[0:00]Thank you for coming. oversold, thank you. Um, cool. So you guys, uh, this is awesome. I've been watching the lectures in this course, isn't it absolutely amazing, the content? And now you're stuck with me today. We'll see how that goes. Um, so, uh, unlike Paul when he was talking in the Q&A and and you guys asked him what he'd do if he was at college today, and he said physics, I actually indulged myself, I went and I went and did physics, did physics at at Cambridge and I think physics is an amazing class to give you transferable skills that are really useful in other areas, but I guess that's not, uh, that's not why you're listening to me today. Like physics isn't the class, like, So I paid for college doing online marketing. Direct response marketing. I started with SEO in the 1990s. I created a paper airplane site. I had a monopoly in the, uh, small niche market of paper airplanes globally, which, you know, when you want to start a startup, also see how big the market could be in the long term, it wasn't great. But what that taught me was how to do SEO. And back in those days it was out of Vista, and the way to do SEO was to have white text on a white background, five pages below the fold, and you would rank top of out of Vista if you just said paper airplanes 20 or 30 times in that text. And that was how you wanted SEO in the 1990s, like, it was a really easy, easy skill to learn. Um, when I went to college, being a physicist, I thought paper airplanes would make me cool, and I was actually the most nerdy person in the physics class, so I created a cocktail site, which was how I learned to to program and that grew to be the largest cocktail site in the UK. Um, and that really got me into SEO properly when Google launched. So with Google, you had to worry about page rank and you had to worry about getting links back to your site, which basically at that stage meant one link from the Yahoo directory, got you to the top listing in Google if you had white text on a white background below the fold as well. Um, when Google launched AdWords, that's when I really started to learn how to do online marketing. And that was buying paid clicks from Google and reselling them to eBay for a small margin, uh, of like 20% um, using their affiliate program. And that was what really kicked me into overdrive into doing what everyone nowadays talks about as growth, or growth hacking, or growth marketing, and in my mind it's just internet marketing. Uh, using whatever channel you can to get whatever output you want, and that's how I paid for college and how I ended up going from being a physicist to a marketer and transitioning to the dark side of the force. So what do you think matters most for growth? You've had loads of lectures and people have said it over and over, so what do you guys think matters most for growth? Someone give me an answer. Great product. Great product. I agree. Great product. What does great product lead to? Customers. And what do you need those customers to do? Spread the word. Someone said stay on your site. Someone said that. 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 on it, but the truth of the matter is, we have a fantastic product. Getting to work on growth at Facebook is a massive privilege, because we're promoting something that everyone in the world really wants to use.
[3:06]Which is absolutely incredible. If we can get people on and get them ramped up, they stick on Facebook. So many times, like I advise multiple startups, my favorite was working with Airbnb, but I worked with Coursera, I've worked with other ones that haven't done as well as those guys. But the one thing that is true over and over and over again, is if you look at this curve, percent monthly active versus number of days from acquisition, if you end up with a retention curve that asymptotes to a line parallel to the X-axis, you have a viable business and you have product market fit for some subset of market. But most of the companies that you see fly up who talk about growth hacking and virality and all of this other stuff, going to try so hard not to swear, but uh, it'll happen. Um, their attention curve slopes down towards the X-axis and in the end intercepts the X-axis. Now, when I show this chart to most people, they say that's all well and good. You had a million people a day in terms of growth when you started the growth team at Facebook or you were at 50 million users. You had a lot of people joining the site so you had a ton of data to do this. We used the same methodology for our B2B growth, getting people to sign up as self-service advertisers, we used this analysis to understand how much growth we were going to have in that market as well. And in that place, when I joined Facebook, the product was three days old. And within 90 days of the product launching, we were able to use this technique to be able to figure out what the one-year value of an advertiser was, and we predicted it for the first year, to 97% of what the number turned out to be. So I think it's very important to look at your attention curve, and this is how we did it. If you see here, this red line is number of users who have been on your product for a certain number of days. So, a bunch of people, that should say zero, but a bunch of people will have been on the product, all of your users will have been on at least one day, but if your product's been around a year or whatever, you will have zero users who've been on it 366 days. Make sense? The curve sensible? Cool. So what you then do is look for all of your users who have been on your product one day, what percentage of them are monthly active? 100% for the first 30 days obviously, because monthly active, they all signed up on one day. But then you look at 31. Every single user on their 31st day after registration, what percentage of them were monthly active? 32nd day, 33rd day, 34th day. And that allows you with only something like 10,000 customers or whatever, to get a real idea of what this curve is going to look like for your product. And you're going to be able to tell, does it asymptote? It'll get noisy out towards the right-hand side, like I'm not using real data. It'll get noisy out towards the right-hand side, but you'll be able to get a handle on, does this curve flatten out, or does it not? If it doesn't flatten out, don't go and do growth tactics, don't go and do virality, don't hire a growth hacker. Damn it. So close. Um, half away, third, ninth, I failed. Um, you shouldn't have a growth team. Um, startups should not have growth teams. The whole company should be the growth team, the CEO should be the head of growth. You need someone to set a North Star for you, gratuitous shot of the, you know, NASA page. You need someone to set a North Star for you about where the company wants to go. And that person needs to be the person leading the company, in my opinion from what I've seen. And Mark is a fantastic example of that. Back when Facebook started, lots of people were putting out their registered user numbers, right? You'd see registered user numbers from Myspace, you'd see registered user numbers from contact, you see registered user numbers. Mark put out monthly active users as the number both internally he held everyone to, and said, we need everyone on Facebook, but that means everyone active on Facebook, not everyone signed up to Facebook. So monthly active people was the number internally, and it was also the number he published externally.
[7:05]It was the number he made the whole world hold Facebook to as the number that we cared about. If you look at what Jan has done with WhatsApp, I think it's another great example. He always published send numbers. If you're a messaging application, sends is probably the single most important number. If people use you once a day, maybe that's great, but they send one message, they're not really their primary messaging mechanism, so Jan published the sends number. Right? Inside Airbnb, they talk about nights booked, and they also publish that in all of the like infographics that you see inside TechCrunch. They always benchmark themselves against how many nights booked they have compared to the largest hotel chains in the world. They have, each of these companies have a different North Star. The North Star doesn't have to be monthly active users for every different vertical. For eBay when I was there, it was gross merchandised volume. How much stuff did people actually buy through eBay? Everyone externally tends to judge eBay based on revenue. Actually Benedict Evans has done this amazing breakdown of Amazon's business, which is really interesting to look at their marketplace business versus their direct business. eBay is all marketplace business, right? So eBay is being judged by its revenue when it actually has 10 times or whatever more gross merchandised volume going through the site. And that was the number that eBay looked at when I was inside there and optimized for. So every different company when it thinks about growth needs a different North Star, but when you are operating for growth, it is critical that you have that North Star and you define it as a leader. The reason this matters is the second you have more than one person working on anything, you cannot control what everyone else is doing. Right? I promise you, having now hit 100 people I'm managing, I I like have no control, it's all influence. Yes, I can say to one person do this one thing, but then the other 99 are going to do whatever the hell they want. And the thing is, it's not clear to everybody what the most important thing is for a company. It would be very easy inside eBay for people to say, you know what, we should focus on revenue. Or you know what, we should focus on the number of people buying from us. Or, you know what, we should focus on how many people list items on eBay. And Pierre and Meg and John, those guys, as various leaders, always said, no, it's the amount of gross merchandise volume that goes through our site. It's the percentage of e-commerce that goes through our site. That is what really matters for this company. Which means when people are having a conversation you're not in a room, or when they're sitting in front of their computer screen and thinking about how they build this particular product 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, or it's not about getting more registrations, registrations don't matter unless they become long-term active users. A great example of this was when I was at eBay in 2004, we changed the way we paid our affiliates for new users. And affiliate programs are a bit out of fashion these days, but the idea of an affiliate program is essentially you pay anyone on the internet a referral for sending traffic to your site. But it's mostly about getting access to like big marketers who do it on their own like separately and there's some really good stories from this.
[10:49]We were paying for confirmed registered users. So all of our affiliates were aligned to getting confirmed registered users to the eBay site. We changed our payment model to pay for activated confirmed registered users. So you had to confirm your account and then bid on an item or buy an item or list an item to become someone that we paid for. Overnight when we made that change, we lost something like 20% of confirmed registered users that were being driven by the affiliates.
[11:27]But the ACU user only dropped by about 5%. The ratio of CUA to ACU went up, and then the growth of ACU massively accelerated.
[11:41]The cause of this was if you want to drive CU, if someone searches for a trampoline, you land them on the registration page, because they think they have to register and confirm before they get that trampoline. If you want to drive ACU, you land them on the search results page within eBay for trampolines, so they can see the thing they want to buy, get excited about it, and register when they want to buy it. And if you drive just CU, people don't have an amazing magic moment on eBay when they visit the site.
[12:25]And that's the next most important thing to think about is how do you drive towards the magic moment that gets people hooked on your service? So in the lecture notes for this course, I've stuck in a bunch of links to people I think are brilliant at all of this stuff. That retention curve I showed earlier, there's a link to this guy Danny Ferrante, who's incredible talking about retention curves. The magic moment, there are two videos linked. One is Chamath talking about growth, who was the guy who set up the growth team at Facebook, and one is my friend Naomi and I talking at F8 four years ago about how we were thinking about growth back then, and in both of those, both of those videos, we talk about the magic moment. So what do you guys think the magic moment is for when you're signing up to Facebook? You hit that big green button. What is the moment when users are like, aha? Mark even talked about it at the startup school a few years back. See your friends. See your friends. Simple as that. And usually it is very simple. I talked to so many companies, and they try and get incredibly complicated about what they're doing. But it is as simple as just when you see that first picture of one of your friends on Facebook, you go, oh my God, this is what the site is about. And Zuck talked at Y Combinator about getting people to 10 friends in 14 days. That is why we focus on that metric. The number one most important thing in a social media site is connecting to your friends, because without that, you have a completely empty news feed, and clearly you're not going to come back. You'll never get any notifications, you'll never have any friends telling you about things they're missing on the site. So for Facebook, the magic moment is that moment when you see your friend's face, and everything we do on growth, and if you look at the LinkedIn registration flow, you look at the Twitter registration flow, or you look at what WhatsApp does when you sign up, the number one thing all these services look to do is to show you the people you want to follow, connect to, send messages to, as quickly as possible. Because in this vertical, that's what matters. When you think about Airbnb, or you think about eBay, it's finding on eBay that unique item, that pez dispenser, or broken laser pointer, um, that you really, really cared about and wanted to get hold of. Like, when you see that collectible thing that you were missing, that is the real magic moment on eBay. When you look on Airbnb and you find that first, you find that that first listing that's like a cool house that you can stay in, and when you go through the door, that's a magic moment. And similarly on the other side, when you're listing your house, the first time you get paid is an amazing moment. When you're listing an item on eBay, the first time you get paid is a magic moment. You should ask Brian what he thinks, because they've done these amazing storyboards, which I think has been shared of like the journey through a user's moment life on on Airbnb, and how excited he is. He's talking in like three lectures time, the guy's awesome at talking about the magic moment and getting his users to feel love and joy and all this stuff. So think about what the magic moment is for your product and get people connected to it as fast as possible. Because then you can move up where that blue line has asymptoted. Then you can go from 50% retention to 60% retention to 70% retention, easily, if you can connect people with the thing that makes them stick on your site.
[15:37]So, a couple more things we were going to touch on.
[15:42]Email, SMS and push notifications. On SEO, there are three things you need to think about. First one is keyword research. People do this badly all the time. So I launched this cocktail site that I talked to you about, I spent a year optimizing it to rank for the word cocktail making, turns out in the UK, no one searches for cocktail making, about 500 people a month. I dominated that search term, it was awesome. I got 400 visits a month. It was amazing. Everyone searches for cocktail recipes in the UK. And in the US, which is the biggest market, everyone searches for drink recipes. So I optimized for the wrong word. So you've got to do your research first about what you're going to go after. So research consists of what do people search for that's related to your site? How many people search for it? How many other people are ranking for it? And how valuable is it for you? Simple economics, I guess. So you do your keyword research, you figure out which keywords you want to rank for. There are great tools out there to enable you to do that. Honestly, the best is quite often the Google AdWords keyword planner tool. Really. Once you've done that, the next most important thing is links. So page rank is how all of SEO essentially is driven, and Google is based on authority. Now, there's a lot of other things in Google's algorithm now, like do people search for your website? There's a lot of stuff about the distribution of what the anchor text is that's sent to your site, so that if you abuse it and spam it, they can pop up with spam. White on a white background, five pages below the fold doesn't work anymore. But the single most important thing is to get valuable links from high authority websites for you to rank in Google. Most important thing.
[17:28]Then you need to distribute that love inside your site by internally linking effectively.
[17:49]And when I joined Facebook, we'd launched SEO in September 2007, which was before I joined. I joined November 2007. And we'd launched it and we were getting no traffic from the the pages we'd launched public user profiles. So when I went in and looked at it, the only way you could get to any public user profile was to click on the footer of the page for the about link. Then click on one of the blog articles, then click on one of the authors, and then spider out through their friends to get to all their friends. Turns out that Google was like, they've buried these pages, they're not very valuable, I'm not going to rank them. We made one change, we added a directory so that Google could quickly get to every page on the site, and we 100x SEO traffic. Very, very simple change, drove a lot of upside about distributing the link love internally. And then the last thing is there's a bunch of table steak stuff, XML sitemaps, making sure you have the right headers. It's all covered really well online for what you want to do. I'm going to stop now and make sure because we had a few questions, but what other questions are there?
[19:00]Go for it.
[19:07]Email is dead for people under 25 in my opinion. Right? Young people don't use email, they use WhatsApp, they use SMS, they use Snapchat, they use Facebook, they don't use email. If you are targeting an older audience, email is, uh, pretty successful. Email still works for distribution, but realistically, email is not that great for teenagers especially, and even for people at university. You know how much you use instant messaging apps and how little you use email, and you guys are probably on the high end of the scale for email because you're in Silicon Valley. That being said, on email, the things to think about. Email, SMS and push notifications all behave the same way. They all have questions of deliverability. So to finish first, first you have to finish. Your email has to get to someone's inbox. So if you send a lot of spam and you end up with dirty IPs or you send spam from shared servers where other people are sending spam from, you are going to end up being put in the spam folder consistently, and your email will fail completely. You may end up being blocked and have your email bounce. There's a lot of stuff around email where you have to look, when you receive feedback from the servers you are sending email to, 500 series errors versus 400 series errors, you have to be respectful of how those are handled. If someone gives you a hard bounce, retry once or twice, and then stop trying. Because if you are someone who abuses people's inboxes, the email companies spam folder you, and it's very hard to get out. If you get caught on a spam house link or anything like that, it's very hard to get out. It's really important with email that you are a high-class citizen, that you do good work with email, because you want to have deliverability for the long run. That counts for push notifications and SMS too. With SMS, you can go and buy SMS traffic via grey routes with people with having phones strung up attached to like a computer and pumping out SMSs. That works for a time, but it always gets shut down, and I've seen so many companies make these mistakes where they think they're going to grow by using these kind of tactics. If you can't get your email, your SMS or your push delivered, you will never get any success from these. Push, you spam your power users. I know that's slightly different to what I said earlier, but you actually spam your power users and give them notifications they don't care about, and make it really hard for them to opt out. So there's no settings where they can opt out, and they start blocking you, you can never push them once they've opted out of your push notifications. And it's very hard actually to prompt them to turn them on once they've turned them off. So number one thing to think about about email, SMS and push notifications is you have to get them delivered. Beyond that, it's a question of open rate, click-through rate. So what is the compelling subject line you can put there so that people are going to open your email, and how can you get them to click when they visit? Everyone focuses towards doing marketing emails that are just spam in my opinion. Newsletters are stupid. Don't do newsletters, because you're send the same message to everyone on your site. Someone who's signed up to your site yesterday, versus someone who's been using your product for three years, do they need the same message? No. The most effective email you can do is notifications. So what are you sending, what should you be notifying people of? And this is a great place where we're in the wrong mindset. As a Facebook user, I don't want Facebook to email me about every like I receive, because I receive a lot of likes, because I've got a bunch of Facebook friends. But as a new Facebook user, that first like you receive is a magic moment. Turning on that notification across all of our channels increased the click-through rate on our emails, SMS and push notifications. But we only turned it on for low-engaged users, who weren't coming back to the site, so it wouldn't be spamming for them, spamming them. So it was a great experience. So think about that. What notification should we be sending is the first thing that you need to think about on email, SMS and push. And then the second thing you need to be thinking about is how can you create great triggered marketing campaigns? So when someone created their first cross-border trade transaction, was one of the best email campaigns I was ever part of at eBay, in terms of click-through rates, it was awesome, because it was really timely, really in context, the right thing to do for the user. So I'd say, make sure you have deliverability, most important thing, focus on notifications and trigger-based email, SMS and push notifications beyond that. So I think we're out of time. There's one thing I wanted to finish with, which is, um, and if you guys have any questions, I guess like you can reach me and if I get spammed, I just won't reply. Um, we have great spam filters. No.
[24:43]Uh, my my favorite quotes is from General Patton, and it's so cliche, it's crazy, but it's awesome. A good plan violently executed today is better than a perfect plan tomorrow. And one of the things Chamath instilled in us and he still instills in us, and Mark instills across the whole of Facebook is this move fast and don't be afraid to break stuff ethos. If you can run more experiments than the next guy, if you can be hungry for growth, if you 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. And I strongly encourage you to do that. Growth is optional. Thank you. Yeah. Thank you.
