take the reins during the much-slower summer months. And more importantly, Justin wanted to fulfill his college sweetheart’s dreams of visiting all the national parks.

Nine weeks and seven thousand miles of driving later, Justin returned with major personal and professional revelations. First and foremost, he had a very difficult time disengaging with work—every time he checked in, it stoked concerns he shouldn’t have left, which in turn impacted his ability to be present with his family. On the personal front, it was the happiest he’d ever seen Allison. “Keep in mind we were in a box with four kids for two straight months...every night, no babysitters or date nights,” he remembers. Justin’s relationship with his family crystallized during the journey, while he became aware of some opportunities for personal improvement, including an addiction to work, along the way.

On the professional front, it helped Justin to cultivate an overwhelming feeling of gratitude. He gained a new appreciation for “already doing exactly what [he] wanted to do, with the people he loved.” He realized that he’d been too narrowly focused on the day-to-day operations, and came back instead focusing on the bigger strategic priorities for the business. Being away also helped him to realize that it was on him to enable the team to operate in ways independent of his input.

—

Justin’s experience highlights a key finding of our research, a way of working that’s a precursor to burnout: functional workaholism. **Like functional alcoholics, functional workaholics manage to remain highly productive despite rapidly depleting personal resources.** They’re so busy, they forget to take care of themselves, leaving PTO on the table and neglecting to disconnect outside of work hours. After enough time, this becomes a (self-destructive) way of life; you almost forget how to work in a healthy and sustainable fashion.

A particularly devious aspect of functional workaholism? You don’t realize it until you’ve stepped away for enough time. In our research, it took participants up to 6 or 8 weeks to fully disconnect from work life and to fully feel themselves again. Once people like Justin realize the way they work, they typically make big changes, both for themselves and at their company. Not only have his cofounders hatched sabbatical plans, but Justin and Allison have also made the RV trip an annual tradition ([read about their travels here](https://www.gagnonsgone.com/).)

![Image from Three myths about sabbatical programs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/57c25565-5b41-4cbf-aaaa-ef6fc3b34805_1600x1200.jpeg)

But the worst thing about functional workaholism is that it’s contagious, especially top-down from a leader. Researchers have termed this dynamic the “[work devotion norm](https://www.theatlantic.com/business/archive/2015/02/the-hidden-cost-of-a-flexible-job/385170/),” which demands that employees make work the sole focus of their lives—or else. Unfortunately, there’s been reason for employees to be fearful: [studies on leaves of absence](https://psycnet.apa.org/record/1999-10222-010) among managers in financial services firms show that those who took a family leave experienced fewer promotions and smaller salary increases post-leave compared to managers who did not take one.

The good news is that things are changing. [Companies](https://www.bloomberg.com/news/articles/2020-12-16/citi-to-offer-workers-a-12-week-sabbatical-extra-vacation-days) ([and countries](https://www.theguardian.com/world/2020/may/20/jacinda-ardern-flags-four-day-working-week-as-way-to-rebuild-new-zealand-after-covid-19)) are experimenting with ways to ensure employees take time off. And [studies on extended leave](https://journals.sagepub.com/doi/full/10.1177/2158244019885389) show that people are more likely to take advantage of policies if their managers do.

As you design a sabbatical policy for your company, consider these three best practices:

1. **The design of the policy:** provide benefits (salary/stipend+insurance) and make sure it’s long enough (ideally at least 3 months).
2. **Before** ***and after*** **sabbatical:** designate off-ramping responsibilities 90+ days in advance, organize re-integration into company/team, especially if responsibilities have changed.
3. **During sabbatical**: Provide resources - benefits and coaching, enforce disconnection.

### **Final thought: a sabbatical is not just to fix a problem**

Thinking about time off as a utilitarian way to make your business better, or to heal your burnout is great. But the overarching theme of our research is that a sabbatical is a peak life experience for those who are able to take them. I’ve spoken to [tech leaders who invested in their family](https://www.npr.org/2013/05/20/183910777/seeing-the-northern-light-a-temporary-arctic-retirement) (and ended up starting a business on accident), busy nonprofit execs who savored just a couple of focused weekends with their kids, and countless others whose stories might not *wow* you on the surface but had a profoundly positive impact on their lives.

A few of the most common words people in our study used to describe their sabbaticals were “human,” “spacious,” and “freedom.” I hope that you’re able to take advantage of a sabbatical, and that you can enable your colleagues to do the same!

Note: DJ takes on a limited number of clients for sabbatical program advisory. He can be reached at [dj@thesabbaticalproject.org](mailto:dj@thesabbaticalproject.org).

![Image from Three myths about sabbatical programs](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/08488344-0949-41c8-b8a8-0c16a9754f9f_1200x1600.jpeg)

*\* Sidenote: as an MBA myself, I consider the two-year degree to be the world’s most socially acceptable sabbatical. When else do you get prestige and a pay raise to travel, try on different jobs, meet people from all over the world, and (your mileage may vary) learn?*

Have a productive and fulfilling week 🙏

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#### Engineering

1. **Discord:** [Engineering Manager](https://pallet.xyz/job/71eeec4f-6dea-4645-95b7-44b1ea38507b) (SF)
2. **G2i:** [Senior React, React Native, or Node Developer](https://pallet.xyz/job/7a1c36d5-eb4f-43e5-b93f-c83f951a1ef9) (Remote)
3. **Novi Connect:** [Senior Software Engineer](https://pallet.xyz/job/1691057a-21ac-4450-b3d6-e2189a5cebc9) (Remote)
4. **Endgame:** [Principal Frontend Engineer](https://pallet.xyz/job/2f6285e1-d9d4-427f-9a62-3ec0e895ab7b) (Remote)
5. **Eppo:** [Backend / Infrastructure Engineer](https://pallet.xyz/job/2cd3039f-b44d-4079-83e0-e303debf2f00) (SF/Remote)
6. **Causal:** [Full-stack Engineer](https://pallet.xyz/job/6daf039f-a20e-4aa0-a7b0-54a8c19963b1) (Remote)
7. **Flux.ai:** [Fullstack Software Engineer](https://pallet.xyz/job/af3f67a4-e209-4b98-8a26-101c7805b207) (Remote)
8. **Coinbase:** [University Grad, Software Engineer](https://pallet.xyz/job/6ac840de-6951-42f8-a55a-051c56a3f303) (Remote)

#### Design

1. **Cameo:** [Senior Product Designer](https://pallet.xyz/job/d095ea77-d995-4895-b764-59b4297a1292) (Remote)
2. **Tango:** [Product Design Lead](https://pallet.xyz/job/2a6c39e6-2dea-4e92-86c9-d147bb07d783) (LA/Remote)
3. **Scratchpad:** [Senior Product Designer](https://pallet.xyz/job/b068e1e5-8ae3-4886-b542-fa3443f1ff9b) (Remote)
4. **Rewatch:** [Senior Product Designer](https://pallet.xyz/job/68207a68-6f8b-4099-8107-197922e2d8cf) (Remote)
5. **Orbit:** [Product Designer](https://pallet.xyz/job/9b1f634f-6900-4322-9b6f-2ff38e477b63) (Paris/SF/Remote)
6. **Imperfect Foods:** [Senior Product Designer](https://pallet.xyz/job/b9cab5f0-9bcb-4caf-a0bc-2443e4768b60) (Remote)
7. **Karat**: [First Designer](https://pallet.xyz/job/29a7b24a-2ba0-489e-8222-d5d2b0b68e43) (LA/Remote)

To add you open roles, [visit Lenny’s Job Board](https://lennysnewsletter.com/jobs)

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

1. **Watch**: Gustavo Dudamel conducting the Simon Bolivar Youth Symphony Orchestra at this New Year’s Eve Concert in Caracas, Venezuela

2. **Listen**: [Stop. Breathe. We Can’t Keep Working Like This.](https://www.nytimes.com/2021/03/05/opinion/ezra-klein-podcast-cal-newport.html), by Ezra Klein and Cal Newport
3. **Read**: [How people get rich now](https://paulgraham.com/richnow.html), by Paul Graham

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

Sincerely,
Lenny 👋

---

## [18/61] 14 habits of highly effective product managers

> ## Q: I’m just starting out as a PM and wondering what makes product managers *great*. What habits should I be building early on?

I was a very mediocre PM at first—I wouldn’t have hired me. But I did learn fast, mostly by watching how the best PMs operated. How they ran meetings, how they organized documents, how they made decisions—and then modeling these behaviors and habits.

> #### Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity.
>
> #### —James Clear

These observations all went into a list that I’ve been adding to and refining over the years, and your question was a great forcing function to synthesize the list and turn it into something useful. Below, you’ll find what to me are the 14 most important habits of highly effective product managers. Why 14? Because PM’ing is at least twice as hard as [normal life](https://www.amazon.com/Habits-Highly-Effective-People-Powerful/dp/0743269519).

Don’t get overwhelmed by this list. There’s a lot here, yes, but you don’t need to nail all of these overnight, or ever. My advice to you is to skim through the list, pick one habit you want to work on, and focus on that habit for the next two weeks. If you want more time, stick with it. Otherwise, pick a new habit. Take it easy, but keep at it. For extra credit, start your own list! Watch the best PMs around you and jot down what they’re doing well. If you note any other essential habits for new, highly effective PMs to develop, leave a comment 👇

[Leave a comment](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product/comments)

## 14 habits of highly effective product managers

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b394b161-ce55-4a6e-aa1f-fe2685e72c98_2048x1024.png)

#### 1. Great PMs take pride in the clarity and conciseness of their documents, emails, presentations, and meetings

They know that people judge the quality of their thinking by the quality of their writing and speaking, and that effective communication is the *most* fundamental PM skill.

**Some ways to build this habit:**

1. Ask your manager (and ideally a trusted peer) to actively give you brutally honest feedback on your docs, meetings, and presentations.
2. Leverage the [Minto Pyramid and the SCR framework](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr) when crafting an argument.
3. Start a “[swipe file](https://www.inc.com/jessica-stillman/new-small-business-must-have-a-swipe-file.html)” where you save examples of well-executed documents, emails, presentations, etc. that you can later come back to for inspiration.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2826ed19-84ae-4ca1-909c-1d7b377bb4ad_1014x678.png)

#### 2. Great PMs build an aura of “I’ve got this”

They rarely drop balls, they come prepared, and their colleagues know that when they take on a task, it’ll get done.

**Some ways to build this habit:**

1. Be very selective with what you take on (say *no*!), and spend more time than anyone else on the things you do take on.
2. Prioritize *and* communicate: When you’re asked to do something new, first determine its priority (i.e. slot it into your already existing set of priorities) and then make sure to communicate that priority to the person (i.e. where it sits in your list of priorities). Both steps are essential to set accurate expectations.
3. Keep a [Waiting For list](https://how-to-gtd.blogspot.com/2012/06/waiting-for-list.html) to avoid losing open threads.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c5fd2e68-1286-45ba-8faa-189e29636e61_1600x898.png)

#### 3. Great PMs hold the bar high for the work they, and their teammates, do

They resist the urge to let people settle for good enough. They push their team, and themselves, to make documents clearer, to make meetings more valuable, and to help people do the best work of their lives.

**Some ways to build this habit:**

1. When you see subpar performance, don’t ignore it. Push back, e.g. “Hey, this strategy doc is confusing, tbh—what if you tweak X, Y, and Z to clarify your point?”
2. When you’re about to share a PRD/one-pager, ask yourself: What’s *one* thing I could do to make this doc more succinct?
3. Make sure to review each major document, meeting, and presentation that your team is outputting—make sure the work your team puts out into the org is always A+.

#### 4. Great PMs hunt for misalignment and quickly push everyone back into alignment

They know that team dysfunction is often rooted in people simply having different information, motives, or priorities. They know that rooting these out is some of the highest-leverage work they can ever do.

**Some ways to build this habit:**

1. When reviewing new designs, always bring people back to “What problem are we trying to solve here?”
2. When you get a hint that team members are misaligned (e.g. quoting data not everyone has seen, optimizing for different goals, shifting priorities), just say, “We may be misaligned on this. What’s your understanding of X?”
3. Create, and keep coming back to, a source-of-truth document that crystallizes the goal, the succinct problem being solved, key assumptions, and key decisions.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6021b36a-e202-4881-bc74-3efbd621b421_1172x596.png)

#### 5. Great PMs always have a point of view, but loosely held

They know they aren’t on the team simply to coordinate other people’s work—that their team is looking to them for new ideas, novel insights, and to push their thinking. They also know they need to be ready to quickly change their POV when they have new information.

**Some ways to build this habit:**

1. Keep this question in your mind: If someone were to ask for my opinion right now, what would I say?
2. When you don’t have a strong POV (e.g. which design to go with, whether to launch the experiment or not), create a simple pros and cons list.
3. When you change your point of view based on new information, share it publicly. Make it very clear you aren’t stuck in your views.

#### 6. Great PMs ruthlessly prioritize, both the team’s work and their own

They know that there are always more ideas than time, and that the greatest gift they can give their team is *focus*.

**Some ways to build this habit:**

1. Say no. Or “not yet.” Prioritizing is another word for sequencing—make it clear that if it isn’t a priority today, that doesn’t mean it won’t ever happen.
2. Try using the phrase “ruthless prioritization” when prioritizing as a team or saying no to an ask.
3. Align with your team and your manager on a single prioritized source-of-truth roadmap. All changes to the plan need to be updated here, which will automatically surface trade-offs and constraints.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8602c0db-65fd-42b3-bf5e-3e3625fc7f02_2504x832.png)

#### 7. Great PMs endlessly look for blockers to unblock

They’re always on the hunt for bottlenecks, unmade decisions, and anything that is keeping their team from operating like a well-oiled machine.

**Some ways to build this habit:**

1. Always prioritize tasks that unblock your team members.
2. Ask your team members often: What’s slowing you down?
3. Look around corners—what’s a looming soon-to-be blocker that you can keep from becoming a blocker?

#### 8. Great PMs build a tight leadership triad with their EM and DM

They know that their team operates best when the leaders of the team speak with one voice, and since most of the team reports to the eng. manager and the design manager, it’s essential that these three leaders work as an aligned unit.

**Some ways to build this habit:**

1. Sit next to your EM and DM (when possible).
2. Have a weekly meeting to align on priorities, share information, and unblock the team.
3. Spend time outside of work hours in order to connect as humans.

#### 9. Great PMs frequently remind teammates of how their work connects to the mission

They know that people don’t work at companies to pull levers, move metrics, or hit goals.

**Some ways to build this habit:**

1. Include your team’s mission and/or vision in every strategy document.
2. In kickoff meetings, find opportunities to remind the team how this random project enables the team/company to come closer to its mission.
3. At the top of your roadmap documents, include your team vision or mission.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/528183ff-b94a-416c-994a-eb29e953e86c_1990x427.png)

#### 10. Great PMs speak with their customers regularly

They know that no matter how confident they are about what their customers want, they are frequently wrong.

**Some ways to build this habit:**

1. Create systems where you and your team interact with customers regularly, like a weekly “Lunch with a customer,” a monthly CX rotation, or a quarterly customer visit.
2. Make an agreement that for any feature that takes more than X weeks to design and build, you first talk to five potential users/customers to validate the desirability of the feature.
3. Build a one-on-one relationship with some of your larger customers, and use that connection to learn about their pain points, gather ideas, and get quick and raw feedback.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c3cf0081-d2d2-4bc1-b3e3-29ad9ee1fe16_4032x3024.jpeg)

#### 11. Great PMs anticipate what’s around the corner so that they can get ahead of it

They know that the most successful PMs are the most prepared PMs, and the best way to be prepared is to have more time to prepare.

**Some ways to build this habit:**

1. Schedule a 30-minute meeting with yourself, each Monday morning or Friday afternoon, to look at your upcoming week and note meetings and deliverables you need to get ahead of.
2. When you hear of priority or strategy changes happening up the ladder, ask yourself: How could this impact our team, and what could we start prepping now?
3. When everything is going smoothly, ask yourself: How could I help my team move even faster?

#### 12. Great PMs make sure everyone has a chance to be heard

They know that most of the best ideas won’t come from them, and that the simple act of listening goes a very long way.

**Some ways to build this habit:**

1. At the end of meetings, check in with people who’ve been quiet to see if they have anything to add.
2. Before finalizing your strategy, roadmap, or spec, give your team a chance to give feedback asynchronously.
3. Organize brainstorms and offer types of ideation sessions where team members can contribute their ideas.

#### 13. Great PMs amplify the successes and contributions of team members

They know that the success of a PM is measured primarily by the success of their team.

**Some ways to build this habit:**

1. Forward examples of great work to your teammates’ managers.
2. Highlight team members’ achievements in your team meetings and email updates.
3. Start a “#team-huzzah”-type Slack channel to celebrate wins, big and small.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fc818c17-661f-4ec4-a2b6-bf7f3d9e8c22_1272x726.png)

#### 14. Great PMs bring good vibes to the team

They know that they are the unofficial-but-de-facto leader of the team, and that the vibes they bring trickle down throughout the team.

**Some ways to build this habit:**

1. Always start off each meeting with energy and positivity.
2. Find something fun for the team to do regularly—a weekly happy hour, a monthly team-building event.
3. Bring surprise and delight to regular events—a team band at your all-hands, goats on your Zoom calls, birthday surprises at your standup.

![Image from 14 habits of highly effective product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1aa40221-6cca-4919-bace-059b99c7d5e9_4032x3024.png)

Leave a comment if you’ve found any other habits to be essential for new PMs to build.

[Leave a comment](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product/comments)

*Have a productive and fulfilling week 🙏*

## **🔥 Featured job opportunities**

#### Product Management

1. **Duolingo**: [Principal Product Manager](https://pallet.xyz/job/16daa6a1-ff27-4097-89cb-41f7a1b33aa6) (NY/Seattle)
2. **Companion Labs**: [Head of / Senior Product Manager](https://pallet.xyz/job/f1e8cbf6-7338-48ae-ba6f-2507b3427e0e) (SF)
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15. **Clockwise:**[Product Manager](https://pallet.xyz/job/c3bac4ce-f356-49b5-918b-110ec159c769) (SF/Remote)
16. **UserLeap:**[Product Manager](https://pallet.xyz/job/e923f27c-b7b8-4edf-aaa5-3bc5be3570e8) (SF)

#### Growth and marketing

1. **OpenPhone**: [Head of Marketing](https://pallet.xyz/job/102a757f-cbea-4113-9588-cf1fc98a8d7a) (Remote)
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3. **Reforge:**[Lifecycle Marketer](https://pallet.xyz/job/c3f09744-d3d4-4817-8817-e04c778aff38) (Remote)
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6. **Labelbox**: [Director of Growth and Demand Generation](https://pallet.xyz/job/c6947128-80d8-49ab-a679-728f0aaf3430) (SF/Remote)
7. **Livepeer:**[Go To Market Lead](https://pallet.xyz/job/3f5394b4-3104-4670-9572-c045b065119a) (Remote)

#### Engineering

1. **Playbook**: [Head of Engineering](https://pallet.xyz/job/94f60a15-f165-4f10-81f1-1e56e2cebfc2) (Remote)
2. **Karat**: [Senior Software Engineer](https://pallet.xyz/job/1b718459-42d4-489b-b725-8139c93b4898) (LA/Remote)
3. **Cable**: [Backend Engineer](https://pallet.xyz/job/8f3f617d-07ba-412f-87f5-6a8ad1d0fe35) (Remote)
4. **Discord:**[Engineering Manager](https://pallet.xyz/job/71eeec4f-6dea-4645-95b7-44b1ea38507b) (SF)
5. **G2i:**[Senior React, React Native, or Node Developer](https://pallet.xyz/job/7a1c36d5-eb4f-43e5-b93f-c83f951a1ef9) (Remote)
6. **Novi Connect:**[Senior Software Engineer](https://pallet.xyz/job/1691057a-21ac-4450-b3d6-e2189a5cebc9) (Remote)
7. **Endgame:**[Principal Frontend Engineer](https://pallet.xyz/job/2f6285e1-d9d4-427f-9a62-3ec0e895ab7b) (Remote)
8. **Eppo:**[Backend / Infrastructure Engineer](https://pallet.xyz/job/2cd3039f-b44d-4079-83e0-e303debf2f00) (SF/Remote)
9. **Causal:**[Full-stack Engineer](https://pallet.xyz/job/6daf039f-a20e-4aa0-a7b0-54a8c19963b1) (Remote)
10. **Flux.ai:**[Fullstack Software Engineer](https://pallet.xyz/job/af3f67a4-e209-4b98-8a26-101c7805b207) (Remote)
11. **Coinbase:**[University Grad, Software Engineer](https://pallet.xyz/job/6ac840de-6951-42f8-a55a-051c56a3f303) (Remote)

#### Design

1. **Cardless**: [Product Designer](https://pallet.xyz/job/4befe144-b63d-4a5c-9626-11a533a8fdd3) (SF)
2. **Cameo:**[Senior Product Designer](https://pallet.xyz/job/d095ea77-d995-4895-b764-59b4297a1292) (Remote)
3. **Tango:**[Product Design Lead](https://pallet.xyz/job/2a6c39e6-2dea-4e92-86c9-d147bb07d783) (LA/Remote)
4. **Scratchpad:**[Senior Product Designer](https://pallet.xyz/job/b068e1e5-8ae3-4886-b542-fa3443f1ff9b) (Remote)
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8. **Karat**: [First Designer](https://pallet.xyz/job/29a7b24a-2ba0-489e-8222-d5d2b0b68e43) (LA/Remote)

*To browse ~200 open, or to add your open roles, [visit Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [How to Draw a Self-Portrait in 11 Levels of Increasing Complexity](https://kottke.org/21/04/how-to-draw-a-self-portrait-in-11-levels-of-increasing-complexity)

[Watch on YouTube](https://www.youtube.com/watch?v=8T3cxSySI2Q)

2. **Listen**: [The 7 Powers with Hamilton Helmer & Jeff Lawson](https://podcasts.apple.com/us/podcast/the-nfx-podcast/id1456824325?i=1000519248039) by NFX
3. **Read**: [99 Additional Bits of Unsolicited Advice](https://kk.org/thetechnium/99-additional-bits-of-unsolicited-advice/) by Kevin Kelly

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

Sincerely,

Lenny 👋

---

## [19/61] Types of business models

> ## Q: I’m working on a startup idea and it got me thinking—what are the types of business models out there? Are there any creative ways to design our business model?

When I saw your question, I went looking for a quick answer. I was sure there would be a bunch of blog posts or HBR articles that succinctly summarize all of the ways you can make money as a business. I was wrong. There was nothing out there. So I’ve gone ahead and taken a shot at coming up with an answer. Below, you’ll find:

1. **The eight types of business models**
2. **A collection of business model innovations**
3. **Inspiration to innovate on your own business model**

Let’s get in there.

![Image from Types of business models](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0d658aa6-a5b7-45cd-a53e-cb893bef9927_2400x3064.png)

### The 8 business models

#### **1. Sell a thing**

- **How it works**: Sell someone your physical or digital product
- **Examples**: iPhone, lemonade, land, stocks
- **Ideal for**: Physical products you manufacture or acquire
- **Business strategy:** Make or acquire a thing —> Sell it for more than it cost you
- **Optimize**: Unit economics

#### 2. Rent a thing

- **How it works:** Allow someone to borrow a product that you continue to own
- **Examples**: Apartments, rental cars, carpet cleaners, mortgage
- **Ideal for**: Physical products you manufacture or acquire that people don’t want (or can’t afford to) to own
- **Business strategy:** Make or acquire a thing —> Rent it out over and over
- **Optimize**: Consumption

#### **3. Take a cut**

- **How it works**: Charge a % for each transaction you facilitate
- **Examples**: Stripe, Airbnb, real-estate agents, bookies
- **Ideal for**: Platforms and marketplaces
- **Business strategy:** Build a valuable platform or marketplace —> Charge a small fee for the convenience of using it each time
- **Optimize**: GMV

#### **4. Charge a subscription**

- **How it works**: Charge a monthly or yearly fee for access to your product or service
- **Examples**: Figma, Netflix, AT&T, gyms
- **Ideal for**: Products/services that people need regularly
- **Types of subscription models**:

- Flat fee (e.g. Superhuman)
  - Tiered plans (e.g. Notion)
  - Per seat (e.g. Figma)
  - Per host (e.g. Datadog, New Relic)
  - Annual contracts (e.g. Oracle, gyms)
- **Business strategy:** Build a valuable product —> Get people to try it —> Convince them to subscribe
- **Optimize**: Engagement

#### **5. Charge based on usage**

- **How it works**: Charge a fee only when people use the product
- **Examples**: Twilio, AWS, Metromile, hourly motels
- **Ideal for**: Infrastructure products
- **Types of usage-based models**:

- One-off cost (e.g. Twilio)
  - Per second usage cost (e.g. AWS EC2, S3)
  - Per mile (e.g. Metromile)
- **Business strategy:** Build a valuable product —> Get people to try it out at a small scale —> Get them hooked and scale with them
- **Optimize**: Consumption

#### **6. Sell a service**

- **How it works:** Provide a service leveraging your skills and experience
- **Examples**: Plumbers, engineers, health providers, tour guides
- **Ideal for**: Hands-on human help
- **Business strategy:** Develop a skill —> Charge for leveraging that skill
- **Optimize**: Skillset

#### **7. Advertising**

- **How it works**: Charge for sharing something with your audience based on views, clicks, or actions
- **Examples**: Facebook, TV, Billboards, podcasts
- **Ideal for**: Products that draw a large and/or sought-after audience
- **Business strategy**: Build an audience —> Charge for access to your audience
- **Optimize**: Traffic

#### **8. Percentage of assets**

- **How it works:** Charge a percentage of the assets you are managing or loaning
- **Examples**: Wealth advisors, loans, credit card companies
- **Ideal for**: Money managers
- **Business strategy:** Convince people to let you manage their money —> Make them money, which makes you money
- **Optimize**: AUM

## How to innovate on your business model

#### Combine two business models

**Examples:**

1. **Sell a thing + Subscription**: Peloton, Mirror, iPhone + iCloud
2. **Take rate + Subscription**: Shopify, Amazon Prime, DoorDash DashPass
3. **Take rate + Advertising**: Instacart, Amazon
4. **Advertising + Subscription:** NY Times, Cable TV
5. **Advertising + Sell a thing:** Kindle

**How might you…**

1. If you’re currently selling a thing, could you add a subscription (e.g. Peleton, Robinhood Gold) or advertising (e.g. Kindle)?
2. If you’re currently take rate, could you add a subscription (e.g. Shopify, Amazon Prime) or advertising (e.g. Amazon, Instacart)?
3. If you’re currently usage-based, could you add a flat-fee subscription (e.g. Amazon EC2 reserved instances)?
4. If you’re currently advertising, could you add a take rate (e.g. affiliate program)?

#### Replace one business model with another

**Examples:**

1. **Robinhood**: Replaced “usage-based” (charging per trade) with “selling a thing” (selling data generated by users).
2. **Dollar Shave Club**: Replaced “sell a thing” (i.e. razors once in a while) with “subscription” (i.e. razors delivered monthly).
3. **Uber**: Replaced “rent a thing” or “buy a thing” (i.e. tax medallions) with “take rate,” allowing drivers to make money driving without any up-front cost.
4. **Warby Parker:** Optimized “sell a thing” unit economics by going straight to the consumer, cutting out high-margin middlemen, which allowed them to offer cheaper better quality glasses.
5. **Rolls-Royce airplane engines**: Replaced “sell a thing” with rented their engines to airlines, versus selling up upfront, enabling low-cost airlines like Southwest.
6. **Alibaba**: An e-commerce business (i.e. “Sell a thing”) that drop-ships products from the manufacturer straight to the buyer’s location, significantly improving their unit economics and allowing them to deliver lower costs.
7. **Chime**: Moved away from “usage-based” (charging fees on bank penalties) to “take-rate,” taking a portion of the transaction fees that Visa charges merchants when customers use Chime’s debit card.

**How might you…**

1. If you’re currently selling a thing, could you replace it with a take rate (e.g. Homeaway —> Airbnb), usage-based (e.g. [Xerox](https://www.petterileppanen.com/2020/03/11/5-business-model-innovations-you-should-know-about/)), subscription (e.g. Sephora —> Birchbox, Dollar Shave Club, SaaS vs. on-prem enterprise software), or rent it (e.g. [Rolls-Royce airplane engines](https://www.lead-innovation.com/english-blog/famous-business-model-innovations), [Hilti](https://www.strategyzer.com/blog/lessons-from-hilti-on-what-it-takes-to-shift-from-a-product-to-a-service-business-model))?
2. If you’re currently selling a thing, could you significantly cut back one step of the value chain to make your product significantly less expensive (e.g. Warby Parker)?
3. If you’re currently renting a thing, could you replace it with a subscription (e.g. Blockbuster —> Netflix)?
4. If you’re currently doing a take rate or usage-based, could you replace it with selling a thing (e.g. TD Ameritrade —> Robinhood)?
5. If you’re currently renting a thing, could you replace it with a take rate (e.g. taxi —> Uber)?
6. If you’re currently flat-fee subscription, could you replace it with usage-based (e.g. Metromile)?

### Bonus: The eight most popular creator economy business models

The list above describes the eight ways for *businesses* to make money, but just for fun, below are the eight most common ways creators (ake solo entrepreneurs) can make money:

1. **Subscriptions** (e.g. Patreon, Substack, OnlyFans)
2. **Tips** (e.g. Twitch, Clubhouse, Twitter Tip Jar, Buy Me a Coffee)
3. **Advertising** (e.g. YouTube/IG/TikTok, [Packy](https://www.notboring.co/))
4. **Revenue share (e.g.** affiliate deals, investing in startups**)**
5. **Selling goods** (e.g. NFTs, merch)
6. **Selling access** (e.g. VIP meetup, private DMs)
7. **Selling access to events or courses** (e.g. [Maven](https://maven.com/))
8. **Job board** (e.g. [my job board](https://lennysnewsletter.com/jobs))

If you’ve come across other examples of business model innovations, I’d love to hear them! Please leave a comment 👇

[Leave a comment](https://www.lennysnewsletter.com/p/types-of-business-models/comments)

### 📚 Further study

1. [Business Model Navigator](https://businessmodelnavigator.com/)
2. [Business Model Innovation – The What, Why, and How](https://www.viima.com/blog/business-model-innovation)
3. [YC Key Metrics](https://www.ycombinator.com/library/1y-key-metrics)

*Have a fulfilling and productive week 🙏*

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*To browse 200+ open roles, or to add your roles, [visit Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [Graduations](https://vimeo.com/497879805) (via [The Viewer](https://theviewer.is/))

2. **Listen**: [The Social Lives Of Trees](https://podcasts.apple.com/us/podcast/the-social-lives-of-trees/id214089682?i=1000520178432) on Fresh Air
3. **Read**: [The Great Online Game](https://www.notboring.co/p/the-great-online-game) by Packy

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

Sincerely,

Lenny 👋

---

## [20/61] Healing your co-founder relationship

*👋 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. [14 habits of highly effective Product Managers](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product)
2. [How to make money](https://www.lennysnewsletter.com/p/types-of-business-models)
3. [Three myths about sabbatical programs](https://www.lennysnewsletter.com/p/three-myths-about-sabbatical-programs)

> ## Q: My relationship with my co-founder is fraying. It’s no longer enjoyable to work with them, and it’s getting worse. But I need to make it work for the good of the business. Any advice?

A co-founder relationship is a lot like a marriage—incredibly fulfilling when it’s working, incredibly painful when it’s not. But essential to keep healthy for the good of the k̶i̶d̶s̶ team.

I’ve had my own trials and tribulations with my co-founder, and what I’ve learned is that, just like in marriage, issues are nearly always rooted in the soft skills of human interaction. To give you the best possible advice on this topic, I asked [Carole Robin](https://www.linkedin.com/in/carole-robin-ph-d-a8b5a91/), the co-creator of the legendary class at Stanford’s business school known as [“Touchy Feely”](https://www.gsb.stanford.edu/experience/learning/leadership/interpersonal-dynamics) and co-author of the new book *[Connect: Building Exceptional Relationships with Family, Friends, and Colleagues](https://www.amazon.com/dp/B0894279WZ/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1)*, to tackle this week’s question. I’ve been waiting for an excuse to bring Carole’s wisdom to this newsletter, and she did not disappoint. Enjoy!

*Thank you to [James Currier](https://twitter.com/JamesCurrier) for connecting me to Carole, and if you enjoy this post, [don’t miss Carole’s new book](https://www.amazon.com/Connect-Building-Exceptional-Relationships-Colleagues/dp/0593237099/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=&sr=)!*

![Book - Connect: Building Exceptional Relationships](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/641d6c39-ed5e-4c4b-bd50-3eb5602f2bf8_752x1024.png)

## When Co-Founder Relationships Go Sideways

*by Carole Robin*

![Image from Healing your co-founder relationship](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6bde66e5-3cf6-48d6-b771-b95cba1f892e_1600x1067.jpeg)

Most co-founder relationships start out with excitement, alignment, appreciation, respect, and a great deal of energy and enthusiasm. If those feelings between or among you were not present, you would not in all likelihood have decided to start a venture together. And as is the case in all relationships, co-founders go through ups and downs with each other. How and if they weather the downs is the difference between staying together and parting ways. It also has a major impact on the health of the organization.

### **Start by looking inward**

When the relationships go awry, a good place to start is to consider what is going on for you personally. In our book *[Connect](https://connectandrelate.com/),* my co-author and I underscore the importance of understanding that we are all equipped with two personal antennae. One looks outward and picks up signals of what is going on for the other person. The other one looks inward and registers what is going on for you. Keeping both those antennae highly tuned helps you see the learning opportunity (for you and for them) embedded in every interaction. **Begin by noticing how you are** ***feeling*****. Are you disappointed? Disillusioned? Resentful? Frustrated? Angry? Worried?** It might be useful to think about this initial exploration as *intra*personal mindfulness. There is a reason the MBAs at Stanford who took the course on which the book is based called it “Touchy Feely.” They discovered the crucial role of emotions in developing functional and robust relationships.

It isn’t always that easy to identify our feelings. Often there may be more than one, they might be jumbled, or they might seem contradictory (for example, you love your co-founder, but there are things she does that drive you crazy). The course syllabus includes a [Vocabulary of Feelings](https://www.dropbox.com/s/s3zo7z4ut1gg69q/Vocabulary%20of%20Feelings_v3.pdf?dl=0), which turns out to be a tool that students use for decades after graduation. We’ve included it in our book’s appendix.

![Image from Healing your co-founder relationship](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0be06a3b-bfba-4bab-ab7e-7a83ec721392_2986x2750.png)

### **Explore the root causes of tension**

Understanding what *you* are feeling more fully expands your choices and lessens the chances of being thoughtlessly reactive. Once you know what you are feeling, you can move on to exploring what happened that resulted in your feeling that way. How much of it has to do with organizational issues, shifting market conditions, or external factors? Are you faced with problems due to your very success? Has the excitement of meeting the challenges of a start-up been replaced by the routine of a more established enterprise? Or are you in disagreement about the company’s future direction? Do some of you want to flip the company and others want to develop it for the long term? Or are there disagreements as to how fast to grow the organization and in what direction? Even though these issues can be quite challenging to resolve, in many cases they can be settled either after full discussion or with the dissenting founder(s) departing, hopefully on good terms.

Even more difficult and likely to result in departures that are not on good terms is what happens when the problems (and your feelings) are a result of your co-founder’s *behavior*. When that is the case, it’s useful to think about becoming more *inter*personally mindful. Interpersonal issues can arise from multiple sources. For example, one of you might perceive a significant power differential has come to exist that now complicates decision-making processes. One of you might be finding another especially difficult to influence. You might have come to discover you have very different leadership styles. Whatever form the issue takes, these tend to be even more challenging because they feel more personal. The dilemma is then how to raise them without causing more animosity and disrupting the company. And of course, if you don’t raise them, you can’t move toward resolving them. Issues like these tend to fester, and they complicate your ability to productively deal with core business dilemmas and strategic disagreements such as those mentioned above.

### **Unpack the issues and look for common ground**

While there is a tendency to see the problem as “the other,” it’s important to realize that you don’t have the full story. First, you have only your perspective, and they are probably experiencing some version of what you are too. Second, it’s useful to acknowledge that most interpersonalissues have an *interpersonal* component. Is it that you tend to dominate or that I tend to go quiet? Do I present ideas in ways that indicate I am not open to hearing any alternatives or do you always go along with what I propose? Allowing for the possibility that we are both responsible in our own way for the situation we are in reduces the tendency for either of us to be accusatory and increases the chance that we can develop a joint problem-solving orientation. The more curious we can each be about the other’s feelings, the more productive and generative our conversations are likely to be.

**It is also easier to move into joint problem-solving if you can find something you share in common and both really care about.** You might already have that embedded in your initial concern—“to not disrupt the company.” That superordinate goal can move you both from “You are the problem” to “How can we resolve this in a way that leaves us both believing we have done what is best for the organization?”

### **Stick to your reality**

There is another potential area of commonality, which is that if you are having trouble with the way I am showing up, maybe others are as well. That could move our conversation from “me vs. you” to a joint concern. It is also important to consider raising issues like this in ways that are likely to lead to a productive exchange. That requires “**sticking with your reality,**” a concept central to the Stanford course and the book. In any interaction between two people, there are actually three realities, as illustrated below. Initially, this man knows only two of the three—his intent/motives and his behavior. Likewise, this woman knows his behavior and its impact on her. Reality #2 is the only one they *both* know. The model includes a metaphorical net, as shown, between Reality #1 (his) and Reality #2, his behavior.

![Image from Healing your co-founder relationship](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/808408c3-8737-4abe-9248-faae7447e39a_960x540.png)

If she can stick with the two “realities,” she knows she might say something like, “This is the third time this month you have decided you want to do something different than what we agreed to after discussing all the pros and cons multiple times” (his behavior, known to both of them) “and I am feeling more and more frustrated” (the impact on her) “and if this is becoming a problem for me, I’m also concerned this might be discouraging for others, which is another reason I think it is important that we talk about it.” Notice how in raising the issue in this way, she has stayed on her side of the “net,” meaning she has not attributed a motive, imputed any intent, or made any judgment. If she had gone over the net, she would have said, “You always have to have the last word” or “I feel that you don’t know what you want” (which does not have a single feeling word in it), which would likely make him defensive and argumentative.

Besides staying on her side of the net, she might add, “What is happening here that leads you to want to come back to revisit decisions we’ve already made? I’m wondering what we’re seeing differently that leads me to think we’re done with an issue and you don’t think so?” In being curious about what is going on for him, she is acknowledging that while she knows what she needs (to move on after making a decision), she doesn’t know what he needs or why he is acting the way he is.

This exchange will hopefully lead them into a more productive problem-solving conversation. **It may be useful to think about the process of generating a solution as answering three questions simultaneously: “What do I need?”, “What do you/others need?” and “What is best for the organization?”** Curiosity—real curiosity—lowers defensiveness and builds relationships.

Finally, it is important that the resolution include an understanding that what you agree to do differently going forward is a trial period to assess whether the impact of the changes you have committed to making is working for both of you, as well as some discussion about how to handle regressions should they recur.

It turns out the interpersonal, or so-called soft skills, are often the greatest determinants of professional success, and they are also often the hardest. But in the end, as we point out in *Connect*, people do business with people, as much as if not more than they do with ideas, products, strategies, plans, or even money. Being an entrepreneur and a co-founder is challenging enough without having developed the interpersonal skills and competencies needed to navigate the journey!

### **In summary, if you are having trouble with your co-founder:**

1. Stick with feelings (*actual* feeling words)
2. Remain curious about the root causes
3. Stay on your side of the net
4. Move into problem-solving, and make agreements

In our new book *[Connect: Building Exceptional Relationships with Family, Friends, and Colleagues](https://www.penguinrandomhouse.com/books/645809/connect-by-david-bradford-and-carole-robin/)*, David Bradford and I go into much more detail on how to work through conflict productively and strengthen your relationships. If you have more thoughts or questions, in addition to checking out the book, check out <https://leadersintech.org> or email me: [carole@leadersintech.org](mailto:carole@leadersintech.org).

*Have a fulfilling and productive week 🙏*

## **🔥 Featured job opportunities**

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*To add your open roles, [visit Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week’s newsletter? 🤔**

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

Sincerely,

Lenny 👋

---

## [21/61] Skills PMs need to build

> ## Q: I’ve been a PM at a mid-sized company for a couple of years now, and I’m still not sure what skills I should be building to be super-successful long term. What are the most important set of skills a PM needs to develop?

Instead of pontificating, let’s get real. There’s no better way to know what skills matter most in your role than by looking at how your company evaluates your performance. If you’re lucky, your manager has shared what’s called a career ladder (also known as a *leveling framework*, *career map*, *role guideline*, *competencies*, or *attributes list)*, which lays out the concrete expectations for your role at your level. Here’s an example from [Intercom’s PM career ladder](https://blog.intercomassets.com/blog/wp-content/uploads/2019/05/Intercom-PM-job-ladder-Logo.pdf) for a Senior PM:

![Image from Skills PMs need to build](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4aecdf7e-8236-4d94-b407-b708d14a8237_2246x1240.png)

If your company doesn’t have such a thing, or you’re pining for something more, this post is for you.

Over the past year, I’ve collected over twenty PM career ladders from companies like Uber, Slack, Airbnb, Intercom, Amazon, and Asana. After analyzing these documents, it’s become clear to me that (1) the PM role varies significantly across company, but (2) there are a set of ten core PM skills that will serve you well no matter where you work.

**In this post I’ll share:**

1. The ten most important PM jobs, based on what these 20+ companies look for in their PMs
2. What separates junior PMs from senior PMs
3. A template to build your own career ladder
4. Nine public PM career ladders to inspire your thinking
5. Some fun facts about these career ladders

Let’s dive in.

## The top 10 jobs of a product manager

After spending *countless* hours reading through every career ladder I could get my hands on, I present the top ten most important jobs of a product manager:

![Image from Skills PMs need to build](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7abc6cd1-f2a2-48de-ad7d-3bea8f1d0a6c_2048x1654.png)

#### 1. Leadership

Surprisingly, though not so surprisingly (since PMs are generally de facto leaders of their team), leadership ended up being the single most cited PM skill, highlighted by 85% of the companies (all but three).

Here’s how companies describe strong PM leadership:

- “Inspires teams to achieve great outcomes. Pushes team when they need to be pushed, and supports teams when they need support.”
- “Role models servant-leadership.”
- “Demonstrates ability to effectively motivate a large team of engineers. Can successfully start and direct self-sustaining teams. Routinely lobbies for and wins resources.”
- “Spreads best practices across the product team to make everyone better.”
- “Demonstrated mentorship and development of other product managers.”
- “Consistently and actively assists others in expanding and developing skills and knowledge, particularly fellow Product Managers.”

#### 2. Execution

Execution (aka, getting sh\*t done) turned out to be the second most important PM attribute, highlighted by 75% of companies.

Here’s how companies describe strong execution:

- “Keeps the team aligned on vision, goals, and strategy over 6-month periods.”
- “Focuses, runs, and plans across a series of teams that operate seamlessly with minimal blockage, minimal noise, and a rapid clip of high-quality delivery. Others frequently turn to this person to understand how to run highly productive teams.”
- “Priorities for a team are clear and trade-offs are well understood.”
- “Delivers almost always on goals and strategy, covering 12-month long product initiatives spanning multiple teams or domains.”
- “When an execution failure happens, they take ownership, explain what was learned, and rapidly remedy the problem.”
- “Identifies issues that will keep the product from delivering on
  time and/or with the desired requirements and communicates to leadership; assesses the alternatives to resolve (“path to green”) and builds a plan for resolution.”
- “Works in a fluid nature to creatively scope projects to get more out of teams than they thought possible. Consistently makes the complex simple.”

#### 3. Strategy

About 75% of companies also highlight strategy as a critical PM attribute, which when combined with the previous two jobs (leadership and execution) basically tells you what companies need PMs for most.

Here’s what great strategy looks like:

- “Can take ambiguous, large product spaces and create principles / focused strategy to organize a wider team along with product plan.”
- “Can connect the dots across pillars, industries, and trends for maximum strategic impact.”
- “Has the capability to set strategies and coach the delivery of chunks of value to customers at the right intervals on the road to their vision.”
- “Focuses their teams on the most important problems, but opens their eyes to problems they don’t realize they're going to have. Also ensures that problems are owned—even if it's not their teams.”
- “Articulates a path to achieve results for a product area.”

#### 4. Communication

PMs do their job through one core skill: communication—by talking, emailing, writing, messaging, and presenting. Unsurprisingly, the fourth most frequently mentioned PM attribute, emphasized by over 60% of companies, is communication.

Here’s what great communication looks like:

- “Demonstrates strong verbal and written communication skills in interactions with team and product stakeholders. Supports communication about team’s work to executives and company at large.”
- “Your oral and informal written communications (Slack, doc comments, etc.) are clear and efficient, and people feel heard in your discussions with them. You choose the right venue and level of formality for your communications. You serve as an effective conduit for information and understanding up and down your reporting chain and outward to stakeholders.”
- “Communicates concisely, influences outcomes, and messages crisply so as to be recounted by partners. Speaks in front of large groups with confidence and clarity. Succinctly summarizes key points to leaders in written and verbal form.”
- “Communicates effectively and directly to executives and company at-large about their team’s work to gather feedback, generate alignment, and garner support.”
- “Able to structure an entire storyline across various media (presentations, videos, documents, sales collateral) to drive engagement and adoption within their product area.”

#### 5. Deliver impact

All the other skills in this list enable the thing that matters most in the end: delivering impact. Impact is the *output* of all the inputs in this list.

Here’s what successfully delivering impact looks like:

- “Shows quantifiable impact by hitting aggressive goals that move metrics for a product area.”
- “Hits dramatically important, broad goals that signal realization of ambitious visions. This can be both internal or external product launches, tech debt reduction, or infrastructure improvements.”
- “Ships a large-sized project during each quarter. Projects make a positive, quantifiable impact on the product group’s KPIs.”
- “Demonstrated track record of delivering step function improvement to the business and customers.”
- “Drives impact by making a project as successful as possible in the context of their team’s broader strategy.”
- “Consistently delivers meaningful impact to customers and our business.”

#### 6. Leverage customer insights and data

About 50% of the companies highlight the job of leveraging data and user research. It’s interesting that this only came up in half of companies. My take is that the remaining companies assume this is going to happen anyway.

Here’s what what being great at this job looks like:

- “Talks to a range of customers using their area of product and beyond, always looking for deeper insight. Is recognized internally as an expert in customer needs for their area of product. Is able to use this insight to effectively create the best possible value in their product area.”
- “Able to derive insights from data to support new product bets.”
- “Anchors decisions in data. Uses data insights to evaluate and inform the story they tell. Uses data insights to inform product strategy and partners effectively with Analytics to define the analysis we need. Can independently seek and evaluate their own data insights.”
- “Serves as effective *first line* for team members in terms of evaluating their insights and interpretation and steering them accordingly.”
- “Works with engineering effectively to ensure instrumentation/data model supports key questions to be answered.”
- “Engages externally with customers to identify key product issues in market; solicits feedback on product roadmap.”
- “For their teams, oversees a comprehensive research plan into their customers (who they are, what they need, how they use the products) and a systematic process for using this research to develop product features.”
- “Leverages data analysis skills to research difficult or ambiguous problems, leading cross-disciplinary teams where necessary and communicating recommendations to senior leadership.”

#### 7. Planning and goal setting

Similarly, about 50% of companies highlighted planning and goal setting as a core PM job. You could argue this is a subset of execution, but the fact that most companies broke this out into its own job tells you how important it is.

Here’s what great planning looks like:

- “Owns business planning and serves as the representative to executives.”
- “Creates effective plans with a defined purpose and business outcomes, defined roles/responsibilities, and clear timelines/milestones.”
- “Defines OKRs and roadmap for the groups they oversee. Works with direct reports to ensure their teams are focused, planning, and operating seamlessly with minimal blockage, minimal noise, and a rapid clip of high-quality delivery.”
- “Determines release goals for a narrow product or component of a large product, prioritizes features according to customer value, and adjusts throughout implementation as needed.”
- “Ensures design and engineering are engaged stakeholders in all product initiatives. Proactively solicits their input for roadmap items and planning.”
- “You can build coherent, achievable, and realistic delivery plans for large-scale projects. You know the difference between being customer-led in figuring out a solution vs. the ability to step back and evaluate if we can actually deliver to the market in a different way.”
- “Creates effective measurable goals that are realistic yet aggressive and gets buy-in both from team and management around them.”

#### 8. Collaboration

Collaboration, the skill of getting work done with others, is highlighted about 40% of the time.

What great collaboration looks like:

- “Demonstrates ability to harmonize significant differences of opinion with partners and stakeholders. This person does not take a lowest common denominator approach, but makes sure the right decision wins in a way that is palatable.”
- “Handles conflict and hard conversations directly and with maturity—can be trusted to lead through challenges or uncertainty.”
- “Effectively negotiates ambiguous situations and drives to rapid decisions.”
- “Proactively looks for opportunities to improve how to work well together within the team and across teams.”
- “Proactively identifies dependencies with other teams, and collaborates and coordinates as needed. Detects collisions with other teams early.”

#### 9. Vision

Surprisingly, considering how much value founders and investors put on vision, only 40% of these companies include vision as an essential skill of PMs. This doesn’t necessarily mean companies don’t want their product managers spending time developing a vision for the product—it probably just tells us that in the stack rank of PM skills, this falls short of the most essential set of skills.

What vision looks like when done well:

- “Crafts a broad, long-term vision for the product area they are managing, including outlining important, new areas for product development.”
- “Drives 1-2–year vision and strategy through a deep understanding of the market segment owned.”
- “Create a strong shared vision for the future of their product and show how that aligns with the company’s goals.”
- “Thinks big and innovates on a cross-functional product or domain area. Vision here is grand and challenging, putting a portion of our business on course for meaningful change. Lookahead: 12 months.”
- “Articulates a vision that inspires, resonates, and drives clarity.”

#### 10. Ownership

And finally, about a fourth of companies highlight ownership as a core PM skill, even over other skills such as technical depth, decision making, and mindset.

Here’s what ownership looks like when done well:

- “No excuses. Accountable and positive in all conditions. Takes ownership of problems and challenges within their remit and outside their domain and doesn't apportion blame to others. Thinks about how to help the company succeed, not just their specific team.”
- “Identifies problems or goals and works independently to find a solution. Links and guides multiple roadmaps toward a coherent, shared set of goals. Influences others to take ownership of work as necessary.”
- “Owns a customer problem and delivery and stewardship of product feature set to address it.”
- “Completely owns and takes responsibility for their area of the product without excuses.”
- “Holds self and team accountable to significant impact on company and department performance”
- “Takes responsibility for outcomes and doesn’t make excuses.”

*Other attributes highlighted, but less than 25% of the time: technical depth, decision-making and decisiveness, culture and values, mindset, hiring, problem*-*solving, empathy, velocity accelerant, influence, organizational design, and competitive insight.*

## What separates junior PMs from senior PMs

While analyzing these career ladders, I also found some consistent patterns in what companies look for as a PM levels-up. In order to move up the ladder of seniority, I’d focus on the following five areas:

#### 1. Increase your scope

Junior PMs focus on a feature, senior PMs focus on multiple products.

- "Feature” —> “Multiple Features” —> “Product " —> “Multiple Products" —> “Product Line” —> “Department” —> “Industry”
- “Feature” —> “Solution” —> “Customer segment” —> “Market Segment”
- “For specific use cases” —> “For a product” —> “Across products” —> “Across groups”

#### **2. Get more proactive**

Junior PMs participate in a project given to them. Senior PMs seek out problems and rally people to solve them.

- “Actively contributes​” —> “Steers team explorations” —> “Facilitates concept explorations”
- “Adapts​ to existing team shipping rhythm” —> “Establishes and drives​ a consistent shipping cadence” —> “Motivates multiple teams to find creative ways to continue to ship frequently even for complex, high-dependency projects”
- “Works with manager to identify what needs to be done” —> “Independently identifies what needs to be done” —> “Consistently challenges team to accomplish more than they think they can”
- “Contributes to team’s roadmap” —> “Owner of the team’s roadmap” —> “The reviewer of teams’ roadmaps”
- “With coaching, creates a bold vision for their area of ownership” —> “Inspires the company by creating bold, game-changing ideas and delivering them” —> “Demonstrates ability to consistently invent and build multiple innovations delivered across products and org boundaries”

#### 3. Deliver impact consistently

- “Can demonstrate meaningful impact” —> “Consistently​ delivers meaningful impact”
- “Demonstrated track record of delivering customer and enterprise value” —> “Demonstrated track record of delivering step function improvement to the business and customers” —> “Impact the strategic decisions of the company through developed subject matter expertise”
- “Seeks to understand product area” —> “Responsible for shaping product area strategy” —> “Responsible for shaping the most ambiguous & impactful strategies across teams”

#### 4. Build trust in order to become more autonomous

- “Requires oversight from a PM II or Senior PM” —> “Requires oversight from a Senior PM” —> “Executes against single-team projects with a high level of complexity or ambiguity with minimal intervention”
- “Requires guidance” —> “Often needs guidance” —> “Without day-to-day management”
- “Drives successful launches with moderate involvement from manager or peers” —> “Owns a customer problem and delivery and stewardship of product feature” —> “Owns delivery and stewardship of a feature set which has an irrefutable impact on the company’s business opportunity”

#### 5. Mentor and lead

- “Begin mentoring APMs and newer team members” —> “Demonstrated mentorship and development of other product managers” —> “Mentors and teaches fellow product managers, product leaders, and leaders across the company” —> “Helps newer GPMs become better managers” —> “People leadership skills are so strong that Directors+ are able to learn from you”
- “Seeks feedback and reviews of one-pagers and PRDs from peer, teammates, and mentors” —> “Takes on a mentee” —> “Mentors product managers within the organization”
- “Does not directly manage anyone” —> “Optionally serves as a trusted APM mentor” —> “Optionally manages a small number of PMs” —> “Usually manages several PMs, but not strictly required if this person is running fairly complex programs. Influence extends beyond own team; their product judgment is frequently sought out by teams outside of product area.”

There are additional shifts that happen as you level up, such as getting more comfortable with ambiguity, increasing the time horizon in which you plan, and the level of impact you have on the organization, but many of these come automatically if you achieve the five above. Also, I don’t want to overwhelm you 🥴

### Fun facts about PM career ladders

I ran all of the documents through a word cloud generator. This definitely looks like the life of a PM to me:

![Image from Skills PMs need to build](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/649f7154-03bd-4883-b827-51ca19defe31_2048x1024.png)

#### What the documents are called

If you’re planning to build a framework for your own company, here what these frameworks are typically called:

1. PM Competencies
2. PM Leveling Framework
3. PM Career Tracks
4. PM Job Ladder
5. PM Career Map
6. PM Attributes
7. PM Role Guideline
8. PM Pathway
9. PM Titles and Role Expectations

Also, the median number of top-level PM attributes is 5, while the average is closer to 7. Slack and Instacart have 4 PM attributes they measure against, while Mixpanel has 9 and Uber has a whopping 19. My advice is to land somewhere between 5 and 9.

### A template to build your own

[Here are a number of templates to get you started building your own framework](https://docs.google.com/spreadsheets/d/1fEY8JnLhvjci1F-twKOFK7gh8Z0SwXCdMxOxXrXZEhw/edit#gid=1925149295).

### Public examples of career ladders

1. [Intercom](https://blog.intercomassets.com/blog/wp-content/uploads/2019/05/Intercom-PM-job-ladder-Logo.pdf)
2. [Optimizely](https://www.dropbox.com/s/8ogtpjvgptix3is/Optimizely%20PM%20Levels%20%26%20Profiles%20-%20FY19.pdf?dl=0)
3. [Wise](https://www.transferwise.jobs/product-management-career-map/)
4. [OpenTable](https://www.dropbox.com/s/5egjhdeo9ls3ugs/OpenTable%20-%20Product%20Management%20Careers%20at%20OpenTable%20v2.pdf?dl=0)
5. [XO Group](https://medium.com/agileinsider/product-manager-skills-by-seniority-level-a-deep-breakdown-cd0690f76d10)
6. [Oscar](https://www.linkedin.com/pulse/deep-dive-product-management-leveling-oscar-sara-wajnberg/)
7. [Gusto](https://engineering.gusto.com/a-framework-to-help-product-managers-achieve-their-potential-2/)
8. [GitLab](https://about.gitlab.com/handbook/product/product-manager-role/)

### In summary

As this post illustrates, and as you likely already know, the PM job is hard. It’s complex, multi-faceted, and full of surprises. But that’s also what makes it so damn fun. There’s no other role I’d rather have at a company.

I hope this post helps you see the role in a new and more concrete light, and if you have any other questions, suggestions, or insights, leave a comment 👇

[Leave a comment](https://www.lennysnewsletter.com/p/jobs-of-product-manager/comments)

*Have a fulfilling and productive week* 🙏

## **🔥 Featured job opportunities**

#### Product Management

1. **Metafy:** [Principal Product Manager](https://pallet.xyz/job/3bd02acf-9da4-4769-9dd7-fed6a81045c8) (Remote)
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#### Engineering

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2. **Playbook**: [Head of Engineering](https://pallet.xyz/job/94f60a15-f165-4f10-81f1-1e56e2cebfc2) (Remote)
3. **Karat**: [Senior Software Engineer](https://pallet.xyz/job/1b718459-42d4-489b-b725-8139c93b4898) (LA/Remote)
4. **Cable**: [Backend Engineer](https://pallet.xyz/job/8f3f617d-07ba-412f-87f5-6a8ad1d0fe35) (Remote)
5. **Transform:** [Data Engineer](https://pallet.xyz/job/bb8679fc-e2cb-4a83-a9d6-b71795c096e5) (Remote)

#### Design

1. **ClassDojo:**[Design Leader](https://pallet.xyz/job/d249ecad-d380-416f-a773-4650e28585cc) (SF/Remote)
2. **Cardless**: [Product Designer](https://pallet.xyz/job/4befe144-b63d-4a5c-9626-11a533a8fdd3) (SF)
3. **Karat**: [First Designer](https://pallet.xyz/job/29a7b24a-2ba0-489e-8222-d5d2b0b68e43) (LA/Remote)

#### Other

1. **Maven:**[Course Strategy and Operations Lead](https://pallet.xyz/job/24216c2e-e429-456c-add2-0ac0662e04b7) (Remote)
2. **Maven:**[White-Glove Course Lead](https://pallet.xyz/job/b333db7b-c2f2-4f87-b82e-a8970ba14193) (Remote)
3. **Free Agency:**[Community Manager](https://pallet.xyz/job/3445e94f-d760-4b3b-9c47-393a6f4702e8) (New York City)

*To browse 200+ open roles, or to add your own roles, [visit Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:**How to Never Lose at Tic Tac Toe

[Watch on YouTube](https://www.youtube.com/watch?v=mExQ8bz3Gno)

1. **Watch**: Tiktok, Emergent Creativity, The Limits of Social Graphs—Eugene Wei and Kevin Kwok

[Watch on YouTube](https://www.youtube.com/watch?v=xbnDay35L8I)

1. **Read**: [Renewable Energy Is Suddenly Startlingly Cheap](https://kottke.org/21/05/renewable-energy-is-suddenly-startlingly-cheap)

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

Sincerely,

Lenny 👋

---

## [22/61] How long it takes to find Product-Market Fit

> ## Q: I’m working on a marketplace startup and I’m wondering, how long does it usually take to find Product-Market Fit?

It’s often said that marketplaces take a while to get going but that once they’re going, they are hard to stop. I’d argue that both of these statements are not true.

To illustrate the second point, take a look at [the a16z Marketplace 100 in 2020](https://a16z.com/2020/02/18/marketplace-100/) vs. [2021](https://a16z.com/marketplace-100/). Notice how many marketplaces have slowed, dropped out, or gone under. Marketplace startups, just like any startup, lose steam and fail. It’s even harder to keep the marketplace flywheel spinning because you constantly have to keep supply and demand balanced (e.g., [Uber and Lyft's recent supply woes](https://www.washingtonpost.com/technology/2021/05/07/uber-lyft-drivers/)). Marketplaces start hard and stay hard.

The time it takes for marketplaces to get going and find product-market fit (PMF) also isn’t any different than non-marketplace startups. Marketplaces certainly have huge benefits over non-marketplaces (e.g., cost efficiency, scalability, network effects), but they aren’t magical.

**To illustrate the second point, and to answer your question concretely, I reached out to the founders of some of today’s most iconic marketplace companies and asked them how long it took them after launching to get to a place where they felt like they found PMF, i.e. a strong sense that their idea was going to work.** Below are their answers and their stories.

#### Takeaways

1. The average time from launch to PMF is around 1.5 years. This doesn’t even include the time it takes to build the v1, which is often another 1+ years of work. So expect to put in at least two years before you get to the feeling of “This is working!”
2. The amount of time it takes for a marketplace to find PMF is no different from the [timelines for non-marketplace startups](https://twitter.com/lennysan/status/1398729270550142977). Except for [the occasional consumer social apps](https://twitter.com/nikitabier/status/1398750269622554625).
3. Just like [in my previous post on PMF](https://www.lennysnewsletter.com/p/what-it-feels-like-when-youve-found), getting to PMF is generally described as (1) a clear and sudden inflection in growth, (2) steady and compounding growth/retention, or (3) hitting an important milestone. For many founders, raising their Series A was the milestone where they finally felt like it was going to work. Validation from smart investors is a powerful thing.
4. Local marketplaces (e.g., Lyft, DoorDash) often got a hint of PMF early but then needed to see if they could replicate it in a second city before feeling confident that they had something durable.
5. Every marketplace started off by concentrating on just a single city or category (except Thumbtack, for better or worse).

On to the stories.

*Huge thank you to Alyssa Ravasio, Amir Nathoo, David Rosenthal, Devon Townsend, Evan Goldin, Gagan Biyani, Gokul Rajaram, Joe Gebbia, Max Rhodes, Mike Xenakis, Ryan Graves, Sander Daniels, and Tony Xu for sharing their stories with us.*

![Image from How long it takes to find Product-Market Fit](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0105c78f-8ab0-482d-8a0d-b8b066c1b44c_2400x4674.png)

*Answers to the question “How long did it take you to find PMF—the point at which you felt like it was going to work?”*

### **Lyft: Immediately in SF; months for a second city**

> “When we launched in SF, it was obvious on Day 1. Even with the demand limited to employees and 3-5 drivers on the platform, it was clear we had a hit. There, it was honestly a regulatory question of whether we’d actually be allowed to keep doing it.
>
> What wasn’t obvious was whether this was an SF-only product. When we launched in LA, we had dozens of drivers in the field on launch day. We launched at like 11am in the morning, and despite a ton (for a small startup) of marketing, we didn’t have a single ride request for hours. Finally, around 4pm, one came in … and then canceled.
>
> We were pretty unsure of whether this would really work outside of SF. It took weeks to months of hard marketplace design work, better marketing, referrals, etc. for it to really start taking off in LA. Once we figured out what made it work there, we replicated it in other cities in much better fashion and raised a ton of cash, which we then deployed to essentially speed everything up.”
>
> —Evan Goldin, started Lyft’s (then Zimride’s) product team

### **Caviar: 3 months**

> “We saw the same group of super-users order over and over again, and retention stayed strong despite not even having an iOS app.”
>
> —Gokul Rajaram, Caviar Lead

### Outschool: 6-9 months

> “We spent two years prototyping and iterating to get to v1 release. It was six months after launch that we knew we had initial PMF based on growth and cohort retention.”
>
> —Amir Nathoo, co-founder and CEO

### Faire: 9 months

> “There were definitely times early on where I felt very strongly based on the evidence that it was going to work, especially when talking with customers and seeing how they were reacting to the product. It took us 9 months of working on it full-time before I was sure it was working based on the numbers.”
>
> —Max Rhodes, co-founder and CEO

### DoorDash: 9-12 months

> “Definitely not immediately. Lots of days of small volumes and slow growth in the beginning. At 6 months, there were finally sufficient volumes where metrics that suggest PMF (retention, order frequency, spend retention) were holding, and we were growing without marketing spend. I felt we had PMF close to 9-12 months in, after we were able to replicate the same or better success in city 2 vs. city 1.”
>
> —Tony Xu, founder and CEO

### **Rover: 9-12 months**

> “At that point, it felt like organic customer and sitter acquisition was taking off on its own in Seattle, and we were able to raise our Series B (which was really an A).”
>
> —David Rosenthal, board member

### **Uber: ~1 year**

> “One year in, we had obvious virality. When you're putting almost no effort into growth but it's clear the product itself is becoming 'word of mouth' viral, you know you have something really special. Then all efforts shift to keeping that magic going as long as possible.”
>
> —Ryan Graves, CEO

### **Cameo: ~1.5 years**

> “It was immediately clear that this product resonated incredibly powerfully with consumers. The first-ever Cameo made the recipient cry.
>
> But it took a long time to feel confident that we had created a long-lasting brand and business. Each round of funding was a step-function change in our confidence that Cameo would last. Lightspeed’s Series A in Nov. 2018 (1.5 years in) was the point that, OK, this thing is going to be a rocket; but it wasn’t until 2020 (3 years in) that I felt like Cameo would be here to stay. This is partially due to healthy paranoia and partially due to not having been on a rocketship startup before. Until then, it was hard to know what metrics to trust, and how sustainable the growth was.”
>
> —Devon Townsend, co-founder and CTO

### Airbnb: ~2 years

> “When my mom booked her first Airbnb, I said to myself, I think we got something here!”
>
> —Joe Gebbia, co-founder and CPO

### **OpenTable: 2 years**

> “PMF Part I: We had PMF for the restaurant software within a year of rolling it out to customers. PMF in this case meant restaurants valued the solution, utilized it every day, and were willing to pay a $99/mo software license.
>
> PMF Part II: We really knew we had PMF when we significantly raised the price. The reality is the initial $99/mo included the software, hardware, and their broadband, which we paid for at $99/mo. Suffice it to say, it wasn’t a winning pricing model absent superb booking fees. We raised the price to $199/mo and handed the broadband contract over to the restaurant. Effectively we tripled the price for many restaurants. We did this in year two and successfully navigated the price increase with very little churn.
>
> PMF Part III: We had a form of PMF for the demand side of the equation the day we launched the website. We knew it was a superior way to make a reservation, and our diner feedback was positive. However, absent enough supply, the actual benefit of our service to diners was limited. We had true PMF by year two when we could observe repeat bookings and an accelerated growth trajectory on bookings.”
>
> —Mike Xenakis, SVP

### **Udemy: ~2 years**

> “Two years in, we went from just $10-20k/course launch to $70k in one day. When you sell $50-75k of courses in one day, you kind of know that you’re on to something. On top of that, we figured out how to scale it—so we not only knew that the product would sell but also had identified our first growth channel.”
>
> —Gagan Biyani, co-founder and CEO

### **Hipcamp: ~2 years**

> “People loved our product pretty quickly, but it took about two years to figure out how to partner with landowners and actually have a revenue model.
>
> I knew we had something when I went to meet one of our first landowners who immediately handed me a letter from a land development company trying to buy her land. She told she hates these letters, because she’s afraid one day she’ll have to call them. She told me Hipcamp makes this junk mail.”
>
> —Alyssa Ravasio, founder and CEO

### **Thumbtack: ~5 years**

> “It took us five years to get to a place where we felt like we had PMF. We spent the first two years focused on nothing but building supply, then the next two years focused on nothing but building demand, and finally one year building our v1 revenue model. Finally at Year 5 we had supply-demand-revenue all come together, and growth took off. After having gone the first five years raising just a couple million dollars and few people paying attention to us, we then over the next couple years raised hundreds of millions of dollars and were finally being noticed.”
>
> —Sander Daniels, co-founder

If there’s one takeaway from this research, it’s that it takes a lot longer to find PMF than most founders expect. An average over 1.5 years *from launch*. Whether you’re building a marketplace or not.

For dozens of more examples, don’t miss this thread:

### 📚 Further study

1. [What it feels like when you've found product-market fit](https://www.lennysnewsletter.com/p/what-it-feels-like-when-youve-found)
2. [How to know if you've got product-market fit](https://www.lennysnewsletter.com/p/how-to-know-if-youve-got-productmarket#:~:text=%E2%80%9CHere's%20my%20simple%20definition%20of,can%20efficiently%20bring%20them%20in%E2%80%9D)
3. [How to Kickstart and Scale a Marketplace Business](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace)
4. [Why marketplaces fail](https://www.lennysnewsletter.com/p/why-marketplaces-fail)
5. [Evaluating a (marketplace) business idea](https://www.lennysnewsletter.com/p/evaluating-a-marketplace-business)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

#### Product Management

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3. **Brex:** [Senior Product Manager on Growth](https://pallet.xyz/job/5a8a0c07-552b-49a0-ac12-e588280790c5) (Remote)
4. **LawnStarter:** [Founding Product Manager](https://pallet.xyz/job/e55f36fa-2103-4ebf-bbe4-dbd4fc63fa4a) (Remote)
5. **Immuta:** [Senior Technical Product Manager](https://pallet.xyz/job/7e71effa-1f76-4607-a9de-57ca1b07f261) (Remote)
6. **Wrapbook:** [Senior Technical Product Manager](https://pallet.xyz/job/dea57461-eb0d-4edb-9097-91885482ce19) (Remote)
7. **Overtime:** [Product Manager](https://pallet.xyz/job/4296af21-ada7-47c8-bc19-9041724f3098) (NYC)
8. **6ix:** [Project Manager](https://pallet.xyz/job/5322e118-bba3-4a9f-ac38-da61d5b4cab8) (Remote/Toronto)

#### Growth

1. **Brex:** [Senior Product Manager on Growth](https://pallet.xyz/job/5a8a0c07-552b-49a0-ac12-e588280790c5) (Remote)
2. **Free Agency:** [Community Manager](https://pallet.xyz/job/3445e94f-d760-4b3b-9c47-393a6f4702e8) (NYC)
3. **Brex:** [Growth Marketing Manager, Search (SEM+SEO)](https://pallet.xyz/job/1811f9d7-21c7-4cd0-8b81-050242749825) (Remote)
4. **OpenPhone**: [Head of Marketing](https://pallet.xyz/job/102a757f-cbea-4113-9588-cf1fc98a8d7a) (Remote)
5. **neo.tax:** [Head of Growth](https://pallet.xyz/job/2fd84c85-b209-47d0-9213-671e0342cff3) (Mountain View/Remote)
6. **Coda:** [Growth Associate Program](https://pallet.xyz/job/bba22fae-9ec5-47a2-b6dd-157f498b1fba) (SF)

#### Engineering

1. **Cable:** [Backend Engineer](https://pallet.xyz/job/8f3f617d-07ba-412f-87f5-6a8ad1d0fe35) (Remote)
2. **Eppo:**[Data Infrastructure Engineer](https://pallet.xyz/job/fa7f68a5-8153-4928-8aff-20a87e3c6d84) (SF/Remote)
3. **Transform:**[Data Engineer](https://pallet.xyz/job/bb8679fc-e2cb-4a83-a9d6-b71795c096e5) (Remote)

#### Design

1. **ClassDojo:** [Design Leader](https://pallet.xyz/job/d249ecad-d380-416f-a773-4650e28585cc) (SF/Remote)
2. **Cardless**: [Product Designer](https://pallet.xyz/job/4befe144-b63d-4a5c-9626-11a533a8fdd3) (SF)
3. **Karat**: [First Designer](https://pallet.xyz/job/29a7b24a-2ba0-489e-8222-d5d2b0b68e43) (LA/Remote)

#### Other

1. **Panther:** [Director of Operations](https://pallet.xyz/job/fb5d0f95-eadf-44b2-8968-d2ad35ed5ab9) (Remote)
2. **Maven:** [Course Strategy and Operations Lead](https://pallet.xyz/job/24216c2e-e429-456c-add2-0ac0662e04b7) (Remote)
3. **Maven:** [White-Glove Course Lead](https://pallet.xyz/job/b333db7b-c2f2-4f87-b82e-a8970ba14193) (Remote)
4. **Maven:** [Instructor Sales & Partnership Lead](https://pallet.xyz/job/9dc74ed0-b098-4313-8be3-050bf057c4bd) (Remote)
5. **Free Agency:** [Community Manager](https://pallet.xyz/job/3445e94f-d760-4b3b-9c47-393a6f4702e8) (NYC)

*Browse all open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [1000 Musicians Play Rock Songs From Nirvana, Queen, etc.](https://kottke.org/21/05/1000-musicians-play-rock-songs-from-nirvana-queen-etc)

[Watch on YouTube](https://www.youtube.com/watch?v=JozAmXo2bDE)

2. **Read**: [The Anxiety of Influencers](https://harpers.org/archive/2021/06/tiktok-house-collab-house-the-anxiety-of-influencers/) by Barrett Swanson
3. **Listen**: [Modern Finance](https://www.modern.finance/) by Kevin Rose

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

Sincerely,

Lenny 👋

---

## [23/61] How people discover new products

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan), and welcome to this month’s* ✨ ***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.*

*To get these emails weekly don’t forget to subscribe* 👇

> ## Q: I’m thinking about my growth strategy, and I know the obvious ways to grow, like Facebook ads and SEO, but what else should I be thinking about when it comes to building awareness for my product? What are all the ways people discover new products?

I love this question. How *do* people become aware of new products? I posit that there are seven ways:

1. **Friends or colleagues (e.g., an invite)**
2. **While browsing online, organically (e.g., SEO)**
3. **While browsing online and seeing a promotion (e.g., FB ads)**
4. **While out and about, organically (e.g., store shelf)**
5. **While out and about and seeing a promotion (e.g., billboard)**
6. **While at home, seeing a promotion (e.g., direct mail)**
7. **Someone reaching out to you (e.g., sales)**

To help you develop your strategy and inspire your thinking, below I’ll explore each of these seven channels, with examples, suggestions, and advice as to which channel is right for you.

Let’s get into it!

## How people learn about new products

![Image from How people discover new products](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1c5ca2ff-3f0f-47e1-846c-1fbdbea7c64a_2048x1086.png)

### 1. Friends or colleagues tell you about it

The oldest growth channel in the book—friends or colleagues telling you about something they’ve discovered and love. This can happen at a party, at your home, at the office, over email, etc. Generally, this is free and very organic (e.g., “I LOVE my new spatula, check it out!”), but it can also be incentivized through [a referral program](https://www.lennysnewsletter.com/p/this-week-16-building-a-referrals/comments?token=eyJ1c2VyX2lkIjoxODQ5Nzc0LCJwb3N0X2lkIjoyOTU5MzYsIl8iOiJPQi9ZbCIsImlhdCI6MTYxNTk1MzkyOSwiZXhwIjoxNjE1OTU3NTI5LCJpc3MiOiJwdWItMTA4NDUiLCJzdWIiOiJwb3N0LXJlYWN0aW9uIn0.SyjfIcAGzZE-83qhOzB_4kZ83wIo5eLlkO3WJiSFlhU#comment-1512457) or even an [MLM program](https://en.wikipedia.org/wiki/Multi-level_marketing). This is by far the cheapest and best way to grow if you can pull it off.

[In a previous post](https://www.lennysnewsletter.com/p/increasing-virality) I covered this topic in depth, including a look which products grew primarily through this channel:

![Image from How people discover new products](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c1b44cff-f5ad-4c50-9fba-e9e72b3a5834_2048x1250.png)

You should invest in this channel if:

- Your product is innately better with friends or colleagues (e.g., Snapchat, Slack)
- Your product is innately fun to share (e.g., travel photos, homes for sale, crime nearby)
- [Your product is remarkable](https://youtu.be/xBIVlM435Zg)—something worth remarking about.

Most products do not grow this way (and it’s nearly impossible to layer on if the product isn’t naturally suited for this), so don’t be sad if you can’t make this work.

### **2. You come across it organically while browsing online**

The next best (a.k.a. cheapest) way to learn of new products is to see people on the internet (organically) talking about them.

This includes seeing social media posts, press, influencers organically sharing something, comments in a forum, Wirecutter articles, and organic search results, etc.

Products that grew primarily through this channel include Clubhouse (people on Twitter talking about it), [e.l.f. Cosmetics](https://www.usatoday.com/story/tech/reviewedcom/2020/12/04/21-viral-things-people-love-tiktok-worth-money-ordinary-smart-kup-and-more/5327938002/) (TikTok influencers raving about it), Zillow (press articles), Animal Crossing (people on Facebook posting about it).

For example, here’s a case study of how e.l.f. used TikTok to get a ton of attention:

[Watch on YouTube](https://www.youtube.com/watch?v=fi6MATONwsE)

Similar to the first bucket, it’s worth betting organic traffic if:

- Your product is remarkable—people are naturally excited to talk about and share it (e.g., Instapot)
- People are already looking for your product—Googling “best CRM” or “best credit card”
- Your product or company makes for a good story—one that reporters would want to cover, for example

### 3. You come across a promotion **while browsing online**

Companies like Wish, Casper, Calm, Blue Apron, and Hims grew primarily through this channel—ads (e.g., Facebook, Google, Twitter, YouTube), paid influencers, affiliate programs, and channel partners. Some examples:

![Instagram Advertising for Beginners](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2cf0cd71-c118-450a-80fa-349d4ab0c919_1762x1352.jpeg)![3 Excellent Examples of Money-Making Blog Posts (aka Affiliate Marketing at  Its Finest)  | HostGator Blog](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ff1d4a27-1884-4f36-9ba2-7267efadadc6_1600x1086.png)

As I covered in [a previous post](https://review.firstround.com/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups), this channel is most effective if:

- Customers aren’t naturally looking for your product (e.g., Impact Gum), and thus you have to come to them
- You generate revenue directly from new users (e.g., purchasing a product, subscribing to a service), which you can then use to fund more ads (e.g., for jeans)

### 4. You come across it organically while you’re out and about

Many new products are discovered by people simply happening upon them while being out and about in the world—noticing a new cereal on the shelf, seeing a Tesla drive by, peeping a Peloton sitting in a friend’s home.

![Image from How people discover new products](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6c249c98-81cf-47f4-a281-20bcc88b909a_4032x3024.jpeg)![DoorDash testing workaround to offset delivery fee caps | Nation&#39;s  Restaurant News](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3cf08c54-4706-4599-8aca-862af72d1edf_1200x628.jpeg)![After 57 days of lockdown, retail stores reopen in Kentucky](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1c5b8ec3-3e89-4da1-af58-06e175091c39_660x372.jpeg)

Most CPG products grow through this channel (i.e., shelf placement), as do retailers (i.e. foot traffic), and some consumer electronics (e.g., those white iPod headphone people used to wear). This is an effective growth channel for physical products that:

- Look great
- Are prevalent
- Are impulse purchases

### 5. You come across a promotion while you’re out and about

This is the classic “out-of-home” (OOH) marketing channel: billboards, bus ads, taxi ads, backs of trucks, flyers, etc. You pay to get your advertisement in front of people who spend time around a certain location in the world.

![Maher Sinjary on Twitter: &quot;@segment&#39;s billboard is really looking nice!  Can&#39;t wait to see it at night.… &quot;](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4b35d8da-d19e-4a02-8018-c7436ffb320e_1024x768.jpeg)![Zoom Booms Due To COVID-19, With Q1 Revenue Nearly Tripling, Stock At New  High – Deadline](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/98c45789-e455-4e9a-9d5e-e153f3e289b3_2048x1079.jpeg)

This is traditionally a hard channel to measure a return on investment in, but can build a massive brand moat if done well (e.g., Nike, Apple, and Coke). It’s also a powerful tactic to get the attention of a certain audience in a specific location, such as Brex heavily leveraging billboards and bus stops in SF to get the attention of founders:

![Bad Times in Tech? Not if You&#39;re a Start-Up Serving Other Start-Ups - The  New York Times](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e49e9c88-db52-4d3d-9790-78c776a20d6f_1024x786.jpeg)

This channel is best suited to:

- Companies that need to build strong brands
- Products that sell to a broad mainstream audience
- Companies looking to make a splash

### 6. You come across a promotion **while** at home

When you think of in-home advertising, you probably think of TV ads, but there’s so much more: direct mail, ads on the packaging itself, flyers inside packaging, radio ads, podcast ads, newspaper and magazine ads. A few examples:

![Image from How people discover new products](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9d415728-296f-40b6-9c40-17ff41c9118b_4032x3024.jpeg)![Image from How people discover new products](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/69ff3d33-40c1-4f4c-bbba-68b43eea9be7_4032x3024.jpeg)![GM Cues Up Chevy Silverado Ad Blitz | WardsAuto](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8e8a785f-ae01-49eb-be90-86f395de1397_1540x800.jpeg)![55 Best Direct Mail Marketing Examples | Blog | Who&#39;s Mailing What!](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c99b31df-fe82-40ff-b60e-b722f259b1d6_1564x838.jpeg)

Direct mail particularly has become a staple of DTC product growth strategies, and podcast and newsletter ads have been an increasingly popular way to get in front of new customers.

This channel is best suited to:

- Companies that sell a subscription, or high average order value (AOV), products that can sustain the cost of this type of advertising
- Companies that can get a lot of value out of targeting geos
- Companies that can get creative with how they use the platforms (e.g., Geico)
- DTC brands

### **7. Someone reaches out to you to tell you about it**

Finally, there’s outbound sales—someone coming to you to tell you about their product. This can be over the phone, email, DM, LinkedIn message, or door-to-door.

![Image from How people discover new products](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/39de9629-0671-4c01-98ff-dec4a080991f_932x1204.png)

Large enterprise companies grow primarily through this channel (e.g., Oracle, Workday, and ADP each have outbound sales teams reaching out to people daily), as well as all the telemarketing- and door-to-door-driven businesses like Cutco and a lot of insurance companies. If you’re a founder, I can’t recommend [this book on doing sales](https://www.foundingsales.com/) highly enough.

This channel is best suited to products:

- That have high AOVs and high LTV (to support the cost of a sales team)
- That require hand-holding to be successful
- That are just getting started and looking for their initial customers
- That began through bottom-up-driven sales motion and are ready to [layer on sales](https://www.lennysnewsletter.com/p/sales-bottom-up)

### Where to go next

OK, so there are seven broad channels to get people’s attention. Where should you invest? In addition to the tips I’ve included throughout, I suggest working your way through these five steps:

- **Step 1:** Who are your early adopters? e.g., middle-aged men in the Midwest, new dog owners in cities, HR leaders at growth-stage companies, etc.
- **Step 2:** Where do they spend time? e.g., a certain community, a certain newsletter, certain events, a certain physical location, etc.
- **Step 3**: What’s the quickest way you can get in front of this group? e.g., send them a mailer, DM on LinkedIn, put up a billboard, run FB ads
- **Step 4**: What’s the *cheapest* way you can get in front of this group? e.g., shelf placement, encouraging existing users to send invites, micro-influencers, etc.
- **Step 5**: How can you stand out when you communicate with this group? What’s remarkable about your product, your story, or your vision? What’s the big problem you’re solving for these people? What’s most surprising about what you offer?

This answer went much further than you likely imagined, but I hope this gives you enough food for thought for developing your GTM strategy. If you have any other suggestions or questions, don’t hesitate to leave a comment.

[Leave a comment](https://www.lennysnewsletter.com/p/how-people-discover-new-products/comments)

### 📚 Further study

1. [A Customer Acquisition Playbook for Consumer Startups](https://review.firstround.com/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups)
2. [The Racecar Growth Framework](https://www.reforge.com/blog/racecar-growth-framework)
3. [Getting your first 1,000 users in B2C](https://www.lennysnewsletter.com/p/how-the-biggest-consumer-apps-got)
4. [Getting your first 10 customers in B2B](https://www.lennysnewsletter.com/p/how-todays-fastest-growing-b2b-businesses)
5. [How to increase virality](https://www.lennysnewsletter.com/p/increasing-virality)

*Have a fulfilling and productive week 🙏*

## **🔥 Featured job opportunities**

#### Product Management

1. **Postlight**: [Senior Product Manager](https://pallet.xyz/job/c205c9c1-b4e8-4a43-a538-adaa2bfe974d?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (NYC, Remote)
2. **Noyo**: [VP of Product](https://pallet.xyz/job/7e49a835-3b73-4bc2-a397-feea3e8d3e80?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
3. **Polygence:** [Head of Product](https://pallet.xyz/job/55046525-1bd3-4901-8452-45fc1c643d82) (Palo Alto)
4. **Metafy:**[Principal Product Manager](https://pallet.xyz/job/3bd02acf-9da4-4769-9dd7-fed6a81045c8) (Remote)
5. **Brex:**[Senior Product Manager on Growth](https://pallet.xyz/job/5a8a0c07-552b-49a0-ac12-e588280790c5) (Remote)
6. **LawnStarter:**[Founding Product Manager](https://pallet.xyz/job/e55f36fa-2103-4ebf-bbe4-dbd4fc63fa4a) (Remote)
7. **Immuta:**[Senior Technical Product Manager](https://pallet.xyz/job/7e71effa-1f76-4607-a9de-57ca1b07f261) (Remote)
8. **6ix:**[Project Manager](https://pallet.xyz/job/5322e118-bba3-4a9f-ac38-da61d5b4cab8) (Remote/Toronto)

#### Growth

1. **Brex:**[Senior Product Manager on Growth](https://pallet.xyz/job/5a8a0c07-552b-49a0-ac12-e588280790c5) (Remote)
2. **Free Agency:**[Community Manager](https://pallet.xyz/job/3445e94f-d760-4b3b-9c47-393a6f4702e8) (NYC)
3. **Coda:**[Growth Associate Program](https://pallet.xyz/job/bba22fae-9ec5-47a2-b6dd-157f498b1fba) (SF)

#### Engineering

1. **Mage**: [Front-end engineer](https://pallet.xyz/job/d41acc31-b5fa-4e68-8c5a-7973c29ad712?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Santa Clara, CA)

#### Design

1. **Panther:** [Senior Product Designer](https://pallet.xyz/job/fb5d0f95-eadf-44b2-8968-d2ad35ed5ab9?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)

*Browse all open roles (and add your own) at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch**: [Man uses Tesla coils to play a-ha's Take on me](https://www.reddit.com/r/nextfuckinglevel/comments/nq5ecm/man_uses_tesla_coils_to_play_ahas_take_on_me/?context=3) (via Simon)
2. **Read**: [Elad Gil on getting your metrics (and your story) straight to succeed in SaaS](https://mixpanel.com/blog/elad-gil-on-getting-your-metrics-and-your-story-straight-to-succeed-in-saas//)
3. **Watch**: [The Craft of Writing Effectively](https://www.youtube.com/watch?v=vtIzMaLkCaM) by Larry McEnerney

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

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

Sincerely,

Lenny 👋

---

## [24/61] Getting buy-in

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

> ## Q: I’m a PM and I’m having a hard time getting buy-in for my ideas. My teammates quickly shoot me down, or disregard my recommendations. Any advice?

That sounds rough! I’d be super-discouraged if I were in your shoes. But I’m inspired that you’re using this as a learning opportunity instead of calling it quits.

To help you build your getting-buy-in muscles, I pulled in Shivani Berry, the CEO and Founder of [Arise Leadership](https://d56wlb04.na1.hs-sales-engage.com/Ctc/UD+23284/d56WLB04/Jks2-6qcW69sMD-6lZ3lhN7PwN52LVkjSW8ccvkj2ZRwb0W7sPTy84z_qJSW1bq-Vs74xMLQW6T4mY018MmdgW1B3zQg80MF-HW7N_JLH1btDHVW5vRJq74qG5CkW6c01gn3q_PsBW50f2Xk3ddpKbW7SH0Z97kQ9PhW90LnR54t_g4JW1kcWbx59WLsBW7BBLhx5KR5wwN9lHvD_GtxxrW2qPLb58h_-JVW5Kr9JV7RylcWN1W9WPhTKrX5W5F1HtV535xn7VWz28y3_S99Ff80BqzR04), to share her tactical, practical, field-tested advice. Shivani was a longtime PM and now teaches aspiring and new women leaders how to influence stakeholders. Unsurprisingly, this topic comes up *often* in her courses. We’re lucky to have her share her frameworks, and I hope you find this as valuable as I did.

*For more from Shivani, check out the [Arise Leadership Accelerator](https://d56wlb04.na1.hs-sales-engage.com/Ctc/UD+23284/d56WLB04/Jks2-6qcW69sMD-6lZ3lhN7PwN52LVkjSW8ccvkj2ZRwb0W7sPTy84z_qJSW1bq-Vs74xMLQW6T4mY018MmdgW1B3zQg80MF-HW7N_JLH1btDHVW5vRJq74qG5CkW6c01gn3q_PsBW50f2Xk3ddpKbW7SH0Z97kQ9PhW90LnR54t_g4JW1kcWbx59WLsBW7BBLhx5KR5wwN9lHvD_GtxxrW2qPLb58h_-JVW5Kr9JV7RylcWN1W9WPhTKrX5W5F1HtV535xn7VWz28y3_S99Ff80BqzR04) for women, [sign up here](https://ariseleadership.com/) to learn more, or reach out to her on [Twitter](https://twitter.com/shivanisberry) or [LinkedIn](https://www.linkedin.com/in/shivaniberry/).*

## **Getting buy-in for your ideas**

*By Shivani Berry*

![Image from Getting buy-in](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/93f614f7-0f11-4381-aece-363ec56e1c5a_500x636.jpeg)

Buy-in is the lifeblood of Product Management. I learned this the hard way. As a new PM, I walked into my first roadmap planning meeting confident and excited. I was about to recommend that we build a new search feature, and I knew it was a slam-dunk idea.

As I shared my recommendation with the product team, I was met with confused stares and irritated faces. After I was done, I was peppered with questions and comments: “Why should we prioritize this over another feature that’s easier to build?” and “I don’t get why we should offer this at all.”

Yikes.

I left the meeting defeated and stressed. My team felt like I was forcing ideas on them and undervaluing their expertise.

This is a common problem, and one you can learn how to fix. I’ll let you in on the painfully obvious secret: *Buy-in is the result of showing your team why your idea achieves their goals*. It sounds trite, but it’s true.

In practice, however, it is difficult to do. In fact, over the years, I’ve realized there are three common reasons leaders fail to get buy-in. In this case, I was guilty of all three:

1. **Assuming everyone is thinking what you’re thinking.** We assume the “right answer” must be obvious, but it almost never is.
2. **Feeling time-crunched.** We believe there isn’t enough time to get everyone fully bought in before you have to move forward.
3. **Fear of disagreement.** We’re afraid someone will dissent, so we try to sneak the plan through. Sometimes we do this subconsciously, and we aren’t even aware of this fear!

To avoid these pitfalls, I’ll share the three tactics that I’ve found to have the largest impact on getting buy-in:

1. **Co-creation**
2. **Presence**
3. **Storytelling**

### **1. Co-creation**

If you co-create your idea with your team, your team will be infinitely more receptive to your suggestions. Co-creation means collaborating with others to identify the best solution or plan of action.

Co-creation is important for two reasons:

- First, you create a better idea. Every day, you work with smart people with diverse perspectives. Leverage that! You don’t need to come up with the best idea; you need to execute on the best idea.
- Second, when you co-create, people feel invested in the idea, so they have a stake in the outcome.

After my failed attempt to rally my team around the feature I thought we should prioritize, I changed my approach and co-created with them. I walked them through the data, and we aligned on which part of the funnel had the biggest opportunity to improve conversion. They saw what I saw.

We then brainstormed potential features and concluded, as a team, that we should prioritize building an improved search feature. In the end, we had a better solution than the one I initially proposed and everyone was bought in.

You can co-create in practically any scenario: aligning with your team on quarterly OKRs, aligning with stakeholders on project status, asking for resources from a cross-functional partner, gaining support for your recommendation, or keeping a meeting on track.

**Three strategies to co-create effectively:**

1. **Start early.** It’s so common to start working on a project and do everything yourself before talking to others. This is shortsighted! Again, your goal isn’t to come up with a great idea; it is to execute on a great idea. So once you have a straw-man proposal to tackle a problem, bring together the group that’s affected. Run a brainstorming session to jointly iterate on the draft proposal and align on what success looks like. That will get everyone’s brain churning and help you co-create. Stakeholders will feel valued. You’ll stop hearing “I wish you’d looped us in earlier.”

![Image from Getting buy-in](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e2a26a80-474d-4f6d-9708-83ad580b985e_1200x1600.jpeg)

2. **Show your work while you work.** Remember math class where your teacher would require you to show the process of solving the problem, instead of just writing down the solution? Take “show your work” one step further. As you are coming up with ideas and thinking through the problem, get used to sharing updates along the way. You can do this by dropping a summary of user interview results in Slack or sharing learnings and challenges in casual conversations in between meetings or formal weekly check-ins.

![Image from Getting buy-in](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e2551a4c-2972-44a6-95d7-a0c117e7a2e5_1112x502.png)

I used to share a slide like this to highlight key learnings and the associated conclusions with the working group and executives.

3. **Be curious.** It’s easy to mentally write off a stakeholder who expresses concerns about your idea. You may think, “They just don’t get it.” This gets you nowhere. Invest the time to understand people’s concerns and motivations. Ask open-ended questions to gain insights to create a compelling pitch. Questions include:

- “What am I missing?”
- “How can we make this stronger?”
- “Can you please walk us through your thinking?”

### **2. Presence**

Presence is an elusive trait. We know it when we see it. It’s our ability to own the room. The *Harvard Business Review* describes it as “your ability to project mature self-confidence; a sense that you can take control of difficult, unpredictable situations, make tough decisions in a timely way, and hold your own with other talented and strong-willed team members.”

Presence is important because it shapes how colleagues perceive us. This impacts our ability to influence.

Presence is a combination of verbal cues, body language, and mindset. One of the actions you can take to improve your presence is to stop saying “sorry” when it’s not warranted. Our words impact how stakeholders perceive us and how we perceive ourselves. Instead of apologizing, say the following phrases:

> 🙈 Instead of: “Sorry to bother you”
>
> 💪 Say: “Do you have a minute?”

> 🙈 Instead of: “Sorry, I messed up”
>
> 💪 Say: “I’ll fix that now”

> 🙈 Instead of: “Sorry, I didn’t realize”
>
> 💪 Say: “Thanks for pointing that out”

> 🙈 Instead of: “Sorry, I didn’t understand”
>
> 💪 Say: “Can you help me understand?”

Natalie, a senior engineer at Salesforce, realized she said “sorry” all the time when we were discussing this in the Arise Leadership Accelerator. She practiced not saying it as her default response. Within a week, her team commented that she presented more compelling ideas and showed up stronger. A seemingly simple change can have a powerful impact.

In addition, own your voice by getting rid of qualifiers like “actually,” “quickly,” or “just.” For example: “I actually have an idea,” “I just think that…” or “I have a quick question.”

- “Just” demeans what you have to say. It shrinks your power and influence.
- “Actually” communicates a sense of surprise that you have something to contribute.
- “Quickly” assumes by default you’re imposing on others.

Don’t minimize yourself. Trust yourself—share your ideas and ask the questions.

### **3. Storytelling**

One big reason we fail to get buy-in is that we assume everyone else is thinking what we’re thinking. Storytelling helps break through this roadblock.

Good storytelling means you present a narrative that resonates with your audience.

**Focus on why stakeholders should care about the idea.** For example, prioritizing a recommendation feature will improve conversion or changing the sprint process will free up time to reduce tech debt.

**When you present your message, cut the backstory to prevent meeting attendees from zoning out.** Ask yourself: What context does the stakeholder *need to know* to make a decision? Eliminate everything else (or put it in the appendix). You can always share more information if needed.

Reflect on these questions to help you craft a streamlined meeting agenda:

![Image from Getting buy-in](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/84dff4d2-5132-45eb-b2d4-d758d876ab18_1204x670.png)

To drive alignment, always focus on co-creating, showcasing presence, and storytelling. It’s an ongoing process. The more you practice, the more natural it will get. Influencing is the best way to drive a larger impact at your company and move up faster in your career. Good luck and happy influencing!

*Special thanks to Lenny, Ellen Fishbein, and Gagan Biyani for reviewing.*

—

Thanks, Shivani!

If you want to get your manager and team excited about your ideas and eager to implement them, definitely check out the Arise Leadership Accelerator for women, led by Shivani. To learn more about the upcoming program, [sign up here](https://d56wlb04.na1.hs-sales-engage.com/Ctc/UD+23284/d56WLB04/Jks2-6qcW69sMD-6lZ3lhN7PwN52LVkjSW8ccvkj2ZRwb0W7sPTy84z_qJSW1bq-Vs74xMLQW6T4mY018MmdgW1B3zQg80MF-HW7N_JLH1btDHVW5vRJq74qG5CkW6c01gn3q_PsBW50f2Xk3ddpKbW7SH0Z97kQ9PhW90LnR54t_g4JW1kcWbx59WLsBW7BBLhx5KR5wwN9lHvD_GtxxrW2qPLb58h_-JVW5Kr9JV7RylcWN1W9WPhTKrX5W5F1HtV535xn7VWz28y3_S99Ff80BqzR04). For more from Shivani, you can reach her on [Twitter](https://twitter.com/shivanisberry) or [LinkedIn](https://www.linkedin.com/in/shivaniberry/).

Have a fulfilling and productive week 🙏

## **🔥 Featured job opportunities**

#### Product Management

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*Browse all open roles (and add your own) at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

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Sincerely,

Lenny 👋

---

## [25/61] My favorite PM interview questions

[Share Lenny's Newsletter](https://www.lennysnewsletter.com/?action=share)

> ## Q: What are your favorite interview questions when interviewing senior Product Managers?

Interviewing product managers is tough, mostly because the job of a PM is so broad and ill-defined. How does one interview one person for *ten* different jobs?

![Image from My favorite PM interview questions](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7abc6cd1-f2a2-48de-ad7d-3bea8f1d0a6c_2048x1654.png)

The answer is you just do it. Building on [last month’s post](https://www.lennysnewsletter.com/p/jobs-of-product-manager) where I dissected the ten jobs of a product manager—based on reviewing 20+ PM career ladders at some of today’s biggest tech companies—in this post I’m going to share my favorite interview questions for PMs, one question per PM “job”. You don’t need to cover all ten questions in one session (i.e. you can split them across interviewers), and you may need to screen for fewer (or more!) areas based on the expectations of PMs at your company. My advice to you is to use this collection as inspiration and tailor your questions to your own needs.

In addition to ten PM-specific questions, I’ve also included my favorite generalist interview questions, no matter the function. I always try to find time to ask at least a couple of these questions.

If you’ve got an interview question or two that you’ve found super valuable, I’d love to hear it! Share it in the comments—including what you look for in a great answer 👇

[Leave a comment](https://www.lennysnewsletter.com/p/my-favorite-pm-interview-questions/comments)

*Shoutout to you [Jamie Quint](https://twitter.com/jamiequint/status/1357505793675776000?s=20), [Erik Metelka](https://twitter.com/eric3000/status/1357509749101776896?s=20), [Anand C](https://twitter.com/anandc/status/1375307223404998659?s=20), [Corinna Stukan](https://twitter.com/stuukkii/status/1357517347003592704?s=20), [Kevin Yien](https://twitter.com/kevinyien/status/1357539304755593218?s=20), [Evan Goldin](https://www.linkedin.com/in/evangoldin), and the [First Round Review](https://firstround.com/review/the-best-interview-questions-weve-ever-published/) for inspiring some of these questions.*

## My favorite PM interview questions

### 1. Impact

> **What’s the most important or impactful product you shipped? What made it so important or impactful?**

What to look for:

- Have they actually launched something significant, and how significant was it
- How do they measure impact/importance, and does it match your definition
- How much responsibility they had in the project, or were they just helping out

Flags:

- The example they pick is not very important—likely means they haven’t worked on anything meaty
- They didn’t have much influence over what it was, or how it turned out

### 2. Collaboration

> **Tell me about a time you disagreed with an engineer on your team, and how you resolved it.**

What to look for:

- Being able to convince others with information while also preserving relationships for the long term.
- Genuinely hearing out the other person’s point of view—understanding their needs and priorities. And ideally, being convinced otherwise.
- Working backward from an outcome both parties want to achieve

Flags:

- Them backing down immediately, without a great reason
- Railroading the other person with their idea

### 3. Ownership

> **Share a time you shipped a product that failed. Why did it fail and what did you learn?**
>
> **Can you give me one other example?**

What to look for:

- Ownership of the failure
- Being able to identify and articulate the source of the failure
- Taking away a lesson that informs how they build product today

Flags:

- Throwing others under the bus
- Not taking the failure seriously

### 4. Leadership

> **Tell me about a time when your team didn’t gel. What was the issue, and how did you deal with it?**
>
> **Has this happened on other teams you’ve been on?**

What to look for:

- Taking it upon themselves to solve this problem—a history of spending time and energy on improving team dynamics
- Being able to articulate the root cause of the issue
- Resolving it

Flags:

- It’s not my job
- A pattern of teams they’ve been on not gelling

### 5. Execution

> **Pick a project you’re proud of that took 3-9 months. Walk me through it from beginning to end. I’ll ask questions along the way. [Give this ~7-10 mins]**

What to look for (and dig into):

- How they aligned around the priorities, success criteria, and a timeline
- How they dealt with delays and disagreements—how efficiently and effectively they got work back on track
- How they kept everyone aligned and focused throughout
- How they kept their manager/execs onboard
- How smoothly the launch went

Flags:

- They were told what to build and they just built it
- There were zero issues, which almost never happens and probably means they aren’t being honest

### 6. Strategy

> **Pick a product you worked on in the past year—talk me through your product strategy for it.**
>
> **[Alternatively] A take-home assignment to come up with a strategy to 10x the growth of your existing product.**

What to look for:

- Excitement to talk about this, body language, and energy
- A clear, succinct, and cohesive articulation of the strategy
- Deep insights into the problem they were solving

Flags:

- A lack of strategy
- It’s hard to follow their strategy

### 7. Customer insights

> **Tell me about a time you did user research on a product/feature, and that research had a big impact on the product.**

What to look for:

- Examples of them talking to customers before launch
- These conversations impacting what they launch
- Experience using different modes of research (e.g. survey, 1:1 conversations)

Flags:

- Haven’t spent time talking to customers
- It’s hard for them to think of an example

### 8. Vision

> **Tell me the vision for one of your recent projects or teams.**

What to look for:

- They actually have a vision to share
- They get excited about sharing their vision
- The vision they share is at least somewhat inspiring

Flags:

- They only share the impact they plan to drive, or a set of features, versus a vision of the future
- They can’t think of any examples

### 9. Planning

> **How do you get your team to commit to a deadline?**

What to look for:

- Working with their teammates to co-create deadlines
- Using deadlines as a tool to motivate and focus, vs. a way to force everyone to work endlessly
- Working backward from hard deadlines

Flags:

- Mandating deadlines to the team without involving them
- Expecting deadlines to be hit or else

### 10. Communication

> ***[This is something you can learn through all of the other questions]***

What to look for:

- Clarity
- Conciseness
- Convincingness

Flags:

- They often ramble
- You don’t feel convinced by their answers

### Bonus: Decision making

> **What’s the biggest one-way-door product decision you’ve ever had to make?**

What to look for:

- Their decision-making process, what inputs they take into account
- How they balance business needs and user needs
- How they bring everyone along
- How they de-risked it (if applicable)

Flags:

- Not bringing people along, working in a silo
- Relying too heavily on their opinion

With these ~~10~~ 11 interview questions in your arsenal (and the additional questions reading this inspires), you’ll next want to put together a rubric that details what you look for in a good answer. This helps you and your teammates keep a consistent bar for each candidate, and is a key ingredient to avoiding bias. [Here’s an example](https://www.dropbox.com/s/j0kgha273o3aq6e/PROD-68984460-270918-0219.pdf?dl=0) courtesy of Evan Goldin, and a neat [rubric template builder](https://rework.withgoogle.com/guides/hiring-use-structured-interviewing/steps/use-a-grading-rubric/) courtesy of Google.

### My favorite generalist interview questions for any function:

To go one step further, here are some of my favorite interview questions that work for anyone at any level:

1. When I go ask people you’ve worked with about you, what will I hear?
2. What’s something you’re better at than most other people—what’s your superpower?
3. What’s something you’re working to improve?
4. Among the people you’ve worked with, who do you admire most and why?
5. What kinds of people do you like to work with? What kinds of people have you found it difficult to work with?
6. Tell me about a time you took the initiative. What happened?
7. What's one part of your previous company’s culture that you hope to bring to your next one? What one part do you hope to not find?

### 📚 Further reading

There are tons more great interview questions out there. Here’s more inspiration:

1. [This Twitter thread](https://twitter.com/lennysan/status/1357504493340880896)
2. [Evan Goldin’s PM interview rubric at Chariot](https://www.dropbox.com/s/j0kgha273o3aq6e/PROD-68984460-270918-0219.pdf?dl=0)
3. [40 Favorite Interview Questions from Some of the Sharpest Folks We Know](https://review.firstround.com/40-favorite-interview-questions-from-some-of-the-sharpest-folks-we-know)
4. [Hire a Top Performer Every Time with These Interview Questions](https://review.firstround.com/hire-a-top-performer-every-time-with-these-interview-questions)
5. [The Best Interview Questions We've Ever Published](https://review.firstround.com/the-best-interview-questions-weve-ever-published)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

1. **Gitpod**: [Product Manager](https://pallet.xyz/job/85a37e65-b9b3-4a93-acf6-e6a6d1f28fa4?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
2. **Shift**: [Senior Product Manager](https://pallet.xyz/job/2907defd-bb4b-4972-86d5-024eda23dcd6?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
3. **Postlight**: [Senior Product Manager](https://pallet.xyz/job/c205c9c1-b4e8-4a43-a538-adaa2bfe974d?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (NYC, Remote)
4. **Noyo**: [VP of Product](https://pallet.xyz/job/7e49a835-3b73-4bc2-a397-feea3e8d3e80?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
5. **Polygence:**[Head of Product](https://pallet.xyz/job/55046525-1bd3-4901-8452-45fc1c643d82) (Palo Alto)
6. **Metafy:**[Principal Product Manager](https://pallet.xyz/job/3bd02acf-9da4-4769-9dd7-fed6a81045c8) (Remote)
7. **Brex:**[Senior Product Manager on Growth](https://pallet.xyz/job/5a8a0c07-552b-49a0-ac12-e588280790c5) (Remote)
8. **6ix:**[Project Manager](https://pallet.xyz/job/5322e118-bba3-4a9f-ac38-da61d5b4cab8) (Remote/Toronto)
9. **Brex:**[Senior Product Manager on Growth](https://pallet.xyz/job/5a8a0c07-552b-49a0-ac12-e588280790c5) (Remote)
10. **Mage**: [Front-end engineer](https://pallet.xyz/job/d41acc31-b5fa-4e68-8c5a-7973c29ad712?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Santa Clara, CA)
11. **Panther:**[Senior Product Designer](https://pallet.xyz/job/fb5d0f95-eadf-44b2-8968-d2ad35ed5ab9?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)

*Browse many more open roles, or add your own, on [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch**: [Transformation of a Bonsai Tree Over 12 Months](https://kottke.org/21/06/transformation-of-a-bonsai-tree-over-12-months)

[Watch on YouTube](https://www.youtube.com/watch?v=Xi6gaRoLUYA)

2. **Watch**: [Jumping from 25,000 Feet Without a Parachute and Landing Safely](https://kottke.org/21/06/jumping-from-25000-feet-without-a-parachute-and-landing-safely)

[Watch on YouTube](https://www.youtube.com/watch?v=GaANi96Z-Wg)

3. **Read:** [Counterintuitive Lessons on How to Get Better as You Scale, From Twilio’s Jeff Lawson](https://review.firstround.com/counterintuitive-lessons-on-how-to-get-better-as-you-scale-from-twilio%27s-jeff-lawson#lesson-5-metrics-are-the-least-important-part-of-your-annual-plan)

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

Sincerely,

Lenny 👋

---

## [26/61] Choosing Your North Star Metric

This is just quick email to let you know [I wrote a guest post](https://future.a16z.com/north-star-metrics/) for [Future](https://future.a16z.com/) (a16z’s new media site) that I’m pretty excited about. It’s a guide for helping you choose your North Star Metric(s), based on a survey of current and past employees at over 40 of today’s most successful growth-stage companies. Check out the table below for a glimpse of what you’ll find. Your North Star Metric is your strategy, and your strategy is your North Star Metric. I hope this guide helps you choose wisely.

[Read the full post](https://future.a16z.com/north-star-metrics/)

![Image from Choosing Your North Star Metric](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d620a8b9-4042-460d-a130-61948c17211f_4000x11160.jpeg)

If you have any feedback, questions, or thoughts, I’d love to hear it [in the comments](https://www.lennysnewsletter.com/publish/post/https://www.lennysnewsletter.com/p/choosing-your-north-star-metric/comments).

[Read the full post](https://future.a16z.com/north-star-metrics/)

Have a fulfilling and productive week 🙏

---

## [27/61] Finding your distribution advantage

> ## Q: This tweet by Justin Kan has stuck with me ever since I saw it:
>
> ## Do you agree with it, and if so, how does one win at *distribution*?

The more startups I work with, the more I’m convinced that Justin is right. While starting a company has never been easier, and building a great product has become table stakes, getting your product in front of the right people efficiently—getting people to even know you exist—is increasingly what separates the haves from the have-nots. As Peter Thiel once put it, “Poor distribution—not product—is the number one cause of failure.”

This is ever-more true because free channels like SEO are getting increasingly crowded, CPMs are going up, privacy features are making it harder to reach people, and every new interesting market quickly grows to dozens of competitors.

![Image from Finding your distribution advantage](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/63a7e0f5-0c61-4879-85aa-11ee46f3394f_2980x2230.png)

To break through the noise, and often to even raise money, you need a unique distribution advantage. You need to find a way to go directly to your early target audience more cheaply and quickly than your competition.

At scale, there’s essentially only one winning strategy: Become world-class at one growth channel (performance marketing, virality, content, or sales) within your market. For example, in discount online shopping, Wish dominates performance marketing, Pinduoduo dominates virality, and Wayfair dominates SEO. In travel, Booking.com dominates performance marketing, Airbnb dominates virality, and Expedia dominates SEO. A few more examples from a [previous post](https://review.firstround.com/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups):

![Image from Finding your distribution advantage](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b582bfbc-23af-4ae1-9f39-6c4c7a6cc257_2560x1367.jpeg)

**When you’re just starting out, though, you have more options. I’ve found seven unique distribution advantages that new startups can take advantage of, each of which I’ll explore below:**

1. Starting with a pre-existing audience
2. Developing a unique viral loop
3. Being first on an emerging platform
4. Having a remarkable story
5. Starting with pre-existing strategic relationships
6. Closing early strategic partnerships
7. Bringing extraordinary hustle

Having one of these advantages is great. Having two or three is even better.

*If you’ve come across any other examples of distribution advantages, please share them in the comments 👇*

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

![Image from Finding your distribution advantage](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e7a965af-7eba-45fe-b0d4-865560e40ba8_2400x2742.png)

#### **1.** Starting with a pre-existing audience

Companies like Kylie Cosmetics (Kylie Jenner), Square (Jack Dorsey), Superhuman (Rahul Vohra), Goop (Gwyneth Paltrow), and Tesla (Elon Musk) all springboarded off their founder’s pre-existing audience, giving them an immediate unfair advantage. This distribution advantage has become increasingly popular with the rise of influencers, who launch their own products (e.g. [MrBeast Burgers](https://en.wikipedia.org/wiki/MrBeast_Burger)) after building direct (free) connections with their market.

Having an audience doesn’t automatically mean you’ll build a durable business, though—[Justin Kan’s Atrium](https://techcrunch.com/2020/03/03/atrium-shuts-down/) being one ironic example.

**How might you create this advantage?** Start building an audience, ideally on a platform that draws the type of people you’ll eventually want to sell to.

#### **2.** Developing a unique viral loop

A second type of distribution advantage is developing a unique viral loop that allows you to grow more quickly and efficiently than anyone else in your market. I previously wrote about [these magical loops](https://www.lennysnewsletter.com/p/magical-growth-loops), and one that always comes to mind is [Faire](https://www.faire.com/) where the team found a way to incentive their supply to drive their demand, and their demand to drive their supply, creating an ever-accelerating growth flywheel:

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

Other companies that were able to grow through unique growth loops include [Dropbox](https://www.dropbox.com/) and [PayPal](https://paypal.com/) (super-successful referral programs), [Slack](https://slack.com/) and [Figma](https://www.figma.com/) (the epitome of bottom-up growth), and a media payroll company called [Wrapbook](https://www.wrapbook.com/) (disclaimer: I’m an investor) that grows through both its supply and demand moving to new gigs and bringing Wrapbook with them:

**How might you create this advantage?** It’s very difficult to layer on if this isn’t natural to your product, but check out [this post](https://www.lennysnewsletter.com/p/increasing-virality) for inspiration.

#### **3. Being first on an emerging platform**

[Zynga and Facebook](https://www.nytimes.com/2020/12/31/technology/farmville-zynga-facebook.html), [Instagram and the iPhone](https://www.investopedia.com/articles/investing/102615/story-instagram-rise-1-photo0sharing-app.asp), [Pinduoduo and WeChat Mini App(s)](https://turner.substack.com/p/pinduoduo-and-vertically-integrated), [Veeva and Salesforce](https://www.veeva.com/resources/veeva-systems-extends-salesforce-com-partnership-into-2025/)—so many companies broke out by riding the wave of new emerging platforms. Check out this thread for many more examples:

I’m sure many companies tried this strategy and failed (e.g. betting on VR, Google Glass, the Twitter API, etc.), but it does work and can work in a big way.

**How might you create this advantage?** Tinker with new platforms (e.g. VR, Snapchat apps, Substack, etc.) when they do launch to see if they are worth investing in, and check out [Mike Maples’s writing on inflection points](https://medium.com/@m2jr/how-to-build-a-breakthrough-3071b6415b06) for inspiration on what to look for.

#### **4. Having a remarkable story**

Companies like Airbnb, Etsy, Zillow, TaskRabbit, and Instacart grew primarily through (free) PR and word of mouth. Why? They are each remarkable—worth remarking about. Thus, reporters and people loved talking about them, which earned them each a ton of free awareness.

![Image from Finding your distribution advantage](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a5d50beb-4f6a-468c-844a-ec77b985da41_2244x1378.png)

The more interesting, unique, or surprising your product, team, or events are, the more you’ll be able to take advantage of this distribution advantage. Note that every founder thinks their product and story are remarkable—the bar for this is higher than you think.

**How might you create this advantage?** Find ways to make your story more “remarkable.” What impossible obstacles have you overcome? What’s something you’ve done that is insanely clever or creative? What’s something people won’t be able to stop talking about?

#### **5.** Starting with pre-existing strategic relationships

A fifth type of distribution advantage, for B2B businesses in particular, is having a lot of pre-existing direct connections with your target buyers. Basically, having warm intros vs. having to go cold. [Commsor](https://www.commsor.com/) sells community management software and also runs the biggest [community managers community](https://www.community.club/). [Twine](https://www.twinelabs.com/) sells HR software and also runs the biggest [chief people officers community](https://www.twinelabs.com/CPOHQ). Atlassian was popular with the open-source community and sold to this group when it first launched. Carta had connections (through its investors) to dozens of startups looking for cap table management help.

This is exactly why joining programs like YC can be so effective for B2B startups—the other startups are often an ideal customer base. This is also why working with large funds like a16z, Sequoia, and Benchmark is powerful—they can connect you to their early-adopter portfolio founders.

**How might you create this advantage?** Begin building a community, a network, or individual connections to people who may one day need what you’re building. If you don’t have these connections by the time you launch, look for an accelerator or network you can join that’ll get you access to your target audience.

#### **6. Closing strategic partnerships**

A few companies saw huge success in securing early strategic partnerships. [Netflix made a deal with DVD manufacturers](https://observer.com/2017/07/how-netflix-used-coupons-to-become-a-70-billion-company-reed-hastings-mark-randolph/#:~:text=By%20July%201999%2C%20Netflix%20had,shipped%20%5Bin%201999%5D.%E2%80%9D) to insert flyers into DVD player boxes, [Kayak made a deal with AOL](https://techcrunch.com/2012/03/30/founder-stories-kayaks-paul-english-discusses-big-wins-important-strategic-alliances-tctv/) to use it for flight search, and [PayPal partnered with eBay](https://www.vox.com/2018/1/31/16957212/ebay-adyen-paypal-payments-agreement) to handle payments. A few more examples:

All of these deals basically made these companies, and if you can make this happen, do it. In practice, however, relying on partnerships early on is rarely successful and often a waste of time. Big companies rarely benefit from working with startups, and it takes them a loooooong time to make anything happen.

**How might you create this advantage?** Come up with a list of potential partners and ask yourself what you can do to help *them* achieve *their* goals. Then go find someone at these companies to pitch, and figure out how long it might take to actually launch something together.

#### 7. Bringing extraordinary hustle

A final distribution advantage is simply making sh\*t happen—no matter what. Tony Xu personally delivered food in the early days of DoorDash.

![Tech and Innovation Awards winner Doordash drives toward delivery of more  than food - San Francisco Business Times](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/821d9f6d-3b5e-4a0b-aec6-354fdab32712_1200x675.jpeg)

Jack Dorsey walked from retailer to retailer pitching the Square dongle to owners. Travis Kalanick handed out Uber coupon codes at Caltrain stations. Ben Silbermann went to Apple stores and changed their homepages to Pinterest.com. There’s also Steve Jobs, Bill Gates, Marc Benioff, Zuck … the list goes on.

If you have none of the other distribution advantages, focus on this one. Make sh\*t happen.

![Image from Finding your distribution advantage](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1d1b28c0-f9e0-4065-b0ea-c9a7e995d3fd_1000x800.png)

**How might you create this advantage?** Fight. Fight. Fight.

Remember, you don’t *have* to have a unique distribution advantage. Many hugely successful companies succeeded without any special advantages early on (as far as I know). Companies like Thumbtack, Segment, Robinhood, Substack, etc. But, without a distribution advantage, you’re probably fighting an uphill battle against founders who do. And that means you need to execute better, faster, and you have less time to lose. Go get ‘em!

*If you have any thoughts or have come across other distribution advantages, please share!*

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

### 📚 Further study

1. [A Customer Acquisition Playbook for Consumer Startups](https://review.firstround.com/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups)
2. [Increasing virality](https://www.lennysnewsletter.com/p/increasing-virality)
3. [Creating buzz at launch](https://www.lennysnewsletter.com/p/creating-buzz-at-launch)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

1. **Clearco**: [Product Manager - Capital Partnerships](https://pallet.xyz/job/82497ce0-6faa-4aa7-a321-86d525a23cd7?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
2. **Frame.io:** [Sr. Product Manager](https://pallet.xyz/job/4846ad99-c62d-4b4f-979a-a558342d6a68?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
3. **SnapStream Media**: [Product Manager](https://pallet.xyz/job/8bec1419-8512-4c77-b7a9-3351dfea8afe?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
4. **Gitpod**: [Product Manager](https://pallet.xyz/job/85a37e65-b9b3-4a93-acf6-e6a6d1f28fa4?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
5. **Shift**: [Senior Product Manager](https://pallet.xyz/job/2907defd-bb4b-4972-86d5-024eda23dcd6?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
6. **Postlight**: [Senior Product Manager](https://pallet.xyz/job/c205c9c1-b4e8-4a43-a538-adaa2bfe974d?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (NYC, Remote)
7. **Noyo**: [VP of Product](https://pallet.xyz/job/7e49a835-3b73-4bc2-a397-feea3e8d3e80?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
8. **Polygence:**[Head of Product](https://pallet.xyz/job/55046525-1bd3-4901-8452-45fc1c643d82) (Palo Alto)
9. **Metafy:**[Principal Product Manager](https://pallet.xyz/job/3bd02acf-9da4-4769-9dd7-fed6a81045c8) (Remote)
10. **Panther:** [Senior Product Designer](https://pallet.xyz/job/fb5d0f95-eadf-44b2-8968-d2ad35ed5ab9?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
11. **6ix**: [Project Manager](https://pallet.xyz/job/5322e118-bba3-4a9f-ac38-da61d5b4cab8?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote, Toronto)

*Browse many more open roles, or add your own, on [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

Sincerely,

Lenny 👋

---

## [28/61] How to know if you're doing a good job as a product manager

> ## Q: I recently transitioned into a PM role, and I never quite know if I’m doing a good job. We have career ladders and performance reviews, but day to day, how can I tell if I’m doing what I should be doing?

There was a period a few years into my PM career when I was certain that if I made a single mistake, people would see how little I knew and everything would come tumbling down. I’ve since learned that this was [classic impostor syndrome](https://www.lennysnewsletter.com/p/this-week-overcoming-impostor-syndrome), and everything worked out A-OK (even though I made numerous mistakes), but what I needed at the time was a way to know what doing a good job as an IC product manager looked like and felt like. Although I’ve written about the [10 jobs of a product manager](https://www.lennysnewsletter.com/p/jobs-of-product-manager) and the [14 habits of highly effective product managers](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product), those are a *lot* of things to keep in your head day to day.

**To answer your question very practically, although the PM role varies widely by company, you can evaluate an IC product manager’s performance with three simple questions (in priority order):**

1. **Is your team delivering business impact?**
2. **Are** ***you*** **personally contributing to the team’s success?**
3. **Do stakeholders regard you highly?**

Answer yes to these questions and you’re doing great. Answer no to any of them and you’re doing OK. Answer no to all of them and you’re failing.

![Image from How to know if you're doing a good job as a product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/80b3319b-4845-4af7-9e1c-6fc9aeb06e63_2400x1350.png)

### 1. **Is your team delivering business impact?**

You could be executing like a boss and everyone in the company adores you, but if your team isn’t delivering meaningful impact to the business, you won’t get very far. As I've written before:

> #### *The job of a product manager is to deliver business impact by marshaling the resources of their team to identify and solve the most impactful customer problems.*

Your job as a PM is to provide leverage to the team to deliver more business impact, and so if your team isn’t delivering impact, you are failing. Impact can be a lot of things, however:

1. Accelerating the company’s growth
2. Making internal teams more efficient
3. Helping the sales team close more deals
4. Making important customers happier
5. Launching an important product

**Takeaway:** When in doubt, find ways to deliver more impact for the business.

### 2. **Are** ***you*** **personally contributing to the team’s success?**

While the team’s impact is priority number one, your *individual* contributions to the team’s success is a crucial element of your performance. The company isn’t looking to you to simply coordinate and execute—especially as you become more senior. Your managers will evaluate you based on what you’ve individually contributed to the team, i.e., whether you’ve:

1. Informed the product strategy and vision
2. Contributed great ideas
3. Uncovered unique customer insights
4. Enabled the team to operate like a well-oiled machine
5. Pushed the company and team to prioritize the correct work

The more senior you get, the more important this component of your performance becomes.

**Takeaway**: Contribute to *what* is built, not just *how* it’s built. Your company is expecting more from you than simply coordinating, note-taking, and communicating.

### 3. Do stakeholders regard you highly?

The third leg of the PM performance stool is stakeholder perception. Unlike a CEO, for whom results are all that ultimately matters, successful product managers need the approval of their teammates and company leaders in order to do well in their careers. Impact and great ideas alone (at least at most companies) won’t get you there. Are you seen as a leader? Do engineers want to be on your team? Do people want to give you more scope? You want people to be “Hell yes, this person is awesome” not “They hit their goals but I wouldn’t want to work with them.”

I remember shipping a few super-impactful features (features that I proposed) that helped us blow out our quarterly goals, but a few key leaders within the org were not happy with the product. They felt these were bad for users, and not something we should have done. This ended up hurting my performance review (as it should have), and it taught me the lesson that perception matters heavily in the PM role.

It’s easy to over-index here and focus *too* much on people liking you and doing everything leaders suggest. You don’t need 100% of people to love you, and part of your job is pushing back on bad ideas. To be honest, if 100% of people love you, you may not be pushing hard enough. I’d aim for 80% of people loving you, 5-10% feeling uneasy, and (occasionally) a few people being like WTF. People don’t need to be happy or agree with you all the time, but in general leaders and teammates need to feel good about how you’re operating and leading—and you need to deliver results more often than not.

**Takeaway:** Relationships and perception matter.

The PM role is weird and complicated, but I hope the above gives a clearer sense of what your company is looking for from you. As a final takeaway, here’s a handy guide to help you get a sense of whether you’re doing a good job as a PM:

![Image from How to know if you're doing a good job as a product manager](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f9b3b250-3bd7-424a-9ea7-041262679bbb_2400x1350.png)

### 📚 Further study

1. [Ten jobs of a product manager](https://www.lennysnewsletter.com/p/jobs-of-product-manager)
2. [14 habits of highly effective product managers](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product)
3. [A comprehensive survey of product management](https://www.lennysnewsletter.com/p/product-management-survey)
4. [Becoming a senior product manager](https://www.lennysnewsletter.com/p/senior-product-manager)
5. [Overcoming impostor syndrome](https://www.lennysnewsletter.com/p/this-week-overcoming-impostor-syndrome)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

1. **Squarespace:** [Senior Product Manager/Product Manager](https://pallet.xyz/job/84d30ce6-d293-4de6-a1bc-b9b7f0656440?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (NYC)
2. **Piñata Farms:** [Senior Product Manager](https://pallet.xyz/job/9f90d5d9-288a-477d-b14b-8b4a9c589a87?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (LA)
3. **Properly:** [Senior Product Manager](https://pallet.xyz/job/beefb83d-8775-4052-96e6-72d8f62ca3ef?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Toronto, Remote)
4. **Clearco**: [Product Manager - Capital Partnerships](https://pallet.xyz/job/82497ce0-6faa-4aa7-a321-86d525a23cd7?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
5. **Frame.io:** [Sr. Product Manager](https://pallet.xyz/job/4846ad99-c62d-4b4f-979a-a558342d6a68?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
6. **SnapStream Media**: [Product Manager](https://pallet.xyz/job/8bec1419-8512-4c77-b7a9-3351dfea8afe?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
7. **Gitpod**: [Product Manager](https://pallet.xyz/job/85a37e65-b9b3-4a93-acf6-e6a6d1f28fa4?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
8. **Shift**: [Senior Product Manager](https://pallet.xyz/job/2907defd-bb4b-4972-86d5-024eda23dcd6?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
9. **Postlight**: [Senior Product Manager](https://pallet.xyz/job/c205c9c1-b4e8-4a43-a538-adaa2bfe974d?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (NYC, Remote)
10. **Noyo**: [VP of Product](https://pallet.xyz/job/7e49a835-3b73-4bc2-a397-feea3e8d3e80?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)
11. **Polygence:**[Head of Product](https://pallet.xyz/job/55046525-1bd3-4901-8452-45fc1c643d82) (Palo Alto)
12. **Mage:** [Front-end engineer](https://pallet.xyz/job/d41acc31-b5fa-4e68-8c5a-7973c29ad712?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Santa Clara, CA)
13. **Pragli:** [Product Designer #1](https://pallet.xyz/job/75075700-7078-4664-a498-df280d166a9e?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote)

*Browse many more open roles (or add your own) at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Read**: [The Power of Product Thinking](https://future.a16z.com/product-thinking/) by Julie Zhou
2. **Watch:** 💉😷

3. **Watch**: [Simone Biles, Mesmerizing in Slow Motion](https://kottke.org/21/06/simone-biles-mesmerizing-in-slow-motion)

[Watch on YouTube](https://www.youtube.com/watch?v=CmRHT4LdyMk)

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

Sincerely,

Lenny 👋

---

## [29/61] Winning at early-stage hiring

> ## Q: I’m the founder of a small startup and I’m having a really hard time hiring. What have you seen work best for startups within your network?

I’ve angel-invested in almost a hundred companies over the past five years, and in reading their investor updates, I’ve consistently seen a divide between startups that are hiring world-class people month after month and those that struggle for many months to fill a single role. Don’t get me wrong, hiring great people is always hard no matter how skilled you are. It’s arguably the hardest part of building a startup. But some founders have a distinct ability to build a gravity around their startup that repeatedly pulls in top-notch talent.

To answer your question, I reached out to a half-dozen of these early-stage founders and asked them what contributes *most* to their hiring success. Five consistent themes emerged:

![Image from Winning at early-stage hiring](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/78d74b98-dac2-4f66-b822-2170a48a8bee_2048x1024.png)

Let’s dig in.

*Thank you, Brandon Hill ([Vori](https://vori.com/)), Julianna Lamb and Reed McGinley-Stempel ([Stytch](https://stytch.com/)), Kevin Tan ([Snackpass](https://www.snackpass.co/)), Nick Handel ([Transform](https://transform.io/)), Sam Corcos ([Levels](https://www.levelshealth.com/)), Siqi Chen ([Runway](https://runway.com/)), and Alex Bilmes ([Endgame](https://endgame.io/)) for sharing your insights. Note that I’m a small angel investor in these companies, which is how I know they are so great at hiring. To those of you I didn’t prod, it doesn’t mean that I don’t think you are great at hiring 💛*

### **1. Captivating** vision

Without a doubt what I heard most from founders was that the central reason they are able to attract and close the best talent is the effectiveness of their mission or vision.

> “**Articulating a crystal clear and ambitious vision** makes it easy for candidates to visualize what they are building towards for the next five years.” —Kevin Tan, [Snackpass](https://www.snackpass.co/)

> “**The size of our vision** (and our ability to demonstrate it through a product demo) has clearly been one of the biggest reasons we’ve been able to hire such incredible people.” —Siqi Chen, [Runway](https://runway.com/)

> “**We spend a lot of time articulating our long-term vision.**The right people will be compelled by the scope, complexity, and long-term societal impact.” —Brandon Hill, [Vori](https://vori.com/)

I heard this most emphatically from founders who had a previous startup without a compelling mission—who are now working on something more meaningful—and how much easier hiring has gotten for them. And this makes sense—the most talented people have the most options and will choose to spend their time on work that fulfills them most.

Your mission can be as ambitious as solving climate change or as seemingly mundane as creating transparency in company financials: whatever works to get your ideal candidates truly excited about the work they’ll be doing.

**Takeaway:** Spend time refining your vision and mission such that it makes candidates feel like their work would be truly meaningful. Get feedback on your current mission/vision from a few people who will be brutally honest with you.

### **2.** A++ early team

The second most consistent theme that came out of my conversations with founders was that the companies that had the easiest time hiring also had an A++ early team.

> “**The best talent wants to work with the best talent.** Find great people from the beginning. Never lower your recruiting bar to hire someone because they can fill a short-term need. It will be very tempting to bring someone on if they are in front of you and ready to go, but it will have longer-term negative consequences if they are not the right person.” —Nick Handel, [Transform](https://transform.io/)

> “**Great people want to work with great people.** People talk about *raising the bar*, but what’s interesting is that there’s a snowball effect—raising the bar happens organically and actually becomes easier if you’re hiring exceptional people. Your team will demand it, and because of the quality of the team you already have, it becomes easier to convince other exceptional people to join.” —Siqi Chen, [Runway](https://runway.com/)

> “**Hiring definitely compounds**. I hear often from candidates that they’re really impressed with our early team.” —Julianna Lamb, [Stytch](https://stytch.com/)

These hires can’t just *good*—they need to be *great.* Hires who are world-class in their field and/or who instantly impress potential candidates. This works for so many reasons:

1. Social proof: If great people are joining, it must be great.
2. Referral network: Great people know other great people.
3. Flywheel: A++ people join to work with other A++ people, and so on.

**Takeaway:** Set the bar for your first few hires *even* higher.

### **3.** Putting in the work

Whenever I see an inflection in a startup’s ability to hire, it almost always comes after a founder realizes that they need to spend a lot more time on hiring. And then they do.

> “**Be prepared to commit ~100 hours for each hire you make.** Interview a lot of people. Ask your network for introductions. Reach out to people on LinkedIn. Get creative on how you source candidates. Write excellent [job descriptions](https://levels.link/eng). There are no shortcuts.” —Sam Corcos, [Levels](https://www.levelshealth.com/)

> “**Sell at every stage of the process**, including the cold outreach email and the first phone call, where it’s critical to get them excited. We also treat every other interview as an opportunity to get them excited about the team, product, and vision.” —Julianna Lamb, [Stytch](https://stytch.com/)

> “**Hiring is strategy.** Come up with a plan and then do what is necessary to execute. This includes defining roles well before needing to hire them, getting feedback, collecting leads, speaking informally with folks in the space to learn, and then narrowing your focus and hiring the person. If you are desperate to fill a role, you will feel more pressure to lower your bar more or mis-hire.” —Nick Handel, [Transform](https://transform.co/)

Like in all parts of life, effort leads to results. And guess what, spending more time on hiring is something every founder can do. No special skills required.

Remember also that hiring is a long-term game. As [Sam](https://www.linkedin.com/in/samcorcos) from Levels put it, “Our best hires are people that weren’t looking at the time I first spoke with them, but we slowly won their interest over the course of ~6 months. The best people are never actively looking for a job.”

**Takeaway:** If you’re struggling, spend a lot more time on hiring.

### **4. Founder’s network**

The founder’s professional network also proves to be a huge asset for early-stage hiring (though this advantage fades pretty quickly).

> “**Our first hire came from my first company**, our third hire from our investors, the next hire from my co-founder’s last company, and the next few came from referrals and inbound candidates.” —Siqi Chen, [Runway](https://runway.com/)

> “**Use your investor network to help close.** Ask investors, advisors, and angels you trust to get on a call to help close the candidate.” —Kevin Tan, [Snackpass](https://www.snackpass.co/)

> “**A lot of it is network early on.**” —Alex Bilmes, [Endgame](https://endgame.io/)

With a large network, not only do you have a pool of warm leads to tap into, you also have insight into who’s most incredible; for potential candidates it’s also less risky joining a company where they know the founder or an early team member. Every part of the hiring process becomes easier.

You can often bootstrap a professional network by bringing on connected investors (e.g. a16z, Sequoia, Benchmark) or by joining an existing startup community (e.g. YC, OnDeck). Or bringing on people with an extensive network of their own.

**Takeaway:** Build your professional network if you plan on starting a company someday.

### 5. Pitching prowess

Finally, there are the actual pitching skills.

> “**You know you’re pitching candidates well enough when they offer to invest** even if they aren’t ready to move on from their current roles.” —Siqi Chen, [Runway](https://runway.com/)

> “**In recruiting, I’d say pitching skills > sales skills.** A successful recruiting process feels much more like the way we interact with investors when fundraising (painting the vision of the future, etc.) than how we talk to prospects.” —Reed McGinley-Stempel, [Stytch](https://stytch.com/)

> “**At the offer stage, we present a custom offer deck** and walk through it with all founders and the candidate present. The detail makes them feel welcomed and loved.” —Brandon Hill, [Vori](https://vori.com/)

This is fairly obvious—the better you can pitch the opportunity, the better you’ll do. But what stood out to me was how much effort these founders put into the closing process. Many found a way to make the experience memorable and delightful, including Brandon’s example above of delivering a custom deck for each candidate. Here’s another tactic I love, from Julianna:

> “We see the actual offer stage as a big place you can stand out. We do a Zoom to surprise the candidate with everyone from their interview panel to share why they’re excited about the candidate potentially joining.” —Julianna Lamb, [Stytch](https://stytch.com/)

There’s also a strong correlation between founders who are great at pitching candidates, selling to customers, and raising money.

**Takeaway:** If you’re a founder, you better get good at pitching.

—

The five themes above came through the strongest when talking to these founders but there was also some ad-hoc tactical advice that I loved…

#### Bonus hiring advice:

1. “**Define values and ways of working first:** The team determines the culture. If you can’t clearly articulate how you want to work and what values you want to protect, you will not find people who can build that culture. People want to understand what they’re getting into, and setting these intentionally allows recruits to find an environment they will thrive in and want to protect.” —Nick Handel, [Transform](https://transform.co/)
2. “**Use any unfair advantages in your network.** Snackpass is very close to college campuses, so we had exclusive ‘deal flow’ that other companies didn’t. We would directly recruit from our Snackpass users, which also had the benefit that they understood and loved the product.” —Kevin Tan, [Snackpass](https://www.snackpass.co/)
3. “**We treat closing a candidate almost exactly the same as closing an investor.** In fact, we’ve found the best candidates will do even more diligence than the average investor. Arguably, candidates are investing something even more valuable than capital: their time. Our pitch and demo for our Series A is pretty much exactly the pitch and demo we do for candidates.” —Siqi Chen, [Runway](https://runway.com/)
4. “**Make specific asks.** When you tap your network, know what you’re asking for. Most people make vague requests for introductions, like ‘Please send us more engineers,’ but you’re much more likely to get positive results if you make specific asks. What’s the specific persona you’re looking for? How many people?” —Sam Corcos, [Levels](https://www.levelshealth.com/)
5. “**We create a custom economic outcomes Notion doc** that does three things: (1) outlines the structure of the market and how we value the opportunity, (2) a Gradient of Potential Outcomes portion that walks through various end-state scenarios, from impending death to IPOing as the Alibaba of the West, (3) comparing their current TC (we estimate based on Glassdoor) to their Vori package. Very important here: We are also candid about the risks and low likelihood of any success in startups generally, and the challenges we will face. This candor actually has the effect of building trust and makes the candidate believe in us more!” —Brandon Hill, [Vori](https://vori.com/)

If you have additional hiring advice, I’d love to hear it 👇

[Leave a comment](https://www.lennysnewsletter.com/p/early-stage-hiring/comments)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

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3. **Crusoe Energy Systems:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/4bd3b894-fa7b-4f31-9022-04ca611ceaeb) (SF, Denver)
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12. **Pragli:**[Product Designer #1](https://pallet.xyz/job/75075700-7078-4664-a498-df280d166a9e?n=Lenny%27s+Job+Board+&r=%2Flist%2Flennys-jobs%2Fjobs) (Remote—US)

*Browse many more open roles (or add your own) at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

Sincerely,

Lenny 👋

---

## [30/61] Kickstarting supply in a labor marketplace

*👋 Hello, I’m [Lenny](https://twitter.com/lennysan), and welcome to this month’s*✨ ***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.*

*Here’s what you missed this month if you aren’t a subscriber:*

1. *[Finding your distribution advantage](https://www.lennysnewsletter.com/p/distribution-advantages)*
2. *[How to know if you're doing a good job as a product manager](https://www.lennysnewsletter.com/p/doing-a-good-job-product-manager)*
3. *[Winning at early-stage hiring](https://www.lennysnewsletter.com/p/early-stage-hiring)*

*Subscribers also get [access to a private Slack community](https://twitter.com/lennysan/status/1413559565354819588), fireside chats with folks like [Teresa Torres](https://mobile.twitter.com/ttorres), [the full archive of past posts](https://www.lennysnewsletter.com/?sort=top), [hundreds of discounts on all kinds of software (including 20% off posts to my job board](https://twitter.com/lennysan/status/1411031645788901378)), and much more.*

> ## Q: **I’m building a labor marketplace (kind of like Thumbtack or Hired**) **and I’m wondering—how do labor marketplaces generally find their supply?**

I’ve spent a lot of time [thinking about marketplaces](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace), but I’ve never dug deeply into labor marketplaces specifically. What makes labor marketplaces interesting is that instead of connecting people to a *product* (e.g. Airbnb and homes, DoorDash and food, Etsy and crafts), they connect people to *people*. How cool!

For example, [The Mom Project](https://themomproject.com/) connects mothers who are returning to the workforce with flexible job opportunities. [Roo](https://roo.vet/) connects on-demand veterinarians with understaffed veterinary hospitals. [Instawork](https://www.instawork.com/) connects small businesses with vetted hourly workers. Many of these marketplaces are all exploding right now as people reenter the workforce post-pandemic.

![Image from Kickstarting supply in a labor marketplace](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d77405b5-de05-44d0-8faa-3d25d33fefe3_2048x1024.png)

Labor marketplaces are generally heavily supply-constrained—meaning their growth is bottlenecked by their lack of supply—so it’s crucial that founders of labor marketplaces nail their supply growth strategy.

To answer your question, I researched about a dozen of today’s most successful and fastest-growing labor marketplaces and found there are essentially four primary ways to drive your supply in the early days:

![Image from Kickstarting supply in a labor marketplace](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fe964627-5ac4-49c4-a8e6-e576f33292fb_2400x1704.png)

Below are first-hand stories and tactics from the founders and early team members behind these amazing companies (plus a bunch of great one-off ideas that anyone may find helpful). Enjoy!

*Huge thank-you to [Allison Esposito Medina](https://twitter.com/techladyallison), [Allison Robinson](https://twitter.com/mrsrobinson_a?lang=en), [Dave Lu](https://twitter.com/davelu?lang=en), [Eric Vishria](https://www.linkedin.com/in/ericvishria), [Iman Abuzeid](https://www.linkedin.com/in/imanabuzeid), [Jaime Getto](https://twitter.com/jaimegetto?lang=en), [Lisa Hu](https://www.linkedin.com/in/lisa-hu-26a6233), [Mike Slagh,](https://www.linkedin.com/in/mslagh) [Peter Faist](https://www.linkedin.com/in/peterfaist?originalSubdomain=ca), [Romeen Sheth](https://www.linkedin.com/in/romeen-sheth-07494427), [Ryan Mapes](https://www.linkedin.com/in/ryanmapes), [Sander Daniels](https://www.linkedin.com/in/sander-daniels-44bb0324/), [Sarah Holmes](https://www.linkedin.com/in/sarah-holmes-164b14a6), [Sumir Meghani](https://www.linkedin.com/in/sumirmeghani), and [Wei Deng](https://www.linkedin.com/in/dengwei) for sharing your insights with me.*

## How to kickstarting supply in a labor marketplace

### 1. Job boards

No question, the single most popular channel for early supply growth in a labor marketplace, particularly for companies that focus on one type of role (e.g. nurses), is posting a generic role to an existing job board like Indeed, ZipRecruiter, or Craigslist. For example:

![Image from Kickstarting supply in a labor marketplace](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/98a203a8-c188-458f-b151-f0fa4ba5668c_530x175.png)
> “**Our customers tell us they use job boards when looking for work**, so we go where our customers go: job boards (like [Indeed](https://Indeed.com)). In the early days, we got a major portion of supply this way.” —Wei Deng, [Clipboard Health](https://clipboardhealth.com/)

> “**We used [Indeed.com](https://Indeed.com) and [simplyhired.com](https://simplyhired.com)** to get started on supply growth.” —Sander Daniels, [Thumbtack](https://www.thumbtack.com/)

> “**Job boards like [Indeed](https://Indeed.com), [ZipRecruiter](https://www.ziprecruiter.com/)**, and others provided approximately 50% of our supply early on.” —Peter Faist, [Staffy](https://staffy.com/)

> “**We used job boards** like [Craigslist](https://craigslist.org) to find supply. Honestly, we tried [Indeed](https://Indeed.com) and other sites, but Craigslist was by far the best for us.” —Dave Lu, [Pared](https://www.pared.com/)

> “**In the early days, we were able to leverage job boards** to recruit candidates at scale. But as we became more of a known player in the space, these relationships became more restricted/complicated. As you can imagine, many job boards don’t want a competitor openly advertising on their platform.” —Ryan Mapes, [Hired](https://hired.com/)

**Advice:** Figure out if (and where) your potential supply looks for work, and go post roles there.

### 2. Targeted **direct outreach**

Whether it was cold outreach to strangers or reconnecting with former colleagues, the second most common growth channel for these marketplaces was reaching out to potential “supply” and convincing them to join:

> “**We acquired most of our early Pros through direct outreach, often in person**. For example, we would visit San Francisco restaurants in the morning and in the late evening, waiting outside the back door to recruit cooks, dishwashers, and servers who were taking the trash out or on a break. We would walk them through our onboarding flow (speaking Spanish if needed!) and help them sign up immediately.” —Sumir Meghani, [Instawork](https://www.instawork.com/)

![Image from Kickstarting supply in a labor marketplace](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1f82a69f-5ac1-483a-86d2-8c032ffbe490_1907x1430.png)
> “**We started with the nurses in our network (family and friends, and friends of friends)** and asked each of them to refer 5 more nurses, and asked those for 5 more etc. That got us to the first 100-200. We did it that way so we could stay in touch with the first few, hear about their experience on the platform, and have really fast feedback loops.” —Iman Abuzeid, [Incredible Health](https://www.incrediblehealth.com/)

> “A successful growth channel for us in the early days was me **personally reaching out to moms via social channels** with a personalized invite.” —Allison Robinson, [The Mom Project](https://themomproject.com/)

> “**Early on, it was a lot of direct reach-out.** Scrapping LinkedIn, GitHub, etc. for lists of engineers and then reaching out directly to get them on the platform.” —Sarah Holmes, [Vettery](https://blog.vettery.com/)

> “**We’d first focus on our network of vets** that my co-founders or colleagues may know in that city and then rely immediately upon word of mouth and referrals, getting them to start talking to others in the beginning.” —Lisa Hu, [Roo](https://roo.vet/)

> “There are 800 US Military bases in the world and they each have initiatives to help service members transition to civilian life. **We identified the top 100 bases and personally reached out** to offer sharing back successful outcomes and average salary data if they referred soon-to-be veterans into our programs.” —Mike Slagh, [Shift](https://www.shift.org/)

**Advice:** Do things that don’t scale—go direct to your potential supply and convince them to try your platform.

### 3. Word of mouth + paid referrals

The third most common growth channel, and one that’s hard to engineer if your product doesn’t yet have strong product-market fit, is word of mouth, often with a referral program layered on top:

> “**Word of mouth has been by far the biggest driver** of growth for us.” —Iman Abuzeid, [Incredible Health](https://www.incrediblehealth.com/)

> “**A lot of our supply came from word of mouth.** The flywheel started to happen when they would go work at a restaurant and other workers would find out about it. Later, we had a two-sided referral program where if supply referred new supply, we would pay them $50 for each activated pro (after completing their first gig). If they referred a restaurant we would give them something like $300.” —Dave Lu, [Pared](https://www.pared.com/)

> “**Word of mouth is huge in B2B labor marketplaces** (i.e. a vet will tell his/her friends about Roo) so we ensure that the vet shift user experience on our platform is excellent, which helps to naturally have active vets tell other vets to try out Roo.
>
> We also couple that with referral promos/bonuses to try to further incentivize (e.g. ‘Refer a vet and once that vet completes her first shift, you get $300!’ type of referral promos).” —Lisa Hu, [Roo](https://roo.vet/)

> “We built some really clever components here, including the **ability to look at a given user’s contacts and suggest which ones to invite** based on their probability of also being a great candidate for our platform (e.g. an engineer).” —Ryan Mapes, [Hired](https://hired.com/)

As Lisa noted above, B2B marketplaces often have the benefit of their supply (e.g. nurses, restaurant workers, plumbers) hanging out and sharing what’s working for them—an excellent breeding ground for word of mouth. If you have this, well done. If not, life will be tougher.

**Advice:** Build something so great that your “supply” can’t help but tell their friends about it.

### 4. Paid social

The final commonly-used growth channel turned out to be paid ads on social networks, particularly LinkedIn:

> “**Paid social was extremely effective** for us early on. Particularly LinkedIn Sponsored Updates and Text Ad placements, targeting by role/company/etc. Also, Facebook custom audience targeting. We scaled this up by spreading budget across a ton of other platforms, but LinkedIn was by far the top performer.
>
> We also sponsored a ton of newsletters and eventually built a decent process for event lead gen, but that worked better for the demand side.” —Jamie Getto, [Vettery](https://blog.vettery.com/)

> “**We saw a lot of success with ads on LinkedIn, FB, and Google.** Also niche podcasts and newsletters. Surprisingly effective and low CAC.” —Ryan Mapes, [Hired](https://hired.com/)

**Advice:** Experiment with running ads on LinkedIn.

Beyond these four common tactics, founders also shared a bunch of great one-off ideas that worked well in their particular market.

### Additional tactics that worked for at least one labor marketplace:

#### 1. Upskill your supply

> “**We built cohort-based courses for transitioning service members** ([Navigating Next](https://www.shift.org/navigating-next) to figure out your goals with supportive peers) and experienced veterans ([Career Accelerator](https://shift.org/career-accelerator) to focus on group interview prep and storytelling). These programs are talent magnets and allow us to ensure we’re only featuring ready-to-interview candidates who are actively on the market—which has become a major unique selling proposition.” —Mike Slagh, [Shift](https://www.shift.org/)

#### 2. First build a community

> “**For us, we started by building a community**. We started as a meet-up like 6 years ago and then I kept running into issues in my own career in tech like sexual harassment and being underpaid etc., so at first I was like: I need to make my career safe by having an insanely good network of women who are going through the same things.
>
> And then it grew to be a huge community, and this is back when every tech company said they had a pipeline problem, but we just kept growing, so we were like—we have the pipeline right here. Then we built the product for hiring from the community, which we’d been honing for 5 years.” —Allison Esposito Medina, [Tech Ladies](https://www.hiretechladies.com/)

#### 3. Make certain there is demand

> **“We learned that to get the initial supply activated, we actually need to have some solid high-quality hospital shifts (demand) listed first to attract vet interest**. So even before we recruit the supply, we get some demand drumming (setting strong messaging/expectations to hospitals that they may not see a lot of vet requests in the beginning). But they’re OK with that, as they’re used to having very little traction getting their shifts fulfilled from non-Roo methods.” —Lisa Hu, [Roo](https://roo.vet/)

#### **4. Get press**

> “**In the early days, we saw a lot of success pitching the stories of our users to press.** When we launched the business, [the](https://www.chicagotribune.com/business/ct-mom-project-0420-biz-20160419-story.html) *[Chicago Tribune](https://www.chicagotribune.com/business/ct-mom-project-0420-biz-20160419-story.html)* [profiled a mom on our marketplace, Phoebe](https://www.chicagotribune.com/business/ct-mom-project-0420-biz-20160419-story.html), who left her job at Google. Phoebe’s story resonated so strongly with so many women, and overnight we acquired thousands of users as this article became syndicated across other outlets and mom blogs, etc.” —Allison Robinson, [The Mom Project](https://themomproject.com/)

#### 5. Do manual onboarding

> “**Candidates only had to submit partial information and then someone like me would build out their profile on a 20-minute call.** After that, they did not have to do anything but accept interview requests.” —Sarah Holmes, [Vettery](https://blog.vettery.com/)

#### 6. Concentrate on a geo

> “**Focused heavily on a select set of geos and roles**—this was key for establishing supply/demand density … which we could later leverage through lifecycle campaigns. I can’t overstate this point enough. This aligned both the supply and demand sides and was critical for our ability to scale.” —Ryan Mapes, [Hired](https://hired.com/)

#### 7. Get the messaging right

> “I learned from [James Currier](https://www.nfx.com/team/james-currier/) that everything starts with language. We set up landing pages and Facebook ads but didn’t do it randomly. We used the Wayback Machine and studied the messaging used by every known labor and non-labor marketplace … and tracked how the messaging changed over the years. So that helped make our first Facebook tests quite successful and cost-efficient: great messaging influenced by our predecessors.” —Iman Abuzeid, [Incredible Health](https://www.incrediblehealth.com/)

Have any questions, comments, or other ideas? Leave a comment!

[Leave a comment](https://www.lennysnewsletter.com/p/labor-marketplace-supply-growth/comments)

*Have a fulfilling and productive week*🙏

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

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---

## [31/61] Why now?

*This is a*🔓 ***free preview of this week’s paid post*** 🔓 *If you’d like to read the full post, [subscribe here](https://www.lennysnewsletter.com/subscribe).*

> ## Q: I’m raising money for my startup and I keep being asked, Why now? What’s the reason that what I’m building is only possible now? I don’t have a great answer. How important is it to have a “why now”?

**Short answer:** Having a strong “why now” certainly gives you a better shot at building a large and enduring business (for the reasons I cover below), but it isn’t absolutely essential. Companies like SpaceX, Airbnb, Pinterest, DoorDash, Instacart, Facebook, and Netflix had little if any *why now*. But these companies all executed like crazy in a large market, and in many cases succeeded because they rode a new trend later in their life (e.g. Netflix and broadband). Bottom line, if there isn’t a great reason why your startup is only possible now, don’t despair—you still have a shot at building a big business, but know that you’ll need to work even harder.

**Long answer:** With the help of a bunch of smart investors, Twitter, and my own research, I’ve collected *why now*s for dozens of businesses (see below), and through this research, I’ve come to some unexpected conclusions:

1. You can build a massive business without an immediate *why now*
2. A *why now* is helpful because it creates two distinct advantages
3. There are five sources of *why now*
4. Your *why now* can emerge later
5. You can still absolutely fail with an amazing *why now*

*Huge thank-you to Sarah Tavel, Ann Miura-Ko, Bill Trenchard, Josh Elman, Alexander Taussig, Garry Tan, Eric Vishria, and everyone who shared their insights [in this thread](https://twitter.com/lennysan/status/1415439833846083586) for contributing their wisdom to this post*🙏

![Image from Why now?](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/854d849d-6b5f-4108-b7d5-71e9219dcfd7_2362x6260.png)![Image from Why now?](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/82cfc1ab-f339-49a3-a398-8486d40a1ed0_2352x3938.png)

### 1. A strong *why now* creates two distinct advantages

Why do investors look for a *why now*? Because the odds that you’ll succeed go up. Investors are bet takers, and they would prefer to place bets where they see a higher expected return.

> #### “The importance of the ‘why now’ has a lot to do with the reason venture capital exists. Venture capital works because there is justification for being an unprofitable company at the outset because the opportunity later on is so huge, compounded by the fact that getting in early enables the startup to gain advantage.”
>
> #### —**Ann Miura-Ko,**Floodgate Capital

A strong *why now—*a change in the world*—*opens up one of two major advantages for your startup:

#### **1. It can unlock the ability to provide a 10x better product**

- **WebGL in browsers:** Figma
- **Adoption of fast broadband in homes:** Netflix, Twitch, YouTube
- **Smartphones with accurate GPS, 3G, and release of Google Maps API:** Uber and Lyft
- **Good enough camera on smartphones:** Instagram
- **Changes in legality of marijuana:** Eaze
- **Release of Gmail APIs:** Superhuman
- **Release of car navigation databases:** MapQuest
- **Advancements in battery technology:** Tesla

#### **2. It can create a new untapped market need**

- **Acceleration of fintech:** Plaid
- **Acceleration of e-commerce:**Shopify, Etsy, Pinduoduo
- **Acceleration of the number of online businesses:** Stripe, Google, AWS
- **Acceleration of e-sports:** Twitch
- **Increase in devices per person:**Dropbox
- **COVID-19:** Zoom, Peloton, Clubhouse, Hopin, OnlyFans, etc.

> #### “I think of markets like currents, not whether or not they are big bodies of water. The stronger the current, the higher your chance of success. ‘Why now’ is often a description of a current— a macro one. The move to cloud, the employment/cultural trends driving the creator economy, etc. are all tremendous *why nows*.”
>
> #### —Sarah Tavel, Benchmark

If you can build a 10x better product, and/or discover a growing untapped market need, you could get away without a strong *why now*. Which brings us to our second point.

### 2. You can build a massive business without an immediate *why now*

Prior to this research, I was sure that you needed to have a strong and immediate *why now* in order to build a large and enduring business. It was instilled in me through everything I learned about investing and starting a company. It turns out this is not necessarily true. Many successful companies had no strong *why now* when they got started, and instead succeeded mostly through the sheer will of their founders and great execution:

- SpaceX
- Airbnb
- Pinterest
- DoorDash
- Facebook
- Instacart
- GitLab
- Cameo
- Duolingo
- TripActions
- Netflix (DVD version)

You could argue that there were macro trends that explain why a DoorDash or an Instacart were only possible in 2013 versus a decade earlier (e.g. increased adoption of smartphones, growing expectation for on-demand services, etc.), but to me, these don’t feel fundamental to their success at that moment in time.

> #### **“Of course any startup benefits from the tightest definition of*****why now*****—if the company literally couldn’t have existed without the ‘why now.’ Platform, technology, regulatory shifts are all examples of this. Uber would not have been possible without smartphones + GPS. Salesforce wouldn’t have been possible without maturity of web browsers + widespread broadband.**
>
> #### **But great companies can also just ride one or more trends to success. The company clearly could’ve existed without these trends but wouldn’t have been nearly as successful.”**
>
> #### **—Bill Trenchard, First Round Capital**

[Subscribe to continue reading 👉](https://www.lennysnewsletter.com/p/why-now)

---

## [32/61] Why now

> ## Q: I’m raising money for my startup and I keep being asked, Why now? What’s the reason that what I’m building is only possible now? I don’t have a great answer. How important is it to have a “why now”?

**Short answer:** Having a strong “why now” certainly gives you a better shot at building a large and enduring business (for the reasons I cover below), but it isn’t absolutely essential. Companies like SpaceX, Airbnb, Pinterest, DoorDash, Instacart, Facebook, and Netflix had little if any *why now*. But these companies all executed like crazy in a large market, and in many cases succeeded because they rode a new trend later in their life (e.g. Netflix and broadband). Bottom line, if there isn’t a great reason why your startup is only possible now, don’t despair—you still have a shot at building a big business, but know that you’ll need to work even harder.

**Long answer:** With the help of a bunch of smart investors, Twitter, and my own research, I’ve collected *why now*s for dozens of businesses (see below), and through this research, I’ve come to some unexpected conclusions:

1. You can build a massive business without an immediate *why now*
2. A *why now* is helpful because it creates two distinct advantages
3. There are five sources of *why now*
4. Your *why now* can emerge later
5. You can still absolutely fail with an amazing *why now*

*Huge thank-you to Sarah Tavel, Ann Miura-Ko, Bill Trenchard, Josh Elman, Alexander Taussig, Garry Tan, Eric Vishria, and everyone who shared their insights [in this thread](https://twitter.com/lennysan/status/1415439833846083586) for contributing their wisdom to this post* 🙏

![Image from Why now](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/854d849d-6b5f-4108-b7d5-71e9219dcfd7_2362x6260.png)![Image from Why now](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/82cfc1ab-f339-49a3-a398-8486d40a1ed0_2352x3938.png)

### 1. A strong *why now* creates two distinct advantages

Why do investors look for a *why now*? Because the odds that you’ll succeed go up. Investors are bet takers, and they would prefer to place bets where they see a higher expected return.

> #### “The importance of the ‘why now’ has a lot to do with the reason venture capital exists. Venture capital works because there is justification for being an unprofitable company at the outset because the opportunity later on is so huge, compounded by the fact that getting in early enables the startup to gain advantage.”
>
> #### —**Ann Miura-Ko,** Floodgate Capital

A strong *why now—*a change in the world*—*opens up one of two major advantages for your startup:

#### **1. It can unlock the ability to provide a 10x better product**

- **WebGL in browsers:** Figma
- **Adoption of fast broadband in homes:** Netflix, Twitch, YouTube
- **Smartphones with accurate GPS, 3G, and release of Google Maps API:** Uber and Lyft
- **Good enough camera on smartphones:** Instagram
- **Changes in legality of marijuana:** Eaze
- **Release of Gmail APIs:** Superhuman
- **Release of car navigation databases:** MapQuest
- **Advancements in battery technology:** Tesla

#### **2. It can create a new untapped market need**

- **Acceleration of fintech:** Plaid
- **Acceleration of e-commerce:** Shopify, Etsy, Pinduoduo
- **Acceleration of the number of online businesses:** Stripe, Google, AWS
- **Acceleration of e-sports:** Twitch
- **Increase in devices per person:** Dropbox
- **COVID-19:** Zoom, Peloton, Clubhouse, Hopin, OnlyFans, etc.

> #### “I think of markets like currents, not whether or not they are big bodies of water. The stronger the current, the higher your chance of success. ‘Why now’ is often a description of a current— a macro one. The move to cloud, the employment/cultural trends driving the creator economy, etc. are all tremendous *why nows*.”
>
> #### —Sarah Tavel, Benchmark

If you can build a 10x better product, and/or discover a growing untapped market need, you could get away without a strong *why now*. Which brings us to our second point.

### 2. You can build a massive business without an immediate *why now*

Prior to this research, I was sure that you needed to have a strong and immediate *why now* in order to build a large and enduring business. It was instilled in me through everything I learned about investing and starting a company. It turns out this is not necessarily true. Many successful companies had no strong *why now* when they got started, and instead succeeded mostly through the sheer will of their founders and great execution:

- SpaceX
- Airbnb
- Pinterest
- DoorDash
- Facebook
- Instacart
- GitLab
- Cameo
- Duolingo
- TripActions
- Netflix (DVD version)

You could argue that there were macro trends that explain why a DoorDash or an Instacart were only possible in 2013 versus a decade earlier (e.g. increased adoption of smartphones, growing expectation for on-demand services, etc.), but to me, these don’t feel fundamental to their success at that moment in time.

> #### **“Of course any startup benefits from the tightest definition of** ***why now*****—if the company literally couldn’t have existed without the ‘why now.’ Platform, technology, regulatory shifts are all examples of this. Uber would not have been possible without smartphones + GPS. Salesforce wouldn’t have been possible without maturity of web browsers + widespread broadband.**
>
> #### **But great companies can also just ride one or more trends to success. The company clearly could’ve existed without these trends but wouldn’t have been nearly as successful.”**
>
> #### **—Bill Trenchard, First Round Capital**

One way to think about this is to look at *why now* in terms of time horizons. The more recent the change, the stronger the current. COVID-19 drove many businesses to new highs (e.g. Zoom, Peloton, Clubhouse). The move to the cloud continues to help spur new businesses, but it has much less of an impact on whether a business succeeds or not. If you can catch an existing large current (e.g. SaaS) and execute like crazy, you’ll still have a shot at building a big business.

![Image from Why now](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f63ea1df-9dd3-48ca-9330-7fcf55d6325f_2516x2780.png)

As Bill points out, so many factors contribute to the success of a startup beyond a *why now,* including:

1. Founders
2. Product
3. Distribution advantages
4. Business model
5. Market size
6. Unique insights
7. Luck

Of the companies with weak *why nows* above, they each succeeded in large part because they were able to build a 10x better product, irrespective of timing:

- **Airbnb**: Cheaper and more interesting accommodations
- **DoorDash**: Better way to get food
- **Instacart**: Better way to get groceries
- **Pinterest**: Better way to organize design ideas
- **SpaceX**: Better and cheaper way to go to space

> #### “At the highest level, truly disruptive startups typically differentiate or innovate across one or more of three dimensions:
>
> #### 1. Product - Most common thing investors anchor on is product or technology innovation
>
> #### 2. Business model - Less appreciated, the way that a company charges for or monetizes a product or service
>
> #### 3. Distribution - How the product gets in the hands of customers
>
> #### Just doing one really well will generally lead to success. If you can innovate on two or three simultaneously, you often become a truly transformative company.”
>
> #### **—Bill Trenchard, First Round Capital**

### 3. Your *why now* can emerge later

For many companies, there was no real *why now* when they got started, but the world changed around them and gave them a huge wave to ride.

> #### “PayPal started as a way to transfer money between PalmPilots, but during the course of building it, just one feature stood out: web payments. The PalmPilot apps were just an excuse to start and build, giving them a chance to discover this bigger opportunity. The random walk to product market fit does happen.”
>
> #### —Garry Tan, Initialized Capital

Additional examples:

- Netflix, and broadband adoption
- Facebook, and [growing digital camera adoption among college students](https://twitter.com/soleio/status/1415788188619116547?s=20)
- Airbnb, and the 2008 recession
- Zoom/Peloton/Shopify/Instacart, and COVID-19

### 4. There are five sources of *why now*

Building on the two distinct advantages that a strong *why nows* bring, it appears that there are five sources of *why now*:

Unlocks the ability to provide a 10x better product:

1. **Ubiquity of new technology** (e.g. Figma and WebGL, Netflix and broadband, Tesla and batteries)
2. **Newly available data or APIs** (e.g. MapQuest and navigation databases, Superhuman and Gmail APIs)
3. **Changes in regulation** (e.g. Eaze and marijuana regulation, Cerebral and loosening telemedicine restrictions)

Creates a growing untapped market need:

4. **Change in people’s behavior** (e.g. Shopify and the rise of e-commerce, Plaid and the rise of fintech)
5. **Change in people’s beliefs** (e.g. Coinbase and belief in crypto, Robinhood and the lack of trust in big banks)

When thinking through your own *why now*, figure out which of these five buckets timing most benefits you. Even better, there’s more than one.

### 5. You can absolutely fail even with an amazing *why now*

> #### **“As an example, a lot of people (me included) thought that there was an inflection point happening with respect to drones back in 2010. I forgot that the FAA’s regulatory hurdles would keep adoption properly in check, so even though we were seeing dramatic changes to product capability and even business model possibilities, there was not going to be exponential increase in adoption until some of the regulatory hurdles were taken down.”**
>
> #### —**Ann Miura-Ko,** Floodgate Capital

Also:

- **Quibi:** COVID-19
- **Cherry, Homejoy:** Adoption of other on-demand apps

Don’t expect an incredible *why now* to save you.

### 📚 Further study

1. [How to build a breakthrough](https://medium.com/@m2jr/how-to-build-a-breakthrough-3071b6415b06) by Mike Maples, Jr.
2. [How to build an enduring, multi-billion-dollar business](https://sarahtavel.medium.com/how-to-build-an-enduring-multi-billion-dollar-business-hint-create-a-10x-product-recast-3527df2b8fcb) by Sarah Tavel
3. [Two eras of the internet: pull and push](https://cdixon.org/2014/12/21/two-eras-of-the-internet-pull-and-push) by Chris Dixon

And finally, a closing thought from Alex:

> #### **“One reason that we ask the question is something my partner Jeremy Liew likes to call the ‘[Here be dragons](https://en.wikipedia.org/wiki/Here_be_dragons)’ effect. Sailors used to explore different corners of the world, but those who went to certain regions never came home. Cartographers would just put dragons on these regions of the map to imply, ‘Well, we don’t know what’s there. We just know the ships that go there don’t come home. So it may as well be dragons!’**
>
> #### **For every good idea, there are probably dozens of founders over the years who have attempted to build a company around a similar premise. And most of them are like those ships that never returned. We don’t really know what happened to them. We just know they never came back. It follows from there that, if you’re working on an idea, someone probably tried it before and failed, so what’s different now? We’ll never know what caused the other ships to sink, so let’s at least try to figure out why now is different.”**
>
> #### —Alexander Taussig, Lightspeed Venture Partners

If you have any insights, thoughts, or questions, leave a comment and let me know!

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

*Have a fulfilling and productive week*🙏

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*Browse many more open roles (or add your own) at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Read**: [38 ways to win an argument](https://www.mnei.nl/schopenhauer/38-stratagems.htm)
2. **Read:** [Who influences the influencers?](https://www.adweek.com/performance-marketing/who-influences-the-influencers/)
3. **Watch**: [The Incredible Logistics of the Tokyo Olympics](https://www.youtube.com/watch?v=B3FKtBNEBRc)

[Watch on YouTube](https://www.youtube.com/watch?v=B3FKtBNEBRc)

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

Sincerely,

Lenny 👋

---

## [33/61] Prioritizing

> ## Q: How do you prioritize your roadmap? Which prioritization framework do you recommend for a team within a mid-sized company?

Judging by [the sea of SEO thirst-trap blog posts about prioritization](https://www.google.com/search?q=prioritization+framework+product+management&sxsrf=ALeKk02hXQvP0V-ahYH0txqrrFeb_L3YJA%3A1627237077317&ei=1ar9YJvuEqW_0PEPpba28A4&oq=prioritization+frameworks+p&gs_lcp=Cgdnd3Mtd2l6EAMYADIECAAQCjIGCAAQFhAeOgcIABBHELADOgcIABCHAhAUSgQIQRgAUNQ5WLs6YNdIaAFwAngAgAGqBYgB1AaSAQUyLjUtMZgBAKABAaoBB2d3cy13aXrIAQjAAQE&sclient=gws-wiz), you aren’t a PM blogger (or PM SaaS tool) if you haven’t shared your perspective on prioritization. So here’s my advice: **In most situations, ignore most of these frameworks and just keep it simple.**

1. Make a single list of all your team’s ideas
2. T-shirt-size (XS, S, M, L, XL) each idea on two dimensions: *estimated impact* and *estimated cost*
3. Sort the list based on the highest ratio of impact-to-cost

For example:

![Image from Prioritizing](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c71d95ef-26bd-4bd3-8345-d481f021a012_880x376.png)

With this very basic framework, you’ll immediately identify 80-90% of your best opportunities and, more important, have a starting point for conversations with your team and team leads. Expect to adjust this list by 10-20% based on dependencies, hard-to-quantify opinions, and other strategic priorities.

I’ve tried so many frameworks over the years, constantly hoping to make the process less subjective. But again and again, I’ve found that there’s no way to avoid the messiness of people, opinions, and unknowns. Instead, I embrace the messiness and keep the process simple and people-focused.

For that reason, I prefer using T-shirt sizes instead of a 1-5 rating (which many people prefer) because it forces me to manually sort the list, and thus keeps me from expecting a magical math formula to give me the answers.

Throughout this process, it’s essential that you get your team’s input before finalizing anything. You most likely missed something along the way, and your team won’t feel bought-in if they don’t have a chance to share their perspective. Here’s one way to ask for their feedback:

> *Hey team,*
>
> *Here’s my first pass at our prioritized roadmap for next quarter. Take a look, and let me know if you see anything missing or misprioritized. Ideally by the end of the week* 🙏
>
> *Go team!*

Remember, prioritization is just another name for sequencing—just because it’s not currently prioritized doesn’t mean it won’t ever happen.

#### **A few templates to help you get started:**

1. [Simplest possible prioritization framework](https://docs.google.com/spreadsheets/d/1dezLP0MAXTZ3_JbbB2OEP1yCLBYPkbTOXLEI-G6ELN4/edit#gid=0)
2. [Gina’s sample prioritization template](https://docs.google.com/spreadsheets/d/1PLxx5lWSoJDk6fuBRxMAKKhYQJpnITdDcbRD9gjhpPg/edit#gid=0)
3. [Optimizely’s prioritization framework](https://docs.google.com/spreadsheets/d/17IpyLuyGyaqnS7tSx_9gVfhCvDfpwUl8TYWRomS2isQ/edit#gid=1687325850https://docs.google.com/spreadsheets/d/17IpyLuyGyaqnS7tSx_9gVfhCvDfpwUl8TYWRomS2isQ/edit#gid=1687325850)
4. [My favorite roadmap template](https://docs.google.com/spreadsheets/d/1zlx3RuidNOW40Zf7gh07p2SqoR53Ungv9JFT-PhHwxI/edit#gid=184965050)

#### **How do I estimate Impact and Cost?**

Take your best-informed guess!

Every decision is somewhere along this spectrum: **Gut <———> Complete data**.Knowing this, use all the data at your disposal (quant and qual), plus your team’s experience, to guesstimate. You are smart people—trust yourselves.

For *Impact*, look at:

- How similar projects performed in the past
- How many users per day will see the feature <— Often overlooked
- How much of an impact this will likely have on a user

Based on these, come up with the expected range of impact. You’ll often be wrong, but you’ll get better over time.

[Shreyas](https://twitter.com/shreyas) has a great metaphor for how to frame your thinking on impact:

For *Cost*, have the people who will likely work on this task estimate it. Give them time to dive into unknowns when necessary. As a PM, you can take the first stab, but always review it with the builders. Make sure to factor in all of the work involved, including research, design, engineering, and launch.

Remember that these numbers are all relative. An XL on *Impact* just means it’s the highest possible impact you can imagine, and an XL on *Cost* is the most amount of work you’d consider biting off.

#### **What about [RICE](https://www.intercom.com/blog/rice-simple-prioritization-for-product-managers/)?**

I love the theory behind RICE, but I find the two additional variables of *Confidence* and *Reach (*as independent variables with equal weight) to not be helpful enough to make the added complexity worth it. I instead bake these factors in my *Impact* estimate, and that works well enough. But if RICE works for you, stick with it!

#### What about MoSCoW, Kano, or WSJF?

I haven’t personally found these super-valuable, but many people swear by them. I’d absolutely encourage you to experiment with these if your current process isn’t working well:

1. [MoSCoW](https://www.productplan.com/glossary/moscow-prioritization/)
2. [Kano](https://www.productplan.com/glossary/kano-model/)
3. [Weighted Shortest Job First](https://www.scaledagileframework.com/wsjf/)

Also don’t miss [this amazing thread full of recommendations](https://twitter.com/lennysan/status/1418664847911256066) from 100+ people.

I highly suggest you stay away from anything that looks like this:

![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/700f8bd4-5b8a-476c-81f8-bdb1c6a8096a_1210x278.jpeg)

#### **How does strategy fit into this process?**

🚨 **WARNING** 🚨 **Do not prioritize your roadmap until you have a strategy.**

Developing a roadmap without a strategy is like heading into battle without a plan.

![Image from Prioritizing](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/09e22b76-32e0-42aa-8344-c152437b014d_356x200.gif)

It won’t end well (usually).

Your prioritization needs to be driven by your Goals/KPIs, which come from your Strategy, which are rooted in your Mission/Vision. It’s all connected 🌀

1. Mission: What are we trying to achieve?
2. Vision: What does the world (or product) look like when we’ve achieved it?
3. Strategy: How will we achieve our vision?
4. Goals: How will we measure our progress towards it?
5. **Roadmap: What do we need to build to get there? <— Don’t skip ahead**
6. Task: What should we do today?

**Here’s a helpful guide to better illustrate where the Roadmap step fits in:**

#### **How do I develop a Strategy?**

This is beyond the scope of this post, but check out [my post on product strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy), which will give you a starting point for building your strategy muscle. I also suggest reading Teresa Torres’s stuff on [opportunity mapping](https://www.producttalk.org/2020/07/opportunity-mapping/), which is a super-helpful framework for breaking down opportunities in front of you.

![A graphic that depicts an opportunity solution tree—a tree structure with a desired outcome at the root, several branches of opportunities, with solutions and experiments as the leaf nodes.](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2c8e1a74-5de9-4068-8425-6633a0dc86c0_550x392.png)

#### How do I prioritize small bets vs. big bets?

If you did your product strategy correctly, you will have identified 2-5 strategic bets your company/team plans to focus on for the next month/quarter/year. These are sometimes called strategic pillars, bets, or swimlanes.

Next, your leaders should have decided roughly what percent of available resources they want to put into each of these pillars/bets/swimlanes. Let’s say:

1. Go mobile-first: 50% of resources
2. Expand into Japan: 30% of resources
3. Revamp onboarding: 20% of resources

Great! Everyone now knows how much focus each of these bets will receive.

Now, within each of these strategic bets, you can start to mix small and big bets. I like to follow the 80/20 rule: Roughly 80% of resources go to incremental low-risk projects, and 20% go to longer-term higher-risk bets. Kind of like this:

![Image from Prioritizing](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/68ce757d-e4fe-4d01-b247-8087645e0e68_953x315.png)

Take on too many long-term big bets, and leaders will wonder why you aren’t moving your metrics (and will often pull your resources). Take on too much incremental work, and you’ll never break out of a local maximum.

I like to think of low-risk incremental bets as creating cover-fire for your big long-term bets, by moving your KPIs and showing success while you continue to make forward progress on your big ambitious bets behind the scenes🛡

![Image from Prioritizing](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/068bcb72-6b9d-4e17-9a89-f3e82539555c_478x200.gif)

#### How do I come up with potential roadmap ideas in the first place?

1. Talking to customers 👂️
2. Talking to employees who talk to customers (e.g. sales, customer support, marketing) 🤗
3. Observing your customers, through data and user research 🧐
4. Spending quality time with previous data dives and user research 🔬
5. Using the product yoursel️f 🕵️‍♀️
6. Thinking in a quiet place 🤔
7. Having small discussions with teammates 💁‍♂️
8. Working backward from your long-term vision 🤩
9. Looking into what caused users to churn 📉
10. Looking at competitors 👀
11. Looking at adjacent markets 😏
12. Looking at analogous businesses in completely different markets 🔭
13. Creating user journey storyboards 🎞
14. Having hackathons and watching the demos 👩‍💻
15. Catching technology shifts 📱

Where great ideas rarely come from:

1. A large brainstorm — bad source for big new ideas, but has other benefits such as getting everyone on the team involved in the process 🎯
2. Staying heads-down for too long — give yourself space to go big and wide on occasion 🙃
3. Copying what your competition is doing — don’t assume they actually know what they are doing 😝

#### What if I work at an early-stage startup?

Watch this:

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

Good luck!

![Image from Prioritizing](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6f010fd2-c47c-4a19-b0d5-d42f4dcc8d23_245x245.gif)

## 📚 Further study

1. [Ruthless Prioritization](https://blackboxofpm.com/ruthless-prioritization-e4256e3520a9) by Brandon Chu
2. [Opportunity Mapping](https://www.producttalk.org/2020/07/opportunity-mapping/) by Teresa Torres
3. [Product at hypergrowth: prioritization for fast-scaling startups](https://blog.superhuman.com/product-at-hypergrowth-prioritization-for-fast-scaling-startups/) by Ketki Duvvuru
4. [Where great product roadmap ideas come from](https://www.lennysnewsletter.com/p/where-great-product-roadmap-ideas)
5. [Getting better at product strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy)

*Have a fulfilling and productive week*🙏

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6. **Evisort:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/f643aa41-7b02-48a7-8bb9-8319e0a32270) (Remote—US)
7. **Truework**: [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/288da35c-9090-4186-8d57-e269611288f3) (San Francisco)
8. **Staffy**: [Head of Product](https://pallet.xyz/list/lennys-jobs/job/ed0b504b-4fa3-48bc-9716-684750df3e80) (Toronto)
9. **Quidax:**[Product Director](https://pallet.xyz/list/lennys-jobs/job/fd33811d-4b9d-40e5-b041-46db566f2d95) (Toronto)
10. **Cord:**[Head of Product](https://pallet.xyz/list/lennys-jobs/job/67d8080e-c51b-4574-ade8-cab0693984a5) (London)
11. **Rally:**[Founding Product Manager](https://pallet.xyz/list/lennys-jobs/job/55e10d59-13ea-461a-bdaa-fe8ad989b41b) (Remote—Global)
12. **Crusoe:**[Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/4bd3b894-fa7b-4f31-9022-04ca611ceaeb) (SF, Denver)

*Browse many more open roles (or add your own) at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Read**: [7 do’s and don’ts to get better at giving and receiving feedback](https://collinmathilde.medium.com/7-dos-and-don-ts-to-get-better-at-giving-and-receiving-feedback-d394bd20d1fb) by Mathilde Collin
2. **Listen**: [How Packy McCormick Plays The Great Online Game](https://ideas.beondeck.com/how-packy-mccormick-plays-the-great-online-game/)
3. **Watch**: [“When you focus on the past, that’s your ego.”](https://www.youtube.com/watch?app=desktop&v=-qLchg4xkOY)

[Watch on YouTube](https://www.youtube.com/watch?v=-qLchg4xkOY)

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

Sincerely,

Lenny 👋

---

## [34/61] How marketplaces win

> ## Q: I read your post on [why marketplaces fail](https://www.lennysnewsletter.com/p/why-marketplaces-fail), but I’m curious about the flip side—how do marketplaces *win*? What do new marketplaces need to get right in order to succeed?

It’s almost a cliché to say that marketplaces are hard—but that’s only because it’s true. On top of all the challenges that all startups need to overcome to build durable businesses (e.g. finding product-market fit, unit economics, beating the competition, etc.), marketplaces have to find PMF twice (for their supply *and* their demand), kickstart an impossibly hard flywheel, while at the same time beating out every much-simpler-to-operate non-marketplace alternative (e.g. Airbnb vs. hotels, Uber vs. taxis).

Fortunately, the marketplace model provides certain advantages which provide **three routes to success:**

1. **Increasing convenience**
2. **Lowering price**
3. **Unlocking desirable supply**

Below, I’ll explore each of these routes, along with a ton of examples. Let’s get to it!

![Image from How marketplaces win](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/92a5a7c1-e503-4781-bf7d-dcc24262b2a5_2400x1350.png)

### **Option 1: Convenience**

The first, and most common, route to marketplace success is to **deliver a significantly more convenient experience**, by aggregating previously disaggregated supply and making it much easier for your customers to trust and transact.

For example, [Thumbtack](https://thumbtack.com/) aggregated thousands of plumbers, electricians, DJs, etc. and made it infinitely easier to find, evaluate, and book one (vs. randomly Googling or looking through the yellow pages). [UrbanSitter](https://www.urbansitter.com/) did the same thing for baby-sitters, [Good Dog](https://www.gooddog.com/) for breeders, [Instawork](https://www.instawork.com/) for hourly workers, [Rover](https://rover.com/) for dog sitters, and [Eaze](https://www.eaze.com/) for 💨.

The marketplace model allows you to offer the unbeatable combination of (1) **variety** and (2) **trust**, and when a startup can deliver these reliably and on-demand, they win.

*Key question: Does your marketplace make it significantly more convenient to solve your customers' problems?*

### **Option 2: Price**

Your second option is to deliver **a significantly cheaper product** than non-marketplace alternatives, thanks to an inventoryless marketplace model and economies of scale. Surprisingly, very few marketplaces win because of this route.

The purest example is [Pinduoduo](https://en.pinduoduo.com/), a $100B company based in China that enables group buying of everyday necessities. It won in large part because it was able to offer the cheapest way to buy certain goods, made possible only by its marketplace model ([see this amazing overview of Pinduoduo’s business](https://turner.substack.com/p/pinduoduo-and-vertically-integrated)).

Otherwise, new marketplaces either use lower prices as an early wedge into the market (e.g. Lyft/Uber and Airbnb, which now win mostly through convenience or having a unique product, respectively) or later achieve lower prices through economies of scale, like Amazon.

*Key question: If you are hoping to win by offering the cheapest product, can you also become the most convenient, or sell something no one else is selling, to build a lasting moat?*

### **Option 3: Unlocking desirable supply**

A third, and maybe the most interesting, route to building a successful marketplace is to **unlock desirable supply** and then build a market around it. [Airbnb](https://www.airbnb.com/) is a classic example of this, having unlocked the supply of private rooms in people’s homes and then created a market for it. [Cameo](https://www.cameo.com/) created a market of personalized celebrity videos, [Outschool](https://outschool.com/) for online classes for 3-to-18-year-olds, and [SpotHero](https://spothero.com/) for on-demand parking spots.

[Hipcamp](https://www.hipcamp.com/en-US) and [Rover](https://rover.com/) didn’t create the market for camping and dog sitting, respectively, but they did unlock exclusive supply that made the experience for customers much more convenient than alternatives.

If you can find untapped “supply” that people didn’t know they wanted, but do, you’ll have a real shot at building a transformative marketplace. [Kevin Kwok’s excellent piece on underutilized fixed assets](https://kwokchain.com/2020/01/23/underutilized-fixed-assets/) is a great primer for going this route.

*Key question: How can you keep your supply exclusive, longer?*

### **Two additional takeaways:**

1. Although most marketplaces take one of these three routes to success, other routes exist. [Snackpass](https://snackpass.com/) and [Whatnot](https://whatnot.com/), for example, seem to have succeeded going a fourth, rarely seen, route: making the experience of ordering food and buying collectibles, respectively, simply more *fun*. Don’t limit yourself to what’s been done before.
2. Interestingly, only Lyft and Uber seem to have achieved all three options (cheapest, most convenient, and unlocking new supply). This may explain why so much money has been poured into ridesharing over the years (i.e. “such a rare opportunity!”), but at the same time, these companies aren’t anywhere near the biggest marketplace companies. This may be because they have one of the weakest moats and the worst unit economics. It’s not just about the quantity of advantages—it’s also about the quality.

Before we close, I want to touch on the other side of the marketplace: supply.

## **What supply wants**

Up to this point, we’ve focused on the demand side of the marketplace—giving customers a reason to visit and buy. In large part, this is because, long-term, you win as a marketplace if you aggregate the demand in your market.

But, you don’t have a marketplace without supply, and you don’t have supply without a compelling reason for them to join your marketplace. The good news is that the value prop on the supply side is very simple: money!

In every marketplace I’ve come across, it always comes down to money on the supply side. That being said, there is an interesting nuance in the value prop depending on whether your supply consists of *businesses* (e.g. DoorDash, Faire, Thumbtack) or *people* (e.g. Airbnb, Rover, GOAT).

#### **People-as-supply value prop:** life-changing income opportunity

When the supply side of your marketplace is regular people, like Airbnb hosts, Outschool teachers, and Cameo celebs, the value prop is essentially “Make life-changing money doing a new type of work that isn’t that hard.” Dog-sit for $50/hour, drive people around for $20/hour, or teach kids math for $100/hour. Not a bad gig. In many cases, you can make a full-time living doing a previously non-existent job, with tons of flexibility.

If you fall in this bucket, your job as a marketplace is to make this money feels real and achievable.

![Image from How marketplaces win](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1e9851e5-2e66-4409-947e-ca6c33429dbb_2154x612.png)

#### Businesses-as-supply value prop: incremental revenue

When your supply is businesses, the value prop is also simple, but different: “We’ll drive (or save you) some percentage additional revenue for your existing business.” In most cases, the marketplace will bring you more demand. For example, from DoorDash:

![Image from How marketplaces win](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/86f83316-4da6-4b7e-a1b3-d8384f569bb5_2164x754.png)

If you fall in this bucket, your job as a marketplace is to be clear about the economics and make the investment for an SMB feel worth it.

### In summary

Here’s a handy chart that summarizes your three options for winning on the demand side, and the two options on the supply side:

![Image from How marketplaces win](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/654b8d2b-149b-45e5-8528-7f0eee654858_2048x1180.png)

*Have a fulfilling and productive week*🙏

## 📚 Further study

1. [Why marketplaces fail](https://www.lennysnewsletter.com/p/why-marketplaces-fail)
2. [Evaluating (marketplace) business ideas](https://www.lennysnewsletter.com/p/evaluating-a-marketplace-business)
3. [How long it takes to find product-market Fit](https://www.lennysnewsletter.com/p/time-to-product-market-fit)
4. [Kickstarting supply in a labor marketplace](https://www.lennysnewsletter.com/p/labor-marketplace-supply-growth)
5. [How to kickstart and scale a marketplace business](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace)

*Thank you, Alex Taussig, Dan Hockenmaier, and Mike Duboe for sharing feedback on this post.*

## **🔥 Featured job opportunities**

1. **Stonks:** [Backend Web Developer, Founding team](https://pallet.xyz/list/lennys-jobs/job/4b47d0cb-9b97-41c8-88ab-e3c188e3c036) (Remote)
2. **Gtmhub:** [Director of Product Management](https://pallet.xyz/list/lennys-jobs/job/9a59fc25-67d1-4082-ba49-2b03c880500e) (Remote)
3. **Gearflow.com:** [Full Stack Software Engineer, Buyer Experience](https://pallet.xyz/list/lennys-jobs/job/bafacefd-3514-45a6-b88d-9e863a894fcd) (Chicago/Remote)
4. **Contra:** [Project Manager](https://pallet.xyz/list/lennys-jobs/job/edd82d32-289f-464a-9e93-b37d1ecaa382) (SF)
5. **Otto:** [Senior Engineer](https://pallet.xyz/list/lennys-jobs/job/88e962f7-aecf-4e50-b04e-9f6cfa3e5ff4) (Remote)
6. **Jetpack Workflow:** [Product Designer (UI/UX)](https://pallet.xyz/list/lennys-jobs/job/1653c4a3-0230-481c-a0fa-9b7203b2783d) (Remote)
7. **Pallet:** [Full Stack Software Engineer](https://pallet.xyz/list/lennys-jobs/job/4fafcda8-cfb9-4e51-9173-04dc72382ea9) (NYC/Remote)
8. **Runway Financial:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/0601f0a1-96ee-4dc5-b9fb-d613f6e212bc) (Remote)
9. **SwagUp:**[Director, Product Management (Dashboard)](https://pallet.xyz/list/lennys-jobs/job/943ab014-bcb4-4d79-8bdb-2c18f7fc0fa0) (Remote)
10. **Whatnot:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/c9d0007f-e954-4306-8776-11d994395e67) (Remote)
11. **Evisort:**[Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/f643aa41-7b02-48a7-8bb9-8319e0a32270) (Remote)
12. **Truework:**[Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/288da35c-9090-4186-8d57-e269611288f3) (SF)
13. **Staffy Inc.:** [Head of Product](https://pallet.xyz/list/lennys-jobs/job/ed0b504b-4fa3-48bc-9716-684750df3e80) (Toronto)
14. **Quidax:** [Product Director](https://pallet.xyz/list/lennys-jobs/job/fd33811d-4b9d-40e5-b041-46db566f2d95)(Toronto)

*Browse many more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch**: Tidal Range

2. **Read**: [Travel Is No Cure for the Mind](https://moretothat.com/travel-is-no-cure-for-the-mind/)
3. **Read**: [Penniless: Why a Victoria man has gone two decades without money](https://www.capitaldaily.ca/news/penniless-two-decades-without-money)

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

Sincerely,

Lenny 👋

---

## [35/61] Five habits of highly annoying product managers

> ## Q: I’m new to product management and I worry sometimes that I’m frustrating or annoying my team without knowing it. I want to avoid that, while still delivering impact. What should I be watchful for?

Product managers appear to be the most disliked function in tech. Case in point:

PMs are often seen as unempathetic, narrow-minded and, worst of all, unnecessary. This makes me sad. But it also tells me that many people simply haven’t worked with a great PM. In my experience, great PMs make everything better: They unblock blockers, stamp out uncertainty, keep everything organized, get your team more resources, protect you from constant flux, align everyone behind an inspiring mission; the list goes on. Once you’ve worked with a great PM, you’ll never want to go back.

But PMs often shoot themselves in the foot (and thus make all PMs look bad) by being, as you suggested, annoying. Especially new PMs who need to learn how to deliver results, without any real authority, under pressure.

To help you avoid becoming an annoying PM, below I’ll cover the five most annoying PMs habits, and how to avoid them:

1. **Obsessing over frameworks, processes and the “right way” to do product**
2. **Prioritizing impulsively**
3. **Expecting everything to be quick**
4. **Avoiding decisions**
5. **Being too prescriptive**

Let’s dive in.

# Five habits of highly annoying PMs

![Image from Five habits of highly annoying product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cdc0557a-3eea-430d-b359-0fdabce87964_390x259.gif)

### 1. Obsessing over frameworks, processes and the “right way” to do product

By far the best way to annoy your teammates is to obsess over the “right way” of building product, especially by treating a specific framework or process that you read about on Twitter (or certain newsletters 👀) as gospel. [I asked people on Twitter](https://twitter.com/lennysan/status/1420773875705544715) what annoys them most about PMs, and this habit came up more than any other:

Best practices from smart people are great and all, but remember—not everything you read about will work within your specific business, market and team. You may be too early-stage for a highly opinionated way of building. Your company may already work in a way that makes it impossible to work differently. You may not have a team that *wants* to change.

You can tell you’re annoying people in this way when no one around you is making an effort to learn more about, or helping you implement, the framework/process/system. Or it feels like they’re just going through the motions. Or worse yet, people make passive-aggressive jokes about your favorite framework or process.

My advice to you is to absolutely try stuff out, and continue learning from the experience of smart people sharing their wisdom, but remember that it’s more important to have a team that is bought-in and excited about your ways of working than having the perfect process.

### 2. Prioritizing **impulsively**

The next best way to annoy your team is to prioritize work without people understanding why it’s being prioritized. Particularly when (it feels like) you’re making decisions off anecdotal data. A few examples from that same Twitter thread:

Your teammates care a lot about what’s being prioritized, because their careers are in large part riding on the success of the team. If they don’t believe that what they’re working on will have a significant impact, their work (and morale) will suffer.

You can tell this is an issue when teammates frequently ask you why something is being prioritized, or push back on the task’s priority. It’s normal for this to happen, say, 10% to 20% of the time, but if you’re getting pushback more than 50% of the time, you’re probably annoying (and losing the trust of) your team.

> #### “With people, slow is fast and fast is slow.” —Stephen Covey

To avoid this, my advice is to (1) always have a strong “why this is a problem” argument in your [PRDs/1-Pagers](https://docs.google.com/document/d/1541V32QgSwyCFWxtiMIThn-6n-2s7fVWztEWVa970uo/edit) and (2) speak with the engineer, designer, etc. in person when kicking off a non-trivial project to explain the rationale behind the importance and address their concerns in real time.

### 3. Expecting everything to be quick

The next best way to annoy the heck out of your team is to suggest that everything you want them to do is going to be real *quick*.

Everyone you work with—engineers, designers, data scientists—also wishes every project could be super-quick. And maybe it could be. But everyone’s burned by promising something will be super-quick and then having to work late nights to deliver it. Instead of suggesting something will be quick, ask, “What would need to be true for this to be doable in the next x days?”

It’s totally OK to suggest something will be quick occasionally, but if you’re finding that the majority of your asks should take “just” a few hours, you’re probably annoying the sh\*t out of your team.

### 4. **Avoiding decisions**

A fourth excellent way to annoy your team is to avoid making a decision, especially until you reach a consensus. Many PMs desperately want to get to a consensus because they worry about upsetting people or being wrong. In practice, this approach just won’t work long-term, and if you ask people, they’ll often tell you that they’d rather you just make a call and move on.

> #### “Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.” —Jeff Bezos

Try this next time you’re stuck on a decision: Ask your team if they’d rather keep hashing it out or for you to just make a call. I bet you they’d rather just move on.

Another tactic you can use is to say, “It seems like we’re not going to get to a consensus here. It happens! I vote we go with x, move forward, see how it goes and change course if necessary. Everyone OK enough with that?”

For more on decision-making, check out my post on [autonomy vs. direction](https://www.lennysnewsletter.com/p/dff9723f-a141-43ec-913a-03b8b16697fe).

![Image from Five habits of highly annoying product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e3dc62b4-1fec-4d59-aafb-d54e090e9246_1456x1830.jpeg)

### 5. Being overly prescriptive

A final way to surely annoy your team is to be overly prescriptive about what to build. Basically, leave zero room for creative thought.

There’s a fine line between articulating the important details of a project spec and spending three pages explaining one button. This annoying habit can apply to both the beginning of a project, telling designers and engineers exactly how a feature needs to work, and also at the end when you spec out each feature for days.

You can tell this is annoying your team if your specs are longer than any other PMs’ you work with, if your designers and engineers don’t really use your documents, or if you hear from your manager that your team is feeling micromanaged.

My advice is simple: Prioritize conversation over documentation. It’s easy to default to more documentation and detail every time one of your teammates misunderstands something. Instead, use that experience to narrow in on what types of nuances need to be clarified in writing vs. discussing. Don’t assume more writing and documentation will solve these problems.

### In closing

As a PM, you are 100% guaranteed to annoy people. You’re in the line of all communication, you’re dealing with people all day, and you have to make complicated decisions under stress daily.

Being self-aware enough to know this puts you ahead of many PMs. I hope that the pointers above put you even further ahead, and make you a less annoying PM—for the good of your team and for all product-management-kind.

*Have a fulfilling and productive week*🙏

## 📚 Further study

1. [14 habits of highly effective product managers](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product)
2. [A three-step framework for solving problems](https://www.lennysnewsletter.com/p/a-three-step-framework-for-solving)
3. [What are the top 10 things you hate about product managers?](https://www.quora.com/What-are-the-top-10-things-you-hate-about-Product-Managers)

## **🔥 Featured job opportunities**

1. **Fabulous**: [Product Manager](https://pallet.xyz/list/lennys-jobs/job/aba1b987-d8fe-4160-be34-43ea3fe18079) (Remote)
2. **Stonks**: [Backend Web Developer, Founding team](https://pallet.xyz/list/lennys-jobs/job/4b47d0cb-9b97-41c8-88ab-e3c188e3c036) (Remote)
3. **Gtmhub**: [Director of Product Management](https://pallet.xyz/list/lennys-jobs/job/9a59fc25-67d1-4082-ba49-2b03c880500e) (Remote)
4. **Gearflow**: [Full Stack Software Engineer, Buyer Experience](https://pallet.xyz/list/lennys-jobs/job/bafacefd-3514-45a6-b88d-9e863a894fcd) (Chicago/Remote)
5. **Contra**: [Project Manager](https://pallet.xyz/list/lennys-jobs/job/edd82d32-289f-464a-9e93-b37d1ecaa382) (SF)
6. **Otto**: [Senior Engineer](https://pallet.xyz/list/lennys-jobs/job/88e962f7-aecf-4e50-b04e-9f6cfa3e5ff4) (Remote)
7. **Jetpack Workflow:** [Product Designer (UI/UX)](https://pallet.xyz/list/lennys-jobs/job/1653c4a3-0230-481c-a0fa-9b7203b2783d) (Remote)
8. **Pallet**: [Full Stack Software Engineer](https://pallet.xyz/list/lennys-jobs/job/4fafcda8-cfb9-4e51-9173-04dc72382ea9) (NYC/Remote)
9. **Runway:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/0601f0a1-96ee-4dc5-b9fb-d613f6e212bc) (Remote)
10. **SwagUp**: [Director, Product Management (Dashboard)](https://pallet.xyz/list/lennys-jobs/job/943ab014-bcb4-4d79-8bdb-2c18f7fc0fa0) (Remote)
11. **Whatnot**: [Product Manager](https://pallet.xyz/list/lennys-jobs/job/c9d0007f-e954-4306-8776-11d994395e67) (Remote)
12. **Evisort**: [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/f643aa41-7b02-48a7-8bb9-8319e0a32270) (Remote)
13. **Truework**: [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/288da35c-9090-4186-8d57-e269611288f3) (SF)
14. **Staffy:** [Head of Product](https://pallet.xyz/list/lennys-jobs/job/ed0b504b-4fa3-48bc-9716-684750df3e80) (Toronto)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

Sincerely,

Lenny 👋

---

## [36/61] The Best of Lenny’s Newsletter 2021

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s*✨ ***free 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. Subscribe to get this newsletter every week* 👇

> ## Q: I recently discovered your newsletter, and I’m finding it hard to browse your posts. Is there someplace I can find your best stuff, ideally grouped by topic?

After two and a half years of putting out this newsletter every single week, we’re now at over 150 posts. Discoverability has become a problem. So let’s fix that. Below, I’ve collected my best posts, from day one until today, roughly sorted by popularity, across nine topics:

1. 📈 **Growth strategy**
2. 🤌 **Product management, the work**
3. 🦸‍♀️ **Product management, the career**
4. **🔭 Finding product-market fit**
5. **📣 Marketing and GTM**
6. **🌱 Scaling your startup**
7. **🎭 Marketplaces**
8. **📊 Metrics**
9. **💼 Management and career**

Going forward, I’ll make this post a living document to track all the best stuff I put out across any channel, so bookmark it for future reference. And enjoy!

![Image from The Best of Lenny’s Newsletter 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5d0529d9-b608-44e5-8711-76a3a7b74735_2048x1024.png)

## 📈 Growth strategy

1. [How the biggest consumer apps got their first 1,000 users](https://www.lennysnewsletter.com/p/how-the-biggest-consumer-apps-got)
2. [How the fastest-growing B2B businesses found their first 10 customers](https://www.lennysnewsletter.com/p/how-todays-fastest-growing-b2b-businesses)
3. [Improving retention](https://www.lennysnewsletter.com/p/how-to-increase-your-products-retention)
4. [Improving conversion](https://www.lennysnewsletter.com/p/this-week-21-strategy-and-tactics)
5. [Increasing virality](https://www.lennysnewsletter.com/p/increasing-virality)
6. [Building a referrals program](https://www.lennysnewsletter.com/p/this-week-16-building-a-referrals)
7. [Winning at content-driven growth](https://www.lennysnewsletter.com/p/content-driven-growth-strategy)
8. [Winning at SEO](https://www.lennysnewsletter.com/p/crafting-an-seo-strategy-issue-34)
9. [The Racecar Growth Framework](https://www.reforge.com/blog/racecar-growth-framework)
10. [Magical growth loops](https://www.lennysnewsletter.com/p/magical-growth-loops)
11. [Six rules of hiring for growth](https://www.lennysnewsletter.com/p/hiring-growth)
12. [Breaking into growth](https://www.lennysnewsletter.com/p/breaking-into-growth)

## 🤌 Product management, the work

1. [Getting better at product strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy)
2. [My favorite product management templates](https://www.lennysnewsletter.com/p/my-favorite-templates-issue-37)
3. [Prioritizing a roadmap](https://www.lennysnewsletter.com/p/prioritizing)
4. [Where great product roadmap ideas come from](https://www.lennysnewsletter.com/p/where-great-product-roadmap-ideas)
5. [The top 5 things PMs should know about engineering](https://www.lennysnewsletter.com/p/the-top-5-things-pms-should-know)
6. [The Minto Pyramid Principle and the SCR framework](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr)
7. [What Buddhism taught me about product management](https://www.lennysnewsletter.com/p/what-buddhism-taught-me-about-product)

## 🦸‍♀️ Product management, the career

1. [What is product management](https://www.lennysnewsletter.com/p/what-is-product-management)
2. [How to get into product management (and thrive)](https://www.lennysnewsletter.com/p/how-to-get-into-product-management)
3. [Should I become a product manager?](https://www.lennysnewsletter.com/p/become-a-product-manager)
4. [Becoming a senior product manager](https://www.lennysnewsletter.com/p/senior-product-manager)
5. [My favorite PM interview questions](https://www.lennysnewsletter.com/p/my-favorite-pm-interview-questions)
6. [14 habits of highly effective product managers](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product)
7. [How to know if you’re doing a good job as a product manager](https://www.lennysnewsletter.com/p/doing-a-good-job-product-manager)
8. [When to hire your first product manager](https://www.lennysnewsletter.com/p/when-to-hire-your-first-product-manager)
9. [Surviving as the first product manager](https://www.lennysnewsletter.com/p/joining-as-the-first-product-manager)
10. [A comprehensive survey of product management](https://www.lennysnewsletter.com/p/product-management-survey)
11. [Product management career ladders](https://www.lennysnewsletter.com/p/jobs-of-product-manager)

## 🔭 Finding product-market fit

1. [How to know if you’ve got product-market fit](https://www.lennysnewsletter.com/p/how-to-know-if-youve-got-productmarket)
2. [What it feels like when you’ve found product-market fit](https://www.lennysnewsletter.com/p/what-it-feels-like-when-youve-found)
3. [How long it takes to find product-market fit](https://www.lennysnewsletter.com/p/time-to-product-market-fit)
4. [What to ask your users about product-market fit](https://www.lennysnewsletter.com/p/interviewing-users-for-product-market)

## 📣 Marketing and GTM

1. [Positioning](https://www.lennysnewsletter.com/p/positioning)
2. [Picking a wedge](https://www.lennysnewsletter.com/p/wedge)
3. [Generating buzz](https://www.lennysnewsletter.com/p/creating-buzz-at-launch)
4. [GTM motions of 30 B2B SaaS companies](https://www.lennysnewsletter.com/p/gtm-motions)
5. [Finding your distribution advantage](https://www.lennysnewsletter.com/p/distribution-advantages)
6. [How people discover new products](https://www.lennysnewsletter.com/p/how-people-discover-new-products)
7. [Pricing your SaaS product](https://www.lennysnewsletter.com/p/saas-pricing-strategy)

## 🌱 Scaling your startup

1. [A playbook for fundraising](https://www.lennysnewsletter.com/p/a-playbook-for-fundraising)
2. [A founder’s guide to community](https://www.lennysnewsletter.com/p/building-community)
3. [The secret to a great planning process](https://review.firstround.com/the-secret-to-a-great-planning-process-lessons-from-airbnb-and-eventbrite)
4. [Increasing team velocity](https://www.lennysnewsletter.com/p/increasing-velocity-issue-61)
5. [Layering sales onto a bottom-up self-serve product](https://www.lennysnewsletter.com/p/sales-bottom-up)
6. [What seven years at Airbnb taught me about building a business](https://www.lennysnewsletter.com/p/what-seven-years-at-airbnb-taught)

## 🎭 Marketplaces

1. [How to kickstart and scale a marketplace business](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace)
2. [How marketplaces win](https://www.lennysnewsletter.com/p/how-marketplaces-win)
3. [How marketplaces fail](https://www.lennysnewsletter.com/p/why-marketplaces-fail)
4. [Evaluating a (marketplace) business idea](https://www.lennysnewsletter.com/p/evaluating-a-marketplace-business)
5. [Choosing a take rate](https://www.lennysnewsletter.com/p/take-rates)
6. [Kickstarting supply in a labor marketplace](https://www.lennysnewsletter.com/p/labor-marketplace-supply-growth)

## 📊 Metrics

1. [What is good retention?](https://www.lennysnewsletter.com/p/what-is-good-retention-issue-29)
2. [What is a good payback period?](https://www.lennysnewsletter.com/p/payback-period)
3. [Choosing your north-star metric](https://future.a16z.com/north-star-metrics/)
4. [Setting goals](https://www.lennysnewsletter.com/p/setting-goals-issue-23)
5. [The most important consumer subscription metrics to track](https://www.lennysnewsletter.com/p/the-most-important-consumer-subscription)
6. [The most important bottom-up SaaS metrics to track](https://www.lennysnewsletter.com/p/the-most-important-bottom-up-saas)

## 💼 Management and career

1. [The 10 commandments of salary negotiation](https://www.lennysnewsletter.com/p/negotiating-comp)
2. [Navigating your early career](https://www.lennysnewsletter.com/p/navigating-your-early-career-issue)
3. [Performance reviews](https://review.firstround.com/the-power-of-performance-reviews-use-this-system-to-become-a-better-manager)
4. [Managing up](https://www.lennysnewsletter.com/p/managing-up)
5. [On taking time off](https://www.lennysnewsletter.com/p/sabbatical-time-off)

To make sure you don’t miss any future posts, and to instantly get access to every past issue, subscribe here 👇

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

1. **Snackpass:** [Product Manager, Payments](https://pallet.xyz/list/lennys-jobs/job/e3813aa9-51f9-405d-ab6b-b6e3338c4397) (SF, NYC, LA, Remote)
2. **Fabulous:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/aba1b987-d8fe-4160-be34-43ea3fe18079) (Remote)
3. **Stonks:** [Backend Web Developer, Founding team](https://pallet.xyz/list/lennys-jobs/job/4b47d0cb-9b97-41c8-88ab-e3c188e3c036) (Remote)
4. **Gtmhub:** [Director of Product Management](https://pallet.xyz/list/lennys-jobs/job/9a59fc25-67d1-4082-ba49-2b03c880500e) (Remote)
5. **Gearflow:** [Full Stack Software Engineer, Buyer Experience](https://pallet.xyz/list/lennys-jobs/job/bafacefd-3514-45a6-b88d-9e863a894fcd) (Chicago/Remote)
6. **Contra:** [Project Manager](https://pallet.xyz/list/lennys-jobs/job/edd82d32-289f-464a-9e93-b37d1ecaa382) (SF)
7. **Otto:** [Senior Engineer](https://pallet.xyz/list/lennys-jobs/job/88e962f7-aecf-4e50-b04e-9f6cfa3e5ff4) (Remote)
8. **Jetpack Workflow:**[Product Designer (UI/UX)](https://pallet.xyz/list/lennys-jobs/job/1653c4a3-0230-481c-a0fa-9b7203b2783d) (Remote)
9. **Pallet:** [Full Stack Software Engineer](https://pallet.xyz/list/lennys-jobs/job/4fafcda8-cfb9-4e51-9173-04dc72382ea9) (NYC/Remote)
10. **Runway:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/0601f0a1-96ee-4dc5-b9fb-d613f6e212bc) (Remote)
11. **SwagUp:** [Director, Product Management (Dashboard)](https://pallet.xyz/list/lennys-jobs/job/943ab014-bcb4-4d79-8bdb-2c18f7fc0fa0) (Remote)
12. **Whatnot:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/c9d0007f-e954-4306-8776-11d994395e67) (Remote)
13. **Evisort:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/f643aa41-7b02-48a7-8bb9-8319e0a32270) (Remote)
14. **Truework:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/job/288da35c-9090-4186-8d57-e269611288f3) (SF)

*Browse many more open roles, and add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch**: [Creating a Space Game with OpenAI Codex](https://openai.com/blog/openai-codex/#spacegame)

[Watch on YouTube](https://www.youtube.com/watch?v=Zm9B-DvwOgw)

2. **Read**: [The French Burglar Who Pulled Off His Generation’s Biggest Art Heist](https://www.newyorker.com/magazine/2019/01/14/the-french-burglar-who-pulled-off-his-generations-biggest-art-heist)
3. **Learn**: [On Presentations](https://www.beautiful.ai/player/-LiSV45O9K1sE8uv5oMj/On-Presentations), by Siqi Chen

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

Sincerely,

Lenny 👋

---

## [37/61] GTM motions of 30 B2B SaaS companies

> ## Q: I’m building a B2B SaaS startup and I’m trying to decide which market segment to go after (e.g. Mid-market, Enterprise, etc.) and how to get to them (product-led vs. sales-led). Do you have any advice?

Product-led, bottom-up, top-down, Mid-market—so many buzzwords, and so many options. Yet going after the wrong segment, with the wrong strategy, could set your company back months, if not years. And startups have very little time to spare.

Since I’ve never built a B2B SaaS startup myself, I don’t have firsthand advice I can confidently dispense, but what I can offer instead (and is likely more useful) is **a thoroughly researched first-of-its-kind breakdown of how 30 of today’s fastest-growing B2B SaaS companies approached their GTM strategy**.

Below, I’ll share who companies like Airtable, Datadog, Figma, Notion, and Stripe went after initially, how they went after them, how that changed over the years, plus five illuminating takeaways that emerged from this research.

But before we dive in, let’s first define some terms.

#### **Product-Led Growth vs. Sales-Led Growth**

- **Product-led:** The product is self-serve (with a freemium or trial offering), and users become customers after using the product on their own. They also generally discover your product through SEO, ads, or referrals. This includes companies like **Figma**, **Datadog**, and **Airtable**.
- **Sales-led:** The product requires someone from the company (usually a salesperson) to onboard you, and new customers generally try the product only after a salesperson reaches out. This includes companies like **Workday**, **Snowflake**, and **Salesforce**.

#### Top-Down vs. Bottom-Up

- **Top-down:** You go after leaders (e.g. execs, VPs, heads-of) within the organization, who buy and spread your product throughout the company top-down. This includes companies like **Workday**, **Carta**, and **Square**.
- **Bottom-up:** You target individual contributors within a company, who spread the product bottom-up, eventually enabling you to sell and expand the product companywide. This includes companies like **Datadog**, **GitHub**, and **Coda**.

#### Other terms

- **Sales assist:** A sales team helps close and expand larger accounts that primarily come through a product-led motion (vs. outbound sales).
- **Bottom-up lead gen:** A sales-led company with a self-serve product that is primarily designed to drive leads to the sales team (not generate revenue).

#### Business segments

- **VSB (very small business):** <10 employees
- **SMB (small or midsize business):** 10-99 employees
- **Mid-market:** 100-1,000 employees
- **Enterprise:** >1,000 employees

*🙏 A HUGE thank-you to everyone who helped me with this post: [Ann Montgomery](https://www.linkedin.com/in/annmontgomery/), [Bri Kimmel](https://twitter.com/briannekimmel), [Brian Balfour](https://brianbalfour.com/), [Cailen D’Sa](https://www.linkedin.com/in/cailen), [ChenLi Wang](https://www.linkedin.com/in/chenliw), [Jackie Bavaro](https://www.linkedin.com/in/jackiebavaro), [Jamie Quint](https://www.linkedin.com/in/jamiequint), [Jeff Chang](https://twitter.com/jeffchang30?lang=en), [Keenan Rice](https://www.linkedin.com/in/keenanrice), [Kenny Mendes](https://twitter.com/kmendes?lang=en), [Nate Abbott](https://www.linkedin.com/in/naabbott), [Tai Rattigan](https://www.linkedin.com/in/tairattigan), [Tom Preston-Werner](https://twitter.com/mojombo), and [Zoelle Egner](https://twitter.com/zoelle) 🙏*

### Top five takeaways:

1. 100% of product-led companies end up adding a sales team, if not going sales-led completely
2. Everyone moves upmarket—few go the other direction
3. Almost everyone starts by going after VSBs or SMBs (aka startups)
4. Everyone targets one (and max three) personas within an organization
5. Sales-led companies often add a bottom-up self-serve product, primarily to drive lead gen

Let’s dive deeper.

![Image from GTM motions of 30 B2B SaaS companies](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b2774061-76f6-487f-a7f2-1cb6974cb040_2400x9912.png)

### 1. 100% of product-led companies end up adding a sales team, if not going sales-led completely

Of the 30 companies I looked at, 19 of them started off product-led, but *100% of them* added a sales team to assist with growth/expansion. Four completely switch to a sales-led motion. Interestingly, zero went the other way (from sales-led to product-led).

Why does this happen? Well, one reason is that most products can’t achieve lasting wall-to-wall adoption without a high-level decision maker signing-off:

> #### “Some companies (Slack, Airtable, Asana, Notion, Figma) can get pretty huge and still work with self-organization—you don’t need a VP of X to ‘roll out’ Slack and force everyone on. It just happens. But many SaaS subverticals are ‘all or nothing’: you can’t use two equity management products, customer support tools, or HR systems. For these, generally there’s a single decision maker who’s better reached via sales-led motions vs. product-led.”
>
> #### —[Nate Abbott](https://www.linkedin.com/in/naabbott/), Head of Product at Front

Another reason companies go upmarket is that venture-scale businesses need to keep growing, and to keep growing you need to find bigger dollars. Which means going after larger companies. And once you get to Mid-market and Enterprises, you need humans to sell, educate, and win deals. Which means a sales team.

> #### “Initial growth at successful early-stage bottom-up companies is often the result of a product-driven flywheel: The product’s value and appeal drive individual user adoption, which in turn drive viral momentum through word of mouth, while product upgrades and individual usage often lead to team adoption.
>
> #### However, as products proliferate through an Enterprise customer, there’s a limit to the users who want or are able to discover, use, and pay for it on their own. As the company starts to scale, relying purely on self-serve often results in an asymptotic flattening of the growth curve, resulting in linear or worse, declining growth.”
>
> #### —[Sarah Wang and David George](https://a16z.com/2020/12/03/adding-top-down-sales-bottom-up-enterprise-startup/), a16z

For companies that completely shifted from product-led to sales-led (e.g. Box, Front, Intercom, Zendesk), I don’t know the specifics behind these shifts, but I hear the transitions were difficult and took a long time to manifest. It took Zendesk 10 years to make the switch. Though I imagine this was absolutely necessary because these products weren’t selling effectively through a self-serve motion.

If you’re going through this transition, don’t miss [this post by Pete Kazanjy](https://www.lennysnewsletter.com/p/sales-bottom-up) that walks you through the process of layering on sales.

### 2. Everyone moves upmarket—few go the other direction

On the same note, *every one* of the companies I looked at moved upmarket. Sometimes this move was in addition to their initial market, and sometimes they left behind that initial market. A few examples:

- **Amplitude:** SMBs —> Enterprises
- **Box:** SMBs —> Mid-market + Enterprises
- **Datadog:** SMBs —> SMBs + Mid-market + Enterprises
- **Gusto:** VSBs —> SMBs
- **Slack:** SMBs —> Mid-market + Enterprises

Knowing that you’ll eventually need to move upmarket, here’s what my buddy Jeff Chang pointed out when I ran this draft by him:

> #### “One thing hidden from this data is many startups successfully sell to SMBs but can’t cross over to Enterprise to get big and don’t end up in Lenny’s Newsletter. It’s good to test for enterprise demand ASAP to de-risk a startup.”
>
> #### —[Jeff Chang](https://twitter.com/JeffChang30), founder and ex-growth at Pinterest

Very few companies moved downmarket, and when they did, it was primarily an expansion into all stages of business (vs. giving up their initial market segment):

- **HubSpot:** Mid-market —> All stages
- **Notion:** SMBs —> All stages
- **Plaid:** SMBs —> All stages
- **Twilio:** VSBs and SMBS —> All stages
- **Zendesk:** VSBs and SMBS —> All stages

> #### “I think the reason companies go upmarket, vs. downmarket, is that starting downmarket requires you to focus on simplicity, to create the self-serve, frictionless motion. It is easier to add things to adapt to enterprise than it is to start complex and then simplify over time. Removing features, flows, permissions, data fields, salespeople, etc. goes against the natural motion of orgs—which is to *add*.”
>
> #### —[Brian Balfour](https://brianbalfour.com/), founder of Reforge

Though you can still get very big without moving far upmarket for many years (e.g. Calendly, Canva, Zapier), what this data tells me is that your initial market is just that—your initial market. Eventually, you’ll be pulled upmarket.

### 3. Almost everyone starts by going after VSBs or SMBs

Of the 30 companies I looked at, 21 went after VSBs and SMBs early on.

> #### “The conventional wisdom is you don’t go straight to Enterprise. You solve a specific problem first, and then you layer in Enterprise requirements like governance, compliance, etc. They [Enterprises] generally also move slower, so it makes sense to start with more nimble customers first.”
>
> #### —[ChenLi Wang](https://www.linkedin.com/in/chenliw), GP at WndrCo, ex-growth at Dropbox, Workday

Only three (Workday, Snowflake, Databricks) started out focusing on Enterprises, and only two (Retool, HubSpot) started out focusing on the Mid-market.

So how do you know where to start? VSBs or SMBs are the safest bet at first because these companies can make faster decisions, there’s less compliance/security risk, and you won’t need a robust sales team immediately. They are also more likely to be the early-adopter types.

> #### “In most markets, the SMB segment is varied enough to allow a startup to win larger and larger customers every quarter without making the leap to Mid-market or Enterprise. While it’s a long way to the top, a rapid ascent upmarket for an SMB SaaS business can be both unnecessary and destabilizing.”
>
> #### —[Adam Fisher](https://www.bvp.com/atlas/moving-upmarket-and-the-ascent-of-smb-saas), Partner at Bessemer Venture Partners

How do you choose between VSBs (i.e. super-early-stage startups) and SMBs (i.e. somewhat more established startups)? Three pieces of advice:

1. **Default to SMB.** Practically speaking, you should prioritize customers who are likely to survive, and very-early-stage startups are not known for their long-term survival.
2. **Follow the pain**. Which scale of company, and who at this company, is most feeling the pain you’re solving? The more pain, the easier the sell.
3. **Find the early adopters**. Who is most likely to give your newfangled, half-baked, hard-to-trust, product a try? Is it engineers at VSBs? Eng managers at SMBs? Helping a few of them be successful will provide social proof to future, less-early-adopter types.

You can also experiment with both segments to see where you feel the stronger pull.

Zooming out, it also sometimes makes sense to go straight to Enterprise. My take is that you do this **only if the pain point you’re solving is specific (or** ***far*** **more acutely felt) within Enterprise businesses**. For example, scaling your data workflows (e.g. Snowflake, Databricks), keeping tabs on your quickly expanding team (e.g. Workday), tracking leads (e.g. HubSpot), staying in compliance (e.g. Vanta), procurement, etc. are Enterprise-specific problems. Winning here out of the gate becomes a huge advantage if you can pull it off, but it also requires a patient sales-led GTM strategy. If you’re going down this road, don’t miss the book *[Founding Sales](https://www.foundingsales.com/)*.

### 4. Everyone targets one (and max three) personas within an organization

Everyone I looked at, other than Dropbox and Notion, had a very specific role or function they targeted within organizations, right out of the gate. For example:

- **Amplitude:** Mobile PMs and growth leads
- **Box:** IT managers
- **Front:** Ops, sales, and support leads
- **Looker:** VP of Eng or head of data
- **Retool:** Internal tools engineers

Though this may take time to nail down, it’s important to figure out not just your market segment and GTM motion but also *who* within an organization you want to target.

> #### “Attacking everyone will pull your product in different directions, require you to build expertise in multiple channels at once, communicate to different types of customers at once, etc. It’s better to focus on one part of the market.”
>
> #### —[Brian Balfour](https://brianbalfour.com/essays/key-lessons-for-100m-growth), Reforge

The beauty of product-led growth is you get a broad swath of adoption, and through that swath, you can find where the pull ends up being the strongest. The more focused you can get, the easier it’ll be to nail your positioning, outreach, and product strategy.

### 5. Sales-led companies often add a bottom-up self-serve product, primarily to drive lead gen

A final takeaway for me from this research is that many sales-led companies—including HubSpot, Salesforce, Box, Databricks, and Zendesk—that previously required a demo before using the product later added a self-serve product that they use primarily to generate leads for their sales teams. Experimenting with a product-led strategy often pays off.

> #### “If your company’s growth is driven by sales, acquisition is driven by how quickly the sales team can convert leads to customers. In other words, new customer growth is a function of how many salespeople you can hire and how quickly. However, there are enough customers out there who want to kick the tires and try your product without getting into a long-term protracted negotiation with a salesperson. If you don’t have self-serve onboarding, you will miss out on all these customers. And the biggest tragedy? You won’t ever know that you missed out on them.”
>
> #### —[Gokul Rajaram](https://medium.com/@gokulrajaram/self-serve-first-the-overlooked-but-essential-paradigm-underlying-great-software-companies-45a67dbec4c4), DoorDash

### In closing

When planning your GTM motion, you basically have three decisions, each of which with a very small number of options:

1. **What market segment to go after**

1. VSB
   2. SMB
   3. Mid-market
   4. Enterprise
2. **Who to go after within the organization**

1. **Top-down:** Founders, VP of x, Head of y, etc.
   2. **Bottom-up:** Internal tools engineers, IC designers, etc.
3. **How to get to them**

1. **Product-led:** A self-serve product that users discover through SEO, ads, or referrals
   2. **Sales-led:** A gated product that users discover through outbound sales

I hope this post gives you a better sense of where your product fits, and thus where to get started 🙏

If you spend time with the table above and notice any other takeaways, I’d love to hear them 👇

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

## 📚 Further study

1. [The Transition: Layering sales onto a bottom-up self-serve product](https://www.lennysnewsletter.com/p/sales-bottom-up)
2. [Growth+Sales: The New Era of Enterprise Go-to-Market](https://a16z.com/2020/07/29/growthsales-the-new-era-of-enterprise-go-to-market/)
3. [Why Most Companies Fail at Moving Up or Down Market](https://brianbalfour.com/essays/key-lessons-for-100m-growth)
4. [SaaS Go-to-Upmarket](https://future.a16z.com/podcasts/saas-go-to-upmarket/)
5. [The “$20M to $500M” Question: Adding Top Down Sales](https://a16z.com/2020/12/03/adding-top-down-sales-bottom-up-enterprise-startup/)
6. [Moving upmarket and the ascent of SMB SaaS](https://www.bvp.com/atlas/moving-upmarket-and-the-ascent-of-smb-saas)
7. [Self-serve first: the overlooked but essential paradigm underlying great software companies](https://medium.com/@gokulrajaram/self-serve-first-the-overlooked-but-essential-paradigm-underlying-great-software-companies-45a67dbec4c4)
8. [Picking a GTM Motion](https://www.field-guide.unusual.vc/field-guide-enterprise/picking-a-gtm-motion)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job opportunities**

1. **Snackpass**: [Product Manager, Payments](https://pallet.xyz/list/lennys-jobs/job/e3813aa9-51f9-405d-ab6b-b6e3338c4397) (SF, NYC, LA, Remote)
2. **Fabulous**: [Product Manager](https://pallet.xyz/list/lennys-jobs/job/aba1b987-d8fe-4160-be34-43ea3fe18079) (Remote)
3. **Stonks**: [Backend Web Developer, Founding team](https://pallet.xyz/list/lennys-jobs/job/4b47d0cb-9b97-41c8-88ab-e3c188e3c036) (Remote)
4. **Gtmhub**: [Director of Product Management](https://pallet.xyz/list/lennys-jobs/job/9a59fc25-67d1-4082-ba49-2b03c880500e) (Remote)
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*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch**: [Building the Perfect Squirrel Proof Bird Feeder](https://www.facebook.com/MarkRoberYouTube/videos/727828361391817/)

[Watch on YouTube](https://www.youtube.com/watch?v=hFZFjoX2cGg)

1. **Read**: [What Is Happening to Facebook Performance Post iOS14.5?](https://www.thesistesting.com/insights/what-is-happening-to-facebook-performance-post-ios14-5)
2. **Read:** [Stack Overflow Developer Survey 2021](https://insights.stackoverflow.com/survey/2021)

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

Sincerely,

Lenny 👋

---

## [38/61] Examples and templates of 1-Pagers and PRDs

> ## Q: Do you have any examples of great 1-Pagers/PRDs/product specs? I’m looking for a structure I can borrow and inspiration for what great looks like.

It’s particularly hard to find real-life examples of great 1-Pagers and PRDs (product requirements documents), in part because honestly most of them aren’t very good, but mostly because these documents have confidential information in them and thus aren’t readily shared.

The good news is that if you’re at a mid-to large-size company, you have the rare gift of having access to boatloads of real-world 1-Pagers from past and current projects. Don’t squander it. Pick a few projects that were big successes, find their original 1-Pagers, and study them. Seriously, add this to your to-do list for next week. You’ll learn a lot.

For the rest of us peons, don’t worry, I got you. Below, I’ve pulled together a handful of solid 1-Pagers, with added commentary, plus a bunch of A+ templates that I love. If you’ve come across any other examples of 1-Pagers/PRDs in the wild that you can share, leave a comment and I’ll add it to the list 👇

[Leave a comment](https://www.lennysnewsletter.com/p/prds-1-pagers-examples/comments)

### **But first, what makes a great 1-Pager/PRD?**

As you read through these 1-Pagers, look for these elements that make them effective:

1. **Problem-oriented:** They crystallize the problem being solved in a few strong sentences—ideally near the top of the document—to focus the brainpower of every teammate in the same direction.
2. **Clear success criteria:** They super-specifically define what success looks like when the product or feature ships, at first to make sure it’s even worth doing, and later to help everyone make tradeoff decisions throughout the project.
3. **Just enough direction:** They give the reader (e.g. engineers, designers, managers) just enough an idea of what the project will entail—including requirements and constraints—without eliminating the opportunity for (your super-smart) teammates to come up with even better solutions.
4. **Urgency:** There’s a clear (proposed) timeline by which to review, align on, build and ship the project, to keep the project moving forward (and from exploding in scope).
5. **Short and sweet:** In the end, if you want this document to be used, it needs to be readable. So keep it brief (that’s why I like the term 1-Pager), clean up formatting and comments anytime it starts to get messy, and put additional context into an appendix at the end.

With that, some examples.

### Examples of 1-Pagers/PRDs

**1. [Lost and Found (Lyft)](https://drive.google.com/file/d/1koKv1Elt8_NAzcWwpbd0llp8LDEs1e-z/view?usp=sharingg+links+to+designs%2C+decisions+made%2C+and+edge+cases.)** by [Evan Goldin](https://www.linkedin.com/in/evangoldin)

Again, I love the problem-orientedness, the very clear success criteria, and the overall simplicity of this document.

To level it up further, it could have crystallized the problem more clearly, outlined the details of the spec more concretely, and generally kept the document cleaner.

**2. [Shift Swap Project Charter](https://docs.google.com/document/d/1eWVN-1LFNTMobw9rp_oqah37NXTGvdYRk__SUpq7_RQ/edit?usp=sharing)** by [John Koht](https://twitter.com/johnkoht)

I love the structure of this one, the problem-orientedness, and the clear success criteria.

It’s missing any sense of a solution, the list of “players” is too long, and there are far too many success criteria. I’d cut back on both of these.

**3. [Shopify to Quickbooks Connector](https://docs.google.com/document/d/1F4WuF0fp7QL1YGnkv5mvbX85iuWZMaGw4ol-IJFFuQI/edit?usp=sharing)** by [Todd Kovalsky](https://www.linkedin.com/in/toddkovalsky/)

I love the acceptance tests, the success criteria, and how fully thought-out the features are—assuming this is meant for an engineer who’s ready to build.

Where it needs work is the document itself, which is relatively messy, not fully fleshed-out, and missing much of any insight into the problem itself.

**4. [prodmgmt.world](https://docs.google.com/document/d/1G3Qrsnp_QyV7twNvKwGc_oir8jBAJ6pd0yyJkUTMTnk/edit#heading=h.9mazvlhmsilr)** by [George Nurijanian](https://twitter.com/nurijanian)

I love the problem-orientedness, the directional solution’ing, and the clear success criteria

This would be stronger if you replaced the “User” section—which doesn’t seem valuable—with a clearer sense of why this direction is the right one.

Now, let’s turn our attention to templates.

### My favorite 1-Pager/PRD templates

1. [My 1-Pager template](https://docs.google.com/document/d/1541V32QgSwyCFWxtiMIThn-6n-2s7fVWztEWVa970uo/edit) — What I use anytime I start a new project.
2. [Front’s PRD template](https://paper.dropbox.com/doc/Front-1-Pager-template--BRKbuX4FcAJ__BMryiLQFQlYAg-lhj0cggaonhJvH3B2f6gg) (by Nate Abbott) — Love the structure and clarity it enforces.
3. [Kevin Yien’s PRD template](https://docs.google.com/document/d/1mEMDcHmtQ6twzNlpvF-9maNlAcezpWDtCnyIqWkODZs/edit) (PM at Square) — Love this whole template, particularly the “Non-Goals” section and the step-by-step flow.
4. [Asana’s project brief template](https://docs.google.com/document/d/1W46cmPfPwXIIH2mNNbbQ5EdjnhQFqGxGhT5iAijmJjc/edit#heading=h.cqt1a4hrfy8u) — Particularly love the problem statement framework.
5. [Intercom’s story template](https://s3.amazonaws.com/marketing.intercomcdn.com/assets/Intercom-Job-Story-template.pdf) — Love the simplicity, while still having everything you need to get started.
6. [Product Hunt’s PRD template](https://docs.google.com/document/d/1yrU5F6Gxhkfma91wf_IbZfexw8_fahbGQLW3EvwdfQI/edit) — Love the way it begins (Who, Why, What). A bit long though.
7. [Steve Morin’s 1-pager template](https://docs.google.com/document/d/1BeNK9BYd3-8pAqVYR_B0Gzp7kGNtWdPFHJKIXI52_84/edit?ts=5f264700#heading=h.6jynaot9cbnq) (EM at Asana) — Love the focus on success criteria and risks.
8. [Figma’s PRD template](https://coda.io/@yuhki/figmas-approach-to-product-requirement-docs/prd-name-of-project-1) — A super comprehensive plug-and-play template.
9. [Bolt PRD Template](https://docs.google.com/document/d/1eBaBOF2A3rIfXeqqjq4uFAxX2f85JqanJmq-72ptur0/edit) — Ideal for hardware products.

I hope these examples and templates provide enough inspiration to craft your own killer 1-Pagers. Good luck!

### 📚 Further study

1. [Great One-Pagers](https://medium.com/@johnpcutler/great-one-pagers-592ebbaf80ec) by John Cutler
2. [How to Focus on the Purpose of Your Product](https://productschool.com/blog/product-management-2/focus-on-purpose-product-one-pager-template/) by Product School
3. [How to Write a Painless Product Requirements Document](https://uxpin.medium.com/how-to-write-a-painless-product-requirements-document-508ff6807b4a) by Jerry Cao

For more templates, [don’t miss this post](https://www.lennysnewsletter.com/p/my-favorite-templates-issue-37), and if you have any other great examples, do share 👇

[Leave a comment](https://www.lennysnewsletter.com/p/prds-1-pagers-examples/comments)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job openings**

1. **Perfect Recall:** [Founding Fullstack Engineer](https://pallet.xyz/list/lennys-jobs/job/7ac1bf05-0aa6-436e-8546-6e14c5222f7e) (Waterloo)
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*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [How Cast Iron Pans Are Made](https://kottke.org/21/08/how-cast-iron-pans-are-made)

[Watch on YouTube](https://www.youtube.com/watch?v=NEQP94YbYFo)

2. **Read:** [The Fun Scale](https://www.rei.com/blog/climb/fun-scale) by REI
3. **Read:** [The man whose software ate the world](https://www.thepullrequest.com/p/the-man-whose-software-ate-the-world?token=eyJ1c2VyX2lkIjoxODQ5Nzc0LCJwb3N0X2lkIjozNDc3NzgwMywiXyI6IktOdlVVIiwiaWF0IjoxNjI0Njc1NTA0LCJleHAiOjE2MjQ2NzkxMDQsImlzcyI6InB1Yi00NzE4Iiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.H_VFVdzCfhAevGszkym2CNUQiAMd1ciQgur8oQCH0pQ) by Antonio García Martínez

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

Sincerely,

Lenny 👋

---

## [39/61] Marketplace city expansion strategy

### 🌅 My new PTO policy

*After 2.5 years of weekly writing, without ever missing a week, I’ve come to realize that to keep this gig sustainable (and the content top-notch), I need a week or two off here and there. Thus, I’m inventing a PTO policy for myself. Here’s how it’ll work: Paid subscribers will still receive 100+ posts a year (including posts from myself, amazing guest authors, and the community), but **there will be four weeks throughout the year in which you won’t receive an issue**. Which means in some weeks you’ll get two or three posts. I suspect many of you won’t even notice, but I just wanted to be up-front about this. If this is an issue for you, please let me know.*

*On to this week’s question…*

> ## Q: How do marketplaces expand from a single market to new markets? When should we expand, how do we pick which markets to expand into, and do you have any other advice for how to launch in a new market?

The early days of new marketplaces fascinate me. There’s so much work happening, all so manual, and most of the time you have no idea if what you’re doing will keep working if you stop doing-things-that-don’t-scale. If you’re lucky, though, eventually, you start to see the beginnings of a flywheel—customers reliably have a good time, supply sticks around, and successful transactions happen reliably without hand-holding. The marketplace starts to work!

Around this time, being an ambitious founder, you start to wonder: **Is now the time to expand into a second market?** Expand too early and risk both markets failing. Expand too late and you give your competition a chance to race ahead.

To help you through this critical decision, I polled the founders and early growth leads at some of today’s biggest marketplaces and asked them a bunch of questions:

1. **How long did it take you to expand into a second market?**
2. **When did you decide it was time to expand?**
3. **How did you pick which markets to expand into?**
4. **What did your launch team look like?**
5. **What did a launch playbook look like?**

Below are their stories.

*A HUGE thank-you to these wonderful people who so generously shared their insights with us: [Casey Winters](https://caseyaccidental.com/) (Grubhub), [Kevin Tan](https://www.kevintan.me/) (Snackpass), [Max Mullen](https://www.linkedin.com/in/maxmullen) (Instacart), [Mike Xenakis](https://www.linkedin.com/in/xenakismike) (OpenTable), [Matt Bendett](https://www.linkedin.com/in/bendett/) (Peerspace), and [Nat Emodi](https://twitter.com/natemodi) (Caviar) 🙏*

## How long did it take to expand into a second market?

Most of the marketplaces I looked at took **8 to 12 months** post-launch to expand into their next market. A few marketplaces, like Caviar and OpenTable, launched their second and third markets at essentially the same time (to get ahead of competition), and interestingly, all of these marketplaces expanded to a small set of early markets: SF, NYC, LA, Chicago, Seattle, and Boston.

![Image from Marketplace city expansion strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/782479f3-9dd6-4759-bcd8-3a189970d59d_3038x4358.png)

As you’d expect, the time prior to expansion was spent finding product-market fit and figuring out how to make the marketplace work within a single, constrained market. e.g. OpenTable:

> #### “The first six months were spent getting product-market fit with the initial installs in SF (the founder sitting with the software in the restaurants).”
>
> #### —Mike Xenakis, former SVP at OpenTable

**Bottom line:** Expect to expand to your second market in under a year after launch, and (considering how quickly markets grow these days) likely much sooner.

## When should you expand to a second (and third) market?

As soon as your first market starts to work.

Why not sooner?

> #### “It’s much easier to focus sales in a geographically concentrated area (e.g. neighborhood) than to take a scattered approach. Twenty restaurants highly concentrated was much better than 30 restaurants spread out.”
>
> #### —Mike Xenakis

For some marketplaces, this meant hitting a meaningful milestone that told them the market was working:

> #### “We were ready to expand to Chicago when we nailed operations in SF and built the tools to actually launch another city. This actually required breaking all kinds of fundamental assumptions that were hard-coded at the time.”
>
> #### —Max Mullen, co-founder of Instacart

> #### “Once we saw the reception in SF, we knew the idea was something that had traction. The specific milestone that convinced us of product-market fit was 100 average daily orders.”
>
> #### —Nat Emodi, early GM at Caviar

> #### “Our first market had extremely high product-market fit. Engagement (orders per week) and retention were high, and over 90% of new users came from friends telling their friends.”
>
> #### —Kevin Tan, CEO of Snackpass

For others, they finally had a launch playbook they were confident in:

> #### “We expanded once we had a playbook to make a market successful, and the resources weren’t fully absorbed in executing the market expansion playbook in our first city.”
>
> #### —Casey Winters, former head of growth at Grubhub

Or they wanted to demonstrate they could make a new market work ahead of an upcoming funding round:

> #### “We wanted to show we could transfer our nascent operational playbook to another large market, taking what we learned in our home market to one we thought had a larger opportunity for growth.
>
> #### We also wanted to demonstrate we could repeat the growth trajectory in multiple markets prior to our Series A raise. This is hard to do when your team is small and resource-constrained. Not all went according to plan because we hadn’t really understood our market model benchmarks at the time. But I’m glad we went for it anyway, because it accelerated the pace of learning.”
>
> #### —Matt Bendett, co-founder of Peerspace

In highly competitive markets (e.g. convenience-store delivery today), it’s even simpler: expand as quickly as humanly possible. This was the case with OpenTable:

> #### “When thinking about city expansion, you need to consider the model being employed by every internet startup in 1999—grab as much land as possible.  There was a false assumption that capital was endless, so everyone emphasized a first-mover advantage investment, and OpenTable was no different.  In the case of OpenTable, there was another element in play: Dining is local. It was conceivable that a competitor could own a given city even if they were a small player. Therefore, there was a rush to get everywhere as fast as possible.”
>
> #### —Mike Xenakis

And with Caviar:

> #### “There was a general conviction that the last-mile delivery model was the future, so we needed to have a first-mover advantage in major cities.”
>
> #### —Nat Emodi

And even more-so with newer marketplaces like [Jokr](https://www.jokr.com/), which from what I understand launched in three markets immediately.

**Bottom line:** Expand into a second market as soon as you feel like your first market is working, you have a semblance of a playbook, and the resources to do it. If, however, you’re in an extremely competitive environment (and have a lot of VC money), it may make sense to be more aggressive.

## How do you pick which markets to expand into?

Create a spreadsheet with 3 to 5 attributes that tell you whether a city will be a good fit, and then stack-rank them. For example, here’s Grubhub’s early spreadsheet (courtesy of Casey Winters):

![Image from Marketplace city expansion strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/870220bb-0c75-4182-92e9-4a2a77048ce2_2608x986.png)
> #### “I built a spreadsheet that mapped population, population density (less likely to have cars and drive to get food), delivery restaurants (restaurants had to do their own delivery), search volume for delivery keywords on Google, and a demographic score we used from census data mapped into a piece of software called Maptitude (trying to find young professionals).”
>
> #### —Casey Winters

Here’s a rough breakdown of what each of these marketplaces put in their spreadsheet:

![Image from Marketplace city expansion strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b384f1ec-a6f6-4cc2-988b-ca8fd86ab126_3038x2730.png)

In addition to city size and demographics, Instacart also looked at waitlists in unlaunched cities (“emails we’d collected from people who tried to sign up from those cities”), whether there was a startup community (“a sign that there were early adopters who would help us with word of mouth”), and the physical layout of the city:

> #### “Every city has unique characteristics. For example, NYC requires a different logistics algorithm that accounts for some deliveries happening on foot. LA is subject to sprawl, so there are multiple zones in that metropolitan area. Chicago, on the other hand, launched as one big zone, similar to how we operated SF at the time.”
>
> #### —Max Mullen

Caviar and OpenTable looked closely at the food culture of the city:

> #### “On the qualitative side, a judgment call on how much of a ‘foodie’ city it was, backed up by awards, reviews, and word of mouth.”
>
> #### —Nat Emodi

> #### “You could take the Zagat guide and quickly establish the most important dining cities in the U.S. Ultimately, it reflected the major metropolitan cities like SF, DC, Chicago, NYC, LA, etc.” —Mike Xenakis

Peerspace looked at the city’s interest in art and entertainment:

> #### “We looked at GDP and population density, but also unique customer criteria including creative industry economies and discretionary income spent on entertainment by market.”
>
> #### —Matt Bendett

And Snackpass segmented its markets into archetypes:

> #### “We chose several market archetypes: college towns, suburban/rural, and urban. By having multiple archetypes rather than the same, we gained confidence that Snackpass would succeed beyond one type of market.”
>
> #### —Kevin Tan

**Bottom line:** Alongside population size and density, determine which 2 to 3 attributes tell you a market is ideal for your marketplace, throw your best guesses into a spreadsheet, stack-rank your options, and iterate from there.

### What should your launch team look like?

Here’s a breakdown of what launch teams look like, initially and down the road:

![Image from Marketplace city expansion strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9f59fe10-32ed-431b-8d22-e0f45d662965_3038x2754.png)

In general, launch teams across the board were very small, primarily salespeople. For example, OpenTable:

> #### “The launch team involved a sales director and usually one or two other sales execs. They would land in a city and set up shop for a month. During that time, they would hire a local sales exec and an operations manager.
>
> #### Together the team would make the initial push to get 20 restaurants signed. Once up and running, the launch team would move on to the next city.
>
> #### Keep in mind that our sales process was labor-intensive (i.e. knocking on doors) and was coupled with a heavy lift on the operations side (installing our system). Eventually we moved away from a launch team and simply moved to a standard market-opening process that involved hiring a local team, bringing them to HQ for significant training, and then turning them loose to drive the market growth. There was no longer a launch team to fly around the country.”
>
> #### —Mike Xenakis

And Snackpass:

> #### “For us, it was essential to have people on the ground who understand the local nuances—which restaurants moved the needle, what were the customer experience issues, etc.
>
> #### In the beginning we had one restaurant-facing launcher per market, while user growth was a centralized team. We still use this model but added in an AE and AM distinction on the restaurant side.”
>
> #### —Kevin Tan

For a few marketplaces, the founders were intimately involved with city launches, who then recursively hired and trained new teams to launch additional markets, e.g. Instacart:

> #### “At first, we as founders launched new cities with a few early engineers to build the tooling on the ground.
>
> #### Then, we trained a set of ‘city launchers’, who then cross trained new launchers in subsequent launches. That allowed us to launch multiple cities in parallel.
>
> #### Eventually the city launch function was centralized into an expansion team based in SF that would launch each city, hire local Area Managers and then move on to the next launch.”
>
> #### —Max Mullen

And Caviar:

> #### “The initial launch team was the Caviar co-founders plus local GMs. This evolved into three-person local teams that would launch a market with support from a central launch team.
>
> #### Our local teams would focus on restaurant sales and courier operations, and the central team would drive marketing, press, customer support, and other functions.”
>
> #### —Nat Emodi

Everyone I talked with eventually converged on a central team running demand growth alongside an inside-sales team supporting supply growth:

> #### “Early on, we’d send a salesperson or two into the market to sign up restaurants and hire a local salesperson. They would sign up 50 restaurants, train up the local salesperson, and leave the local salesperson to execute against their quota.
>
> #### On the demand side, I would create landing pages and Adwords campaigns for all of the neighborhoods and cuisines we covered, get them indexed for SEO, bid on Adwords for the ones that had four or more restaurants, and reach out to some local bloggers and tell them about the launch to get some inbound links. After a while, we figured out we didn’t need to hire a local salesperson. We could just send a salesperson for a couple weeks, have them get 50 restaurants, and then hire an inside salesperson in HQ to continue to grow supply in the market. I hired a dedicated search engine marketer who automated a lot of these workflows as part of the job of owning all of our SEM spend. We had a city launch manager for a little while once we started doing a lot of them. I don’t think it helped much.”
>
> #### —Casey Winters

Same story with Peerspace:

> #### “Early on, we set up shop in each market. That consisted of an office, a city manager, a supply acquisition specialist (possibly more than one), and a community manager to drive local awareness and host loyalty.
>
> #### We built intangible value this way, as our legacy markets suggest now, but the effort wasn't scalable, nor was it a pathway to profitability that a company needs with limited runway.
>
> #### Over time, we focused more energy on a repeatable launch playbook and growth forecast so we could add supply quickly and monitor markets to see how they performed.
>
> #### We added a Metro Development function to review performance and prioritize markets that needed triaging or doubling down on. We went from highly customized to centralized. In retrospect, the real answer is somewhere in the middle, and our playbook adapts depending on the market opportunity and how much of a cold-start problem we have ahead of us.”
>
> #### —Matt Bendett

**Bottom line:** Start small and sales-driven.

### What does a launch playbook look like?

Instead of summarizing these playbooks, I present the high-level playbooks shared with me in their full glory:

#### **Grubhub’s early city-launch playbook (credit: Casey Winters):**

> 1. Maintained the city expansion spreadsheet to determine the next target markets. As part of annual planning, figure out our capacity for new markets and put them into the plan.
> 2. Once ready to launch a market, send paratrooper(s), i.e. salespeople, into the best neighborhoods for two weeks, get 50 restaurants to sign up. Only pay when you receive an order, cancel anytime, no hidden fees.
> 3. Hire a local salesperson (early) *or* staff an inside salesperson with the new territory (later) to continue to grow supply.
> 4. We knew restaurants gave us a few months to prove we could drive demand, so this starts the clock for the demand-side growth team (read: me) to start generating order volume. The first step was to get the restaurant’s page live. The SEO/SEM landing pages would show the restaurants available for any geo and cuisine combination, e.g. “Nob Hill Thai delivery,” “94107 food delivery.”
> 5. Start bidding on Adwords for the keywords where we had 4+ restaurants that matched the term, because at that point, we would have a decent enough conversion rate and could hit expected CAC targets (which were based on a six-month payback period).
> 6. Email local bloggers in the market and tell them we are about to launch. Offer their readers $10 off their first order by going to our market launch landing page.
> 7. Once the promo expired (after 30 days), redirect that landing page to the market SEO landing page to develop page/domain authority.
> 8. Continue to sell into the market, driving conversion and retention improvements on the demand side. Once we hit certain targets there, it would open more demand-side growth efforts, e.g. transit advertising.
> 9. The VP of sales and I review zip-code-level reports of supply and demand for all markets every month to help focus our teams on driving better liquidity in the right areas.

#### **OpenTable’s early city-launch playbook (credit: Mike Xenakis):**

> 1. Establish a target list of restaurant influencers—the restaurants that others in the city would follow if they saw them using a new solution.
> 2. Sponsor some local restaurant information-gathering sessions.
> 3. Sell hard on the value of the software as a much better way to run a restaurant. We had a low emphasis on the online demand piece in the early phase of market development.
> 4. Leverage SEO and restaurant websites as the biggest driver of demand. After going public, we began investing more in SEM as well.
> 5. Watch the network effect take root. More restaurants led to more diners, which led to more restaurants.

#### **Snackpass’s early city-launch playbook (credit: Kevin Tan):**

> 1. Build initial supply—namely, whale restaurants.
> 2. Secure content such as promotions and rewards.
> 3. Market content to the user base and turbocharge this with tactics such as social media events, ambassadors, and other types of field marketing.

#### **Peerspace’s early city-launch playbook (credit: Matt** Bendett**):**

> Supply is king:
>
> 1. Get the market seeded and initially curated with variety that exemplifies your unique offering.
> 2. When we hit a certain threshold, marketing components would kick in, some automatically and others manually.
> 3. Our goal was to amplify this in many areas at once, so we staffed up our supply ops team but kept the spend efficient and time-to-payback (with fully allocated OpEx) quantifiable. Seeding markets after we anchored our mature metros really made a difference.
>
> It took a lot of trial and error on different playbook approaches before we settled on something that worked for us. We considered the wealth of data we had access to but chose to keep the KPIs simple (examples): supply benchmark required by vertical, booking targets necessary to sustain growth, leading indicators like searchers per listing, % utilization of available inventory.
>
> Getting the markets comparable to one another allowed us to determine where Ops resources and marketing budget needed to be allocated.

#### **Caviar’s early city-launch playbook (credit:** Nat Emodi**):**

> 1. Identify the part of town with the highest density of restaurants and most affluent customers.
> 2. Focus disproportionate effort on signing up major “market maker” restaurants that were super-popular among locals and had limited or no delivery.
> 3. Once we got a few of these, it was a matter of very quickly ramping up consistent courier coverage to ensure fast deliveries, and customer support to ensure high CSAT. These both had a direct correlation on a market’s early retention metrics.

## In summary

1. **Time it takes to expand into a second market:** Average is 6-8 months.
2. **When it’s time to expand:** As soon as you feel like your first market is working, have a semblance of a playbook, and have the resources to do it.
3. **How to pick the next market:** Create a spreadsheet with 3-5 attributes that tell you a city will be an ideal fit for your marketplace, and then stack-rank them.
4. **What an early launch team looks like:** Small and sales-driven.

Again, a HUGE thank-you to [Casey Winters](https://caseyaccidental.com/), [Kevin Tan](https://www.kevintan.me/), [Max Mullen](https://www.linkedin.com/in/maxmullen), [Mike Xenakis](https://www.linkedin.com/in/xenakismike), [Matt Bendett](https://www.linkedin.com/in/bendett/), and [Nat Emodi](https://twitter.com/natemodi).

If you’ve got a story to share about your marketplace expansion lessons, I’d love to hear it 👇

[Leave a comment](https://www.lennysnewsletter.com/p/marketplace-city-expansion/comments)

*Have a fulfilling and productive week*🙏

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

1. **Read:** [The Return to Workplace Index](https://envoy.com/content/return-to-workplace-index/) by Envoy

![Image from Marketplace city expansion strategy](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/29536ad0-26a3-4304-9dbf-0346c918691d_2102x1120.png)

2. **Read:** [The Growing Specialization of Product Management](https://www.reforge.com/blog/product-specializations) by Adam Fishman
3. **Read:** [How to Achieve Sustainable Remote Work](https://www.newyorker.com/culture/cultural-comment/how-to-achieve-sustainable-remote-work) by Cal Newport

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [40/61] Demand driving supply: The little-understood growth loop behind a surprising number of iconic billion-dollar companies

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s ✨ **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 about work. If you’re not a subscriber, here’s what you missed this month:*

1. *[GTM motions of 30 B2B SaaS companies](https://www.lennysnewsletter.com/p/gtm-motions)*
2. *[Templates and examples of 1-Pagers and PRDs](https://www.lennysnewsletter.com/p/prds-1-pagers-examples)*
3. *[A guide to marketplace city expansion](https://www.lennysnewsletter.com/p/marketplace-city-expansion)*

*Subscribe to get this newsletter every week 👇*

#### Book of the month: *[The Cold Start Problem](https://www.amazon.com/Cold-Start-Problem-Andrew-Chen/dp/0062969749/ref=tmm_hrd_swatch_0)*, by Andrew Chen

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4b7999be-12bf-47cf-a5d2-36dc5702c082_1024x938.jpeg)

Did you know that [Andrew Chen](https://andrewchen.com/) has a book coming out?? Yes, the same Andrew Chen who’s written some of the most well-known growth essays out there (and who for the past three years has been working on this book instead of blogging):

1. [Growth Hacker is the new VP Marketing](https://andrewchen.com/how-to-be-a-growth-hacker-an-airbnbcraigslist-case-study/)
2. [How to build a growth team](https://andrewchen.com/how-to-build-a-growth-team/)
3. [The Law of Shitty Clickthroughs](https://andrewchen.com/the-law-of-shitty-clickthroughs/)
4. [The Power User Curve: The best way to understand your most engaged users](https://andrewchen.com/power-user-curve/)

I’ve read a preview copy of Andrew’s book, and I can tell you it’s *very good*. It’s full of real-life examples, actionable advice, and concrete takeaways (basically, all the same reasons you subscribe to this newsletter). Pre-order now to make sure you get a copy as soon as it ships 👇👇👇

[Pre-order The Cold Start Problem](https://www.amazon.com/Cold-Start-Problem-Andrew-Chen/dp/0062969749/ref=tmm_hrd_swatch_0)

On to this week’s post…

> ## Q: I’ve noticed that some of my customers end up signing up to become “supply” in my marketplace, which helps me grow the marketplace faster. Amazing! Any advice for leaning into this behavior?

Marketplaces have the most interesting growth loops. Your supply can drive your demand, your demand can drive your supply, demand can drive more demand, and supply can drive more supply. What a world! If you can find, nurture, and accelerate one or two of these loops, you’ll find a powerful new growth lever that your competition may not have.

To study the growth loop you’ve identified within your business—where your demand is directly driving your supply—I’ve pulled in Brian Rothenberg, who presented a memorable talk on this very topic at a recent conference. Brian has spent the past 15 years starting, growing, and investing in marketplaces, and he personally founded two marketplace startups. He also led customer acquisition at TaskRabbit, spent over six years scaling Eventbrite to its IPO as VP of Growth, and is now a Partner at [Defy](https://defy.vc/). We’re lucky to have him share his insights, and I hope you find this as informative as I did.

*For more from Brian, you can find him on [Twitter](https://twitter.com/bmrothenberg), [LinkedIn](https://www.linkedin.com/in/brianrothenberg/), and [his website](https://brianrothenberg.com/).*

# Demand driving supply

*by Brian Rothenberg*

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/387b4e1f-d078-4803-8a1d-d61bc3d0b776_5694x4174.jpeg)

A surprisingly large number of iconic billion-dollar-plus companies—including Airbnb, DocuSign, Uber, Lyft, Square, Eventbrite, GoFundMe, and SurveyMonkey—share a unique and little-understood growth loop: **demand driving supply**.

In Lenny’s post [“Magical growth loops,”](https://www.lennyrachitsky.com/p/magical-growth-loops) he shares several examples of this in action. For instance, Lyft:

1. Lyft gets a new rider
2. This rider takes a ride, meets the driver, and gets excited about driving
3. The rider becomes a driver

Lenny and I have discussed this dynamic with other growth leaders, but there hasn’t been much written about how these companies have actually attacked this opportunity. In this guide I’m going to share my learnings around how to identify this powerful growth loop, how to determine whether it can benefit your business, and how to use it to power your own organic growth.

To help bring this to life in the most tangible way possible, I’m going to explore a specific demand-driving-supply growth loop that we identified and successfully amplified during Eventbrite’s startup to scale-up days:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8b6662ab-bb41-4979-99a6-88b7882e10b0_1368x1238.png)

1. Eventbrite recruits an event creator
2. An attendee buys ticket(s) to the event through Eventbrite and gets excited about organizing their own event
3. The attendee becomes a creator

At Eventbrite’s IPO, this viral loop was important enough to be listed as the first of four key components of our GTM strategy. From our S-1:

> *A significant number of creators become aware of us through either word of mouth or interacting with our platform as attendees. In a 2016 internal survey of more than 3,000 global creators, 36% of creators reported first learning about Eventbrite through word of mouth and **34% of creators reported first learning of Eventbrite by attending events produced by other Eventbrite creators**.Both of these factors have helped us grow organically with low creator acquisition costs.*

Other hugely successful startups have benefited from this built-in dynamic as well. For example, former Square COO [Keith Rabois](https://www.linkedin.com/in/keith/) once shared that in the early days, approximately 1% of people who bought through the Square reader (demand side) later became Square merchants (supply side), becoming a powerful viral distribution mechanism for Square. As Square added more merchants, those merchants shared Square with more buyers, of which a portion of buyers converted into merchants, and so the flywheel spins. Fast-forward to today, and Square is valued at around $120 billion.

### How to identify this growth dynamic

Eventbrite’s Series A investor and board member [Roelof Botha](https://www.sequoiacap.com/people/roelof-botha/) from Sequoia Capital first saw this growth opportunity in his diligence process and talked about it in a 2009 TechCrunch interview with Kevin and Julia Hartz (13:01 in [video](https://techcrunch.com/2009/11/30/eventibrite-sequoia-roelof-botha-hartz-venture-capital/)):

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3be8f689-98e0-4a2f-b1f4-356c091b1c9f_1874x1006.png)

Building on anecdotes and qualitative evidence that buyer-to-seller conversion was already happening even at a very early stage, early employees [Felicia Evans](https://www.linkedin.com/in/feliciayiu), [Tamara Mendelsohn](https://www.linkedin.com/in/tamaramendelsohn), [Nels Gilbreth](https://www.linkedin.com/in/nels-gilbreth-36a9821/), and others conducted important preliminary data analysis, research, and initial experiments to further vet the opportunity for this growth loop. After I joined as Eventbrite’s first head of growth, our initial growth team chose to prioritize this as our top area for experimentation. Given our existing attendee-to-creator conversion, we hypothesized that we could materially increase this rate of conversion, and our modeling showed that doing so could provide a material lift to our organic growth.

If you’re thinking about exploring this viral loop for your business, my number one piece of advice is to **first see if it’s already happening. Only lean into it if you’re already seeing this behavior**, rather than trying to force it from a cold start.

### **How?**

Start by looking at your data, to see if demand-to-supply conversion is already happening (e.g. Lyft riders converting to drivers). How many and what percent of your supply side first interacted with your product as demand-side users?

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9961f41e-6894-4b62-a1b9-677cd439e477_936x748.png)

This can start small at the earliest stages of your company. A seed-stage company I recently evaluated as a potential investment has just 38 sellers on its platform, but five of them started out as buyers on the platform. This at least gives me some early indication that this powerful demand-to-supply growth loop could emerge as a future growth driver. A small sample size is OK to start; you just want to see evidence that it’s happening organically.

### **What kind of conversion rate should I be looking for?**

I’ve asked friends at companies that have experienced this demand-to-supply loop what they’ve seen in terms of conversion rates. I’ve heard a pretty broad range, from roughly 0.5% to around 5% of users, starting as demand-side users and then converting to supply-side users. But I have seen rare companies with even higher rates. For example, [Aalto](https://aalto.com/) (disclaimer: I’m an investor), a new real estate marketplace that connects homeowners and buyers directly, is moving substantial volume in part because 11% of buyers who join (to access Aalto’s exclusive housing inventory) also want to sell via its streamlined sales experience.

While there are cases of double-digit conversion rates, it’s more likely to be a relatively small percentage that you can expect to convert. Because the conversion rate tends to be small, this loop is often more apparent and becomes a more powerful lever as the demand side of your business increases in scale. In the earliest days, when your startup has just hundreds or single-digit thousands of demand-side users, this may not materially move the needle in terms of supply-side growth. Where it becomes really powerful is when the volume of demand-side users ramps up into the hundreds of thousands and millions. It’s around this time when the data will tell you some interesting things.

For many businesses with this demand-to-supply dynamic, there tends to be some latency. As such, I’d start by looking at the following:

1. **Buyer-to-seller conversion rates in the first month, after the second month, and so on.** Again, to start you are primarily looking to see if it’s happening even at very small numbers, say 0.1%. Then I’d suggest looking at whether this conversion rate holds constant, or ideally increases, over time. In the example chart below, looking at the blue line you can see that for Eventbrite some percent of attendees created their first event (became the supply side) in the same month that they bought a ticket. That percentage then grows after the first month (red line) and again after the second month (green line). So from this analysis we learned that demand-side users converted in the same month in which they attended an event, and also that this conversion continued to happen over subsequent months.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/39d21023-f389-40e9-b63c-f41b9be29d6d_862x674.png)

2. **Look at cohort-based views.** You want to see cohorts following a reasonably consistent pattern in terms of the rate at which they convert, and how quickly. Why? If you know when your buyers are naturally converting, that may be a good guide in terms of when to concentrate your efforts around trying to convert more of them. In the example below, the conversion rate is highest in the same month that they bought a ticket, before stabilizing around month 5 or 6, so we focused our efforts on the first months after someone bought a ticket.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/88a0675e-c1fb-48cb-9e36-4bbc5c9e3de0_1736x738.png)

If you aren’t yet at a stage or scale where you have this type of data, there are still directional signals you can look for. Just as Roelof at Sequoia did, you can ask customers where they learned about your product, either by directly talking with them or through a survey (e.g. “Where did you first learn about us?”). Sometimes this will also come through in sales conversations where a sales prospect will mention how they interacted with your platform from the demand side first.

If demand-to-supply conversion isn’t happening organically, even as a very small percentage, it probably isn’t right for your network or marketplace.

### It’s happening. Time to figure out why—and why not

When you do see this growth loop happening and you want to see if you can increase the rate of conversion, **it’s imperative to figure out why, and also why not**. Why aren’t *more* users converting? One of the most important questions to answer is whether or not the demand side of your user base understands your full product offering, namely, how it’s used on the supply side.

In our quest to better understand Eventbrite’s opportunity, we conducted a survey of our attendees. In doing so, we learned that attendee understanding of Eventbrite was not good. For example, about 50% of respondents did not know whether to agree with the statement “Anyone organizing an event can sell tickets through Eventbrite.” If your demand side doesn’t understand the basics, you have little chance to convert them. We then spoke with 20 users who had converted and we tried to understand the reasons they switched over, as well as the barriers they faced along the way. From those interviews, we were able to formulate hypotheses to set the stage for future testing. For example, we learned that many people who had converted from an attendee into an event creator often did so after having attended more than one Eventbrite event. So we formed a hypothesis that focusing our efforts on users who had attended two or more events may be a promising segment to experiment with.

All of these qualitative learnings gave us confidence that helping attendees better understand how Eventbrite works as an events platform could dramatically improve our demand-to-supply conversion rate. So we made it our growth team’s goal to help attendees understand that they can easily organize an event on Eventbrite, and measured our success based on increasing demand-to-supply conversion rate as well as growing the number of new event creators who first started as event attendees on the platform.

### Prioritizing focus when leaning into this growth loop

Optimizing for demand-to-supply conversion requires a few basic things. Potential users who may convert to supply need to:

1. **Know who you are**
2. **Know what you do and how you help them**—the “aha” of your value, specifically in context of the supply-side use case
3. **Keep you top-of-mind when that need arises**

I recommend starting with the higher-traffic and/or most contextually relevant parts of your product where your branding and positioning can be improved. There are probably a million different things you could do to try to achieve those sub-goals, so focus on changes that seem most likely to create material changes in the conversion rate. The goal is to convert as many demand users into supply users as possible—so the pages that the demand-side users interact with are a natural starting point.

And in terms of how to improve your branding and positioning, it’s a good idea to listen to your users. Ask users who have converted to the supply side, and use their reasons for switching to draw in new converts. Drawing from our prior user interviews:

> *“I was seeking a better way than forms and PayPal.”* —Kelsey

Messaging to test: “Save time: there’s a better way.”

> *“As a consumer buying tickets for my kids, I thought ‘This was easy and it worked,’ and that was enough for me to try Eventbrite.” —Ronnit*

Messaging to test: “It’s easy. You had a great experience with Eventbrite. So can your own attendees.”

### How to measure

It’s tough to experiment without measuring, so let’s start there. In my experience, measuring these efforts to improve buyer-to-seller conversion is not as straightforward as A/B testing a landing page or an onboarding flow. For one thing, we had a fairly long tail in terms of latency of conversion: Just because you’re going to an event today doesn’t mean you have a need to host your own event the next day, and many demand-to-supply conversions happened months or even years after buying their first ticket. To help combat the sometimes long latency in converting, we looked for leading indicators.

To see if we were making progress, we’d look at low-latency cohorts as a leading indicator that we were on the right path as we rolled out improvements or tests. Low-latency cohort analysis involves looking at sets of users who take the key demand-side action (in Eventbrite’s case, buying a ticket) in a given period and then looking at how they convert into the supply side across recent time intervals (could be days, weeks, or months).

Whether you should look at days, weeks, or months depends on a couple factors. One factor is the natural frequency of usage for your product. For a product category like grocery delivery with pretty high natural weekly usage, you might get a lot of signal looking at weekly cohorts (e.g. how many consumers who had groceries delivered in a given week and then converted into a delivery driver within the same week, second week, and so on). Another factor is your product’s scale and whether you have a large enough data set to draw conclusions from daily or weekly data (requires larger scale), or if you’re better off looking at longer-latency but higher volume of data cohorts like monthly or quarterly (requires less scale).

Using a low-latency cohort example from Eventbrite below, we’d look at our demand-to-supply conversion rate for users converting in the same week (e.g. buy a ticket, and then publish an event in the same 7-day period). This is the blue line, or “0 week,” on the chart below. We’d also look at conversion rates for users converting within 14 days (red line: “1 week”) and 21 days (green line: “2 week”). We were looking to see if there was an uptick in the fastest-converting users, as that was often a leading indicator that our changes would drive more sustained lifts in conversion.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1add7858-852c-4f36-83c9-07d943ef6e26_1016x620.png)

To be honest, at times it was not entirely scientific, but we were able over time to measure pre/post lift from our efforts in terms of when we made changes, and if we saw conversion lifts that sustained over time:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d365d933-3cd7-4b4b-b575-a4e19ff58f0e_1170x592.png)

### **Time to start experimenting: learnings from Eventbrite, SurveyMonkey, Airbnb, and more**

As I noted above, a core part of the effort here is showing prospective converts who you are (your brand) and what you do (your product’s value). To do so, it’s crucial to emphasize consistent branding and key messaging throughout the demand-side journey. For Eventbrite, most of our traffic initially flowed through our event ticketing pages. Early on, most of these pages had little to no branding, or were so customizable that they ended up looking like “Myspace for events,” making it nearly impossible for people who visited these pages to even know what Eventbrite was. Over time, we shifted to greater consistency, including more prominent branding.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4e33d2e0-f779-4d7e-a0f1-9434a764dd8d_1554x858.png)

For some products for which the creator/customer is using and promoting your product to *their* customers (e.g. Patreon, DocuSign, SurveyMonkey, WordPress), I’ve observed a common tension where the creator/customer often wants to promote their branding and downplay/remove your product’s brand, effectively white-labeling your product. This customer desire is obviously at odds with my advice above. When trying to go from minimal to more branding, increase your logo size, or add in key messages and calls to action, do so slowly over time. These changes tend to not be as big of a deal as people think, but they’d likely overreact if you were to make them all at once.

SurveyMonkey is another business that was able to drive meaningful growth through demand-to-supply conversion. One of SurveyMonkey’s most important user journeys is its core demand-side experience: taking a survey. SurveyMonkey used this important demand-side user flow to reinforce: (1) *who* it is (its brand), (2) *what* it does (“see how easy it is to create a survey”), and (3) a CTA to actually create a survey (introducing the supply-side funnel to the demand side).

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/63528aac-e771-4a15-9bec-86c67be1805c_1178x744.png)

[Continue reading online 👉](https://www.lennysnewsletter.com/p/demand-driving-supply-marketplaces)

When the survey taker clicks “Done” to submit their survey responses, they see the following page:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b040092b-4910-49e2-9161-afb7227b1d44_1021x584.png)

Is that the homepage? Nope, it’s the “survey complete” page. What it lacks in subtlety it likely makes up for in effectiveness. I’ve heard from former SurveyMonkey employees that these efforts were highly impactful in dialing up the product’s built-in virality and conversion from survey takers (demand) to survey makers (supply).

Similarly, at Eventbrite, immediately after a person completed their ticket purchase, we used part of the page to message that the platform could be used “to organize events of all kinds! Eventbrite makes it easy to create an event page and manage who’s coming.”

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/17fc68c9-77b4-445b-9564-bed8e363d857_866x686.png)

Here’s an Airbnb experiment that I thought was clever. I assume the prospective-guest-to-host messaging flow is a pretty important flow for guests. In the example below, after sending a message to a host on Airbnb, it displays a modal urging you to “list your home in order to pay for your trip” (I didn’t capture the modal, but you get the point). I thought this was pretty smart, as they know you’re planning to be out of your home, so why not use your space to help pay for your trip?

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2301d33e-ae7b-42d1-86cd-7a1b17c74bfa_1248x1234.png)

For most marketplaces, product listings pages tend to see the highest traffic of any single page type. Furthermore, the people most likely to participate in your product on the supply side are often the same people who are already using (or will someday use) your product from the demand side. Put these two together, and it makes logical sense to use some of this screen real estate to promote the sell-side experience. Here’s an example from Etsy:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ecfe8007-991a-452f-8361-585e0f970ee7_1192x684.png)

[Thrilling](https://shopthrilling.com/), the leading marketplace for quality vintage clothing, helping 20,000+ small retailers digitize and sell their unique products online (disclaimer: I’m an investor), benefits from this viral loop as well. Below you can see a more prominent example of this type of messaging:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bd5f962b-fb1a-4300-a21b-36f8cfdfa65b_984x720.png)

Continuing with other high-impact areas of your product that you can use to position your service as being applicable to both the demand and supply side, let’s look at the header and/or primary navigation within your app. Again, your goal is to communicate: (1) “who” you are (your brand), (2) “what” you do (key things the demand and/or supply side should do), and (3) provide a CTA to take those key actions. While this falls into general best practice, it can be supremely beneficial in helping your demand-side users understand that they can also use your platform in a supply-side experience. For websites, the header is above-the-fold, it’s generally on all/most pages of the site, and helps users with not only literal site navigation but also in navigating “what’s this product do?”

Let’s look at an old Airbnb example. I see (1) the “who” in terms of Airbnb’s brand and (2) the “what” in terms of users being able to either find local listings or become a host.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2349a743-8443-4ec3-b98b-3c2026fd1998_1254x736.png)

Early on at Eventbrite, we did a pretty poor job of this. For a while we only had a tiny logo with messaging to contact the event organizer directly:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8ce6a3fb-7212-40d4-9128-922e8d80292d_1576x558.png)

We made this simple header change to “Create an event” or “Find events,” and it turned out to be one of our most impactful changes in terms of both general product understanding and also in lifting demand-to-supply conversion:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dbbc2375-a27a-4e03-87c2-1dd19a89a756_928x748.png)

If those header changes seem too subtle, check out the old Airbnb experiment that my former growth team colleague [Felicia](https://www.linkedin.com/in/feliciayiu/) captured:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fe9ea286-7355-47da-8ddc-ebf3e4942b70_767x240.png)

Beyond the general awesomeness of using a large pop-up with social proof to call attention to “List your space,” I love that [Gustaf Alstromer](https://www.linkedin.com/in/gustafalstromer), Airbnb’s former growth product lead, is the first person to show up. How meta is that to show up in your own experiment? :-)

And here’s a native app example where Uber’s rider app is using their primary navigation to call out “Drive with Uber”:

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cc2c2561-bd81-431b-9378-6c77d48b28cc_739x1600.jpeg)

OK, so you’ve got your key user flows and high-traffic areas of your product covered. If you want to keep going from there, think through what other real estate you have.

I mentioned earlier how Eventbrite’s event pages received a lot of traffic. Given that events naturally expire after their date, we had a lot of expired event pages that people would still organically find and continue to visit. We used this as an opportunity to (1) help those users find relevant live and upcoming events (the product experience improved greatly over time relative to the below), and (2) again communicate that they too can use the platform to “create an event.”

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dac9dcf2-a904-49b9-89b8-149435cc2454_1782x1058.png)

In my final example, we even got creative with the paper tickets that people used to download, print, and bring with them to events. When standing in line waiting for an event, why not reiterate that the event-goer can also use Eventbrite to organize their own events?

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6a4879cf-0238-4a0e-8cbb-c6b7a6aa51a4_898x1202.png)

OK, so we were a little shameless, but it worked :-)

### How to get more targeted

Some of the above examples involve pretty broad strokes across large parts of your product and user base. Driving buyer-to-seller conversion tends to be a volume game, but you can and should get more targeted. Segmentation and deeper data analysis can help you home in on driving more impact with the right users at the right times.

Ask questions like:

1. **Who are the users who have a higher propensity to convert?** What are their shared attributes, and how are they different from the overall user base?
2. **When are they most likely to convert?** Is there a tipping point for users to convert?
3. **Are users who do convert high-value or lower-value?** If low-value, is it worth the investment?

At Eventbrite, we looked at the data for predictive markers of the “aha” moment when buyers were converting at a higher rate.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a5103201-72d4-4232-ad69-a956b2c96dd8_764x640.png)

We found a point where this conversion rate jumped by many multiples. This was a pretty good signal to focus on this point within the user journey, and we piled our efforts into doing so.

Another insight I’ve heard from multiple more horizontal marketplaces is how cross-category usage often drives the aha moment of “Oh, I can sell almost anything on this platform!”

So for example, a first-time buyer who googles “handmade necklace,” finds Etsy, and purchases a piece of jewelry, may think, “I’ve bought on Etsy. They sell handmade jewelry.”

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e2b3e968-4891-43da-8998-0c438e0237c3_1654x516.png)

Whereas when that same buyer later receives a link from a friend to a handmade toy on Etsy, they experience the “aha” that Etsy sells all kinds of handmade items.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/208912ea-f517-4469-b891-578b3ddbc9c5_1660x518.png)

I have seen and heard multiple examples of cross-category purchase/usage being an unlock in terms of the demand side understanding the breadth of offerings, and thereby that the platform is more accessible to many/all categories and different use cases.

Putting together the ideas from the above examples, at Eventbrite we created programmatic emails that went out to users right when they crossed the aha moment that we had uncovered in the data. Furthermore, we personalized the emails to each user, reminding them of the events they had previously bought tickets for. And then we tested different value propositions and wording, often using the exact words that prior users who had converted used to describe the key value of converting.

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0028de71-5005-4b1b-83da-9db7e4d262a5_1502x672.png)

Deeply understanding your users’ behavior can help you make additional optimizations, whether that be through more targeted and personalized notifications or well-timed calls to action.

### In closing

If it’s naturally happening in your product, demand-to-supply conversion is your friend. When you find it, embrace it. At Eventbrite, through sustained iteration we more than tripled our demand-to-supply conversion rate, and in doing so were able to unlock material organic growth for the business. Many of the great marketplaces of our time have used and leaned into this growth loop to accelerate their journey toward building iconic billion-dollar businesses. I hope this guide helps you on your journey as well.

Are you seeing this demand-to-supply growth loop emerging in your startup? [Let me know!](https://twitter.com/bmrothenberg)

![Image from Demand driving supply: The little-understood growth loop behind a surprising](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/185f6df9-f982-4261-ba6e-3c5261b0fe33_1584x760.png)

*Thanks, Brian!*

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Sincerely,

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---

## [41/61] How behavioral science can boost your conversion rates

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to a ✨ **bonus free 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 about work.*

> ## Q: I’m looking for ways to increase the conversion rate of our core flow. I’ve already read [your post on conversion](https://www.lennysnewsletter.com/p/this-week-21-strategy-and-tactics), and it was great, but do you have any other suggestions?

I’ll be honest, I wasn’t sure what to do with your question when I first got it. But then, while catching up with my buddy [Kristen Berman](https://www.linkedin.com/in/kristenberman), I found my answer. Kristen co-founded a company called [Irrational Labs](https://irrationallabs.com/), which helps companies and nonprofits understand and leverage behavioral economics to increase the health, wealth, and happiness of their users. This work often includes helping companies design product and features that drive user behavior change. In practice, this can mean spending a lot of time on improving conversion. While chatting with Kristen, she shared story after story of how they used a few basic principles of behavioral science to more than double conversion of a bunch of different products. I was blown away, and knew I had to get her to share her wisdom more broadly. After much cajoling, she agreed to write a guest post.

**Below, Kristen shares four stories of huge conversion wins across a handful of companies—and the behavioral science principles behind them. She then shares five behavioral design strategies you can apply to your own product immediately.** If you want to learn more about how you can apply behavioral design to your product, definitely check out Kristen’s upcoming [Behavioral Design Interactive bootcamp](https://behavioraleconomicsbootcamp.com/bootcamp-lp-classic-cohort/), which starts October 8. Use code ‘Lenny’ for 10% off. And enjoy!

*For more from Kristen, sign up for the [Irrational Labs email](https://irrationallabs.com/newsletter/) or follow Kristen on [Twitter](https://twitter.com/bermster).*

# How behavioral science can boost your conversion rates

*By Kristen Berman*

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d826ba63-c326-4f65-86cf-4e72efb3bc4b_2195x1646.png)

People don’t always act rationally. We say one thing and do another. We even act against our best interests.

The field of behavioral science studies these behaviors. It sits at the crossroads of psychology and economics, looking at the effects of cognitive, emotional, and social factors on decisions and, ultimately, actions. The application of behavioral science is typically called [behavioral design](https://irrationallabs.com/learn/our-method/).

More and more companies are using behavioral design to conduct user research, develop products, and design experiments that drive behavior change and growth. It’s an end-to-end lens on product development that helps teams think differently about their customer.

A study by J. Michael McGinnis of the National Academy of Medicine found that [40% of premature deaths](https://www.prb.org/resources/up-to-half-of-u-s-premature-deaths-are-preventable-behavioral-factors-key/) are the result of our own choices. Our decisions around food, exercise, drinking, and driving are literally killing us (and sometimes others). We’re bad at making decisions that are good for us. By designing solutions that align with our psychology, we can make it easier for people to do things they already want to do.

To help you improve your own product, positively, I’m going to share **four concrete examples** of experiments that saw significant shifts in conversion rates when they used behavioral design to drive product design—and why they worked.

Of course, proceed with caution. We don’t recommend dragging and dropping these principles into your app without experimenting to test if/how they work for your context.

### 1. Increase the immediate benefit to taking any action: *forced choice and present bias*

The mobile app [Steady](https://steadyapp.com/) helps gig workers track their income. To do this, it needs access to a user’s bank account—but this bank-linkage step creates friction. It’s a common drop-off moment for users: 92.9% give up during the process.

We went through the behavioral design process with the goal of boosting the number of users who linked their bank account. By redesigning the choice architecture and creating CTAs with this in mind, [linkage jumped by 63%](https://bootcamp.uxdesign.cc/why-slowing-users-down-can-help-them-make-meaningful-choices-329e99a982a8), from 7.1% to 11.6%.

Why did this work? We used something called [forced choice](https://www.jstor.org/stable/30038845). This means we asked people to “accept” or “decline” the new feature. By asking people if they wanted to decline (which is definitive and final), there was now a cost to not accepting it—you might not get a second chance. Suddenly, “accept” looks much better in comparison. When we allow people to skip something or say “maybe later,” there’s very little cost to them.

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f1584c90-8344-4464-90f1-088fee2c2da6_890x714.png)

But we thought we could do better.

We then applied another behavioral science principle to improve this screen even more: [goal gradient](https://home.uchicago.edu/ourminsky/Goal-Gradient_Illusionary_Goal_Progress.pdf). By focusing a user’s attention on “completing” setup, we boosted conversion from the base of 7.1% to 15.9%.

Why did this work? The immediate benefit to the user of taking the action should be higher than the cost of the action. This is because we tend toward [“present bias](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3909663).” In the prior example, we increased the benefit of saying “yes,”  by making “no” relatively more costly (definitive and final). Now we increased the benefit of saying “yes” by focusing people on a short-term goal: completing setup. People (you, your users, your customers) all want to complete things. By making people feel closer to completing something, we delivered a bigger immediate benefit.

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c448baf4-7e06-48ae-8dec-8bb488a31214_464x690.png)

**The behavioral science takeaway:** Always evaluate whether the immediate benefit to your user is more compelling than the cost to them. Typically, any step is friction—and friction presents a cost. Of course, [there are exceptions.](https://irrationallabs.com/blog/its-not-always-about-making-things-easier-when-to-make-your-sign-up-flow-harder/) But generally, more cost means you need more (immediate) benefits.

### 2. Make people feel like they already own it: *the endowment effect*

Our team worked with [Livongo](https://hello.livongo.com/), a diabetes management company, to help it rethink its onboarding strategy. After they conducted the behavioral diagnosis and assessed the psychologies at play, they made one simple change that [drove a 120% increase](https://irrationallabs.com/case-studies/livongo/) in registration.

What was it? Switching email phrasing from “Join the program” to “Claim your welcome kit.”

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b1cd4a4b-2144-4917-9021-703aaa7ff84c_1400x602.png)

That may sound simple, but it leveraged a key psychological insight well-known by behavioral scientists. When we feel like something is ours (the “[endowment effect](https://www.sciencedirect.com/science/article/abs/pii/S0022103109001279)”), we may be likely to value it more. In addition, the opportunity to “claim your welcome kit” is both a more concrete and comparatively smaller ask. People only had to say “yes” to receiving a kit, not joining a program.

**The behavioral science takeaway:** Experiment with designing products that allow the user to more quickly feel [psychological ownership](https://www.gsb.stanford.edu/faculty-research/working-papers/psychological-ownership-intervention-improving-government-benefit) (a form of endowment). Your product is *already* theirs, and by not taking action, they may lose the opportunity to benefit from it.

### 3. Lean into existing behavior, and then make it easier: *friction*

[EarnUp](https://earnup.com/), a fintech app, wanted to help its users pay down debt faster (thereby saving them thousands in interest).

We created a basic A/B email test on a random selection of EarnUp’s user base. We asked both groups to start paying more than their minimum payment. But in one condition, we framed this request with psychologically pleasing numbers: round numbers. People were prompted to “round up” to an even number.

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/336d96b8-f017-41aa-8660-5d5486bda0df_1358x688.png)

[The results were impressive.](https://nextbillion.net/fintechs-elephant-seal-problem/) First, simply asking people to increase their mortgage payments led 10% of people to increase their mortgage payment by $60, saving them $8,000 in interest and decreasing their mortgage term by two years.

But the real win was making it easier by asking users to “round up.” That condition increased the number of people who chose to overpay by 40% from baseline. On average, this population would shave an additional two years off their mortgage.

Why did this work? Try to recall how much you pay on a loan bill. It’s unlikely you know the exact amount to the dollar—you’ll likely recall a round number. We already mentally round up the amount we pay on loans. EarnUp’s new feature (rounding up your payment) made it psychologically easy for people to do more of what they were already doing.

In a sample of data obtained from the fintech company [Digit](https://digit.co/), 48% of users set goals that were multiples of $500, and 87% of users set goals that were multiples of $100. In a data sample obtained from the fintech company [Qapital](https://www.qapital.com/), 93% of savings goals were multiples of $50, and 88.5% of goals were multiples of $100. Only 2.6% of goal amounts did not end in a zero or a five.

**The behavioral science takeaway:** Lean into what people are already doing, and then make it easier for them. Peloton’s Director of Product, David Packles, is [vocal that he uses this strategy](https://www.youtube.com/watch?v=1-KatWuirn4) in Peloton’s product design process.

### 4. Get commitments on day one: *mental models*

Access to credit is critical in today’s economy. It facilitates important life milestones like purchasing a car, which we know is often vital to both getting and keeping a job, especially among low-income households.

To help people get credit and keep it high, Duke University’s [Common Cents Lab](https://commoncentslab.com) partnered with Latino Community Credit Union to help support borrowers with their loan repayment.

After going through the behavioral design process and analyzing transactional data, the team decided to help people create a savings backstop. If borrowers ever missed a payment, the bank could withdraw from this no-fee fund and avoid hitting a person’s credit score or levying a fee.

Here’s how it worked: When signing the loan documents, people were asked by the loan officer whether they wanted to *round up* their payment and put the extra into savings. This was an opt-out on their loan form. People could check a box to decline.

Like the prior example, this “round up” concept worked. The surprise was how well it worked—in the winning condition, [a whopping 36% of people](https://advanced-hindsight.com/wp-content/uploads/2018/05/2017-Common-Cents-Lab-Report-509.pdf) agreed to round up their loan payment. By the end of their loan periods, people who agreed to this arrangement and kept money in the account would have an average of $1,000 stashed in savings.

This opt-in percentage (36% vs. 14%) was wildly better than the EarnUp nudge. Why?

This time, instead of an afterthought in an email, “round up” was a part of the core product’s mental model from day one, and part of onboarding. The product was designed from the ground up with core behavioral science insights.

Behavioral science provides a lens to decision-making that is valuable at the early stages of ideation. With an up-front model of how and why someone will likely engage with your product, you’re less likely to need marginal improvements later.

**The behavioral science takeaway**: [Day 1 is the day your users have the most momentum](https://bermster.medium.com/do-this-1-thing-right-from-the-beginning-and-users-are-more-likely-to-stick-with-you-says-93ac7f76f426) they will ever have. Catching them at this moment with the right features and mental model will drive higher opt-in rates and engagement than at any other time in the user’s lifecycle.

## How can *you* integrate behavioral science in your work?

These examples highlight the power our *environment* has on driving our decisions. The truth is, people want to manage their diabetes. They want to track their variable income. There’s no lack of intent—there’s lack of action. But if you were to ask these customers *why* they didn’t complete the flow, they wouldn’t mention endowment or choice architecture. Behavioral design helps uncover and design for these driving forces.

It’s important to note that the interventions described above didn’t just fall from the sky. Behavioral design is a process. We don’t just interview users. In behavioral design, we do an in-depth behavioral diagnosis that maps the user’s environment of decision-making; we collect data about existing behaviors, and we conduct a literature review to deep-dive into the user’s psychology.

In other words, behavioral scientists go beyond [what users](https://www.ted.com/talks/kristen_berman_don_t_listen_to_your_customers_do_this_instead) *[say](https://www.ted.com/talks/kristen_berman_don_t_listen_to_your_customers_do_this_instead)* [they’ll do](https://www.ted.com/talks/kristen_berman_don_t_listen_to_your_customers_do_this_instead) (or what they say they want) and focus instead on what they’re actually doing, as well as the underlying psychology behind it.

Using [behavioral design](https://irrationallabs.com/learn/our-method/) to assess the problem, and understand every step of user behavior, we can offer a targeted solution. Here are 5 tactics you can use in your own product development process.

## **5 actionable behavioral design strategies**

1. **A literature review:** Unless you’re working on self-driving planes, you’re not the first person to study your problem. Spending a day getting up to speed on existing research insights will help you develop your hypothesis. We find that too many teams start cold and conduct focused interview groups. User interviews can be helpful, but small samples are noisy, and even one misguided answer can lead to misdirection at the critical early stages.

*[A 5-step guide to doing a literature review](https://irrationallabs.com/content/uploads/2020/04/Literature-Review-101.pdf)*

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/82b88cc0-b2b4-417e-bbde-5b7d1371d859_754x522.png)

2. **Pick a key behavior:** This is the number one place we think PMs should spend more time with their teams. When designing for behavior change, the most important thing is—quite literally—to pick the behavior you want to change. Most teams we work with focus on engagement and retention but fail to make a clear and unified hypothesis about the most important action to drive this. As behavioral scientists, we get uncomfortably specific about this.

Imagine you’re a PM at Airtable. You say that you want new users to create more workspaces. This is interesting, but it’s not clear exactly what you mean. How quickly? How many? From scratch? An uncomfortably specific key behavior looks more like: *Within one week of joining, users start to fill in one workspace via a pre-existing template and invite two collaborators.*

By outlining these specifics, the team can now debate how to design a successful intervention.
3. **Behavioral map:** After aligning on a key behavior, it’s time to map the environment of decision-making. What is every single step someone needs to do to get to your key behavior? These are cognitive steps (making decisions) and logistical ones (filling out a form field). This is different from any “journey map” we’ve seen, in that it’s wildly more detailed. Doing this usually leads to several “ahas” for marketing and product teams.

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9c8bdff3-9bf7-4025-b307-755dac68c593_972x1114.png)

4. **Identify the psychologies at play:** At each step, what are the underlying forces driving our behavior? At Irrational Labs, we’ve boiled down the list of biases to a simple framework—the 3Bs. To drive a key behavior, we need to reduce the barriers and increase the (immediate) benefits. Translation: Humans tend to follow the path of least resistance and respond to immediate incentives. At each step of our map, we first identify barriers and benefits. These insights drive your roadmap.*[Learn more about the 3Bs](https://nudge.behavioraleconomicsbootcamp.com/3bs-sem-optimize-kpis-split-test/).*

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3282d29f-44bf-4926-8288-645f416a9637_856x522.png)

5. **Conduct theory-based experiments:** Experimentation is the cult religion of behavioral science. While you may already run experiments, there’s likely a way to make them more strategic. For example, by changing only one thing at a time (vs. launching a “redesign”), you can isolate what works and why. You’re then empowered to build a long-term roadmap around the insights. *[Get the experimentation guide](https://nudge.irrationallabs.com/experiment-design/).*

**Want to develop your own capacity in behavioral science and drive impact? Check out our 4-week bootcamp that starts October 8. [Apply today](https://behavioraleconomicsbootcamp.com/bootcamp-lp-classic-cohort/).**

For more real-world case studies, sign up for the [Irrational Labs newsletter](https://irrationallabs.com/newsletter/).

And I leave you with this:

![Image from How behavioral science can boost your conversion rates](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6ed6d676-ed8d-4b1f-963a-16e2577a2b12_1148x890.png)

Sometimes we are all a bit irrational.

*Thanks, Kristen!*

## **🔥 Featured job opportunities**

1. **Aescape:** [Product Management Lead](https://pallet.xyz/list/lennys-jobs/jobs/117d35d9-a9b3-49d0-82df-b27a6c074e0f) (Brooklyn, NY)
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3. **Mynd:** [Product Lead, Internal Tools](https://pallet.xyz/list/lennys-jobs/jobs/b6da1eaa-5a2b-4ad4-92f9-5ac4b9f764e5) (Remote-US)
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*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

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

Sincerely,

Lenny 👋

---

## [42/61] Getting more technical

> ## Q: I don’t have a technical background, and I find it hard to follow what my engineers are saying sometimes and, even worse, to make informed trade-off decisions. How can I level up my tech skills to become a more effective PM?

I was an engineer before I was a PM, and I can tell you that having that background is a PM superpower. You can predict timelines, anticipate blockers, and avoid black holes of endless work.

However, the majority of PMs are in your same boat—never having written a line of code, having only a vague sense of how software works, with an ever-present tinge of impostor syndrome when talking to engineers.

Here’s the good news: You don’t have to learn to code to see most of the benefits. Frankly, I wouldn’t spend any time there (unless you *really* want to). Instead, I’d start by learning a few basic concepts and then asking your engineering partners a ton of questions. Start at the bottom of this pyramid, and work your way up.

![Image from Getting more technical](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/87031309-b5be-48a6-a9dd-56b741888d05_2400x1350.png)

Let’s explore each step.

### 1. Learn the basics

Start by learning the basic terms, technologies, and concepts involved in building product. Investing a few hours here will immediately level up your game and also build the foundation for further development. You can do this on your own or, better yet, with a buddy.

**Here’s a handy lesson plan to get you started:**

1. [How programming works](https://www.youtube.com/watch?v=N7ZmPYaXoic)
2. [The difference between front-end and back-end](https://www.codecademy.com/resources/blog/front-end-vs-back-end/)
3. [How software systems are architected](https://www.youtube.com/watch?v=xpDnVSmNFX0&list=PLMCXHnjXnTnvo6alSjVkgxV-VH6EPyvoX)
4. [How websites work](https://www.youtube.com/watch?v=vcRmKtL4o_4)
5. [How web apps work](https://technically.substack.com/p/whats-a-web-app)
6. [How databases and SQL work](https://www.youtube.com/watch?v=zsjvFFKOm3c) (plus [learn the basics of SQL](https://www.codecademy.com/learn/learn-sql))
7. [How APIs](https://www.youtube.com/watch?v=OVvTv9Hy91Q) and [Webhooks](https://www.youtube.com/watch?v=41NOoEz3Tzc) work
8. [What libraries and frameworks are](https://www.youtube.com/watch?v=LimOOe6I4eo)
9. [How GitHub](https://www.youtube.com/watch?v=wrb7Gge9yoE) and [pull requests (PRs)](https://www.youtube.com/watch?v=For9VtrQx58) work
10. [What AWS is](https://www.youtube.com/watch?v=a9__D53WsUs)

Set a few hours aside next week and go through this list. Most are short (fun) videos, and will have large ROI on your time. To go deeper, see the additional reading at the end of this post.

### 2. Ask questions

With some foundation in place, you can now leverage the incredible gift right under your nose: the engineers you work with! Guess what, they are experts at the very thing you want to learn. How convenient. And in my experience, most engineers love nothing more than explaining their craft to curious people.

Here’s some tactical advice for how, and who, to ask questions—from other PMs who went through what you’re currently going through:

**Questions you might want to ask:**

1. Can you draw me a rough diagram of how our system is architected?
2. Say we were to add feature x—what would be involved in making it happen, from idea to launch?
3. What slows your work down the most, in general?
4. Can you show me what it takes for you to update copy in our product?
5. What would you recommend I study in order to level up my technical skills?

**TL;DR** If you’re ever feeling not *technical* enough, put together a list of questions, grab an engineer, find a whiteboard, and ask them questions until you start to understand WTF is going on.

### 3. Build something yourself

Finally, if you want to reach the pinnacle of being a technical PM, you need to learn to code and then build something yourself.

Learning to code is a serious endeavor, and I won’t truly do it justice in one post. Here are a few places I recommend embarking on your coding journey:

1. [CS50: Introduction to Computer Science](https://online-learning.harvard.edu/course/cs50-introduction-computer-science?delta=0) (free)
2. [freeCodeCamp](https://www.freecodecamp.org/) (free)
3. [Codecademy](https://www.codecademy.com/catalog) (free)
4. [Udemy](https://www.udemy.com/courses/development/web-development/)
5. [Coursera](https://www.coursera.org/search?topic=Information+Technology&index=prod_all_products_term_optimization&query=Most+Popular)

Getting technical, as a non-technical PM, is hard. Don’t feel sad if it doesn’t come quickly. Set a few hours aside to learn the basics, ask your engineers more questions, and eventually, if you want to go the extra mile, try to build something yourself. I promise that with a few hours up-front and a few whiteboarding sessions, you’ll see your product with new eyes—and, at the same time, become a much more effective PM.

## 📚 Further study

To go deeper, some additional suggestions:

1. [Subscribe to Technically](https://technically.dev/), by Justin Gage
2. [Learn SQL](https://mode.com/sql-tutorial/) and start running your own queries
3. [Explore more videos by freeCodeCamp.org](https://www.youtube.com/c/Freecodecamp)
4. [Explore more videos by Codecademy](https://www.youtube.com/channel/UC5CMtpogD_P3mOoeiDHD5eQ)
5. Get the [Technical Product Manager Certification](https://www.oneweekpm.com/p/technical-product-manager) by PMHQ

If you’ve gone through this journey and have any additional advice for PMs looking to become more technical, please share 👇

[Leave a comment](https://www.lennysnewsletter.com/p/getting-more-technical/comments)

*Thank you to everyone who shared their suggestions in [this amazing Twitter thread](https://twitter.com/lennysan/status/1437202727877033984). Have a fulfilling and productive week*🙏

## **🔥 Featured job openings**

1. **Pinpoint:** [Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/70b2de44-b90f-4d37-a146-948144a92873) (Remote-Global)
2. **Aescape:** [Product Management Lead](https://pallet.xyz/list/lennys-jobs/jobs/117d35d9-a9b3-49d0-82df-b27a6c074e0f) (Brooklyn, NY)
3. **Mynd:** [Senior Growth Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/c4bde52c-d66e-4b42-96fb-2ba861f72e27) (Remote-US)
4. **Mynd:** [Product Lead, Internal Tools](https://pallet.xyz/list/lennys-jobs/jobs/b6da1eaa-5a2b-4ad4-92f9-5ac4b9f764e5) (Remote-US)
5. **CHPTR:** [Founding Back-End Engineer](https://pallet.xyz/list/lennys-jobs/jobs/c96f89cb-0288-4028-ae4d-f380567449de) (Remote-US)
6. **Permutive:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/1ff1e376-ab34-4138-ba4a-822475672a93) (NYC)
7. **CloudTrucks:** [Product Manager-Console (Workflows & Automations)](https://pallet.xyz/list/lennys-jobs/job/68d092da-db3a-4f25-8b95-2072342c18fe) (SF)
8. **Fairchain:** [Software Engineer, Full Stack](https://pallet.xyz/list/lennys-jobs/job/f2963b88-7eaf-4b4d-9788-4b58f5c6b785) (NYC)
9. **HomeLight:** [Senior Product Manager, Listing Management](https://pallet.xyz/list/lennys-jobs/job/48c02f5e-e681-4b83-9012-fb08ae2c1e52) (SF, Phoenix, Seattle)
10. **Perfect Recall:**[Founding Fullstack Engineer](https://pallet.xyz/list/lennys-jobs/job/7ac1bf05-0aa6-436e-8546-6e14c5222f7e) (Waterloo)
11. **Spatial:** [Backend Engineer](https://pallet.xyz/list/lennys-jobs/job/9424b997-d1e3-4eb1-8b0a-e9f1cc622fb5) (Remote-US)
12. **Maven:** [Product Lead](https://pallet.xyz/list/lennys-jobs/job/de48b7e9-782d-4c3e-a354-6abd66fb7d0d) (Remote-US)
13. **Republic:** [Product Manager](https://pallet.xyz/list/lennys-jobs/job/da2ec715-1731-4709-9194-e4c630709ab1) (NYC, Remote-US)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** Michael Seibel — Building Product

[Watch on YouTube](https://www.youtube.com/watch?v=C27RVio2rOs)

2. **Read:** [The Day You Became A Better Writer](https://dilbertblog.typepad.com/the_dilbert_blog/2007/06/the_day_you_bec.html) by Scott Adams
3. **Look:** [The Winners of the 2021 Drone Photo Awards](https://kottke.org/21/09/the-winners-of-the-2021-drone-photo-awards)

![Drone Award 2021 01](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/53e4819b-20aa-45a0-9371-a06213031100_1300x865.jpeg)

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [43/61] The 10 commandments of salary negotiation

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to a ✨ **bonus 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 about work.*

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

1. *[GTM motions of 30 B2B SaaS companies](https://www.lennysnewsletter.com/p/gtm-motions)*
2. *[Getting more technical](https://www.lennysnewsletter.com/p/getting-more-technical)*
3. *[Examples and templates of 1-Pagers and PRDs](https://www.lennysnewsletter.com/p/prds-1-pagers-examples)*

*On to this week’s post…*

> ## Q: I’m about to start interviewing for a new job, and I’m really bad at negotiating. I know I should, but I basically never negotiate my comp. How do I learn to negotiate, without pissing anyone off?

If you think you’re bad at negotiating, I’m even worse, I promise you. Why can’t you just *tell* me how much it’ll be, and then we can move on? Why do we need to play this game?? Jeez louise.

Well, the reason we have to play this game is because, like it or not, everyone else is playing it. And you’re probably losing — on salary, equity, and promotions.

The good news is that because the other side is playing, they expect you to play along (especially at larger companies). So it rarely creates hard feelings when you negotiate. But you have to know how. And that’s where today’s post comes in.

Since I’m so bad at this, I pulled in [Niya Dragova](https://www.linkedin.com/in/stefaniyadragova/), co-founder of [Candor](https://candor.co/), to answer your question and to share her hard-earned negotiating wisdom with us. Niya has single-handedly helped hundreds of people negotiate their compensation at all of the top tech companies and, as you’ll see below, has incredible insights into the process. I can honestly say this is the most useful post I’ve ever come across on the topic, and I’m really excited to share it with you all. Enjoy!

*You can find Niya on [LinkedIn](https://www.linkedin.com/in/stefaniyadragova/) and [Twitter](https://twitter.com/mediumsizecats), you can learn more about Candor [here](https://candor.co/), and don’t miss [Niya’s insightful weekly newsletter](https://candor.co/newsletter) that highlights hiring trends across the largest tech companies.*

![Image from The 10 commandments of salary negotiation](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1c89c41d-0c4a-4f0d-ab1a-68f26e896821_2048x1340.png)

# The 10 commandments of salary negotiation

*by [Niya Dragova](https://www.linkedin.com/in/stefaniyadragova/)*

The largest salary increase I’ve helped get was for a female FAANG executive: I helped her get $5.4M more on her offer. Through the process, it struck me that even though she was a senior leader everyone admired (you’d 100% know of her if I told you her name), she had very little knowledge of how to negotiate. Don’t get me wrong — she knew how to ask and be assertive, but she was much less comfortable “playing the game.”

*And she’s not alone.*

Regardless of how senior or junior you are, most tech folks struggle with negotiation. Partially this is because compensation is set up to be intentionally misleading. Partially it’s because sticking up for yourself is nerve-racking AF.

Here are the 10 commandments to negotiation I wish everyone knew:

### **1. Negotiation starts earlier than you think**

Every recruiter worth their salt will ask about your salary expectations when you first start interviewing. Do not — I repeat, do not — give them a number.

What to do instead: Ask for the range they’re budgeted for the role.

How to say it: *“Can you tell me the salary band for this level? Happy to let you know if it’s within my range, and we can discuss specific numbers later when I’ve met the team.”*

**Bonus points:** If you’re junior/mid, time all your interviews so you get offers around the same time. If you’re senior, get some press before you start meeting folks.

### **2. Mine for intel during interviews**

Go into the interview ready not just to answer questions but to ask some of your own. You will use this as ammunition to negotiate later. Here are a few examples of what you should ask:

- What’s the biggest priority for the team right now?
- Why is this role open?
- What’s the biggest challenge for someone stepping into this role?
- How does the org structure on the team work?

### **3. Don’t give in to the pressure**

Once you’ve been offered the role, the recruiter’s job shifts from evaluating you to closing you. Most experienced recruiters will ask you again to put up a number for your salary. Clever recruiters may even tell you that they “will go to bat for you.” Yeah, no thanks.

What recruiters say: *“If you give me your number, I will make it happen for you.”*

What they mean: *“I’ll get you something lower, but kinda close to what you asked for.”*

*[Editors note: Some recruiters do indeed go to bat for you, and genuinely want to help you get what you want. Just don’t assume they all do.]*

### **4. At FAANG, your recruiter may have no say at all**

At FAANG-size companies (i.e. over 5K employees), compensation is heavily formulaic. In fact, there is often a separate team — the “compensation committee” — who sets your salary. They take into account your background, interview performance, and level. They give the recruiter a number to go with. The recruiter then gives you the number, and every time you negotiate they have to go back to that committee to ask for a re-evaluation.

*What do clever recruiters do?* They get your number up-front to save some legwork.

Unfortunately, this may hurt your chances of getting more on your offer later. It also deprives you of some valuable data — where you fall in the level/salary band. If you get caught in this loop, quickly turn the tables: most companies will consider “new information,” like another offer, to reopen a negotiation. Don’t forget, an offer to stay from your existing company also counts!

### **5. Read between the lines**

Your initial offer speaks volumes, if you know how to interpret the data. Here are a few scenarios you should consider:

Let’s say you’re applying for an L6 role at a big company.

**Initial offer comes in low**: The team may have felt that you have a lot of “room for growth.” In this case, my advice is to dig deeper and ask the interviewer to share feedback from folks who met you to fix any misconceptions before you *ever* negotiate. Telling someone you want more money because you’re “the greatest PM ever” while the team felt you were “meh” is not going to fly.

**Middle of the road**: You got “the number” (the medium opening number that’s basically a template recruiters use). It’s the most common opening offer — companies do this to reduce risk of lawsuits. Over 80% of people get it. It likely means you don’t have a strong advocate on the interview loop. Do not negotiate until you match with a team and you have a manager batting for you.

**Initial offer comes in top-of-band**: There was likely a discussion about giving you a higher level. Many times in this case, you can push for an “out-of-band” offer — essentially getting paid for an L7 while you’re an L6.

### **6. At a startup, the playbook is different**

You may be dealing with the founder directly. It’s very likely there is no range for the role, as smaller companies have much less access to salary data. The goal at the initial offer conversation is to understand three things:

- The current state of the company ([financing, runway, profitability](https://www.youtube.com/watch?v=wLbl8TGiM8E))
- The plan for your role/function
- [The value of the equity](https://www.hbsaccelerate.org/people/joining-a-startup/how-to-value-your-equity-at-an-early-stage-startup/), considering exit scenarios

That last one can be tricky because you need data the recruiter may be reluctant to give — the option strike price, preferred price, number of outstanding shares — and you need to understand [how options work](https://blog.ycombinator.com/understanding-startup-stock-options-berbix/). At last, get ready to ask:

> *“What is the valuation based on?”*

And get ready to not get a straight answer until you’ve asked five times (yes, this is normal).

**TL;DR:** Ask the questions an investor would ask because, \*news flash\*, you are now an investor — but instead of cash, you’re staking your time and earning trajectory on the company’s success. You can meet with the investors too; it’s 100% OK to ask for that when the company is early-stage.

Lastly, 2021 has been a weird year for startup compensation, so much of the data from previous years is unreliable. Remote work, abundant access to capital, and greater trust in international talent have skewed things quite a bit. Still, I find the [Holloway Guide ranges](https://www.holloway.com/g/equity-compensation/sections/typical-employee-equity-levels) to be a good starting point.

### **7. Your job is to win hearts and minds**

It can be tempting to think you need to negotiate now that you have data. Nope, not yet. The next step, instead, is to upsell your worth before you come back with any kind of counteroffer. This is especially important if you’re going for a senior role.

**What to do next:** Ask for follow-up meetings with decision makers. If you’re a Director or higher, you can usually ask to meet with any VP and possibly C-level execs. VPs can often meet with the CEO and even board members. Take your time; this is important if you want your salary to reflect your value. If everyone wants you, you’ll be calling the shots later.

**How to run these effectively:** Come prepared with three things, tailored to who you’re meeting:

- Questions about how you can create meaningful impact
- Ideas based on your interviews so far
- Bonus points: discussing obstacles to your taking the role and making them sell you on it

### **8. OK, now get some good data**

Did you know that women make only [47 cents in equity](https://tablestakes.com/study/?__cf_chl_jschl_tk__=pmd_40A1mRKd.gfsbXa2LItgrog1X5XNDc.dyIU.kg9pqdo-1630552956-0-gqNtZGzNAdCjcnBszQi9) for every dollar a man makes? A HUGE reason for that is that many women don’t fully evaluate their offer before negotiating. Let’s change that. Particularly if you are a woman, ask yourself these questions:

- Is the offer competitive? (Browse 5.3M offers [here](https://candor.co/offers).)
- How does it work? ([When do I vest; what is the stock worth?](https://candor.co/guides/salary-negotiation#understand))
- Is it all true? ([Is the value of the equity over-inflated?](https://www.holloway.com/g/equity-compensation))
- Does it add up? ([Consider taxes](https://www.picnictax.com/blog/tax-planning-for-startup-employees/) on bonuses and stock.)
- If you have goaled comp, are the goals realistic?

### **9. Comparing offers**

Not all offers are made equal — in fact, they are intentionally confusing. At Google, you may get a front-loaded vesting schedule on your stock; at Amazon, sizable cash bonuses the first two years. It seems obvious that you should look at the comp, but that’s not everything:

- Which company has a better trajectory?
- How do promotions work?
- Is your manager influential enough to pull for you when needed?
- Is your product or team visible enough to get good resourcing?
- What’s the company brand worth to your earnings trajectory?

**TL;DR:** Getting paid more up-front doesn’t always mean you’ll make the most overall. Plan carefully.

### **10. Time to make an ask**

It can be awkward to ask for more money, but trust me, everyone expects you to do it. On top of that, it doesn’t help that so much of the advice out there is conflicting. Let’s set the record straight:

> *“I need a competing offer.”*

**MYTH:** You absolutely do not need multiple offers. Just being able to say you’re speaking to other companies is sufficient — you can quote the expected salaries for other roles if needed.

> *“I need to provide copies of my other offers.”*

**MYTH:** Nope, nope, nope (even though Google in particular loves to ask for them). You signed an NDA before every interview, so you can always use that as a reason.

> *“I should send the recruiter an email with my ask and justification.”*

**MYTH:** Negotiating via email = MAJOR CRINGE and definitely a worse outcome. I know there are folks selling fill-in-the-blank templates out there. My advice if you want a meaningful/large increase is to have the conversation over the phone.

> *“If I find a number online, I can quote it as a reason to get more.”*

**MYTH:** Nothing boils a recruiter’s blood more than “It says X on Glassdoor.” Compensation is an exact science — have arguments prepared that are specific to your situation.

> *“The best way to get more is to reiterate how qualified I am.*”

**MYTH:** You already got interviewed and everyone’s read your resume. That’s how you got your initial offer; now you need to build additional arguments. Use the information you collected during the interview about what challenges the team is facing — maybe that increases the scope of the role? Discuss why leaving your current role will be hard — are you critical to your current team? In other words: instead of *asking* for money, make them *give you* more money by bringing in obstacles the recruiter needs to overcome to close you.

> *“I need to be aggressive and threaten to walk if they don’t match.”*

**MYTH:** LOL, let me know how that goes for you. My guess is you’ll get a mediocre increase worded as a “final offer.” If you want big moves, I’m talking $100K+ more, you need to collaborate with your recruiter, not make them an enemy.

**As a final word of wisdom:** Start with negotiating your overall compensation, not individual components. For example, ask for “500K” and then the next round ask “Can I have X more equity?” Then, when you’ve exhausted all other avenues, ask for a signing bonus. If you still need more help, you can always [read our guide](https://candor.co/guides/salary-negotiation).

#### **Now that you’ve got all these RSUs in your compensation…**

If your new RSUs are more than 10% of your liquid net worth, you should make a plan to diversify ASAP. Holding a concentrated position can translate into greater portfolio volatility, which has been shown to reduce compounded growth rates and future wealth. At Candor we help you automate RSU diversification by converting your stock weekly, even during blackout periods. You can find us [here](https://candor.co/).

*Thanks, [Niya](https://www.linkedin.com/in/stefaniyadragova/)!*

*Till next week, and have a fulfilling and productive week 🙏*

## **🔥 Featured job opportunities**

1. **Highlight:** [Founding Blockchain Engineer](https://pallet.xyz/list/lennys-jobs/jobs/6db63ec8-0421-4e06-9908-0376f44c2f99) (Remote-Global)
2. **Pinpoint:** [Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/70b2de44-b90f-4d37-a146-948144a92873) (Remote-Global)
3. **Aescape:** [Product Management Lead](https://pallet.xyz/list/lennys-jobs/jobs/117d35d9-a9b3-49d0-82df-b27a6c074e0f) (Brooklyn, NY)
4. **Mynd:** [Senior Growth Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/c4bde52c-d66e-4b42-96fb-2ba861f72e27) (Remote-US)
5. **Mynd:** [Product Lead, Internal Tools](https://pallet.xyz/list/lennys-jobs/jobs/b6da1eaa-5a2b-4ad4-92f9-5ac4b9f764e5) (Remote-US)
6. **CHPTR:** [Founding Back-End Engineer](https://pallet.xyz/list/lennys-jobs/jobs/c96f89cb-0288-4028-ae4d-f380567449de) (Remote-US)
7. **Permutive:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/1ff1e376-ab34-4138-ba4a-822475672a93) (NYC)
8. **CloudTrucks:** [Product Manager-Console](https://pallet.xyz/list/lennys-jobs/job/68d092da-db3a-4f25-8b95-2072342c18fe) (SF)
9. **Fairchain:** [Software Engineer, Full Stack](https://pallet.xyz/list/lennys-jobs/job/f2963b88-7eaf-4b4d-9788-4b58f5c6b785) (NYC)
10. **HomeLight:** [Senior Product Manager, Listing Management](https://pallet.xyz/list/lennys-jobs/job/48c02f5e-e681-4b83-9012-fb08ae2c1e52) (SF, Phoenix, Seattle)
11. **Perfect Recall:**[Founding Fullstack Engineer](https://pallet.xyz/list/lennys-jobs/job/7ac1bf05-0aa6-436e-8546-6e14c5222f7e) (Waterloo)
12. **Spatial:** [Backend Engineer](https://pallet.xyz/list/lennys-jobs/job/9424b997-d1e3-4eb1-8b0a-e9f1cc622fb5) (Remote-US)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [44/61] Saying no

> ## Q: I find myself often having to say no to my manager. What’s an effective technique for saying no while maintaining their trust and not making them see you as the “no” person?

First of all, it’s OK to be the “no” person. It’s literally your job—to create focus and stability for your team and company. Saying no is how you do that. And I bet your leader (mostly) appreciates you for it, even if it doesn’t feel good.

But that doesn’t answer your question. There’s certainly a skill to saying no, especially when you have to do it often.

Whenever I reflect on a question like this, I try to flip the script and imagine I’m the other person in the situation. As a *manager*, how would I want my report to deal with the barrage of ideas that I throw at them?

Me, I’d want them to:

1. Truly listen
2. Assume I know what I’m talking about
3. Come at it with an attitude of “How *could* we do this, if we wanted to?” vs. “Here are all the reasons we can’t”
4. Be direct and honest about where they see gaps in my thinking
5. Be open-minded to big, radical, scary ideas

Basically, to treat me like an adult.

Yes, managers differ in how strongly they hold their views and handle criticism. And yes, not every idea your manager suggests will be good. Or feasible. But your manager almost surely has broader context, insight, and experience than you, and they are looking to you to help them make their ideas stronger—not just point out all the reasons it can’t be done.

At the same time, your team has limited resources, and you have limited brain capacity to evaluate every idea. So you’ll be saying *no* often. It’s important to get good at it.

My advice to you for saying *no* effectively is to follow this three-step process:

- **Step 1: Listen, ask questions**
- **Step 2: Form your own point of view**
- **Step 3: Respond constructively**

Below, I’ll unpack each of these steps, but to give you a glimpse of where we’ll end up, here are five lines you can use to effectively say no (sorted by how good the idea is) :

> ***“Yes, but here’s what’ll need to change. Should we move forward?”***

> ***“Yes, but not right now because we should stay focused on X because of XYZ. Do you agree?”***

> ***“No, but how about we do XYZ in instead, which achieves a similar outcome?”***

> ***“No, but there’s something there. Let’s explore it further. Here’s what I suggest as a next step…”***

> ***“No, because it’s a bad idea for reasons XYZ. Do you agree?”***

Let’s dive in.

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/020d3622-4a7f-4516-b547-721395df6380_2048x1024.png)

### Step 1: Listen, ask questions

When you first hear your manager’s idea, avoid reacting with a quick yes or no. Especially if you think it’s a terrible idea. Instead, start by getting curious. Force yourself to ask at least three questions. For example: What does my manager see that I don’t see? Am I too in the weeds? Am I afraid of shaking things up and doing something risky? Am I missing some important broader context?

For example, say your manager proposes building a Clubhouse-like audio experience into your product. Before immediately responding with “That’s a terrible idea,” take a breath. Start by saying something like:

> #### “Interesting! Let me try to better understand what you’re thinking here…”

Make it clear you’re open-minded to their idea. You can start by saying “I’m into it” or “Interesting!” or “I’m intrigued.” You want your manager to feel that you’re genuinely open to the idea. And actually try to be!

Then pivot to “Let me try to better understand what you’re thinking…”

**Questions you may want to ask:**

1. Can you help me visualize what it’ll look like in the product, roughly?
2. How high of a priority is this for you, vs. other work we’re doing? Do you think we hop on this now or queue it up for our next planning cycle?
3. How perishable do you think this opportunity is—if we tackle it next year, would the opportunity still be there?
4. What gets you most excited about this idea?
5. How do you see this fitting into our broader strategy—or is this a new direction you think we should take?

Essentially, practice the Socratic method:

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

Dig as far as you can, in the time you have, both to understand where your manager is coming from and to make sure they recognize that you genuinely care about the idea.

This step becomes even more effective if you can turn it from a verbal to a written conversation, where you and your manager are forced to crystallize your thinking in writing. Here are a few templates to get you started:

1. [Initiative strategy template](https://docs.google.com/document/d/1RQWuvWDgcAv1ylksFXtiwhuTbHLcL1byIcoXsbCQfic)
2. [Amazon 6-pager](https://writingcooperative.com/the-anatomy-of-an-amazon-6-pager-fc79f31a41c9)
3. [Eigenquestions: The Art of Framing Problems](https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems)
4. [Two-way writeups: Coda’s secret to shipping fast](https://coda.io/@lshackleton/two-way-writeups-coda-s-secret-to-shipping-fast)

Only after you’ve given the idea a real chance should you proceed to the next step.

### Step 2: Form your point of view

With context, you can now form your own opinion. The key here is to form *your own*, independent point of view. Forget what others believe and what’s easy. Do you, as a leader within the company, believe this is a good idea? Come at it with an open mind.

**Tips for staying open-minded:**

1. Take your team’s feelings out of the equation. You can always think about how to message and implement the changes later. If you didn’t have to deal with any drama, is this an objectively good idea?
2. Is it perishable? Does it need to happen now?
3. What’s the potential downside if it fails? What’s the potential upside if it succeeds?
4. Does it align with your business and/or product strategy? Or is it orthogonal and a distraction?
5. Is it likely your business will be better off if it happened?

As you think through the idea, consider where you land across this spectrum of options:

1. Yes, this is an amazing idea and should happen ASAP.
2. Yes, this is a great idea and should definitely happen, but not right now.
3. Yes, this is an interesting idea and we should explore it further.
4. No, this is a bad idea, but we can achieve similar results with a variation of it.
5. No, this is just a bad idea and we shouldn’t do it.

The hardest part of this step is often not deciding whether it’s a good idea or not but finding the time to think through each aspect in depth. One trick I use is to spend 10 minutes filling out a [1-Pager](https://docs.google.com/document/d/1541V32QgSwyCFWxtiMIThn-6n-2s7fVWztEWVa970uo/edit), fleshing out the problem being solved, the evidence of the problem, and a high-level strategy. This helps me narrow in on the biggest gaps in the idea, which I then follow up on with the original idea-giver.

Once you’ve formed your own point of view, you can focus on how best to respond and articulate your answer back to your manager.

### **Step 3: Respond constructively**

The final step is to get back to your manager with your answer. Depending on how you feel about the idea, below are five phrases you can use to form a response. You’ll notice the first two start with “yes”—but if you look closely, they actually help you say no. Keep reading.

#### Path 1: “Yes, but here’s what’ll need to change. Should we move forward?”

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/56bd5168-a29b-4d3b-8404-5782a306de62_2048x770.png)

Go this route if (1) you actually believe this idea should happen immediately or (2) more to our point, you don’t actually love the idea and instead want to communicate how painful it’ll be to make it happen:

1. Existing priorities that will get pushed
2. Launch dates changing
3. Resources getting moved around
4. Risks being introduced
5. Impact on dependencies and other projects

Lay out the rough plan for how you’d go about changing course and jumping on this opportunity. Try to be as precise and unbiased as possible. The goal here isn’t to be deceitful but to clearly and transparently give your manager all the information they’ll need to make a well-informed decision. If you firmly believe this is a bad idea though, I suggest going a different route.

#### Path 2: “Yes, but not right now because we should stay focused on X because of XYZ. Do you agree?”

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/db44c7af-edce-433e-996f-e69ba4ad7359_2048x770.png)

Go this route if you like the idea but don’t believe it’s worth disrupting the work that’s in-flight. In my experience, a majority of ideas will fall into this bucket.

The key here is to remind your manager of *why* your team is focused on something else right now, and why it’s best to keep it that way.

[Ken Norton](https://www.bringthedonuts.com/about/) shared some great advice:

When speaking with your manager, your job is to help them see what you see—that the work in progress should stay the highest priority. To do this, you can:

1. Bring up the roadmap and review it together—point out what impact each of the major tracks of work aims to have
2. Bring up slides/memos from your last planning session—review the high-level strategy
3. Discuss the broader strategy—and how this project does or doesn’t fit
4. Bring up some of the pain that would be involved in making a change
5. Discuss how urgently this needs to happen, vs. waiting until the next planning cycle

Again, the goal is to avoid disrupting existing impactful work, even if the idea is a good one, by reminding your manager why you committed to it in the first place.

#### Path 3: “No, but how about we do XYZ instead, which achieves a similar outcome?”

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/63249c07-1497-4e85-9bfe-300f84d7d5e9_2048x770.png)

You know how, as PMs, we learn to listen to customers to understand their problems but not necessarily rely on their proposed solutions? It works the same way with colleagues. Your manager may have identified a big opportunity but may not have nailed the optimal way to tackle it.

While marinating on the idea in step 2 of our process, look for a simpler, or even more impactful solution, to the opportunity your manager found. Ideally one that doesn’t disrupt what your team is currently working on. Win-win!

[Check out this post](https://www.lennysnewsletter.com/p/where-great-product-roadmap-ideas) for some inspiration, and when presented with a new idea, always ask yourself: Is there a better way to achieve the same outcome? Can I pivot my manager’s idea to something even stronger?

#### Path 4: “No, but there’s something there. Let’s explore it further. Here’s what I suggest as a next step…”

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a8c8d3cb-4509-4f33-ac9b-ac48624bf95f_2048x770.png)

Use this path sparingly, because it’s the easy way out. Many ideas will be interesting and worth exploring, but you have limited time to explore every interesting idea.

Having said that, many ideas will be worth exploring. So go ahead and explore. Just make sure to communicate a clear next step, and a timeline for the exploration.

> #### “Originality is fragile. And, in its first moments, it’s often far from pretty. Our newest and most daring ideas are ‘ugly babies’ … They are not beautiful, miniature versions of the adults they will grow up to be. They are truly ugly: awkward and unformed, vulnerable and incomplete. They need nurturing—in the form of time and patience—in order to grow.”
>
> #### —Ed Catmull, co-founder of Pixar

A few ways to explore a nascent idea:

1. Discuss it with smart colleagues
2. Create wireframes and run them by potential users
3. Prototype it
4. [Write a 1-Pager](https://docs.google.com/document/d/1541V32QgSwyCFWxtiMIThn-6n-2s7fVWztEWVa970uo/edit)
5. Run a quick A/B test to see if there’s a bigger opportunity.

At the end of your exploration, you’ll end up down one of the other four paths.

#### Path 5: “No, because it’s a bad idea for reasons XYZ. Do you agree?”

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a065c439-cd81-48fc-96cd-0cde3fd42573_2048x770.png)

Finally, there are ideas that are just plain bad. They should never be done, and it’s your job to cut them off quickly. Some of the reasons an idea could be bad:

1. **Low ROI**: The workload will be very high, and the impact will not be as high as one thinks.
2. **Strategically misaligned:** This idea doesn’t support the broader strategy and is a distraction.
3. **Too high-risk:** This has too high a chance of failing and/or hurting the business.
4. **Bad product experience:** This will hurt the product experience, without enough benefit.
5. **High cost:** The cost to design, build, launch, and maintain it will simply be too high for this to be feasible.

When laying out your case for why this is a bad idea, remember that you’re trying to convince your manager they are wrong. Never an easy task. You need to come at it with a clear and convincing argument. Don’t half-ass it.

What I find works best is to be as unbiased as I possibly can in my writeup. Let facts speak for themselves. Leave opinions off the table, especially at first.

I like making a pros/cons list, and occasionally use a [Minto pyramid](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr) structure, leveraging all of the raw evidence at my disposal:

1. **Data:** What evidence do we have (either quantitative or qualitative) that this is a good idea? Is there evidence telling us it’s a bad idea?
2. **Working backward:** If we work backward from our *ideal* product experience (i.e. our vision), does this play an important role in that future?
3. **Strategy:** How closely does this align with our product strategy?
4. **Opportunity cost:** How much work is this expected to take, and what work would be deprioritized in order to make this happen?
5. **History:** Is there anything we’ve done in the past that’s similar to this idea that has worked out, or failed, that informs this idea’s chances of success?
6. **Authority:** Do smart people with experience with the problem space tell us there’s something great here?
7. **A quick test:** What’s the quickest test we can run (either in product or in user research) to give us evidence this will work?

In this process, you may even convince yourself it’s a great idea. Or you may find there’s just enough reason to give it a shot if your manager feels strongly about it.

Managers come in all shapes and sizes, some more rational and open to feedback than others. Sometimes you’ll succeed, sometimes you won’t. That’s normal. The more you do this, the better you’ll get. And eventually you’ll be the person on the other side, sharing your many brilliant ideas with your direct reports, hoping you don’t hear this:

![Image from Saying no](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4d855f11-95f5-49f1-a899-73f52ef4f21d_480x400.gif)

Good luck! If you come across any other great advice, I’d love to hear it in the comments 👇

[Leave a comment](https://www.lennysnewsletter.com/p/saying-no/comments)

## 📚 Further study

1. [This Twitter thread, by Jorge Ortiz](https://twitter.com/JorgeO/status/1438255769934200833?s=20)
2. [Templates for how to say no](https://www.starterstory.com/how-to-say-no)
3. [Ask a manager: How to say no to your boss](https://www.askamanager.org/2019/03/how-to-say-no-to-your-boss.html)
4. [How to Tell Your Boss “No”—Without Saying “No”](https://www.themuse.com/advice/how-to-tell-your-boss-nowithout-saying-no)

*Have a fulfilling and productive week*🙏

## **🔥 Featured job openings**

1. **Brace:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/f04ce367-5a1f-462e-a79d-725870b8eded) (NYC)
2. **Goldin Auctions:** [Director of Marketing](https://pallet.xyz/list/lennys-jobs/jobs/9c678421-6315-445c-a735-9362904b5229) (Remote-Global)
3. **Highlight:** [Founding Blockchain Engineer](https://pallet.xyz/list/lennys-jobs/jobs/6db63ec8-0421-4e06-9908-0376f44c2f99) (Remote-Global)
4. **Pinpoint:** [Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/70b2de44-b90f-4d37-a146-948144a92873) (Remote-Global)
5. **Aescape:** [Product Management Lead](https://pallet.xyz/list/lennys-jobs/jobs/117d35d9-a9b3-49d0-82df-b27a6c074e0f) (Brooklyn, NY)
6. **Mynd:** [Senior Growth Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/c4bde52c-d66e-4b42-96fb-2ba861f72e27) (Remote-US)
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13. **Perfect Recall:**[Founding Fullstack Engineer](https://pallet.xyz/list/lennys-jobs/job/7ac1bf05-0aa6-436e-8546-6e14c5222f7e) (Waterloo)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [Japanese Curry Udon Noodles](https://www.youtube.com/watch?v=z7pxUWAWjvs)

[Watch on YouTube](https://www.youtube.com/watch?v=z7pxUWAWjvs)

2. **Listen:** [20Growth: How to Hire a Head of Growth](https://www.thetwentyminutevc.com/casey-winters/) with Casey Winters and Harry Stebbings
3. **Read:** [Executive Engagement](https://svpg.com/executive-engagement/) by Marty Cagan

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [45/61] My all-time favorite reads on product, growth, leadership, writing, investing, and much more

> ## Q: I’m taking some time off and looking to study up on all things product and company building. Any recommendations?

For the past three years, I’ve been keeping a private collection of all my favorite reads/listens/watches: around 200 of the most actionable, highest signal-to-noise content I’ve come across on product, growth, investing, writing, and much more.

Access to [this collection](https://coda.io/@lennysan/lennys-newsletter-community-resources) has been a perk of your paid subscription, but many of you didn’t know it existed, aren’t sure how to find it, and honestly, it’s gotten a bit stale. Inspired by your question, I’ve spent the past week cleaning it up—removing posts that haven’t stood the test of time and adding dozens more.

**Below, I present my all-time favorite content across seven subjects:**

1. **🚀 Growth**
2. **🌱 Startups**
3. **✍️ Writing**
4. **💸 Angel investing**
5. **🦸‍♂️ Product management**
6. **👑 Leadership**
7. **🏗 Frameworks**

I’m certain I’ve missed many great pieces of content. You can [nominate](https://coda.io/form/Nominate-a-resource_dzwJdExoJuW) your favorite posts to be added or just reply and share it with me—seriously, please do that 🙏. You can also [visit the full directory here](https://coda.io/@lennysan/lennys-newsletter-community-resources) anytime. Within some of these categories, for completeness, I’ve included some of my own writing that has been particularly helpful to readers (and that I’m particularly proud of).

Finally, some advice for not getting overwhelmed by this amount of content:

1. Pick the one subject you’re most curious about *right now* and read just a few of the pieces
2. Save this email and come back to it when you’re looking for inspiration in a subject
3. Archive this email immediately and get back to work

![Image from My all-time favorite reads on product, growth, leadership, writing, investing](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b9654246-b8b0-432c-bdd9-12776264fa26_2048x1024.png)

## 🚀 Growth

#### General

1. [Startup = growth](https://www.paulgraham.com/growth.html) by Paul Graham
2. [Growth wins](https://www.reforge.com/blog/growth-wins) by Casey Winters, Brian Balfour, and Kevin Kwok
3. [Growth](https://www.youtube.com/watch?v=n_yHZ_vKjno) by Alex Schultz
4. [Growing a startup](https://www.julian.com/guide/growth/intro) by Julian Shapiro

#### Growth strategy

1. [Growth loops are the new funnels](https://www.reforge.com/blog/growth-loops) by Brian Balfour
2. [Four fits for $100m+ growth](https://brianbalfour.com/four-fits-growth-framework) by Brian Balfour
3. [Distribution](https://a16z.com/2017/06/09/distribution-model-sales-channels/) by Ben Horowitz
4. [The power user curve](https://andrewchen.com/power-user-curve/) by Andrew Chen
5. [The racecar growth framework](https://www.reforge.com/blog/racecar-growth-framework) by Dan Hockenmaier and myself
6. [Drive growth by picking the right lane](https://review.firstround.com/drive-growth-by-picking-the-right-lane-a-customer-acquisition-playbook-for-consumer-startups) by Dan Hockenmaier and myself

#### B2B sales

1. [Founding sales](https://www.foundingsales.com/) by Pete Kazanjy
2. [Fear of sales](https://blog.eladgil.com/2019/10/fear-of-sales.html) by Elad Gil
3. [The “$20M to $500m” question: Adding top down sales](https://a16z.com/2020/12/03/adding-top-down-sales-bottom-up-enterprise-startup/) by a16z
4. [B2B SaaS marketing guide](https://www.kracov.co/writing/b2b-saas-marketing-guide) by Alex Kracov
5. [How I’ve approached founder-led sales](https://www.kracov.co/writing/founder-sales) by Alex Kracov
6. [The greatest sales pitch I’ve seen all year](https://medium.com/the-mission/the-best-sales-pitch-ive-seen-all-year-7fa92afaa248) by Andy Raskin
7. [Simple math to set up a sales team](https://sacks.substack.com/p/simple-math-to-set-up-a-sales-team) by David Sacks
8. [Positioning your startup is vital—here’s how to nail it](https://review.firstround.com/Positioning-Your-Startup-is-Vital-Heres-How-to-Do-It-Right) by Arielle Jackson
9. [Positioning](https://www.lennysnewsletter.com/p/positioning) by April Dunford

#### B2B GTM

1. [The modern GTM](https://www.field-guide.unusual.vc/chapters-enterprise/the-modern-go-to-market) by Unusual Ventures
2. [GTM nirvana](https://docs.google.com/presentation/d/1YoaOOX6a2SR7exE4roSg1AxYOxFykCEUS6roYyUtydU/edit) by Caroline Clark
3. [The market curve](https://medium.com/sequoia-capital/the-market-curve-44097b626f6d) by Mike Vernal
4. [This GTM-leader-turned-investor crowdsources early lessons from Stripe, Figma & more](https://review.firstround.com/this-gtm-leader-turned-investor-crowdsources-early-lessons-from-stripe-figma-and-more#lesson-3-beware-of-abandoning-founder-led-sales-prematurely-but-be-ready-to-scale-immediately-once-you-find-true-market-pull) by Meka Asonye

#### PLG / Bottom-up

1. [Introduction to PLG (product-led growth)](https://www.field-guide.unusual.vc/field-guide-enterprise/introduction-to-plg-product-led-growth) by Sandhya Hegde
2. [Picking a GTM motion](https://www.field-guide.unusual.vc/field-guide-enterprise/picking-a-gtm-motion) by John Vrionis
3. [How David Sacks built the first bottom-up playbook for enterprise](https://wfh.substack.com/p/how-david-sacks-built-the-first-bottom) by Bri Kimmel
4. [The Transition: Layering sales onto a bottom-up self-serve product](https://www.lennysnewsletter.com/p/sales-bottom-up) by Pete Kazanjy
5. [Growth + sales: The new era of enterprise go-to-market](https://a16z.com/2020/07/29/growthsales-the-new-era-of-enterprise-go-to-market/) by Peter Lauten and Martin Casado
6. [How to know if you’re interviewing at a product-led company](https://andrewskotzko.com/how-to-know-if-youre-interviewing-at-a-product-led-company/) by Andrew Skotzko
7. [Product-led growth lessons from Atlassian](https://mattryall.net/blog/product-led-growth) by Matt Ryall
8. [The product-led-growth (PLG) playbook for B2B startups](https://blog.stage2.capital/the-product-led-growth-plg-playbook-for-b2b-startups) by Mark Roberge

#### SEO

1. [Winning at SEO](https://www.lennysnewsletter.com/p/crafting-an-seo-strategy-issue-34) by Brian Ta
2. [The SEO strategy Zapier used to reach $140M ARR](https://ryanberg.co/how-zapier-reached-35m-arr-with-this-saas-seo-strategy/) by Ryan Berg
3. [How MasterClass built an $800M edtech empire in just 5 years](https://foundationinc.co/lab/masterclass-empire/)
4. [The Canva backlink empire: How SEO, outreach & content led to a $6B valuation](https://foundationinc.co/lab/canva-seo)
5. [How we grew our SaaS blog traffic to 30k monthly visits in 6 months](https://www.openphone.co/blog/how-we-grew-our-saas-blog-traffic-to-30k-monthly-visits-in-6-months/)
6. [Content-driven growth](https://www.lennysnewsletter.com/p/content-driven-growth-strategy) (by me)

#### Marketplaces

1. [The hierarchy of marketplaces](https://sarahtavel.medium.com/the-hierarchy-of-marketplaces-introduction-and-level-1-983995aa218e) by Sarah Tavel
2. [Four paths to marketplace success](https://a16z.com/2020/02/20/marketplace-engagement/) by D’Arcy Coolican
3. [Underutilized fixed assets](https://kwokchain.com/2020/01/23/underutilized-fixed-assets/) by Kevin Kwok
4. [Marketplace supply strategy](https://a16z.com/2021/03/31/marketplace-supply-strategy/) by Casey Winters and Anne Lewandowski
5. [“White space” for building a marketplace](https://sarahtavel.medium.com/white-space-for-building-a-marketplace-how-to-find-your-competitions-vulnerabilities-and-79674aa4d399) by Sarah Tavel
6. [Sequencing business models: The types of marketplaces](https://caseyaccidental.com/marketplace-types) by Casey Winters
7. [The a16z Marketplace 100: 2021](https://a16z.com/marketplace-100/) by D’Arcy Coolican and Brandon Barros
8. [Operating leverage](https://www.firehose.vc/p/firehose-194-operating-leverage-) by Alex Taussig
9. [How to kickstart and scale a marketplace business](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace) (by me)

#### Growth team structure

1. [How to hire a head of growth](https://www.thetwentyminutevc.com/casey-winters/) by Casey Winters and Harry Stebbings
2. [Building growth: product, process, and team](https://www.reforge.com/blog/growth-system) by Brian Balfour, Casey Winters, and Kevin Kwok
3. [I’ve built multiple growth teams. Here’s why I won’t do it again](https://cxl.com/blog/dont-build-growth-teams/) by Lars Lofgren

## 🌱 Startups

#### General

1. [Startup advice](https://blog.samaltman.com/startup-advice) by Sam Altman
2. [The hardest lessons for startups to learn](https://www.paulgraham.com/startuplessons.html) by Paul Graham
3. [Building product](https://www.youtube.com/watch?v=C27RVio2rOs) by Michael Seibel
4. [The cadence: How to operate a SaaS startu](https://medium.com/craft-ventures/the-cadence-how-to-operate-a-saas-startup-436aa8099e8)p by David Sacks
5. [Choosing your north star metric](https://future.a16z.com/north-star-metrics/) (by me)

#### Fundraising

1. [On presentations](https://www.beautiful.ai/player/-LiSV45O9K1sE8uv5oMj/On-Presentations) by Siqi Chen
2. [Advice on pitching](https://www.ycombinator.com/library/3b-advice-on-pitching) by Aaron Harris (YC)
3. [All the public startup pitch decks in one place](https://medium.com/startup-grind/all-the-public-startup-pitch-decks-in-one-place-7d3ddff33bdc) by Andy Sparks
4. [A playbook for fundraising](https://www.lennysnewsletter.com/p/a-playbook-for-fundraising) by Marc McCabe
5. [The unusual guide for raising seed and Series A capital](https://www.field-guide.unusual.vc/field-guide-enterprise/fundraising-milestones-valuations) by John Vrionis
6. [Writing a business plan](https://www.sequoiacap.com/article/writing-a-business-plan/#) by Sequoia
7. [A guide to seed fundraising](https://www.ycombinator.com/library/4A-a-guide-to-seed-fundraising) by Geoff Ralston (YC)
8. [How to run an investment process](https://schlaf.me/ondeck/) by Steve Schlafman
9. [Market sizing guide](https://blog.pear.vc/2021/08/03/marketsizing/) by Pear VC
10. [Let’s talk Series Bs](https://mrallenmiller.medium.com/lets-talk-series-bs-9733cc2eebf1) by Allen Miller

#### Product-market fit

1. [Do you have product market fit?](https://www.youtube.com/watch?v=bpnYFG1-rdk) by Casey Winters
2. [Andy Rachleff on “How to know if you’ve got product market fit”](https://podcasts.apple.com/us/podcast/andy-rachleff-on-how-to-know-if-youve-got-product-market-fit/id1488560647?i=1000458416917)
3. [How to know if you’ve got product-market fit](https://www.lennysnewsletter.com/p/how-to-know-if-youve-got-productmarket) (by me)
4. [What it feels like when you've found product-market fit](https://www.lennysnewsletter.com/p/what-it-feels-like-when-youve-found) (by me)
5. [How long it takes to find product-market fit](https://www.lennysnewsletter.com/p/time-to-product-market-fit) (by me)
6. [What is good retention?](https://www.lennysnewsletter.com/p/what-is-good-retention-issue-29) (by me)

#### Pricing strategy

1. [Pricing your SaaS product](https://www.lennysnewsletter.com/p/saas-pricing-strategy) by Patrick Campbell
2. [Bottom up pricing & packaging: Let the user journey be your guide](https://a16z.com/2021/03/11/bottom-up-pricing-packaging-let-the-user-journey-be-your-guide/) by Jennifer Li and Martin Casado
3. [Per seat or per use pricing: A framework for evaluating the right strategy for your startup](https://tomtunguz.com/seat-vs-usage-based-pricing/) by Tomasz Tunguz
4. [Pricing lessons from working with 30+ seed and Series A B2B startups](https://review.firstround.com/pricing-lessons-from-working-with-30-seed-and-series-a-b2b-startups) by Tyler Gaffney

#### Financials

1. [The burn multiple](https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200) by David Sacks
2. [Cash conversion cycle: Bridging the gap between profitability & cash flow](https://every.to/napkin-math/cash-conversion-cycle-bridging-the-18577406) by Adam Keesling
3. [Benchmarks of option plans](https://www.indexventures.com/optionplan/#expected_funding_rounds_pre_exit=series-b-and-c&employee_country=us&mode=seed) by Index Ventures

#### Co-founder relationship

1. [Investing in your co-founder relationship to weather the storm](https://schlaf.me/cofounder/) by Steve Schlafman
2. [The founder dating playbook: Here’s the process I used to find my co-founder](https://review.firstround.com/the-founder-dating-playbook-heres-the-process-i-used-to-find-my-co-founder) by Gloria Lin
3. [Healing your co-founder relationship](https://www.lennysnewsletter.com/p/saving-your-co-founder-relationship) by Carole Robin

#### Working remotely

1. [GitLab’s guide to all-remote](https://about.gitlab.com/company/culture/all-remote/guide/)
2. [Zapier’s guide to working remotely](https://zapier.com/learn/remote-work/)

## ✍️ Writing

1. [How to write usefully](https://www.paulgraham.com/useful.html) by Paul Graham
2. [On Writing Well](https://www.amazon.com/dp/B0090RVGW0/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1) by William Zinsser
3. [The day you became a better writer](https://dilbertblog.typepad.com/the_dilbert_blog/2007/06/the_day_you_bec.html) by Scott Adams
4. [Why you should write](https://perell.com/essay/why-you-should-write/) by David Perell
5. [Writing well](https://www.julian.com/guide/write/intro) by Julian Shapiro
6. [Write for one person](https://perell.com/note/write-for-yourself/) by David Perell
7. [On Writing: A Memoir of the Craft](https://www.amazon.com/Writing-10th-Anniversary-Memoir-Craft/dp/1439156816) Stephen King

## 💸 Angel investing

1. [How to angel invest](https://nav.al/angel-1) by Naval
2. [How to be an angel investor](https://www.paulgraham.com/angelinvesting.html) by Paul Graham
3. [Investing in public: Non-obvious lessons from 100+ angel investments](https://sacerdoti.medium.com/investing-in-public-non-obvious-lessons-from-100-angel-investments-a5951985593e) by Tod Sacerdoti
4. [Spearhead blog](https://spearhead.co/blog) by Naval and Nivi
5. [Angel](https://www.amazon.com/Angel-Invest-Technology-Startups-Timeless-Investor/dp/0062560700) by Jason Calacanis

## 🦸‍♂️ Product management

#### General

1. [10 traits of great PMs](https://medium.com/@noah_weiss/10-traits-of-great-pms-a7776cd3d9cd) by Noah Weiss
2. [Building products](https://medium.com/the-year-of-the-looking-glass/building-products-91aa93bea4bb) by Julie Zhuo
3. [Product management mental models for everyone](https://blackboxofpm.com/product-management-mental-models-for-everyone-31e7828cb50b) by Brandon Chu
4. [3 types of product managers: Builders, tuners, innovators](https://www.sachinrekhi.com/3-types-of-product-managers-builders-tuners-innovators) by Sachin Rekhi
5. [What makes a strong product culture?](https://newsletter.bringthedonuts.com/p/what-makes-a-strong-product-culture) by Ken Norton
6. [Good product team/bad product team](https://svpg.com/good-product-team-bad-product-team/) by Marty Cagan
7. [Executive engagement](https://svpg.com/executive-engagement/) by Marty Cagan
8. [Observations on product management](https://hackernoon.com/observations-on-product-management-3abc7e00148e) by Dan Hill
9. [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

#### Templates

1. [My favorite product management templates](https://www.lennysnewsletter.com/p/my-favorite-templates-issue-37) (by me)
2. [Growth experiment write-up template](https://docs.google.com/document/d/1aPAOEvYbT9gsSUUtucANjcKQf1J5CqMwLgbMhuAiQxY/edit) by David Ly Khim
3. [180+ OKR and goal examples](https://hypercontext.com/goal-examples)

#### The PM role

1. [Communication is the job](https://boz.com/articles/communication-is-the-job) by Boz
2. [The growing specialization of product management](https://www.reforge.com/blog/product-specializations) by Adam Fishman and Keya Patel
3. [How to become a peak product manager](https://www.ravi-mehta.com/product-manager-skills/) by Ravi Mehta
4. [Dropbox VP, product and growth Adam Nash on great product leaders](https://www.youtube.com/watch?v=24F8WlyMR00)
5. [How am I going to move my product forward today?](https://www.sachinrekhi.com/how-am-i-going-to-move-my-product-forward-today) by Sachin Rekhi
6. [A leader’s guide to implementing OKRs](https://www.sachinrekhi.com/a-leaders-guide-to-implementing-okrs) by Sachin Rekhi
7. [Time management: Tips for product managers](https://medium.com/@johnpcutler/time-management-tips-for-product-managers-925e4ac5efa9) by John Cutler
8. [Product management career ladders](https://www.lennysnewsletter.com/p/jobs-of-product-manager) (by me)
9. [A comprehensive survey of product management](https://www.lennysnewsletter.com/p/product-management-survey) (by me)

#### Getting into PM

1. [How to get into product management](https://www.lennysnewsletter.com/p/how-to-get-into-product-management) (by me)
2. [Breaking into PMing](https://twitter.com/sriramk/status/1249860579994435585) by Sriram Krishnan
3. [How to break into product management](https://www.sachinrekhi.com/podcast-how-to-break-into-product-management) by Sachin Rekhi

#### Strategy

1. [Good Strategy Bad Strategy](https://www.amazon.com/dp/B004J4WKEC/) by Richard Rumelt
2. [WTF is strategy?](https://hackernoon.com/wtf-is-a-strategy-bcaa3fda9a31) by Vince Law
3. [Applying leverage as a product manager](https://blackboxofpm.com/applying-leverage-as-a-product-manager-ffad4a99db24) by Brandon Chu
4. [How to become a strategic leader](https://sloanreview.mit.edu/article/how-to-become-a-strategic-leader/) by Julie Zhuo
5. [How to define your product strategy](https://gibsonbiddle.medium.com/intro-to-product-strategy-60bdf72b17e3) by Gibson Biddle
6. [Mission, strategy, and tactics](https://boz.com/articles/strategy-tactics) by Boz
7. [Working backwards](https://www.quora.com/What-is-Amazons-approach-to-product-development-and-product-management) by Ian McAllister
8. [Getting better at product strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy) (by me)

#### Vision

1. [The Magic of Thinking Big](https://www.amazon.com/Magic-Thinking-Big-David-Schwartz-ebook/dp/B00NGZIR92/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=) by David Joseph Schwartz
2. [How to build a breakthrough](https://medium.com/@m2jr/how-to-build-a-breakthrough-3071b6415b06) by Mike Maples, Jr.
3. [A founder’s guide to coming up with vision and strategy](https://laurabehrenswu.com/2019/02/14/a-founders-guide-to-coming-up-with-a-strategy/) by Laura Behrens Wu

#### Execution

1. [Product development cycle fundamentals](https://www.ycombinator.com/library/4e-product-development-cycle-fundamentals) by Michael Seibel
2. [Making good decisions as a product manager](https://blackboxofpm.com/making-good-decisions-as-a-product-manager-c66ddacc9e2b) by Brandon Chu
3. [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
4. [How am I going to move my product forward today?](https://www.sachinrekhi.com/how-am-i-going-to-move-my-product-forward-today) by Sachin Rekhi
5. [Measure What Matters](https://www.amazon.com/dp/B078FZ9SYB/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1) by John Doerr
6. [Miro’s product alignment approach](https://blog.farbodsaraf.com/p/miros-product-alignment-approach) by Farbod Saraf
7. [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
8. [Deadlines](https://blackboxofpm.com/deadlines-d6925e5c694f) by Brandon Chu
9. [A three-step framework for solving problems](https://uxdesign.cc/how-to-solve-problems-6bf14222e424) (by me)
10. [Prioritizing](https://www.lennysnewsletter.com/p/prioritizing) (by me)

#### Communication

1. [Executive communication](https://www.heavybit.com/library/video/executive-communication/) by Michael Dearing
2. [How to write email with military precision](https://hbr.org/2016/11/how-to-write-email-with-military-precision) by Kabir Sehgal (HBR)
3. [The Minto pyramid principle and the SCR Framework](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr) (by me)

#### Design

1. [How to identify good design in 6 steps](https://medium.muz.li/how-to-identify-good-design-in-6-steps-e35da387b7c9) by José Torre
2. [10 exercises to train product thinking](https://blog.standuply.com/10-exercises-to-train-product-thinking-cda9882327b7) by Alex Kistenev
3. [How to work with designers](https://medium.com/the-year-of-the-looking-glass/how-to-work-with-designers-6c975dede146) by Julie Zhuo
4. [Training your product intuition](https://merci.medium.com/training-your-product-intuition-276a7f8965b6) by Merci Victoria Grace
5. [UX Tools](https://uxtools.co/blog/)

#### User research

1. [Discovery: Learning vs. insights](https://svpg.com/discovery-learning-vs-insights/) by Marty Cagan
2. [The ladder of evidence: Get more value from your customer interviews and product experiments](https://www.producttalk.org/2017/03/ladder-of-evidence/) by Teresa Torres
3. [Why you only need to test with 5 users](https://www.nngroup.com/articles/why-you-only-need-to-test-with-5-users/) by Jakob Nielsen

#### Hiring and interviewing

1. [How to hire a product manager](https://www.bringthedonuts.com/essays/productmanager.html) by Ken Norton
2. [Cracking the PM Interview](https://www.amazon.com/Cracking-PM-Interview-Product-Technology-ebook-dp-B00ISYMUR6/dp/B00ISYMUR6/ref=mt_other?_encoding=UTF8&me=&qid=1604518122) by Jackie Bavaro and Gayle Laakmann McDowell
3. [Interview tips for senior PMs](https://jackiebo.medium.com/interview-tips-for-senior-pms-2424f7b7c967) by Jackie Bavaro
4. [Product manager interview: Create a product roadmap](https://productmanagerhq.com/product-manager-interview-create-a-product-roadmap/) by Clement Kao
5. [Our 6 must reads if you’re hiring a product manager](https://review.firstround.com/our-6-must-reads-if-youre-hiring-a-product-manager) by First Round Capital
6. [Stage of company, not name of company](https://theskip.substack.com/p/stage-of-company-not-name-of-company) by Nikhyl Singhal

#### Managing and leadership

1. [The Manager’s Handbook](https://themanagershandbook.com/) by Alex MacCaw
2. [The Making of a Manager](https://www.amazon.com/dp/B079WNPRL2/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1) by Julie Zhuo
3. [Be a great product leader](https://adamnash.blog/2011/12/16/be-a-great-product-leader/) by Adam Nash
4. [The job of leadership is to foster alignment and enthusiasm toward the right goal](https://ev.medium.com/the-job-of-leadership-757e4bc3e539) by Ev Williams
5. [How to craft your product team at every stage, from pre-product/market fit to hypergrowth](https://review.firstround.com/how-to-craft-your-product-team-at-every-stage-from-pre-product-market-fit-to-hypergrowth) by Nikhyl Singhal
6. [Managing and developing product managers](https://blackboxofpm.com/managing-and-developing-product-managers-2f9a3963fab6) by Brandon Chu
7. [Crossing the canyon: Product manager to product leader](https://www.reforge.com/blog/crossing-the-canyon-product-manager-to-product-leader) by Fareed Mosavat and Casey Winters

#### Books

1. [The Five Dysfunctions of a Team](https://www.amazon.com/Five-Dysfunctions-Team-Leadership-Fable/dp/0787960756/ref=sr_1_3?dchild=1&qid=1633218032&s=books&sr=1-3&text=Patrick+Lencioni) by Patrick Lencioni
2. [Difficult Conversations](https://www.amazon.com/Difficult-Conversations-Discuss-What-Matters/dp/0143118447/ref=sr_1_1?crid=3UHZA5822BT7I&dchild=1&keywords=difficult+conversations&qid=1633218077&s=books&sprefix=diffi%2Cstripbooks%2C381&sr=1-1) by Douglas Stone, Bruce Patton, and Sheila Heen
3. [Quiet Leadership](https://www.amazon.com/gp/product/B000XUBC04/ref=dbs_a_def_rwt_bibl_vppi_i1) by David Rock
4. [INSPIRED](https://www.amazon.com/INSPIRED-Create-Tech-Products-Customers-ebook/dp/B077NRB36N/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1604518136&sr=8-1) by Marty Cagan
5. [Measure What Matters](https://www.amazon.com/dp/B078FZ9SYB/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1) by John Doerr
6. [High Output Management](https://www.amazon.com/High-Output-Management-Andrew-Grove-ebook/dp/B015VACHOK/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1604518093&sr=8-1) by Andy Grove
7. [Good Strategy Bad Strategy](https://www.amazon.com/Good-Strategy-Bad-Difference-Matters/dp/0307886239/ref=sr_1_2?crid=6Y4216VBY4SS&dchild=1&keywords=good+strategy+bad+strategy&qid=1604518099&sprefix=good+stra%2Caps%2C221&sr=8-2) by Richard Rumelt
8. [Radical Candor](https://www.amazon.com/Radical-Candor-Revised-Kick-Ass-Humanity/dp/1250235375/ref=sr_1_3?crid=166R5M9J274R&dchild=1&keywords=radical+candor&qid=1604518107&sprefix=radical+cando%2Caps%2C220&sr=8-3) by Kim Scott
9. [Don't Make Me Think, Revisited](https://www.amazon.com/gp/product/B00HJUBRPG/ref=dbs_a_def_rwt_bibl_vppi_i0) by Steve Krug
10. [The Mom Test](https://www.amazon.com/dp/B01H4G2J1U/ref=cm_sw_em_r_mt_dp_JQhTFb87JRW2A) by Rob Fitzpatrick
11. [The Design of Everyday Things](https://www.amazon.com/Design-Everyday-Things-Revised-Expanded/dp/0465050654/ref=sr_1_1?crid=2295ECMZR7NCW&dchild=1&keywords=the+design+of+everyday+things&qid=1604518114&sprefix=the+design+of%2Caps%2C219&sr=8-1) by Don Norman
12. [The Lean Startup](https://www.amazon.com/gp/product/0307887898/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0307887898&linkCode=as2&tag=bdickason-20&linkId=81b071dc5c7a3de02e958da0b043dbeb) by Eric Ries

## 👑 Leadership

1. [The Great CEO Within](https://docs.google.com/document/d/1ZJZbv4J6FZ8Dnb0JuMhJxTnwl-dwqx5xl0s65DE3wO8/mobilebasic) by Matt Mochary
2. [Etsy lessons](https://larahogan.me/blog/etsy-lessons/) by Lara Hogan
3. [To show recognition, try speaking a different language](https://medium.com/@katiemdill/to-show-recognition-try-speaking-a-different-language-2f5b0682820c) by Katie Dill
4. [The best approach to the worst conversation: “You’re fired](https://review.firstround.com/The-Best-Approach-to-the-Worst-Conversation)” by Michael Lopp
5. [Shishir’s tips for executive onboarding](https://coda.io/@shishir/executive-onboarding) by Shishir Mehrotra
6. [Exec 101: First 30 days](https://sriramk.com/exec-101-first-thirty-days) by Sriram Krishnan
7. [A career cold start algorithm](https://boz.com/articles/career-cold-start) by Boz
8. [Say no](https://growth.eladgil.com/book/the-role-of-the-ceo/role-of-the-ceo-managing-yourself/#say-no) by Elad Gil

## 🏗 Frameworks

1. [Jobs to be done (JTBD)](https://jtbd.info/2-what-is-jobs-to-be-done-jtbd-796b82081cca) by Alan Klement
2. [DACI decision-making framework](https://www.atlassian.com/team-playbook/plays/daci)
3. [Gokul’s S.P.A.D.E. Toolkit](https://coda.io/@gokulrajaram/gokuls-spade-toolkit)
4. [Product management frameworks](https://twitter.com/shreyas/status/1399042778613485578) by Shreyas Doshi
5. [Frameworks v0.2](https://docs.google.com/document/d/1-UiEeoiV0xBFVZgid63FRaph03OCmHzyEExubn63j0U/preview?pru=AAABd3tL7t4%2AnXt0OF-ZzdI8U_ZK8RlDbQ#heading=h.by5ehyjf5695) by Chris Paik
6. [Aggregation theory](https://stratechery.com/2015/aggregation-theory/) by Ben Thompson
7. [Status as a service](https://www.eugenewei.com/blog/2019/2/19/status-as-a-service) by Eugene Wei

[Visit the directory](https://coda.io/@lennysan/lennys-newsletter-community-resources)

*Anything missing? Please [nominate](https://coda.io/form/Nominate-a-resource_dzwJdExoJuW) anything else you’ve found useful. And have a fulfilling and productive week*🙏

## **🔥 Featured job openings**

1. **Brace:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/f04ce367-5a1f-462e-a79d-725870b8eded) (NYC)
2. **Goldin Auctions:** [Director of Marketing](https://pallet.xyz/list/lennys-jobs/jobs/9c678421-6315-445c-a735-9362904b5229) (Remote-Global)
3. **Highlight:** [Founding Blockchain Engineer](https://pallet.xyz/list/lennys-jobs/jobs/6db63ec8-0421-4e06-9908-0376f44c2f99) (Remote-Global)
4. **Pinpoint:** [Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/70b2de44-b90f-4d37-a146-948144a92873) (Remote-Global)
5. **Aescape:** [Product Management Lead](https://pallet.xyz/list/lennys-jobs/jobs/117d35d9-a9b3-49d0-82df-b27a6c074e0f) (Brooklyn, NY)
6. **Mynd:** [Senior Growth Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/c4bde52c-d66e-4b42-96fb-2ba861f72e27) (Remote-US)
7. **Mynd:** [Product Lead, Internal Tools](https://pallet.xyz/list/lennys-jobs/jobs/b6da1eaa-5a2b-4ad4-92f9-5ac4b9f764e5) (Remote-US)
8. **CHPTR:** [Founding Back-End Engineer](https://pallet.xyz/list/lennys-jobs/jobs/c96f89cb-0288-4028-ae4d-f380567449de) (Remote-US)
9. **Permutive:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/1ff1e376-ab34-4138-ba4a-822475672a93) (NYC)
10. **CloudTrucks:** [Product Manager-Console](https://pallet.xyz/list/lennys-jobs/job/68d092da-db3a-4f25-8b95-2072342c18fe) (SF)
11. **Fairchain:** [Software Engineer, Full Stack](https://pallet.xyz/list/lennys-jobs/job/f2963b88-7eaf-4b4d-9788-4b58f5c6b785) (NYC)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [46/61] 60 ideas to boost your growth

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to this month’s*✨ ***free 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 subscriber, here’s what you missed this month:*

1. *[Getting more technical](https://www.lennysnewsletter.com/p/getting-more-technical)*
2. *[Saying no](https://www.lennysnewsletter.com/p/saying-no)*
3. *[My all-time favorite reads on product, growth, leadership, writing, investing, and much more](https://www.lennysnewsletter.com/p/my-all-time-favorite-reads-on-product)*

*(Also, [my genius wife’s second book](https://www.maybethiswillhelpbook.com/) came out today! As one reviewer put it, “it feels like a hug from a friend, with charts!!” You can order it from [Amazon](https://www.amazon.com/Maybe-This-Will-Help-Feeling/dp/1797211250/?tag=smarturl-20), [Bookshop](https://bookshop.org/books/maybe-this-will-help-how-to-feel-better-when-things-stay-the-same/9781797211251), or your local bookstore.)*

> ## Q: I’m looking for creative ways to get the word out about my product. Do you have examples of clever growth tactics I can use for inspiration?

In [The Racecar Growth Framework](https://www.reforge.com/blog/racecar-growth-framework), [Dan Hockenmaier](https://www.linkedin.com/in/dan-hock) and I wrote about how it’s helpful to think about your business like a high-performance race car—the same four components that help a car drive faster also help your business grow:

1. **⚙️ The (Growth) Engine:** Self-sustaining growth loops that drive most of your growth (e.g. virality, performance marketing, content, sales)
2. **💥 Turbo Boosts:** One-off events that accelerate growth temporarily but don’t last (e.g. PR, events, Super Bowl ads)
3. **💧 Lubricants:** Optimizations that make the growth engine run more efficiently (e.g. improved customer conversion, a stronger brand, higher customer retention)
4. **⛽ Fuel:** The input that your engine requires to run (e.g. capital, content, users)

Your Growth Engines are the most important component to get right long-term ([read why in the full post](https://www.reforge.com/blog/racecar-growth-framework)), but when you’re just starting out, Turbo Boosts—one-off events that accelerate growth temporarily—are incredibly valuable. Although they don’t have compounding value, they do bring in users (giving you a chance to learn what’s working), and they often help you kickstart your growth engine.

**To inspire your own Turbo Boost experimentation, I’ve pulled in [Ali Abouelatta](https://twitter.com/abouelatta_ali), the author of the excellent [First 1000](https://read.first1000.co/) newsletter, who spends much of his time investigating how today’s largest companies acquired their first 1,000 users. Leveraging all of his past research, Ali has pulled together the motherload of examples, which you’ll find below. I hope you find it as fascinating as I did. Enjoy!**

*You can find Ali on [Twitter](https://twitter.com/abouelatta_ali), and definitely subscribe to his newsletter: [First 1000](https://www.first1000.co/).*

# 60 ideas to boost your growth

*by Ali Abouelatta*

With so many businesses being created every year, standing out is only getting harder. Case in point—since Naval wrote the above tweet, the number of new business applications in the U.S. has almost doubled, from 2.58 million in 2012 to 4.35 million in 2020.

To get people’s attention, you need to do something special. Something remarkable. And that’s where today’s post comes in. I’ve collected 60 examples of successful Turbo Boosts—one-off events that temporarily accelerate growth for companies large and small—to inspire you to come up with something special of your own.

Broadly speaking, there are seven common types of Turbo Boosts—seven strategies to get a burst of attention for your product:

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bfe06853-957c-46f4-b29f-d4b79a91ede0_2318x2328.png)

Below, I’ll explore each of these strategies and share examples of how companies have leveraged each one.

## 1. Create a viral video

A video that tells your story, demos your product, or delights people so much that they can’t help but share it with their friends.

#### **[GoldieBlox](https://youtu.be/M0NoOtaFrEs)**

GoldieBlox’s launch video highlights its mission of making STEM toys more inclusive. The video received over 3 million views in the first 48 hours.

[Watch on YouTube](https://www.youtube.com/watch?v=M0NoOtaFrEs)

**Distribution:** PR (*Business Insider*, *Los Angeles Times*, *Silicon Valley Business Journal*, *Time* magazine)

**Why it worked:** Surprise, mystery, and controversy.

#### **[Monet](https://www.tiktok.com/@joanna.shan/video/6883220655790181638?_d=secCgYIASAHKAESMgow9YV1K52ytQf7szopLK%2FZp9bW1KDqf%2FmoIBLQrSzUWvQFZnPmu1mzbzsnGEvEXyE7GgA%3D&language=en&preview_pb=0&sec_user_id=MS4wLjABAAAAAXkeCw_itwGFE-NErPm6pS4zyNTiaUajCIkYMhJRJ58GE1v7eglop9AlgisazR2J&share_item_id=6883220655790181638&share_link_id=5B7CFEED-1FB7-41EC-96D1-7841A6D31436&timestamp=1612033814&tt_from=copy&u_code=d49d71lflala9e&user_id=6649257795608870918&_r=1)**

Monet, a dating app where people match based on their drawings, got over a million views on its launch video.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/89309ddb-2862-4d88-b375-c76140d1a3bb_569x791.png)

**Distribution:** TikTok

**Why it worked:** Personal and different.

#### **[Dropbox](https://www.youtube.com/watch?v=7QmCUDHpNzE&t=83s)**

Drew Houston released this demo video as part of his YC application for Dropbox. The video received over 500,000 views.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5f8bfa41-2ce1-4e02-b104-dd6d5a0aa1e5_760x472.png)

**Distribution:** Hacker News and Reddit

**Why it worked:** The product was impressive.

#### **[Twitter](https://www.youtube.com/watch?v=EGnMThF_2Lo)**

This was the first Twitter product demo, back when it was called twttr. The video did not gain significant traction until Twitter resurfaced it in 2010.

[Watch on YouTube](https://www.youtube.com/watch?v=EGnMThF_2Lo)

**Not all Turbo Boosts work :)**

#### **Additional examples:**

1. **[Poo-Pourri](https://www.youtube.com/watch?v=ZKLnhuzh9uY)**
2. **[Man Crates](https://www.youtube.com/watch?v=tj3-boydrI0&t=18s)**
3. **[mmhmm](https://www.youtube.com/watch?v=c8KhKBLoSMk)**
4. **[Dollar Shave Club](https://www.youtube.com/watch?v=ZUG9qYTJMsI)**

## 2. Launch a mini-product, or “drop”

Launch a non-core product offering that gets attention, which reflects attention toward your brand and/or core product.

#### **[Calm: Do Nothing for 2 Minutes](https://www.donothingfor2minutes.com/)**

Donothingfor2minutes.com was the precursor to Calm. Visitors were asked not to move their cursor for two full minutes or the counter started over. The website received over 2 million unique visits and facilitated 100,000+ email captures in 10 days.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e2b1fdeb-5d35-47c5-9c21-bce2812aecf4_2431x1304.png)

**Distribution:** Hacker News, PR coverage, and social shares (from people who completed the challenge)

**Why it worked:** Turned a problem (being constantly distracted) into a fun challenge.

#### **[Tommee Tippee: Advice Wipes](https://youtu.be/wnoQGBwzUYA)**

Tommee Tippee created Advice Wipes, limited-edition baby wipes made from recycled baby books and articles, launched as part of its U.S. expansion plan.

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

**Distribution:** PR (ClickZ, *Adweek*) and mom communities (Scary Mommy, Simply Real Moms)

**Why it worked:** Highlighted a problem that resonated with its target audience.

> *“The campaign is based on a poll of 1,000 new moms, which showed that more than half feel entirely overwhelmed by unsolicited parenting advice and opinions.” ([source](https://www.clickz.com/tommee-tippee-turns-parenting-advice-into-baby-wipes-with-parenton/24717/))*

#### **[Toucan: Own The Word](https://jointoucan.com/own-the-word/claim)**

[Toucan](https://jointoucan.com/) teaches people a new language while they’re surfing the internet. The company launched [Own The Word](https://jointoucan.com/own-the-word/claim), which gave people (or brands) “ownership” of any word for 99 cents a month.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d1918507-5cf0-451e-b9b2-485d4666049b_1184x1316.png)

**Distribution:** Customers and investors tweeting their claimed words

**Why it worked:** Owning a sought-after word on the platform became a social flex.

#### **[MSCHF: Satan Shoes](https://satan.shoes)**

Satan Shoes are a series of custom Nike Air Max 97 sneakers created as a collaboration between Lil Nas X and MSCHF, an art collective.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/aef37fd6-8169-4424-90bf-06eb60b250ca_292x292.png)

**Distribution:** PR (*New York Times*, NBC, The Verge, CNN, BBC), and Lil Nas X promoting it

**Why it worked:** A controversy hyped by Lil Nas X and a [lawsuit from Nike](https://www.theverge.com/2021/4/8/22374480/nike-mschf-lil-nas-x-unauthorized-satan-shoes-lawsuit-settled).

#### **[Party Round: Helpful VCs](https://helpfulvcs.com/)**

Party Round created a pixelated NFT collection for some of the most popular VCs.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/09947403-f3bc-4a05-9266-c47688ac835c_1180x1036.png)

**Distribution:** Twitter

**Why it worked:** Influential VCs tweeting about the project to claim their NFT.

#### **[Bad Unicorn: MindF](https://mindf.cc/)**[\*\*\*](https://mindf.cc/)

MindF\*\*\* is a satirical take on meditation apps.

[Watch on YouTube](https://www.youtube.com/watch?v=l1ltkH6Fepo)

**Distribution:** Product Hunt

**Why it worked:** Poked fun at a popular product.

[Continue reading online 👉](https://www.lennysnewsletter.com/p/turbo-boosts)

#### **[Stir: Goodbye Mixer](https://www.goodbyemixer.com/)**

A tool that allowed streamers to easily export their follower list from Mixer, after Microsoft announced it was shutting the service down.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cc1d2cfb-0ce8-4cef-92c3-7e17081f0218_1021x619.jpeg)

**Distribution:** Twitter

**Why it worked:** Solved a real problem for streamers using Mixer.

#### **[Codecademy: Code Year challenge](https://en.wikipedia.org/wiki/Codecademy#:~:text=Code%20Year%20was%20a%20free,continued%20the%20program%20into%202013.)**

Prior to launching its product, Codecademy released a new year’s challenge called Code Year. The challenge received over 400,000 sign-ups in three months.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b9105cf2-1ecd-4147-b6f8-47e83a3a2813_1166x591.png)

**Distribution:** Influencers, including Mike Bloomberg, Farhad Manjoo, Boris Johnson, and Fred Wilson

**Why it worked:** Great timing (i.e. new year’s resolutions).

#### **Additional examples:**

1. **Stir:** [Collab Party](https://collab.party)
2. **PopJam:** [Sock and Awe](https://en.wikipedia.org/wiki/Sock_and_Awe)
3. **Party Round:** [The BIGTECH Fellowship](https://bigtechfellowship.com/)
4. **Twitter:** [NFT Drops](https://twitter.com/Twitter/status/1410227743636217856?s=20)
5. **Uber:** [UberPUPPIES](https://www.youtube.com/watch?v=HEwBCtO4BBs)

## 3. Run an enticing limited-time offer

Running a promotion on your existing product, giving people a reason to pay attention and act.

#### **[Mint Mobile: The Bobby Bonilla Plan](https://www.mintmobile.com/product/bobby/)**

Every year on July 1 (until 2035), retired baseball player Bobby Bonilla receives $1.2 million from the New York Mets. Mint Mobile created a limited one-day deal called the Bobby Bonilla Plan as a way to celebrate the occasion.

![https://cdn.substack.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7337bc2b-2e27-41bc-928c-9099b82cb44d_2654x1290.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7337bc2b-2e27-41bc-928c-9099b82cb44d_2654x1290.png)

**Distribution:** Ads and PR (*Forbes*, CNET)

**Why it worked:** It’s funny.

#### **[Coinbase: Dogecoin sweepstakes](https://twitter.com/coinbase/status/1400571428009779202?s=20)**

**Distribution:** Ads

**Why it worked:** Great timing: the Dogecoin craze 🚀🌜.

#### **[Cards Against Humanity: $5 for nothing](https://www.vox.com/2015/11/28/11620980/cards-against-humanity-sells-nothing-for-71000-on-black-friday)**

For Black Friday, Cards Against Humanity asked users to pay $5 in exchange for nothing.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4b0b9ed2-5044-4c3b-85ba-655da57cdbc1_641x700.png)

**Distribution:** Existing customers

**Why it worked:** Novel, funny, and unexpected.

#### **[Cash App: 99% off everything](https://twitter.com/CashApp/status/1316809835871178753?s=20)**

**Distribution:** Social media post

**Why it worked:** Free money.

#### **Additional examples:**

1. **Fast:** [$5 hoodie](https://twitter.com/pkligerman/status/1406099022096613378?lang=en)
2. **Cards Against Humanity:** [99% Sale](https://www.99percentoffsale.com)
3. **Amazon:** [Prime Day](https://www.amazon.com/primeday)

## 4. Coordinate an influencer-led promotion

Partner with an influencer to promote your product.

#### **[Honk: Influencer Twitter launch](https://twitter.com/search?lang=en&q=%28%40usehonk%29+min_faves%3A3+until%3A2020-12-23+since%3A2020-12-22&src=typed_query)**

Honk’s coordinated Twitter launch captured a lot of attention in the tech sphere. Over 1 million “honks” were sent the following day.

**Distribution:** Twitter: tech influencers and investors

**Why it worked:** Hype and FOMO.

#### **[Step: Charli D’Amelio](https://www.tiktok.com/@charlidamelio/video/6925130864099740934?lang=en)**

Charli D’Amelio, the #1 followed TikToker, invested and partnered with teen banking app Step.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a5efbd81-b9af-41ab-ac68-a1c7613508ca_1390x938.webp)

**Distribution:** PR (*Forbes*, *Business Insider*, NBC, TechCrunch) and TikTok

**Why it worked:** A lot of media attention because it was Charli’s first startup investment.

#### **[Reddit: Paul Graham’s Essay](https://www.paulgraham.com/sfp.html)**

Reddit got its first 1,000 users when Paul Graham mentioned the platform on his blog.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7679d0f0-15d3-401d-bc71-879d20848453_926x622.jpeg)

**Distribution:** [paulgraham.com](https://www.paulgraham.com/sfp.html)

**Why it worked:** People in tech trust Paul Graham.

#### **[Spanx: Oprah’s Favorite Things](https://www.inc.com/sara-blakely/how-sara-blakely-got-spanx-on-oprah.html)**

Oprah chose Spanx as her favorite product of the year (2000).

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c2135d95-b031-42f6-8091-54d5f449dc5d_949x534.jpeg)

**Distribution:** Sending gift baskets to Andre Walker*,* Oprah’s hairstylist

**Why it worked:** Oprah!

#### **Additional examples:**

1. **Casper:** [Kylie Jenner](https://www.instagram.com/p/0gMVQOnGnn/?hl=en)
2. **Atoms:** [Alexis Ohanian](https://twitter.com/search?lang=en&q=%28from%3Aalexisohanian%29+%28%40wearatoms%29&src=typed_query)
3. **Twitter:** [Om Malik](https://gigaom.com/2006/07/15/valleys-all-twttr/)
4. **Creative Juice:** [MrBeast](https://www.theverge.com/2021/3/24/22348926/mrbeast-creator-investment-fund-creative-juice)

## 5. Co-marketing

Collaborate with another company to promote your products.

#### **[Toucan x Bark](https://jointoucan.com/bark)**

Toucan partnered with [Bark](https://www.barkbox.com/) on April Fools’ Day to create a (fake) “woof” translator.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/93bf0e71-b440-403e-8c45-eb3c08b7fd81_1288x599.png)

**Distribution:** Collaboration with Bark, which co-marketed the promotion

**Why it worked:** It’s funny.

#### **[MainStreet x Stripe Atlas](https://twitter.com/mainstreet/status/1405555975147462659?lang=en)**

**Distribution:** Partnership with Stripe Atlas, which both co-marketed

**Why it worked:** A win-win. Atlas provided additional value to its customers through the 25% discount and MainStreet got access to those customers.

#### **[Eight Sleep x IFTTT](https://ifttt.com/explore/partner-case-study-eight)**

Eight Sleep launched a co-marketing campaign with IFTTT following its integration with the service.

**Distribution:** Partnership with IFTTT, which both co-marketed

**Why it worked:** Integration unlocked additional use cases for both products to highlight and promote.

#### **[MicroAcquire x Pipe](https://pipe.com/microacquire/seller)**

MicroAcquire, a marketplace to sell and buy businesses, partnered with Pipe to help buyers fund acquisitions through future recurring revenues.

**Distribution:** Partnership with Pipe, which both co-marketed

**Why it worked:** An entertaining Cameo, and giving out swag to share the post.

#### **Additional examples**:

1. **[Atoms x Pomp](https://www.atoms.com/bitcoin)**
2. **[Red Bull x GoPro](https://www.youtube.com/watch?v=Aec4uWBZoNQ)**
3. **[Hulu x Uber Eats](https://press.hulu.com/news/2021/09/28/hulu-and-uber-eats-announce-partnership-to-give-eligible-hulu-subscribers-six-months-of-complimentary-uber-eats-pass/)**
4. **[Apple x Hermès](https://www.apple.com/apple-watch-hermes/)**

## 6. Organize an exciting offline experience

Organize an in-person experience that gets people fired up about your product.

#### **[Hinge: Launch Party](https://www.washingtonian.com/2013/02/08/hinge-launch-party-photos/)**

Over 2,500 people attended Hinge’s (re)launch party. The following day, the company made more matches than it did throughout its entire history.

![Hinge: The Launch Party](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/03793e64-ce04-48c9-9144-b3df97d9dab2_600x400.jpeg)

**Distribution:** Email list from an ex-roommate who was plugged into the D.C. social scene, and inviting friends of friends

**Why it worked:**

> *“I knew if we wanted something like this to be successful we needed a large, core group of people who are all connected on Facebook and had power as influencers.”*—[Justin McLeod](https://www.inc.com/will-yakowicz/hinge-a-party-to-save-the-dating-world.html)

#### **[Simulate: Dino Nuggs Hunt](https://simulate.com/drop/001/)**

Simulate, the company behind the plant-based “chicken” nuggets Nuggs*,* hid boxes of limited-edition dinosaur-shaped nuggets all over L.A. and New York and winners received a year’s supply of the product.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fedcad7c-a2c3-41de-96ed-8eaf575f8488_768x1024.jpeg)

**Distribution:** Billboards and social media

**Why it worked:** A scavenger hunt is fun.

#### **[Snackpass: Events with local college groups](https://www.thedartmouth.com/article/2020/01/snackpass-app-builds-a-growing-profile-on-campus)**

Snackpass hired 60 brand ambassadors and sponsored university-centric events for every new campus launch.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6356cdef-06e2-4a4d-afca-f8a68842681b_448x442.png)

**Distribution:** Partnering with fraternities, athletic teams, and campus groups

**Why it worked:** The “cool factor” of those groups reflected on Snackpass being cool.

#### **[Snapchat: Spectacles vending machines](https://www.theverge.com/2016/11/10/13584488/snapchat-snap-inc-spectacles-vending-machine-snapbot-available)**

Snapchat dropped off strange vending machines at random locations around the U.S. with a limited number of Spectacles.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a507e021-f369-4319-b2e7-9ab7c2f286fd_700x381.png)

**Distribution:** PR (*New York Time*s, Mashable, *Business Insider*, BuzzFeed)

**Why it worked:** Hype and FOMO.

#### **Additional examples:**

1. **Glossier:** [Summer Fridays Pop-Up](https://observer.com/2015/07/summer-fridays-are-beautiful-at-the-glossier-pop-up-shop/)
2. **Refinery29:** [29Rooms](https://www.refinery29.com/en-us/2018/09/209141/29-rooms-nyc-2018-photos)
3. **The Hustle:** [Hustle Con](https://hustlecon.com)

## 7. Pick a fight

Take a stand against a big company or competitor, which creates controversy and attention.

#### **[Hey: Fight with Apple](https://twitter.com/dhh/status/1272968382329942017?s=20)**

**Distribution:** Twitter (@[DHH](https://twitter.com/dhh), 400K+ followers) and PR (The Verge, Protocol, AppleInsider, TechCrunch)

**Why it worked:** Created a controversy that many agreed with.

#### **[Salesforce: Fight with Siebel Systems](https://www.businessinsider.com/marc-benioff-salesforcecom-chief-has-pulled-some-crazy-stunts-2012-3#he-hired-fake-protesters-to-disrupt-a-siebel-conference-and-drew-the-cops-in-1)**

Marc Benioff created a fake protest in front of the Siebel Systems conference (a competitor at the time).

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1b9118ba-bde5-4e79-89ab-115b5f5016c5_806x600.png)

**Distribution:** Local media

**Why it worked:** Local media stations thought it was a real protest.

#### **[Fanhouse: Fight with Apple](https://twitter.com/jasminericegirl/status/1402691047940100100?lang=en)**

**Distribution:** Twitter

**Why it worked:** Created a controversy, David vs. Goliath style.

#### **[WePay: Fight with PayPal](https://blog.hubspot.com/blog/tabid/6307/bid/7007/how-a-block-of-ice-increased-one-company-s-customers-by-225.aspx)**

WePay’s sign-ups increased by 300% when it dropped a block of ice with the message “PayPal freezes your accounts” during the PayPal annual developer conference.

![Image from 60 ideas to boost your growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b57869aa-42a5-448a-b25f-0f36d791eebb_629x841.png)

**Distribution:** PR (TechCrunch)

**Why it worked:** The media was interested in PayPal’s account freezing practices.

#### **[DoNotPay: Fight with Robinhood](https://twitter.com/jbrowder1/status/1354871260459589633?lang=en)**

**Distribution:** PR (CNBC, *Vice*, *Fortune*, *New York Times*, Yahoo News, etc.)

**Why it worked:** Robinhood suspending/limiting the trading of GameStop and other meme stocks.

#### **Additional examples:**

1. **Epic:** [Fight with Apple](https://www.theverge.com/2021/9/12/22667694/epic-v-apple-trial-fortnite-judge-yvonne-gonzalez-rogers-final-ruling-injunction-breakdown)
2. **Netscape:** [Fight with Microsoft](https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp.)
3. **Six4Three:** [Fight with Facebook](https://www.nbcnews.com/tech/social-media/inside-bikini-photo-startup-six4three-s-scrappy-battle-put-facebook-n995016)
4. **Egnyte:** [Fight with Box](https://www.egnyte.com/box-vs-egnyte-permissions)

## In closing

I hope one or more of these examples inspires you to come up with a clever way to get the word out about your own product. But remember, although Turbo Boosts can be a powerful tool to stimulate growth, do not fall into the trap of over-relying on them, because:

1. They are an unreliable source of growth.
2. They are neither scalable nor repeatable.
3. Getting a Turbo Boost to work doesn’t mean you have product-market fit, and it won’t really help you find it.

At the same time, if you look at the history of successful companies, nearly 100% of them invested in Turbo Boosts, and continue to do so. So if you are experimenting with Turbo Boosts, you’re in good company. Good luck 🚀

*Thanks, Ali! Ali will soon be graduating from Cornell and will be looking for a PM role. If you’d like to chat with him, reach out on [Twitter](https://twitter.com/abouelatta_ali). Also, don’t forget to subscribe to his newsletter, [First 1000](https://www.first1000.co/).*

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10. **Aescape:** [Product Management Lead](https://pallet.xyz/list/lennys-jobs/jobs/117d35d9-a9b3-49d0-82df-b27a6c074e0f) (Brooklyn, NY)

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[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [47/61] Taking the week off

I’m taking the week off—my first PTO since starting this newsletter! I’ll be back next week with an exciting new post. And per [my-PTO policy](https://www.lennysnewsletter.com/p/marketplace-city-expansion), I’ll make up for this week’s post later this year 🙏

A few pics from my travels…

![Image from Taking the week off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1704354d-084c-4e8f-a0fb-a8dbe2ee0041_4032x3024.jpeg)![Image from Taking the week off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dc34963e-59e7-42b8-9a88-0c51f8b47eb8_4032x3024.jpeg)![Image from Taking the week off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c2ef3e8e-73d8-4366-a34c-95ca7c7b9575_4032x3024.jpeg)![Image from Taking the week off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/cfbc8273-7a2f-4497-a73c-6477c8ff175a_3024x3037.jpeg)

See you next week 👋

---

## [48/61] Picking a wedge

> ## Q: I’m hearing from investors that I need a wedge, to narrow our product focus and our GTM. What exactly is a wedge, and how do I pick the right wedge?

Whenever I think of wedges, I think of this guy:

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

A wedge in business is the same idea—you drive a wedge into the market and then use that wedge to win the market:

![Image from Picking a wedge](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e21e663c-448e-492d-b35d-42a7b08ad0bc_2570x974.png)

Twilio started with an API to send SMSs and is now the de facto communication API platform, worth over $60B. Airbnb started out allowing people to rent their extra rooms and now accounts for a fifth of the $90B vacation rental market. Amazon started out selling books and now represents about 40% of *all* U.S. e-commerce. If these companies had gone at their massive markets head-on, they’d arguably have had a much harder time. But by using a wedge strategy—focusing all their energy at one precise point—they were able to break in, build momentum, and win.

> #### “The wedge metaphor to me is most useful in making sure you’re not a blunt instrument trying to chop into a market by being everything for everyone, but instead the sharp blade with extraordinary focus on a specific persona/use case to start.”
>
> #### —Sarah Tavel, GP at Benchmark

### What exactly is a wedge?

A wedge is simply a strategy to win a large market by initially capturing (1) a tiny part of a larger market or (2) a large part of a small adjacent market.

![Image from Picking a wedge](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b36d496a-c006-40e4-b773-8f8e604a5864_3038x5686.png)

In business, as in rock cutting, a wedge is made up of two parts: (1) the right tool and (2) the right place to strike. In other words, the right initial product and the right initial market.

Tesla’s wedge (into the larger transportation market) was a luxury car targeted at affluent early adopters. Robinhood’s wedge (into the consumer finance market) was a commission-free trading platform targeted at millennials. PayPal’s wedge (into the payments market) was an online payment platform for eBay sellers.

### Do I always need a wedge?

I don’t think so. Companies like Zoom, Slack, Workday, Notion, Datadog, Spotify, and Peloton went straight at their respective (large) markets with an amazing product and won. You can argue about semantics, but in practical terms, as far as I can tell, these companies didn’t use a wedge strategy—they attacked a large market straight-on.

![Image from Picking a wedge](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e264f95c-0f60-4664-b193-eebde2453b5e_374x200.gif)
> #### “We kept hearing that to enter a big market, you need a wedge—something really sharp and really specific, and then you expand from there. It turns out for some classes of problems, such as infrastructure management, which is what we do, the wedge doesn’t work. There is a large amount of stuff you need to do from day one if you want your product to be useful. Our initial product was positioned as a very broad platform to bring multiple teams together, and actually didn’t have that wedge aspect. That disconcerted some investors.”
>
> #### —Olivier Pomel, CEO and co-founder of Datadog ([source](https://www.thetwentyminutevc.com/olivier-pomel/))

### When do I need a wedge?

A wedge seems most essential when you’re going after a market that is (1) entrenched or (2) crowded. When it’s hard to break in head-on.

![Image from Picking a wedge](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/62a9dbb5-57f5-437e-965f-25c00edfe8f5_200x200.gif)

The more entrenched and competitive the market, the more valuable a wedge will be. Chime needed a wedge to get a foothold in the entrenched banking market. Stripe needed a wedge to break into the entrenched payments market. Airbnb needed a wedge to get traction in the competitive accommodations market.

You could certainly attempt to go at it head-on, by raising more money and building a 10x better product, but starting with a wedge has many benefits.

### Why is a wedge useful?

A wedge gives a startup a number of advantages over its competition—primarily driven by having a narrower, more precise focus:

1. With a more focused value prop, your pitch and sales process become quicker and easier, which drives more revenue that you can reinvest in growth and the product.
2. With more customers, you can more quickly build social proof (e.g. traction, logos, and testimonials).
3. With early revenue, you can avoid having to raise a lot of money and thus keep ownership and control longer.
4. You can build, launch, learn, and iterate toward product-market fit more quickly.
5. Once you’ve “wedged” into a company, you can expand revenue by offering additional products and services.

> #### “When I say it needs to have a good wedge, I’m looking for an entry point that provides some sort of power to the startup.”
>
> #### —Ann Miura-Ko, GP at Floodgate

In marketplaces (and any network-effects businesses), starting with a narrow focus is even more essential, as [Mike Duboe](https://twitter.com/mduboe), GP at Greylock, explains:

> *“Many marketplace founders focus on the sheer size of a market. But I view too broad an initial market as a flag. I would much rather see a founder communicate a deep insight into a narrow market wedge where pull is strong. A few reasons why:*
>
> 1. *Liquidity is the name of the game with marketplaces. It’s faster to build liquidity in more narrowly defined market segments.*
> 2. *Building density in one subvertical helps a team more effectively build a playbook before expanding to the next.*
> 3. *The narrower the initial focus, the more likely one is to build a deeper and differentiated product.*
> 4. *Narrower market → deeper end user empathy for founders & product teams. Conversely, too much breadth can introduce noise in early user research & product work.*
>
> *Overall, starting narrow improves one's likelihood to discover & solve a precise pain point.”*

Sarah Tavel, GP at Benchmark, has a similar view:

### What makes a good wedge?

From what I could tell, a good wedge:

1. **Is narrow and focused**—solves a very specific problem, for a specific group, extremely well
2. **Builds momentum**—can be sold quickly and keeps customers coming back
3. **Naturally extends into a much bigger opportunity**—more product, more revenue, more users
4. **Avoids competition**—the whole point is to give you an easier path
5. **Is hard to replicate**—it is not just about getting in, but also staying in
6. **Educates the market**—sometimes customers aren’t ready for the bigger transformation, and need to start with a small dose

> #### “Wedge selection should be very intentional. Don’t just build for the first customer persona you think of or the closest city to where you live. Build for the group that has the most acute pain point, or the highest willingness to pay, or the fastest sales cycles. The more carefully you pick your wedge, the easier it will be to succeed and to expand to the larger market. A product that’s 10x better on average might actually be 50x better for some groups but only 1.1x better for others. Picking the right group will determine whether you quickly find product-market fit or face an uphill battle.”
>
> #### —Leo Polovets, GP at Susa Ventures

## How to pick a wedge

To pick a wedge, find a large market and then:

1. Pick a very narrow (and very painful) problem
2. Pick a very specific segment of people to solve that problem for

### Step 1: Pick a very narrow (and very painful) problem

For [Carta](https://carta.com), it was cap table management:

> *“Carta’s wedge was cap table management for startups. By accessing the atomic unit of equity ownership, the company could use this data to offer more equity management capabilities, allowing Carta to expand into 409a valuations, total compensation tooling, unlocking liquidity and more—all the while bringing value to employees, investors, and companies both private and public.”*
>
> —Naomi Ionita, Partner at Menlo Ventures

For [Gainsight](https://www.gainsight.com/), it was helping companies understand their customers:

> *“A good example of a wedge is what I experienced seeing Gainsight’s journey from their early days when they had a few hundred thousand of ARR. They started out with a dashboard that provides a 360-degree view of each customer. With a few simple integrations—Zendesk, Salesforce, and a website tag—Gainsight would collect a trove of data about each customer and display that data in an easy-to-understand 360-degree view. This drove tremendous logo velocity for Gainsight in the early days.*
>
> *Over time, Gainsight massively expanded the product footprint to include ‘playbooks’ for CSMs (customer success managers), marketing automation (e.g. to allow CSMs to communicate with customers in an automated fashion), data science (to predict churn), etc. When Gainsight launched initially, the market wasn’t ready for this big of a transformation, but the customer-360 health score was a great wedge to help the early adopters recognize the power of building out a customer success function.*
>
> *Gainsight’s wedge worked because it was sold to the same buyer, was a fast ‘land,’ which drove lots of usage, and the footprint extension felt very natural. As a result, over time Gainsight was able to significantly increase ASPs (application service providers) from 10-15K to 30K to much, much higher over time.”*
>
> —Ajay Agarwal, Partner at Bain Capital Ventures

For [PayPal](https://paypal.com/), it was accepting payments for online eBay auctions:

> *“At the time, we were vaguely aware of the auction use case, but it was discussed along with splitting dinner tabs, student allowances, and a bunch of other nebulous value props. The truth is that we thought ‘emailing money’ was a terrific product idea, but we had no idea who would actually use it or what the market would be.*
>
> *Our customer service rep forwarded me an email from an eBay power seller. The eBay seller had turned the PayPal logo into a nice-looking button for her auctions and was asking our permission to use it. eBay sellers were desperate for a [payments] solution because their alternative was to wait a week for a check to arrive in the mail and then wait for it to clear. Some of them had already found PayPal on their own. One of them cared enough to make an auction button and ask our permission to use it.*
>
> *We rolled out other features for auction sellers that made it even more convenient to use PayPal. We dropped other plans and went all-in on the eBay use case. Results were immediate. At the end of 1999, PayPal had less than 10,000 users. By the end of January 2000, we hit 100,000 users. A few months after that, 1 million. By the summer of 2000, 5 million. It felt like the servers were melting. The growth curve looked like a perfect hockey stick.”*
>
> —David Sacks, Former COO of PayPal ([source](https://medium.com/craft-ventures/the-sharp-startup-when-paypal-found-product-market-fit-5ba47ad35d0b))

### Step 2: Pick a very specific segment to solve it for

For [Twilio](https://twilio.com/), it was Ruby on Rails developers:

> *“There were other companies that had similar offerings to Twilio, but [co-founder] Jeff Lawson uniquely identified a new wave of Ruby on Rails developers who knew nothing of other programming languages and infrastructure. He did an incredible job making it easy to program phone infrastructure as a Ruby developer. Back then, this new wave of web programmers was a movement and really didn’t have exposure or the technical chops to figure out the old infrastructure. As some of those startups became big companies, with the on-demand wave (Uber, DoorDash, Postmates, etc.), Twilio became a dominant company in their market.”*
>
> —Saar Gur, GP at CRV

For [Square](https://square.com/), it was small independent offline retailers:

> *“Square used an initial wedge to capture their early customers. Thanks to the iPhone, it was a very cheap mobile credit card processor that had a ton of demand from food trucks, massage therapists, etc. They had tens of thousands of small businesses on the waitlist before they ever launched (if I recall correctly).*
>
> *They also were one of the first POS systems to use an iPad, and many restaurants and stores thought the iPad was more ‘on-brand’ and cool than the old Micros/Aloha POS systems.*
>
> *This gave them the wedge to move upstream over time into larger retail deployments.”*
>
> —Saar Gur, GP at CRV

For [Outschool](https://outschool.com/), it was homeschoolers:

> *“One way to find a wedge is to start with a small market that’s underserved. Outschool started with homeschoolers, as a wedge into the broader K-12 education market. It assumed that all schoolers would adopt the same behaviors over time, and it allowed them to build a supply of teachers (which can serve homeschoolers and regular schoolers).”*
>
> —Alex Taussig, Partner at Lightspeed

For [Uber](https://uber.com/), it was a specific type of rider in SF:

> *“The wedge was black cars for price-insensitive riders in San Francisco. The compounding network of riders and drivers came by launching new geographies, going downmarket via UberX and Uber Pool, and adding other modes of transportation (bikes, scooters, etc.) to dominate the transportation market.”*
>
> —Naomi Ionita, Partner at Menlo Ventures

## What then

With a wedge in hand (knowing the very specific problem and the very specific segment you’re going after), the next step is to strike—to build it and get it in front of users. This topic is a post in itself, but here’s a bit of guidance:

If you’re building a B2B product:

If you’re building a consumer product, here’s some advice on how to [build](https://www.lennysnewsletter.com/p/prioritizing), [grow](https://www.lennysnewsletter.com/p/how-the-biggest-consumer-apps-got), and [find PMF](https://www.lennysnewsletter.com/p/how-to-know-if-youve-got-productmarket) for your product.

Now, get out there and find that 🎯

![Image from Picking a wedge](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/43a76e69-0292-42a2-9293-146c2a8de02b_220x387.gif)

### 📚 Further study

1. [The sharp startup: When PayPal found product-market fit](https://medium.com/craft-ventures/the-sharp-startup-when-paypal-found-product-market-fit-5ba47ad35d0b) by David Sacks
2. [The product wedge: How to scope your initial product](https://every.to/divinations/product-wedges-a-complete-guide) by Nathan Baschez and Austin Langlinais
3. [The market wedge: How to pick your initial market](https://every.to/divinations/the-market-wedge-how-to-pick-your-initial-market) by Nathan Baschez and Eric Thompson
4. [The “thin edge of the wedge” strategy](https://cdixon.org/2010/12/26/the-thin-edge-of-the-wedge-strategy) by Chris Dixon
5. [All wedges are not created equal](https://nbt.substack.com/p/all-wedges-are-not-created-equal) by Nikhil Basu Trivedi

*A big thank-you to [Alex Taussig](https://lsvp.com/team/alex-taussig/), [Ajay Agarwal](https://www.baincapitalventures.com/team/ajay/), [Ann Miura-Ko](https://www.linkedin.com/in/amiura), [Bryan Offutt](https://www.linkedin.com/in/bryanoffutt), [Leo Polovets](https://twitter.com/lpolovets)*, *[Mike Duboe](https://twitter.com/mduboe), [Naomi Ionita](https://twitter.com/npilosof?lang=en), [Saar Gur](https://www.linkedin.com/in/saargur/), and [Sarah Tavel](https://twitter.com/sarahtavel) for contributing to this post 🙏*

*Have a fulfilling and productive week ✨*

## **🔥 Featured job openings**

1. **Hyphen:** [Senior Software Engineer](https://pallet.xyz/list/lennys-jobs/jobs/409ba7dc-d175-45cf-a3e8-5b50d020c874) (LA, SF, San Jose, Atlanta, Remote-US)
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*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Read:** [Warren Buffett: “Really Successful People Say No to Almost Everything”](https://medium.com/accelerated-intelligence/warren-buffett-really-successful-people-say-no-to-almost-everything-ab78832ffebc)
2. **Measure:** [The SaaS Metrics That Matter](https://sacks.substack.com/p/the-saas-metrics-that-matter?token=eyJ1c2VyX2lkIjoxODQ5Nzc0LCJwb3N0X2lkIjo0MjczMDE0MSwiXyI6IktOdlVVIiwiaWF0IjoxNjM0NjE2NTE2LCJleHAiOjE2MzQ2MjAxMTYsImlzcyI6InB1Yi05MTI4OSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.Sjwt-Tpu-oUzL4ABNOuLwVyCboE94jtuyEs_t-0kxEI) by David Sacks and Ethan Ruby
3. **Watch:** [I Am A Product Manager](https://productcollective.com/i-am-a-product-manager/?mc_cid=8fcaf6fdb0&mc_eid=UNIQID) by Chris Webb

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

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [49/61] Breaking into growth

## ✨ Announcement: Applications for my [PM course](https://maven.com/lenny/product-management-fundamentals?custom=true) now open ✨

This is the course I wish I had when I was starting out. It’s targeted at new PMs (<2 years experience), and will run 11/29-12/17. The course is part-time (evenings PST), and fits into a busy PM schedule.

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Dozens of students who took the previous course credit the course with helping them get a promotion, land a better gig, or simply become more confident in themselves.

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#### Topics we'll cover:

- Leveling up your strategic thinking and vision
- Strengthening your written and verbal communication
- Collaborating and influencing your peers more effectively
- Mastering the art of shipping on time while keeping your team happy
- Gaining confidence as a PM
- Leveraging user research, metrics, and stakeholders to prioritize
- Delivering better presentations
- Understanding what separates good PMs from great PMs
- …and much more

Become a more confident PM, armed with a toolkit full of actionable advice, tactics and frameworks to immediately put into action.

Spots are limited, so apply now 👇

[Apply now](https://maven.com/lenny/product-management-fundamentals)

*Pro tip: Ask your manager if you can expense this to your learning and development budget.*

> ## Q: How do I make the transition from a product manager to a growth PM? I’m a recent graduate with no technical background (from business school), and I’m new to PM and wondering how I make the transition into a growth-focused role.

Though the difference between a regular PM and a “growth PM” isn’t as big as you may think—most PMs are responsible for driving business growth one way or another—there are indeed roles where your job is solely to drive growth. A few examples:

- [Head of Growth at Shef](https://jobs.lever.co/shef/e98c6b46-0ffa-4b20-bd27-f328aacc0737)
- [Growth PM at Primer](https://www.notion.so/Growth-PM-San-Francisco-CA-3049279c24844c41bf99c159fe74e78b)
- [Growth Associate at Launch House](https://lennys-jobs.pallet.xyz/jobs/cc16e91a-64cd-40b0-b48b-0a9befd0a77b)

Four years into my PM career, I made this transition myself, moving from a generalist role to a growth role (driving Airbnb’s supply growth). I had a feeling that growth work would be super-interesting and that deepening those skills would pay off, so I made an effort to make the move. I’m really happy I did.

My approach to making this transition was simple—and I would suggest the same approach to you:

1. Ask
2. Learn
3. Do

#### 1. Ask

This probably sounds exceedingly obvious, but start by telling your manager you want this, e.g.

> *“Hey, manager, I just want to let you know that I’m really interested in product growth, and I want to get into a growth-focused role as soon as I can. What do I need to do to get there?”*

This step alone was the primary reason I got the chance. My manager knew it was important to me, so when an opportunity arose (about six months later), they helped me grab it. Use the [Baader-Meinhof phenomenon](https://en.wikipedia.org/wiki/Frequency_illusion) to your advantage.

And don’t just ask once. Keep telling them. Ask them to work together on a plan to get you there. I suggest starting by identifying the skills you’ll need to be successful in the role and then putting together a plan to build them while in your current role.

#### 2. Learn

Next, get smart about growth. Here’s a lesson plan to get you started (maybe find a buddy and explore one topic a week):

**1. Experimentation**

- [Learn the basics of A/B testing](https://netflixtechblog.com/what-is-an-a-b-test-b08cc1b57962)
- [Learn about p-values, power, and significance](https://netflixtechblog.com/interpreting-a-b-test-results-false-positives-and-statistical-significance-c1522d0db27a)
- [Learn about fostering a culture of experimentation](https://www.lennysnewsletter.com/p/fostering-a-culture-of-experimentation)
- [Learn about the benefits and pitfalls of building with data](https://medium.com/the-year-of-the-looking-glass/the-agony-and-ecstasy-of-building-with-data-56215764d67c)
- Take the [Reforge Experimentation + Testing course](https://www.reforge.com/experimentation-testing)

**2. Growth strategy**

- [Learn about the history of the growth role](https://brianbalfour.com/growth-machine/why-growth)
- [Learn about ways to drive growth](https://andrewchen.com/theres-only-a-few-ways-to-scale-user-growth-and-heres-the-list/)
- [Learn about principles, processes, teams, and tactics](https://brianbalfour.com/growth-machine/principles-process-team-tactics)
- [Learn my favorite high-level growth framework](https://www.reforge.com/blog/racecar-growth-framework)
- [Learn about funnels](https://ahrefs.com/blog/marketing-funnels/)
- [Learn about loops](https://www.reforge.com/blog/growth-loops#:~:text=Loops%20combine%20how%20your%20product,harder%20for%20others%20to%20replicate.)
- Take the [Reforge Growth Series](https://www.reforge.com/growth-series)

**3. SEO**

- [Learn the basics of SEO](https://ahrefs.com/blog/what-is-seo/)
- [Learn how to do SEO](https://ahrefs.com/blog/seo-basics/#how-to-do-seo)
- [Learn how to run SEO experiments](https://www.lennysnewsletter.com/p/seo-experimentation)
- [Learn about content-driven growth](https://www.lennysnewsletter.com/p/content-driven-growth-strategy) and [winning at SEO](https://www.lennysnewsletter.com/p/crafting-an-seo-strategy-issue-34)

**4. Performance marketing (aka paid growth)**

- [Learn the basics of performance marketing](https://www.khoslaventures.com/a-primer-on-paid-marketing)
- [Learn how to make and run an online ad](https://www.julian.com/guide/growth/make-ads)
- [Learn about CAC](https://andrewchen.com/how-to-actually-calculate-cac/)
- [Learn how product can automate ads](https://eng.lyft.com/lyft-marketing-automation-b43b7b7537cc)
- [Learn about the downsides of paid growth](https://andrewchen.com/paid-marketing-addiction/)

**5. Virality**

- [Learn about the types of virality](https://news.greylock.com/the-five-types-of-virality-8ba42051928d?gi=ee0e3f5e160b)
- [Learn about viral loops](https://andrewchen.com/whats-your-viral-loop-understanding-the-engine-of-adoption/)
- [Learn about ways to increase virality](https://www.lennysnewsletter.com/p/increasing-virality)

**6. Conversion optimization**

- [Learn the basics of funnel conversion optimization](https://amplitude.com/funnels)
- [Learn tactics to improve conversion](https://www.lennysnewsletter.com/p/this-week-21-strategy-and-tactics)
- [Set up analytics and track conversion within your funnels](https://segment.com/recipes/improve-conversion-by-removing-funnel-bottlenecks/)

**7. Data and SQL**

- [Learn about SQL in a course](https://www.codecademy.com/learn/learn-sql) or [online](https://mode.com/sql-tutorial/), and start running queries
- [Take a class on statistics](https://online.stanford.edu/courses/xfds110-introduction-statistics) and [experimental design](https://www.coursera.org/specializations/design-experiments)

#### 3. Do

Learning theory will get you only so far. Find time to do some actual growth work. As someone smart said, “Do the job you want.” Demonstrate to yourself, and others, that you can do this work and be successful.

A few suggestions:

1. Design and run a handful of experiments. [Here’s a template](https://docs.google.com/document/d/1aPAOEvYbT9gsSUUtucANjcKQf1J5CqMwLgbMhuAiQxY/edit) to get you started.
2. Identify your company’s [primary growth engine](https://www.reforge.com/blog/racecar-growth-framework).
3. Run a [Facebook ad](https://www.facebook.com/business/ads) and an [AdWords ad](https://support.google.com/google-ads/answer/6324971?hl=en).
4. Analyze [your company’s SEO health](https://ahrefs.com/site-audit).
5. Ask your existing growth PMs if there’s anything you can help them with, in an effort to learn.
6. Find a gig that lets you do growth immediately.
7. Finally, JUST DO IT

If you’ve got a story to share about how you broke into growth, I’d love to hear it 👇

[Leave a comment](https://www.lennysnewsletter.com/p/breaking-into-growth/comments)

## 📚 Further study

1. [The growing specialization of product management](https://www.reforge.com/blog/product-specializations) by Adam Fishman and Keya Patel
2. [Reforge blog](https://www.reforge.com/blog/) and [courses](https://www.reforge.com/all-programs)
3. [Demand Curve growth course](https://www.demandcurve.com/program)
4. [Netflix’s blog on experimentation](https://netflixtechblog.com/decision-making-at-netflix-33065fa06481)
5. [Casey Winters’s blog](https://caseyaccidental.com/)
6. [Growth & User Acquisition newsletter](https://www.indiehackers.com/series/growth-acquisition)
7. [First 1000 newsletter](https://read.first1000.co/)

*Thank you, [Che Sharma](https://twitter.com/chesharma87), for feedback on this post. Have a fulfilling and productive week*🙏

## **🔥 Featured job openings**

1. **Enterpret:** [Principal Product Manager](https://lennys-jobs.pallet.xyz/jobs/ffbf9d72-bac3-4a65-a086-43dcb9b46bcb) (NYC)
2. **Launch House:** [Growth Associate](https://lennys-jobs.pallet.xyz/jobs/cc16e91a-64cd-40b0-b48b-0a9befd0a77b) (Remote-US)
3. **Hyphen:** [Senior Software Engineer](https://lennys-jobs.pallet.xyz/jobs/409ba7dc-d175-45cf-a3e8-5b50d020c874) (LA, San Jose, ATL, Remote-US)
4. **Rapchat:** [Data Analyst](https://pallet.xyz/list/lennys-jobs/jobs/e32872cf-766d-47f1-b367-6e9b0d437294) (Remote-US/EU)
5. **The Parent Company:** [Product Manager - Consumer Growth](https://pallet.xyz/list/lennys-jobs/jobs/31f0e76e-aace-4a3c-a1bd-370dab92eda2) (Remote-US)
6. **Spokn:** [Head of Product Design](https://pallet.xyz/list/lennys-jobs/jobs/4ae774dd-1c74-4709-897e-dd4413a2aa5c) (Remote-US)
7. **Custom Ink:** [Senior UX Architect](https://pallet.xyz/list/lennys-jobs/jobs/6cf2edfe-0149-4cf8-99f4-7bf23a949975) (Fairfax VA, Remote-US)
8. **PadSplit:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/a4a610e5-a0dc-4c28-9c19-9905c60917ad) (Remote-US)
9. **Matter:** [Design Lead](https://pallet.xyz/list/lennys-jobs/jobs/d08a9ae6-80b3-414f-8e36-daa2b8ea6768) (Remote-US)
10. **Papaya:** [Director, Product Management](https://pallet.xyz/list/lennys-jobs/jobs/4d7cac8e-4fc5-4df3-9dff-185749963030) (Remote-US)
11. **Airtable:** [Engineering Manager, Monetization](https://pallet.xyz/list/lennys-jobs/jobs/6806a6f6-bb9d-4a9c-b4a6-d48d36951670) (SF)
12. **Catalog:** [Design Director](https://pallet.xyz/list/lennys-jobs/jobs/9ffd590f-5cda-4bbd-b1bf-687a7f89eb48) (Remote-Global)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Listen:** [Tim Ferriss with Chris Dixon and Naval Ravikant talking about web3](https://tim.blog/2021/10/28/chris-dixon-naval-ravikant/)
2. **Read:** [Learn to hire well](https://hunterwalk.com/2021/10/22/learn-to-hire-well-and-youll-never-lose/) by Hunter Walk
3. **Learn:** [How to launch on Product Hunt, a detailed guide](https://www.indiehackers.com/post/how-to-launch-on-product-hunt-a-detailed-guide-569166376a) by Xavier Coiffard

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [50/61] 🚨 Applications now open for my live course—Product Management Fundamentals

Hey there,

This is just a quick note to let you know that I’ve opened up applications for my occasional live cohort-based course: [Product Management Fundamentals](https://productmanagementfundamentals.com/).

It’s targeted at new PMs (<2 years of experience), and will run 11/29-12/17. The course is part-time (evenings PST), and fits into a busy PM schedule. This is the course I wish I had when I was starting out.

![Image from 🚨 Applications now open for my live course—Product Management Fundamentals](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/81559f36-a746-4fef-8254-57aef893bff9_2022x938.png)

In addition to live lectures, real-world assignments, group breakouts, and meeting 100+ other early-career PMs, you’ll also learn from amazing guest speakers, including:

- **[Ken Norton](https://www.bringthedonuts.com/)**
- **[Shreyas Doshi](https://twitter.com/shreyas)**
- **[Jackie Bavaro](https://twitter.com/jackiebo)**
- **[Andrew Chen](https://andrewchen.com/)**
- **[Adam Fishman](https://www.linkedin.com/in/adamjfishman/)**

Many students from the first cohort credit the course with helping them get a promotion, land a better gig, or simply become more confident in themselves:

> *“I wanted to let you know that less than 3 months following your PM Fundamentals course, **I’m now leading both Product AND Design** for a brand new product our company is rolling out. Absolutely couldn’t have done it without your insight, so wanted to say thank you!”*

> *“I wanted to reach out and let you know that I **just got promoted from an APM to a PM**! I have to credit your workshops for developing my skill set, pushing me to try new tactics, and raising the bar I set for myself. Thank you for developing that class, and the effort you put int” it!*

> *“The course exceeded my expectations. Even more, there were a lot of delights compared to usual workshops. PM fundamentals are not normally well served by workshops, and so **finding this amount of context + quality is unheard of**. Plus, the Slack community, and the coaches, where really engaging and not just an afterthought. That with the expert guests all combined = big differentiators.”*

#### Topics we'll cover:

- Leveling up your strategic thinking and vision
- Strengthening your written and verbal communication
- Collaborating and influencing your peers more effectively
- Mastering the art of shipping on time while keeping your team happy
- Gaining confidence as a PM
- Leveraging user research, metrics, and stakeholders to prioritize
- Delivering better presentations
- Understanding what separates good PMs from great PMs
- …and much more

What a few other folks have had to say:

![Image from 🚨 Applications now open for my live course—Product Management Fundamentals](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/43f0bf83-4ec3-444c-b0fb-d6a6641e426c_1170x272.png)![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1c2c4b30-631c-4514-bf63-58374903d0ad_846x216.png)![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/037c0abc-a096-4653-85e4-dc7da3a42f26_1172x432.jpeg)![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/299dacdb-c346-4c89-9d1d-12081536dd62_1168x268.jpeg)![Image](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/be34ec1f-ec50-4df1-8a2a-e309aa062298_1170x494.jpeg)![Image from 🚨 Applications now open for my live course—Product Management Fundamentals](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8edaf25b-ce8c-4615-aabf-0905eabc9089_1180x220.png)

Spots are limited, so apply now 👇

[Apply now](https://maven.com/lenny/product-management-fundamentals)

*P.S. Ask your manager if you can expense this to your learning and development budget. If not, I’m also giving out a limited number of scholarships.*

---

## [51/61] Six rules of hiring for growth

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to the monthly ✨ **free edition**✨ of my weekly newsletter. If you’re not a subscriber, here’s what you missed this month:*

1. *[Picking a wedge](https://www.lennysnewsletter.com/p/wedge)*
2. *[Breaking into growth](https://www.lennysnewsletter.com/p/breaking-into-growth)*
3. *[Community wisdom](https://www.lennysnewsletter.com/p/community-wisdom-tools-to-capture)*

> ## Q: When is the right time to hire my first full-time growth person? What should I look for when hiring for growth?

As [Paul Graham teaches us](https://www.paulgraham.com/growth.html), “Startup = growth. The only essential thing is growth. Everything else we associate with startups follows from growth.” Thus, your first growth hire is one of the most important hires you’ll make. To tackle your question, I’ve pulled in [Elena Verna](https://www.linkedin.com/in/elenaverna/), one of the smartest growth people I’ve ever met (and who I’ve been trying to convince to write a guest post for nearly a year). Below, Elena generously shares her six hard-won lessons on growth hiring. Over the past 10+ years, Elena has helped hire and build growth teams at companies like [Netlify](https://www.netlify.com/), [MongoDB](https://www.mongodb.com/), [HP](https://hp.com/), and [Krisp](https://krisp.ai/), and previously led growth at [Miro](https://miro.com/), [SurveyMonkey](https://www.surveymonkey.com/), and [Malwarebytes](https://www.malwarebytes.com/). An early draft of this post has already become my go-to reference for helping founders figure out their growth hiring strategy, and I’m excited to share it with you all.

*You can find Elena on [LinkedIn](https://www.linkedin.com/in/elenaverna/) and [Twitter](https://twitter.com/ElenaVerna).*

![Image from Six rules of hiring for growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ff07715a-98ac-4e71-a600-fe493f74b999_2048x634.png)

Do you have strong product-market fit and feel ready to ramp up your investment in growth by hiring your first full-time growth person? Unfortunately, some of the first set of decisions that founders make when embarking on this journey are flawed. The most common mistakes they make are:

1. Hiring a growth generalist without understanding what growth means for your company
2. Building a growth team before a data team
3. Prioritizing Head of Growth as your first growth hire
4. Hiring the wrong type of growth profile
5. Chasing after external talent
6. Putting growth in the wrong department

Today I want to offer a step-by-step framework for how to go about building a successful growth team.

![Image from Six rules of hiring for growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8e9aca2d-57f8-4049-915b-cdd23bb9b177_2048x1102.png)

### **Rule 1: Growth model before growth**

Great *products* have incredible product-market fit—they have correctly proved a compelling value hypothesis that describes why a customer is likely to use the product. Great *companies*,on the other hand*,* have product-market fit coupled with a strong **growth model**—predictable, sustainable, and defensible *strategies* that help achieve maximum distribution in the market. Just like a product, your growth model needs to be researched, built, launched, and iterated on. You won’t get it right immediately. I suggest spending time on this during, or shortly after, you’ve found product-market fit, to ensure that your initial traction can be scaled.

A growth model is made up of two parts:

1. **Growth levers**
2. **Growth motions**

**Growth levers** describe ways to impact your business’s revenue growth by making changes to your customers’ journey. Growth levers answer the following questions:

1. **Acquisition:** How do you acquire customers?
2. **Retention:** How do you activate and engage your customers?
3. **Monetization:** How do you monetize your customers?

Every growth lever is leveraged through a **growth motion**. A growth motion describes which team or tactic is accountable for a successful outcome in the growth lever. There are many fantastic, established growth motions to apply to each growth lever, such as product-led, sales/success-led, marketing-led, support-led, community-led, etc.

Let’s explore the first three:

#### **1. Product-led**

Product is accountable for the output of the growth lever by engaging customers in product actions.

- **Acquisition example:** Miro (collaborative whiteboard platform) customers need to collaborate in the product to receive value, which results in customers acquiring more new customers via invites to colleagues.
- **Retention example:** SurveyMonkey (online surveys platform) customers receive notifications that new responses have been collected on an open survey, triggering them to re-engage with the product to analyze results.
- **Monetization example:** Netlify (web workflow platform) customers discover a product feature wall for site password protection and convert via self-serve monetization flow to the paid plan to unlock functionality.

#### **2. Sales- and success-led**

The sales team engages customers in the actions that will result in the growth lever output.

- **Acquisition example:** Sales team discovers potential decision makers through outbound efforts, convincing them to see a demo or start a trial.
- **Retention example:** Success team holds quarterly business reviews with the customer to communicate value delivered, to ensure that the customer continues to engage.
- **Monetization example:** Sales team nurtures the customer, resulting in contract signing.

#### **3. Marketing-led**

Marketing engages customers in the actions that will result in the growth lever output.

- **Acquisition example:** Marketing team utilizes organic or paid methods across third-party platforms such as Google, Facebook, and Twitter to grab customer attention and convince them to give the product a try.
- **Retention example:** Marketing uses an email lifecycle to communicate the value of the product to the customer.
- **Monetization example:** Marketing team deploys messaging nurture, retargeting tactics to generate monetization interest from the customer.

Now mix and match, layer, and sequence the above motions across the growth levers! You can be marketing-led in acquisition; product- and sales-led in monetization; and product-led in retention; while ideating how to sequence product-led to acquisition. The unique combination, layering, and sequencing of the growth motions localized for your product and deployed against your growth model is what will create a *predictable*, *sustainable*,and *competitively defensible* growth model. So what is your most critical growth lever right now and most likely growth motion to apply against it?

### **Rule 2: Invest in the data**

Although the final desired output of any business is revenue, the levers that a team pulls to impact revenue sit deep within the user journey of your product. Relying on financial performance as the ultimate guiding principle for decision-making leads to short-term revenue optimization and limited investment in long-term sustainable growth. Understanding customer progression through a data lens will help you identify not only which growth lever you should prioritize, but where you should focus your efforts to yield the biggest short- or long-term impact.

Whether you are a marketplace, SaaS, direct-to-consumer, social network, or any other type of business, **you can think of your data as a company organizational chart**:

- Revenue is the “CEO” (it’s an outcome metric).
- Acquisition, retention, and monetization are part of the “leadership team,” strategizing how to make the company successful.
- Activation, engagement, conversion, etc. are the key “team members” that work tirelessly to deliver on outcomes for the company—these are the metrics your growth team will drive and impact.
- “Chief of staff” is your North Star metric, which keeps close tabs on the “CEO,” working behind the scenes as a predictor to revenue success.

![Image from Six rules of hiring for growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/67b65506-99a8-416c-9295-a41db5783f5d_8118x6035.jpeg)

Building a company’s data organization will allow you to:

- Understand where the most customer friction happens, and prioritize opportunities for growth.
- Help your first growth team members hit the ground running, and be empowered with data insights to have a greater chance of delivering the biggest impact.
- Aid in the creation of growth teams or growth pods around acquisition, retention, and monetization.

It may take many years to develop a comprehensive company data org, but once you do, you will be data-driven. Focus on the “leadership team” first, which will get you to a data-informed stage. Starting to identify team members will transition you to data-driven territory. See more on data efficacy stages in [this blog post](https://www.reforge.com/blog/scaling-data), and [a guide to helping you find your North Star metric](https://future.a16z.com/north-star-metrics/).

### **Rule 3: Create the first growth model yourself**

This is where you do *not* hire the Head of Growth. It is up to the core leadership team to figure out the first version of your growth model—the primary levers and motions that you believe will drive your business growth. Only you know all the nuances of the market, product, and customer, hence are best positioned to put together the first version of a growth model that will have the highest likelihood of success.

Your growth model, just like product-market fit, is part of the core foundation of your company. Product, marketing, and growth leaders can help you evolve and scale initial traction, evolving your business for long-term success. But doing the first growth-model exercise with the founding team will help you create an authentic growth model that closely leverages your product-market fit strengths and takes advantage of the market opportunities. In fact, companies leverage their growth models to win against direct competitors. Two examples:

> *SurveyMonkey hit product-market fit in the early 2000s by creating a software solution that enabled a much easier way for customers to collect feedback. It won a prosumer market with the product-led acquisition approach of the survey creators distributing SurveyMonkey-branded surveys to the respondents via casual contact loop, monetizing prosumers via product-led self-serve channels.*

> *Qualtrics, a direct competitor, was able to enter the online survey market by applying a sales-led acquisition motion, targeting educational institutions first. With students gradually entering the workforce and becoming decision makers, it switched its acquisition motion heavily toward enterprise buyers, getting great traction with sales-led monetization inside companies. Nearly the same product was able to enter and succeed by applying a unique growth model against its product.*

So why is it a bad idea to outsource the first growth-model creation exercise to the Head of Growth?

1. **Tasking a new Head of Growth hire with the creation of the growth model will likely result in a copy-paste solution from their past.** It takes many months, if not years, to understand the true DNA of the product and market, which should guide growth model selection. You will either lose precious time on the market by waiting or rush and end up with a model that will have a high likelihood of failure. The goal of a great growth team is to accelerate organic trends—to make it easier for people to do things they already want to do. Your existing team is best equipped to understand all the things people already want to do related to your product.
2. **Switching a company’s mindset from building great products (product-market fit) to growing a fantastic business (growth model) is an evolution that every business has to embark on during its scaling journey.** Tasking a new Head of Growth on the leadership team with achieving this mindset shift may result in internal resistance to change. Evolving the mindset with the founding team is the key to setting a company up for success not only with growth but with any newly formed department.

It is important to understand that the initial growth model is a hypothesis with assumptions that are yet to be proven. Your team’s first order of business will be to *learn* about the validity of the assumptions.

[Here’s a sample template](https://miro.com/app/board/uXjVMAQfsQg=/) for what a growth model could look like:

![Image from Six rules of hiring for growth](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8b766269-219d-436f-bbb8-d6fed27835e7_10341x4737.jpeg)

### **Rule 4: Hire a builder**

In growth, there exist three types of profiles:

1. **Innovators:** Enjoy thinking *big*. They love ideating about new loops, channels, and tactics and pressure-testing existing hypotheses. Most often they hold VP-level roles in Growth and will be best deployed to evolve your growth model.
2. **Builders:** Generalists who will help you build out your existing growth model hypotheses by creating systems, processes, and learnings. Most often they hold Growth PM, Growth Marketing, and Lifecycle Manager titles.
3. **Optimizers:** Hold deep functional knowledge and will allow you to capture every last bit of the improvements out of any given channel, tactic, or loop. These are SEO specialists, Adwords specialists, and CRO titles.

In almost all cases, you want to start by hiring a **Builder**, to prove your model’s validity. If most of your assumptions were right and you are enjoying early traction, you should move to **Optimizers** next to capture most of the value, finishing with **Innovators** to begin iterating on the model.

If your growth model hypothesis was wrong and you are not seeing the expected impact, then move to **Innovators** next, who will help you evolve the model based on existing learnings from failures, going after **Optimizers** only after traction with the growth model has been established.

### **Rule 5: Prioritize homegrown talent**

As tempting as it is to open a new role for growth and hire from the outside, it is often the quickest way to fail in growth efforts. Reasons include:

1. **The growth function has been around for only a decade**, generally speaking—there are not enough people out there who have “been there, done that.” Especially if you are looking for a Head of Growth, you will likely search for a good portion of the year, losing precious time on the market.
2. **If somebody has been there and done that, it is not likely they will want to do it all over again and again**. I’m sure you’ve heard: “not open to full-time, but advising is an option.”
3. **Strong growth leaders are** ***extremely*** **expensive** due to scarcity of supply.
4. **Growth leaders need internal support.** Many of the best ones will run fast-paced and sometimes controversial experiments to help you prove out and evolve your growth model. It’s a good idea to find a growth leader who is hard for your team to stay mad at. Sometimes the best option already works on your team.

Growth is about evolution, not revolution. Almost nobody starts their career in growth. Most successful growth leaders came from other departments. A few examples:

- Data analytics: [Casey Winters](https://www.linkedin.com/in/caseywinters) (ex-growth at Pinterest, CPO at Eventbrite), [Elena Verna](https://www.linkedin.com/in/elenaverna/) (ex-growth at SurveyMonkey), [Crystal Widjaja](https://www.linkedin.com/in/crystalwidjaja/) (ex-growth at Gojek, CPO at Kumu)
- Engineer: [Lenny Rachitsky](https://www.linkedin.com/in/lennyrachitsky/) (ex-growth at Airbnb), [Matt Greenberg](https://www.linkedin.com/in/mattgreenberg/) (ex-growth at Credit Karma, CTO at Reforge)
- Marketing manager: [Adam Fishman](https://www.linkedin.com/in/adamjfishman/) (ex-growth at Lyft, Patreon), [Adam Grenier](https://www.linkedin.com/in/akgrenier/) (ex-growth at Uber, growth at MasterClass)
- Product manager: [Bangaly Kaba](https://www.linkedin.com/in/iambangaly/) (ex-growth at Instagram, growth at Popshop Live), [Naomi Ionita](https://www.linkedin.com/in/naomipilosofionita/) (ex-product/growth at Evernote and Invoice2go, partner at Menlo Ventures), [Nick Soman](https://www.linkedin.com/in/nicksoman/) (ex-growth at Gusto, CEO at Decent)

Among the unifying qualities across all of these growth leaders are their natural powers to:

1. Connect actions to outcomes
2. Be data-driven
3. Have a growth mindset
4. Respect for scientific method
5. Hunger for learning

So who are the people within the analytics, product, marketing, engineering, or even financial planning and analysis team to take on the first builder/innovator roles?

### **Rule 6: Let your growth model dictate growth org placement**

Should the growth team be in marketing? Product? Sales? Community? Support? Although each organization and their leaders are unique and hence there is no universal right answer, your growth model should help inform the decision process.

**Step 1:** Start by prioritizing the growth lever you need to drive the most improvement for:

1. **Acquisition:** My new user growth is 50%, but I believe I should be at hypergrowth of 75% due to current market demand and saturation.
2. **Retention:** Less than 10% of my customers reach the aha moment, which prevents my loops from working, and I need it to be 30%.
3. **Monetization:** My free-to-paid conversion is 2%, while the industry average is 5%.

Most companies start with acquisition or retention (specifically onboarding), followed by monetization.

**Step 2:** Next, your growth model should indicate what growth motion you either need to build out, optimize, or introduce: marketing-led, product-led, sales-led, etc. For example, to build on the acquisition lever mentioned in Step 1:

- We will accelerate acquisition from 50% to 75% by capturing SEO and kicking off paid marketing on Twitter: Marketing-led motion

- Hire a growth marketer under marketing
- We will accelerate acquisition by introducing user referral loops and increasing collaborative feature adoption in the product: Product-led motion

- Hire a growth PM under product
- We will accelerate acquisition by hiring BDRs and increasing our outbound efforts: Sales-led motion

Avoid hiring a growth marketer to solve your product-led motion. In addition to lacking the background to create the most value, they will spend much of their time spinning wheels outside their function in meetings with the product team because of the changes that person’s motions will require to the product.

Lastly, companies often wonder whether they should embed growth within an existing team or create a stand-alone function. Most companies end up going through cycles of centralization and functional distribution of the growth teams because both models have their strengths and weaknesses.

**Embedded teams**

- Pros: Cleaner org design; feels like evolution; easier propagation of learnings; growth mindset throughout the org.
- Con: Hard time maintaining growth focus, often working on core product or marketing projects and failing to drive a change in the ecosystem. This is often a silent killer.

**Stand-alone teams**

- Pro: Full autonomy in decision-making.
- Cons: Feels like revolution; tend to absorb so much outcome accountability on their shoulders that the rest of the organization feels a lack of responsibility to deliver on growth goals for the business.

I would recommend always starting with the embedded model, to ensure that growth is an evolution and not a revolution, while frequently re-evaluating organizational design.

Growth models and growth teams are just as important to a successful business as strong product-market fit. There are many incredible products that you’ve never even heard about because they have not invested in their growth model and end up slowly dying. Conversely, there are a lot of terrible products with such strong growth models that they make a company incredibly successful.

In any case, I hope you use the tools I’ve described here to create a great growth team and build a successful company!

### 📚 Helpful additional resources

- [20VC podcast episode on the biggest mistakes you can make when hiring for growth](https://www.thetwentyminutevc.com/elena-verna/)
- [Crystal Widjaja blog post on the journey to scale data](https://www.reforge.com/blog/scaling-data)
- [Andrew Chen’s blog post on hiring for a Head of Growth](https://andrewchen-com.cdn.ampproject.org/c/s/andrewchen.com/hiring-head-of-growth/amp/)
- [Reforge’s Growth Series course](https://www.reforge.com/growth-series)

*Thanks, Elena! You can find her on [LinkedIn](https://www.linkedin.com/in/elenaverna/)* and *[Twitter](https://twitter.com/ElenaVerna)*.

## **🔥 Featured job openings**

1. **Mynd:** [Product Lead, Leasing & Residents](https://lennys-jobs.pallet.xyz/jobs/fb8cc2e5-7d3c-48ca-9fa8-38fbb4a3411f) (Remote-US)
2. **TaskRabbit:** [Chief Product Officer](https://lennys-jobs.pallet.xyz/jobs/17de265a-eadd-4e61-9a8b-a4ff0dc0b494) (Remote-US)
3. **Fiveable:** [Head of Product](https://lennys-jobs.pallet.xyz/jobs/c569b4e4-3b48-4ed6-9e85-ca71fc7023f0) (Remote-US)
4. **Catalog:** [Senior Project Manager](https://lennys-jobs.pallet.xyz/jobs/f2bec9f3-9eaf-4d5f-aa4a-48e81f3e3a78) (Remote-Global)
5. **Enterpret:** [Principal Product Manager](https://lennys-jobs.pallet.xyz/jobs/ffbf9d72-bac3-4a65-a086-43dcb9b46bcb) (NYC)
6. **Launch House:** [Growth Associate](https://lennys-jobs.pallet.xyz/jobs/cc16e91a-64cd-40b0-b48b-0a9befd0a77b) (Remote-US)
7. **Hyphen:** [Senior Software Engineer](https://lennys-jobs.pallet.xyz/jobs/409ba7dc-d175-45cf-a3e8-5b50d020c874) (LA, San Jose, ATL, Remote-US)
8. **Rapchat:** [Data Analyst](https://pallet.xyz/list/lennys-jobs/jobs/e32872cf-766d-47f1-b367-6e9b0d437294) (Remote-US/EU)
9. **The Parent Company:** [Product Manager - Consumer Growth](https://pallet.xyz/list/lennys-jobs/jobs/31f0e76e-aace-4a3c-a1bd-370dab92eda2) (Remote-US)
10. **Spokn:** [Head of Product Design](https://pallet.xyz/list/lennys-jobs/jobs/4ae774dd-1c74-4709-897e-dd4413a2aa5c) (Remote-US)
11. **Custom Ink:** [Senior UX Architect](https://pallet.xyz/list/lennys-jobs/jobs/6cf2edfe-0149-4cf8-99f4-7bf23a949975) (Fairfax VA, Remote-US)
12. **PadSplit:** [Senior Product Manager](https://pallet.xyz/list/lennys-jobs/jobs/a4a610e5-a0dc-4c28-9c19-9905c60917ad) (Remote-US)
13. **Matter:** [Design Lead](https://pallet.xyz/list/lennys-jobs/jobs/d08a9ae6-80b3-414f-8e36-daa2b8ea6768) (Remote-US)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [52/61] What is product management

> ## Q: What exactly is the job of a product manager?

I generally avoid meta questions like this, since they’re rarely actionable or useful. But because this is such a common PM interview question and because I’ve gotten this question from readers enough times and never found a definition that I like elsewhere, I’m going to tackle it this week.

## The job of a product manager

I like this baseline definition:

> ### **Your job as a PM is to deliver business impact by marshaling the resources of your team to identify and solve the most impactful customer problems.**

There are three parts to this, each essential:

#### **1. Deliver business impact**

Fundamentally, you are responsible for delivering business impact. If your team drives positive impact—hitting important goals, reducing costs, shipping an important project, etc.—you’re doing your job.

#### **2. Marshaling the resources of your team**

Your job isn’t to do the building yourself but instead to increase the leverage of your cross-functional teammates—designers, engineers, data scientists, researchers—to deliver impact. To paraphrase [Andy Grove](https://en.wikipedia.org/wiki/Andrew_Grove#Writing_and_teaching), a product manager’s output = the output of their team.

#### **3. Identify and solve the most impactful customer problems**

Business impact comes from solving customer problems. Thus, it’s your job to lead your team to correctly identify, prioritize, and solve the most *impactful* customer problems.

PMs are the ultimate business lever.

> #### Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.
>
> #### —Archimedes

## The three core jobs of a product manager

Another way to define the role of a PM is to break out the day-to-day jobs of a product manager:

![Image from What is product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f20f2147-5cc4-453e-ac6a-8c274d5931ff_2400x1350.png)

1. **Shape the product:** Harness insights from customers, stakeholders, and data to prioritize and build a product that will have the most 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 around one vision, strategy, goal, roadmap, and timeline to avoid wasted time and effort.

All of that is a means to delivering impact.

### The attributes of successful product managers

A different approach to understanding the PM job is to look at how PMs are evaluated. Earlier this year, I [collected and analyzed dozens of career ladders](https://www.lennysnewsletter.com/p/jobs-of-product-manager) from companies big and small, and out of this emerged 10 common attributes of successful product managers:

![Image from What is product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/91aa44f2-b262-4611-bc95-6a757799fbf2_2048x1654.png)

[You can learn more about each of these attributes here](https://www.lennysnewsletter.com/p/jobs-of-product-manager), including which attributes most separate junior and senior PMs. You’ll need to develop each of these to thrive as a PM long-term, but if you’re just starting out, I’d suggest focusing on these five:

1. Communication
2. Collaboration
3. Execution
4. Customer insights
5. Strategy

At the end of the post, I link to further reading on each of these areas.

### The most important PM skills when interviewing

In a different research project, [I surveyed about 1,000 PMs](https://www.lennysnewsletter.com/p/product-management-survey) across hundreds of companies and asked them what skills matter most when *hiring* PMs. The results provide insight into not only what PMs need to demonstrate when they do the job (i.e. the list above) but also what skills companies look for when hiring. In addition to communication, execution, strategic thinking, and collaboration—which we covered above—companies also look for “product sense.” To learn more about this skill, I suggest [this post](https://future.a16z.com/product-thinking/) by Julie Zhuo.

![Image from What is product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f060ad54-6d6a-4ff3-9df3-bd971d68da98_925x566.png)

### How the PM role varies by company

Everything we’ve talked about above is based on the typical PM role. But the PM role is rarely typical. If you’re looking to get into PM, it’s important that you look into how the company you work at (or plan to work at) specifically looks at the PM role. There are two axes across which the PM role most varies:

1. **Skills:** Which skills matter most
2. **Influence:** How much influence a PM has within the org

#### How skills vary

Though companies look for the same broad set of skills in their PMs, the skills they care about the *most* vary widely. Here’s a look at which skills a bunch of well-known companies emphasize (the darker the color, the more important it is to them):

![Image from What is product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/edf6145e-a8ec-46a9-bf3d-bd035b82d56e_2912x2974.png)

#### How influence varies

The amount of influence a PM has within an organization also varies widely. On one end of the spectrum, we have the mini-CEO, who is very much in charge. On the other end, we essentially have a project manager—responsible for execution but with no real say over what gets built. Here’s what this spectrum looks like at these same companies—Zynga on one side and Apple on the other:

![Image from What is product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/141dff48-e2d7-42a6-b689-1c892edba92f_2912x1506.png)

### Startup PM vs. big-company PM

Finally, when looking at the PM role, it’s important to differentiate between a startup and a big-company PM. The difference is even more significant than the two spectrums we looked at above. Every single part of the job is different:

![Image from What is product management](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b78eea23-5eab-4c1b-be8f-b02028bf3b7a_2934x1834.png)

In the end, no matter how many definitions and details you read about the PM role, it’ll never be exactly the same at any company. Every founder and product leader will have their own unique take on what they expect from their PMs. So what to do?

- If you’re already at a company and looking to understand the role better, ask your manager what “amazing” in the role would look like.
- If you’re exploring getting into PM, ask the companies you talk to (1) what skills they care about most and (2) how much say a PM has compared to other functions.
- If you’re just curious about the PM role, find a few PMs and ask them about their job.

## 📚 Further study

1. [Product management career ladders](https://www.lennysnewsletter.com/p/jobs-of-product-manager)
2. [A comprehensive survey of Product Management](https://www.lennysnewsletter.com/p/product-management-survey)
3. [Should I become a product manager](https://www.lennysnewsletter.com/p/become-a-product-manager)
4. [How to get into product management](https://www.lennysnewsletter.com/p/how-to-get-into-product-management)
5. [Startup PM vs. big-company PM](https://www.lennysnewsletter.com/p/product-management-startup-big-company)
6. [Getting better at product strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy)
7. [The Minto Pyramid Principle and the SCR Framework](https://www.lennysnewsletter.com/p/minto-pyramid-principle-scr)

Have a fulfilling and productive week 🙏

## **🔥 Featured job openings**

1. **GetSetUp:** [Product Lead, Discovery](https://lennys-jobs.pallet.xyz/jobs/522f84e1-0499-4ddd-975a-f996f648fa0a) (Remote-Global)
2. **Morty:** [Founding Product Manager](https://lennys-jobs.pallet.xyz/jobs/e30caace-f287-4fe1-8215-6d08c88f51c1) (Consumer)
3. **Otto:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/3e0d39f0-55dc-4bc8-bdd1-c58e5611ddf7) (Remote-US)
4. **Mynd:** [Product Lead, Leasing & Residents](https://lennys-jobs.pallet.xyz/jobs/fb8cc2e5-7d3c-48ca-9fa8-38fbb4a3411f) (Remote-US)
5. **TaskRabbit:** [Chief Product Officer](https://lennys-jobs.pallet.xyz/jobs/17de265a-eadd-4e61-9a8b-a4ff0dc0b494) (Remote-US)
6. **Fiveable:** [Head of Product](https://lennys-jobs.pallet.xyz/jobs/c569b4e4-3b48-4ed6-9e85-ca71fc7023f0) (Remote-US)
7. **Catalog:** [Senior Project Manager](https://lennys-jobs.pallet.xyz/jobs/f2bec9f3-9eaf-4d5f-aa4a-48e81f3e3a78) (Remote-Global)
8. **Enterpret:** [Principal Product Manager](https://lennys-jobs.pallet.xyz/jobs/ffbf9d72-bac3-4a65-a086-43dcb9b46bcb) (NYC)
9. **Launch House:** [Growth Associate](https://lennys-jobs.pallet.xyz/jobs/cc16e91a-64cd-40b0-b48b-0a9befd0a77b) (Remote-US)
10. **Hyphen:** [Senior Software Engineer](https://lennys-jobs.pallet.xyz/jobs/409ba7dc-d175-45cf-a3e8-5b50d020c874) (LA, San Jose, ATL, Remote-US)
11. **Rapchat:** [Data Analyst](https://pallet.xyz/list/lennys-jobs/jobs/e32872cf-766d-47f1-b367-6e9b0d437294) (Remote-US/EU)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [Birds with people arms](https://kottke.org/21/11/birds-with-people-arms)

[Watch on YouTube](https://www.youtube.com/watch?v=dK2rxOVcH38)

2. **Read:** [Wait, but Have You Tried](https://www.newyorker.com/humor/daily-shouts/wait-but-have-you-tried) by Michelle Rial (my wife!), *The New Yorker*
3. **Listen:** [Red (Taylor’s Version)](https://open.spotify.com/album/6kZ42qRrzov54LcAk4onW9#login) by Taylor Swift

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [53/61] The most important consumer metrics to track

> ## Q: I’m building a consumer app and wondering what metrics I should focus on.

There are many types of consumer businesses, and the metrics you focus on depend heavily on the type of consumer product you’re building. In particular, how you make money. Below I’ll focus on five types that I’m most familiar with:

1. **Subscription—trial-based** (e.g. Calm, Noom)
2. **Subscription—freemium** (e.g. Duolingo, Spotify)
3. **Ad-based** (e.g. Snap, Twitter)
4. **Marketplaces** (e.g. Airbnb, Etsy)
5. **DTC** (e.g. Hims, Glossier)

Don’t look at these suggestions as the one and only answer. Instead, use them as a starting point. As you learn more about what levers most impact the health and growth of your business (e.g. retention, margins, acquisition, etc.), focus on those. Try to narrow in on the two or three metrics that most directly drive your business’s success. I’ve learned this lesson many times over: greater focus leads to greater impact.

*Big thank-you to [Sriram Krishnan](https://www.notion.so/sriramkri/Sriram-Krishnan-5a434396fb9d43bfaebce6aa5c1f5e01) and [Yuriy Timen](https://www.linkedin.com/in/yuriytimen/) for contributing to this post.*

## **The most important consumer metrics to track**

#### **Subscription—trial-based**

Trial-based subscription products generally succeed through low acquisition costs, a high conversion rate from trial to paid, and high retention. I’d start by focusing on the following six metrics:

1. **Trials growth:** New trials started
2. **Conversion:** % of trials that convert to customers
3. **Customer retention:** Month 1/3/6 cohort retention
4. **Revenue:** Monthly recurring revenue
5. **CAC:** Cost of acquiring a trial
6. **Growth spend efficiency:** Payback period or CAC/LTV

#### **Subscription—freemium**

Freemium-based subscription products generally succeed through building large pools of free users (generally through WOM/virality), a high-enough conversion rate from free to paid, and high retention. I’d start by focusing on the following eight metrics:

1. **User growth:** New signups
2. **User retention**: Week 1/2/12 cohort retention
3. **Customer growth:** New paying customers
4. **Customer retention:** Month 1/3/6 cohort retention
5. **Conversion:** % of free users that end up converting to customers after 1-3 months
6. **Engagement:** Key action each day/week/month
7. **Revenue:** Monthly recurring revenue
8. **Growth spend efficiency:** Payback period or CAC/LTV

#### Ad-based

Ad-based products generally succeed through virality-driven (aka cheap) user growth, large percentages of daily/weekly engagement, and high retention. I’d start by focusing on the following six metrics:

1. **User growth:** New signups
2. **Engagement:** DAU, WAU, or MAU
3. **Intensity:** DAU/MAU, WAU/MAU, or [L7/L30](https://andrewchen.com/power-user-curve/)
4. **Retention:** Week 2/4/8 cohort retention
5. **Activation:** % of new users who “activate,” whatever that means for your product
6. **CAC:** Cost of acquiring a new user

#### **Marketplaces**

Marketplaces generally succeed through efficient acquisition costs, high-enough buyer conversion, and either high AOV or high purchase frequency. I’d start by focusing on the following five metrics:

1. **Bookings:** Total number of transactions
2. **Revenue:** Total GMV
3. **Buyer retention:** Month 1/3/6 purchaser retention
4. **Supply retention:** Month 1/3/6 supply cohort retention
5. **Conversion:** % of visitors who end up purchasing

#### **DTC**

DTC businesses generally succeed through highly efficient acquisition costs, sustainable margins, and high AOV. I’d start by focusing on the following seven metrics:

1. **Customer growth:** Number of new purchases/subscribers
2. **Customer retention:** Month 3/6/12 cohort retention
3. **Revenue:** Monthly (recurring) revenue
4. **Growth spend efficiency:** Payback period, and/or contribution margin, and/or ROAS
5. **Gross margins:** Net sales revenue minus the cost of goods sold (per purchase or from an annual subscription)
6. **CAC:** Cost to acquire a customer
7. **AOV:** Average order value

## Summary image for reference

![Image from The most important consumer metrics to track](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2536735b-cb9c-4b4b-ac87-cf73a753c183_3038x5834.png)

Have any suggestions or feedback? Found anything else to be essential, or not useful? I’d love to hear from you 👇👇👇

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

## 📚 Further study

1. [What is good retention?](https://www.lennysnewsletter.com/p/what-is-good-retention-issue-29)
2. [DTC Metrics, Explained](https://medium.com/ro-co/dtc-metrics-explained-29ff99ff5657) by Zachariah Reitano
3. [10 Factors to Consider When Evaluating Consumer Subscriptions](https://nbt.substack.com/p/10-factors-to-consider-when-evaluating) by Nikhil Basu Trivedi
4. [DAU/MAU is an important metric to measure engagement, but here’s where it fails](https://andrewchen.com/dau-mau-is-an-important-metric-but-heres-where-it-fails/) by Andrew Chen
5. [The Power User Curve](https://andrewchen.com/power-user-curve/) by Andrew Chen
6. [Choosing Your North Star Metric](https://future.a16z.com/north-star-metrics/)

Have a fulfilling and productive week 🙏

## **🔥 Featured job openings**

1. **Panther:** [Product Manager (Core)](https://lennys-jobs.pallet.xyz/jobs/e5d8025a-078b-48f5-b083-67978ff06b89) (Remote-Global)
2. **The.com:** [Software Engineer](https://lennys-jobs.pallet.xyz/jobs/e3ea6743-db26-4796-bdfd-3a6885b7b3c3) (SF)
3. **Relive:** [Product Manager](https://lennys-jobs.pallet.xyz/jobs/7a4300f0-d46e-43a4-a8db-dfec28c4e511) (Remote-EU)
4. **GetSetUp:** [Product Lead, Discovery](https://lennys-jobs.pallet.xyz/jobs/522f84e1-0499-4ddd-975a-f996f648fa0a) (Remote-Global)
5. **Morty:** [Founding Product Manager](https://lennys-jobs.pallet.xyz/jobs/e30caace-f287-4fe1-8215-6d08c88f51c1) (Consumer)
6. **Otto:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/3e0d39f0-55dc-4bc8-bdd1-c58e5611ddf7) (Remote-US)
7. **Mynd:** [Product Lead, Leasing & Residents](https://lennys-jobs.pallet.xyz/jobs/fb8cc2e5-7d3c-48ca-9fa8-38fbb4a3411f) (Remote-US)
8. **TaskRabbit:** [Chief Product Officer](https://lennys-jobs.pallet.xyz/jobs/17de265a-eadd-4e61-9a8b-a4ff0dc0b494) (Remote-US)
9. **Fiveable:** [Head of Product](https://lennys-jobs.pallet.xyz/jobs/c569b4e4-3b48-4ed6-9e85-ca71fc7023f0) (Remote-US)
10. **Catalog:** [Senior Project Manager](https://lennys-jobs.pallet.xyz/jobs/f2bec9f3-9eaf-4d5f-aa4a-48e81f3e3a78) (Remote-Global)
11. **Enterpret:** [Principal Product Manager](https://lennys-jobs.pallet.xyz/jobs/ffbf9d72-bac3-4a65-a086-43dcb9b46bcb) (NYC)
12. **Launch House:** [Growth Associate](https://lennys-jobs.pallet.xyz/jobs/cc16e91a-64cd-40b0-b48b-0a9befd0a77b) (Remote-US)
13. **Hyphen:** [Senior Software Engineer](https://lennys-jobs.pallet.xyz/jobs/409ba7dc-d175-45cf-a3e8-5b50d020c874) (LA, San Jose, ATL, Remote-US)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Listen:** [Balaji Srinivasan on Tim Ferriss](https://tim.blog/2021/11/15/balaji-srinivasan-2/)
2. **Read:** [Content marketing for founding teams](https://www.notion.so/Content-marketing-for-founding-teams-fd1c96b0ef9840b29088b5385603ff12)
3. **Subscribe:** [Growth & User Acquisition](https://www.indiehackers.com/series/growth-acquisition)

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [54/61] Lenny’s holiday gift guide

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to a ✨ **special edition**✨ of my weekly newsletter. Normally I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office. But this issue is a little different…*

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/626a513e-ea93-473c-b8ef-1645fc476803_2048x1024.png)

Happy holidays, everyone! For something a little different, I thought it would be fun to put together a gift guide to help you win the holiday season. Below I’ve curated 50+ products that I absolutely love, which would also make great gifts. Enjoy!

## Focus and productivity

**1. [Centered](https://centered.app/):** My main to-do app, and probably my most-used app period. It combines a simple task list with flow-inducing music, distraction reminders, and a community of fellow-concentrators. Use code FLOWWITHLENNY to get 50% off your first year.\*

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/95e111a5-f60e-4fae-8955-eaaf5a972dba_2780x1560.png)

**2. [Taika Matcha Latte](https://taika.co/products/matcha-latte/):** My go-to drink when I want to focus. Delicious, effective, and goes great with Centered. It’s made from organic ceremonial-grade matcha, a blend of adaptogens and functional mushrooms, and is designed to keep you feeling awake, aware, and inspired. Use code LENNY to get 20% off (or [use this link](https://taika.co/?discount=LENNY)).

![taika (@taikacoffee) / Twitter](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d4f120fb-6e37-4e32-86e3-2e4ccd72315e_1376x1154.jpeg)

**3. [Magic Mind](https://magicmind.co/):** My other favorite focus-inducing drink, made by my buddy [James Beshara](https://jamesbeshara.com/). Pairs well with green tea. Use code LENNY23 for 23% off.

![Magic Mind](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c443b9b3-984a-4dcc-a0b2-a9ffd396af52_2400x1257.jpeg)

**4. [Jabra Elite 85h Wireless Noise-Canceling Headphones](https://www.amazon.com/Jabra-Wireless-Noise-Canceling-Headphones-Copper/dp/B07RS8CFJZ/ref=asc_df_B07RS8CFJZ/?tag=hyprod-20&tag=&linkCode=df0&hvadid=343288438787&hvadid=343288438787&hvpos=&hvpos=&hvnetw=g&hvnetw=g&hvrand=6076254961062063397&hvrand=6076254961062063397&hvpone=&hvpone=&hvptwo=&hvptwo=&hvqmt=&hvqmt=&hvdev=c&hvdev=c&hvdvcmdl=&hvdvcmdl=&hvlocint=&hvlocint=&hvlocphy=9032091&hvlocphy=9032091&hvtargid=pla-781643475970&hvtargid=pla-781643475970&psc=1&adgrpid=68271436279)**: I’ve been using these headphones for years and can’t recommend them enough. No matter what’s going on around me, they help me focus and stay in the zone. Originally a gift from [my mother-in-law](https://twitter.com/lennysan/status/1441513455173861376?s=20).

![Amazon.com: Jabra Elite 85h Wireless Noise-Canceling Headphones, Copper  Black – Over Ear Bluetooth Headphones Compatible with iPhone &amp; Android -  Built-in Microphone, Long Battery Life - Rain &amp; Water Resistant : Everything](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/60c42e31-2f98-44a8-8da1-faa3ea00e857_522x616.jpeg)

**5. [Mailman](https://www.mailmanhq.com/):** A Gmail plugin that batches your incoming email and keeps your lizard brain from getting distracted by the endless trickle of new email. It’s a game-changer. Use code LENNY for 50% off an annual plan.

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

## Travel

**1. [Topo Designs Global Briefcase](https://topodesigns.com/products/global-briefcase?variant=39897590071349):** My favorite travel bag. Fits 3-4 days of clothes, has plenty of room for electronics, and includes a special slot for a laptop. It also looks great, and you can wear it as a backpack.

![Topo Designs Global Briefcase 3-Day Review | Pack Hacker](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/44e7da3b-95cc-4bdd-a9cd-cdfadd411c37_2220x1480.jpeg)

**2. [Alaska Bear Pro Contoured Sleep Mask](https://www.amazon.com/gp/product/B074MQ2CG9/ref=ppx_yo_dt_b_asin_title_o02_s00?ie=UTF8&th=1):** For anyone who has trouble falling (or staying) asleep when there’s light outside. I’ve tried a lot of sleep masks, and this is my favorite because it leaves lots of room around the eyes.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5b8de0ce-81bb-407a-8b98-79a7946a24ec_1452x1153.jpeg)

**3. [Combo Lightning and Micro USB charging cable](https://www.amazon.com/gp/product/B015STFVU6/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1):** Never make the mistake of bringing the wrong charging cables again.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/268e8d91-d90e-4819-ab03-427aad98833f_1500x1302.jpeg)

**4. [Vacu Vin Wine Saver Pump](https://www.amazon.com/gp/product/B07ZTXD1R6/ref=ppx_yo_dt_b_asin_title_o07_s00?ie=UTF8&psc=1):** Removes air from your wine bottle to keep wine tasting new for a few extra days.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c6b1eb4c-6dea-41b3-980a-229df7ff6200_1170x1500.jpeg)

**5**. **[Atlys:](https://www.atlys.com/)** Get a visa for 195+ countries in minutes (not days).\*

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9e997470-cc6c-4bdd-a26c-a563aa6a824d_8748x5844.png)

**6. [K9 dog backpack](https://www.amazon.com/K9-Sport-Sack-Adjustable-Veterinarian/dp/B075ZG46SY?th=1):** For any dog owner in your life. Here’s our little guy in action:

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0ea9bf89-c4ff-466d-b01c-029227440bc9_4032x3024.jpeg)

## Books

**1.** ***[Am I Overthinking This?](https://www.michellerial.com/)*** **[and](https://www.michellerial.com/)** ***[Maybe This Will Help](https://www.michellerial.com/)*** **by Michelle Rial:** An unofficial box set—my wife’s bestselling first book, *[Am I Overthinking This?](https://www.amazon.com/Am-Overthinking-This-Over-answering-questions/dp/1452175861/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=&sr=)*, and the prequel, *[Maybe This Will Help](https://www.amazon.com/Maybe-This-Will-Help-Feeling/dp/1797211250/?tag=smarturl-20)*, which just came out this week. They’re great gifts for the chart-lover in your life, and you can get both for under $30.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fdde2141-d5c9-4599-a0ab-0c967bdadd65_1920x1080.jpeg)

**2.** ***[The Cold Start Problem: How to Start and Scale Network Effects](https://www.amazon.com/Cold-Start-Problem-Andrew-Chen/dp/0062969749/ref=tmm_hrd_swatch_0)*** **by Andrew Chen:** After three years of work, Andrew’s book is coming out in two weeks. It’ll be an instant classic, and a great gift for founders and growth teams.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f953973b-493f-4813-8918-d9b862798b1b_1152x1596.jpeg)

**3.** ***[A Short History of Nearly Everything](https://www.amazon.com/Short-History-Nearly-Everything/dp/076790818X)*** **by Bill Bryson:** My current obsession. I’ve learned more about the world per-page than from any other book. A great fit for anyone who’s curious.

**3.** ***[The War of Art](https://www.amazon.com/War-Art-Through-Creative-Battles/dp/1936891026/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=)*** **by Steven Pressfield:** For anyone in your life doing creative work.

**4.** ***[Tiny Beautiful Things: Advice on Love and Life from Dear Sugar](https://www.amazon.com/Tiny-Beautiful-Things-Advice-Sugar/dp/0307949338)*** **by Cheryl Strayed:** For anyone in your life going through real-life sh\*t.

**5.** ***[Ready Player One](https://www.amazon.com/Ready-Player-One-Ernest-Cline/dp/0307887448/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1637785838&sr=1-1)*** **by Ernest Cline:** For anyone in your life trying to understand how the coming metaverse may look.

**6.** ***[Finite and Infinite Games](https://www.amazon.com/Finite-Infinite-Games-James-Carse/dp/1476731713)*** **by James Carse:** A mind-bending (and short) book that changed the way I looked at life.

**7.** ***[Sum: Forty Tales from the Afterlives](https://www.amazon.com/Sum-Forty-Afterlives-David-Eagleman-ebook/dp/B001TKA0VO/ref=sr_1_1?keywords=sum&qid=1637786189&s=books&sr=1-1)*** **by David Eagleman:** Short, hilarious, and infinitely creative.

## Newsletters (that aren’t already free)

**1. [Drawing Links](https://drawinglinks.substack.com/) by Edith Zimmerman**: A comics newsletter with short illustrated stories about her life.

**2. [Letters from an American](https://heathercoxrichardson.substack.com/) by Heather Cox Richardson:** A newsletter about the history behind today’s politics.

**3. [2pm](https://2pml.com/) by Web Smith:** Analyzing the intersection of media and commerce and how those principles are applied elsewhere.

## Home

**1. [iOttie wireless fast-charging stand for iPhone](https://www.amazon.com/iOttie-Wireless-Charging-Charger-Qi-Certified/dp/B07GT2G5B3/ref=sr_1_1?keywords=Ottie+Ion+Wireless+Fast+Charging+Stand%2C+Qi-Certified+Charger+iphone&qid=1637782031&sr=8-1):** Best device I’ve found to charge my phone at night.

![Review: iOttie iON Wireless Stand Charger offers good looks, upright iPhone  charging options - 9to5Mac](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/efb5cdef-0b17-4490-a563-35e030da4fe2_1200x628.jpeg)

**2. [COCOFLOSS Coconut-Oil Infused Woven Dental Floss](https://www.amazon.com/COCOFLOSS-Coconut-oil-infused-Designed-Cruelty-Free/dp/B0108T9C2E/ref=sr_1_6?keywords=coco+floss&qid=1637777056&sr=8-6):** Seriously, try this floss.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/9926a742-f1ce-4332-94e2-1df5946063e7_1500x1189.jpeg)

**3. [Magnetic Measuring Spoons](https://www.amazon.com/gp/product/B001GAQKKW/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1):** Love these friggin’ spoons. Easy to keep together, easy to use, easy to wash.

**4. [U-Taste cooking tongs](https://www.amazon.com/U-Taste-Heat-Resistant-Non-Stick-Silicone-Stainless/dp/B083SGH6CY?th=1&psc=1):** Useful for mixing, grabbing, dropping, turning—basically, everything.

**5. [Italic](https://italic.com/referral):** High-quality products from the same manufacturers as top brands, but without the brand name and for 50%-80% less. Great for sheets, towels, sunglasses, jackets, shoes, and so much more. Almost too good to be true.

## Writing

**1. [Writer.com](https://writer.com/):** A browser extension that helps you write better. Has completely replaced Grammarly for me.\*

[Watch on YouTube](https://www.youtube.com/watch?v=a47PbSO5k5g)

**2.** ***[On Writing Well: The Classic Guide to Writing Nonfiction](https://www.amazon.com/Writing-Well-30th-Anniversary-Nonfiction-ebook/dp/B0090RVGW0/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1637786344&sr=1-1)*** **by William Zinsser:** The book that taught me the most about writing well.

**3. [MUJI gel ink ballpoint pens](https://www.amazon.com/Muji-Point-Black-0-38mm-Japan/dp/B01N8QNC59/ref=sr_1_5?gclid=CjwKCAiA4veMBhAMEiwAU4XRr3Q1q3HqaoVkYlq3bj3q8kgXLB4ZHUZLnBlJ7LwNY-Iegmad6GrazxoCxp8QAvD_BwE&hvadid=178329398298&hvdev=c&hvlocphy=9032091&hvnetw=g&hvqmt=e&hvrand=10822700442691433796&hvtargid=kwd-4737523358&hydadcr=27292_10167455&keywords=muji+pens&qid=1637788493&sr=8-5):** Hard to beat these pens for quality, reliability, and affordability.

## Other great apps

**1. [Hand Mirror](https://handmirror.app/):** See what you look like on camera before you start your Zoom.

![Screenshot of the menu bar with Hand Mirror open, showing a camera view but instead is a screengrab of the BBC kid clip. Rafa is funny he swears.](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3ae7b56e-3530-4e73-ae6d-7051702c54b5_1200x750.jpeg)

**2. [PictureThis](https://apps.apple.com/us/app/picturethis-plant-identifier/id1252497129):** Magically identify plants just by taking a picture of them.

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c285c605-f2eb-40d6-a9d6-6868442f03c3_1982x1024.png)

**3. [Mem](https://mem.ai/):** My go-to note-taking app—and so much more. “As simple as Apple Notes. As powerful as Google Search for your mind.”\*

**4. [Rocket](https://matthewpalmer.net/rocket/):** Easiest way to use emojis on a Mac.

5. **[AllTrails](https://www.alltrails.com/):** An unbeatable gift for your outdoorsy friends.

## Art

**1. [Katie Gong](https://katiegong.com/)**

![This Woodworker Puts a Modern Twist on an Age-Old Trade | ideo.com](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/790091ce-b54e-47a7-b80e-8be0fae548d6_1315x640.jpeg)

**2. [Meghan Shimek](https://www.meghanshimek.com/)**

![BE124F4A-943A-43F4-A0BD-84FA20A09C35.JPG](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e63fc39e-f1da-4d6a-8d18-86b8d4538477_750x563.jpeg)

3. **[Tricia Choi](https://www.roaringartistgallery.com/tricia-choi)**

![center_1.png](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/04b52318-a0ff-4b09-9609-5c869f4278ba_1500x1492.png)

**4. [Molly Kars](https://mollykars.com/)**

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/81001a48-333a-429a-867b-37a7254eaac4_800x1000.jpeg)

**5. [Nicole Lavelle](https://buyolympia.com/Item/nicole-lavelle-doing-it-anyway)**

![Image from Lenny’s holiday gift guide](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/420640ca-d337-4b9a-b5f2-5682953ef1b6_1500x1285.jpeg)

**6. [Donate on someone’s behalf to DrawTogether](https://www.gofundme.com/f/draw-together-classrooms):** Art kits to boost kids’ creativity.

![60976951_1636410823565459_r.jpeg](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4576039d-a718-46c3-b716-caa3edfb2e7c_1200x677.jpeg)

## Donate to a nonprofit

Each month I’ve been [donating a portion](https://twitter.com/lennysan/status/1457072555160838145) of my [job board](https://www.lennysjobs.com/)’s revenue to a nonprofit that helps underrepresented groups learn tech skills (to eventually fill these open roles). Here are my five favorite charities:

1. **[BlackGirlsCode](https://wearebgc.org/)**: Building pathways for young women of color to embrace the current tech marketplace as builders and creators by introducing them to skills in computer programming and technology.

2. **[Hidden Genius Project](https://www.hiddengeniusproject.org/programs/)**: Training and mentoring Black male youth in tech, entrepreneurship, and leadership skills.

3. **[/dev/color](https://devcolor.org/):** A global career accelerator for Black software engineers, technologists, and executives.

**4. [Techtonica](https://techtonica.org/):** Partnering with tech companies to provide free tech training, laptops, living stipends, and job placement to women and nonbinary adults in need in the Bay Area.

**5. [Code2040](https://www.code2040.org/):** Increasing the participation and leadership of Black and Latinx people in the innovation economy.

*\*If you see an asterisk, I’m an investor or advisor to the company. Mostly because I find a way to invest in the products I love most.*

**Got anything else to recommend? Leave a comment!**

[Leave a comment](https://www.lennysnewsletter.com/p/lennys-holiday-gift-guide/comments)

## **✨ Happy holidays to you and yours ✨**

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

Sincerely,

Lenny 👋

---

## [55/61] A founder’s guide to community

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to a ✨ **free monthly edition**✨ of my weekly newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out about work. [Subscribe](https://lennysnewsletter.com/subscribe) to get this newsletter weekly.*

> ## Q: My co-founder and I are thinking about building a community around our product. Should we? And how do we get started?

Community—so hot right now. Ask any founder if they’ve thought about building a community and 9 out of 10 times you’ll get an immediate yes. And for good reason. Companies like [Atlassian](https://cmxhub.com/build-award-winning-communities-with-these-tips-from-the-atlassian-community/), [Glossier](https://blog.tokywoky.com/community-decoded-glossier), [Datadog](https://openviewpartners.com/blog/datadog-community-lightning/#.YaPVnPHMKrM), [Twitch](https://blog.twitch.tv/en/2019/03/22/meet-our-twitch-ambassadors-8a1bf129acf5/), [dbt](https://www.getdbt.com/community/), [Salesforce](https://nira.com/salesforce-history/), [Peloton](https://researchci.com/the-network-effect-why-pelotons-community-is-its-secret-weapon-amidst-competition/), and [many others](https://twitter.com/lennysan/status/1465038676598030341) have succeeded in large part due to the passionate community they built around their early products. A thriving community creates a sticky and evangelical user base, becomes a great source of ideas, and can even become a clever way to [scale customer support](https://www.airbnb.com/askasuperhost) (e.g. Airbnb):

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6318fa9a-4b55-4f99-8ae1-970759948bb1_2762x1336.png)

To guide you on your community-building journey (and even make sure it’s worth doing), I’ve invited [David Spinks](https://twitter.com/DavidSpinks), the author of the book *[The Business of Belonging](https://cmxhub.com/the-business-of-belonging/),* a popular [weekly newsletter for community builders](https://davidspinks.substack.com/), co-founder of [CMX](https://cmxhub.com/) (a community of 30K+ community professionals), andVP of Community at [Bevy](https://www.bevy.com/) (a conference and community events platform) to share his hard-fought wisdom with us. When I saw the first draft of this post, this was my response:

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/35d1d41e-3e8f-4934-907a-54031b06fca1_1286x226.png)

Below, you’ll find a plug-and-play comprehensive guide to building your product community. Here’s what David has in store for you:

**1. Should you even be investing in community?**

1. Defining community
2. Aligning community to business objectives
3. Aligning community to your members’ goals
4. Who should own community?
5. What to look for in a community hire

**2. What does a community strategy look like?**

1. The three levels of community strategy
2. Creating community-level goals
3. Creating tactical-level goals

**3. How do you build a meaningful community?**

1. Designing community programs
2. Launching your online community
3. Launching a community-led event program

Enjoy!

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ed8e5a3a-a4d7-4d5d-89ce-f7a44f2e4fed_2048x684.png)

Community! It’s the talk of startupland these days.

In the [2021 CMX Community Industry Report](https://cmxhub.com/the-2021-community-industry-report-the-data-you-need-to-build-thriving-communities/), 86% of companies said that “community is critical to [their] mission” and 69% of companies said that they “plan to increase their investment in community in the next year.”

And according to First Round, even in 2019, 80% of startups were investing in community, and 28% considered it to be “their moat and critical to their success.”

Through my work on [CMX](https://cmxhub.com), [Bevy](https://www.bevy.com), [my podcast](https://pod.cmxhub.com), and [my book](https://cmxhub.com/the-business-of-belonging/), I’ve had the opportunity to advise and learn from thousands of community teams small and large.

This article takes many of the core lessons and frameworks from my work and applies them specifically to the needs of founders and startups who are just getting started with community.

**I’ll share some of the most common questions companies have about starting communities and give you actionable steps to get started. You’ll also be able to put the frameworks I share here into practice using [A Founder’s Guide to Community Worksheet](https://docs.google.com/document/d/1dBID0wCPTQSptUoUkYk4VIEBUsTP0NJemoTPGO7ZmSo/edit?usp=sharing) as you work your way through.**

### 1. Should we even be investing in community?

Good! You’re starting with the right question. With “community” being so hot these days, companies are quick to launch communities without stopping to ask: Why?

Community is a big investment, and it’s a very long-term commitment. It should not be taken lightly.

#### Defining community

Community is more than just a feeling of belonging. In the context of business, it’s a structure for creating value. A simple way to understand it is to compare “community” to an “audience.”

To build an audience, you help people.

To build a community, you help people help each other.

It’s a subtle but massive difference in mindset. Traditionally, businesses create all the value for the consumer. Community-driven businesses create spaces for consumers to create value for each other.

Take Lenny’s Newsletter, for example. Lenny has built an incredible audience by creating valuable content that helps founders and product leaders. But Lenny saw an opportunity to scale the value he could provide to all of you by offering a community where members could support each other, and invited members of the community like me to contribute content. Now the amount of content and value that’s created isn’t limited by Lenny’s time and resources; it’s limited only by the motivation and ability of the community to contribute.

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/80d02704-d600-4e24-b238-40069f345697_2238x1406.png)

Community unlocks the ability to scale value creation, with a relatively small team. It’s how Duolingo is able to run [2,600 events every month](https://www.youtube.com/watch?v=C5h79SwDcFU) with a community team of three people. It’s how [83% of questions](https://cmxhub.com/building-community-is-smart-business-erica-kuhl/) asked by Salesforce customers are answered by other customers. It’s how [a subreddit with 155,000 members](https://www.reddit.com/r/Notion/) helps Notion users exchange ideas for how to be more successful with the product. They all empower their community members to contribute.

There are lots of ways for members to contribute and take on leadership roles, including:

- Moderators: keep content clean and organized in the community
- Facilitators: start conversations in the community and host discussions
- Event organizers: start local chapters and self-organize local or virtual events
- Ambassadors: advocate on behalf of the brand
- Content contributors: write articles, create videos, or develop other forms of content
- Committee members: join a customer advisory board to guide product direction
- Power users: achieve status by being the most active members of a platform
- Mentors: dedicate time to supporting other customers one on one or in small groups

Building community starts with creating a sense of belonging. That’s the baseline. But exponential growth happens when members start taking an active role.

#### Aligning community to business objectives

The next question is: Why should we build community? As with any investment, it’s important to understand the business goals before you start investing your time and resources.

There are six objectives that a community can drive. To help businesses wrap their heads around the options, use the [SPACES model](https://cmxhub.com/the-spaces-model/):

1. **Support:** Create spaces for customers to answer questions and solve problems for each other. Example: [Autodesk support community](https://www.autodesk.com/community)
2. **Product:** Create spaces for customers to share product feedback and ideas with each other and with your team. Example: [Atlassian feedback section](https://community.atlassian.com/t5/Feedback-Announcements/ct-p/feedback-forum)
3. **Acquisition:** Build programs that help you grow your pipeline and customer base. Example: [Branch’s Mobile Growth community](https://mobilegrowth.org/)
4. **Contribution:** Enable members to contribute content, services, or something else of value to a platform you create. Example: [Notion Template Gallery](https://www.notion.so/Notion-Community-04f306fbf59a413fae15f42e2a1ab029#8d82ce462ca742a8907941f2227a441f)
5. **Engagement:** Connect customers to each other around their common interests in order to increase customer retention. Example: [Culture Amp’s Culture First](https://www.cultureamp.com/community)
6. **Success:** Enable customers to teach each other how to better use your product and be more successful in their careers. Example: [Salesforce’s Trailblazer program](https://trailhead.salesforce.com/trailblazercommunity)

Each objective comes with a different set of metrics that you’ll likely want to use to measure the business impact of the community:

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/874714c0-0f4a-45f1-974c-71a550837df5_1600x902.png)

In my experience, the objective that startups focus on depends on their current stage.

**Pre-product-market-fit stage**

At this stage, your goal is likely going to be around **Product**—collecting feedback and insights that will help you solve a clear problem for your customers. The added value of having a community is being able to share updates and collect feedback quickly from a group of your beta users in a shared space instead of asking them individually. They can respond to each other’s ideas and feedback. They can ask questions of you and of each other in a shared space, which can be easier than emailing you directly. And you can observe the organic conversations they’re having, which can bring up unique insights they wouldn’t have shared with you directly.

**Growth stage**

Your product is working, and your goal is to start growing your customer base. At this stage, companies’ community objective is usually **Acquisition** and **Engagement**. Your community can be a lead-gen source, bringing new prospects into your funnel. You may also start to identify early ambassadors who want to advocate for your product and refer new customers. Hosting events will reach new people on a local level, and empowering your members to self-organize events will reach regions you don’t have access to. Events and online communities will also deepen your customers’ connection to your product and brand, increasing retention and customer lifetime value.

**Maturity stage**

You’ve already grown your customer base to the point where there’s an ongoing need to support them and help them better use your product. At this point, companies usually focus on **Support** and **Success**. Your community will allow your customers to answer questions and solve problems for each other, rather than your team needing to support all the customers yourself. You can also build educational communities where your customers can teach each other how to better use your product and help each other grow in their careers.

Note: If your product is a platform like a marketplace, an open-source or crypto project, collaborative consumption, wikis, social networks, or anything else where the product itself is built or populated by users, then you’ll likely focus on **Contribution** from day one. Your product only works if you’re contributing, and building a community to engage and activate your most loyal contributors will be really important.

Of course, with any community program, you get the added benefit of making customers feel a sense of belonging and connection, which should lead to increased loyalty and an all-around more meaningful experience with your brand. But that’s the icing on the cake. Focus on the tangible ROI that community will drive for your business when making the decision to invest. You’ll want to be able to say with confidence, and data, that community had a measurable impact on your business.

#### Aligning community to your members’ goals

It’s great that you have business goals, but if your members aren’t motivated to contribute to those objectives, your community program will fail. For example, if you want product feedback but people aren’t motivated to try your product and share their feedback with you, your community will be silent. Or if you want members to start organizing events but your members don’t have that motivation, there’s a misalignment that will result in failure.

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4bcff88a-d6c3-4f7c-acf5-6fbeb81c1f98_1600x861.png)

**You have to talk to your potential members and identify their needs and motivations.**

It’s the simplest thing you can do to start building community today, yet it’s something that companies constantly skip over. Why? Because talking to people takes time and effort. It requires patience and a lot of listening. It can be emotionally taxing to get direct feedback. And it’s just more fun to brainstorm ideas and build things quickly.

But make no mistake, the number one thing you can start doing today is talking to your members. It has the dual impact of building deeper relationships with members and giving you insights into how you can improve your product and community experiences. Email is OK, but it’s much better to talk live on the phone or in person. “Get out of the building,” as they say.

**Your customers are going to join your community because of benefits, not belonging.** Belonging comes *after* someone has been a part of a community and formed relationships. What’s going to get them in the door in the first place is a clear understanding of how the community will help them solve a problem or achieve a goal. Those are the questions you should aim to answer in your member research.

**How to conduct user research about a potential community:**

1. **Start a spreadsheet** of the people that you’ll reach out to for an interview. Start with people that you already have relationships with, since they’ll be more likely to say yes to an interview. But also make sure you reach out to people you don’t know well but you think are a good potential fit for the community, as they’ll likely be more honest with you. Include criteria about them that will help you ensure you’re talking to a diverse group of people. That criteria could be: (1) roles—job titles, departments, company size, etc., and (2) demographics—race, sex, age, location, etc.
2. **Reach out to 10 of them to start**, and ask for a 30-minute call. Take lots of notes, and pull out the two or three key insights that come from each conversation. After completing your interviews, reach back out to each member to thank them for their time and feedback. Share the key themes from your research with them and how it’s shaping the community plan. Ask them if you’re on the right track and if they’d be interested in being a founding member of the community.
3. **As you grow your community, make a habit of speaking with members regularly**. Our team members all make a commitment to talk to at least one community member every week.

The key questions to answer in your interviews ([part 1 of the worksheet](https://docs.google.com/document/d/1dBID0wCPTQSptUoUkYk4VIEBUsTP0NJemoTPGO7ZmSo/edit?usp=sharing)):

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bdc6461e-3c97-41e2-8226-da640b3acb7e_1524x1170.png)

Once you’ve done your research on what your business goals are and what your members’ needs are, you can rank each of the objectives and narrow it down to the one to three objectives you’ll focus on (I wouldn’t recommend going bigger than that). I also recommend accounting for how measurable each objective is for you right now, because if you can’t measure it, you’ll have no way of knowing if your community program is successful.

Here’s an exercise you can do to help identify the business objectives for your community ([part 2 of the worksheet](https://docs.google.com/document/d/1dBID0wCPTQSptUoUkYk4VIEBUsTP0NJemoTPGO7ZmSo/edit?usp=sharing)):

**Rate each of the SPACES objectives by the following criteria:**

- **Business impact:** How important is this objective to your business in the next 6-12 months? If you work under a specific department, how important is this objective to your department?
- **Measurability:** How easy will it be for you to access the data you need to measure this objective?
- **Member motivation:** To what extent do you believe your members will be motivated to participate in a program built for this specific objective?

Then add the numbers up and put in your total rating in the last column to see which objectives are rated highest and, therefore, may be the most important ones for you to focus on.

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d369c464-ad7c-42f7-81ed-e503086f6d68_1286x942.png)

#### Who should own community?

For startups, it’s really common for one of the founders to own community at the start. It makes sense—the founder wants to be as hands-on as possible to stay close to customers. And you may not have the funds to [hire a full-time community lead](https://cmxhub.com/hiring-community-manager-questions/).

My recommendation is to start there, and look to hire a full-time community professional when the founder is no longer able to handle the workload and you have the resources to hire someone.

That said, if you have the resources already because you’ve been bringing in revenue or you’ve raised funding, and you’ve decided that you want to take a community-led approach to achieving your goals, then you should hire a full-time community lead right away.

It doesn’t mean that the founders won’t be involved in the community. On the contrary, it’s critical that everyone in the company sees community building as part of their role. And a great community lead will prioritize keeping the founders engaged in the community. They’ll also be able to start setting up the systems and processes to build and engage the community, measure it, and communicate updates to the entire team. A community professional’s job isn’t just engagement; it’s to build out the infrastructure that will make the entire community operation successful.

Look at community like you would any other critical role in your business. Take product, for example. The founders often own product first and then hire a product expert to take the lead on operationalizing the product process. And if you hire a junior PM, you’ll have to provide them with a lot of guidance and training. If you hire a senior PM, you’ll feel more confident in handing it off, which will free up more time and brainspace for you.

Community is the same. If you hire a junior community manager, they’ll bring lots of good energy and ideas, but they won’t have existing systems and processes from past experiences. You’ll have to provide them with that guidance or help them find it elsewhere. If you hire someone who has led community programs and teams before, you’ll be able to more readily hand off community operations to that person.

#### What to look for in a community hire

**The number one thing I recommend looking for in your first community hire is a genuine curiosity for the topic that your community is built around.** They don’t have to have a lot of experience in the topic of the community. I’ve seen many community professionals be successful at leading communities of engineers when they themselves weren’t engineers. If they’re curious about the topic, it will make all of their interactions more authentic. Community members will sense their authenticity and will be more likely to engage with them.

Some questions I like to ask when interviewing candidates for a Community Engagement Manager position are:

1. Tell me about your background and why you’re interested in leading this community.
2. We want to make sure that the person in this role has experience putting together an engagement plan for online community programs. Can you tell me about a time you worked on a problem like this?
3. What separates good from exceptional when leading communities?
4. What skills do you think are required to drive quality community engagement?
5. Say we’ve been seeing a drop in engagement consistently over three months. What would you do to assess the situation and turn things around?
6. What values are really important to you when it comes to the teams/companies that you work with?
7. How would your current or past colleagues describe you as a leader?
8. How would they describe an area that you could improve on?

Keep in mind that community isn’t all about being a people person and driving engagement. A lot of community professionals function in more of an operational capacity. They work behind the scenes, creating systems and processes to make the community run more efficiently. And instead of engaging in the community directly, they may look to empower members of the community to take the lead on content creation.

**Some of the operational tasks that a community professional might take on:**

1. Managing analytics dashboards and reporting
2. Creating processes for common community programs like running an event or recruiting new leaders
3. Optimizing the community journey and new-member onboarding
4. Internal communications
5. Quarterly planning
6. Creating automations to reduce repetitive tasks
7. Vetting and implementing new technology into the community stack

When hiring your first community lead, spend some time considering what their tasks will be. Specifically, if you expect them to focus more on engagement, operations, or both. For a brand-new community, it’s likely you’ll want them to be primarily focused on engagement. For a community you’re ready to scale, you may want them to be more focused on operations.

### 2. What does a community strategy look like?

#### The three levels of community strategy

Once you’ve decided that you’d like to invest in community, you understand your business goals, and you’ve determined who will be responsible for running the community program, you’re ready to start mapping out your community strategy. Mazel tov!

Your strategy should include three parts:

1. **Business-level goals**—which we discussed in part 1
2. **Community-level goals**—which we’ll discuss here in part 2
3. **Tactical goals**—what you’ll do day-to-day to build community and drive business impact

I recommend planning your community out on an annual, quarterly, and monthly basis. At CMX and Bevy, our community team uses [objectives and key results](https://www.atlassian.com/work-management/strategic-planning/okrs) (OKRs). At the end of every quarter, we review the past quarter’s results and set new OKRs for the upcoming quarter. These goals roll up into our business’s annual goals.

I recommend planning to report on community progress every month. We send out a monthly CMX Report that updates the rest of our team on each of the three levels I listed above. Here’s an example of the table of contents from a recent report:

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f7970902-082b-41db-b635-76a0ba78a2cc_1246x1404.png)

Revisit your community strategy every quarter and set new community- and tactical-level goals. Try not to change it up too much within the quarter. At the least, your top-level business goals should remain the same unless there’s a big shift for the business.

#### Creating community-level goals

Building on your business-level goals, the second level of your community strategy focuses on your community goals, and the programs you’ll run to achieve those goals. Programs are anything that you create to connect your members to each other. It can be an asynchronous space like a forum, Slack, Discord, or message board. Or it can be a synchronous experience like a meetup or conference.

The idea is that by building successful community programs, you will drive business impact. It’s not always going to be direct *causation*, such that customers who participate in your community are spending more as a result. But companies will often do *[correlation](https://cmxhub.com/erica-kuhl-salesforce-community-roi/)* [analysis](https://cmxhub.com/erica-kuhl-salesforce-community-roi/) that show how members who participate in their community are more likely to buy the product, renew a contract, refer new customers, etc.

At CMX, we focus on acquisition as our business goal and use specific actions in the community, like joining a space or attending an event, as a touchpoint in the sales journey. So at the end of each month and quarter, we can report how many leads and closed deals were sourced from community programs and how many were influenced by community programs.

We don’t do this, but you could get more specific and look at activity rates in the community as a “touchpoint” to see how many people became a customer after, say, being active in the community for three straight months, or after becoming a top 10% contributor.

For startups, and even for larger enterprises, this is probably overkill. Keep it simple. Are members in your community taking actions that are valuable to your business (buying, renewing, evangelizing, contributing, etc.)? If yes, then you’re good.

**You’re not going to be able to measure** ***exactly*** **how community health equates to business ROI. There are going to be a lot of things you do to build a healthy community that don’t have measurable ROI. But if your team is aligned on the belief that what’s good for your community is good for your business, and you’re measuring what you can measure, then you’re set up for success. If your company expects every single community action and program to have measurable ROI, then you have unrealistic expectations and you should step back.**

Once you’re aligned that community health is important, you can measure and report on the health of your community over time. To do that, I recommend measuring three things:

1. **Activity:** Are your members participating regularly?
2. **Value:** Are your members getting the benefits that they came for?
3. **Belonging:** Do your members feel connected, safe, and included?

For activity, a simple metric you can track is “% of total members who are active every month,” aka monthly active users (MAUs). Activity is often defined as logging in at least once in the past 30 days, but you can get more specific and look at comment and post rates as well.

If you’re just kicking off a community for the first time and you’re curating a small group of founding members, this percentage should be very high, at least 50%. As your community grows, the percentage will naturally go down.

**For reference, the metrics for CMX community spaces today are:**

- CMX Slack (4,200 members): 14% MAU (active is defined as posted, commented on, or reacted to a message or comment in a channel or DM)
- CMX Hub Facebook group (11,800 members): 18% MAU (active is defined as viewed, posted, commented, or reacted to anything in the FB group)

If you want to go a little more in-depth, you can use what is called [the stickiness score](https://www.pendo.io/pendo-blog/use-stickiness-ratio-measure-product-health/), which is DAU/MAU. Essentially it says: of the members who participated at least once in the past 30 days, here’s how many participated in one day. It speaks a little bit more concisely to the quality of contribution.

In addition to your online community metrics, you should also track repeat attendance at your events.

For **value** and **belonging**, you can answer these questions through interviews and surveys:

1. For **value**, we use Net Promoter Score (NPS) as one measure of the value members get from the community that we can track over time. We’ll also ask two questions in surveys:

1. What value do you expect to get from the community?
   2. On a scale of 1-10, to what extent do you feel you’re getting that value?

Both NPS and the 1-10 rating give us a measurable way to track the value of our community over time.
2. For **belonging**, we ask members to provide ratings (1-10) on questions like:

1. Do you feel safe in the CMX community?
   2. Do you feel like your voice is heard?
   3. Have you formed relationships with other members of the community?
   4. Do you feel included?

And we give them the option to share additional context on why they selected their ratings in a long-form answer, if they’d like to.

We send out one large annual community health survey to all of our members, and a shorter health survey to every member 90 days after they join the community. [Here’s how we run our annual survey process.](https://cmxhub.com/how-we-run-community-health-surveys-at-cmx/)

Once you start collecting this data, you’ll be able to use it to inform future goals. You might focus on increasing MAUs by 10%, for example, or increase NPS by 5 points.

Here’s a cheat sheet for measuring community health ([also in our worksheet](https://docs.google.com/document/d/1dBID0wCPTQSptUoUkYk4VIEBUsTP0NJemoTPGO7ZmSo/edit#heading=h.cdxn1nejfszz)):

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6bd9f367-f152-42d8-b451-26c03f6d59e6_1264x1366.png)

#### Creating tactical-level goals

On the third level of your community strategy, you’ll lay out all the specific things you plan to do in the upcoming month and quarter in order to improve community health and engagement and drive business impact.

Examples of tactics could be:

- Host 3 educational events
- Create a community member onboarding process
- Write a set of community values and guidelines
- Personally message 10 passive members
- Post in the community every morning

You should assign goals to any tactic that you work on so that you can determine if it worked and therefore you should keep doing it, or if it didn’t work and you should cut it. It’s not always possible to measure every tactic, but do your best.

For events, we send a survey after every event asking for NPS and asking members to share their experience at the event.

For onboarding, you might look at new-member activation rates.

For community values and guidelines, you can ask in your next survey if members are aware of the values and if they align with them.

For personally messaging members, track to see if those members become more active after hearing from you.

For posting in the community every morning, track the response rate to your posts to determine what’s resonating with the community.

### 3. How do we build a meaningful community?

#### Designing community programs

Before you kick off a new program, I recommend mapping out your community design so you can be intentional, rather than leave it to chance. After you launch a program, revisit your community design every three to six months to find opportunities to evolve the experience and keep things fresh.

All community programs have some of the same fundamental elements, what we call the [7Ps of community](https://cmxhub.com/the-7ps-of-community/):

1. **People:** Who the program is focused on
2. **Purpose:** Why they need this program
3. **Place:** Where members will gather
4. **Participation:** What members will do
5. **Policy:** Guidelines and rules that will shape the experience
6. **Promotion:** How members will learn about the program
7. **Performance:** What success looks like

([You can fill out your own 7Ps of community in part 3 of the worksheet](https://docs.google.com/document/d/1dBID0wCPTQSptUoUkYk4VIEBUsTP0NJemoTPGO7ZmSo/edit?usp=sharing))

Let’s look at an example of how the 7Ps are represented in an actual community program: TuesdaysTogether, a program run by the software company HoneyBook in which members of its community host a meetup on the second Tuesday of every month. At each event, creatives and entrepreneurs gather for coffee and conversation. Natalie Franke, the founder of [Rising Tide](https://www.honeybook.com/risingtide/#), mapped out the 7Ps for these incredible community events:

**1. People**

TuesdaysTogether meetups are gatherings for small-business owners who have a desire to share their knowledge, learn from their peers, and grow together. The events are organized by local industry leaders in the community and are focused on gathering creatives and entrepreneurs including artists, bloggers, boutique owners, calligraphers, designers, event planners, florists, makeup artists, photographers, stylists, wedding pros, writers, and more.

**2. Purpose**

We believe that getting out from behind your computer and building true relationships with other creative entrepreneurs is an incredible tool for success. By joining a TuesdaysTogether meetup, community members can expect to learn new business tips directly from their colleagues, grow in confidence, and find a network of compassionate professionals in their local area.

**3. Place**

Meetups occur on the second Tuesday of the month at local coffee shops.

**4. Participation**

Meetups will vary from city to city, and each leader has the freedom to cultivate gatherings that best fit their local area. However, most gatherings include a discussion on the topic of the month followed by an open question-and-answer segment. We encourage all attendees to not just attend and listen but to actively participate in the discussion.

**5. Policy**

Every meetup is designed to be approachable, authentic, and uplifting, and embody the five Rising Tide values:

1. People come first.
2. We go the extra mile.
3. We love what we do.
4. We are fearless.
5. We are family.

Leaders also agree to the Rising Tide community code of conduct and are expected to uphold the values and act in accordance with the Rising Tide mission in person and online.

**6. Promotion**

Local leaders promote their events and grow their local communities over time by inviting members to their local Facebook group.

**7. Performance**

A successful TuesdaysTogether meetup will receive positive reviews from attendees in a post-event survey.

This is a brief example of a 7P design, and a full 7P plan can go into much more depth. But even briefly, you can see how designing for each of these elements can give you a more clear idea of what a space or experience will look and feel like and help you get clarity on the focus, intention, and expected outcomes of the space or experience.

Each Rising Tide leader could use the 7Ps to get more specific in designing local events and experiences. They could use it for defining the key elements of local Facebook groups that the leaders use to keep their communities engaged in between events.

#### Launching your online community

Launching a community is a lot like hosting a party. You don’t want to invite everyone to your house and *then* get everything ready. You want to make sure everything is set up before people arrive, and host a pre-party so that when people arrive, the vibes are already flowing.

Your community’s pre-party is extremely important, because when anyone joins the community, they’ll observe how people are interacting with each other and they’ll replicate it. Your pre-party is the mold for what your community culture will look like moving forward. And because it’s small, it will never be easier for you to shape that mold in the way you want. Once your community is big, it will be much harder to change directions. So start small.

**I’ll say it again: start small.**

The biggest mistake I see companies make when launching a community is going too big too fast. Not only do you miss out on the opportunity to shape the cultural mold, it’s also a worse experience for your community members. They’ll be one of many, instead of feeling like they’re part of a curated group of select members. They’ll be lost in the noise and overwhelmed by the rush of people and content.

How small should you start? I’d recommend starting with 10 to 50 members. In the community world, the people you invite to the pre-party are commonly known as [founding members](https://medium.com/@caremjo/how-to-create-a-founding-members-group-to-validate-your-community-membership-idea-5dc41db27e27). These are people who:

1. Have a really clear need for the community
2. Embody the values and culture you want to create
3. Aren’t so busy that they won’t be able to take an active role in starting the community

These members are part of your founding team. They’re like the concentrate in your juice. Their job is to show up in the community *before* there’s a reason to, because no one is there yet. And they’ll do it because:

1. They like to be early adopters, and take pride in being a founding member
2. They see value in being connected to the other founding members
3. They’re bought into the vision of the community

When we launched a private paid community for CMX back in 2017, we created a founding members group on Facebook to build the foundation of community before we migrated to a dedicated platform. We shared this overview with our founding members:

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c5bf8ca6-5d93-413b-b0e6-8c4b7e200add_1196x1218.png)

Your ask of these community members is simple: seed quality content and conversations in the space, so that when you start to open it up to more people, the “vibes are already flowing.” New members will see the types of questions being asked, the quality of the answers, and the kinds of people who are participating, and they’ll replicate that example.

Ask your founding members to post thoughtful questions in the community. Then message other founding members and ask them to jump in and answer those questions. Aim to get at least three quality answers per post. You can make it more structured by asking a member to do an Ask Me Anything (AMA) in the community where they get to be the expert, and it’ll generate a lot of quality content.

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a696a85d-f040-4fe4-ac15-41277f848559_534x704.png)

You can also organize curated experiences for your founding members. Host a dinner or a private Zoom call. Engage them through live experiences that help them more deeply connect with each other and feel like they’re part of something special. You can start doing this before you even have a forum or message board for them to engage in.

**Tip: When you launch a new forum or message board, keep the number of channels or topics to a minimum.** You may even want to start with just one “general” channel. This condenses engagement into one space and improves your ability to reach a critical mass of content and conversation in that space. Then, as the conversation grows, you can open up new channels and topics based on themes that you’re seeing in the general channel. Think about it like a party again. Say you’re opening up a club—you’ll want to keep everyone in one room so it feels full and then open up other rooms as the club fills in. If you have too much space for the initial group of people, it’ll feel empty.

Have your founding members seed content and conversations in the space for one or two weeks, then start opening it up to more members. You should still take it slow, because you don’t want to overwhelm the existing community. I like using a 2x multiplier every two weeks: 10-> 20-> 40-> 80-> 160.

#### Launching a community-led event program

Where companies are able to really scale their community is by empowering members of their community to self-organize events.

Take [Finimize](https://www.finimize.com/), for example. Its team of three community professionals are leading a program where an event is hosted almost every day of the year. They’re able to run more than 200 events annually by empowering members of the community to host events under their brand.

In addition to being able to scale quickly, it also personalizes the community experience for your members, since your hosts will more closely understand the needs of the communities they organize, either because it’s an in-person event and they understand the local culture, or it’s a virtual event and they focus on a specific topic.

![Image from A founder’s guide to community](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4f08bfab-474c-4630-ade0-e677e59b15ef_1600x751.png)

To kick off a program like this, start by hosting the events yourself. You want to find community-market fit for your events and ensure that the format and content is resonating with your members. You’ll know your events are working when they’re growing—you’re starting to see people come back to multiple events, and attendees rate the events very highly in your post-event surveys.

Once you’ve identified an event format that works, turn it into a repeatable model that others can copy. You do this by creating a host playbook that maps out everything from:

- Community mission and values
- How to launch a chapter
- How to promote an event
- How to find a venue
- Where to find design assets and resources
- How to select speakers
- The community code of conduct
- Anything else that your hosts need to succeed

Just like in your online community, I recommend starting small with three to five hosts so you can learn with them and ensure that the model works before you start scaling it up. Identify a few people who have already expressed an interest in hosting events, and give them permission to start organizing. Do this for three months or as long as you need to feel like the program is working.

Create an application form for others to volunteer to host and share their information with you, so when you’re ready to scale, you have a list of volunteers ready to go.

When you start opening it up, review the applications and set up interviews with everyone to ensure that they’re the right fit.

It’s absolutely critical that you choose the right people to run these programs, since they’ll be representing your brand and community. Make sure they have the right motivations (genuinely care about helping others), are aligned on values, and understand the expectations you have of them.

A common expectation you can set is that they host at least one event per quarter. Sometimes hosts can host an event every month, which is ideal, but you don’t want to set too high of expectations since they’re volunteering their time.

Businesses usually reward these volunteers with swag, access to perks, invitations to exclusive events, speaker training, and other benefits. Some brands offer them a budget for their events, and some will compensate them too.

The beauty of these programs is that once you nail the model, the sky’s the limit for how big you can scale it. Google has over 1,000 Google Developer Groups around the world, for example. You can power massive communities with a relatively small team with these sorts of distributed leadership programs. For a startup with limited resources, it’s a true competitive advantage.

If you follow the playbook laid out here, a thriving community will start to form over time.

There will be hard days. There will be days when engagement is low. Or worse, there will be days when members are upset and there’s negativity in the community.

The key is to just keep showing up, keep talking to your members and making them feel heard, and keep on caring.

Eventually your community will start to grow organically and you’ll be able to take more of an operational role, optimizing the system and making it easier for your members and leaders to contribute to the community.

If you ever get stuck, you can always turn to your fellow members here in Lenny’s community, and of course the [CMX community](https://cmxhub.com/community) is packed with others who are building communities just like you.

I’m also always happy to help. You can DM me on Twitter anytime [@DavidSpinks](https://twitter.com/davidspinks) or follow along on [my newsletter](https://davidspinks.substack.com).

**Thank you for building community <3**

*Thanks, David!*

## **🔥 Featured job openings**

1. **Relish Works:** [Associate Product Manager](https://lennys-jobs.pallet.xyz/jobs/e6008616-d0ba-4765-ab3a-8eec826cd044) (Remote-US)
2. **OnFrontiers:** [UI/UX Designer](https://lennys-jobs.pallet.xyz/jobs/c5c630a8-eef4-4ee2-b5c0-f454921f70ff) (Remote-US)
3. **OnFrontiers:** [Product Manager](https://lennys-jobs.pallet.xyz/jobs/08ad9dfd-0a57-4679-8e59-5fb49545eedf) (Remote-US)
4. **Panther:** [Product Manager (Core)](https://lennys-jobs.pallet.xyz/jobs/e5d8025a-078b-48f5-b083-67978ff06b89) (Remote-Global)
5. **The.com:** [Software Engineer](https://lennys-jobs.pallet.xyz/jobs/e3ea6743-db26-4796-bdfd-3a6885b7b3c3) (SF)
6. **Relive:** [Product Manager](https://lennys-jobs.pallet.xyz/jobs/7a4300f0-d46e-43a4-a8db-dfec28c4e511) (Remote-EU)
7. **GetSetUp:** [Product Lead, Discovery](https://lennys-jobs.pallet.xyz/jobs/522f84e1-0499-4ddd-975a-f996f648fa0a) (Remote-Global)
8. **Morty:** [Founding Product Manager](https://lennys-jobs.pallet.xyz/jobs/e30caace-f287-4fe1-8215-6d08c88f51c1) (Consumer)
9. **Otto:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/3e0d39f0-55dc-4bc8-bdd1-c58e5611ddf7) (Remote-US)
10. **Mynd:** [Product Lead, Leasing & Residents](https://lennys-jobs.pallet.xyz/jobs/fb8cc2e5-7d3c-48ca-9fa8-38fbb4a3411f) (Remote-US)
11. **TaskRabbit:** [Chief Product Officer](https://lennys-jobs.pallet.xyz/jobs/17de265a-eadd-4e61-9a8b-a4ff0dc0b494) (Remote-US)
12. **Fiveable:** [Head of Product](https://lennys-jobs.pallet.xyz/jobs/c569b4e4-3b48-4ed6-9e85-ca71fc7023f0) (Remote-US)
13. **Catalog:** [Senior Project Manager](https://lennys-jobs.pallet.xyz/jobs/f2bec9f3-9eaf-4d5f-aa4a-48e81f3e3a78) (Remote-Global)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [56/61] The most common pitfalls of new product managers

> ## Q: I just became a product manager. What would you say are the most common pitfalls of new PMs?

Being a new product manager is a lot like being a new President. You’re thrust into power, entrusted to lead people (many of whom you’ve barely met) to achieve ambitious goals, with limited authority, all the while learning how to do this job, on the job. Also, you’re immediately jumping from crisis to crisis, with little appreciation, and half the people have no reason to trust you. It’s a surprise anyone ever wants this gig 🥴

The good news is that, unlike the presidency, there are only a handful of pitfalls that trip new PMs up. Also no big red button. Avoid these pitfalls and you’ll have a great shot at ~~re-election~~ keeping your job:

![Image from The most common pitfalls of new product managers](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c3fdfe00-4f3e-4f46-b66a-e3a3d59e7c85_2048x1024.png)

### Pitfall #1: The Coordinator

You are a [product manager](https://www.lennysnewsletter.com/p/what-is-product-management). Not a *project* manager. You weren’t hired to just coordinate other people’s work. You were hired to bring your own point of view. To help shape the product. To deliver optimal business impact. You do all this *not* by simply executing other people’s ideas but by actively pushing your team in the right direction and making sure the right product decisions are made.

**Signs you are pitfalling:**

- You rarely have strong opinions about product decisions
- You worry about expressing your point of view
- You often optimize for team happiness over impact
- You don’t maintain a high bar for the work your team takes on

**How to avoid this pitfall:** Strive to *always* have a point of view. You don’t need to always share it with others or get your way, but by forcing yourself to always come with a perspective, you’ll start to develop a POV and the confidence to share it. Where do *you* think this button should go? What feature do *you* think should be prioritized next? What’s *your* proposal for next quarter’s strategy? Don’t just coordinate—lead.

### Pitfall #2: The **Dictator**

At the other end of the spectrum is a PM who fully embraces the supposed “mini-CEO” role. This person may have recently transitioned from an engineering or ops role, or is fresh out of an MBA program, and has been waiting for their chance to finally run the show. They think they need to have all of the ideas, micro-manage every decision, and that their teammates are there to execute their plans. [Unless you work at Zynga](https://www.lennysnewsletter.com/p/product-management-survey), this won’t work out for you. Your teammates didn’t sign up to report to you. They are your peers, and they expect for their ideas to be heard and their input to be taken into account. The good news is that this will actually lead to better outcomes (and better teammates). The bad news is that you need to learn to lead through influence.

**Signs you are pitfalling:**

- Your specs are incredibly detailed—there’s no room for discussion
- You present fully baked roadmaps, strategies, and visions, without genuine interest in feedback
- You get frustrated when anyone disagrees with your conclusions
- You rarely let someone get their way if they disagree with you

**How to avoid this pitfall:** Let go. Leave more space for feedback, input, and discussion. Think of yourself more as a team captain than as the CEO. Lead not through force but through trust, collaboration, and influence. Absolutely push the team in the direction you believe they should go, and optimize for impact and good decisions, but see what happens when you give your teammates a little more space to contribute.

### Pitfall #3: The Dreamer

Your first responsibility as a PM (especially as a new PM) is to help your team execute, today. To ship, to hit dates, to make sure everyone knows what they should be working on. But many PMs come into the role expecting to spend most of their time developing strategy, visioning, and thinking big. That’s fun, but that’s not the role you signed up for. You need to earn this right. Yes, strategy and vision are essential, but not at the expense of the immediate needs of your team.

**Signs you are pitfalling:**

- There’s frequent misalignment within your team, and among stakeholders
- Team members often don’t know what they should work on next

- Project specs are vague and block team members from designing/building
- You spend more than 10% of your time on strategy or vision work

**How to avoid this pitfall:** Ask your teammates where they’d rather you spend time—helping them execute, or developing the strategy/vision. They’ll generally have a very quick answer for you. If it’s the former, then you’re spending too much time on the latter.

### Pitfall #4: The Feature Factory

The flip side of the above is the PM who equates shipping with success. “Look at us, we’re shipping left and right and giving customers everything they want. We’re killin’ it!” Wrong. Shipping isn’t success. Success is shipping work that (1) has meaningful impact on the business, (2) has high ROI relative to other opportunities, and (3) moves you closer to achieving your strategy. Teams become factories when they lack a strategy. A good strategy tells you what you need to do in order to win but, more importantly, what you should *not* do. Without a strategy, you may be moving fast, but you’re not going anywhere.

**Signs you are pitfalling:**

- You translate every customer request into a feature
- You don’t have a written-out public product strategy
- Most people on your team don’t know what your strategy is
- You’re obsessed with deadlines
- Your KPIs are all about features shipped, not business metrics

**How to avoid this pitfall:** [Articulate a strategy](https://www.lennysnewsletter.com/p/getting-better-at-product-strategy), get buy-in, and make sure all of your projects and priorities are in support of this strategy.

### Pitfall #5: The Busted Umbrella

And finally, there’s a reason PMs are often called “shit umbrellas.” It’s their job to shield their teams from stupid shit. Like time-sucking questions, unnecessary drama, and the whims of execs. People outside your team have no idea how much impact their ad hoc asks and “quick” questions have on the team. It’s your job to help them see this, and to protect your team from them. Help your [makers](https://www.paulgraham.com/makersschedule.html) (e.g. engineers, designers, etc.) stay focused and in flow. Unfurl your shit umbrella.

**Signs you are pitfalling:**

- Your teammates are often pinged by other PMs, managers, and leaders
- You don’t spend time filtering requests of your team
- You don’t push back on asks of your team
- Your teammates don’t know why they need a PM

**How to avoid this pitfall:** There’s a delicate balance between protecting your team and keeping information from them. Encourage people outside your team to contact you with questions before going to your team directly. And encourage your teammates to direct questions to you. Help both sides see that you can help them get what they want if they work through you. And when you can handle something yourself vs. bothering your team, handle it. The more shit you handle, the more valuable you become to your team.

These are the five most common pitfalls I’ve seen, but there are others. However, instead of obsessing over all of the things you may be doing wrong, I’d encourage you to instead work on [building great habits](https://www.lennysnewsletter.com/p/14-habits-of-highly-effective-product). If you come at it from both directions, avoiding pitfalls and building great habits, you’ll be on your way to 4 more years.

*Have you experienced any other pitfalls as a new PM? I’ve love to hear it.*

[Leave a comment](https://www.lennysnewsletter.com/p/product-manager-pitfalls/comments)

### 📚 Further study

1. [The Top 12 Product Management Mistakes](https://svpg.com/assets/Files/toppmmistakes.pdf) by Marty Cagan
2. [Good Product Manager/Bad Product Manager](https://a16z.com/2012/06/15/good-product-managerbad-product-manager/) by Ben Horowitz
3. [Good Product Managers, Great Product Managers](https://twitter.com/shreyas/status/1249039638829793280?lang=en) by Shreyas Doshi

*Have a fulfilling and productive week 🙏*

## **🔥 Featured job openings**

1. **OpenPhone:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/a4e59b3d-06a3-4f89-a340-b8bd5f8aee97) (Remote-US)
2. **TaxBit:** [Product Lead](https://lennys-jobs.pallet.xyz/jobs/4a453e47-d6c8-4241-becc-763fe8097d97) (Seattle)
3. **Orbiit:** [Director of Product Management](https://lennys-jobs.pallet.xyz/jobs/be8a2c08-274c-4ebf-b20e-79439dc7b70e) (NYC)
4. **Relish Works:** [Associate Product Manager](https://lennys-jobs.pallet.xyz/jobs/e6008616-d0ba-4765-ab3a-8eec826cd044) (Remote-US)
5. **OnFrontiers:** [UI/UX Designer](https://lennys-jobs.pallet.xyz/jobs/c5c630a8-eef4-4ee2-b5c0-f454921f70ff) (Remote-US)
6. **OnFrontiers:** [Product Manager](https://lennys-jobs.pallet.xyz/jobs/08ad9dfd-0a57-4679-8e59-5fb49545eedf) (Remote-US)
7. **Panther:** [Product Manager (Core)](https://lennys-jobs.pallet.xyz/jobs/e5d8025a-078b-48f5-b083-67978ff06b89) (Remote-Global)
8. **The.com:** [Software Engineer](https://lennys-jobs.pallet.xyz/jobs/e3ea6743-db26-4796-bdfd-3a6885b7b3c3) (SF)
9. **Relive:** [Product Manager](https://lennys-jobs.pallet.xyz/jobs/7a4300f0-d46e-43a4-a8db-dfec28c4e511) (Remote-EU)
10. **GetSetUp:** [Product Lead, Discovery](https://lennys-jobs.pallet.xyz/jobs/522f84e1-0499-4ddd-975a-f996f648fa0a) (Remote-Global)
11. **Morty:** [Founding Product Manager](https://lennys-jobs.pallet.xyz/jobs/e30caace-f287-4fe1-8215-6d08c88f51c1) (Consumer)
12. **Otto:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/3e0d39f0-55dc-4bc8-bdd1-c58e5611ddf7) (Remote-US)

*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Watch:** [That Funny Feeling—Bo Burnham](https://www.youtube.com/watch?v=ObOqq1knVxs)

[Watch on YouTube](https://www.youtube.com/watch?v=ObOqq1knVxs)

2. **Read:** [Bill Gates, Jeff Bezos, Elon Musk … and Paul McCartney](https://www.bloomberg.com/opinion/articles/2021-12-04/gates-bezos-musk-mccartney-great-managers-of-the-last-century) by Tyler Cowen
3. **Watch:** [14 Peaks](https://www.netflix.com/title/81464765)

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [57/61] The Atomic Network

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to a ✨ **special edition**✨ of my weekly newsletter. Normally, each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out about work. If you’re not a subscriber, here’s what you missed this month:*

1. [The most important consumer metrics to track](https://www.lennysnewsletter.com/p/the-most-important-consumer-metrics)
2. [What is product management?](https://www.lennysnewsletter.com/p/what-is-product-management)
3. [The most common pitfalls of new product managers](https://www.lennysnewsletter.com/p/product-manager-pitfalls)

Earlier this week, [Andrew Chen](https://twitter.com/andrewchen) (GP at a16z, ex-Uber Growth, ex-founder, prolific blogger) published his long-awaited book, *[The Cold Start Problem](https://www.coldstart.com/)*. In it, Andrew explores the powerful role of “network effects” in kickstarting and scaling some of Silicon Valley’s most successful companies.

Here’s what Twitter looked like for many of us this week:

![Image from The Atomic Network](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0d550f6d-b4fb-46d9-9297-4d392d778c48_2048x1024.png)

So much so that it became a meme:

Clearly, Andrew knows how to solve the cold start problem 🥁

Below, I’m honored to share an exclusive excerpt of my favorite chapter in Andrew’s new book: **The Atomic Network**. In it, Andrew teaches us precisely how to solve the cold start problem for products that need a critical mass of users before they’re useful—marketplaces, communities, social networks, dating apps, collaboration tools, etc. Essentially, he argues that if you can create a small, stable, engaged network that can self-sustain—an atomic network—then likely you can build a second network adjacent to the first one. This could be a single city, college campus, or small beta test at an individual company. And if you can build one, and then two, you can probably build 10 or 100 networks. Copy and paste many times, and you can build a huge interconnected network that spans the entire market. This aligns with [my own research](https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace), and gives you a guide for getting your business off the ground. Enjoy!

*If you want to read more of [Andrew's book](https://www.coldstart.com/), stop by your local bookstore or a major book retailer near you.*

![Image from The Atomic Network](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/6e7ebb25-f057-4f4a-976f-d9a6ef13ce53_1584x396.jpeg)

## **The Atomic Network**

Whether for credit cards, multiplayer games, or business collaboration software, **the “atomic network” is the smallest network needed that can stand on its own**. It needs to have enough density and stability to break through early anti-network effects, and ultimately grow on its own. I liken it to an atom because it is the unit upon which larger networks are ultimately built. If you can build one, and then another, you can build the rest of the network—this is the base unit to build everything else.

In Slack’s case, the atomic network turned out to be pretty small. The threshold was just the team of people around you—under ten in a single company might be enough—and there would be enough chat activity to sustain user engagement. Contrast that to the credit card, which needed to launch in an entire city to make it work. After all, they had to sign a critical mass of retailers and consumers, and it makes sense to sign up most of a downtown commerce district as part of the strategy.

To build an atomic network requires a hodgepodge of different tools. Common themes emerge when you look at Slack’s strong network launch as well as the successes across marketplaces, social networks, developer platforms, and dozens of other categories. Many of them are counterintuitive: The networked product should be launched in its simplest possible form—not fully featured—so that it has a dead simple value proposition. The target should be on building a tiny, atomic network—the smallest that could possibly make sense—and focus on building density, ignoring the objection of “market size.” And finally, the attitude in executing the launch should be “do whatever it takes”—even if it’s unscalable or unprofitable—to get momentum, without worrying about how to scale.

Embedded within Slack’s strategy, and the strategy of many early-stage networked products, is a series of short-term boosts—often called “growth hacks”—which are important in forming the initial atomic networks. In Slack’s case, it was their incredible buzz within the early-adopter startup community, and their invite-only launch. There are other famous examples: The $5 referral fee that lit up the original PayPal network, or Dropbox’s demo video on Hacker News that created a huge line of folks excited to try the magical cloud-storage product. Or the “Uber Ice Cream” promotions letting people order soft-serve ice cream, on demand, via the rideshare app. In the early days, local news-papers and social media would often cover the ice cream promotion, which helped build out the rideshare network. Each of these growth hacks gave an important, quick lift that established an atomic network, kicking off future growth.

Once a single atomic network can be built, it becomes straightforward to build many others by repeating the same playbook. For Slack, an early-adopter team might start using the product regularly, until it starts to grow organically inside the company. Eventually the entire company upgrades to become paying customers. Rinse and repeat. Slack’s earliest customers were other startups, but eventually, atomic networks started to form inside larger customers like IBM or other Fortune 500 companies. Once Slack could build a dense network that sustained a single team, it could eventually take over an enterprise.

#### Why Starting with a Niche Works

The atomic network is a complementary point of view to Clayton Christensen’s Disruption Theory. These small networks often grow in niches, slowly growing to take over the entire market. Chris Dixon, my colleague at a16z, summarized the idea in an essay titled, appropriately, “The next big thing will start out looking like a toy”:

> #### Disruptive technologies are dismissed as toys because when they are first launched they “undershoot” user needs. The first telephone could only carry voices a mile or two. The leading telco of the time, Western Union, passed on acquiring the phone because they didn’t see how it could possibly be useful to businesses and railroads—their primary customers. What they failed to anticipate was how rapidly telephone technology and infrastructure would improve (technology adoption is usually non-linear due to so-called complementary network effects). The same was true of how mainframe companies viewed the PC (microcomputer), and how modern telecom companies viewed Skype.

I think Chris is right, but I would extend this idea further into the target audience, too. Not only will the product initially look like a toy, but as a corollary to Disruption Theory, there is a huge benefit to picking a smaller and more targeted starting point. Nail this initial niche network, establish an atomic network, and grow from there. In other words:

*The next big thing will start out looking like it’s for a niche network.*

Networked products often look like toys, and moreover, toys for a weird niche. This is why they are easy to underestimate. The atomic networks are forming in niche audiences like teens or gamers, and picking up a lot of buzz, but it’s not clear yet that it will be interesting to the mainstream. But that may soon change, as the network gets built out. In the meantime, you’re not in the target audience, and that’s okay.

Underestimating new products in this way is the number one way to make dumb predictions in the tech industry. It’s what leads pundits to say a product won’t work, isn’t interesting, or has a small market size—followed by that product proving them wrong just a few years later. These erroneous predictions are understandable, because it’s hard for a product to resonate when its network doesn’t include you, your friends, or your colleagues. The addressable market will seem small, and it’s not until relevant people join that the product will feel like it’s for you. It’s not that product changes are needed—it’s that the network needs to fill out to the point where the people and content are relevant.

#### Picking Your Atomic Network

The first step to launching an atomic network is to have a hypothesis about what it might look like. **My advice: Your product’s first atomic network is probably smaller and more specific than you think.** Not a massive segment of users, or a particular customer segment, or a city, but instead something tiny, maybe on the order of hundreds of people, at a specific moment in time. It was similar for Uber, whose networks we tend to talk about as “San Francisco” or “New York,” but in the earliest days, the focus was on narrow, ephemeral moments—more like “5pm at the Caltrain station at 5th and King St.” The general managers and Driver Operations had an internal tool, called Starcraft—referring to the real-time strategy game popular at the time—that allowed them to click on a group of cars, text them “Go to the train, lots of riders!” and direct them in real time.

Once rides start to consistently happen at these moments, then the discussion might shift to focus on the wider network defined by the 7x7 square miles of the city, then adding the suburbs of East Bay and Silicon Valley as the next step. Years later, a company might talk about entire countries or mega-regions, like EMEA or APAC, but in the early days, it’s about something much more focused. It should be about building the smallest possible group.

Whereas our typical business verbiage revolves around aggregations of millions of people—that’s usually what we mean when we talk about “markets,” “segments,” and “demographics”—the language of launching new networks should be focused on groupings of a handful of people, with the right intent, in the right situation, at the right time. This is true in dating apps, marketplaces, but even in workplace products. The wedge begins with “The Q2 planning cycle in the Product team at Chase Bank.”

The more users you need to get to an atomic network, the harder it is to create. There are networked products with small minimum size requirements, for example the telephone, a communications product like Snapchat, or Zoom for videoconferencing. This makes it much easier to get started—because as long as you can get each new user to find a friend that’s already on the network, or to invite a friend, then it’ll work. No wonder these are some of the stickiest, fastest-growing products, too. But there are drawbacks, too, because what’s easier for you will be easier for your competitors—they just need a few users to get started as well, which is why there are so many messaging apps and chat features inside larger products.

Let’s look at the other end of the spectrum on network size. There are enterprise products like Workday (a financial HR management tool) that require the company to implement them before there’s any value. Here, a viral growth strategy is difficult, because it’s not enough to dribble in a few users at a time. If you need hundreds of users on the same platform at once, company-wide coordination is needed. In this situation, a top-down enterprise sale that gets a company to mandate usage for everyone might work better.

#### The Power of Atomic Networks

Growing city by city, campus by campus, or team by team is a surprisingly powerful strategy. It leads to dense, organic connections of users that strengthen network effects across multiple dimensions: Engagement goes up, because users are more likely to find other relevant users. Viral growth goes up when prospective users of a product see that their friends and colleagues are all using the service.

The concept of atomic networks is powerful because if you can build one, you can probably build two. Each one often becomes easier, because each network can be intertwined with the next—Slack’s success within one company can help it become successful in another, as employees move about and introduce the product to new workplaces. Facebook’s early campus launches became easier over time as students’ friends at different schools began to demand the product more and more. Build a few atomic networks, and soon you can copy and paste them into many, many markets.

*Thanks, Andrew! Grab your own copy of* [The Cold Start Problem](https://www.coldstart.com/)*, and follow Andrew on Twitter [@andrewchen](https://twitter.com/andrewchen).*

## **🔥 Featured job openings**

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

Sincerely,

Lenny 👋

---

## [58/61] What is a good payback period?

> ## **Q: What is a good payback period?**

To answer this question, like I did with our [look at retention](https://www.lennysnewsletter.com/p/what-is-good-retention-issue-29), I brought out the big guns. I polled the smartest growth people I could get hold of and asked them what payback periods they expect when investing in, or advising, startups. Everything that you find below is based on the collective wisdom of these superstars: [Adam Grenier](https://twitter.com/akgrenier), [Andrew Chen](https://twitter.com/andrewchen), [Andy Johns](https://twitter.com/ibringtraffic), [Bill Trenchard](https://twitter.com/btrenchard), [Brian Rothenberg](https://twitter.com/bmrothenberg), [Casey Winters](https://twitter.com/onecaseman), [ChenLi Wang](https://twitter.com/chenliw), [Dan Hockenmaier](https://twitter.com/danhockenmaier), [Darius Contractor](https://twitter.com/dariusmc), [Elena Verna](https://www.linkedin.com/in/elenaverna/), [Jamie Quint](https://www.linkedin.com/in/jamiequint/), [Josh Buckley](https://twitter.com/joshbuckley), [Mike Duboe](https://twitter.com/mduboe), [Naomi Ionita](https://twitter.com/npilosof?lang=en), [Sriram Krishnan](https://www.notion.so/sriramkri/Sriram-Krishnan-5a434396fb9d43bfaebce6aa5c1f5e01), and [Yuriy Timen](https://www.linkedin.com/in/yuriytimen/) 🔥

### What is a good payback period?

Broadly, the consensus is:

- **For B2C businesses**, a payback period ofless than 1 month is GREAT, 6 months is GOOD, and 12 months is OK. And the exceptional cases can pay back their acquisition costs on the first transaction.
- **For B2B businesses selling to SMBs**,less than 6 months is GREAT, 12 months is GOOD, and 18 months is OK. And similarly, the exceptional cases get their customers to prepay their contract and recoup all acquisition costs up-front.
- **For B2B businesses selling to enterprises**,less than 12 months is GREAT, 18 months is GOOD, and 24 months is OK. The exceptional cases can pay back their acquisition costs within 6 months.

Here’s a handy chart summarizing the findings:

![Image from What is a good payback period?](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dfc1164f-1ea6-41e1-963a-4b00d5b7f879_3836x2568.png)

### What exactly is payback period?

The payback period is the amount of time that it takes to earn back the cost of acquiring a new customer. For example, if it costs you $100 to acquire a new customer (e.g. running FB ads) and you make $25 per month from that customer, your payback period is four months.

### How do you calculate payback period?

To calculate your payback period, simply divide your CAC by your gross profit:

![Image from What is a good payback period?](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ef1ce21a-eee7-45d5-a95f-47e29d926265_2968x680.png)

The biggest mistake founders make when calculating their payback period is looking at revenue, without subtracting the cost of good sold (i.e. margin):

> **“If a startup acquires a customer for $100, and that customer generates $10/mo in revenue, with 80% gross margins (or $8 of monthly gross profit), the payback period on a gross profit basis is $100/$8 = 12.5 months. Not 10 months, if you were just looking at revenue. As my former CFO used to say, ‘Revenue doesn’t pay our salaries—gross profit does.’ You have to take out the cost of goods sold, and many people do not.”**
>
> **—Brian Rothenberg**

Also:

> **“Including brand search in your paid campaigns bucket will lower your payback period, and I’d consider that cheating.”**
>
> **—Elena Verna**

### Why is tracking payback period important?

The shorter your payback period, the more quickly you can reinvest your cash into growth, and the faster you’ll grow. If, for example, you spend $100,000 on growth and get paid back in three months, while your competitor takes six months, you’ll be able to spend twice as much money on growth without having to raise one additional dollar.

Increasingly, startups are focusing on payback periods over LTV/CAC ratios because accurately calculating LTV for an early-stage company is highly suspect. This is the same reason you don’t want long payback periods for early-stage companies:

> **“The way I think about it is the more data you have about your customers over time, the better you can predict actual lifetime value. An early-stage startup has very little data, so if it has a long payback period, it’s not guaranteed there will be a timeline that pays off at all due to all the assumptions. A late-stage company has over a decade of cohorts it can compare new customers to, to predict what they will look like in six months, one year, two years, etc.”**
>
> **—Casey Winters**

### Are higher payback periods OK?

Yes! There are a handful of cases where having a higher payback period is actually a good thing.

#### 1. When you can confidently predict your LTV

> **“It is important to remember that what really matters is the ultimate LTV of the customer. If your product is incredibly sticky (i.e. more than 5-year LTV) or shows high growth in account (through additional usage fees/upsell/cross-sell), an 18-month payback period may be really good.”**
>
> **—Bill Trenchard**

> **“Generally it’s the case with larger companies to have payback periods of 18 to 24 months. These are companies with large balance sheets, that can float it, in more competitive categories. They generally have a lot of data on their LTV curve and how it performs over time.”**
>
> **—Josh Buckley**

#### 2. When you’re a mature business and can think longer-term

> **“In some cases, with mature enterprise SaaS businesses that have predictable LTVs and renewal data, as well as multi-year contracts, I’ve seen payback periods stretch as far as 24 months.”**
>
> **—Yuriy Timen**

> **“At different stages of maturity (5+ years, 10+ years), you can probably shift the OK, Good, Great designations from the summary above up one level because you have more confidence in the lifetime value and therefore the payback. Usually you have more cash as well. In those cases, let’s say a consumer business that is 10 years in and getting payback in one month, it should really be trying to grow more aggressively by extending its payback period, probably leaving a lot of profitable growth on the table by staying at one month.”**
>
> **—Casey Winters**

#### 3. When you’re optimizing for growth

> **“I’ve seen payback periods as high as 5 to 7 years. There are good reasons a company might tolerate that, such as much-needed fuel into a growth loop, it’s an investment into key target market segment, or it’s just early inefficiency that will take some time to optimize. Not every channel comes out of the gate with good payback period, after all.”**
>
> **—Elena Verna**

> **“The payback period you choose to target is highly contingent on the stage of the business and how quickly you are trying to grow. Lower payback periods are not objectively optimal, because they may mean you’re leaving growth on the table.”**
>
> **—Dan Hockenmaier**

> **“So much of it depends on how one is maximizing revenue vs. profit. The same company could be 8 months if it was profit-focused or 24 months if revenue-focused, and feel good about each.”**
>
> **—Darius Contractor**

#### 4. When your sales team is scaling quickly

> **“If your product is sold through a sales team and you are growing that team rapidly, typically your payback period will look worse than it actually is because you will have many sales reps ramping/learning to sell the product in a given quarter. This can add a significant additional cost in CAC without the associated benefit. For this reason, it’s important to look at the number based on reps who are 'fully ramped' or productive, excluding the cost of those who are ramping (and sales from them, of course).”**
>
> **—Bill Trenchard**

#### 5. When you deeply understand your growth engine and market

> **“It’s natural for mobile games' for example to see their payback periods get longer over time, because the ad network algorithms are very effective at finding their ‘core’ players, and over time you’ll saturate that base and have to spend less efficiently to find newer customers. For example, in MMO strategy mobile games, they have a deep understanding of their multiyear LTV, which tends to follow a fairly linear curve. The problem is the CPIs in that category have gotten so expensive, and it’s all about acquiring whale users who spend $1K-$10K++, so it’s common for companies in those categories to now spend with a payback of 12-24 months.”**
>
> **—Josh Buckley**

### Should you look at blended payback, or payback by channel?

It depends on your primary growth engine. If the vast majority of your growth is organic, then looking at blended payback is fine:

> **“Great payback = 0, because it's all organic! After all, the magic of a product like Tinder is that it has a ton of organic. Thus they don’t spend as much on marketing.”**
>
> **—Andrew Chen**

Otherwise, when the majority of your growth comes through paid spend, you should look at payback by channel:

> **“It’s important for teams to report payback on paid CAC, and not blended. Teams will eventually want granularity into customer quality by acquisition channel, but as a starting point, it’s important to understand how customer value and retention differ for paid vs. organic cohorts and make decisions accordingly.”**
>
> **—Mike Duboe**

Partly because blended payback is often not useful:

> **“With rare exceptions, most businesses over time either stay organic-only or come to rely heavily on paid marketing for growth. So a blended payback is somewhat of a useless metric—it doesn't matter if you’re organic-only, and it converges to the paid marketing payback otherwise.”**
>
> **—ChenLi Wang**

Partly because it’ll hide important information:

> **“If paid is the majority of your growth, then your paid-only payback and your blended payback will look nearly identical. But if paid is a minority of your growth, then the inefficiency of paid may be disguised by the (free) organic growth.”**
>
> **—Elena Verna**

### How do I reduce my payback period?

Going back to our formula, you have three variables to play with:

1. Reducing CAC
2. Increasing price
3. Increasing margin

Easier said than done. Luckily, our experts shared a couple of tactical tips:

#### 1. Encourage annual plans

> **“Businesses with a high proportion of annual plans will have a shorter payback period because you collect the cash up front! This is a key lever for businesses to pull, especially D2C companies that go after affluent consumers, or really any B2B product. You're effectively getting a ‘loan’ from your current customers to buy more future customers. The typical path is making annual plan = 10x monthly, but I’ve seen as low as 6x just to have the positive cash cycle to grow. One of the highest-ROI ‘optimization’ hacks for mid-stage companies is running in-app promos, emails, etc. to get people from monthly to annual plans.”**
>
> **—ChenLi Wang**

#### 2. Adopt PLG tactics

> **“I am seeing a growing number of enterprise SaaS companies, often in the 18-to-24 month payback range, taking a page from the PLG playbook by exploring self-serve motions to increase their sales efficiency. Another, often underutilized, method of decreasing payback period is driving expansion/increasing pricing. With a usage-based pricing model, SaaS businesses can build in a natural escalator to increase LTV and reduce payback towards the goal marker of <12 months.”**
>
> **—Naomi Ionita**

As you play with your payback period, pay close attention to your *incremental* payback:

> **“As you expand payback periods, it’s important to measure the payback on the** ***incremental*** **customers you’re acquiring. For example, if you extend your payback period from 6 to 12 months but get very few incremental customers in the process, it implies that your payback periods on those incremental customers is well beyond 12 months, and it might not be the right investment to make.”**
>
> **—Dan Hockenmaier**

### Finally, let your business model be your guide

I’ll leave you with Adam Grenier’s sage and personalized advice for determining your initial payback period:

> “I tend to start with a baseline of wanting to see payback within 6-12 months. That’s usually something that you can predict with relatively decent confidence and, if you’re growing quickly, allows you to account for that the fact the makeup of your customer, product, and even pricing may change a lot within a year. This is a baseline to figure out the right answer for your company but be able to start moving fast while you come up with a more thoughtful answer:
>
> - **Low loyalty + low frequency (e.g. airfares):** Most people buy plane tickets 1-2 times a year. Their loyalty is super-low. So to confidently get a one-year payback, you probably need to do that in the first transaction. So the ideal target payback period may be 1 to 7 days.
> - **Low loyalty + high frequency (e.g. games):** This is normally ad-supported, full of microtransactions, and whale-driven. So often, the target here is to get as many people as humanly possible as fast as possible. In this strategy, usually, you need payback in 1-3 months, since people don’t stick around for most games past that time frame.
> - **Mid-loyalty + mid-frequency + higher purchases (e.g. gig services like rides, food, groceries, etc.):** You can usually expand out a bit longer because people tend to jump back and forth, and over time find a pretty steady cadence. So here, 6-12 months is usually where I’ve seen it land.
> - **Mid-low cost + high-frequency (e.g. streaming services):** Most people subscribe monthly and use it weekly, at relatively low cost, and change costs aren’t high. So you likely want a 3-to-6-month payback period.
> - **Higher cost + high frequency + painful to change** **(e.g. phone/internet service providers):** These tend to have higher monthly costs, the change cost is pretty annoying and can include penalties if you switch, and you'’re using the service on a daily basis. So this might warrant a 1-to-2-year payback because once in, the likelihood of changing goes down, and winning the market may be worth it. I think a lot of ‘creator’ services will fall in this category, i.e. getting a creator on your platform might be worth the marketplace value of securing them at a cost that may not pay back for a full year or two.
> - **Mid-high cost + yearly subs (e.g. Noom, Peloton):** They can likely optimize and run off of an immediate payback period. Then you’re just making decisions around how you want to account for churn and renewal to potentially shift up or down.”
>
> —Adam Grenier

If you have any other advice on tracking, improving, or operationalizing payback period, I’d love to hear it 👇

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

*A huge thank-you to [Adam Grenier](https://twitter.com/akgrenier), [Andrew Chen](https://twitter.com/andrewchen), [Andy Johns](https://twitter.com/ibringtraffic), [Bill Trenchard](https://twitter.com/btrenchard), [Brian Rothenberg](https://twitter.com/bmrothenberg), [Casey Winters](https://twitter.com/onecaseman), [ChenLi Wang](https://twitter.com/chenliw), [Dan Hockenmaier](https://twitter.com/danhockenmaier), [Darius Contractor](https://twitter.com/dariusmc), [Elena Verna](https://www.linkedin.com/in/elenaverna/), [Jamie Quint](https://www.linkedin.com/in/jamiequint/), [Josh Buckley](https://twitter.com/joshbuckley), [Mike Duboe](https://twitter.com/mduboe), [Naomi Ionita](https://twitter.com/npilosof?lang=en), [Sriram Krishnan](https://www.notion.so/sriramkri/Sriram-Krishnan-5a434396fb9d43bfaebce6aa5c1f5e01), and [Yuriy Timen](https://www.linkedin.com/in/yuriytimen/) 🙏*

## 📚 Further study

1. [The Importance of Payback Period for SaaS Startups](https://tomtunguz.com/payback_period_cash/) by Tomasz Tunguz
2. [What is a Best in Class Payback Period for a Software Company in 2020?](https://tomtunguz.com/payback_period_2020/) by Tomasz Tunguz
3. [CAC Payback Period: How to Calculate and Reduce SaaS Payback Period](https://www.profitwell.com/recur/all/calculate-and-reduce-payback-period) by Patrick Campbell

*Have a fulfilling and productive week 🙏*

## **🔥 Featured job openings**

1. **Mynd:** [Product Manager, Buying Services](https://www.lennysjobs.com/jobs/5acd93b4-3e73-45f6-894f-a701509a81ea) (Remote-US)
2. **OpenPhone:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/a4e59b3d-06a3-4f89-a340-b8bd5f8aee97) (Remote-US)
3. **TaxBit:** [Product Lead](https://lennys-jobs.pallet.xyz/jobs/4a453e47-d6c8-4241-becc-763fe8097d97) (Seattle)
4. **Orbiit:** [Director of Product Management](https://lennys-jobs.pallet.xyz/jobs/be8a2c08-274c-4ebf-b20e-79439dc7b70e) (NYC)
5. **Relish Works:** [Associate Product Manager](https://lennys-jobs.pallet.xyz/jobs/e6008616-d0ba-4765-ab3a-8eec826cd044) (Remote-US)
6. **OnFrontiers:** [UI/UX Designer](https://lennys-jobs.pallet.xyz/jobs/c5c630a8-eef4-4ee2-b5c0-f454921f70ff) (Remote-US)
7. **OnFrontiers:** [Product Manager](https://lennys-jobs.pallet.xyz/jobs/08ad9dfd-0a57-4679-8e59-5fb49545eedf) (Remote-US)
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9. **The.com:** [Software Engineer](https://lennys-jobs.pallet.xyz/jobs/e3ea6743-db26-4796-bdfd-3a6885b7b3c3) (SF)
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*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

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

1. **Read:** [Techno-optimism for 2022](https://noahpinion.substack.com/p/techno-optimism-for-2022) by Noah Smith
2. **Read:** [Amp It Up!](https://www.linkedin.com/pulse/amp-up-frank-slootman/) by Frank Slootman
3. **Listen:** [7 Powers with Hamilton Helmer, on Acquired](https://podcasts.apple.com/us/podcast/acquired/id1050462261?i=1000544283775)

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [59/61] The top 5 things PMs should know about engineering

*👋 Hey, [Lenny](https://twitter.com/lennysan) here! Welcome to the ✨ **bonus free edition**✨ of my weekly newsletter. Each week I tackle reader questions about building product, driving growth, working with humans, and anything else that’s stressing you out about work. If you’re not a subscriber, here’s what you missed this month:*

1. [What is a good payback period](https://www.lennysnewsletter.com/p/payback-period)
2. [What is product management](https://www.lennysnewsletter.com/p/what-is-product-management)
3. [The most common pitfalls of new product managers](https://www.lennysnewsletter.com/p/product-manager-pitfalls)
4. [The most important consumer metrics to track](https://www.lennysnewsletter.com/p/the-most-important-consumer-metrics)

> ## Q: How do I become a more technical PM?

As you may know, [I took a crack at this question](https://www.lennysnewsletter.com/p/getting-more-technical) a few months ago, and that post that turned out to be one of my all-time most popular posts. But considering how often I still get this question—clearly, questions remain. Also, with the rise of Web3, fintech, data infrastructure companies, and other deeply technical products, it’s only becoming more important for PMs to build their technical chops.

To help you develop those chops, I’ve pulled in [Justin Gage](https://randomshit.dev/), author of the fantastic [Technically](https://technically.dev/) newsletter (fittingly described as “a place for not software engineers to learn about software engineering”), to share his highly actionable tips on becoming a more technical PM. In my previous post on the subject, I linked to Justin’s newsletter numerous times, and that’s because he’s especially talented at explaining deeply technical subjects clearly and directly. We’re super-lucky to have Justin share his wisdom with us. And if you want to go deeper, definitely subscribe to [Technically](https://technically.dev/).

## The top 5 things PMs should know about engineering

*by [Justin Gage](https://randomshit.dev/)*

There’s an old debate about how technically minded product managers should be. On the one hand, understanding your developers, their process, and their work is part and parcel of shipping products effectively. On the other hand, you don’t want to step on your engineers’ toes, and getting too deep into the codebase isn’t a great use of your time. One point we can all agree on, though: a strong technical knowledge foundation means a more effective PM. So in that spirit, this post will cover the top five technical things PMs should know.

If you don’t understand some of the ideas here, that’s fine! The more you work with engineers, the more comfortable you’ll get. And of course, every company is different; some companies hire only super-technical PMs, while others prefer generalists, or even design-focused ones. But no matter what, the more you understand, the better you’ll do.

## **Learn #1: Your company’s tech stack**

**What to know:** What technologies your company’s app, site, and infrastructure use. For example, [Technically.dev](https://technically.dev/) is built with React and Next.js, deployed on Vercel, and written in HTML, CSS, and JavaScript.

![Image from The top 5 things PMs should know about engineering](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d37cfdbc-e3d1-4cab-86c5-e76da0bc3557_3836x4000.png)

**Why it matters:** Choices of programming languages, frameworks, and infrastructure all come with important trade-offs that impact what might make a project something that could take a few hours, or a few weeks. If you’re using a NoSQL database, you can skip migrations when adding new features, but you might run into data quality issues. If parts of the stack are legacy, you may want to avoid projects that touch them. But perhaps more qualitatively, speaking the language of your engineers helps build trust and improves communication.

**How to learn about it:** Do as much snooping as you can, and then just ask your team.

First, look at your company’s GitHub repositories. You should be able to see what kinds of programming languages are in there, as well as any files or notes specific to what frameworks the app relies on. Here’s a screenshot of [Supabase’s main repo](https://github.com/supabase/supabase), an open source Firebase competitor. Note how GitHub tells you what languages the code is in (on the bottom right):

![Image from The top 5 things PMs should know about engineering](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a561381a-c242-4e06-b701-8776399361ee_1600x715.png)

Beyond languages, the structure of your team’s project might indicate what frameworks they’re using. If you see some files prepended with .next, your team is probably using NextJS. If you see “import { useState } from ‘React’ ” in any files, your team is probably using React. Reading through code files isn’t too fun and is not the best use of your time, but peeping at a few can at least give you some grounding.

After you’ve done your snooping work to impress them, just ask one of your developers.

## **Learn #2: Sensitive points in the codebase**

**What to know:** Which pieces of the codebase—logical or procedural—are tangled, sensitive, or otherwise intransigent.

**Why it matters:** Knowing the hardest parts of the app to work on can help you plan more effectively and avoid project delays. If updating the marketing site copy takes a few days because [Gatsby](https://www.gatsbyjs.com/) (a popular JS framework) requires a re-deploy to change content, you might de-prioritize that work in favor of something that you can move on quicker. There might not be much you can *do* about this as a PM, but it’s useful knowledge to have and can help you allocate resources more effectively.

**How to learn about it:** Talk to fellow PMs about projects that went surprisingly quickly or surprisingly slowly. A personal example: after doing some work on improving the onboarding experience, I was frustrated with how long things were taking. I eventually learned that the section of our codebase that dealt with onboarding was poorly organized and very difficult to test locally. That explained it! And of course, ask your engineers; they’ll know better than anyone.

## **Learn #3: Your build and deploy process**

**What to know:** How your app gets built and deployed to your users, what’s manual and what’s automated, and how long it usually takes.

**Why it matters:** Writing code is only half the battle—you need to get it to your users by deploying the changes to production. Larger teams and more complex apps can have multi-day deployment processes that may delay projects and add to lead time. Knowing these pressure points can also help you more effectively batch features and understand what’s worth doing when.

A good example is how your company distributes cloud builds vs. on-premise builds. If it takes a while to get newer versions of your software to your on-premise customers, as a PM, you might try to batch a few features on a tighter timeline so that your team can bundle them together for a single release. For small updates like copy changes, you might feel comfortable doing them yourself if the release process is easy, but may time them along with another PM’s release if deploys take longer.

**How to learn about it:** Ask your developers, but you can also do some legwork before then by looking at pull requests (PRs) that have been merged and what the GitHub checks (or whatever else your version control system is) run for builds. Here’s an example from Supabase; it looks like the team is using [Vercel](https://vercel.com/) to deploy the app, since the Vercel bot commented on the PR with links to deploy previews.

![Image from The top 5 things PMs should know about engineering](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ca385698-5dea-43df-9e40-d9a103dc339f_1600x812.png)

This is good to know—after doing some digging on Vercel, you might navigate to its site and learn that its product makes deploys quick and easy, usually sub-5 minutes. That information may come in handy later on when you’re wondering if you can get that copy change in before the deadline, or if asking your engineer for a quick change is going to be too bothersome. To find open PRs on your team’s repositories in GitHub, just navigate to the repository, click on the “Pull Requests” tab, and click on any one.

If your app also has customers that deploy it on-premise, you’ll want to get information on how upgrades work (do customers get them automatically? how often does the team recommend updating?), how far behind cloud they are, and how difficult one-off builds are.

## **Learn #4: How to contribute code**

**What to know:** How to make code changes and open a PR, specifically for small, self-contained changes like updating copy or changing colors.

**Why it matters:** Great products have great copy, and you shouldn’t have to rely on your engineers to fix typos. Being able to make small changes yourself, be it copy or fixing an errant border radius (generally frontend stuff), will result in more polished products shipped faster. Don’t bite off more than you can chew, though; keeping the code you contribute to smaller copy- or design-related tweaks will win you points.

**How to learn about it:** As you get started, sit down with your favorite engineer on your team and ask them to walk you through how to contribute code. It’s going to look *something* like cloning your app’s repository locally, running it locally, making a fix and committing your changes, and then opening a PR in GitHub. You can even cheat and edit some code directly in GitHub, as long as it’s low-risk (like this markdown file):

![Image from The top 5 things PMs should know about engineering](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2b3c1d8a-cbda-4bc0-94e9-5569e63799d6_1600x1089.png)

Learning how to code is obviously beyond the scope of this post. Personally, I got my start by studying some slides from a Python class in college (that I *wasn’t* taking), brushed up with [Codecademy](https://www.codecademy.com/), and then ended up building full-stack apps in my free time over the course of my career. If your goal is to be dangerous, focus on your team’s primary programming language and set a reasonable goal with a developer. Maybe it’s updating the copy on the website or something simple. The hardest part tends to not be the code itself but rather the process around the code, like handling version control and CI (continuous integration).

## **Learn #5: Technical basics 101**

**What to know:** Outside of your company’s codebase, you need a basic understanding of how apps, data, and infrastructure work. Beyond being able to code, a conceptual understanding of what pieces come together to build applications is table stakes.

**Why it matters:** A lot of what your developers tell you will sound like complete nonsense without the right technical foundation. And whether you know how to code or not, you’ll want to know what your developer means when they say they can keep this feature to a “frontend change only.”

**How to learn about it:** There’s no teacher as valuable as experience. The reality is that knowing how to code—specifically, how to build apps that relate to your company’s stack—is the best way to be more technically literate. But that takes a long time, and simply isn’t for everyone! Thankfully, there are some shortcuts you can take in the meantime. A few that have worked for me:

#### **1. Read engineering blogs**

They’re sometimes surprisingly easy to understand, and can get you used to the terms engineers use daily. I like reading [Segment’s](https://segment.com/blog/engineering/), [Slack’s](https://slack.engineering/), [Netflix’s](https://netflixtechblog.com/), and [Stitch Fix’s](https://multithreaded.stitchfix.com/). Teams usually write these for recruiting purposes—look at all the cool stuff we’ve built!—but they can still contain useful base knowledge. Much of being technically literate is understanding how software is used *in practice*, and these blogs are great for that.

#### **2. Look up everything you don’t know**

Technical writing and speak is built on layers and layers of concepts; you need to start from the bottom to understand the top. Search for terms you don’t understand rather than just glossing over them. There aren’t very many good central resources online for going from 0 to 1 in being technically literate, but many individual concepts have useful explainers. A nice example is [Duo Security’s guide to SAML](https://duo.com/blog/the-beer-drinkers-guide-to-saml). Search enough and, with a discerning eye, you’ll find writing styles you like.

#### **3. Find a developer friend on the outside**

Chances are you’re friends with a developer outside your company; buy them a coffee! Come with some questions prepared. It’s usually unproductive to have them dump their knowledge on you, but a series of pointed questions around a particular topic can lead to a fruitful conversation. For example, when I’m writing newsletter issues, sometimes I’ll grab 30 minutes with an engineer friend to make sure I fully understand a topic I’m writing about. Doing your research beforehand to make sure you have good questions is the key.

Aside from these, though, [subscribe to Technically](https://technically.substack.com/subscribe)—it’s made for exactly you :)

*Thanks, Justin!*

## **🔥 Featured job openings**

1. **Mynd:** [Product Manager, Buying Services](https://www.lennysjobs.com/jobs/5acd93b4-3e73-45f6-894f-a701509a81ea) (Remote-US)
2. **OpenPhone:** [Senior Product Manager](https://lennys-jobs.pallet.xyz/jobs/a4e59b3d-06a3-4f89-a340-b8bd5f8aee97) (Remote-US)
3. **TaxBit:** [Product Lead](https://lennys-jobs.pallet.xyz/jobs/4a453e47-d6c8-4241-becc-763fe8097d97) (Seattle)
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*Browse more open roles, or add your own, at [Lenny’s Job Board](https://lennysnewsletter.com/jobs).*

#### **How would you rate this week's newsletter? 🤔**

[Legend](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=5) • [Great](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=4) • [Good](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=3) • [OK](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=2) • [Meh](https://a.sprig.com/672d7967625042535f477e7369643a3434363132?r=1)

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

Sincerely,

Lenny 👋

---

## [60/61] Taking the week off

Taking this week off to spend time with family, friends, and getting outside. Happy holidays, and see you next week 👋

![Image from Taking the week off](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/c7c591b9-0443-4677-a216-8df1b962adcd)

P.S. [My PTO policy](https://www.lennysnewsletter.com/p/marketplace-city-expansion).

P.P.S. If you’re hankering for some time off, [don’t miss this post](https://www.lennysnewsletter.com/p/sabbatical-time-off).

---

## [61/61] The Best of 2021

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/96bd9b5a-c887-45e0-95fc-5ed06b69dbc9_4096x2048.png)

## 2021 in review

It was a big year for this newsletter:

1. **Hit #1 paid business newsletter** on Substack ([rankings](https://substack.com/))
2. **Crossed 90,000 subscribers** (2x’d from the start of the year)
3. **Reached 1m page views** (primarily from the U.S., India, Europe, Canada, Australia, Brazil, the Netherlands, and Singapore)
4. **Published 58 posts** (including 12 guest posts), plus 52 additional posts from the community itself—a total of 110 posts!
5. **Grew to over 6,500 amazing members** inour Slack community **🔥**

Your support for this newsletter is what makes it all possible, and I’m *so* incredibly grateful for you. THANK YOU for allowing me to do this work. Happy holidays, happy new year, and wait till you see what I’ve got in store for 2022 ✨

## The 12 most viewed posts of 2021

A rundown of the most popular posts this year:

### 1. [Choosing your North Star metric](https://future.a16z.com/north-star-metrics/)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f5f48de3-0ea7-4a3c-a7c1-90da10301d0f_1061x599.png)

### **2. [The 10 commandments of salary negotiation](https://www.lennysnewsletter.com/p/negotiating-comp)**

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1c89c41d-0c4a-4f0d-ab1a-68f26e896821_2048x1340.png)

### **3. [A quick-start guide to positioning](https://www.lennysnewsletter.com/p/positioning)**

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dc597ea0-acf1-4a8b-b18e-30c59d2f9616_1593x912.png)

### 4. [Content-driven growth](https://www.lennysnewsletter.com/p/content-driven-growth-strategy)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bfdcf754-87e8-4801-abb4-f6a114462d81_2048x1024.png)

### 5. [A founder’s guide to community](https://www.lennysnewsletter.com/p/building-community)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ed8e5a3a-a4d7-4d5d-89ce-f7a44f2e4fed_2048x684.png)

####

### 6. [Six rules of hiring for growth](https://www.lennysnewsletter.com/p/hiring-growth)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8e9aca2d-57f8-4049-915b-cdd23bb9b177_2048x1102.png)

### 7. [What is product management](https://www.lennysnewsletter.com/p/what-is-product-management)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f20f2147-5cc4-453e-ac6a-8c274d5931ff_2400x1350.png)

### 8. [The top 5 things PMs should know about engineering](https://www.lennysnewsletter.com/p/the-top-5-things-pms-should-know)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/39fcd17c-a99a-49b5-9750-3e9a1269991a_1100x598.png)

### 9. [How behavioral science can boost your conversion rates](https://www.lennysnewsletter.com/p/how-to-use-behavioral-science-to)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f1584c90-8344-4464-90f1-088fee2c2da6_890x714.png)

### 10. [Picking a wedge](https://www.lennysnewsletter.com/p/wedge)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a58b0c08-c409-40d2-aa4e-06e0ced37e4e_1100x737.png)

### 11. [Prioritizing](https://www.lennysnewsletter.com/p/prioritizing)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e43e8601-d7e8-456f-b30d-fb48bb87ebfc_852x282.png)

### 12. [GTM motions of 30 B2B SaaS companies](https://www.lennysnewsletter.com/p/gtm-motions)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ebb9e4e3-cb8a-46f6-aa13-610fa1437d15_1100x681.png)

### Bonus: [Taking a sabbatical](https://www.lennysnewsletter.com/p/sabbatical-time-off)

![Image from The Best of 2021](https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e00f4337-2f57-4d72-99bb-0df779595c5c_1080x809.jpeg)

## Some of what’s coming in 2022:

1. A multi-part series on kickstarting and scaling a consumer business, and a B2B business
2. A comprehensive survey of how companies build product
3. What *didn’t* work when acquiring early users
4. When to pivot, and when to commit
5. How and when to differentiate
6. Roundup of PM interview processes
7. Mapping input and output metrics
8. The math formulas behind growth
9. A deep dive into customer success
10. Benchmarks around churn rate, growth rate, sales efficiency, and more
11. Many amazing guest posts
12. Plus, I’ll be doubling down on making the Slack community even better, with more fireside chats, new curated resources, and surprise perks for the most active community members.

Get excited 🎉

#### **Finally, a few folks I’d like to give special thanks to:**

- [Shre](https://www.linkedin.com/in/shreman) for helping me run our wonderful Slack community
- [Kiyani](https://www.linkedin.com/in/kiyanibamba/) for curating our rich weekly Community Wisdom posts
- [Natalie](https://www.natalieharney.com/) for taking this newsletter up a few notches with her illustrations
- My amazing-but-anonymous copy editor for helping me sound smart
- Everyone who actively participates in our Slack community
- And each and every one of you reading this right now

See you in 2022 ✨✨✨

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

Sincerely,

Lenny 👋

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