Lenny's Podcast: Product | Growth | Career

The original growth hacker reveals his secrets | Sean Ellis (author of “Hacking Growth”)

Sep 5, 2024

Sean Ellis, a pioneering growth expert who coined 'growth hacking,' shares invaluable insights on measuring product-market fit with his renowned Sean Ellis Test. He discusses strategies for improving user activation and retention rates, and selecting North Star metrics that reflect genuine customer value. Listeners gain wisdom from his experiences at Dropbox and beyond, understand how user feedback drives product success, and explore the evolving landscape of growth strategies in the age of AI.

01:44:25

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Sean Ellis

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Quick takeaways

The Sean Ellis Test effectively measures product-market fit by assessing user disappointment, providing critical insights for startups.

Identifying 'must-have' users allows startups to enhance their offerings and align closely with the core customer base driving growth.

Improving onboarding processes is essential for maximizing user activation and retention, ensuring that new users see immediate product value.

Establishing a North Star metric guides growth strategy by unifying team objectives around delivering user value and correlating with revenue growth.

Deep dives

Understanding the Sean Ellis Test

The Sean Ellis test is a structured approach used to assess product market fit by determining how disappointed users would feel without a product. It employs a simple question, asking users to rate their disappointment on a scale from 'very disappointed' to 'not disappointed at all'. Achieving a threshold where at least 40% of users claim they would be very disappointed indicates strong product market fit. This method provides actionable insights into product reception, allowing startups to focus on what truly matters to their users.

Understand the Must-Have to Fuel Sustainable Growth

02:24

Engage Users When Their Experience is Fresh

00:46

Focus on Must-Have User Experience for Growth

01:35

Identify Your Must-Have Product

01:35

Intro

4min

Uncovering Product Market Fit and User Engagement

4min

Measuring Product Success

5min

Navigating User Engagement for Growth

17min

Navigating Product-Market Fit

13min

Understanding Customer Benefits Through Effective Surveys

2min

Mastering Product-Market Fit for Sustainable Growth

11min

Navigating Activation Challenges and Enhancing User Onboarding

5min

Strategies for Growth and User Engagement

18min

10.

Harnessing North Star Metrics for Growth

13min

11.

The Art of Asking the Right Questions in Growth Hacking

2min

12.

Questioning for Insights and Growth

7min

13.

Connecting and Collaborating: Final Thoughts and Resources

3min

Sean Ellis is one of the earliest and most influential thinkers and operators in growth. He coined the term “growth hacking,” invented the ICE prioritization framework, was one of the earliest people to use freemium as a growth lever, and, most famously, developed the Sean Ellis Test for product-market fit (which a large percentage of founders use today to track if they’ve found PMF). Over the course of his career, Sean was head of growth at Dropbox and Eventbrite; helped companies like Microsoft and Nubank refine their growth strategy; was on the founding team of LogMeIn, which sold for over $4 billion; and is the author of one of the most popular growth books of all time, Hacking Growth, which has sold over 750,000 copies. In our conversation, he shares:

• The proper use of the Sean Ellis Test for measuring product-market fit

• How to increase your activation and retention rates

• How to select the right North Star metric for your business

• Case studies from his work growing Dropbox and other products

• How growth strategy has changed over the past decade

• How AI is impacting growth efforts

• Much more

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Find the transcript and show notes at: https://www.lennysnewsletter.com/p/the-original-growth-hacker-sean-ellis

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Where to find Sean Ellis:

• X: https://x.com/seanellis

• LinkedIn: https://www.linkedin.com/in/seanellis/

• Website: https://www.seanellis.me/

• Substack: https://substack.com/@seanellis

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Sean’s background

(02:18) The Sean Ellis test explained

(06:28) The 40% rule

(08:06) Case study: improving product-market fit

(12:34) Understanding and leveraging customer feedback

(16:50) Challenges and nuances of product-market fit

(22:22) When to use the Sean Ellis Test

(23:46) When not to use the Sean Ellis Test and other caveats

(27:13) Defining your own threshold and how the Sean Ellis Test came about

(36:13) Tools for implementing the survey

(37:30) Transitioning from surveys to retention cohorts

(39:13) Nubank’s approach

(40:18) Case study: Superhuman’s strategy for increasing product-market fit

(45:18) Coining the term “growth hacking”

(48:24) How to approach growth

(57:25) Improving activation and onboarding

(01:05:17) Identifying effective growth channels

(01:10:28) The power of customer conversations

(01:12:43) Developing the Dropbox referral program

(01:14:47) The importance of word of mouth

(01:15:23) Freemium models and engagement

(01:19:21) Picking a North Star metric

(01:24:30) The evolution of growth strategies

(01:27:12) The ICE and RICE frameworks

(01:30:11) AI’s role in growth and experimentation

(01:32:52) Final thoughts and lightning round

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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

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Lenny may be an investor in the companies discussed.

Get full access to Lenny's Newsletter at www.lennysnewsletter.com/subscribe

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