3.2Growth

So what do you think matters most for growth? You’ve had tons of lectures, and people have said it over and over, so what do you guys think matters most for growth?

Audience: Great product.

Schultz: What does a great product lead to?

Audience: Customers.

Schultz: And what do you need those customers to do?

Audience: Spread the word.

Schultz: Yes that’s it, retention. Retention is the single most important thing for growth. Now we have an awesome growth team at Facebook and I’m super proud to work in it, but the truth of the matter is, we have a fantastic product. Getting to work on growth of Facebook is a massive privilege because we are promoting something that everyone in the world really wants to use, which is absolutely incredible. If we can get people on, and get them ramped up, they stick on Facebook.

number one problem I’ve seen for startups, is they don’t actually have product market fit, when they think they do.

Retention is the single most important thing for growth and retention comes from having a great idea and a great product to back up that idea, and great product market fit.

The way we look at, whether a product has great retention or not, is whether or not the users who install it, actually stay on it long-term,

you have awesome product market fit. You’ve built an ecommerce site, and you have 60% of people coming back every single month, and making a purchase from you, which would be absolutely fantastic. How do you then take that, and say, ‘now it’s time to scale

Startups should not have growth teams

Mark put out monthly active users, as the number both internally he held everyone to,

Every different company when it thinks about growth, needs a different North star.

retention rate is important, you should know what vertical you are in and what retention rates are, What you need to do is have the tools to think, ‘who out there is comparable’ and how you can look at it and say, ‘am I anywhere close to what real success looks like in this vertical?’

The way we look at, whether a product has great retention or not, is whether or not the users who install it, actually stay on it long-term, when you normalize on a cohort basis, and I think that’s a really good methodology for looking at your product and say ‘okay the first 100, the first 1,000, the first 10,000 people I get on this, will they be retained in the long-run?

Gross Merchandise Volume

its the amount of Gross Merchandise Volume that goes through our site, the percentage of e-commerce that goes through our site, that is what really matters for this company. This means that when someone is having a conversation and you’re not in the room, or when they’re sitting in front of their computer screens, and thinking about how they built this particular project or this particular feature, in their head it’s going to be clear to them that it’s not about revenue, it’s about Gross Merchandise Volume.

The machine of getting users and then direct them for browsering items listed.

Okay, are your power users leaving your site because they’re getting too many notifications? No. Then why would you optimize that? They’re probably grown-ups and they can use filters.

what you need to focus on is the marginal user, think about the user on the margin, don't think about where yourself when you are thinking  about growth. the number one thing we need to focus on is getting them to those 10 friends or whatever number of friends they needed.

So for operating for growth, what you really need to think about, is what is the North star of your company

one metric

everyone in your company is thinking about it

and driving their product towards that metric

and their actions towards moving that metric up

Just have a North Star, and know the magic moment that you know when a user experiences that, they will deliver on that metric for you on the North Star,

and then think about the marginal user, don’t think about yourself. Those are, I think, the most important points when operating for growth. Everything has to come from the top.

 knocking down barriers is often important to think about for growth.

 Facebook started out as college-only, so every college that it was launched in was knocking down a barrier. When Facebook expanded beyond colleges to high schools, I wasn’t at the company, but that was a company-shaking moment where people questioned whether or not Facebook would survive,if the culture of the site could survive.

The two things we did, I think that really drove growth initially was, 1) We focused on that 10 friends in 14 days 2) Getting users to the magic moment. That was something that Zuck drove because we were all stuck in analysis paralysis and, ‘Is it causation? Is it correlation?’ Zuck would say ‘You really think that if no one gets a friend, that they’ll be active on Facebook? Are you crazy?’

First, is payload - so how many people can you hit with any given viral blast. Second, is conversion rate, and third is frequency. This gives you a fundamental idea of how viral a product is.

Everyone thinks that Facebook is a viral marketing success, but that’s actually not how it grew. It was word of mouth virality because it was an awesome product you wanted to tell your friends about.

And one other thing that Chamath instills in us and Mark still instills across the whole of Facebook is move fast and don’t be afraid to break stuff. If you can run more experiments than the next guy, if you can be hungry for growth, if you can fight and die for every extra user and you stay up late at night to get those extra users, to run those experiments, to get the data, and do it over and over and over again, you will grow faster.

Mark has said he thinks we won because we wanted it more, and I really believe that. We just worked really hard. It’s not like we’re crazy smart, or we’ve all done these crazy things before. We just worked really really hard, and we executed fast. I strongly encourage you to do that. Growth is optional.

when we think about the future what belongs to the next generation, we have to try hard to focus on the positive rather than the negative otherwise the what belongs to the next generation would seem stupid anyway.

In retrospect, when I was determined to participate the grand social experiment of monetary system, that is, Bitcoin, I was guided by this mindset. I knew I had to try hard to focus on what seemed positive rather than negative, otherwise what seems wonderful today might well seemed no more than stupid three years ago.

The future is unstoppable, it has to come, and everyone should have a nicer tomorrow, we cannot change the past, but we might well change the future by switching our mindset when thinking about the future or what belongs to the next generation.

to something unrealistically illusion often comes from the single focus point. not good.