Ivan was a driving force behind DropBox’s 12x growth during his time there. Previously, he was the co-founder of TipJoy, and he also worked at Facebook in commerce. He is currently working on a stealth startup.
TOPIC IVAN COVERS
- What is TipJoy
- His background in Facebook and Dropbox
- His background in stealth startup
- What kind of his core customer acquisition strategy
- His ultimate kind of growth lesson he learned
- What market demands affect the growth potential more than strategy
- How does being a Facebook change his perspective on growth
- His best advice to anyone trying to grow a startup
- And a whole lot more
LINKS & RESOURCES
WATCH THE INTERVIEW
READ THE TRANSCRIPTION
Bronson: Welcome to another episode of Growth Hacker TV. I’m Broughton Taylor and today I have Yvonne Kerrigan with us. Yvonne, thanks for coming on the program.
Ivan: Thank you very much for having me.
Bronson: Absolutely. You’ve done quite a few exciting things, so I think people are going to have a good time kind of diving into what you’ve been a part of here, just to give people kind of a quick overview. You founded Tipb Joy. You worked in Commerce at Facebook and you led growth at Dropbox for a few years. And you actually helped Dropbox achieve 12 X growth during your time there. Now, we’ll get to Dropbox in a minute because I know there’s a lot of questions about that. And, you know, that’s kind of the the big name brand around growth that people are very interested in. But first, I want to go back a little bit to Tim Joy, because it wasn’t always super easy for you individually. He’s kind of an example of that, right? Sure. So tell us, what was Tim Joy? Just kind of give us the brief overview there.
Ivan: Sure. The genesis of it was that, you know, I saw this great stuff I loved on the Internet and I thought, you know, I should really, like give back to it would be awesome to help support it. But I’m not going to go and pay pal somebody 20 bucks with too much money and it takes too much time. So the thought was, well, why don’t we make it, like, really easy, like single clip to just, like, give back very easily the stuff you love. And thinking about that is like, well, that’s actually a huge opportunity. If you can get micropayments, sort of. It’s been this really tough nut to crack for years and years. And so we thought that by focusing on user experience that there could be a lot of interesting things you could do there. And as the Web became more social, we thought that would be a whole other layer to it, because you can have like maybe some viral payments or something like that. So when you spread like that, a payment is like an endorsement that you really like it. So it’s really good message to send. And so we did a lot on making it really easy, for example, for blog posts to get like a little widget to get paid. And then we actually did a lot on Twitter as well as, as that platform was rocketing through the roof we thought would be great if it took off like Facebook did to be a payments engine on top of it. So we made it so that you can do like p $2 a username and that would actually be monitored and then that would actually trigger a payment. So it’s sort of like a direct message sort of command and also that we had an API on top of that so developers could use it. So is is all around like some really interesting and innovative stuff around micropayments, user experience, social payments. Is really exciting stuff to work on.
Bronson: Yeah. No, I mean, even looking back like it’s an exciting idea. I love the name of it. I love what it does. I love the Twitter payments, you know. But ultimately, you guys had a hard time growing it. I mean, you had a hard time kind of fighting merchants and you had a hard time finding payers, so kind of chicken egg. And it was difficult to get either. And so let me ask you, what was the ultimate kind of growth lesson that you learned from that? Is it that the market demands really affect the growth potential more than any strategy you can come up with? Or is that the wrong lesson to pull from that? How do you see it?
Ivan: Well, I think that is interesting because in my career working on stuff and growth, it actually started from the poor performance of Tip Jar. This is around when some really good assets were coming out there, like Startup Lessons Learned was just a blog that was getting popular and you know, Andrew Chan and others blogging about these issues. And so I got a chip on my shoulder about it and I’m like, What happened here? And I was like, Why is this working? And, you know, towards the end, like when it was clear what direction is going in, I just sort of paying more and more attention to it, which is what attracted me to Facebook and Dropbox, too, because it’s a place to learn how to solve these problems. So, you know, looking back in hindsight, there’s a lot of things I can point to that were really the the problems here. One is that whenever you have a marketplace structurally, you have a problem of liquidity. And that’s like a fancy jargon term, which typically you should avoid jargon. But what it basically means is that you have this problem of, well, payers aren’t going to they’re all going to use a payment system that is they’re they’re not going to try to use one that advocates for you and the merchants. They need something. They need, you know, they need you to make it so that they have higher revenue. And if they sell more or lower overhead, lower fees or maybe easier for the developers to integrate. And so for us that we thought, oh, we’re dealing with free content, they’re not doing anything right now. It should be easy for them to get on board. But what we should have done probably is look at the highest level as to where we would have gotten traction and that would have gone in two directions. We already started having some traction with non-profits because they really like seamless payments to make it easier for people to donate. But commerce is one where we should have focused more on. So that was an interesting is today. You see a lot of different startups that are in a similar spirit. Like Gum Road is an example of like easy digital payments. And Kickstarter has some similarities as far as a community of people supporting stuff they love. And I can go on like Stripe is an example of something that is really focused on developer user experience, which we cared about too. So if we had focused on like the highest, highest area for growth, just the top level strategy, it would have been commerce. And I would also say that there’s a platform issue there as well, because Facebook was actually much, much bigger than Twitter. But the perception around. There was that is this this rocket going up? And so if we built the same tools on Facebook that we had on top of Twitter, we would have done better. I don’t know if we would have been like the winners, but I think that overall we would have done probably better than we ended up doing. So there are other startups in that space. I think there’s one called Spare Change, which was acquired by a much larger one called Place Ban and Place Brands doing well. So there’s room for payment startup on social networks. They just weren’t doing anything is, in my opinion, as interesting as what we were trying to do.
Bronson: Yeah, that’s great. Now, I love what you said about it. Kind of gives a chip on your shoulder because that’s how I got into growth. Hacking was, you know, me and my team would build products and then we realized it’s really hard to get growth right. And so I’m like, all right, I’m a smart guy. Like, if I can’t figure this out, like, something’s wrong. So it just, you know, it made me, like, want to know more, want to learn more when I want to figure out more things. Well, let me ask you this. You know, looking back at Tim joined, now you’ve had some experiences with Facebook and Dropbox and your startup that’s in stealth. And maybe we’ll talk about at the end if you had to do over again. Do you think because of the skill sets you kind of acquired over the years, that you could make it work if you had a second at bat on that one?
Ivan: Going back in time, yeah, I think there’s a chance we could have done a lot. I mean, if you look at Kickstarter, which started a bit after us, they did so well. So if knowing what I know now, I just built Kickstarter a year before they did.
Bronson: Sure that you could do it right.
Ivan: But I mean, more practically, I think that there were some issues around like some of the analytics we looked at, like we had a lot of performance measurements, but not a great deal of insight into what was driving the right kind of performance. And so if you look at, say, like one distribution channel would have been the blogs that were using us directly because somebody that starts paying on a given blog might be a blogger themselves and that they start using the widget because they saw somewhere else. This is viral growth or even on Twitter payments, which I mentioned. If somebody’s like what what kinds of users could have been using the products on Twitter that brought in other people that used it in a good way. Looking at the number of people that netted or the transaction volume, there are all sorts of ways we could have not looked so much on performance metrics, which is more just this report on how things were going and more about what we could have done to drive things like where we could have focused our marketing efforts on or where we could have changed the product. So there is statistic issues around platform, like where we go, like on Facebook versus Twitter, which that also would have come out if we actually modeled out like the expected growth just by looking on the absolute numbers that are out there. So this approach that I have around growth is is just so much more rigorous than it would have been back then. So one of my favorite words, because I just because I tell people and giving advice is just like, don’t swing. This is like you’ve got to dig in, you know. And so we really yeah, it’s surprising because we’ve actually had a lot of stats that were just all like results and not drivers. And so just that approach to analytics would have been a huge change in how we, how we made decisions.
Bronson: Yeah, you know, we’ve had people on the show, you know, actually we had the coauthors of Lean Analytics, both of them come on, and they talked about the idea of looking at the indicators that really can change the future, not just tell you what happened in the past. How do you know the difference in those two things, though? Because, you know, a rookie looking at a bunch of numbers, they all look the same like some of them are telling you what’s going to be in the future and some are telling you what’s in the past. How do you know which ones to focus on? You know, now that you’ve done it for a little bit, how do you get rigorous, I guess is the question?
Ivan: Yeah. So I would start with at the highest level, just have a goal and this is pride and I need need to say this. The problem, though, is that you have dozens and dozens of numbers. You can see if you look at performance metrics like you have Google Analytics maybe Mixpanel up in that he got. You have all these like actual performance like per like the speed of your databases and the time it takes for things to work, all these things. And the problem is you have dozens and dozens of numbers to look at. And so you need to curate that and have one number, ideally, maybe two. And then you need to dig a bit deeper as to what are the components that go into that. So for example, if you’re looking at active users, then the number of new signups matters and then you look at where are those signup channels? And okay, one of them is a social invite channel. What does that social invite flow look like? You had this page, you submit this form, and then you had this optimization around that and you somebody receives an email and clicks it and it registers. So if you just break down the problem, starting from your main goal, going to every step along the way, it’s really easy to find the sort of what the drivers could be because sort of performance metrics doesn’t give you any insight on what to do next. So if you see the number of page views you have, say, that’s the perfect example of what’s called like a vanity metric where it doesn’t tell you what to do and it’s not really very impactful. But if you see, for example, a conversion rate, then you could think of maybe some product changes that would increase that conversion rate. So very often when you break it down into the actual components, then it just immediately yields potentially dozens of things that can drive growth and you know exactly how they map. Your main goal too to that was really important.
Bronson: Yeah. I mean, what you’re saying in one sense, it doesn’t sound like brain surgery. It just seems like being logical. I mean, it must get it, which is why it’s like this mysterious thing, but it really is just like, what? What are you trying to do? What components go into that? Or are you going to do to change those components now get to work? You know.
Ivan: Yeah. The problem becomes actually around how your company makes decisions because very quickly, you come to this point of having many, many more things you can do that can even potentially map to some, you know, moving the needle and then you have to decide what to do next. And so a lot of companies, they start from a position of having some tasks that are like that, like a growth team for something, but then they have some other tasks that are like just, oh, we need to get this done that they don’t really justify them in the same way. So one part about having like one clear goal actually means that everyone understands that goal. And that is probably one of the best lessons from Facebook because they like what they would tell you as far as how to grow is actually really straightforward. It’s that you measure what your users are doing. You run a test to see how you can improve it. And then you you deploy that and you run that as parallel as possible. But implicit to all of this is the goal. And of course, Facebook misses that fact because everyone at Facebook understood, oh, we just got to get everyone in the world on this. So it was just the whole company innately understands the goal of Facebook is to like win, to dominate. And so as far as methodology, it’s like they miss it because it was so ingrained in their culture, which is funny because it’s like seeing the forest of the tree. They just don’t understand, like how important it was that they had this aspect of their culture that other companies don’t have. And so, I mean, take an example like Foursquare, should they make money or should they drive engagement or should they get API partners to use their data? Like, what’s that? What’s the goal of Foursquare? Yeah, I know. Like, know like and so this is actually, I think one reason why it’s hard for them because it’s, it’s really like it’s really debatable, like and so who makes these decisions and then how do you diffuse that through your organization to to have that go into your your very culture of how you how you build things? Yeah, it’s really tough. So I think that it sounds logical, but then there are issues that get in the way that are political, sometimes personalities and sometimes just structural problems because it’s actually it’s simple. If the goal is everyone in the world should be on this, it’s just it’s just really, really straightforward. But let’s say you’re some enterprise startup and you’re actually targeting just small to medium sized businesses, and there’s only a certain bracket that work in there. Then it’s then it’s a bit more complicated, like as far as, like, wait, it’s not obvious what you should do, you know?
Bronson: Yeah, you know, I was talking about it kind of, you know, away from the actual problems. It all sounds so easy. But then when you’re in the board meeting, it’s messy. Businesses are messy. So you’re absolutely right about all that stuff. So you right Facebook after Tim join you know you’ve already mentioned some of this, but how does being a Facebook change your perspective on growth? And you’ve already mentioned, you know, they just realize they’re there to win, they’re there to dominate. They’re there to get, you know, not 1 billion, but all of the billion of people, you know, on there. How else does being a Facebook kind of change you as an individual in the way you think about growth now?
Ivan: I thought that one of the most illustrative points was when we knew we had, you know, not everyone works on growth of Facebook, right? They have like separate data science teams. And I was working just on the credit side, but the most fascinating aspect was thinking about growing the credits product, using the same tools that the rest of Facebook growth as a whole used. You know, so when you think about active users, then that becomes like active payers. And if you have some re-engagement hook like somebody tagged in a photo, maybe there’s something we could do like somebody else. You played a game you might like or something like that. Some, some of that gets you back into using the product. And then that, that was really fascinating because it shows how abstracted all these ideas are and that means that they can be applied in company. And so it’s very easy to think about just specific tactics within a company that that works for them. But seeing even within a single company, that approach applied to multiple products. Another example is their advertising products. So when you if you’ve probably most people watching this have like run an ad campaign on Facebook and if you’ve ever received a email newsletter from them, that is equivalent to being tagged in a photo on Facebook. But as an advertiser, not as a as a just a normal user. And they think about it in the same way and they drive their metrics the same way. So that’s really fascinating. I think that they just had their heads on straight about how they build things really like just humble and going from first principles. And because of that, they found, I think, a framework that works across different kinds of products, which is fascinating.
Bronson: Yeah. Is there like a cheat sheet of like, hey, here’s what works for all the individual products and Facebook replicate this when possible or is it just part of the culture? You’re going to send an email and pull them back in, you know what I mean?
Ivan: Yeah. I mean, some of it is just this innate, innate sort of intuition you build. I think that’s the thing. Like intuition sounds like something. That you’re born with. But actually something is built over time. And so you can’t help when you’re at a company that’s growing fast to just think about things in ways that are predisposed to that. So like people talk about, you know, like sending more email is something that some people like and other cultures might not appreciate. Before I came to Facebook, I was actually kind of turned off by it, but then became very clear. I was like, No, you actually want to send as much email as you can get away with. And it’s like anything that will trigger more emails, and especially if your users do it, if one user triggers an email that then somebody else goes to because then they can’t blame you because there is no friends, actually. So this this kind of thing, it’s like a cultural thing. You end up learning about this kind of organization, which I think is pretty interesting.
Bronson: You know, you told us some of the lessons were kind of positive. Were there any negative lessons that you walked away with? Like, you know, Facebook, this is the way we do it. But I wish we had. No, I think there’s a better way. I mean, or is it just kind of like, yeah, they’re doing it right and that’s why they’re winning so much?
Ivan: Yeah, I think Facebook is pretty awesome success story. So there’s not much you can point to as like, what am I even going to say I expected? But I do think there were some things specifically on credits that I thought they could have done differently. I mean, even the product being called credits, it’s like a virtual currency that immediately eliminates a huge amount of commerce. Like if they had thought about it from just what I would say as a first step as far as your goal. Like if you’re okay, you’re trying to power payments for as big as, say, the world. Like, what would you do? And so commerce would be really important, but the pricing structure and that as a virtual currency like doesn’t fit e-commerce doesn’t fit subscriptions, it doesn’t fit quite a bit. And so now they’re pulling back from that. And so I think there are some specific tactical mistakes and charging mistakes depending on how you look at it. But that’s that’s just a you know, I think overall, Facebook is an amazing company, so they do a really good job.
Bronson: Yeah, that’s great. So now let’s talk about Dropbox a little bit. So while you were there, like I said earlier in the intro, they experienced 12 X growth. That’s that’s an insane number.
Ivan: Yeah, it was going on before I got there and then continued after. So I joke like, you know what? That’s why. Because I might be like two or three X, maybe two or 3%, like, I don’t know, somewhere between like as far as what I specifically did. Yeah, but the company itself is amazing. Thing is, a rocket ship is really growing like a weed.
Bronson: Yeah, well, it’s kind of like your experience with Facebook is like, obviously you’re not, you know, responsible for Facebook’s growth and you’re going to walk away with a ton of lessons because of that ethos and that culture and what just, you know, you talk about intuition. So the same thing is true for Dropbox. Like you being there, you’re going to have a pool of knowledge that you may not be aware of that other people just don’t have. And so that’s what going try to drag out of you. Is what you know after being there. So you arrive at Dropbox. What’s kind of your core customer acquisition strategy when you get there? Maybe it’s something they already had in place and you’re just going to pick up the pieces and keep running, or maybe it’s something kind of new you’re bringing to the table. But the. What was the main strategy there?
Ivan: Yeah, I think Dropbox is well known for a few reasons, so I would be remiss if I didn’t just say the most obvious, which is that the product was free. Like, you know, it’s like it’s a freemium. And so that’s like from the very beginning, a plan to get distribution. And before I got there, they noticed that people were really telling others about them a lot, about using the product a lot. And you have to understand how adverse the environment is for Dropbox because it’s a desktop client that requires a download which you don’t want to build that. Like nobody wants to have that like installed in a crowded space. And so they as far as user acquisition, I think the key insight that came before I got there was that, look, if people are already using word of mouth, then we need to help that along and that there’s this natural currency with extra space that we can reward people. And so this referral program was really innovative at the time. I think underappreciated, though, is actually how complex and nuanced all the different signup channels are for Dropbox and how different they are. And so this is where when you ask about like core customer acquisition strategy, you have to say like, well, wait a second, there’s actually like five or six different ways to sign up for Dropbox. It’s actually not obvious.
Bronson: Well, break them down for me. Like, okay, the things about signing up that’s nuanced.
Ivan: So you have you have signing up on the Web versus the desktop client, which those are different because as far as we care about successfully using a desktop client, getting the client on your desktop is better, but then you have mobile, which means that you have like Android, iPad, iPhone, and then you have multiple social channels where you have like, for example, like I sent you a link to some piece of content on Dropbox and then you can sign up there, which is sort of like signing up from the web, but you really have stuff that you care about within somebody’s Dropbox. Then you have the social channels, which is like a share folder, invitation and referrals. So those are two different things. So when to talk about how a Dropbox grows socially, you have the referral, which is sort of like, I’m just going to get people to sign up from this link and then they’ll get a bonus. But then shared folders. I already have content there and there’s this persistent collaborative space. So I think one really interesting aspect of Dropbox is because of the structure of their products, it became. Very much like a break it down kind of strategy about as far as user acquisition. It’s like you have all these different channels and some of them are viral, which you can drive. Some of them are like an app stores, which you could drive as well in different ways. So it became it’s a big triage problem because there are so many things you can do. Like I would probably bias how I think about problems, but you have like the main goal you care about like active users or then below that would be sign ups and then driving that into actual drivers and breaking it down. And it’s just it gets very complex. So you have to have your head on straight about how you measure everything and just making sure you’re working on the right things at the right time.
Bronson: Yeah. So talking about how you kind of decide what to work on, you know, I’m sure you didn’t have the resources to work on every possible channel as fully as you would like to. So how did you decide to work on, you know, or what’s how did you focus on mostly when you first got there, maybe out of those that you listed also wondered like, all right, I’m tackling that one.
Ivan: Yeah, I think that I mean, we tried many different things, different areas. But developing on the web is actually far easier than changing the desktop client or the mobile clients and email as well. And so there is a natural tendency to move towards things you can change the fastest. And this is actually interesting structurally, because I think there’s there’s a one dimensional spectrum of quality versus agility, because if you spend more time on something, you’re not going to move as fast. And Facebook is much more biased towards agility, saying things like move fast and break things. They pull back from that a bit. And now that they they kind of have some, you know, the antifragile infrastructure. But then on on Dropbox’s side, the reason the desktop client is successful is because it’s so good. And so smoothing out all those rough edges made it so that it was the quality that actually made it spread by word of mouth. So because of that, focus on quality, but that product development approach then bled into other parts of the product. And so and I think that the way that they thought about like how to optimize a web page or, you know, how to do email campaign is all very like considerate and careful and slow and it could be a lot faster. So that’s if I were to critique them, that would be like one thing that I think is changing, but I think that’s as a slow cultural shift for that to be improved. But overall, I think that there is like a natural tendency to move when they want to focus on growth, to focus on things you can do very quickly to show the fast impact because it is very much a iterative process. So that means things on the web. So it’s like forms that might be some some point where you invite other people. So like the referrals page was heavily optimized, registration pages were heavily optimized. But I think the problem with thinking about things like breaking down and taking like a very regimented approach to how you drive things, you actually really also have to be extremely creative. And this is where it’s difficult because it’s so easy to start just focusing on the tiny little wins when the biggest win as far as, you know, the effort to expand versus the benefit they get from it could actually be a lot of effort and then you get a huge win at the end of the day. And so that’s just a really important message, I think. And Dropbox had this feature that was called camera uploads. And what it did is when you plug in your phone or a camera or SD card to your computer, the desktop client sucked everything up into Dropbox and the mobile apps both got updated to have the same kind of features. They just constantly having all of these photos being uploaded and on Android is even better because it’s baked right in to the cameras on certain phones. So just using your camera meant that you’re sending Dropbox a great deal of data. So this isn’t about user acquisition, it’s more about engagement. But that product was incredibly complicated to build. It’s just really, really hard to imagine, if you like, you had an old phone and you sent it to Dropbox, but you also put in iPhoto. Then you put it from iPhoto on a new phone. Then you plug that phone in again to make sure you don’t have a million duplicates on your your dropbox is the kind of thing like smoothing out the rough edges is really hard to do. So I think it’s just an interesting example because that was an incredible amount of work, but had this amazing product as a result, I personally think is the best way to manage your photos. I just yesterday a friend said that they lost their phone, but all their photos are still there because they’re all in Dropbox, which of course they are because Dropbox is a really good place for all your stuff, so they should put everything into Dropbox.
Bronson: My grandmother came down to visit and she’s 80 something and she has Dropbox on her iPad and she made her photo sync with it. I’m like, You’re awesome.
Ivan: That’s great.
Bronson: Even tell her to get it. Like somehow she knows that Dropbox is the right thing to use. So you mentioned, you know, with with analytics and growth, you’re trying to run fast. So that’s why you focus on the web. You can iterate quick, you can learn, you can make, you know, fast changes. But then you also talk about the reason that everything worked to Dropbox is because of the slowness and the quality and the product. How do you balance those two? Because a lot of people watching this, they’re, you know, obsessed with lean startup. They’re obsessed with air grease and like doing things that way overall. And yet Dropbox is a little bit of both. It’s slow in quality, it’s fast with you in growth. And somehow those are a tension here. They work together. How do you make it work?
Ivan: I think that you just have to be just focused on like how you make decisions. And so it’s not that can’t be. You know, you have a bunch of things you can do and you discuss what you should do. And when you’re working on them, you make tradeoffs as to whether something should be in a rough and get it done, or actually this should be pretty high quality. And so you tension is the right word for that because there’s a give and take. You know, I think, for example, if you have a certain kind of designer or product designer, they might really want the experience to be a certain way. And that’s important. And you have to you have to respect that. It’s actually not always, you know, move fast and break things that even at Facebook, it’s just not that’s not the approach they take for certain products. Right? Like, for example, for Facebook, like the tracking ad clicks actually, like you got to get that number right. So you cannot charge people for impressions at the best. Yeah. Yeah, accuracy is much more important there. And maybe then maybe then you just move fast and biased things towards undercounting or something like that. Yeah, but it’s a network you balance so it’s actually not obvious that’s the right solution. Yeah. And so I think that this is, it’s just really important to be in any kind of process you’re trying to optimize, to be reflective about just conscientious about how you improve things. And this is just basic about how you get better at anything like deliberate practice. And so when you want to get your process around how you make decisions better, focus on how you make decisions and look to say like, well, we said we’re going to do this. And what was the actual results? You know, both on how many products we thought we can get done, but also for an individual project tracking the success after you launch, it is incredibly important to build that intuition so that when you’re having these discussions about what to work on, that you have it with informed by history. So there’s no simple answer for. I mean, I think what’s interesting is that I’ve worked at great companies since my last startup, and so I’m trying now with like a three person team, hopefully soon four or five. Like I’m going to try to apply all these principles, but even there’s no like set formula for it. But I think it’s important to get to realize there are issues here. It’s not just a matter of somebody that’s leading growth to say we do X, Y, Z, and that’s it. It’s like not top down. It’s actually a whole it’s a company wide matter. And so there is there’s just some hard problems and dealing it’s like a people problem because you have different opinions, you need to organize. And this is just a basic issue in management, like how you go about making decisions. So it’s there is no simple answer, unfortunately.
Bronson: I’m so glad you’re talking about all the greatness to this. Right, because you know. Yeah, you know, come on here. And just like, okay, here’s the five rules, you know, you should be fine when really there is so much tension, so much gray, so much just people have to figure things out based on intuition and numbers and gut and other things. So I’m so glad to hear that, you know, that’s kind of the way you’re portraying it. Let me ask you about a few of the specifics with Dropbox and then we’ll get into your new start up a little bit. So you mentioned the kind of get more storage referral incentive and how well that has worked for you guys. Other people have done similar things without similar results. Why does it work so well for Dropbox? I mean, is there anything around that, any commentary you can give us too? Like, look, here’s why it was so good and replicating. It may or may not work for you or I don’t know. What are your thoughts on that?
Ivan: I think the best I can do is just describe why I thought it was good, because you know who’s to say where it would fit in another product or not. And I think some of the things are obvious and some are not. So for one, when when does this come into play? It’s when you’re deep in the product. It’s like you’ve already used it and you’re running out of space and I need some more space. What am I going to do? I’m going to buy some friends. Do you care? Like you want it right now and you’re dealing with this. There’s a bunch of them. This is you’re dealing with this virtual currency of space. And so you’re not talking about money. And there’s a difference between market and social norms. And so if you start talking about money, people start thinking in those terms. And so they think like, Oh, this is like a dollar or two, that’s not worth my time. But when you’re dealing with with virtual currency, they think of it just like when I say that, I mean, like megabytes, this virtual currency, they, they, they think about it in a different way. That’s much as much more socially appropriate, I think. And making it symmetric is really important because what it does, I think if you think about a person getting the invites, that they’re going to get some extra space than they would have gotten if they just signed up. They don’t know what dropbox’s like. They’re not really influenced by that. In my opinion. It’s kind of difficult to measure, so it’s really about lowering the barrier for the invite her, not the invite. So by making it symmetric you think, Oh, I’m doing them a favor, so I’m going to send them this link. And then that the amount is actually really important because it’s, it’s small enough that you want to do it multiple times, but it’s large enough that is meaningful. And so there’s, there’s this balance here as to how you do that. But it’s and we played around with like granting some people larger bonuses that we expected to be more social. So like with students doing that kind of thing, playing around with like the max number of referrals you can get credit for. Another aspect is that we you actually have to do a bit more than just sign up to get the credit because of this whole that’s partially for fraud because it’s so. Easy to game otherwise. But also because we want everyone to be aligned incentives to get them deeper in the product, to start using it legitimately. And there’s more, more than that. But I think that if you look at other people’s referrals programs, they’re often like they’re missing a lot of that. I mean, the thing is, if you look back at the original awesome referral program with PayPal, they basically gave you ten bucks. Somebody else signed up and linked an account. That’s enough money that it’s like, Fuck my friends. I’m just going to go and like spam everyone. I know about this and they just spent a bunch, a bunch of money on that and it cost them a huge amount of money, but it’s a land grab and it totally paid off in the end. So Dropbox is not the only program like referral program that works, but most people don’t have the deep pockets and starting too late because people already exist. So it’s not even that not worth it there. There is. There’s a bunch different ways you can work it.
Bronson: Yeah. Now, before you got to Dropbox, Drew the founder. He created a video that ended up going viral. It got posted on some big places. And it was a video. This kind of showed you how to use Dropbox. It had some Easter eggs in it, you know, in the right crowd. Kind of caught on to it for some reason. Now, that was before your time there, but was there anything like that after you got there? Kind of one time, can’t repeated. It’s not an evergreen strategy. It’s not something I’m going to try again. But wow, look what it did for us.
Ivan: Yeah. I mean, there is I think that’s a really notable campaign just because how creative it is. And they just had a lot of fun with that and it fits so well. I don’t know if they were thinking about this at the time, but it fits so well with how they were thinking about just the the initial market of techie users that were going to use a product and give good feedback for it so that it really hit that nail on the head. There were like one time and things we can do and I’ve already mentioned one or two, like increasing the number of referrals you can get, which is an excuse to email our users to say, Hey, we increase the number of referrals you can get and they think you have a referral program and then they go said referrals. So like this is like the excuse that, you know, people see you there. Yeah I mean that was a that was the thing is within Dropbox with how considerate they are to the users it’s you had to find a way to get that messaging out because he couldn’t you couldn’t do anything frivolous because that was off brand and so within the company was interesting to work with. So there are there are temporary things like that, but I would say nothing as creative as original video as I don’t think anything will ever top that.
Bronson: Yeah, that’s right. Has there been any growth channels that you thought would work that you were like, All right, when I take this job at Dropbox, I’m going to do X, Y and Z and it’s going to be awesome. They’re going to think I’m the coolest person ever. And then you try and you’re like, All right, I didn’t want to sell anything that should have worked in your mind that didn’t.
Ivan: So, I mean, there’s there’s really tactical, specific things like that that’s really tough for me to say. I really thought that would have worked beforehand because we’re running lots of experiments and so some experience with that report. And one example is like on the referrals page, there’s actually a bunch of different ways to send referrals. You can send it like with a bulk email importer with just typing in emails or Facebook through email through Twitter, and then also like a global link, as we call it, that you can just pass out wherever you want. And we thought like, well, what if we broke this up into stages and like had them do one thing that was the best channel to date, and then others. And that was one example where I thought I was really going to have some lift, but it could have also been done differently and might have had less like it might have been better. So I didn’t work right. Yeah, I can’t even say because then we moved on to other things, you know, and it wasn’t like we kept on trying the same pattern because you don’t have time for that. Like, I’m sure there’s something that could be better there. But overall, I think that you really have to have the right approach to do sort of how you incrementally build things. And so it is it’s tough to say there’s a one huge channel that would have been good or not.
Bronson: Yeah, I’m looking back at Dropbox now. Is there anything about the growth of Dropbox that would surprise people watching this? They think they know the growth story. Is there anything like, well, you don’t totally know the growth story. There’s some things here that are surprising.
Ivan: Yeah, I was thinking about this the other day, and I think what was interesting is just how complex it is at the end of the day. And so there’s that there’s not one silver bullet that it takes, like a lot of work on making the product really polished. It takes a lot of effort on driving different metrics. And so but the good work, the good news is that even when you look at like a product like Dropbox, like why, why is it successful or even why is it considered like simple or clean? And this is what I think is really surprising, is that it doesn’t take some da Vinci like designer to come down from upon high and bless you with a great product. It’s actually just a lot of hard work. And that’s great news because none of us are Da Vinci is right. So you can just, like, work really hard and then get there. So if you want to build a product of the quality of Dropbox, just work hard and then like smooth out the rough edges and then just just pump it out. And so for growth, it’s the same thing actually. It’s like the same iterative approach to drive things. It’s, it’s just it’s not one silver bullet. I mean, with Facebook, people have asked like, you know, what was it that made it grow? And that’s just an absurd question. Because there’s just a thousand things they did that made it awesome to grow. So yeah, it’s not one thing, which is good news.
Bronson: Yeah, that’s really good. And that’s what I was trying to say. Like, I can work hard, like, that’s within my control. I can’t be Da Vinci. That’s, that’s not within my control. So that’s actually very encouraging to me personally to hear that. All right. So I know you got to go just a couple minutes here. Let’s talk about your your new stealth startup. I’m going to ask you about it. I don’t know what you’re willing to talk about. You can tell me to stop asking questions if you want to. But what can you tell us about your new venture?
Ivan: Yeah. I mean, the nice thing is that it doesn’t actually specifically matter what I’m working on, because when it comes to like growth tactics, the strategy is the structure of the business we can look at. And so the actual product is not very relevant. So it’s there for this innovation. So it’s a it’s a B2B startup that is focused on helping companies work better. That’s what I’ll say. So it’s very broad. We’re doing something much more specific than that. But being a subscription service that’s B2B means a lot of things. So immediately you know that the price point is high enough that you’re probably going to have ads that you use to drive growth that you’re probably going to even have maybe even a sales team or like pay to get good press. All right. Put the effort into paying, literally. There is there’s a lot of things that certain price points afford you. So if you’re a consumer app, you can’t pay to get users in the door because that’s just not the right. The math doesn’t work out because if we spend a dollar per user, you’re going to end up spending hundreds of millions of dollars to get people. And so that’s one thing about the structure, but I think that there’s a lot of other creative things we could do. The one I’m most excited about is just that it is actually an enterprise product that is kind of social and that one person’s using it. It means that other people should start using it. And so that’s the way I think about that, is more about the efficiency of our ads or sales team where if you if the the net revenue you get from a given customer takes into account the revenue that they would get from bringing on other people, that just makes it that much more efficient because you have this problem with with when you’re when you’re paying for distribution, where you have your customer acquisition cost and then you have your lifetime value. And if the lifetime value is greater than your customer acquisition cost, you can drive that channel really hard. That could be AD or could be a sales team. It could be a bunch of things. And if you have virality added into that, then that just makes your lifetime value like a multiplier essentially, and that makes it just that much easier to find channels that are that are productive. And when it comes to the growth of my startup, like structurally, I’m extremely excited about that, let alone that. It’s also a social product, which means that there are all these hooks that I can have to get people engaged to come back in. So this isn’t so much about distribution, but more about re-engagement, where any social product done right will have things that are socially appropriate at the right time to get you to come back into use the product which will increase engagement and retention. And that actually affects your lifetime value because people will find the product useful. So that’s that’s really where we’re we’re hoping things will pay off. On the engagement of the virality side as far as taking all these lessons learned from growth and apply applying to start.
Bronson: Let me ask you about that. Knowing what you know now, would you ever start a startup that wasn’t inherently able to put into play what you’ve learned? If there wasn’t a way to reengage people with it, if there wasn’t a way for to possibly go viral? Would you do something that’s a great idea but didn’t have some of the things baked into it by the nature of it? Or do you just totally ignore it?
Ivan: I mean, there are certain products that aren’t really conducive to that. So like if we if I built like a robot, you know, going back to like my robotics would be.
Bronson: Hard to go by.
Ivan: With a distribution model. Like, like how does that work? Yeah, all these, all these probably negative stories that I can have, like a swarm of drones. But I think that this is not like a hypothetical question. Before I did the startup, I had a spreadsheet of dozens of ideas and actually thought about growth in the context of each of them and made the decision to do this one because it worked out so well, both on the quality of the core product we’re building and also how quick we’d be to revenue and then how easily we can drive that out to get growth further down the line.
Bronson: Yeah, that’s what I was getting at. All right. Last question, Yvonne. This has been an awesome interview. People are going to love this one. What’s the best advice you can leave us with for anyone trying to grow a startup? High level advice.
Ivan: So what we were talking about before with intuition really applies. And so people think that there’s some like some lessons to learn, some secret, and the way to get good at anything is just to do it, just to practice. It’s like riding a bike. And so there’s not some secret formula. And so you just that’s really, really good news because you just got to try and then you’ll get good at it. And if you’re focusing on growth, you’re going to get really in-depth knowledge about it for for you and for others around you from like where you learn from. So just, you know, be heads down and work hard and then you’ll make it.
Bronson: That’s awesome. Yvonne, thanks again for coming on the show.
Ivan: Cool. Thank you.