💎 Growth Gems #117 - Paid UA and Product
Fellow growth practitioners!
I’ve dug up more gems 💎 during my last shift in the growth mine. This week, I’m bringing you back insights on:
Mined from the depths, I hope these hard-dug insights from Hannah Parvaz, Lisa Kennelly, Jake Gutstein, and Jason Calacanis are helpful.
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I do my best to go to the mobile growth events in NYC and rarely fly out for an event.
But this time it’s different!
RevenueCat is hosting its first App Growth Annual event on September 25.
They’re bringing together 200 top app growth professionals for “a day of inspirational content, actionable workshops, and invaluable connections.”
This one is a no-brainer.
If you can’t make it in person or don’t get approved (they’ve had a lot of applications), make sure you join virtually!
If you’re going, come say hello if you see me!
Paid UA: focus on mastering a channel
Gems from Hannah Parvaz (Founder at Aperture) and Lisa Kennelly (Global Product Marketing Strategist) in Avoid Growth Traps: How & When to Diversify Channels on Growth Mentor Live
I’ve previously shared gems from Hannah (cf. Growth Gems #) and Lisa (cf. Growth Gems #).
They’re experienced growth marketers, and I usually like their takes.
There are just a few insights below, but ignore them at your own risk!
💎 Adding a new paid acquisition channel is rarely the obvious or correct solution to grow.
(07:30) by Lisa
She shared her go-to response when an exec or someone at the company suggests a new channel: “Explain to me your thinking and how that’s an opportunity for us.” Then, she asks, “Does it make sense right now?”
This sounds like a good starting point for this discussion. It is never easy, and, as she said, “just because we can doesn’t mean we should.”
💎 Don’t half-ass things. Get one paid acquisition channel right first, and get your process/system right. Then, you can expand from there.
(17:20) by Hannah
💎 I consider adding any paid acquisition channel the highest effort because it is ongoing—it’s “forever.”
(25:40) by Hannah
This hit home.
It’s particularly relevant when you choose between adding a channel and another time-bound growth initiative.
Something else that is important to consider is how much you can scale the new channel you want to add. Thiago Monteiro (then at Peak Labs) was saying that if they can’t scale a channel to 5% of the overall mix, they do not invest.
💎 There’s maxing out a channel from a performance perspective, and there’s maxing out for your awareness on a channel. At some point, if your messaging is super niche, and there’s no good awareness of your product, you’re going to max out from a performance perspective, and you might need to generate awareness.
(19:24) by Hannah
How do you generate awareness?
In another appearance (on the Sub Club podcast), Hannah mentioned running engagement campaigns that boost Instagram and TikTok posts because CPMs are much cheaper than direct response ads ($1-$2 vs. $7-$12).
You hit people with your awareness ads, get them to see things a few times, and then hit them with direct response ads. With this approach, you need to look at both your overall cost (awareness + direct response) and your cost channel by channel.
💎 The same person might have a different mindset when they’re on different channels. Think about that when choosing a channel and creating ads. Example: Facebook/Instagram to catch up with friends, TikTok to learn.
(32:30) by Hannah
User research and Strategy: validating ideas, raising funds
Gems from Jake Gutstein (Co-founder/CEO at Zest) and Jason Calacanis (Investor and Author) in Building a consumer app’s MVP and how to fundraise with Zest’s Jake Gutstein on This Week in Startups
Sometimes, I like mining gems outside our “mobile growth bubble”.
A couple of years ago, I had this idea for a “Duolingo for cooking”. I got excited, but my first App Store search made me discover Zest.
I contacted Jake because I liked what they were building, and we’ve been in touch since. He and his team are doing exciting things in a few areas (product, organic social), so I was excited to hear him talk more about their journey!
Validating ideas
💎 First validating your idea can be as simple as combining JotForm, Venmo/CashApp, Google Slides, and SMS. Example: Zest had a Google Form allowing them to create a meal plan for users, and once they paid, they would share the meal plan in Google Slides and send the grocery list via text.
(05:50)
Here are more details about the flow:
Potential users would fill out a questionnaire on Jotform
On the last question, they would give their Venmo/Cashapp info
After payment, Zest (going by Salus at the time) would distribute these Google slides (the meal plan)
If you try their app, you’ll notice some of the tone and concepts (e.g., quick how-to videos) were already in the slides!
One caveat to the friends & family method is that they might not represent a broader audience or take pity on you instead of giving you candid feedback.
For this reason, Jason mentioned that buying traffic on Facebook and sending it to a landing page might give you a better signal. But from there, it’s ok to keep it simple if it helps validate (or not) faster.
User research
💎 In user research, don’t ask, “Do you want to X?”. Instead, ask, “When did you decide to start to X?”. Example: “When did you decide you wanted to learn how to cook?” instead of “Do you want to learn how to cook?”.
(11:15)
💎 While it makes sense to validate a business idea while still working a full-time job, at some point, you have to give it a real chance and set a clear deadline. Example: Zest’s team set a three-month deadline to secure funding for the next 12 months and establish a clear development path.
(12:25)
It’s important to get started, though. The 4 co-founders from Zest were initially meeting twice a week to make progress.
💎 Developers are often underestimated. They can aspire to be entrepreneurial, have ownership, make decisions, and not just be code writers. Having a technical person early on who has ownership can be key to succeeding.
(15:30) by Jason
💎 Building a product should focus on time as a limited resource rather than fixating on a product launch. A six-week timeframe allows for “fixing on time” and building something substantial while keeping the end goal in sight: you give yourself six weeks and make tradeoffs to be able to ship what you committed to.
(20:00)
This is taken from the 37 Signals book by Jason Fried and David Heinemeier Hansson.
Jake also explained that as a founder, you have to accept the reality of the current situation and focus on controlling input rather than being beholden to hitting metrics. Living in the past or future is not useful; instead, concentrate on what can be achieved in the present moment.
💎 User motivation to use a product can take various forms. To find those motivations:
Find users to interview with a tool like Respondent.io (a two-sided marketplace) and pick people who had a successful outcome
Conduct interviews, where after the initial prompt of “When did you decide to do X?” you dig deeper into each answer (no need to follow a specific script).
(24:24) by Jason
For Zest, here are the motivations they uncovered:
It can stem from achieving personal milestones like hitting level six
Saving money on daily expenses for future investments
Satisfaction with providing nourishing food for others. Understanding that individuals find motivation in different ways is crucial for engaging them effectively.
💎 Instead of thinking about “launching,” take a “continuous prototyping” approach, engaging in rapid iterations towards improvement. This mentality of prototyping and “everything as unfinished” can be applied to both business processes and business performance.
(34:37)
Raising funds
💎 Get as much live, candid feedback from as many investors as possible and quickly iterate based on it.
(42:30)
Jake talked to 130 investors, one reason being that some investors tend to be wary of churn.
Something else I’ve been impressed by is how Jake keeps investors and people he’s been in contact with updated on progress via monthly updates, which also allows him to put out “asks” that help his business. He uses paperstreet.vc for these. Very smart.
Here is an example:
💎 Many challenges in raising funds come from an “articulation gap.” What matters to investors are CAC, LTV, and payback period, and you need to both speak their language (de-risk the areas where their minds will jump to) and articulate the product vision.
(44:15)
💎 Investors approach opportunities differently. Some start by trying the product, while others start with market demand and work backward to find products.
(45:47) by Jason
💎 Qualifying investors is crucial for first-time fundraisers, and there is no one-size-fits-all approach. However, a best practice includes having a scorecard system for sourcing investors.
(46:25)
Jake was kind enough to share the Template for his Sample Investor Tracking Game.
Organic social approach
💎 Instead of focusing your organic/influencer content (e.g., TikTok) only on your potential users’ stated goals, think about the context they are struggling in. How can you partner with people who talk about the moments and reasons customers begin their journey?
Example: rather than partnering with amazing food creators, Zest looks more into people who talk about the moments in life that lead them to want to cook (e.g., being lonely, providing, having agency over their life, saving money, etc.).(49:00)
Before I leave, here is a quote on (lengthy) onboarding funnels:
“When you’re thinking: should I add another one [question], you probably should.” - Yeva Koldovska (Product Manager at Headway)
See you next time.
Stay curious!
⛏️ Sylvain
🔗 Sources: