Sangeet is a platform expert that advises and mentors numerous startups. In this episode he teaches us the Growth Canvas, a structured approach to thinking about virality.
TOPIC SANGEET COVERS
- He teaches Growth Canvas
- His best way to define a platform
- What are the fundamental building blocks of a platform growing platform
- How did he begin thinking about it
- His insights about the biggest mistakes that he sees startups make as think about virality
- What gives him the idea to create a Growth Canvas
- The structured approach to thinking about virality
- And a whole lot more
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Bronson: Welcome to another episode of Growth Accretive. I’m Bronson Taylor and today I have Sanjeet Chowdhury with us. Sanjeet, thanks for coming on the show.
Sangeet: Thanks for having me here. Great to be here.
Bronson: Yeah, absolutely. I think we can have a fun discussion because of your expertize. But let me tell our audience a little bit about you first. You were a founding member of into its business in Asia. You’re a contributor to Harvard Business School Books. You’re a technology analyst, a conference speaker, a startup mentor and a self-proclaimed platform junkie. Does that all sound about right?
Sangeet: Yeah. Well, yes and no.
Bronson: So tell me, you do so much recently. What have you spent most of your time doing? What are you currently got going on?
Sangeet: Sure. So I, I used to run incubation for Intuit, Indonesia, and at the time I got really interested in multi-sided businesses which connect, you know, creators of consumers or buyers with sellers. We think of it as you know, we think of it as content platforms like YouTube, which connect video me to the various viewers or marketplaces like Airbnb, eBay. Mm hmm. So what I realized was that this model was pretty much the business model for the future of the Internet, because the Internet is about connecting different people together, and business is about connecting supply and demand. So if you can connect supply and demand with a network, that’s pretty much the future of what Internet businesses are going to be. So I believe that these businesses are going to be more than more pervasive, not just in the startup world, but even traditional industries will have to move towards this model in some way. And so I just wanted to really, you know, understand this model extremely well, because I think is the model of the future. And that’s what I’ve been doing. And all my activities, whether it’s the book that I’m writing or the speaking that I do or the tons of advisory work that I do, are all aligned towards understanding how platforms work and helping platform startups and platform businesses to grow that. That’s what I’ve become and that’s great.
Bronson: On that kind of a high level. What’s the best way to define a platform? Have you had to kind of summarize it into something simple?
Sangeet: Sure. A platform is essentially a form of business which connects people, which connects people who produce something with people who consume that. So if you think of Airbnb, it’s people who have rooms and who want to let it out. They’re producing something and then they are travelers who are traveling and they’re consuming those rooms, right? In the older model, if you weren’t thinking of platforms, you would have to build a hotel and you would have to build your own rooms to satisfy demand. But with platforms, you can. You don’t need to own any of the rooms. You just continue to say. So YouTube, again, is a platform that connects to sites at Twitter, to the platform that connects people who reach something with people who read those tweets. So that that’s that’s really the easiest way of thinking of platforms. I don’t think of the two sites as two different markets, but as the tools that people perform, because on the Internet, we can perform a needle daily. So that’s how I think.
Bronson: Now that makes a lot of sense. Now with platforms, you know, you’ve been really drawn to platforms like you said in your work. Currently, you call yourself a platform junkie. You write a blog that is going to platforms dot info. So really your entire universe kind of revolves around this platform idea. What made you so drawn to it initially? You said earlier that, you know, you you think it’s the future, but initially, was that while you were drawn to it or was that other things?
Sangeet: Well, it was the fact that I myself was building quite a few platforms where they were that into it. I built a pretty large platform out in India connecting farmers with buy the farm produce and the impact that it had on the farmers was immense. It led to a 50 to 70% increase in annual income for the farmers because of the fact that it could uniquely match them with the right buyers. So I felt that that’s where the power of the Internet is in connecting. It was sets of people who need each other, because traditionally we’ve never had this this supreme amount of connectivity. So we’ve always had whatever, you know, a business pushes out to us, we go to a store, then we buy it. But now we live in a world of choice. And that’s why I believe that every industry I mean, if you think of education, education is is not about joy. That’s about there is certain schools you can go to and just consume whatever they start over there. But now we are seeing things like Udemy and Skillshare coming in with anybody can be anything and anybody can learn that. So I see this happening across industries really. And that’s that’s really why I’m excited about it.
Bronson: Yeah, absolutely. And every industry that has a platform come to it gets revolutionized. And I think, like you said, education is just beginning that. And so it’s going to be great to see more and more platforms really come in and figure out how to connect the supply and the demand of education. And I’ll go for every market that the world has. I think, you know, software is eating everything and platform is eating. Both industries, I think. Right.
Sangeet: I agree. I mean, that that’s very. But then that article by Marc Andreessen was one of the reasons that got me into this way. The software is eating everything and it’s not just because it automates things, but also because of the connectivity. That’s that’s really what’s happening now.
Bronson: You mentor a lot of startups, you know, through different channels. When you mentor startups, do you encourage them to try platforms? Because sometimes, you know, startups can have a small idea or a simple idea. And to think platforms, you have to think big. You don’t start usually thinking about platforms and connecting people with the supply and demand. You think about a simple thing you can do for the world and turn a buck. Do you encourage them to think big and think platforms well.
Sangeet: If you think of it, a lot of startups these days want to be the Airbnb effects or the effects. Now, ambient Airbnb themselves are platforms fundamentally. So if you want to build the Airbnb effects, you have to ultimately understand how platforms work, how do you get both sites in together and things of that sort? So very often what I see is, you know, you it’s, it’s ultimately it’s, it’s fairly simple. You just need to realize that your users are not just consumers, they are also producers. So the way you create features for them, the way you have incentives for them to come on board are different for them as producers and different as consumers. So that’s the only fundamental difference that you need to account for. Apart from that, you need to realize that platforms needed to value without without users because you do that creating value. So if you take all of these two factors, building a platform, it’s becomes more manageable at the same time of it. We always hear this thing, you’re going to have only one Facebook. No matter how many social networks you build, you’ll have only one that will have a billion users. So platforms have this tendency to have some kind of a winner take all, you know, model. So you need to be careful about what kind of platform you’re building and whether you know that that market is already taken care of or is the best you can do, like Instagram competing with Facebook. So you need to think about that both aspects. Otherwise, I think startups are really the ones that are changing the world with platforms today. So I do encourage them to do that.
Bronson: Yeah, yeah. No, it’s great. I like how you see it because you don’t see it as a super difficult task. You just see it as a set of things that need to be in place. You have to think differently, but it’s very possible. Just don’t compete in a platform that already has a winner because they usually do have a winner take all. So fight about tomorrow’s platform, not about yesterday’s. So I like how logical and methodical your thinking around platforms really are. Now you have a great resource, a great article that you wrote where you talk about the different approaches to business and you talk about the platform approach in distinction to the stuff approach and the optimization approach. Talk to us about those three, the stuff, the optimization and then the platform, because I think it’ll give us a sense of the movement toward platforms in the world.
Sangeet: Sure. So. So traditionally the way business has worked in. Since you create something, you push it out and people consume it. And if you think of news, traditionally, journalists would read the news. They would push it out. And then users would would read it. They would read it. The optimization approach is essentially what happened in the first wave of the Internet, or as we call it, which was there’s a lot of stuff that’s been created. But so far we’ve just been getting all of that, pushed it. Now let’s pull it. So that’s what Google did. There’s a lot of news out there. But but you go to Google and you figure out exactly what you want to do. Then you got a query based on that and it tells you the date for those. Now, the platform approach is essentially what does it say? Is that for getting the journalists, everybody, the journalist, so everybody now can create stuff? So that’s that’s the platform approach. So if you think of another example, if you think of the travel accommodation problem, hotels, how to stuff approach, you want to serve more travelers, you build models, like minded women. You know, hotels are coming in and they said, we’ll do the optimization approach, we’ll get all the hotels together and we’ll help you figure out the best hotel based on that. So we’ll optimize it. But then Airbnb comes in and says, Forget hotels, anybody you don’t know hotel now. So that’s the platform. So that’s the transition, you know, of how software the leading the world first by optimization and then by platforms that that’s okay.
Bronson: So to start out, we had things to sell and that was kind of the very beginning. And then we optimized how we got the things to the people. They could Google search for it, they could find it more efficiently. We could find our buyers. Now the idea of a maker and a buyer have emerged and we have platforms. Everyone’s a creator, everyone’s a consumer. And the platforms make even better connections than Google can because it’s all there in real time at once. So is that kind of the movement through it?
Sangeet: Precisely. I mean, you you you just nailed it with that. That’s exactly what it’s about.
Bronson: Yeah, it’s exciting because that’s a very different model for the world. And like you said earlier, we’ve never had these super connected computers at all ever in the history of mankind. So it’s essentially it’s the first time that platforms are possible at scale, which is incredibly exciting. I mean, I can’t wait to see what it’s going to do in the next ten, 20 years because it’s going to turn everything on its head. I think.
Sangeet: It’s doing.
Bronson: Yeah, exactly. Now, growth out of TV is all about growth. I mean, that’s our angle on things. So let’s talk about how to grow a platform, because I know you actually have a lot of expertize in this and you’ve already mentioned a little bit of it. You know, as we talked here, the chicken and egg problem, some of those things. And you actually have the skill set of overcoming some of the difficulties associated with the platform. So first, tell us, though, what are the fundamental building blocks of a platform of growing a platform? How do you begin thinking about it, you know, at stage one?
Sangeet: Sure. So the platform is interesting because when you start, typically the platform has zero value. If you think of Twitter, that’s just a place where you can write 140 characters. It’s absolutely useless. So so there’s a problem that at number of users there’s absolutely no value for the first user does not find any value. So due to the critical mass of users, the users who come in do not see any value in using the platform. So till you hit the critical mass, you cannot just rely on, you know, setting up a funnel and optimizing the funnel because it’s not just about getting traffic and converting them. It’s not like an airline ticketing website at all. So the first challenge is how do you bring in users when there’s no value, but how do you bring it to consumers when there are no producers? How do you think in the sellers when there are no buyers and then vice versa? How do you bring in buyers and sellers? That’s a challenge that we see across platforms, and I’d love to talk about how that translates into how those things can be sold, because that’s what this show is about, right? The second challenge that platforms have is. You’re getting all of these people into onto the platform as you grow. You need to ensure that you connect the right people to each other so that there’s no noise, because it’s like getting a lot of people into a room and then there’s just going to be a cloud over there. So you use data extremely carefully to decide, okay, this is this is a person who’s worth listening to. This person is not worth listening to. So you need duration of the users, users who are creating stuff and you need to have the content that they feeding. So of all the videos on YouTube, this is the video that you should be watching. That’s that’s what you do. You should be able to do. So these are the two growth challenges that a platform has first starting off and then second, maintaining that level of signal over the noise.
Bronson: Yeah, that’s great. Well, let’s talk about both of those a little bit and how we kind of overcome those. So the first one is, you know, having supply and there’s no demand having to man when there’s no supply, you know, when there’s no consumers and no producers, you have nothing but a Twitter that’s able to produce 140 characters, but it’s completely useless. So how do you. Which side you attack first? How do you think about it? How do you get either side? Walk us through the process. You know, as granular as you can to to kind of, you know, show us how one of these things are built.
Sangeet: And I think this is the interesting part because I read a lot about this on my blog. But let me condense that for, you know, 3 minutes of good debate on this. Right. So so think of it this way. You have a platform, you have producers and consumers. So you have a demand side and a supply side, right? Mm hmm. Now, the way to solve the chicken and egg problem is to create some incentive so that one side can come on board and stay long enough so that you can bring in the other side. You think this first site has an incentive?
Sangeet: Right. So let’s let’s take an example. Let’s let’s let’s take the example of it. It started. Yeah. I mean, it had a chicken and egg problem. Nobody was posting any links and nobody was reporting anything. So it just did a lot of thinking. They just load a few simple bots, which started putting up links over there and started opposing and downloading those links. So pretty soon you had these thousands of fake users who were using that. It’s so that now when you got a real user, he felt that there was actual activity happening with it. Okay. Because the supply enforced right off the bat in a similar way, they did something very similar people also the box with which they could purchase stuff on eBay and then it would insist on being by people and by that, the demand was created for people. So that’s how people solve the problem. Now, let’s let’s take a slightly different example. Let’s think of, you know, how you can leverage existing platforms to build. So think of Airbnb. What you did was you had to get hosts and you have to get travelers. But you, you were starting with nothing. So what we did was that it used Craigslist, which already had both these bodies, and then it started allowing users from Airbnb to Craigslist so that if I’m a host on Airbnb, my listing gets posted to big list. The demand side from the list comes from Airbnb. Ultimately, Airbnb went after that hosts on Craigslist and said, Why don’t you start posting stuff on Airbnb? So they got to supply that. So this kind of gloss, you know, cross-pollination with an existing platform works really well for platforms. Yeah. Another, you know, another thing that we see very often is that because platforms that Zillow value at Zillow uses a way to solve that is to create something which has some value even for the single user. So have some single user value. Okay. So Instagram people think of Instagram as this photo taking app, but Instagram is really a social network. That’s that’s why it’s so threatening and that’s why people bought it for $1,000,000,000. But to start the social network, Instagram started with something that had single user value, which was just an app. And in the course of using the app, I asked the producer could share my thing on Facebook and then get consumers on Instagram, ironically, using Facebook to go Instagram. Yeah, right. So so that’s another thing that we see very off the platforms. So yet another model that we see often is the ad for platforms to go very fast. You. Initial users do all be interested in each other, right? So if you’re getting people who are selling, you know, toys you want to buy is also people who are looking to buy toys. So focusing on a niche is extremely important. And that’s one of the reasons Facebook did so well because it focused on Harvard initially and then it focused on the various Ivy League schools and then connected all of them together. That’s something we see with local commerce platforms as well, like Foursquare just focusing on New York and then gradually spilling over to other cities. So did some of the you know, the models that are used, you decide the supply or the demand. One of these you’re going to start. You get the other side. If you think of one last model that I’ll share this. If you think of Skillshare, since I’m involved with them as a writer, if you think I’ll get a share of you, essentially you just stuck at one side, which is you just started with teachers initially and you tell the teachers, Hey, we’re giving you stuff too. Then your class, you get the students for this. And then when the students come, some of them become teachers. Even writing in works the same way. So that’s that’s another model of solving the, you know, the chicken and egg problem so that many of these different models, these are some of the government patterns that we see.
Bronson: Yeah. Now, that’s such great advice he just gave us. I want to walk through little pieces of it just to make sure everybody’s clear on what was said. You know, one of the things you mentioned, the what I heard at least, was that when you’re growing a platform, there’s different stages. And the stage that Reddit is at now, you can’t just begin there. You have to do things that you don’t plan on doing long term to actually get things going. So if your PayPal, you don’t plan long term on robots buying things on eBay. If you’re Reddit, you don’t plan long term on having bots upvote and downvote things, but if you think you can skip that stage, you’ll never get to the place where you get to ignore the bots doing things. So you have to get really creative and hustle a lot and or stay in the stage you’re in for being a platform. And you also thought about leveraging other platforms as kind of the second thing, you know, other platforms. You know, that’s the thing about platforms is because they’re so super connected, they’re perfect to kind of siphon off users from other people. They’re so super connected and the connections are so loose and not hierarchical that you can actually go into an existing platform and take large amounts of users if you’re super creative about it. But then you’re also probably going to be able to be disrupted the same way. So you have to think about that, you know as well. You also mentioned having a single player mode, making sure that there’s an experience that doesn’t have to have a group to make sense until you have the group. And then you talked about focusing on a niche, kind of like, well, Facebook did this. I think all of those, you know, bits of advice are just incredible for growing a platform and the things we should all keep in mind. Now, let me ask you this. What are some of the biggest mistakes that you see startups make? Because you see startups that you mentor or they’re building platforms, you give them your advice. They go off and do what they think is right, but they’re not. So what are the mistakes you see?
Sangeet: I think the biggest mistake is it doesn’t seem obvious, but very often startups try to do platforms the way they would do on platforms, the stuff businesses, right. So they just decided that, okay, I’m going to spend some money on F.M. and I’m going do some content marketing and I’m just going to get this traffic. And then they look at those traffic spikes and it doesn’t really matter because they’ve not solved the chicken and egg problem. So you have a huge drop off and that’s one of the most common problems that I see, that until you solve the chicken and egg problem, none of these optimizations matter. Duke is all that you’re going to have problem. As you mentioned, it’s all about horses. You just got to get a lot of people somehow together and get them to interact. And it’s not about looking at Google Analytics and seeing where people are dropping off and not it’s extremely different from that. So that’s one challenge that I see very often. The other mistake I see very often is that right in the beginning, the startup does not focus on quality. So if you think of a dating website, if you just have a lot of men coming there and, you know, just just creating a mess that none of the ladies want to get come in. So that’s a problem that happens across platforms. If you want to open out, if you want to create the next YouTube and you don’t have a lot of high quality videos, you’re not going to get good human interest at all. So focus on quality right from day one is very important. And I think, you know, the platforms that have done really well have done good. The focus, right. If we look at LinkedIn, it focused on Silicon Valley in the beginning, really high quality connections from the get go that it focused on very good content right from the beginning. So quality focus is extremely important.
Bronson: So ignore funnels initially and focus on quality content. And I think I read on your blog last night, you know, you talk about how, you know, people want to focus on, you know, active, you know, acquisition funnels like the AR funnel, you know, you know, acquisition activation, retention, referral revenue, the popular day McLure funnel. And that’s great when you’re building a platform until you figure out the supply and the demand, there’s nothing you can really do with the funnel and that’s when you have to get, you know, do the Reddit or the PayPal kind of hack to make things work. It’s not really about moving them through to the point of purchase. It’s just a different mindset. And I can imagine it’s hard to change gears into platforms if you’ve never been around them, if you’ve only been in other kinds of businesses. It’s probably hard to change gears and force yourself to think that a platform uses new kinds of connections through new kinds of things, and other models just don’t apply as well as we wish they would.
Bronson: Yeah. Now, let me ask you this. What are some examples of companies that just do a great job with growing a platform? I mean, we know about the some that you’ve already mentioned, you know, Airbnb and you know, those kind of things. What are some other ones that you always point to as great case studies of how to do this well?
Sangeet: Well, okay. Some of the some of the ones that have done it really well now, I think Facebook as an obvious example, but there’s really got a lot of things right on to and they did that really well. I would say whoever has done it really well on a city by city basis, they have less of a problem because less of a chicken and egg problem because the supply side is heavily curated by them. They decide which limousines come in and all of that so they can get one side on board. But they’ve done a very good job of building a platform. I mean, Airbnb, the best example, I mean the YouTube, the fantastic example again any day apart from that flicking at a really good job early on of you know think of is one of the first content platforms out there on the web and they did a really good job by integrating with the blogosphere and getting the bloggers on board initially. So these are some of the examples. You know, Squid is a great example, actually. If you think of Square, Square is trying to create a platform layer on top of that. If that’s were to with it started with the single user model, it just said, okay, I’m just targeting the widgets first and you don’t even need to convenience to be on square. And then later on they said, okay, now that we have consumers, they don’t want the square. So these are all the you know, and the single case study, the firm doing this, right? Yeah.
Bronson: No, that’s great. Until you just mentioned Square, I never thought about Square as a platform. And it just shows you how exciting this new world is where, you know, credit card merchants can become platforms for buyers and sellers that aren’t necessarily, you know, businesses to actually go and, you know, give money back and forth. So platforms are just there’s so many things that are left to be done with platforms still. Now, you also teach about virality. You mentioned you’re an adviser to Skillshare and you also have an upcoming class on Skillshare. And the class is around the growth canvas. And the growth canvas is about designing virality for a product. So that fits in perfect with the audience that’s watching Growth Actor TV. So first, you know, we’ve heard about, you know, the lean canvas, you know, the business model canvas. There’s all these canvases that are out there, but I’ve never seen a growth canvas, which is really exciting to me. So what gave you the idea to create a growth canvas? And for the people watching, they’ll have this on the screen as you talk here. But what gave you the idea for this?
Sangeet: Well, you know, a problem that I often see while approaching growth in general is that we try to package everything into X and then we try to apply it across the start ups, whether it applies or not. And we all learn in retrospect that it doesn’t apply like that. So whatever. So that’s a challenge that I’ve seen with virality as well. We’ve tried to figure out these invite loops and then we try to focus that. It’s just about optimizing and that’s it. But if you think of it but charity is actually not just a hack, it’s part of the user experience because it’s something that a user does on your product because of it. Someone who is not on your product comes onto your product. So it’s actually a conversation happening between two people that is facilitated by your workflow, right? So I feel that in this whole focus on key and this whole focus on optimization, we’re kind of losing the, the basics of virality, which is the sender recipient, the sender, well, using the product, spreading the word about it and the recipient just taking some action and coming back. So how can we make this a good experience? So it’s a design approach to go with it rather than an Excel approach to both, if I could put it that way. Yeah. And if you think of, you know, what, what I like to build with a good canvas, essentially, if you think of a standard and a recipient talking to each other, how can you minimize the friction that is there for this whole cycle to work? So you minimize that from a design perspective rather than saying, okay, if we spend if you spend more than twice, the game’s going to go up this way because sending more than twice may not be a good experience for the user. So that’s that’s really why I’ve kind of looked at it from a spatial perspective. This is how the earth should look.
Bronson: Yeah, that’s why I was excited when I saw it because, you know, I’ve had people on a show before talk about the viral loops that they used and that that’s exciting to talk about. And there’s things to learn from that they talk about, Oh, the user signs up and then they email a friend and we send the friend this. But nobody’s ever really taken that one step higher and said, okay, philosophically at the canvas level, what’s going on? What values are being exchanged? And I love the way you kind of boil it down, which is there’s a sender and there’s a recipient, and all it’s happening is the sender is sending something to the recipient and you’re facilitating that, like you said, in the workflow, the product. So that’s kind of the simplest and easiest way to think about virality. But all of a sudden, a lot of things become very clear when it goes beyond, oh, viral. Let’s just have an email in the. Intentionally. Oh, viral. It’s just have a social network integration. That might be the answer. But you didn’t get there through working through the actual questions that would make that the answer. So this canvas allows us to really get to the end result intelligently and not just imitate someone else’s approach to virality. Do you think that’s right?
Sangeet: Yeah, absolutely. And I’d love not to take into the kindness account how it works.
Bronson: Take us through it and we’ll have it up on the screen and the canvas. I’m not sure how you move through it when you teach it. So I’m just gonna let you kind of move through it the way you think is best. I don’t know if you start with the sender or the house or the recipient, but you go ahead and walk us through the canvas here.
Sangeet: Okay. Sure. So you have the canvas thinking of you, the single batching process that’s happening there to send on your product. So this guy is using your product and he you want him to do something, which is send something out, right? Mm hmm. Now, the challenge that happens with virality is a user comes to your product for a certain reason. The act of sending something out should be aligned with that reason. Because the problem with gaming, for example, is the user there to play a game is not there to send invites. So you need to see what can you get the user to do. That is actually a part of using the product itself. So if you think of so this is again the platform thinking helps because if you divided users into producers and consumers and if you focus on producers, then if the producer is creating something, it’s in the interest of the producer to send it out of the product. So if you think of Kickstarter, I’m creating a project on Kickstarter. If I want to get it funded, I’m going to send it out. And the moment I send it out, people are going to come to know about it. So people are going to come back to Kickstarter, even though I never invited anybody to Kickstarter. So the invitation is no longer about sending an email invitation or the Facebook entry gets information. The invitation becomes a part of using the product itself. If you think of how do I put a media, I put a video on YouTube, the next thing I want to do is tell the world about it. So I go to Facebook, I go to my blog instead of the video over there. So these are the old ways. So I kind of try to figure out what is the motivation for the sender. And that’s the first blog, the byte by Will the Sender What You Want Them to do. So the three motivations that I boil boiled down to, typically there are three motivations for for instance, one that I’m here for a certain reason and if I spread the word, I get more fun out of it. And I took a picture of Instagram. I share that on Facebook. I get more fun out of it. The other is fame. So I put this video on YouTube. If I share it, I get more fame out of it. And the final thing that you would not usually want to go to, but some banks have to escort you. If you cannot deliver funnel fame to the user, you have to give them some money to get it to get the stuff out. Right. So essentially, motivations boil down to these three factors. Then you need to see how you can, you know, get the user involved in the fun and fame itself and get the stuff out. The second part is what exactly is going out of the product? Usually we think it’s an invite, right? We think that we just send an invite out and we get to get somebody back in. But here’s the problem with invites. We just get so many of them that we don’t like it, right? So the way to get people to know about your product is to send a part of your product out there. And the best part of the product to send out there is actually what is created on the product. So think of what your product and then what you’re creating on it. If it’s YouTube, it’s a video, if it’s Instagram, it’s a photo. If it’s Kickstarter, it’s a project. The thing that you they’re creating on it is something that can be sent out and it can travel on an external network. Right. And over there, that’s going to get leaked. We do that, getting it to the issuer and more than more people can see it. But it’s it’s a part of your product and it’s acting as a demonstration of what it brought to the boat. It’s not just a dumb anyway. Right. So that’s the same upside down on the recipient side. The sender took something and extended it out on an external network. Now, this is where, you know, we normally think, hey, it’s a Facebook integration, but do those for different products, different kind of integrations might be useful. If you’re if you’re creating a sylveon phobia monkey, you may not want to share that with your Facebook friends. You may want to use email to send the service to certain people. If you’re if you’re if you’re using Etsy, you might want to share your product on Pinterest, not on any other, because it’s all about visuals. So you need to see what is that external network which complements what I’m building over here. If you think of YouTube, like when YouTube started, there was no Facebook account. So another thing but wasn’t big enough at any point early on. So what you did with it, a lot of integration with MySpace where you already have had these banks and the fan fanbases. So the band suddenly had a way to put up the video within and then begin to buy. It was no longer about invites. It was about finding a good external network. So that’s the bad part of it. What’s the what’s an external network? Lines with the platform that we have. Finally, when you are on the external network, there is this question of why build the unity connection there. So yes, the recipient was the recipient the connection. So if you just you know, you just see this whole list of giving notifications on Facebook, it’s not something that I want to take an action on that typically do what even I feel you this take actions. One is that what is shared on the network clearly shows what the additional product is about. So a video of YouTube if if it is put on Facebook, it shows that of get you to the the place that you go to see more videos. Right. So it shows that this is what that platform is about. Secondly, there should be a clear call to action that this is exactly what you need to do. Very often, you know, we we to put a call to action, we just think that getting the word out is enough. So that’s that’s where, you know, you can play on to why the recipient will take action. So these are the full design elements of good, if I could put it that way. And then there’s the optimization elements which we already focus on a lot. But do you want me to pause before they get to the optimization?
Bronson: No, I think that’s great. I mean, basically, you know, just to make sure we’re clear here, you have the center side and the recipient side. And with both the sender and the recipient, you have to ask the question, why? Why should the sender send it and why does the recipient want it? And those are things you really walked us through, because we can just think, Oh, they want our product to succeed. They don’t they don’t care. So we have to give them some actual motivation that they care about. And then on the sender side, you’re thinking about, okay, what do they send? And then on the recipient side, where do they receive it? And so we have to be you know, we have to choose those things carefully, choose the right platform that makes sense for the product and send the kind of thing to that network that shows off the product. And so it really makes a lot of sense if you ask the why for both sides put out content that’s relevant on a network that’s relevant, then really you can start using the how engine to grow over, you know, virally. So let’s talk about the how engine in the middle chunk there. Walk us through kind of mechanics of that.
Sangeet: Sure. So how is pretty much what we do when we think of other looks. But the problem is we we forget the other four questions and then actually jump to how very often so. Right. So how is essentially, you know, if you think of the sender, how can we. Of things that he sends out. So that could involve two things. It and this is where this becomes interesting because we usually have this dichotomy that should I focus on, I should focus on engagement. But if you focus on the design, the more often you engage a creative on your product to create something, the more often you are likely to have something else. So engagement and growth are really become linked, right? If you if you answer the question and for that, it allows you to send it to print it as well to share it on to. But that’s a place where engagement and growth are getting linked together. And so the first thing is how how can I increase the number of sense to ways to do that? Either they just keep bugging the user to send something more often, or just say, Hey, buddy, why don’t you create something? And now that you’ve created something, send it out there. So that makes it more, you know, organic for the user. The second thing is, you know, how do you allow it to spread to more than the network? Because now it’s outside your product. It’s outside. It’s not on your domain. It’s not you know, the video is not the user is not at YouTube.com, the user is on Facebook. So what YouTube does is the moment the video finishes, the it shows you the nine other videos out there. And the interesting thing is the user may not have wanted to share the video that he saw, but one of the other nine videos he might want to share that with his friends. Right. They use on the on the external network. And so they have these videos different ways of how you can increase the ability for something to spread externally. Finally, you know, the third part is how do you convert, which is having a really crisp call to action and keep testing different calls to call to actions, whether you often be ignored this far because we focus entirely on the top of the funnel, how can we get more stuff out when the call to action is very important and the final part is when the user clicks, how can you minimize the number of steps between that click and creating something on your platform? Mm hmm. So either creating or sharing something from there. So essentially, that’s it. How can you minimize the number of clicks with the next set? And if you think of all of this, then none of this is in principle. None of this is really new. It’s just that it’s the new structure of putting things together. Back in the nineties when we used to have these emails forwarded to 100 people or you will die with in the next seven days, that’s about all of the motivation of whether there’s a clear call to action. There’s a clear reason for spread. I mean, everything is that that really is the perfect example of something we can buy those Jane spam mails.
Bronson: Yeah. You know, one of the things I love about how you’re thinking about it is that the best way to get somebody to share something is not just bag them, but have them become a creator. And there’s something about it. Once you’ve actually taken part in the act of creating, then it’s a part of you and you want to share yourself. You want to talk with the thing you were a part of. So I love that little insight there. But yeah, you’re right. It all comes full circle. You know what we were doing in the nineties with those Mel? You know things. It’s all the same now. We’re just refine it a little bit on how to make money with it, but it’s still the same stuff. No, that’s great. Now, when it comes to virality, let me ask you the same thing. I ask you about platforms. What are some of the biggest mistakes that you see startups make as they think about virality? And I think I know what you’ll say based on what you’ve already said. But go ahead and tell us, though.
Sangeet: Sure. Okay. Yeah. Recently I recently actually wrote about this as well. And ironically, that post went to the elevator because it would. So, yeah. So, so couple of things. The first thing, I mean, I’m not going to have too much about this because we discussed this, but it’s that well, I’ll tell you that experience because you are making you this take actions. So if you believe that design is important, you need to design by that as well. You don’t just optimize by the loops. That’s the first part. The second part that I feel is very important is that very often we don’t understand the difference between vitality and word of mouth. Word of mouth is something that happens when I like a product so much that I want to tell other people about it. And it’s not something that happens only in the Internet world. It happens offline as well. I love this toothpaste. I want to tell people about it. Whatever vitality is very different. Vitality is whether they like a product or not. I’m a video product, but while using the product, it’s in my best interest to share something that gets people back to the product. So I never go with any people that, Hey, Instagram is so cool. Well, why don’t you download it? I just share the picture and people know that I’m a crappy photographer. They see the picture and they know, Hey, there’s something about Instagram that makes them a good photographer. And so that’s that’s why that to be it has nothing to do with delivering delight. It is just about creating workflows where people can share something from the product. So that’s a common mistake that I see is that startups think that they are they have designed by reality, but what they’ve actually done is they’re hoping for word of mouth. They believe that the products over they’re hoping for what the word of mouth is, something you cannot guarantee. Right, because it’s not in your control. But vitality is something you can design for. You can see, okay, in the workflow, this is where you have the right motivation for somebody to send something out. So that’s a goal. Again, a very common mistake that I see. So I share that.
Bronson: I love that distinction. I mean that you’re helping me in my thinking as you’re talking about the difference in word of mouth and virality. I’m realizing that I’m not quite thinking about some of these things accurately because you can design virality. You’ve said there were a few times, and I think that’s the right word. You know, we’re not talking about the UX, we’re not talking about the UI. We’re talking about designing, engineering, virality by understanding these pieces and how they come together. And when you design virality, you know, like you said, it’s in their best interest to share it. Even if they’re not going to share it by word of mouth. They may never tell someone to download Instagram, but they are telling people inadvertently because it’s in their interest. You know how the platform works. So I think that’s awesome insight right there. You know, saying this has been such a great interview. Let me ask you one last question here. And it’s a high level question that I in just about every interview with. But what’s the best advice that you can give to any startup that’s trying to grow?
Sangeet: It’s okay. Yeah. It’s an easy.
Bronson: All right.
Sangeet: Jeff, because I give this all the time, so. Okay, so the best advice is don’t focus on sign ups, don’t focus on app downloads. All those are useless metrics. The the the only metric that you should be focusing on is pretty simple. If you can explain what is why a user uses your product in one sentence, just look at the number of users who are doing exactly that. So if you’re building a marketplace, the reason it should be used is for transactions. So nothing else matters. None of those transactions matter after use does not matter. People keep saying Dubai. For Airbnb, it doesn’t really matter. It’s just about transactions. Active use matters. If you’re creating a product, you want people to spend more time. So Pinterest, Facebook, Dubai, email, you matters. So focus on what people need to do over there and just see how many people are doing that. And everything else is really a vanity metric. So this is something I see startups struggling very often with, but there’s a very simple thing. I mean, if you think of if you think of something like Google, for example, all the marketing is focused not on people downloading Uber, but it’s focused on people entering the credit card number into Uber because that is an example of somebody who is going to at some point use where to buy something to book a cab. So focus on what that action is, which predicts that the is going to keep using you for what you are. So that’s really the cop.
Bronson: That’s that’s incredible advice. I love that it allows metrics and analytics to actually seem simple and human because we all know the one thing that actually matters. And yet we come up with all these metrics to just, you know, cloud our vision and confuse everyone, confuse ourselves. At the end of the day, every product has one metric that truly matters, and just focusing on that can lead to so many great breakthroughs saying, this is an awesome interview. I’m so glad that you came on the show and I’m going to watch this one over myself just to learn from it again. So thanks again for coming on.
Sangeet: Thanks. Appreciate it. Thanks for having me. I loved it.