Dan is an investor a serial entrepreneur, and the founder of Clarity.fm, a startup that allows you to connect with experts so that you can make faster and better decisions to grow your business. Dan is an expert on product growth hacking.
→ His background in Clarity
→ Clarity aims to help businesses grow and has a network of 10,000 experts
→ Clarity is a company that offers expert advice to businesses via phone calls
→ The service is targeted towards entrepreneurs
→ Clarity is not a mentorship service, but rather a way to provide expert advice
→ Good advice and the right idea at the right time can lead to growth opportunities for businesses
→ Clarity used certain “growth hacks” to attract the right type of experts to the platform
→ His expertise in product growth hacking
→ How to get people to pay money to make a phone call on the platform
→ The importance of building a product that allows the suppliers (experts) to generate demand for themselves
→ And a whole lot more
Bronson: Welcome to another episode of Growth Hacker TV. I’m Bronson Taylor and today I have Dan Martel with us. Dan, thanks for coming on the program.
Dan: Thanks for having me.
Bronson: Bronson Absolutely. Now then you really don’t need much of an introduction for the people that hang around growth hacking circles. But just in case they don’t know who you are, you’re an investor. You’re an entrepreneur. And you’re probably the biggest startup celebrity to come out of Canada. But pretty good. Well, it’s that.
Dan: Celebrity is an interesting word.
Bronson: Well, I would say startup celebrity. You know, we have our own little sub community, you know. But let’s talk about your current startup clarity. Clarity has actually been mentioned a number of times on this program. People come on to talk about how they use clarity and how it helped their startup and how it helped them grow. So tell us, what is clarity?
Dan: So clarity is the easiest way to schedule, find and pay for expert advice over the phone to grow your business. So we have experts like Chris Brogan in the social media space. Eric Recently in startups in in the top growth hackers in the world, we probably have about 80% of them on clarity. So, you know, we’ve got 10,000 experts on clarity and 13,000 calls across 50 countries. So and it’s been around actually a year may or so, not even a year yet. So that’s it’s just a marketplace for advice.
Bronson: Yeah. Now, you mentioned a guy like Eric Reese. So you’re saying a nobody like me can call up arteries for the right number.
Dan: You can schedule a call with Eric and he’ll take it. Absolutely. People do.
Bronson: And that’s just one of 10,000 people, high quality people that I can do that with. Yeah. So obviously the benefit of that is amazing. You know, anybody can see the win there. What made you want to start clarity? I’m assuming it was some personal kind of thing going on there that you knew this was a need?
Dan: Yeah. I mean, there was two things that came together. One, I made a commitment to only work on another idea. If I if I knew it had the potential to impact a billion people within a decade in a positive way. And then second, I wanted to solve something, a problem that was really meaningful. And, you know, when I started thinking about growing up, you know, being an 18 year old entrepreneur, growing up in the middle of nowhere in eastern Canada, I just thought, you know, the most powerful thing I’ve learned over managerial career was how to seek out and get great advice from people who’ve been there before. And for those who may not have the ability to track or didn’t grow up in the right place, or maybe even just don’t have the personality to to kind of reach out and act, I thought, how can I make that process accessible and open to anybody, regardless of where you live or what your social standings are? And that was my vision for clarity.
Bronson: You know, that’s perfect. I can relate. I grew up in Kentucky, so middle of nowhere there was no community talking about tech and startup stuff. So advice is well sought after. You know, when I look at clarity, it seems like it’s almost doing what Angel is did for investing. It’s doing for mentorship. Do you think that’s accurate? It’s kind of democratizing it, make it accessible.
Dan: Yeah. I mean, we I feel like Angels is a is an amazing product and I aspire to have. There’s a lot of things they do really well, a lot of the social filtering. And, you know, they allow you to build profiles. You know, we don’t we don’t use the word mentoring because I think mentoring is definitely a personal thing, one on one. You know, charging somebody for that time is is not a good fit for what clarity’s doing. What we’re trying to do is help people make better decisions. So, you know, if you’re tasked to do something for the first time ever or from your boss or whoever, I mean, startups, it’s just very natural. Like every time you get up to do something, you know, that day, it’s probably the first time you’ve ever done it. Yeah. So we just want to help you make better decisions by connecting people who’ve been there before. So I definitely, you know, think that we’re filling that same space. But we’re, you know, the products grow now. We’re, we’re really half startup people. And then the other half, you know, real estate investors, you know, other types of industries like restaurants, etc., that are using the product. So we’re really trying to connect with the 400 million entrepreneurs around the world.
Bronson: Yeah, you mentioned a couple times there the goal to make right decisions. You know, in startup circles, there’s so much emphasis on execution and there should be. I mean, without execution, you don’t get anything done. It doesn’t matter. But does there need to be some emphasis on new ideas? Good advice. I mean, I guess what I’m getting at is can the right idea at the right time really lead to growth opportunities in your mind?
Dan: I think that there are opportunities, you know, certain business ideas that given, you know, the landscape of the Internet or whatever, you know, are going to do. Well, I mean, you know, the best advice ever got from one of my advisors was, you know, if you’re going to go into an industry, make sure you pick one that’s growing. And I mean, if you just do that, if you if you’re like nobody in 27, 28 starting a social media product, you’re going to grow ten, 20% year over year. Just as that’s what the market was doing. Yeah. So there’s this, you know, saying says high tides rise all boats. So, you know, trying to fight against that trend and getting into something like publishing would probably not be a great. But yeah, I think I think timing definitely plays a big part. You could be too early or you can be too late. Um, and if the markets are growing, you’re going to inevitably grow with them.
Bronson: Yeah. I mean, you mentioned earlier you have 10,000 experts on clarity right now. So let’s talk about the growth of clarity a little bit. How do you get to 10,000 experts? Because people are watching this. They’re trying to go grow a marketplace as well, maybe. How did you go from 1 to 10 to 1000 to 10000? What does that look like?
Dan: Yeah, I mean, there’s. And so we actually do have some some growth hacks that we’ve applied that I can’t talk about, because if I did, then it wouldn’t be very good if everybody was getting in front of those users. But I guess the framework I would suggest to the listeners is you want to figure out where are your customers. So in a marketplace you have supply and demand, right? So that’s true for any marketplace. And you got to treat both of them different. They both have to get to product market fit. So the experts have needs. The members that are looking for advice have needs. And they’re and sometimes are totally different. But obviously you got to get them together on the expert side, you know, you ask what makes a great expert? So somebody who’s been there before, somebody that likes to give advice, somebody that’s already out there sharing and communicating. So then you ask yourself, okay, well, where does that customer type exist? Where do they where do they hang out? What are some of the characteristics? One of the artifacts that they generate and just by saying what I just said, like, you know, other types of people that like to share, they like to give advice, etc., etc.. I mean, you can just imagine the different social networks that allow you to do that. So how are you going to source those people will go find them, go, go, go. Create a message that resonates and insert yourself into that conversation. And, you know, that’s what we did. We essentially said, who who has access to these types of people and how can we pull them off of those networks and the clarity. Yeah.
Bronson: Now what about the other side of the market? How are you acquiring the users? Because almost I think you can appeal to the ego of the experts and you can get people on board there. What do you do to get people to pay money to make a phone call that maybe aren’t used to doing something like that?
Dan: Yeah, so so the supply side is always the harder or the demand side is the hardest part. So a lot of people, you know, they kind of been like, hey, we have, you know, a thousand listings. And I’m like, that’s actually not interesting is how do you get everybody to activate? So in the early days of clarity, we actually like manually onboarded these experts and then worked with them to figure out how can we allow them to promote themselves to the demand side. So, so that was a big one. So, so how do you build a product that allows your suppliers to actually generate demand on their own? Because if you have to do it all for them, then the economics actually don’t work very well. And you got to do paid marketing or other types of demand. Generation economics don’t work, so you have to figure out how do you allow them to actually amplify their listing so that they can get so that they can introduce the product to other people? Well, honestly, all we’ve done on the supply side is just made a product that works like it sounds crazy, but I think a lot of a lot of marketplaces, they don’t work very well. Like like you said, like you’re telling me I can talk to Eric Reece. Yes. The part that’s that’s funny is that most people don’t. So what I’m trying to do is just how do you make a product that’s more approachable? How do you introduce it to people in a way that doesn’t seem scary? You know, I mean, everything from the request flow to scheduling, we’ve we’ve revamped it. It used to be like you posted a request and the person would call you whenever they were free. Well, that wasn’t very good. It didn’t feel good. And we got into scheduling and we’re doing a bunch of stuff around it so that we can allow people to experience the product with a very low commitment. And and we have not done anything on the growth hacking for the demand side. We’ve just really focused on a great expert experience, make sure that they get activated, onboarded, and then figure out how can we make the product not feel scary for the from the demand side.
Bronson: Yeah, I can attest that the part has a great feel to it. I mean, it’s almost it’s interesting how the design feels it. It feels like a mobile app on a big screen in a good way. Like it’s phenomenal and intuitive, you know.
Dan: So, so some people think that that’s really clever. And I well, I’ll tell you the secret behind that it was lack of of so we got rejected from Apple on the app store. We were going to launch mobile first and we’re launching in four days and we said, what can we do? And we essentially just unbundled the iOS app with the front end and just deployed it like that. And it actually for the last year it’s worked really well. So it wasn’t intentional. And we’re actually working on a new version of the product that’s going to have a desktop view and a mobile view and a tablet view. So thanks for the feedback. Like you like it cause a lot of people do, but it’s definitely not. I wouldn’t recommend it. And it’s funny because I’ve seen people copy us not knowing why we did that. I think so. Yeah, it’s it’s not the way to build an app. It’s confused given the amount of emails I get to support saying I think I’m stuck on your mobile version of your app is not worth the headaches.
Bronson: That’s great. And you mentioned earlier you wanted to get involved. You weren’t going to get involved in startup unless you can have a billion people using it and ten years. And you think clarity has the potential? You know, I know, you know, entrepreneurs have to talk like that. You know, they have to, you know, get the team riled up. They have to, you know, make a buzz in the marketplace. Do you really think a billion people could use clarity? And if so, what do you have to do to get there? Because you’re going to have to do some big plays to kind of make that happen.
Dan: Yes, I think that you can say something a magnitude smaller and still get the team excited. So the reason why I chose a billion was and again, it’s not a billion people using it is a positive impact on a billion people.
Bronson: A company of a number of people being affected by a phone call.
Dan: Exactly. So. So with clarity, I mean, the economics and the math is, you know, if we can get 10 million entrepreneurs a year talking to each other or getting advice from other really smart people, and they go off and build companies, that’s a billion people. They create services that, you know, entrepreneurs in actions every day make the world a better place for all of us. Enjoy. That is the definition of entrepreneurship. They don’t exist if they don’t create and sell or solve a problem. And by solving problems, you make the world better for everybody else. So that’s that’s our mission. And 100% we think we can get there. I mean, a decades, a long time. I think a lot of people overestimate where they can get done in a year and underestimate what they can get done in ten. And we’re just starting and we’re only a year in. And there’s compounding effects as you go along. You know, the big trends that we are riding is the mobile. So making sure, you know, that we’re on every device and we’re writing the mobile trend. I think Instagram is a great example of a company that, you know, even though their product was great, they rode the iOS growth curve. Mm hmm. And we’re going to do the same thing. And then social media and identity and reputation online is they’re all they’re all kind of trending growth factors that we’re we’re taking advantage of right now. Collaborative consumption is another kind of theme right now that seems to be getting a lot of steam that we’re part of. So, yeah, I don’t see any issues. I mean, what are the things we can have to do? Just keep building a product that’s more engaging and build features that allow our users to share their experience with their friends.
Bronson: Yeah, you said something in the middle there that I want you to unpack for us, because I think it’s such good advice for growing a startup. You overestimate what you can get done in a year and underestimate what you can get done in ten years. Go into that a little bit deeper. What do you mean by that? How do the overestimate had the underestimate and what does that have to do with growth?
Dan: Yeah. Well, I mean, the easiest way to explain it is I’m now on my third company. So I started coming called Sphere Technologies over four years, built it grew to 30 people, got acquired in 2008, then moved to San Cisco in oh nine, started Flow Town two years later, you know, raised capital, grew that, sold out, run in October of 2011. And I’ve been on the clarity now for a little so it’s been live a little under a year but started January 2012. And you know we’ve raised 1.6 million. Our growth is doing really well and that’s all been done within nine years. So I started Spirit when I was 24. I’m 33 now. So, you know, that’s a I mean, that’s a lot in nine years, right? So I mean, I think a lot of people if you just focused on one, right, I just plan on focusing on clarity for the next decade. Plus, people don’t realize, like there’s this compounding effects. If you stick with one idea and really push it, the amazing expertize that you build in the velocity and the network and the relationships and I think most people don’t plan far out enough. And it’s just a really healthy thing to do. Yeah.
Bronson: Yeah. A long view of watching it done is really a competitive advantage because you don’t get depressed in year one and you realize that, you know, the compounding effects you talked about, like a lot can happen in year three and four and five and six if you just don’t get down in the dumps in year one, you got to push through.
Dan: And I’ll say that it’s usually year three when things actually start working. Most people don’t realize this, but if you ask any business owner, like, When did things start feeling scary? It’s usually year three and four where receivables started, you know what I mean? Growth started happening, organic word of mouth, all that energy and marketing and you put out front started paying off. So, you know, if you just stick it out to year three or four, I think you’ll you’ll be happy. And then the rest of it is just growth.
Bronson: Yeah, that resonates with me. I started my company about three or four years ago and I feel like this is the first time I have any clue what I’m doing. So it makes a lot of sense. Now throughout your career, you’ve kind of gained a reputation for being a great marketer. You know, with Flow Town, the last one, it was a marketing play and you grew that substantially, sold it and with clarity. I mean, it’s got a lot of buzz, it’s got a lot of steam. You know, you’re marketing that very well. So let me ask you kind of high level, what do you know about startup growth that others just neglect or myths? You know, what’s one of those things that you just get that allows you to kind of do this repetitively?
Dan: You know, the one thing I think that I spend a lot more time than most people on is really perfecting the product messaging. So so what does clarity do? I mean, I you know, everybody on my team will be able to tell you that. We help you make faster decisions. We build Schedule A for expert advice over the phone. Grow your business like I think a lot of start ups actually don’t know how to describe what they do and they do it almost as a FOMO. So fear of missing out. Right. I invest in a company that’s amazing company, amazing product. They just raise a bunch of money on our and the entrepreneur. And he doesn’t want to say this one thing because they do three. And I’m like, I mean, you can’t pick two at most, but three and it doesn’t it doesn’t feel good. And and internally he knows it. Right. Like I said, let’s play this role playing game. Like what if you’re giving advice to somebody in a similar situation as you, what would you say to them? And he says it. And then I go. Exactly. So I think that I just spend a lot of time on positioning and messaging. And and the thing that happens is when you really get clear about what you do and what you don’t do, then the market knows how to share that message. And that’s where growth happens. I think, you know, a lot of people think growth is marketing tactics and I think growth is is growth. Hacking is a product thing. It’s not a marketing thing. Right? It’s like I spent most of my time on product because I don’t want to spend anything on paid channels because I need to understand that the product itself will work first. And step one is what do you do? And then want people to get to that moment of gratification. Like if I say it helps you get on a phone call, if you don’t get on a phone call, then I fail, right? And like everything I do is trying to get you to that point where you feel the product working and then after that you try to do retention, engagement stuff. But most people don’t really say, okay, here’s what we do for our customers. Let’s put that on the home page and let’s make sure everything after that gets them to feel that as soon as possible. I mean, just think about like compound interest, right? If if you sign up for a product and they say they solve this problem, but you don’t feel that until two weeks later, if all the company did was figured out how to introduce that and make you feel that within a week, within a day, within hours of signing up, they’re going to have compound growth just by by fixing that. And it has nothing to do with clever marketing or social sharing or anything else. It’s just making sure that what you say your product does, you can deliver on the promise possible.
Bronson: Yeah. Not like what you just did there, because we’ve had people on a show before talk about, you know, copywriting and communicating the message positioning, kind of the medium of your idea that’s going to spread. But no one’s then connect to the dot into the product and saying how fast into the product can we make them know that that tagline is true? And how often can we make it true to get that compounding interest? So I think that’s the new insight that I’ve never heard. And, you know, it helps me like I’ve never really thought about it. How fast can I make my promise true in the product? So that’s great. I love that.
Dan: City. It’s compound interest.
Bronson: Absolutely. Let me ask you this. Another kind of high level question. As a marketer, you know, how much of a star of growth is strategy and product, as you say, and how much of it is circumstance? Because before you mentioned, you know, when the tide rises, all the boats rise, that kind of thing. How much is it? I mean, can you take a great product with a bad marketer and when can you take a great marketer with a bad product and win? I mean, how does that work?
Dan: Well, so I mean, that’s when you ask that question, it’s under the assumption that the product doesn’t change. Right. And I don’t think that any entrepreneur is going to sit here and tell you that their ideas never change. It’s changes every day. It’s not, you know, every hour you learn something new. So to me, it’s can you take, you know, like can you take an idea and iterate around it to make it good? Of course. And I think what I’ve learned is I actually have no clue how I’m going to get to 10 million entrepreneurs using Clare every day. All I believe in and I have 100% faith in is the process that’s getting me the success I’ve had in the past. It continues to get me. That’s all I need to believe is that I will learn faster than any other competitor or any other opportunity in the market and I will win. So what are things you can do to learn faster? How can you instrument the product so that you learn faster? How can you introduce the customer to the benefit faster? All those things are really the, you know, the question of can you make a bad product? Great, of course. But you just got to be willing to change because there’s a there’s a reason why it’s not great. And if it’s not great, you’re probably not solving a problem the customer has and you’ve got to pivot. So your messaging is off. You can fix that. If the product doesn’t deliver on the benefit, you promise on the home page, fix that. If it doesn’t retain people, you know, you just keep tweaking and fixing and iterating. But you’ve got to make sure your instrument and you understand where the funnels broken or where the engagements broken. And you know, like we’ve gotten to the point now where we actually survey in the product, ask our users what information is missing for you to make a better decision on this page. And they tell us. So we get 500 responses. We look at the data, they tell us what they need, we add it so we don’t even have to be that clever any more. In regards to how do we optimize the product, we’ve just gotten clever about the process that we use to learn.
Bronson: Yeah. And when you talk about a. Process. You exuded confidence when you say how we’re going to get to 10 million, you know, every week or every day or every month, whatever it was. And you say, I don’t know, but I know the process works. I know it’s going to work. I know I’m going to make it happen. So let me ask you about this. You know, looking at your history, kind of when you were younger, you went through a considerable amount as a young man. You overcame a lot as a young man. And it really showed a lot of grit, not just to survive what you went through, but to really thrive now in your thirties, being the guy you are. How much is Grit a part of growing a startup? Because when you say, I don’t know how we get to 10 million a month, but we will. I mean, that’s grit. That’s something a lot people can’t say and actually mean it. But I actually think you mean it when you say it. How important is great to growing the startup?
Dan: I mean, the the how important is having faith when nothing else, no other indication tells you that you should it’s it’s it is what being an entrepreneur is about. But I think what’s helps over the years and I learned at a very young age how to believe in a process or believe in something, that you just have faith and then you get these little moments of reassurance and then you’re like, wow, okay, that’s that’s working. I’m going to keep doing it. You know? And I think the best way to Fast-Track that as an entrepreneur is spend time with other successful entrepreneurs. You will learn in those hour lunch sessions or coffee meetings that they are not that smart. They’re not Einstein, they’re not geniuses. I am not, you know, brilliant. I just surround myself with smart people. I ask really good questions. I take action. I don’t think about it. And I realize that two times out of three I’m going to be wrong, but that one time is going to be so good that it’s going to make up for the other two. And I just got to get there faster. And and that is that is the thing is that we’re, you know, we need to have confidence for our team, but it’s based on a reality that other people have the same uncertainty and doubt. And that’s okay. Those are healthy things to have. You don’t want to be like blindly walking around thinking everything’s gonna be great and you’re not doing anything. But if you take action and you get real feedback from customers, then those are validation points either proving right or wrong that are going to give you that confidence to keep moving forward. And that’s the process that I talked about. I just I just know that the best thing I can do every day is understand from our point of view, by talking to them, by looking at their actions, how to solve problems that they they’re telling me by just looking at the numbers.
Bronson: Yeah, yeah, yeah. Over and over what you just said. You mentioned process actions. Doing something two out of three will fail. It’s almost like as long as you’re moving forward, you’re moving. And as long as you’re learning while you’re moving, you’re doing fine. Certainly. That’s the thing is just grit is the thing that allows you to do something, even when it might fail. You just keep doing it, it seems like.
Dan: Well, that was a great quote. It kind of summarizes you can’t learn to surf by reading a book. That’s awesome, right? Like you got to stop reading the blog post and just get out and do a start up and you got to talk to customers and all those things. Like you can, you can you can educate yourself to death, but you actually didn’t learn anything because you was never in a, in a scenario that had a feedback loop. It was just very one way consumption. And I’m all about, you know, I heard somebody say the other day, it’s like we can spend two days talking about how I would work or spend two days doing it to learn how it’s working right. And like, just like me, it takes less time to actually implement prototype than to talk about it. Just do that and then get some real data. Yeah.
Bronson: And I think that’s why success favors those with grit, because grit helps you learn. You know, academic learning alone is not enough anymore. And it’s the thing that allows you to put yourself out there, be wrong and learn from it. So I think that’s great advice. Now you’re also an investor and a mentor to a lot of startups, so you kind of get a window into what what startups are thinking, what they’re doing, kind of, you know, the pulse on what’s going on with a lot of, you know, younger people starting these things. What are some early indications to you that a startup has growth potential? I think I might know what you’re going to say based on what you said before, but go ahead.
Dan: You know the reason? So who I invest in, it’s always people first, right? I’m going to trust them. And usually and it sucks for people that want to pitch me now. They may be listening like, Oh, I’m going to reach out to them like I need to know you. And it takes three or four months for me to get to know you, and we have to be around each other, exchange ideas. So, you know, I’ve been fortunate enough to spend a lot of time in San Francisco and meeting thousands of entrepreneurs every year just at speaking at events. So I actually have enough inbound flow of deals just by that network that I don’t need people cold emailing me. If you feel like doing it, you can try to, you.
Bronson: Know they will.
Dan: I don’t I’m not like an investor because like I’m trying to make money. I do it purely based on personal. Like I enjoy this person’s ideas, what they’re building. I can see myself as a customer. What do I look for? Growth opportunities. I mean, to me, it’s it’s a product that retains their users. So retention is the first one. Like I don’t really care much about monetization. I want to know that you have an idea and it’s based on fundamentals from an industry that’s well thought out. So you have like advertising as your primary monetization while those those channels. Different types of ad products have been thought out. So you can just assume if you have this size of an audience, how much money you make. What I care more about is like, show me who’s using the product and how are they using it and how often are they using it? Because if you have retention, then you can improve growth. If you have no retention, then growth is going to be a losing battle because you have a bucket with big holes in it.
Bronson: Yeah, makes sense. You know, as you talk to these startups, I’m sure you feel like you’re repeating yourself often because a lot of times they need to know the same thing and it’s the same thing they don’t know. What advice do you find yourself kind of giving just over and over? What’s the broken record of Dan that just keeps playing to startups when they come around about groups specifically?\
Dan: So I heard a quote yesterday actually that said, Most people need to learn something new. They just need to be reminded of what they already know. So I think a lot of times when I’m talking, these entrepreneurs are not saying anything they don’t know. I’m just helping them essentially reinforce what they know they should do it and what order. Right. I think right action. Right time is really important. Some people spend time and money on things in the beginning that just don’t matter. And that’s why they don’t figure it out in time. Startups die because they don’t have enough time to figure it out. So figure out what you do now versus later is actually probably the most important thing that I do at startups. But yeah, yeah. You know, that’s the thing that I feel like we talk a lot about is, you know, if it’s a marketplace like a clarity or get around or Udemy, it’s, you know, what, what’s the supply side product market fit like what’s in it for them? What do they need to figure out? And then what’s on the demand side? So there’s profit and marketplaces on both sides and there’s diagrams and metrics that you need an instrument for both to understand them. So usually in the beginning when I, you know, after I invest in a company, it’s just instrumenting those, those kind of funnels so that we have some visualization and understand where the opportunity lies. Then it really is just saying, okay, what’s the biggest opportunity? Where is the biggest drop in our funnels? And let’s just start fixing those. And once those are fixing the product, then we go look at top of funnel and say How can we introduce more users to the product? But there’s no point doing top of the funnel until you make sure that the funnel is actually working. And it’s twice as hard if you do in the marketplace. So I don’t think there’s any one specific thing. It’s more helping them understand the data that I feel like there’s not a lot of good information on that. It’s like, okay, I’ve instrumented everything using KISSmetrics or Mixpanel and now what should I be spending my time on? I actually have visibility, but I don’t know how to understand the information. I feel like that’s the part that I spend a lot of time helping startups with.
Bronson: Yeah, you mentioned that they focus on the wrong things early on when they should be focused on those later or vice versa. Give us some examples of those. What’s something you know that young startups just really want to focus on that’s completely irrelevant until they cross certain milestones?
Dan: Absolutely. I mean, the number one would be getting corner store, you know, like big, big customers, you know, name brand companies to use your product and or getting press, right. Like launching like, you know, I invest in a company a couple of months ago and as soon as the deal was done, they announced it and I was like, whoa, what? What happened? Why? You know why? And they’re like, Oh, well, one of our major investors wanted to announce it. I go, That’s great. But that’s their motivation. They wanted to get the word out so they could seem like they invest in smart companies. But your product isn’t even launched yet, so where’s the value to you? You just lost it on and you only have one chance to make a first impression. You got to make sure that you’re very strategic about when you do that so that you can get a consistent amount of users. Your product. I mean, the number I always tell entrepreneurs is get 50 new sign ups a day, right? Every day. And I say that quickly and they’re like, Well, how do you do that? It’s hard, but you know that all you need to do is get 5350 people every week, sign up for your product, and that’s enough people to test closed to test feedback. Then that’s that’s what you got to do. And you can do that through content marketing. You do it through the product, you can do it through press well time, press at a certain interval. You can do it through, you know, influencer networks. You can, you know, you can just figure out like, okay, well, I’m going to spend 20% of my time on these things are going to help with the top of the funnel. But once I get to this level, I’m done and I’m going to work on retention. One retention is good, then I’m going to work back on top of the funnel again. Right? Those are the kind of things that I think about that I see a lot of startups spend time and energy on the wrong things, right?
Bronson: So you acquire enough users not because you’re in acquisition mode just to figure out the data of the funnel. Once the holes are plugged, then you go back to acquisition phase for real and maybe paid money into a time into it, resources into it, because now the funnel saw you’re not going to lose people.
Dan: Yeah. And I mean you only want to test K channels when you understand LTV. Well you need some, some amount of data to understand how you need to charge in your product to understand lifetime value. So if you’re doing any paid acquisition and you have no monetary payment in your product, you’re doing it backwards.
Bronson: Okay. Now it seems like that process is going to take more than a weekend. I mean, the. The process you just laid out. I mean, it’s going to be a long term kind of process before you really get to the place where you’re trying to grow as quick as possible. So do you do you see startups just want to grow fast when you do that?
Dan: Well, so I mean, I think it’s really healthy to have goals, right. So, you know, Graham recently wrote, if you’re not growing 10% week over week, then you’re not growing a venture backed startup. And and I agree that you that that growth is one of the key factors. But I think more importantly and you want that kind of growth just to have enough users, right? The 350 users a day. I mean, if you’re doing a 10% week over week, it should only take you 2 to 3 months to get to that volume. And then you should stop and make sure the products working is it you get addicted. And there was a post recently on one of the designers at Formspring and I know the founder on that Formspring. And, you know, they came out and they did this and they I think they got addicted or this earth seem to keep the hockey stick when they shoot. It took the energy that they were investing and trying to keep this happening and say, how do we stop people from turning? Mm hmm. Right. And and if they would have done that after, then they could have spent time again. Maybe they wouldn’t have the outcome that they had when they had to shut it down. I don’t know. Right. I mean, giving other people advice on their start ups is the stupidest thing in the world, because I don’t know anything about their circumstance or context and it makes it absolutely irrelevant. And I always apologize when I do, even in knowing anything, because I would be able to do it. But I think, yeah, you should spend two or three or four months but have the goal. Right, is get to 50. Sign up. Let’s get let’s get to retention 20% we for week for those cohorts let’s focus on paid acquisition rates and just have those goals. And then one of the tricks I think that’s interesting that we do that I don’t see very often is we measure our goals on a weekly basis. And the reason why is if you set yearly goals, you get one chance a year to really write down people lap most. You’ve got no goals. So why once a year is better than nothing? So most startups have none. They just every day get up and decide, I’m going to just try stuff and then better than that’s quarterly, right? So do you set the goals of the quarter and you try to hit them? You know, most people, if they’re smart, they do monthly, but it can. But you only get 12 shots a year on. We adjusted with with weekly. We actually get 52 times a year to sit down with a team and say, here’s what’s important, here’s what we think we can do to improve it. Here are the actions. Let’s build, test, measure, learn and and iterate 52 times a year. And I think that’s one of the big reasons why we’ve had successes. You know, we we reassess every Sunday and the clock stops at Saturday night at 8 p.m.. We know if we hit a goal or didn’t and then we sit down on Sunday and say, what? What did we learn? What did we not give in fast enough?
Bronson: Yeah, that’s great. Are there any myths about growth that you want to debunk? Any, you know, kind of old wives tale that float around about growth that you hear in startup circles. You can say, yeah, that’s not true.
Dan: So I will say growth hacking. So I used to call it metrics based marketing. That’s that’s where I got my teeth cut in. Like I spent a lot of times on that metric based marketing is predominantly product marketing. And then there’s this thing called growth hacking that all of a sudden, you know, started taking off. And, you know, I think the biggest myth is that people think it has to do with any paid channels like growth. Hacking has nothing to do with aid. It has everything to do with product. And in product you have two types of things. You can either use OPM, which is other people’s networks. So YouTube did that with MySpace, Facebook, Airbnb did it with with Craigslist. And there’s, you know, people with eBay and there’s a bunch of examples of open, right? And then the other one is shareable moments like what in your product can you give to a user to share with somebody else? And I mean, a good example people use all the time is Dropbox referral, but most people don’t understand that the referral invite for Dropbox only works because the person giving the invite gets value that the and then the other person receiving gets more value they could have not gotten if they didn’t get the invite from the person asking somebody just invite your friend is not going to work doing it the way Dropbox is going to work. Another brilliant one is Angel Angels has these references and people I’ve worked with and customers now and they ask you to insert their email to verify well how great it is that every time you build your profile you might have ten different people points that you’re then inviting to confirm on Angel listeners. They don’t have an account, they get to create an account. I mean, brilliant. So, you know, or Hootsuite, when they added the the team accounts where you could invite your teammates to collaborate around a social account. I mean, that’s brilliant, right? It’s like product management software. You invite people to collaborate or invoicing software where you invoice the customer and they can pay through the system, like anytime you can share the product with somebody else. And it’s really natural, logical to do that. So I mean, between the open in the shareable moments, there’s a lot of opportunities that everybody. I can look into to figure out how can they make the product grow. But going back to the beginning, it only works if you can get people to experience the benefit right off the bat. So it’s kind of like there’s these things you got to do in a certain order. And those are the ways that I think about it, is get people to experience a product and then figure out how do you make the product grow? Using those two strategies as buckets of ideas. And then once that’s well tuned, then you pay channels. But the biggest mistake, I think it was like, okay, we’re going to we’re going to grow hack using Twitter’s new ad platform or StumbleUpon or whatever. It’s like a marketing doesn’t work content marketing pay. If you pay people to write content, it’s pay. So don’t don’t kid yourself on that when you’re.
Bronson: Like, No, that’s great. Do you know of any examples of maybe lesser known startups that you think are just getting marketing right and getting growth right? Maybe they’re not well known because they haven’t had scale yet, but, you know, there’s something going on there.
Dan: Well, the one I like recently that I saw was Buffer. So Buffer lets you set up schedules for when you share stuff. And I started using the product and they they prompted me. I think after three weeks they noticed that I had a blog with a lot of traffic and they offered to give me a free membership to the pro account if I inserted the buffer share button on my blog. And I thought that was just brilliant, right? Because clearly people that like the product for Buffer again when we talk about like where do my customers hang out? If people are sharing and tweeting stuff, they probably have an online presence. The prime of what’s now a buffer does I’m assuming is they rank order the people using the product that have a blog and say who are the top 5% that if we actually gave them a pro account, it costs us $10 a month lost revenue. Is it worth getting the distribution and having that button on those blogs? Right. And I think that’s just really smart. So I mean, that’s one that really stood out recently. Another one is Health Tap, which is in the health space, know health at your fingertips. So they’re, you know, they’re really trying to revolutionize I mean, their flows around every Q&A that they do. They have a photo and I don’t know who sets the photo of the doctor when they answer the question, says the photo, or if they do it internally, but they add a photo and they restrict the answer to short answer and long answer. So the short answer is actually the answer and then the longer version. And by doing that, they allow you to have social share buttons that are really value added because it’s super intuitive. So I can pin it to Pinterest, I can share it on Facebook and it has a photo. So like those little things that either they built into the interface or whatever, and they’re taking these moments and allowing you to share their optimizing the sharing. So I thought that was really clever as well.
Bronson: Now those are great, you know, great examples. And they use the two things you talked about shareable moments in the app and, you know, leveraging other people’s networks with Buffer. So you’ve kind of two examples showing the two things that you’ve already told us about today. And this has been an awesome interview. I got one last question for you. What’s the best advice kind of high level that you can give any startup that’s attempting to acquire, retain, monetize, just grow their startup?
Dan: Wow. So like taking.
Bronson: Any direction you want.
Dan: I would say make your retention and understand where it’s at today. I think most startups have no clue where the retention is, and if they actually looked at it, they probably be pretty sad to find out after seven or eight weeks that their users go to zero. So if that’s the case and it goes to zero retention, that means every seven weeks you need to gain 100% of the existing users you already got and 110% if you want to grow. And it’s just crazy. But that’s what people do every day.
Bronson: Yeah, that’s great advice. This has been an awesome interview. Dan, thank you so much for giving us some of your time.
Dan: Absolutely. My pleasure. Thanks for having me.
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