Y Combinator Startup Podcast - #132 - Dan Hockenmaier and Gustaf Alströmer

Episode Date: June 26, 2019

Dan Hockenmaier is the founder of the growth strategy firm Basis One. Prior to Basis One he was the Director of Growth Marketing at Thumbtack. You can learn more at BasisOne.com.Gustaf Alströmer is a Partner at YC. Prior to YC he was the Product Lead for Growth at Airbnb.You can find Dan on Twitter @danhockenmaier and Gustaf is @gustaf.The YC podcast is hosted by Craig Cannon.Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year.Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/***Topics00:00 - Intro00:50 - Dan's most unpopular advice1:45 - What growth strategies do people jump on too soon?2:20 - Questions Dan asks a company he's advising3:50 - Traits Dan looks for in early growth hires6:30 - How product and growth are tied together11:30 - Good/bad learnings from Facebook's growth team14:00 - A/B testing17:00 - Retention and other metrics20:45 - The importance of experimentation23:45 - Getting ideas for A/B tests then choosing which to do25:00 - Advice for employees who want to get a growth program going29:00 - B2B vs consumer growth tactics34:00 - Pricing experiments35:30 - Paid marketing39:30 - Launching in new markets40:15 - Hiring for marketing43:45 - Metrics for marketing hires45:45 - Toni asks - Why did Airbnb grow so fast?48:45 - Step function growth changes for companies that already had scale49:55 - Michael Savage asks - It would be great to discuss growth into new regions for example Africa and UAE. What would their approach be, how does it differ from region to region, culture to culture? 52:30 - Justin LaRosa asks - What are some of the most common drivers of viral growth?55:20 - Hiring a growth agency vs building your own team58:20 - How do you think about growth in the context of improving humanity?

Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinators podcast. Today's episode is with Dan Hockenmire and Gustav Alstramer. Dan is the founder of the growth strategy firm Basis 1. Prior to Basis 1, he was the director of growth marketing at Thumbtack. You can learn more about Dan at basis 1.com. Gustav is a partner at YC. Prior to YC, he was the product lead for growth at Airbnb. You can find Dan on Twitter at Dan Hockenmire, and Gustav is at Gustav. All right, here we go. Today we have Dan Hockenmeyer and Gustav Alstramer. So Dan is the founder, investor, and advisor at Basis 1, which is growth strategy consulting. And previous to that, you were a director of growth marketing at Thumbtack.

And Gustav's a partner at YC and also was a product lead for growth at Airbnb. So Gustav, why don't you start it off? Sure. So I was thinking by getting it right into it. So, Dan, you advise a lot of startup on growth and you kind of get into their teams and work directly. with them on growth. What is the most unpopular advice that you give the founders of the companies that you work with? So I say nine times out of 10, we are talking them out of doing things that they want to do. I think, you know, as you know, there's this huge power law to growth. I think most

the gains come from, you know, one channel, a handful of tactics. And most early teams are really good at coming up with good ideas that they want to try. And often that has diminishing returns. So we're often talking them out of things. I think the like second class of things, would be actually that the company may not be ready for a traditional growth effort. And so I think it's really important to think about where they are in terms of product market fit and when the kind of the right types of tactics should be, should be used. Yeah. In terms of being specific around that, like what are the most common things that people are trying to jump on too soon? So I think really heavyweight acquisition, particularly if it's unsustainable prior to having the right kind of retention.

And so like you don't have to have best in class retention numbers, but you need to be seeing some cohorts of people for which retention truly levels out and they use the product very long term. And if you don't see that, you're not ready. And particularly if you're doing things like paid marketing or others, which can have big burn implications, you can get to that too fast. And that can be really problematic. So let's say I run a series B company. It's a consumer company and I just hired you to help me figure things out. What are the questions you going to ask me and what are the data you want from me? So I think it's a really healthy exercise to actually start with a pretty traditional spreadsheet model, you know? What are the kind of channels of acquisition? How does

traffic convert, activate, retain? What your different cohorts of retention look like? And how does all this link up? Now, how to like your existing users then start referring other users? How does monetization fuel your paid growth strategy? And when you build something like this, you can like play around and say what happens if our activation rate goes up by 5%. Usually that's really powerful, much more powerful than a 20% increase in acquisition. And so I think about the kind of full stack of things and how it all links together, and it's a really good starting point for where there's leverage. So if I am that founder and I couldn't hire you, I couldn't afford you, like, who is the person

in my team that should kind of make that spreadsheet? Like, where do I start if I don't hire you? So I'm a big fan of smart analytical generalist, actually. And it depends a little bit on whether you need more of a marketing business type person or more of a technical person. but somebody who, one, has kind of low pride of ownership and just wants to move fast and test things and figure out what works and is deeply analytical can often get a lot of that, a lot of that work done. I mean, I think, you know, we can talk about the composition of a, like, large-scale growth team,

but that's a luxury that many don't have. And so finding somebody who can do lots of those things before you know what's really going to work is really valuable. And so what signals during an interview would you look for? So I think the big thing is can they hold the equation of you? your business in their head. So like, do they know how a change is going to impact the overall output of what your business is optimizing for, whether that's weekly active users or transactions in a marketplace? And do they have an intuitive sense for where the kind of important things to work on are? And then the other type of stuff, like learning channels, you know, most people can

get up to the speed on that pretty quickly. It's much harder to teach the kind of like strategic kind of understanding of where to focus. Did you find that true at Airbnb as well? Yeah, I would say so. That's probably true. Okay. I'd be curious if you have any kind of counterpoints or areas where you needed more specialty earlier on. So I would say that the story of Airbnb was basically we had probably one of the best park market fits that I've seen.

But not necessarily thanks to like an amazing user flow and amazing onboarding or even amazing acquisition channel. It's just like a really good experience. So if you think about the early days of Airbnb, half the price, the most unique experiences that you can imagine, was actually very compelling. And you can think about the neighborhoods. Like if you want to live in New York, your options were to live in a hotel in Midtown versus living somewhere in a real neighborhood. There are real people. And you can go down to the corner and grab a coffee just like normal citizens. That is a great kind of like product experience.

And it sort of sells itself. And I give you an early example. Like before we had, we would call instant book. The way that you would book an Airbnb is that you would send a request to someone and that person have to then request a book and that person had to then confirm that booking before you actually got the booking. In many cases, actually the majority of cases in the other days, the request was not confirmed. So you wanted to book something and sorry, it didn't work out. And that was sort of like if you think of the idea of Airbnb, which is book any house or room in the world as he says booking hotel, wasn't really true.

So if I think of that kind of product experience, there's a lot of friction in the early days that sort of didn't, it mattered, but it also didn't really matter for the success of the company. When I joined Airbnb, we were like, whoa, this is really working, but what are all the things that we can optimize? We optimize sort of like the onboarding flow. We optimize all the different acquisition channels, SEO, paid marketing, referrals. We've tried looking at retention, all of those are different things. But fundamentally, what it worked for Airbnb was this is a great product experience, and we just want to make it more available. the world. Right. So this is a key question and perhaps a dichotomy between growth and product, right? Like the classic YC advice is build something people want. So like, where do you guys fall

in this debate? Like how much of it is just building a great product and how much of it is like being great at growth? So I think like that maybe the better way to frame this is not like which is more important because we can debate that. But like I think rather obviously both play a role long term. It's more how the two are tied to one another. And so I think like, you know, if you think in particular on the consumer side, but it's true for B2B as well, to get to 100 million in revenue, typically 70, 80% of all new customer acquisition is coming from one channel. And so, like, the best products are the ones that are built to optimize for that channel. So if it's paid marketing, you need to monetize quickly and deeply. If it's SEO, you have to have a really good way to generate

and curate content or else you just can't compete because the other products are doing that. And so if, you know, I get a lot of questions around like, how do we kind of like add some SEO on top of this product or ad virality. And that's just never the answer because you need to be asking that question two years ago, you know, a year ago. And so you can build for it. And so I think that piece is really important. I do think there are examples where a product is so unique that it allows them to compete on kind of like a different vector, you know? And so like Zoom's S-1 that everybody's looking at, I mean, like, the metrics are incredible. And one of the reasons is they like came in the back door, basically. They have like a product that people love and it becomes viral. And they're already

pre-qualified before sales gets to them. And everybody, all their competitors are knocking on the front door in this much less efficient way. And so that was the case where the product let them do something different on the distribution side that nobody else could do. Like square, being able to go out for SMBs with a automated underwriting products is a similar example. And so like, yes, product blew those markets wide open, but it's still not the same as like saying you don't have to go build the distribution. Like you still need to do the work on the growth side. I would, I would, I We have this YouTube video when I talk about growth in startup school, and there's the first couple slides that they talk about sort of like the evolution of Facebook and their growth.

I would argue basically that a bad product will not grow. A good product will grow to some sort of like general natural adoption curve. And that curve could be fast in the beginning, but eventually it'll slow down a lot. And the role of the growth team for a good product is to make sure that doesn't slow down, kind of built on top of multiple layers of new channels or new onboarding or sort of better, conversion and they roll the growth team which is like identify all those things and all those opportunities and just do it. So I agree with Dan. Like a great product is going to have a sense of natural adoption. It's just going to go not towards its full potential. So there's really a lot of

things that great product can do. And I use a lot of great products on my phone, my computer, and I know that they're not sort of reaching their potential in terms of adoption because many basic things are not optimized. I'm giving you a very concrete. example. So at Airbnb, we had this team called authentication. They were working on sign up and login. Very basic things. A lot of startup founder founders think that those are just two things to check up the box. I built sign up and I built login and then I am done. It is actually incredibly difficult to make a 100% perfect sign up and logging experience, which meant that team existed for several years. And because the people who are signing up and logging into Airbnb, had a very clear

goal like booking or leaving a review or something along those lines. It was actually very, very valuable. For us to fail on that was complete, like, so like that was like not acceptable. Yeah. So we just kept optimizing and optimizing and optimizing. And I'll give you in a specific example. In the early days of Airbnb, we used to automatically log you out after like, I think two days. And we were like, why we do that? Well, security reasons. That makes sense. So then we would run an experiment, we set the kind of expiration date of that cookie to seven days and then 30 days and then unlimited. And I think we lifted the, the outcome of that experience, the outcome of that experience is over 1% increase in revenue for the whole company just by extending the session length and making

it a little bit easier to log in. And the security aspect of that, we actually solved in a different way. We made it kind of like Amazon where if you want to do something sensitive to the site, you'd have to go and log in again or authenticate again. So if you were going to book, then you have to put in your password. Yeah, but that's just like the amount of code required. to make that change was like minutes or hours, but the impact on the company was crazy. Yeah. But I think what that tells the story is that there are these things

that really makes it easier for user to kind of access that really good product. But as a founder, you don't really think about it unless you actually make the spreadsheet, actually know what's happening in the product and go deep on it. Yeah, absolutely. Yeah, do you think Facebook recognize

that they weren't hitting their full potential when they started their growth team? It's a good question. I wasn't there. But I think probably they did understand that they had this amazing thing, you know, and you start to realize that if you accelerate growth in very small percentages, you get something really, really good. I actually think like the legacy of that growth team and then like Twitter and LinkedIn and the others that followed is actually maybe problematic when we think about some of the applications of growth later on because they were applied in this case of like extreme product market fit. And the things you do in that scenario are

slightly different than when your earlier stage and trying to figure out how it works. And so I think like out of that, we got a little bit of this kind of growth hacking mentality, just like throw things at the wall and see what fits and don't think about product market fit because it's assumed that that is solved for, which in many businesses it's not. And so, so I think like we have recovering from that legacy in growth for a while. And that's just like in a practical terms means like just don't throw gasoline on every fire. Like what do you mean by that specifically? Yeah, I think it means think about the, think about the metrics you're optimizing for, making sure they're long term, making sure they're sustainable. I also think like one of the mistakes that companies make a lot is this idea that speed of testing or velocity of testing is the most important thing.

It is important to move fast because it is quite hard to have good hypotheses about what's going to work. Like I am constantly wrong about trying to predict the results of experiments. And so you do need to just test a lot of things. However, if you just get, if you optimize for speed at all costs, you know, you should be instead thinking about things like how do we test really disparate things to make sure that we are really testing at the ends of the experience to understand, you know, what's going to drive. So instead of like moving minor things around the conversion flow, test entirely different flow or a very different experience, not only will you learn more, you know, based on kind of where the result nets out, but you actually will get results back faster because sample size is a product of your effect size. So like driving a higher effect is more important. And I think the other thing is if you look at a backlog of 80 or 100 experiments, often there's only four or six hypotheses underneath that.

And you should really be like thinking about which hypotheses you're testing rather than just trying to run through all 80 tests. And so like in the example of thumbtack, when we're optimizing conversion, we may think they need more education as they're moving in. We may think there's a trust issue. We may think we actually don't even have the right types of users in the flow overall. There's different sets of experiments that will test those things.

Do you like the one or two right things against each hypothesis, validate or invalidated, and then move on. And so I think like just a more thoughtful, slightly slower, actually approach can sometimes work really well. I would love to dive into that. So let's talk about A-B testing and experimentation. So this is something that I tend, I used to say that like, if you ask any product manager at AIMB, what's the most useful tool that you ever used there? And they would say it's the experiment framework, the ability to run A-B-Test and easily measure the impacts of new changes. use. When you meet with startups, how far long are they? And sort of like in terms of the

ability to run experiments and what are the type of advice you give them? I'll give you a common question again in the early days. It's sort of like what tools should I use. But I'm not sure if that really applies at your stage. But I love to hear what you think. Yeah. So we're typically working with companies that are a little bit later. So kind of series being on often. So they have some of this. Earlier stage, I think there's like a first order question ahead of experimentation, which is like, is the site instrumented in the right way? Are you updating that instrumentation as you change features, is all of this kind of queryable,

the sequel and serviceable to the company? All that stuff has to happen first, I think, so that you can like really, you have kind of the integrity of data, but then building a thoughtful framework on top of that, an experiment framework. I think increasingly the third-party tools to do this,

the full-stack tools are pretty good, actually. And so even for quite talented teams, the answer is usually not to build it yourself right away. You know, I'd love to hear if you have a rule of thumb on this, I think generally if you can be comfortable with the fact that an entire engineer is going to be maintaining that infrastructure in perpetuity, then maybe that's okay. If that feels like too much, then you probably should be thinking more about a third-party type infrastructure prior to that.

Yeah, I used to recommend building your own tool because that's sort of like my primary experience to the Airbnb. I think we started with an external tool, but then we built our own thing. And I describe often how incredibly simple the first tool was. It was basically a feature flagging tool. that would like, you can show things to some users and other things you were not visible to some users. And then you would basically just sort of like run that 50-50, the feature-filing tool, and then you run queries on your database. And that's sort of how we get started.

Like the first year or two, I remember all AAB tests was basically an Excel like output with some calculation on statistical significance. Then, I mean, 2014, 2015, we built this like really elaborate tool that would do all things automatically and it's just like magic. but that wasn't how we got started and we could really start with just the feature flagging tool and those exist as tools that you can use and as long as you, like you said,

you can query the data you would know sort of like, feel pretty comfortable about about sort of like how a certain new feature wouldn't perform. The one thing I would say is the thing you want to decide early on is who sort of like

what is the thing that you're controlling the experiment on and I would recommend that it's going to be user accounts. You're doing it on visitors or something like that it's going to be typically much harder. But you're on user accounts, it's like relatively hard to fail. Even do like the market level experiments or search experiments, those are difficult.

Those are like difficult enough. The data scientists there would make mistakes early on and kind of have to throw things away. But if you just do a simple user account, experiments is pretty straightforward. Yeah. How else did you break apart metrics? Like you have all this tooling, but then how do you start thinking about like, okay, these are the things that matter.

These are the things we're going to start tracking. So in the first week of YC, we had. the growth boot camp, and the first talk I gave a growth boot camp is on retention. So I basically walk through the kind of the connection between a product value and retention and how a great product often is completely reflected in that retention graph. And I asked everyone, are you measuring any of these things that basically what is the metric that measured the product value? Do you measure that over time?

And then if you do those things, you kind of have a retention graph. So in many products, B2B and consumer, this applies. and it's something that companies should be doing. And you don't need enormous sample size to get useful data from that. So that's typically what I start. The second thing is sort of like where it's users coming from, some basic Google Analytics or basic,

just like source tracking is a good place to start. After that, I like to have a survey asking people sort of like how they heard about the product because some things can be hidden in the source tracking sometimes. You have the survey on checkout or over email? At sign up. Like for example, if you come into Google, brand or Google. Like, for example, if you're coming through Google, you're going to have to

determine is that someone who know about your product before, not knowing about your product before. If they know about your product, how did they hear about it? Well, that Google isn't going to tell you that, or the app store isn't going to tell you that. You're going to have to find out from the users. And it would, it's sometimes useful to just break it down a little bit deeper and sort of like, how do people hear about the product in the first time? Is it through friends? Is it through workplace or whatever? I think those things are important. And then after that, it's the end-to-end funnel. It's sort of like, what are the steps from the first time I heard about your product to get to that product value. There's lots of things you can

measure there. Yeah. I think that's a great overview. One thing I would add is if you are working on retention or trying to optimize retention metric, very often the way to do that is actually quite early in the product experience. The types of ways that you set a user up for good retention, and it could be the first session, first week with a product. And so the next set of metrics you need after retention is what are the early proxies for retention. So you can experiment on that. And so this is like a slightly harder question that we work with companies on. But I think, you know, there's one level, which is just what are all the things that correlate to retention or satisfaction. And then you've got to go start experimenting to understand causality. But that set of

metrics and having really good metrics for what does healthy activation look like. When do we know a user is on the right path? That stuff is a really kind of important add to the model once you've got the basics built. What was an example of that at Thumback? So in this case, and in general, for marketplaces, the kind of North Star or the top metric is not something like weakly active users because you need something that combines both sides in the marketplace. So in our case, it was transactions or requests placed. It's probably quite similar for Airbnb. We, you know, the real world product, the thing we were optimizing for is hires happening in the real world. So a professional getting hired by a consumer. We didn't actually

have full data transparency into what was happening off the platform. And so we had to look for upstream proxies for when that was going to happen. And the main thing was when a consumer got a certain number of quotes from a pro, we had, they then believed that we did the job for them. We gave them options. They could go choose. Their higher rate was much higher. Their NPS would actually, like, you could watch it spike at a certain number of quotes. And so the metric we were going on was the number of customer requests that had that many quotes. And actually, our liquidity metric in each market, when you looked at general contractors in New York, the way we measured the health of that market was what percentage of consumer requests were getting a

sufficient number of quotes. And that's what set us up on a kind of a healthy trajectory in that market. So I want to go back to an early question. We were talking about experimentation a while. One of the experiences I've had is I've kind of like start talking to later stage companies, maybe series B, series C, and I'm like, do you run experiments? And they're like, yes, we do. So how many have you ran in the last 12 months? It's like 12. And that would be on a large engineering team. So I often find that people understand the idea of an AB test, the understand that sort of like what it could be used for but they haven't fully immersed into doing it and they haven't fully kind of got the entire company rallied around it as a way to validate

sort of decisions. I'm curious to see like what have you seen if that was the case you came at a company and I said I've ran 12 experiments in last year. I have 50 engineers like what would you tell me and how to change that? So I think the big thing here is like growth increasingly I think is less of a team or atomic unit and it's just like the way of running a business using data and experimenting. And I think that is quite hard to just talk somebody into. You know, it's like a philosophy for how you run a business. And so I think the most successful way to do that is kind of like bottoms up and organically, which is why I think you sometimes see these like small SWAT team like growth teams that start to optimize and get quick wins on one part of the product. And like just showing it

through numbers is often the very best way to get to that answer. And so like one of my favorite examples here is the team, the early team at SurveyMonkey did a great job of this. Like there's like one page in the product, which is the end of the flow when you take a survey. You have like millions of people hitting this page that could ultimately at some point become survey creators as well. And they had done no testing on that page.

And so the growth team basically just said, we're just going to make it our job to optimize this specific page and started running tests there, and the results became so evident that the kind of influence of the growth team expanded over time. And so I think this kind of like, I'm just not sure it's something you can talk somebody into. I think you've got to build it.

How do you deal with the founder who's like, well, I built, made a great product. It worked. Now I have lots of users, and I raised lots of venture capital. But I'm not running experiments. So, like, how do you change? Sort of like, I understand you can't talk me into it,

but I'm interested in the idea of making progress, but I'm not interested in having my ego sort of like hurt by having data tell me whether this product is actually better or worse. I mean, yeah, it's a great, but I think it becomes the culture around the way that you think about experiments. You know, I think one of the most powerful things of experimentation or elements of it is that when it's done, you send it out to the whole company and talk about why I want or lost. You can even get into a culture of like, you know, like unveiling the results of experiment and having people guess which one kind of went well or not well. And I think that becomes something that people really like. And it's like you realize that it is teaching you a lot about your users in the business that would be hard to get otherwise.

And so I think this like building this kind of culture around is really important. What's in your experience a great way to get ideas for AB test to run? So like let's say, okay, I have my experiment framework figured out. Like I know how to run experiments. Now I need lots of ideas and things to test. How do you, how do you experience go about that? So ideally they come from everywhere. We actually like basically kind of like open this up pretty broad funnel.

So certainly everybody in the growth team, but even others outside of that were basically all adding stuff in a brainstorm or Google Doc or whatever it was. You do have to have somebody synthesizing that that is not in a crowd source to function. But I think like many of our best ideas came from engineers and other parts of the company who just had some insight into a part of the product or a user experience that nobody else had. And so I think like basically broadening the scope and then having some kind of, you know, synthesis. And who decides what to work on first? So you have 15 ideas of things to fix on the onboarding flow. Who decides what to work on first and what's a good framework in your experience, too? Yeah.

So I think there's a kind of a central point, which is a product manager thinking about that point and engineering lead thinking about that part of the product. I do come back to this hypothesis-driven approach. So what do you believe you're testing and what is the best way to test that thing? I think it's a really good way to force that conversation. I do think it's hard to be very collaborative at that end stage when you're deciding what to what to choose. People have different roles. So that makes sense.

Yeah. So as an employee, so Gustav, you're talking about advising founders of these later stage companies. But Dan, you mentioned these bottom up approaches. What are other good examples of employees at companies being like, hey, I want to take a growth-driven approach here? And then like getting buy-in across the whole company. Like, we mostly talk about advice in the context of founders. but like let's give some advice for employees who like really want to get a growth program going. Yeah, absolutely.

So I think there are certain classes of things that are easier to get off the ground and test. And so actually one of the reasons that paid marketing is so common early in companies is just like very quick, quick to get off the ground and you can validate that. And so I think finding those types of things where you can really prove something with a small budget or small team are super important. and very often, you know, testing a new channel in that way can be a way to really prove something. You don't have to go get permission to do that in many cases. And so I think there's like many examples in the acquisition area of just going and finding this thing that may work. Cool. I'm curious if you have others.

I'm trying to think of good examples here. But I would say what you said around publicizing what is the goal and publicizing any effort towards that goal towards the company is a great way to doing it. So I really like when you have a weekly email of all the metrics in your company that goes out to everybody. Now that will anchor people to say, oh, it's bookings. That's the thing that we're going for is bookings. Okay. So then the next national question would be, what are the drivers of bookings? And well, that's your funnel.

And then if you are any of those teams that are the driver of the funnel of that metric bookings, now you need to improve that metric. And if you run an AB test, you can actually prove that you improve that metric. So what we did at Airbnb was effectively, we would have in top line metric, which was bookings, and then we would say to a bunch of different teams, growth team, marketplace teams and others, that you guys are in charge of driving incrementality to that metric.

And as an engineer or anyone on any of these teams, you just come up with the best idea that you can impact that booking's metric in some way, and then you start running experiments. And they could be, like, I really love this idea of allowing everyone to come up with ideas on what to fix because the more kind of ingrained you are with a certain part of the funnel, let's say you are working on sign up, for example. Let's say you're working on even something deeper, referral sign up. So I, at Airbnb it would be tens of thousands of people that would sign up from referral link every day. They have high intent to become users and maybe eventually

spend that money. But if that sign up flow is not perfect, well, there's a lot of things you can do there. And there's some engineer who knows that flow really well, who's going to know that, well, these, it's like five examples of things are not working. If I fix them, then that's the kind of thing you want to share to the company so that people start understanding the income mentality of these small things. If I'm an general engineer, I would say try to think about orient yourself around what's high intent. This is different for different companies.

But in case of Airbnb, the early wins are often in the high intent flows. So like where people actually thinking about booking are actually about to book. So search conversion is important to one. Signup conversion is important. sort of like online marketing, traffic was an important one for us, versus, for example, homepage is super confusing. And there's many companies that have this experience where, like, people coming to your homepage is a combination of people that really want to do the thing

that you offer, people just looking around, people accidentally ended on your page. It's just like a random, it's just a hard place to start. Yeah. Versus like if you were optimizing the landing page for Google conversion, well, that's going to be a lot of people that want to do exactly what you offer. Right. Yeah, it's a great point. You're probably trading off intent and scale because you don't want to go so deep that you're dealing with 2% of the population. But too high funnel doesn't work. That was the mistake that we made. We actually made the mistake of going all focusing on the onboarding for the home page because they're like, well, that has the biggest scale by a long shot.

But it turned out that only like 10% of the people that come to the homepage actually have a booking in mind. Right. And everybody else has something else in mind when they come to it there and be homepage for the first time. That's crazy. So guys, when it comes to advising companies, what are the main differences in growth? between a B&B, a B2B company and a consumer when you're advising them? So I think consumer has been kind of leading the chart on what to do for the last like 10 years. And I think many of these tactics and strategies are now being adopted by B2B. And one thing that I, if you see YC companies coming in and doing YC in the early stage program, now the most common advice is sort of like build a framework to figure out how to do more sales faster.

And that's a funnel. And we kind of give them advice. So start in the end and say, if I need to sell 10 to 10 customers every week, work your way back forward from how many people need to pick up the phone or how people have to show a demo to. How many people do you have to email or some other way reach to get to that demo and just like build a funnel and sort of like start that way. And then now you know what sort of like the early part of that funnel look like. So there are many of the tactics that are using consumer that now being applied to B2B. but it came a little bit later. The benefit of B2B is you typically have much higher LTV.

So you can spend, you can be a lot more creative on online marketing. You can often like the first question I asked companies is sort of like, can you make a list of all the potential customers in the world? Hopefully if that list is sort of like in the hundreds of thousands or smaller, make that list. Like find a way to make that list and then like take that those people and put it through all the different Gochannel that exist, whether it's online marketing, whether it's sales, automated sales, just like go after that list.

If your product is so mainstream that it's in the millions and millions, then you're going to act like a consumer company. Because you're going to go after the same kind of strategies that a consumer company would go after. But what if you went after a big client in the wrong way? People talk about fundraising in this context. Like maybe you shouldn't try your pitch on Sequoia the first time, for example, right? So how do you think about that? there's a distinct difference to me between SMB and enterprise

and they often have very different sort of like closing closing kind of cycles if you mean if you want versus as SMB company often what you do is you have this top of the funnel on your sales funnel

and then you have a relatively automated way to sign them up so that maybe is one video demo and then you have a customer. And this is typical for SaaS companies, I think, is that you have some way of scaling up the ability to sign up these customers. In the enterprise world, which I have much less experience, the end closing event, there's going to be through real traditional sales in some way. Now, you can build up the excitement through content marketing that can even be targeted content marketing, trying to figure out who is a decision maker and targeting those people. There are lots of things that you can do.

In many cases, social proof is a super critical. thing here because it's relatively easy to understand how companies make decisions about a new product. And you kind of have to just deeply understand that and then mimic your growth strategy towards how that has happened. And I think in the SaaS SMB kind of group,

there's just a lot more distributed how people make those decisions. And I was one of the first users of Slack inside AMB. I certainly wasn't the buyers of communication software. me but I was I mean a few other people be like hey we should try this new thing it seems awesome yeah like a year later everyone's on slack so that was like if you're in that category you can grow much more bottom up versus if you if you enterprise category you have to identify that list of those people first and be like these are people on going after right yeah I was just curious about

like potentially putting your highest value potential customer in some kind of weird experiment and like churning them out but I'm like oh shit oops maybe we shouldn't have changed the color it's a purple or whatever. Yeah. I mean, I do think, so one of the things that I've learned working with more and more companies is that more types of decisions or type two decisions than you think, the type of decision you can actually roll back and get another shot at. It's maybe, you know, we don't work with companies that are dealing with large enterprises,

typically more SMB, and so you maybe have a little bit more leverage there. But even things like pricing, features, packaging, those types of things that feel very final, you often get leveraged to keep testing. And so in general, I think testing some of those things is okay, particularly early on while you're finding the right mix of things. And so I wouldn't worry too much about burning that audience. Of course, you know, the reputation, the community, those types of things is important.

But as long as you go into experimentation with good intent and think about the end use, I think you're okay. Okay. I'm curious to dive a bit into that. You have a lot of experience with pricing experiments or pricing? Some, some experience. Yeah.

So in your experience, what's the best advice to a C or CRESA funded company or a seed fund company where like, I have a price for my product is somehow, is correlated to LTV.

I want to figure out if that's the right price or not. Like, what would you start? Yeah. Yeah, so I think we're like backing up one step and saying, are we growing, you know, virally and is basically therefore, it's all about removing friction

and price is a good way. to remove friction or lowering price? Or are we going to need to fund this through paid marketing and other things, in which case you actually need a significantly higher margin? So, like, what's the starting point? Yeah. I think is a really important piece. And then the second one is price and anything related to monetization is really tough because

it's basically a system of incentives and it will change people's behavior. And so you have to observe these things over very long periods of time to make sure you're getting the right answer. And so I'm like a big fan of running AB test for a sufficient amount of time and then flipping it to, you know, maybe 5% remaining in the, in the, you know, in the, you know, the original test for a very long term to observe the thing that you thought happened continues to happen and validating that. But I think if you start from the place of where do we want our martyrs to be and how's

that fueling our growth strategy and then thinking about long-term metrics and I use pricing to influence that. So let's say I run a subscription product and you bump the price from $10 to $15. I should hold a whole like group for long period of time on the $10 bucket. I think often that gives you a much richer kind of insight into how it changed people's behavior. Got it, got it. I see.

Cool. So when it comes to paid, how do you guys feel about paid marketing, especially in the context of like the dynamic shifting over the past five years, say? What do you think about paid marketing? I would say that the big untold story of growth is that we've shifted from from free channels to pay channels. And paid channels are pain marketing forals to some extent. But pain marketing is the one that is the most obvious one. I think the reason that happened is because the platform shifted from offering free traffic to offering pay traffic. And there is benefits with pay traffic because it's highly targeted. Like much easier to target the campaigns you're running towards specific users versus in the free channels targeting is not that easy. So I think that's really the general trend, which means to me that it's not easier. because it's equally competitive if you are a subscription service

or an e-commerce service that acquiring people through paid that's very competitive because there are lots of other companies doing the same thing going after the same customers. So you have to learn how to be data-driven, creative,

and just really treating online marketing as something that you constantly have to innovate on versus something that is just sort of like set and forget. Here's my online marketing team and then they just try to hit their targets. It's something you constantly invest in. And if you, I'm not sure if this is good advice for seeds funding companies,

but if look at the evolution of the online marketing team at Airbnb, it went from like one or two engineers to when I left, I think we were 15 or 20 engineers on online marketing. And they were building everything from attribution system to automated bidding to all these different things. And I think that general trend for online marketing is going towards more data-driven, more automation, and just less, elevating the humans to sort of like making more high-level decisions.

Absolutely. Totally agree. I mean, just to add on this, I think it's becoming more common, and there's an important place for paid marketing. It's fast to get off the ground. It's relatively easy to test. If it becomes your primary channel, it's a very hard thing to sustain because it's expensive, but also because it degrades pretty quickly, actually.

So, like, you know, if you look at the D2C companies or Blue Apron, I think, you know, they grew really quickly on the backup paid marketing, and then they realized later cohorts got more expensive. They retained less well. And so this kind of like has this compounding negative effect. And it can be a scary place to be. And so I think if you're thinking about paid marketing more as an accelerant rather than the growth strategy, it's a much healthier place to be. And so like, you know, a couple examples of places I think is used very effectively is to cede a new market you might be launching, for example, or at Thumbtack or other marketplaces very often used to help balance the marketplace because it can be much more surgical than, you know, organic or

SEO or something like that. And so, you know, we knew maybe we needed. more general contracts in New York, but not, you know, plumbers in Phoenix. And so we were willing to pay a lot for one area, not the other. And it was helping play this function. But the core of the growth was still organic and SEO, which is more sustainable over time. What do I do if I have that? So let's say I have 70% of my use acquisition coming from Instagram ads. Yeah.

Like, is that a problem for the growth team or the online marketing team? Is that a product problem? Like, where should I start if I have that situation? So I think it is primarily a product problem. If you haven't, if you have tried other things that they haven't worked, you obviously need, you typically need to do core product work to enable yourself to go into these other types of channels. I think the other thing is, these are all, like we were just talking earlier, business model

competitions where like the best companies at monetizing are going to win in paid marketing. And so if your product is better at monetizing, it allows you to then go do more of that. And so I think it's like, it's very hard to get in this place where you were just spending more and more into some of these core channels and watching that degrade. Got it. And so thinking about, yeah, what are the enablers of that? So how do you think about that when you don't necessarily have all the data? So you're talking about like, say you're entering New York City, right? And you're like, all right, we're going to do a lot of paid to enter New York City.

But you don't necessarily know how long you can maintain that. And at what rate, the ratio will shift and you start getting organic growth. You know what I'm saying? So how do you even think about that in the early days of a new market? I think it's really hard. I mean, you certainly will be spending into negative ROI to start in any of these cases. You hopefully have built a model over time as you launch markets where you can understand what that curve looks like and figure out where you are on that maturation curve. But I think understanding the shape of that curve is the most important thing. You just have to test your way into it for the first few.

Yeah. Okay. So, Dan, one of the kind of experiences that I've seen now becoming a pattern is I worked with this YC company. They get funded. They get C.RSA funding. And then maybe even B funding. And then somewhere in that line, they get a board member. And that board member said, oh, you need a VP of marketing. I need a head of product marketing.

And you already have maybe a growth person or online marketing person. And now you have these like multiple roles sort of like going after the same thing. And that time you can create friction. So experience, I'm curious to learn what you have experience here. And so like what kind of advice do you give founders? Yeah, absolutely. I mean, I think, so first of all, I think most companies can go longer without a VP of marketing than they think they can as a general rule of thumb. I think, you know, one of the problems we have in the market is how many really good experienced team builders who also know growth marketing and fit this VP marketing profile are there.

There's like there's not that many of them. And so, like, hiring the perfect person for that is very tough. But if you kind of, like, disaggregate the things that that person is going to be asked to do, it's growth marketing, which often should be closer to product, actually, or more like a real growth effort. Messaging or, like, product marketing, those kinds of things. That can often be product marketing, and it may live in product or design or something like that. And then sometimes PR is also put into this, which can also be a distinct thing. And so I think like, are you just solving, do you want all these things and you're just like trying to find the person can do all those? Or is there a way to solve your individual challenges with a, with individual people that may be part of existing teams?

I think one of the symptoms of bad organizational friction is when you have multiple teams working on the same metric without joint accountability. It's like very classically, a retention metric will get split between in product growth stuff and a marketing team owning email and push notifications. And it's really hard if they, you, you get a. a disjointed consumer experience because two teams are thinking about the same problem, and it's much better if you can combine that into one. And adding somebody like a VP marketing in the mix can make that an even harder problem because both these leaders think that they own that. So if you make all these decisions, like how would you organize that? You have email, push on vacation, like the classical sort of CRM marketing stuff that often comes out in a box from some other

company. And then you have the retention product team. Like if you sort of like make these decisions, like what would you decide? So I think it depends a little bit on, um, the company's DNA. So if they are at a place where they really understand analytical experimentation-based approaches, then maybe it's easier to just build it as part of the product team. If you need to prove that this works and evangelize it, you might want a standalone team where you go get a growth person. So I think that's probably like the right starting point. I also think different areas of the funnel lend themselves to different type of approaches. So acquisition is a little bit easier to disaggregate because they're unique channels where, you know,

some are more marketing heavy like paid acquisition, which becomes very engineering heavy over time. Some start very engineering and product heavy from the start conversion and retention, those types of things. And so I think like thinking about the type of problem you're trying to solve. But specifically for this retention question, I think it is typically healthier for that all to be within product pretty early on. Do you think that every single person that you mentioned now should have a way to measure their ability to sort of drive incremental growth for the company, like whether you're in brand marketing or PR or online marketing or products. Should all of them sort of share this incrementality metric, or are they kind of going after

slightly different things? Slightly different things. So I think the growth stuff, the growth marketing stuff, certainly should be all kind of contributing to this North Star metric in a very clean kind of tree. I think where you have a challenge when you have these like very hard to measure outside inputs like PR and brand and those types of things. I think brand is this like topic that we get all spun up on, but really like the output of brand, like trust and reputation and things you care about, that is obviously very important. But what you can do with brand marketing is like actually a small piece of that. It's like the awareness piece.

It's like maybe wrapping in like a hook that people can remember it by. That's not brand. that's a way to accentuate brand. And so actually, like, if you have a great product that people love, brand is just accumulated customer goodwill. So maybe actually the best way to grow your brand is just to get more people to your product. And that's a growth team.

Yeah. And so, like, I think very often we'll talk to a team that they have, like, you know, they're kind of paid marketing stuff going over here that's very performance focus. And they, for just some reason, have this, like, other budget over here that doesn't have any metrics tied to it and they're willing to just spend on, quote-unquote, brand. And very often that budget is wasted.

And so I'm much more kind of amenable to as much as much about kind of measurable core growth activities that ladder up to a metric. Is it important for a startup, like even in the later stages to measure brand awareness and brand consideration like the traditional brand marketing metrics? Like is that useful? The sentiment is very important. How many people, what your MPS is, how many people would be disappointed if you went away, those kinds of things are a really good signal around fit. but raw awareness and benchmarking against competitors and those types of things, I have rarely seen that become actionable in a product, maybe with the exception of knowing when you've kind of tapped out a core market, but that's a late stage problem.

So related to this, Tony asks about Airbnb. So you could talk about Airbnb in the context of, wow, they have such a great brand, but on the other hand, they have a great product. So Tony asks, how can Airbnb a startup like Airbnb grow so quickly? Was it the need of the customers? Was it marketing strategies? Was it the idea of just travel in general and the dream of vacations? Like, what do you think?

I think that what may be unique on the guest side. So there's two products, the host product and the guest products. On the guest side, it was the viral nature of this unique experience. So if you go to New York and you stayed in an apartment that was in a local neighborhood and you just had a very unique experience that you never had before, it is fundamentally something you talk about when you come home. And we kind of studied this. We studied when do people talk about travel?

Well, before you go about to go to travel, you ask your friends where to go. When you're traveling, you post lots of photos and stuff online. It's actually one of the prime things we do when we travel is to share information to our friends about it. And then when you come back and you tell your friends how great it was. So this is natural things that people talk about. And similarly to how Uber and Lyft is sort of viral in their nature because it's a new experience. And it's something that we often do together with friends. So I think that was the primary driver of this new, really great product.

In terms of tactically what we did, like I've seen graphs on the incrementality on online marketing, the oldest of Airbnb, and it was very important. Like, have we not done online marketing early on, we were certainly not been as big as we are today. So that was critical. That was sort of pretty proven stuff. It was Google, people Googling for things that relate to Airbnb or that relate to staying in homes or apartments. And we just bought those keywords. and that helped us drive growth. Like Dan said, that was a very good way to be strategic about where we wanted to grow.

So, like, maybe it wasn't super useful to buy these keywords in San Francisco, but if you're in Europe or in Asia or in Russia or somewhere, it certainly was very important to kickstart those markets. And then after that, it was the word of mouth that also drove most of it. But if you look at the composition of growth of Airbnb, word of mouth is by far the biggest driver. So I think it was like way over 50% on the guest side and way, over like 70% on the host side

of people that heard about me for the first time through a friend. After that, it was online marketing referrals and SEO. Those are the three sort of like teams and channels that we had and remains very important all those three channels.

And at the scale it got to the point for like, yeah, every single small tenth of a percent improvement matters a lot. So that's sort of like when you get to that scale, it's not like you just spin up a new channel and now you have lots of new growth

in that channel. It doesn't really work That way, there's this pretty expected ways that people will discover a product like Airbnb, and we just made sure we optimize them like crazy. Yeah. Are there any examples of a already big company doing something, and it's like a step function improvement in retention or conversion? Yeah, and that's actually the example I give on the Facebook graph on my YouTube video from startup school.

There were more product changes than there were anything else. But when Facebook figured out to translate international license site was very important for the growth. Obviously, when they grew out of made it available outside of just a university, this is a really big one. But then mobile was a huge one. So I don't know if we've seen a platform shift like that in the last five or seven years. But when we saw mobile happening, if you were a desktop app, then you were only speaking to a very small audience compared to what is going to happen. So rearranging Facebook for mobile, if you look at both Instagram and WhatsApp are mobile products. So that was a really big step function for them.

And the last thing was making Facebook available in sort of like very data constrained and hardware constrained markets. So making like Messenger Lite and sort of like even acquiring WhatsApp and making Facebook available in places where like the native Facebook app that we used to here wasn't actually a great user experience. Yeah, it was too heavy. Yeah. And I think those are all product changes, but they are step functions for a company like that.

So another international question, Michael Savage, asks, it would be great to discuss growth into new regions, for example, Africa and UAE. What would their approach be? How does it differ from region to region culture to culture? We, when we grew Airbnb, we actually divided international growth into two different buckets. One, what we call sort of like product limitations and one that we call sort of like cultural impacts. I don't know. There's not the right words, but effectively trying to say, everyone said, oh, people in Germany is so different. People in France are so different. People in Japan are so different. And that is in the hypothesis, often coming from people who live in those countries, saying that we are different. So therefore, we need a different experience. And it's a very common thing that's hard to prove, which is why everyone, a lot of people share that opinion. Now, we need to prove those things to be able to actually build a team around, making the product different by cultures. In my experience, we basically started that problem. by asking around and we didn't find a lot of massive cultural differences.

Like the stack was basically mobile phones, iOS and Android, desktop, Chrome, Facebook, Google. This is true for most markets in most countries. Like the exceptions are China, South Korea, Russia, maybe a handful of other countries. Those are the exceptions, but everyone else kind of like the stack that I described is sort of how people use your product. So within that, it was very hard for us to prove material changes and people culturally use products. the other thing that on the product side,

for example, if you don't have the stack, then that's a difference for sure. If you have slow internet or slow phones or any of those examples or like that will materially impact sort of like how you use your product. But the thing about the top of the funnel in some of these countries is, for example,

Google is not available in the sense that like it's not a search engine in Russia or in Korea or in China. You have to do something else there. In the Middle East, and many of the more emerging markets, the ads are actually quite a good arbitrage for some of these countries, companies, because there are not a lot of premium services to charge for things. And a lot of the brands have actually not gone onto these platforms yet, which means there's a good arbitrage moment for startups. Ads anywhere? Ads on Facebook or ads on Instagram or ads on Google.

Okay. Because the prices are so low and there aren't like a lot of well-developed companies. that are actually sort of like able to take advantage of it. And there's just as much usage on these platforms in these countries that are here, if not more. Next question. Justin Lerosa asks, what are some of the most common drivers of viral growth? So I would say my early part of my experience on my career was a lot working on messaging and growing services like Voxer through viral growth. It changed a lot.

So the viral growth dependent on certain platforms, typically platforms that have some sort of like list of contacts and a list of friends that you grew through. Obviously, Facebook is a different example of that. All of these platforms have changed in different ways and we're less susceptible to that today. There are pockets of interest, I think. There's like the viral growth inside corporations. Like that is a really interesting one. I see a lot of companies sort of you license that in a different way, whether that is through your, let's say there's a vice company growing through teachers nailed this really well there's

another one who's growing through sort of like the Google apps and sort of like using the social proof of your coworkers using products that's a really strong one and I think you see this more new niche variations of viral growth then you see the general so like in environmental growth it's just much more difficult these days to do it and the channels aren't generally available in the same way. So the thing to see still seems to be working pretty well is referrals, like incentivized viral growth. You just have to make sure you can measure the incrementality of that because you are giving away money for new users. But I often see why the companies are like taking some of their referrals advice from Airbnb and then coming back and say, actually, that was really a meaningful for us and we're growing faster.

So I have seen that continue to work versus the general viral channels have been in many cases saturated. and not a good way for startups to grow anymore. Yeah, viral is much harder. I totally agree. It's like in much more kind of like closed networks rather than open networks. The other thing is referrals are potentially more like paid marketing than they are like forality in some ways. And so thinking about it in that way and payback and the other things is really important.

And so when we talk about the growth of referrals, we're talking about another form of growth of paid marketing. It's just a different end person who's getting paid. But yeah, I think that it's until we see a big platform shift, reality is harder and harder. What do you think about that in the context of a bootstrapped company? How should they think about growth in that way? Well, one advantage of referrals is you have control over the levers such that you can make it ROI positive or you can make it work for you. So I think where companies get over their skis is when they're not thoughtful about payback on these things.

I just think thinking about it as free growth is not kind of the right the right way to approach it. Okay. Yeah. AWS is so cheap. Whatever. Cool. Cool. So after you left Thumbtack, you now start your own growth agency,

basis one. Sort of like, what is the, if I'm a series B founder out there looking to get help with these things, sort of like, should I go in and hire growth agency? So like, why should I do that versus build a own team?

Just tell a little bit about that. So the first answer is you should not hire consultants in many cases. I think for almost all things related to growth, paid marketing, not only do you want to build that muscle yourself, but it's like the front line. You're dealing with your customers and the feedback is so rich that if that person is not sitting next to a somebody else on your team, you're missing all of that learning. And so maybe an agency or a consultant can help you get off the ground, give you best practice. This is particularly true if you were in like a well-known space like e-commerce where there

are frameworks you can apply. But typically your aspiration should be to have a smart in-house team as quickly as possible. The way that we work with companies is somewhat tangential to this, which is focusing on really acute high leverage problems that we have leverage on because we've seen them before. So why are customers churning? How do we use monetization to drive growth? And we're not trying to replace the team, but rather unblock them such that they can execute. really quickly and deliver them some insights that would take longer to get otherwise. But in most cases, particularly when it's more operational, I would say build it yourself. When are you done? So like if you work for the company, you're like, my work is down here. Like how do you know when

you're like, okay, I've completed my mission here? I think it's when the mental model is internalized, right? When they're when the conversation becomes really seamless. Like that's the right place where they're clearly off and running with it. And there are some insight. And there are some insights. about how the product grows, who the customer is, what they need, that is being internalized and acted upon, that we feel really good that they're going to take it from there. How long is typical an engagement for you guys? We typically start around three months. Sometimes they go longer than that, but sometimes that's all you need to actually get up

the curve and understand some of these things. And like this is a never-ending problem. Things like monetization growth, you will always be optimizing. But at least for that kickstart or what are the spark or where are the areas to start kind of what are the deep wells to start mining, that piece can be relatively quick. And why did you start consultancy versus just sort of like joining another company and work and growth another company? I tried to join another company actually.

And I was working with founders and CEOs and like the journey at Thumbtack from like 30 to 500 was so fun and I was going to go do that again. But I just started to see a consistency of the type of questions I was getting. And there weren't really people on the other side that were able to effectively answer them. I think, you know, as an independent advisor, it was kind of hard to provide the help that they needed. but when we started pairing it to analytics and user research and the ability to really wrestle a problem to the ground, that's when it became really powerful.

So, I mean, the short answer is we kind of like grew into it organically and it's just really fun to get to work with a lot of these founders. So we've stuck with it. Cool. So last question, which was actually submitted by Gustav, as two people who both advise and work and growth, how do you think about growth in the context of improving humanity, given that a lot of these products have filter bubbles, like can create addictive responses.

And on the other hand, like you're trying to make the world a better place. So how do you balance that? Yeah. So I'm optimistic here. I think there are maybe two reasons for that, one of which I think is more valid. But I think one is companies like Facebook and others maybe got some flak because they were optimizing for these short-term metrics like click-through rate and time on site and those types of things. that over time has become more sophisticated and measure longer-term metrics, you can optimize more, you know, in keeping with both the interests of the company and the consumer.

And so that's one angle of it. I think, like, the one that I give more credence to is that, like, this stuff, these cat's out of the back, right? We're like, we're not going back to a world where we don't have these addictive products competing for our attention, but we can weaponize these same tools we have learned for good things. And so, like, other products are going to come in. You know, you see this happening with meditation apps and exercise apps and healthy eating apps. They're using all the same growth tactics to turn you into a better person. And I'd like to see more and more of that.

And so I think, like, the way is not to try to, like, put the cat back in the bag, but just to fight back with the channels, you know, the tactics we've already built. Yeah, I asked this question. I thought about a lot in the last year. I think as a growth team, you should have principles. You should be like, try to figure out. These are the principles that I want to follow. Some of that means we're not going to have any dark patterns in our app.

And then the most important thing is to ask the question, why? Like if something is really working, why is it working? Like, why is it that this is now sort of like changing the behavior of my users? And the more you understand that, I think, the safer, sort of like, the more safer place you are in terms of sort of like making good decision for the company. And then I would say much of this that we're talking about is actually tied to, engagement-driven product. So product like you mentioned, fighting for our attention.

That's sort of like where much of this have happened. And I think there is a fundamental problem sort of like with the driving the attention and then sort of like having advertising as a monetization engine. If you change that and you say, actually I'm the customer,

I'm paying for the product, then you get different outputs because now you're optimizing for me as a customer. You're not optimizing for someone else. I think there's like, there are nuances here. And I think these are probably the most challenging questions to answer for companies fighting for attention, especially if you're free product fighting for attention versus for many other products like I think it's actually

massive beneficial to them to do a lot more of this. That's great. All right. Thanks for coming in. Thank you so much. Thanks, Sam. Thank you. All right. Thanks for listening. So as always, you can find the transcript and the video at blog.combinator.com. And if you have a second, it would be awesome to give us a rating and review wherever you find your podcast. See you next time.