Julian Shapiro: recommendation

Transcript context

…Okay. The first idea that I want to chat about is something that you call product-led acquisition. I believe it's the most popular page in any of your handbooks. It comes from you working with thousands of companies to help them figure out their growth strategies through Demand Curve. I'm curious to hear what this concept is and how people can use it to help their products grow. Product-led acquisition to your audience will be more commonly known as product-led growth, but I think product-led growth is a bit of a misnomer. It's often used, as you know, to basically refer to SaaS companies who are using self-serve sales funnels where a salesperson isn't required, right? Bypassing sales and allowing the product to grow itself. That's fine. But I think the term we really care about as growth marketers is product-led acquisition, meaning the use of the product grows the product. For example, if I'm using PayPal and I'm sending $1,000 to somebody else, there is no way they will not create a PayPal account to accept the $1,000. By me trying to use PayPal in its everyday intention and me getting value out of it to settle a debt, I'm automatically enticing someone else, very strongly so, to also become a PayPal customer. That's product-led acquisition. There's a few different categories I've identified, and I think the reason why people like this part of this article I wrote is because it's, in my opinion, the absolute best way to grow any startup. If your startup can grow via product-led acquisition, not all can, maybe some are enterprise-base and all they're going to make work is sales, then it is by far the best way to grow because zero marginal cost to have users invite other users. It's scalable. It creates network graphs typically and has compounding effects there in terms of both moats and the ability to acquire more customers quickly. Basically to the point I just mentioned is basically viral. The other interesting thing here is there are far fewer dependencies. Let's say your company primarily grows via content and SEO, where you're at the mercy of Google releasing an algorithmic update let's say twice a year, which occasionally will absolutely tank your traffic and most people know what I mean by that if they've experienced that. It's awful. Or ff you're a paid acquisition-led company, as opposed to a content-led acquisition company, meaning you're running Facebook Ads, let's just stick a Facebook for now, Facebook and Instagram, you're also at the mercy of the volatility of CPMs and whatever weird updates Facebook introduces or whatever targeting options they suddenly remove. Your entire acquisition strategy is anchored on something that is completely out of your hands and very volatile. Product-led acquisition is like the better you craft your product and the incentive structures for existing users inviting other users, that's entirely in your control and the better you grow. That's the quick context. Now, I'll go into some examples. We started with the example of... Actually one thing that came to mind that I love is Paul Graham, who we mentioned earlier, Paul Graham from YC, has this quote which is "don't start a startup where you need to go through someone else to get users." That always really resonated with me. Here are the categories of product-led acquisition that I've identified. which is "don't start a startup where you need to go through someone else to get users." That always really resonated with me. Here are the categories of product-led acquisition that I've identified. Number one, like I mentioned, is users inviting other users to settle debts. If I'm going to pay you money I owe you for splitting dinner on Venmo, or a business expense that I'm paying you, you're my vendor on PayPal, or anything that's allowing me to just pay you money I owe you and I have to use a product to do so, whoever is collecting the money from me is going to make an account on that product if necessary to claim their hard earned money. Almost guaranteed way for you to have user-led growth, product-led growth. Now, it doesn't have to be money. It can be settling a debt of like an NFT, for example. Someone buys an NFT from you on OpenSea and the only way for them to receive their NFT, I'm just making this up right now, is to also have an OpenSea account or a wallet that's specific to that collection. Again, making this up. The point is if you're settling the debt of something you owe someone and they must make an account to capture the thing owed, they're going to sign up. That's category one. Category two is when you're inviting someone to join the product you're using to partake in a conversation that the otherwise cannot access. Why does Telegram, WhatsApp, iMessage, all these chat apps, Discord, grow so quickly? Pretty obviously because if you and your little clique of friends are having your conversation in that app, then the person who's also in your real life friend group, but who hasn't yet installed the app has to install the app in order to have the conversation with you. Inviting people to critical, social, or business conversations in an app is the other way that you can nearly guarantee you'll grow very quickly from product-led acquisition. The business version of this is Slack. You sign up for Slack. You invite all your friends or all your coworkers. Then you even invite all your vendors via Slack Connect. Slack Connect was a brilliant Slack feature where they're saying, "Hey, we're now going to encourage you to invite people who aren't using Slack who are outside of your work." I don't know how that's done for them as a feature, but in theory, it's a brilliant way to expand the surface area for inviting people via product-led acquisition. Just to recap where we are real quick, one of the ways of acquiring customers is to encourage existing users, to pay other people or to encourage them to come into your app to have conversation that's only happening on the app. If I'm a product person and I'm road mapping my product, I will think, is there anything in my product conducive to either one of those two functionalities, settling debts, or can I introduce chat within my product? And if so, you might be cracking open an amazing channel. When I tell people about product-led acquisition, I'm usually doing it in the context of let's rethink your product feature roadmap to prioritize features that facilitate these things that can lead to explosive growth.…

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