by @abhia90 // newsletter // youtube

https://youtu.be/6lY9CYIY4pQ

YC Partner and growth expert Gustaf Alstromer talks about how to measure product market fit, how to decide on a growth channel, metrics that lie about PMF and other mechanics of growth for startups.

Summary:

• Focus first on PMF and retention. Remember, you NEED to have these 2 things before you focus on Growth
• "If you build it they WON'T come"— so, It's all up to you (see "Do things that don't scale" by Paul Graham)
• Build a culture of experimentation

Product Market Fit

• How to use data to understand if you've made something people want?

  • 2 ways:

    1. Identify the metric that represents the value your users from your product

    2. Measure the repeat usage of that metric

    

Retention

• Repeat usage is the best way to see if somebody is liking your product

Growth channels & tactics

• This applies only IF you have PMF
• 2 ways to grow at scale:

  1. Product Growth/Conversion rate optimization

     • Your product is a funnel/growth loop (ex: Every page on your website is a funnel; your job is to figure out: 1) how many ppl make it that far (ie to the end), 2) why are they dropping off, and 3) what can I do to increase the number)
     • Every step in the funnel has a drop-off for some reason
       • Ex: The content on the page is not suited for them (ex: page suited for Millennials vs Baby boomers)
     • Areas for Optimization
       • Internationalization
       • Authentication (ex: funnel that ppl go into after they sign up for your website/newsletter)
       • Onboarding
       • Purchase conversion

  2. Growth Channels (platforms in the world that ppl tend to discover products on) — Ex: Google— using it to find insurance, a doctor, etc), FB, Instagram

     

     Most companies grow huge using only 1 or 2 of these channels —> so you should just choose one of them and get really good at it (b/c each of these channels takes a long time to set up and get good at)

     • Referrals and Virality

       • ie Word of mouth

       • Referral = a financial incentive to tell your friends about the product

         

         AirBNB referral funnel

         

         How the referral email is actually composed— note how each portion is optimized

     • Paid Growth

       • DO NOT do this if you DON'T have revenue!

         

         Your revenue has to be higher than the CAC

     • SEO

       • You're eventually going to have to be as good as Pinterest or TripAdvisor (who are optimizing for millions of keywords)

       • Its a Zero-Sum game (b/c you're competing against others)

       • You obviously have an advantage if you're working with new keywords (ex: ASMR)

         

         Off-page optimization (aka Domain Authority)= how valuable does Google think your website is— the more you're linked to big name websites or articles, etc, the more valuable and higher ranked your website is

     • A/B Testing

       • Good, but focus on this later on

         

         If you do decide to proceed though...look up a/b testing calculator— will tell you if a/b testing is worth doing

       • Helps you make decisions (b/c product decisions are really hard)

       • Experiment review