Understanding Conversion and Its Importance in the Growth Engine

Lenny writes the #1 business newsletter on Substack (Lenny's Newsletter) and previously sold his company, Localmind, to Airbnb.

He then spent 7yrs at Airbnb leading product + growth teams and now angel invests + works as a full-time creator.

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In this conversation you'll learn about:

– the racecar growth framework: growth engines, turbo boosts, lubricants + fuel

– core growth engines: performance marketing, virality, content + sales

– examples from Airbnb, Zapier, Superhuman, Wish, Casper + others

– benchmarks for user retention + types of virality 

– 3 steps to getting early users

– growing a newsletter + the differences in approach for creators vs companies

Timestamps:

• 0:00:00 - Snippet + What We Cover
• 0:01:28 - Sponsor Break
• 0:02:17 - Lenny Intro + Background
• 0:07:38 - Scale of Newsletter
• 0:09:17 - Questions To Ask Yourself When Figuring Out Your Next Step
• 0:12:18 - Energy + The Struggle Of The Content Treadmill
• 0:13:31 - Early Days Of Airbnb
• 0:15:09 - Creating Something Remarkable
• 0:17:22 - Racecar Growth Framework - Who Is This For?
• 0:18:20 - Early vs Late Stage Growth
• 0:19:48 - Engine, Turbo Boosts, Lubricants + Fuel
• 0:20:05 - Growth Engines - virality, performance marketing, content, sales + bonus examples
• 0:24:11 - “1st time founders focus on product, 2nd time founders focus on distribution”
• 0:28:09 - Becoming The Best In The World At 1 or 2
• 0:28:38 - Airbnb vs Booking
• 0:29:16 - Performance Marketing
• 0:30:51 - Wish + Casper - Built On Performance Marketing
• 0:31:42 - Feasibility When Bootstrapping
• 0:32:31 - If You Should Be Performance Marketing Driven: 1) Generating Revenue From Users 2) Not Something Users Are Looking For
• 0:34:01 - Growth vs Brand Marketing
• 0:35:37 - When To Expand To The Next Engine + S Curve
• 0:36:56 - Examples Of Virality - Word-of-mouth, referrals, inviting friends, etc
• 0:40:22 - Bottoms Up vs Top Down Virality
• 0:41:31 - Knowing When You’re Going Viral - K Factor vs % of people who came in thru referral
• 0:42:33 - % Benchmark To Aim For
• 0:43:24 - Companies Who Are Suited To Viral Growth
• 0:43:48 - Clubhouse + FOMO
• 0:45:17 - User Generated Content Loop
• 0:47:29 - Data Driven SEO - Zapier + Thumbtack
• 0:49:11 - Editorial SEO + Figuring Out Content Strategy
• 0:50:31 - Superhuman Example
• 0:51:13 - Desired Outcomes, Primary + Secondary KPIs
• 0:52:43 - Sales Channel
• 0:55:19 - Turbo Boosts + Lubricants
• 0:56:52 - Power Of Events
• 0:58:37 - Retention + Conversion
• 1:00:41 - Activation: Using Product For Its Core Purpose
• 1:02:03 - Superhuman , Creators + The Customers Who Care
• 1:05:38 - User Retention Benchmarks
• 1:07:44 - Common Pitfalls
• 1:09:36 - Getting First 1000 newsletter subscribers
• 1:11:20 - 3 steps to getting early users
• 1:14:45 - Creators vs Companies - Finding Core Users
• 1:19:27 - Would You Still Be Doing This With 1000 Subs?
• 1:20:55 - 5 “Jobs To Be Done” Of Content
• 1:21:49 - Newsletter Discoverability
• 1:23:42 - What Gives You Energy
• 1:25:23 - Airbnb Job vs Creator Life
• 1:26:22 - Tim Urban on Content That Spreads
• 1:27:18 - Creators: Value vs Support
• 1:29:22 - Decision To Stay On Substack
• 1:31:31 - Knowing What To Write About
• 1:35:57 - Longer-Term Plan

Thank you to our sponsors:

AppSumo - the marketplace entrepreneurs trust to buy and sell the products that grow small businesses into name brands: https://www.appsumo.com

Space - the easiest way to engage your team over audio: http://www.JoinSpace.co