How to Design Growth: Growth Hacking 101 at Seedcamp in Rome

Introduction: this presentation was performed on the 5th of June 2014, at Seedcamp in Rome. I want to thank Seedcamp, the organisation, Nicola Mattina, Giuliano Iacobelli, Carlos Espinal and my company, Automattic, for giving me the opportunity to speak in front of such a great audience.

Growth Hacking 101

Good afternoon! My name is Luca Sartoni, I work at Automattic, the company behind WordPress.com and many other products and today I’m gonna introduce you to Growth Hacking.

How many of you are from Rome, the eternal city? A couple of hours from here there is a lovely town called Assisi, where many many years ago San Francis used to shock the system with his unorthodox approach to religion.

Many of you, know this prayer, attributed to him:

“Lord, grant me the strength to accept the things I cannot change,
the courage to change the things I can,
and the wisdom to know the difference.”

How many of you knew this prayer before?

So, it turned out that this prayer was mistakenly attributed to San Francis, while in reality it was written by Reinhold Niebuhr, an american theologist about 700 years after.

You know, Abraham Lincoln was right when he said:

“The problem with quotes found on the internet is you have no way of confirming their authenticity.”

If the Internet tricks us on simple attribution of quotes, how can we make good decisions as entrepreneurs?
How can we focus on what matters and make the right choices if we don’t know what is right and what is wrong?

How many of you are entrepreneurs? How many of you have a startup?

So I have a question for you: what is a startup?

Paul Graham, Co-founder of Y-combinator seed capital firm defined a startup as a company designed to grow fast.

How to design growth

Adaptation

There are things that we can’t control. We have to deal with it. I know that it’s difficult to accept it as a fact, but this is how reality works. We cannot change how people behave, how people nurture and cultivate their interests, how they interact with devices and interfaces. Of course we can come up with interesting elements of design, we can dramatically change people’s life. Just imagine how Apple impacted our world since the introduction of the iPhone in 2007. But they just didn’t show up one day out of the blue. There were years of research and development, a strong vision and hard work.

In a single sentence: “Growth is a matter of culture”.

Culture

So first element for a strong growth by design is education. Hire diversity and focus on all the abilities that as a technical team probably you lack of.

At WordPress we say: “code is poetry”. That wants to be an inclusive statement. Everybody should be included in your developmentm process. Every single diverse input is precious and you cannot even imagine to start a global project if you don’t have those elements of contamination in your company’s DNA.

Hire anthropologists, philosophers, artists. Give them a technical platform and education. Teach them code, let them contaminate your company and you’ll have much more chances to succeed. You cannot a afford to have an solid technology company if you just rely on pure technology, you need people to resonate with other people.

Make sure that everybody understands how growth is relevant to their sigle contribution to the company and how they can deliver a better product.

A common misconception is that growth is all about user acquisition or all about revenues. This is dead wrong. It depends and it’s a case to case deal. There are projects that make sense to focus on acquisition only, other project are focused on revenues, other on more strategical indicators. This is something you need to define and then be honest to yourself.

If you jump from one metric to the other depending on what is good this week, you are not going very far. It can work for a few months but it’s not gonna work on the long run. Be honest with yourself and define your key metrics. They can change, but only as a result of a pivoting, not as a consequence of the weekly performance report.

In order to design your growth you need a scientific approach, contaminated with all the possible diversity you can. But the core of your approach needs to be mainly scientific.

Which tools we can borrow from science and apply to growth?

Tools

Let’s have a look at three must-have tools for growth: A/B tests, usability tests and sliding windows.

How many of you are familiar with A/B tests? Very simple: given a population, we randomly assign them to groups (bucketing) and we try different design elements or flows according to the groups they belong to. We analyse the results and we determine which element or flow worked best.

There is an entire universe behind A/B testing, and there are many cognitive traps you can fall into. So please study and improve your A/B testing processes. But let me give you three quick tips on how to avoid the classic mistakes: seasonality, meaningful measurement of impact, micro optimisation fallacy.

Weekly seasonality: it does not matter how much traffic you have, people on monday afternoon behave differently than on thursday morning. I always run tests for a week, at least. This helps me to have more complete sample of the population and helps to reach the statistical significance.

Meaningful measurement of impact: let’s say you have a complete marketing funnel like this, from awareness to revenues. Let’s say you run a test on the signup interface in order to increase activation. If your test involves a specific point of the funnel, use a relevant metric within the same segment of the funnel. If you measure revenues, for instance, there is a high chance to have meaningless results because many other variables are able to influence that metric.

Micro optimisation fallacy: this is a tricky one because it is a direct consequence of the previous step. If you do it right measuring within the same step of the funnel, there is a good chance that one day or the other you fall into this fallacy. This happens when you reach points of relative optimisation and you don’t realise that there are better opportunities just because you have a short sight. How to overcome this? Strong vision, bold decisions and experience.

Usability tests are big helpers on this. Are you familiar with usability tests?

They are easy to explain, very difficult to perform correctly.

You simply take real people and you ask them to try out your product. You ask them to perform key tasks and you study how they behave. Is sounds simple, right? Well, it’s not THAT simple but with a few tips you can get good results from the very first test.

Usability tests help you to find roadblocks and major fails. So, when it’s the right time to run usability tests?

When your site is ready for going live? NO
When your producs is almost ready for shipping? NO
When you MVP is almost ready? NO

The sooner the better! Ask people to try out stuff as soon as you have the idea. Ask them what they think of it. Gather costructive criticism as soon as you can.

As soon as you have a piece of interface, let them go through it, and keep looking where they get stuck. And then ask them why they got stuck.

The big advice I want to give you here is: don’t listen to them when they tell you how it should be done. I know, it sounds awkward but it’s true. If they were able to make it better, they probably would have made it better before you. They are not your engineers, they are your testers, so listen to them carefully about the problems they had, but most of the time their solutions are simply not good enough and they are not the right people for that.

Judge them by facts, not by their words. So if they say that something was easy to perform, don’t trust them. Measure how much time they spent on it and compare it with other people’s performances. When they find a major roadblock or say that something is broken, ask them questions to understand why they find it broken, not on how to fix it.

The third and last tool it’s important to know it’s very trivial. But very tricky at the same time: sliding windows.
Always compare metrics on a 28 days basis. This way you always include 4 weeks of data, you don’t have longer and shorter months and the comparison is always normalised.

Just to wrap up, let’s have a look at the serenity prayer, with a modern growth twist:

“Grant me the ability to adapt to the things I cannot change,
the culture to change the things I can,
and the right tools to know the difference.”

Thank you very much, if you have any question, drop a comment.

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