The 3 Questions Every Startup CEO Needs to Ask to Reach 1 Million Users
Some of this information is taken from my new book Explosive Growth — A Few Things I Learned Growing To 100 Million Users & Losing $78 Million.
There are numerous strategies that helped my startup acquire at least 1 million users on several apps, however these are the 3 questions that you need to be asking yourself if you want to grow your product to stratospheric levels.
1. Is There One Thing Your Product Does 10x Better Than Anyone Else?
If you look at the current startup ecosystem, you’ll see dozens of identical products differentiated by minor features or branding. Most of these products are doomed.
When you’re offering essentially the same value as another product, users have no real reason to stay loyal to your product, or to deal with the headache of migrating from your competitor’s product to yours — a concept called “switching costs.”
If you take one thing away from this article, let it be this:
A product that is merely marginally better than your competition is worthless.
In order for customers to switch to your service — and in order for you to retain your customers — your product needs to do one thing at least 10 times better than any other product.
And don’t just estimate your product’s comparative value. Find a way to quantify your product’s performance, and then organize an experiment to actually test it against your competitor’s. I call this the ‘10x Experiment’.
For example, when my dating app AreYouInterested first transitioned to Facebook’s app platform, we wanted to do one thing:
Help people find a date faster than any other service.
So we tested it. We had people sign up for our service and others, and time how long each service took them to find a date.
Because our app was the first to use ‘Facebook Connect’, our customers were able to sign up with a complete profile on our service 10x faster than any other. We were also the first app to implement swiping on mobile, which allowed our users to receive matches and messages 10x faster than competitors.
Once I verified this, I knew we were sitting on a goldmine.
Our dating app would soon after grow to 100 million users.
At the sametime, this 10x experiment would later force us to admit when a new competitor had a better product.
Several years later, a new app was on the market: Tinder. Hearing all the buzz about it, we ran the same experiment using AreYouInterested against Tinder. Everyone using Tinder found dates 10x faster than on the other dating apps, including ours unfortunately.
We knew right then that Tinder would grow explosively.
Legendary entrepreneur and author Gary Vaynerchuk sums it up best by saying, “You can market your ass off, but if your product sucks, you’re dead.”
#ExplosiveGrowthTip: Run The 10x Experiment: Have you quantified how much better your product’s core offering is than the competition? Is it 10x better? (Share your #ExplosiveGrowthTip on Twitter and tag @CliffLerner)
2. Are You Actually Data-Driven, Or Do You Pretend To Be?
Being “data-driven” is sort of like leading an “active lifestyle.” A lot of people claim to be active, but in reality, they jogged twice last month.
What allowed AreYouInterested to grow so quickly was that we were running hundreds of simultaneous tests and letting the data guide our development.
The key for us was to avoid being too selective about the data we measured. We tested and measured everything, and then let the data paint a thorough picture of where the opportunities were for us to double-down. This constant A/B testing enabled us to get 100,000 users in one day.
If this sounds vague, let me give you an example. Many early stage startups focus on measuring one thing — growth. They will measure their number of signups month-to-month, create a chart that shows “hockey stick growth,” and call it a day.
However, growth only tells one piece of the story. If that same startup with “hockey stick growth” has horrible retention and loses 80% of users after a month, then their growth means nothing.
Similarly, if the startup has a low Net Promoter Score (a score assigned by surveying users on their likeliness to promote your product to a friend), then all high growth means is that the startup is great at signing up new users — not that their product is high-quality.
#ExplosiveGrowthTip: Growth without retention is worthless. And marketing a product with a low Net Promoter Score & Retention is essentially saying to potential customers, “Hey, my product sucks, come check it out.” Do you know what your NPS and 30-day retention is?
Ultimately, to call yourself data-driven, you need a data analytics platform that can answer almost any question, including:
- What user behavior correlates most strongly to users leaving your product?
- What is the point in the customer journey where customers realize your product’s value and become much less likely to leave? This is commonly referred to as your product’s “Aha Moment.”
- What do all of your best users, your “Power Users,” have in common?
Once that analytics system is in place, you are free to test anything and everything. You can “move fast and break things,” to quote Facebook, knowing that your data will instantly validate or invalidate your new idea.
You will also need a process to evaluate all of these tests. We developed a simple, quick, and effective system called ‘CIO’ (Celebrate , Iterate, Obliterate). Here’s how ‘CIO’ works — every week you would evaluate each test and do one of the following:
- Celebrate: If an experiment exceeded our lofty goals, we’d ‘lock it in’ for all users.
- Iterate: If it showed potential, we’d tweak it and revisit in a week.
- Obliterate: If the idea didn’t add massive value, we’d remove it completely.
If you’re doing this right, most of the tests will be obliterated. This is a good thing since it means that you’re constantly learning. Also, keeping ordinary features around will ultimately clutter your user experience and create a bloated code-base, so it’s critical to constantly obliterate mediocre ideas. And when the rare ‘celebrations’ do occur, make sure to actually celebrate, which for us meant playing Celebration by Kool & The Gang.
And as the Hall-Of-Fame entrepreneur Mark Cuban says, “You only have to be right once.”
With real analytics, you can test integrations with new platforms, roll out new features rapidly, and change up your operations quickly and without fear. This agility is key to explosive growth.
Without the instant feedback of a real analytics platform, you’re forced to build slowly, without an ability to validate and iterate on ideas quickly — essentially a death sentence for startups.
#ExplosiveGrowthTip: You can’t improve what you don’t measure.
#ExplosiveGrowthTip: Building product and testing features without robust analytics is like driving blindfolded — it won’t end well. Do you have an effective dashboard with all your key metrics?
3. Do You Have A Vision For Your Culture?
Building a great culture can often times be orders of magnitude harder than building a great product. While your product won’t change without you authorizing a development, anyone within your company can affect your culture, making it much more difficult to control.
However, without a great culture, your company will fail 100% of the time.
Many founders are completely product-focused. They hire people for their skillsets, and dedicate all of their attention to building a perfect product. As a result, their company culture is created largely without their input, and it often isn’t pretty.
A great culture is built intentionally. It involves hiring employees that you REALLY enjoy spending time with, are eager to learn new skills, and will run through walls to succeed when the inevitable roadblocks appear.
It also sometimes means passing on people who have impressive skills, but aren’t the right culture fits.
A great way to screen for culture fit is what I call the ‘Beer’ (or Karaoke) test. As part of every job interview, we would take the candidate out for a social activity — bowling, karaoke, drinking, etc. We’d do anything as long as it was in a casual environment doing an activity the new candidate enjoyed . If their personalities clashed with our team, they were a no hire.
This isn’t to say that everybody who works together needs to also be best friends, but you spend more time with your co-workers than anyone else so it’s particularly important in a small group that people generally like each other.
#ExplosiveGrowthTip: Implement the beer (or karaoke / anything the interviewee enjoys doing for fun) test. Don’t hire someone you wouldn’t want to spend time with after work. Several of our best ideas came as a result of hanging out with coworkers outside of work.
Another key, and often overlooked, piece of your culture comes from your mentors. I was lucky to have Andrew Weinreich as my mentor. His unique experiences, as a result of creating the world’s first social network called sixdegrees, helped me navigate the explosive growth opportunities on Facebook.
The incomparable entrepreneur and Author of some of my favorite business books, Tim Ferriss says, “You are the average of the five people you associate with most, so do not underestimate the effects of your pessimistic, unambitious, or disorganized friends. If someone isn’t making you stronger, they’re making you weaker.”
This concept may be the most important idea here. Your values, quality of your decision making, and motivation to achieve your goals and dreams will be greatly influenced by people you surround yourself. If you spend time with people who are negative and drain your energy, you won’t succeed.
Author of “Mastermind Dinners” and Networking Guru Jayson Gaignard has some prophetic advice for this: “Be a talent scout. Amazing people become increasingly amazing over time.”
Unfortunately, I didn’t meet Jayson until two years ago at his world-class Mastermind Talks Conference. I could’ve used his advice a few years prior when I inexplicably passed up opportunities to work with legendary entrepreneurs including Mark Cuban, Tim Ferris, and Gary Vaynerchuk, (more on this in my book), but I won’t make that mistake again.
#ExplosiveGrowthTip: Write down the five people you spend the most time with. If you become the average of them, would you be happy with that outcome? If not, it might be time to upgrade your inner circle.
Tweet your #ExplosiveGrowthTip and tag @CliffLerner.
All of these Explosive Growth tips and viral marketing case-studies are taken from my Best Seller Business Book, Explosive Growth: A Few Things I Learned While Growing To 100 Million Users And Losing $78 Million.
