James Currier on Unlearning What You Have Learned | #ProductSF

At Product SF Growth Expert and Managing Partner at NFX Guild, James Currier shares eight counterintuitive examples for ways to think about growing and developing an early product. This presentation was recorded at Product sf, an event hosted by Greylock Partners that brings together founders, PMs and product leaders to talk about the challenges of building new innovative products that change lives and create habits. For more podcasts, please visit news.greylock.com I.

Am thrilled to bring James Currier up the stage. James is one of I remember when I was working for Reid back In, you know, 2004, 2005, there was a list of about 10 people in the valley who were considered people who really understood growth and virality. Reed certainly put himself on that list. There was a guy named Greg who was running a company called Tagged, and James Currier and Stan Chidanovsky, who are running a company called Tickle, were very much in the top five on that list. James and Stan actually invented the email importer that Reid was talking about earlier with LinkedIn. And you know, over the past decade I've been lucky to get to know James better, consider him a great friend and actually one of the people who's taught me as much as anything about growth and network effects. James has founded 10 different companies, have gotten to 10 million users. So Tickle to Monster back then, which was a quiz app, is one of the co founders of GIF, which is a B2B health app. So a lot of his lessons don't just apply to consumer but also apply to B2B. And now he's a founder and runs a program called the NFX Guild that is one of the best programs to bring early startups into where they really can kind of come and sort of get sort of a boot camp on network effects and growth from James and Sam and Gigi, who are the partners there. So I'm thrilled with what James is going to have to tell us about the secrets of growth. Thanks James.

We've put this together for you. So as Josh had said, I've got this long history of just growing companies a lot for those of you who don't know me. And right now we're running NFX Guild, which is this accelerator for growth and for network effects. And that means that I've spent 1100 office hours in the last 18 months with these 45 companies working on product and design and on growth channels and, and on retention and all that. 60% of these companies are B2B. So what we're talking about isn't only for consumer companies. Okay? So that's sort of my background. So what I want to talk about today is I'm a student of growth. I don't think you'd be good at growth without seeing yourself just as a student, because it's constantly changing and it's constantly evolving. So I'm a student of growth. And one of my favorite teachers, of course, like most of you, is Yoda. And I love this phrase that he's got, which is, you must unlearn what you have learned. And in the last 18 months, I've really felt that a lot about myself. I needed to unlearn a bunch of things that I had learned. And so I'm gonna share some of those with you today. The first thing got about eight of them. I am not a fan of paid growth. I, like Reid, have had a strong belief that no big company was ever created that bought their traffic, okay? And there's a lot of good reasons to feel that way. First of all, we actually suggest zero, because if you start spending money, it becomes a drug for you and for your team, okay? And it warps the team. It warps how everyone thinks about what's going to happen. They don't do the hard things around the product to figure out how to get it to grow organically because they think, oh, we'll just buy some more traffic. All right? And of course, the biggest companies literally have not used paid acquisition. And trading. Your equity for advertising is really the deal with the devil that you're making, okay? So when you have companies that pay for their growth, like a Zynga or a Groupon, you see, very quickly they soar up, but then they drop pretty badly. Okay? So there's lots of reasons to dislike paid growth, but a couple things are happening. So some of you might have seen this chart before. If you look at the history of the free growth channels that were available to us, you can see that this is what's happened over the last 15 years. But what's interesting today is that while it's confusing and there's lots of different ways to grow organically, there isn't actually a really clear way to go. It's the lowest point that I've seen in the last 15 years of our ability to virally instrument growth. It's the lowest point. A lot of people don't talk about that, but that's the facts right now. And the reason and what's also happening at the same time is that the paid channels, if you look at the history of the paid channels, they have been growing up, getting better, getting more and more sophisticated, getting larger. Right. The trend over the last 15 years is clear that the paid infrastructure is becoming much more viable for those of us who are starting companies. And what's interesting about it, of course, is that there's three of them that are really dominating, or two of them, actually. And it's our friends over at Facebook. And you all know this intuitively, but I haven't actually said this publicly, but my God, they've taken over, and they've taken over through size and excellence. Not only are there tools for targeting better than everybody else's, but they're growing so quickly. They have so much inventory that you can still buy something worth $5 for a buck on their platform. Google was like that for about a year and a half before all the people who were bidding on their platform sort of overbought. I remember running a dating site 10 years ago where we were paying $2.40 for somebody worth $1.80 to us. But we had to to keep the network effect going in our matchmaking site. And so Google became really overpriced really quickly. This happened to happen with Facebook. And so darn them. Darn them. They've got us. They've got us. And so many of the companies that I'm working with are using that Facebook platform that Rob Goldman and his team are doing with the. With the targeting to great, great effect. And so it's a real. I don't know how long it's going to last, but it's a real moment in time to take advantage of this platform. It might be another year, might be another two years, I don't know. But right now, it's fantastic time to buy traffic on Facebook. So be grateful that they're there and don't ignore it. So I'm softening on my dislike of paid. I'm really starting to open up to the opportunity that maybe that's going to be okay if we have tools like this going forward. Okay. Now, if you've got a company that has higher LTV and you're a B2B, paid is better for you. If you've got a really competitive industry where you've got to get to size and scale before others do, paid can be critical to your overall business growth strategy. Okay. If you aren't going to grow without buying, then you should probably do that too, so you can stay in business and get the next round of funding or hire the next person who's excited about your growth. Okay. And it also can move you, if you do it at the right time, with the right ferocity, you can move into a market leadership position, which then builds a network effect for you. Okay, so these are cases in which I do advocate using paid technology. And what that means is that I believe that today paid is more necessary than ever. And your strategies and tools and techniques and sophistication about how to spend your money in these things is more important than ever. Okay? The corollary to that, which we could also spend a whole day talking about, is that fundraising is now more expensive. Actually, fundraising is becoming more and more of a competitive weapon because the distribution environment has changed. So think about that broadly as you think about how to grow your business. Second. Second point I want to make. So I am unlearning my dislike of paid. I'm unlearning that, and I encourage you to do the same. Second thing, we believe that language is the foundation. But. But what most product people do, I don't know if it's you guys, but most product people start by saying, oh, there's a problem, and we're going to build a product that's going to solve that problem, and then we're going to market it. Our passion is in building, most of us. And so we start around the building of the product that's going to solve the problem, and then we slap some language on it. And I hear this conversation all the time. And out of the 45 companies in the last 18 months, at least 40 of them have come in and said some version of this. And I don't know where people are being taught this. I don't know how I was taught this back in the 90s, but I was also taught this. But through experimentation, I realized that this is actually the wrong way to look at it. Okay, the right way to look at it, if you want to grow your business, is to say, what is the language? How am I going to market this? Reid had mentioned earlier this idea of figuring out your distribution channel. I'll actually say, figure out your language. Your distribution channels will take care of itself once you explore those as well. But figure out what the language is and then build the product to fit what the language is. Okay, so let me give you some examples. Years ago, we had a company where it said, store your photos on the homepage, and we were allowing for digital photography to be stored on the site, and we were not growing. And so one day we literally just changed the homepage to say, share your photos. And the team that was working on it said, oh, our site doesn't actually share photos, it just stores the photos. And I said, well, fix that, right? And so what ended up happening was they started building features that allowed people to share their photos. And we registered 47 million people in six months. Okay? And that was back when the Internet was 250 million people. Okay? So what we realized is that by changing the language, you change how the users are interacting with your site. They're going to get viral, they're going to use it. But you also change your thinking about the product so that the features and the way the subsequent language in the product works actually fits with the main value proposition. And we create explosive growth with that. Another quick example, we had a matchmaking website and the promise there was find a date, and it wasn't growing, and we had to buy all this traffic from Google and elsewhere to keep the whole thing going. So what we do is we changed the language and the value proposition to, say, help people find a date. And when we did that, we registered 28 million people in about nine months virally, with no cost to us because we changed that, and then we changed the product subsequently. Okay? So these were my first tastes of how powerful that language can be. And then I'll give you another example. This is kind of a crazy one. We wanted to be in the gaming space. We did eight games that didn't work. Okay. We were running out of money. And we said, well, all the best games have a name that sort of says thing of a place, you know, like World of Warcraft or, you know, whatever. So it's like, okay, well, where are we going to have the battle? There's going to be a battle in the game. So we came up with all these different places where you might end up having a battle. And we put up ads on Facebook. Okay. This is at the early Facebook platform, trying to figure out which ones people are going to click through on. So which one clicked through the most click throughs was on Atlantis. We're like, who the hell knew that? All right, Atlantis. So apparently we're going to build a game that's in Atlantis. All right, next, let's go on Facebook and try wars, battles, Dragons, Amazons, whatever. What do you think the number one click through was? Of course it was Amazons. And so my team said, oh, let's do Amazons of Atlantis. And I'm like, no, they're clicking through to look at naked breasts. They're not actually clicking through to play Amazons of Atlantis. So we went with number two, which was Dragons. Okay, so we're like, all right, let's build a Dragons of Atlantis game. And go. And in six months, the team actually was. Five months, the team built a game. And the first year, we did 60 million. The second year, the game did $120 million. Okay, so using. Starting with language, all right, everyone's doing it wrong. So unlearn what you have learned, you know, and everyone coaches you. When you do a pitch in venture capital, start with the problem and then talk about how you solve it. Unlearn that, too. Okay, number three, you guys are successful. You all went to the right schools, you work for the right companies, you have all the right friends. You're successful. And so you want to tell people what you can do for them. Hey, I'm going to do this for you. This is what my product does. This is what my team built. Don't you want this? This is what you think is going to win them over? But you know what? People don't care about you, and they don't care about their product. What do they care about? They care about themselves. So you've got to turn your language and your approach to people. You've got to unlearn that tendency to say how great you are. Okay, so here's an example of a viral path we had. Signing in with Facebook will make our app work better for you. Right? But they don't care about our app. Well, it's about you. Aren't you talking to the user about them? It's going to work better for you. Well, no, fundamentally, you're talking about your app. So change it to feeling lazy. Sign in with Facebook. This is what WhatsApp does, because the feeling lazy is about me. And then I sign in with Facebook doesn't tell us at all about the product. And so we copied that from WhatsApp and we put it on a couple different companies, and we'd get like, a 20% lift almost. Okay. Just by doing that. Okay. Or another example would be 232 new members joined, you know, our website this week. Congratulations to our community. So, James, aren't I talking to them about our community and them and their community? Well, no, you're fundamentally talking to them about you. Again, you're still obsessed with yourselves, so you got to get over that. You've got to unlearn that and try something. Like, another person who works at Google is now connected to you. See who it is. Right? Massive lift. Massive lift. Airbnb actually does a really good job. You can't see it from there, but basically, I'm going to show you all the circles. This is all about your friend, Kent. It's all about friends. And then all the red circles are about you, you, you, you, you, you and your friends. It's not about Airbnb. It's about you and Kentucky. Even though it's about renting hotels or something, it has nothing to do with hotels. It has everything to do with you and your friends. And this gets incredible race. In New York, there was an elevator in a building run by a husband and wife. And the people were complaining that the elevator was slow. They were always complaining and the couple were sick of it. And so one of the couple went down and put in a beautiful piece of art. And the complaining stopped for three weeks while people stared at this beautiful new piece of art. And they said, see, that's the problem solved. People just want something to look at. But after three weeks, people started complaining again. So they put in another piece of art. Two weeks later, people started complaining again that the elevator was too slow. So one of them came up with a brilliant idea of putting a mirror in the lobby, and the complaining stopped for good. Because people's interest in themselves is endless. If you remember that story and apply that to how you build your product flows and how you think about your growth, you're going to find uplift in every stage of your company. Okay? All right. So unlearn talking about yourself. Number four, network effects. Okay. We've discovered 13 different network effects, and we try to apply them to every company that comes into the NFX Guild. Sometimes, most of the time we can, not always. But what these network effects do is they help you with retained growth. Okay. A lot of people think network effects are viral effects. They are not. Viral effects is a completely different playbook. Network effects is about retaining people, so network effects are about retaining people. But you want retained growth, because new user growth isn't really much of anything. Everything should be retained. So you want to build network effects into your business. And in fact, a bunch of these companies in the NFX Guild have turned their businesses into networks so they could build the network effects. And then on top, in fact, two of them in red at the top actually changed their name to include the word network in the business, and they turned it into a network so that on top of it, they could build lots of growth paths. It gives you a fertile foundation, on top of which to build lots of different growth paths, because the language just makes sense. Oh, if I'm joining a hotel's network, then when I get that email, that makes sense. To me, and suddenly the click through rates are higher, the retention is higher, et cetera, et cetera. So make it a network. And we've seen generally 30% new user growth and 100 increase in retention. When you move to this kind of a model, create that foundation, that substrate of a network effect in your product and on top of that, you build lots of great growth and retention paths. Okay? So here's another thing to unlearn speed. You guys think you're fast, you think you're working hard, okay? It is true that it's the number one advantage of a startup. Don't unlearn that, don't unlearn that. It is true. It is. It is the number one advantage of a startup. And it's true that if you can just get in more iterations, you're going to do better than your competition and better than you did last week. That is true. However, your level, your speed bar is set way too low. I guarantee you. I guarantee you. And I've discovered who the culprit is. The culprit is the schools you went to, okay, because you went to grammar school and then high school and then college and probably some of you grad school and then. And these things work at a certain pace. And you were successful in those environments, weren't you? And so that taught you this background noise that that level of speed is okay and that that level of speed will produce success for you. And then there's another culprit, which is these bigger companies that you've worked for where you also were successful, where things work at a certain pace and you just believe that that's how it's supposed to be. The fact is, the speed benchmarks you should be operating on, and this is a whole other longer talk that I give, the speed benchmarks you should be operating at are much, much higher than what you've been led to believe. And it's actually not painful to work at that speed if you have the right mentality about it, okay? You have to unlearn your assumptions about what speed looks like. It was a company who came in our first class and they were growing at about 150 people a day. And we got them to move to daily releases, which for many of you isn't a big deal. But for them it was a big deal. And suddenly they discovered all sorts of opportunities that they could incrementally explore. And then boom, the website took off. Now it's growing, I don't know, seven or eight thousand new users a day. Another company, Trellis was just in the last class and they were in the same situation. They moved to two times daily releases and their growth just exploded. Okay, so there's a speed bar that you guys don't want to be below. And getting your teammates to feel that way and to understand what real speed means is one of the critical things you need to do as a startup. Sixth thing I want to mention, and this comes up all the time with my companies. So they come in and they're like, okay, James, in the first week they say, here's my product. It's kind of working. I just want it to grow faster. And when you dig in on and they say, what do I do about this registration process? What do I do about this signup process? What do we do with this, this email? And that's usually missing the point. That's usually missing. If you dig into the numbers, you have to take a step back. You have to look at the foundation of the business to get real growth. Right. Tweaking things isn't going to make a big difference. Sometimes you have to change what it is that you're focused on growing. So a lot of folks just, especially in the last year and a half, when the funding environment's a little more difficult, competition is increasing among startups. I'm encouraging companies to actually jump to where they're monetizing so maybe they can take advantage of some of that paid acquisition. Right. And jumping from doing top line growth, which is where most of them are focused, and jumping them all the way down to monetized growth is really a big shift for the company, but makes a massive impact and gets them into a place where they can actually afford to grow. So instead of thinking of having a lifetime value of $0.18 for their user, they should be thinking about how could they have a lifetime value of 1800, but maybe serve far fewer users. Okay. And then be able to actually grow and build a big business. So jump to the money is a way of thinking, how do I build my business? Not just how do I build my user base? Right. You're already stuck on this idea that I've got the product, now I just need to build user base. That's not usually the case. Often you got to go all the way back and say, maybe I should just think about growing revenues. That's one way to do it. Another way to think about growing your business and not just your user base is to think, am I targeting the right customer base? Do I have the right customers to get to faster growth? So as an example, one of the companies was, came into our, into the accelerator and they were targeting both supply and demand with a small team of five people. So they were spread out basically trying to build two businesses at once. And what we decided to do was to target just power supply. Not just target supply, but, but target power sellers on supply, a very narrow target. And we got them to go talk to 10 of them. And nine of these power sellers said they wanted the mock ups that they made in about a day and a half. And once we knew that they wanted that, then we could go after them aggressively. And the company's gonna go from 0 to 10 million in GMV this year and we'll do 40 to 50 next year just based on contracts they've already signed. Okay. It was a change of who their target customer was and then which channel they used or whether they bought traffic on Facebook or whether they sent flyers in the mail or fax, it didn't really matter. All of the channels worked once they identified the right customer. Okay, so going back to those basics, before you start saying, how can I get a 4% increase? Okay, this is what we work on. Another example, the second company I'll mention is a company that's doing software systems for mid sized software companies to sell SaaS products. And they were targeting the customer success people. And they talked to 24 customers and four of them said they wanted it. And they came in saying, this is great, we've got four customers. I'm like, but how many did you talk to? And they said 24. And I said, boy, when I see a good company, the company has already experienced the market taking two fingers, shoving it in their nose and pulling their head forward. If no one has pulled your head forward like that, then you haven't found the market you want to be in. Okay? You're spinning your wheels. And so I encouraged them to range up and down the sales and marketing teams with their product to see if there was a better response. And sure enough, they went after the sales development reps. And out of 24, 23 wanted the product. So now that's what they're doing. And they're growing really, really quickly. Okay. The challenges of going back and thinking through the fundamentals about growing the business, not just your new users, okay, is that it's painful for your team. People don't like it. They get worried they bought into a different vision when they were hired. You convinced them of a different vision two months ago. You've got to change the homepage, you've got to change language. Many of Them were excited to serve this customer, but they're not excited to serve that customer. They don't want to be at your company if we have to serve this person, not this person. You might even have to change the name of the company in order to serve the new customer or to monetize at a higher rate. Instead of being an ad driven model. These are challenges to going back. And so most CEOs and most product people don't do the hard work of bringing their team along for the fundamental changes at the bottom which are going to allow for growth to just explode. And therefore the companies fail, they run out of money because of fear of going through these challenges. And I encourage you to understand that these are just fears and you will get through it and you will see massive growth if you find the right target. So the eighth thing that I'm going to unlearn and then we'll stop for a couple questions, is changing the name of your company. Often when you make radical shifts to what you're doing, you've got to go back and change the name of the company. I mean, we had a company called Emode back in the day and it was a horrible name. It sounded like 1999 because we invented the name in 99. And by 2002 or 2003 it just was old and we were buying, I don't know, half a million dollars of radio ad time and people couldn't understand it in the car. Emode. What was that? So we changed the name to Tickle, which was understandable, it was spellable, it was trademarkable, it was memorable. And we doubled the value of our company in a month. We increased our traffic by 50% and doubled the value of the company by changing the name to Tickle. And I just woke up to the power of the name of my company and how important that is. And most people overlook it. And it's a very emotional thing for people. I signed on to work for this company, not something called Tickle. And in fact, the engineers came to us and, and they sat in a group and they were all just glum as can be. They said, we don't want to work for a company named Tickle. Everyone's going to think it's a porn site. And I was just like, oh my gosh, we're going to lose this, like the whole company. They're going to quit over this name. And the board tried to fire me because I was doing this all wrong. And then six months later, we were on the COVID of Business 2.0 magazine. Is the way to change your name. So I learned a lot from that experience and I share that with you so that hopefully you can do the same thing. I invested in Infoseek back in the 90s and, and Yahoo just killed them because their name was better. Just killed them. I watched it, the press, everyone wanted to talk about Yahoo, exclamation point. Infosec is just a boring name. The guys were boring. It was bad. We just got killed. And then 60% of the companies in the NFX guild do actually shift the name of their company during the program. And the way we think about it is the name is so important because this is what is exchanged between people when they meet each other. Right. I say to you, I was just on Twitter and you hear Twitter and I just exchanged something with you. Okay? And it's the same thing. It sits between people, these words. That's why these names are so important. Okay? So these are eight things that you should unlearn what you have learned and hopefully it'll be helpful. Thanks. Question. So you showed the graph of the mobile platforms for organic growth. You saw the bump for Facebook, which was huge, and then a smaller bump for mobile, and now it's sort of at a low. But the paradox is that we have the most ubiquitous computing usage, Internet usage ever. Yes. And you see when someone like Pokemon tracks that like within two months, 500 million users, it's insane. So it feels like in this room we're trying to figure out, like, where does it get? Because we're sitting on this giant, giant install base. But it seems like there's really no obvious place to penetrate. I mean, curious for your. Well, that's exactly right. You know, the question is, we've got Pokemon Go growing at all time highs, yet we all feel a little bit like we don't know how to manufacture the growth. And that's the difference is that what we call that is entertainment virality, you know, so Pokemon Go is just random entertainment virality. Everyone wanted to talk about it, it captured the gestalt and boom, off it goes. Because we've got 2 billion people online now. You're going to see more of Those grow to 150, 200, 300 million people in the course of a month. But it's random. And for all of you, you're running one company. If you're an investor, it's a little bit better. You can invest in 30, but it's really random what ends up blowing up like that. And so for us as entrepreneurs, we would much rather have channels that we could manufacture that growth in. And those are the channels that are now going away because the platforms with the traffic have figured out how valuable it is, and they've just put payment walls in front of us in a very clever way, month by month, week by week, year by year. And that's why we're all paying more. Luckily, certain platforms like Facebook have given us good enough tools so that it's actually worth the money these days. But eventually it will stop being worth the money when Ford and GM and everybody else starts actually buying on Facebook. But for now, we've got an advantage, and in two years, when it stops, we'll figure something else out. Yep. Excuse me. When you talk about the learnings in the 20 to 100 per week, is that across the board in your mind? Is that everything from, like, advertising tests to homepage tests to product changes? Yeah. From my perspective, when I say 20 to 100 a week, I just want you guys thinking in orders of magnitude more than what we're doing today. And, you know, most teams, when I. When I tell them, hey, we're going to build this kind of a game in four months, they say it can't be done. And then it turns out it can be done. It was actually fun to do it. And so 20 to 100 experiments a week, you can do that as long as you have the systems in place. And that could be anything. But you want to be looking at data and making a decision on your product 20 to 100 times a month. That's at least. At least. I see people do more. I mean, we would release our Dragons of Atlantis game. We probably had, I don't know, at one point, we probably had 2 or 3 million concurrents and 45 million registered users, and we were releasing the site four times a day. I mean, so it can be done. Anything else? We good? We're good. Thanks, guys. Awesome.