YC
Growth with Alex Schultz (How to Start a Startup 2014: Lecture 6)
@ Y Combinator
03/24/17
Takeaways
AS
Alex Schultz
03/24/17
@ Y Combinator
I started with SEO in the 1990s by creating a paper airplane site, which taught me how to do SEO effectively.
AS
Alex Schultz
03/24/17
@ Y Combinator
In the 1990s, the way to rank high in search engines was to use white text on a white background and repeat keywords multiple times.
AS
Alex Schultz
03/24/17
@ Y Combinator
When Google launched AdWords, I learned to buy paid clicks and resell them for a profit, which was a pivotal moment in my marketing career.
AS
Alex Schultz
03/24/17
@ Y Combinator
Retention is the single most important factor for growth; if users don't stay, the business won't succeed.
AS
Alex Schultz
03/24/17
@ Y Combinator
A viable business has a retention curve that levels off, indicating product-market fit for a segment of the market.
AS
Alex Schultz
03/24/17
@ Y Combinator
If your retention curve slopes downwards, it indicates a lack of product-market fit, regardless of initial growth metrics.
AS
Alex Schultz
03/24/17
@ Y Combinator
To achieve growth, focus on product-market fit first; without a great product, growth tactics won't be effective.
AS
Alex Schultz
03/24/17
@ Y Combinator
Every startup should have a clear North Star metric that aligns the entire team towards a common goal, such as monthly active users or gross merchandise volume.
AS
Alex Schultz
03/24/17
@ Y Combinator
At eBay, we shifted our affiliate payment model to incentivize activated users, which improved the quality of users we acquired despite a drop in quantity. To drive user engagement, land users on the search results page for trampolines on eBay instead of the registration page, allowing them to see what they want to buy and register when they're ready.
AS
Alex Schultz
03/24/17
@ Y Combinator
For social media platforms, connecting users with their friends quickly is essential; without this connection, users are unlikely to return due to an empty newsfeed.
AS
Alex Schultz
03/24/17
@ Y Combinator
The magic moment for Facebook users occurs when they see their friends' faces, which is crucial for user retention and engagement.
AS
Alex Schultz
03/24/17
@ Y Combinator
When considering growth, focus on the marginal user—the one who doesn't receive notifications—rather than optimizing for power users who are already engaged.
AS
Alex Schultz
03/24/17
@ Y Combinator
Establish a North Star metric for your company that aligns with your mission and values, ensuring everyone in the organization is focused on driving that metric up.
AS
Alex Schultz
03/24/17
@ Y Combinator
Internationalization is critical for growth; Facebook initially expanded too late into international markets, allowing clones to emerge while it focused on the U.S.
AS
Alex Schultz
03/24/17
@ Y Combinator
Building a scalable translation infrastructure is vital for reaching diverse markets; Facebook utilized community translations to quickly adapt to new languages.
AS
Alex Schultz
03/24/17
@ Y Combinator
Virality can be analyzed through three factors: payload (how many people you can reach), frequency (how often you reach them), and conversion rate (how many take action).
AS
Alex Schultz
03/24/17
@ Y Combinator
Hotmail's viral marketing success came from adding a link in every email, which had a low payload but high frequency and conversion rate, effectively spreading their service. Hotmail became viral due to its high frequency and conversion rates.
AS
Alex Schultz
03/24/17
@ Y Combinator
PayPal's growth was driven by its two-sided marketplace, connecting buyers and sellers, and its viral mechanism through eBay.
AS
Alex Schultz
03/24/17
@ Y Combinator
PayPal incentivized users by giving away money for signing up friends, which contributed to its viral growth on the consumer side.
AS
Alex Schultz
03/24/17
@ Y Combinator
Both PayPal and Hotmail achieved viral growth because of their high conversion rates, not necessarily high payloads or frequency.
AS
Alex Schultz
03/24/17
@ Y Combinator
Facebook's growth was primarily through word-of-mouth rather than email sharing, as it lacked a native way to contact non-users.
AS
Alex Schultz
03/24/17
@ Y Combinator
The virality of a product can be assessed by its conversion rates at each step of the user journey, from invites to sign-ups.
AS
Alex Schultz
03/24/17
@ Y Combinator
To achieve a high K-factor, it's crucial to analyze the conversion rates at each stage of the user acquisition process.
AS
Alex Schultz
03/24/17
@ Y Combinator
Effective SEO requires thorough keyword research to target the right terms that people are actually searching for.
AS
Alex Schultz
03/24/17
@ Y Combinator
Building valuable links from high-authority websites is essential for improving your site's ranking on Google.
AS
Alex Schultz
03/24/17
@ Y Combinator
Email is becoming less effective for younger audiences, who prefer instant messaging apps over traditional email.
AS
Alex Schultz
03/24/17
@ Y Combinator
Deliverability is critical for email, SMS, and push notifications; if messages don't reach the inbox, they won't be effective.
AS
Alex Schultz
03/24/17
@ Y Combinator
The most effective emails are notifications tailored to user engagement, rather than generic newsletters.
AS
Alex Schultz
03/24/17
@ Y Combinator
A strong growth strategy involves running numerous experiments and being willing to adapt quickly based on data.