Lenny Rachitsky: prediction

Transcript context

…Perfect. So, I'm a partner at Menlo Ventures. I focus on early-stage SaaS from seed to series B. I started my career in engineering and consulting before getting into tech back in '06. Fell in love with product. Did some new product development at a big media company before business school. And while at business school, I spent time at the Design Institute at Stanford. So, this was an opportunity to kind of bridge my analytical background with this refreshing view on human-centered design and learning from the founder of IDEO. So, brought that with me then to Evernote back in 2011, early days over there. I was there from about 10 to 100 million users. And over that arc, I shifted from more of a core product role to starting our growth product function. This was super organic. I started just collaborating with colleagues from across the business, come up with hypotheses, do user research, run experiments, drive metrics. This was a new way of building product back then. This was a decade ago, so the acronym PLG had not been coined yet. And I really just thought of myself as a user and data-driven product person. After Evernote, I joined a bootstrapped mobile SMB company called Invoice2go. It was the top-grossing business app at the time. There, I built teams across product, data, growth engineering, design and research, and again, focused on product-led growth and monetization. Over those two jobs, I found myself doing a lot more advising and speaking on the side on these topics. And my board members used to farm me out to their companies to help their founders think through things around product growth and pricing and various topics like that. And Reforge came together at the same time, so I would come in and speak on topics through that community. So, that really accelerated my transition into venture. I realized how much I love having that portfolio view of the world and helping founders look around corners. So, I think it's an incredible privilege to get to do the work that I do. One thing you mentioned is Evernote. I don't know how much you can talk about this, but they just got sold, right? Someone bought Evernote. And if I think back to Evernote, it feels like they could have been Notion, which is killing it right now. Any thoughts on what maybe they missed and didn't turn into Notion along the way? Yeah. We're going to clear some cobwebs here. It's been a while. But one challenge that Evernote really struggled with was this evolution from single-player to multiplayer to team to enterprise. It's a chasm that a lot of bottom-up SaaS businesses struggle to cross. Evernote was philosophically antisocial. It was meant to be your second brain, kind of your personal tool. And I think that capped the company's growth potential. I always used to say you can't retrofit collaboration. You have to be collaboration-first. And a lot of companies now really take that for granted. But back in mid-2000s, this was kind of a new way of building product. And so we missed that bridge. If companies do that well, it benefits every metric. That bridge from single-player to multiplayer. Acquisition goes up. You grow organically through referrals and shared workflows. Retention goes up because now you have these shared workflows that are incredibly sticky. Employees are accountable to each other to say, "This is how work gets done." Design in Figma, roadmap planning and ticketing in Jira are linear. It just becomes the default platform. And modernization goes up. Revenue scales with usage. And so the more people using it, the more they use it. You start tripping the wire on paying more and more over time. And so Evernote really struggled in crossing that chasm from the prosumer tool of choice that employees wall-to-wall were using, but never became this larger high-ACV contract from a sales perspective.…

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