Archie Abrams: prediction

Transcript context

…So let's follow this thread of metrics. You're big on absolute numbers and you've been talking about this already, versus percentages and ratios. Talk about that and how you encourage your teams to think about metrics. Yeah, I think one of the things that I think happens particularly in large, in Shopify's growth order, it's about 600 folks. When you have teams naturally break up the world into different funnel stages or different points in the journey, it gets very seductive to look at my part of the funnel, and what's my conversion rate through that part of the funnel? And then the team starts to optimize for that conversion rate as their north star over a longer time period. I'm going to try to move my conversion rate from 10 to 12% or what have you. But in practice, I talked about it's actually almost always easier to just make it harder to do the thing right before your step in the funnel to increase your conversion rate. If I make it harder to sign up, it's going to be very easy to increase sign up to activated rate, because I just have fewer people and the people who made it through our higher intent. And so I see teams get really stuck when they are trying to optimize conversion rate, but they just make it harder to do the previous thing. Versus everyone is thinking about absolute number of people who made it through their "stage" of the funnel. So instead of I'm trying to convert a bunch of people, a conversion rate, I just want more people to get activated. And then once you start thinking that way, you realize actually the best way to get more people to get to a step sometimes, and often they just get more people in the door in the first place. So make it easier to sign up or reduce friction. It's the opposite. Because that will always hurt your conversion rate, but it may actually give you more people on the outside. And a lot of teams get very nervous, their retention rate went down, their LTV went down. Oh my goodness, is this this going to affect our ability to pay? No, your CAC also went down by probably more. And so now you have the ability to likely spend more and you have more people through the door, getting to each point in the activation or the immersion journeys. What I'm hearing is essentially teams are gold not on increase, lift this conversion step by some percentage. It's drive some absolute number of new merchants, potentially.…

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