20Growth: Inside Perplexity's Growth Machine: What Worked, What Did Not Work | Why Paid Acquisition is a Drug and Brand Marketing is BS | The Good, Bad and Ugly of A/B Tests and Why Micro-Optimisations are Under-Rated with Raman Malik
Nov 15, 2024
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Raman Malik, Head of Growth at Perplexity and a former member of Lyft's growth team, delves into the heart of growth marketing. He shares why he sees paid acquisition as a 'drug' and dismisses brand marketing as often ineffective. Raman emphasizes the importance of partnerships and data-driven strategies for user retention. He offers insights on the nuances of A/B testing and advocates for hiring former founders for their unique perspectives. Discover the underestimated growth channels that propelled Perplexity forward and the real metrics that define engaged users.
Engaging users early on and achieving multiple interactions is vital for retention and long-term loyalty in product growth.
A successful growth strategy for startups relies heavily on collaboration between marketing and product teams to optimize user experiences.
Micro-optimizations, while under-appreciated, play a crucial role in improving key metrics, complementing larger-scale innovation efforts.
Deep dives
The Importance of User Engagement
Users typically need to interact with a product three to seven times before they commit to giving it a fair trial. Achieving three queries in a single session can indicate a positive user experience and potential for retention. Engaging users early on is crucial, as it lays the groundwork for their likelihood to return. Fostering this initial level of engagement is seen as a key metric for growth and customer loyalty.
Growth Team Structure and Strategy
The role of the head of growth encompasses both marketing and product functions, bridging the two to improve user acquisition, activation, retention, and monetization. Growth teams must focus on enhancing the entire user lifecycle instead of merely driving new user acquisition, ensuring that users become repeat customers. A successful growth strategy requires collaboration between product and marketing teams to create cohesive marketing campaigns and user experiences. Building the right infrastructure to measure user interactions and behaviors is foundational for driving growth.
Micro-Optimizations vs. Big Swings
The growth process involves a mix of small micro-optimizations and large-scale initiatives to yield significant results. Micro-optimizations can lead to substantial improvements in key metrics, like retention rates, which can elevate overall active user numbers. However, there's a need to balance these with larger, riskier projects that target breakthrough innovation or engagement. Aiming for a success rate of about 25% on these substantial initiatives allows for meaningful advancements while fostering a culture of experimentation.
Effective Acquisition Strategies
Most of the growth for consumer products emerges from organic, word-of-mouth referrals, making it a crucial acquisition channel. Partnerships can enhance distribution, as they create opportunities for free trials, thus gaining new users more effectively than traditional advertising methods. Targeting the right audience and nurturing existing users play a significant role in acquisition strategies. Understanding when and where to allocate marketing resources is essential for maintaining efficient growth.
Retention as a Major Focus
Retention strategies prioritize moving users from initial engagement to long-term active use, with specific metrics to track success. Identifying metrics like the number of queries in initial sessions can signal higher rates of retention and user satisfaction. Establishing a maintenance plan for regular check-ins and improvements is essential for retaining users while exploring new growth opportunities. Strategies must be personalized to different audience segments, focusing on those that demonstrate higher engagement and retention.
Raman Malik is the Head of Growth at Perplexity where he is responsible for growth marketing, onboarding, activation, retention, and monetisation. Prior to Perplexity, Raman, was an early member of the growth team at Lyft and joined Perplexity earlier this year after his own startup journey.
In Today’s Episode with Perplexity’s Head of Growth:
1. Inside the Perplexity Growth Machine:
What have been the single biggest needle movers in the growth of Perplexity?
What has not worked? What have they learned from that?
How have partnerships driven growth? Lessons on what makes a good vs bad partnership?
Why does Raman think paid acquisition is a drug and Perplexity do not do it? How does Raman advise other founders when it comes to paid acquisition?
2. Acquisition, Retention, Churn: Mastering the Basics:
Why does Raman think that brand marketing is BS? When does it become more important?
What are the simplest things startups and product teams can do to drive retention up?
How do Perplexity count an “engaged user”? What metric suggests they have a retained user?
What is the good, the bad and the ugly when it comes to A/B tests?
3. How Perplexity Built a Growth Machine:
Why does Raman advise all founders to hire more former founders?
How does the way you manage founders turned employees differ from employees who have never been founders?
What is the must under appreciated growth channel today that has worked for Perplexity?
What growth channel has been the biggest flop for Perplexity? What did Raman learn from losing money on the channel?
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