Digest

Matt Lerner, a growth expert with extensive experience at PayPal and 500 Startups, discusses the importance of a growth mindset, characterized by humility and curiosity, rather than relying on past playbooks. He shares his personal experience with LinkedIn, where he initially dismissed the platform but eventually found success through experimentation and persistence. Lerner defines growth loops as positive feedback loops that drive growth, emphasizing the need to identify and double down on these loops. He also discusses the impact of AI on growth, highlighting how AI can raise the floor for creative tasks and automate previously difficult processes. Lerner emphasizes the importance of finding the right talent for growth, advising against solely focusing on impressive resumes and instead seeking individuals with a strong learning aptitude and a bias for action. He concludes by discussing the importance of experimentation and learning, highlighting the need for a growth mindset and a willingness to embrace new technologies.

Outlines

00:00:00

Introduction

This Chapter introduces Matt Lerner, a growth expert with over a decade of experience at PayPal and 500 Startups, as the guest on the 20 Growth podcast. The episode focuses on building and scaling growth teams.

00:03:34

Matt Lerner's Journey into Growth

This Chapter delves into Matt Lerner's career path, starting with his early days in Silicon Valley and his eventual entry into the world of growth at PayPal in 2004. He shares his experiences at PayPal, his transition to venture capital, and the realization that many startups were making preventable mistakes. This led him to start his own business, helping startups avoid these mistakes and find their high-impact growth levers.

00:07:35

Defining Growth

This Chapter explores Matt Lerner's definition of growth, emphasizing that it's about delivering value to customers and helping them understand the value you offer. He differentiates growth from traditional job functions like marketing, product, and sales, highlighting three key differences: the absence of a playbook, the need to sell a product that nobody is looking for, and the cross-functional nature of growth.

00:13:14

Growth: Art or Science?

This Chapter delves into the debate of whether growth is an art or a science. Matt Lerner argues that it's both, highlighting examples of over-optimized websites that lack a good user experience and ineffective ad campaigns that fail to resonate with customers. He emphasizes the importance of blending both art and science in growth, requiring collaboration between creative and analytical individuals.

00:14:38

Mapping Your Growth Model

This Chapter focuses on the process of mapping a growth model, starting with the North Star metric. Matt Lerner advises against using revenue or profit as the North Star, as these metrics can be achieved without delivering true customer value. He suggests focusing on user behavior metrics that reflect the value delivered to customers, such as the number of sheets created or tables shared in an accounting software.

00:19:37

Preventable Mistakes in Startups

This Chapter explores common preventable mistakes made by startups, drawing a parallel to Leo Tolstoy's Anna Karenina. Matt Lerner identifies three patterns: overthinkers who spend too much time debating and delaying action, underthinkers who build products without sufficient market validation, and higher-and-delegate types who rely on best practices without a clear understanding of their target market and value proposition.

00:22:44

Channel Diversification in Early Stage Startups

This Chapter discusses the importance of channel focus in early-stage startups. Matt Lerner argues that startups should avoid spreading resources too thinly across multiple channels and instead focus on mastering one channel before expanding. He emphasizes that while paid advertising can be useful for testing and validation, it shouldn't be the primary growth strategy in the early stages.

00:42:59

Growth Mindset and Experimentation

This Chapter emphasizes the importance of a growth mindset, characterized by humility and curiosity, rather than relying on past playbooks. Matt Lerner shares his personal experience with LinkedIn, where he initially dismissed the platform but eventually found success through experimentation and persistence.

Keywords

Q&A

• What are the key differences between growth and traditional job functions like marketing, product, and sales?

  Matt Lerner highlights three key differences: 1) Growth often lacks a playbook, as you're creating something new. 2) You're selling a product that nobody is looking for, requiring you to understand customer needs and motivations. 3) Growth is cross-functional, requiring strong collaboration and relationship-building skills.

• Is growth an art or a science? How do you balance the two?

  Lerner argues it's both. Over-optimized websites can be a poor user experience, while ineffective ad campaigns lack customer resonance. The trick is to blend art and science, requiring collaboration between creative and analytical individuals.

• What is the best North Star metric for a startup, and why?

  Lerner advises against using revenue or profit as the North Star, as these can be achieved without delivering true customer value. He suggests focusing on user behavior metrics that reflect value delivered, such as the number of sheets created or tables shared in an accounting software.

• What are some common preventable mistakes made by startups?

  Lerner identifies three patterns: overthinkers who delay action, underthinkers who build products without validation, and higher-and-delegate types who rely on best practices without understanding their market.

• What is the right time to hire a growth leader in a startup?

  Lerner contradicts the common advice of hiring post-product market fit. He argues that startups often lack the resources and brand appeal to attract top talent early on. Instead, he recommends the founder take on the growth role initially and hire generalists who can learn quickly.

• How do you find and interview growth candidates who can learn quickly and adapt to a changing environment?

  Lerner focuses on figuring out if candidates have a growth mindset. He uses broad questions to assess their strengths and areas for development, and asks open-ended questions that don't have clear right or wrong answers. He also looks for candidates who are curious, willing to learn, and not afraid to make mistakes.

• What are some quick wins that new growth hires can implement in their first few days?

  Lerner suggests quick wins like changing a bad headline to a good one, analyzing customer value from different channels, and waking up dormant leads with email sequences. However, he emphasizes that these are one-time fixes and don't replace the need for fundamental growth strategies.

• What is the right onboarding process for a new growth hire at a startup?

  Lerner outlines a two-step process: 1) Become an information sponge by learning about customers, the growth model, and the team's capabilities. 2) Prioritize the most impactful work based on the company's limited resources and runway.

• What is a 'locksmith moment' in the context of startups?

  Lerner describes a locksmith moment as the exact moment of highest need for a customer, where a startup can insert itself and provide a solution. It's about finding people where they need it most and creating a sense of urgency.

• How do you approach messaging for a horizontal product with multiple use cases?

  Lerner suggests using survivorship bias to identify initial use cases and then conducting customer interviews to understand their problems and desired outcomes. He recommends using verbs to identify key outcomes and testing different messages through ads and landing pages.

• What is a growth loop, and how should startups think about them?

  Lerner defines a growth loop as any positive feedback loop in a business. It's a cycle where one action leads to another, ultimately resulting in increased growth. He emphasizes the importance of identifying and doubling down on these loops.

Show Notes