Named after a 13th century explorer, who bumbled his way in the dark from Europe to China (the center of all civilization at the time), the children's game hooks into something primal. It keeps kids engaged for hours at a time.
Marketer and designer Nathan Barry has previously pointed out that this game also serves as an analogy for call-response.
Direct response, even. You only want to be chasing after the Polos, and avoiding everyone else in the pool.
That's my kind of marketing.
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The Marco-Polo analogy holds really well for what it's like to enter a new market. You know there are people interested. You want to catch them, yet avoid everyone else.
You just need to figure out how to reach the "Polos". Speak to them. Hook into what interests them.
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
There's three more twists, though, compared to shouting "Marco" in a pool:
You can use any medium you want to reach them, not just yelling at the top of your voice: advertising, free content, phone calls, events, or anything else.
You can optimize what you say, not just "Marco", to attract & identify the "Polos".
You can be really smart about choosing the first "Polos" you want to pursue.
This is exactly the situation you're in, when launching a product. I call it medium-market-message match. The 4Ms. 😀
Choosing a channel and message and market can feel like choosing an elevator
Choosing media is an interesting game. Essentially, you're tapping into other people's existing audiences, and putting a message in front of them. Depending on how relevant that message is for that particular audience, more people will "convert". And then you can be smart about who you actually go after.
Pol-ah, you got me.
And the best way of testing these combinations?
Why, never thought you'd ask.
Landing Page MVPs.
There's a good book on this topic called Launch Tomorrow. Arguably, I'm not the best person to judge that, since I wrote it. But I'm right anyway–this time.
It goes into constructing constructing tests around the 4Ms. Put all of your ducks in a row.
Catch the "polos" who are keen to hear what you have to say.
Even better, build products which are popular with lots of "polos".
In the early days, when I was just polishing off the manuscript of Launch Tomorrow, I gave it to a friend who also lived and breathed startups. I specifically requested that he keep it quiet and just asked for feedback. Professionally, he was a marketer but in this case I was hoping to get some honest “tough love” from him. To make sure the book would be good.
After speaking with him in person, I dropped a pdf into gmail, and forwarded it on to him. Coincidentally, I also happened to have an early trial version of Streak installed on my gmail account, which is an app which measures email opens, now primarily used by salespeople.
Over the next week or so, it turned out 37 people had opened that email 56 times in different locations around London and Europe. This simple indicator was enough to convince me that the manuscript is definitely at least a minimum viable product. If not a bit more. There were a lot of tweaks I wanted to make, but clearly my idea audience was enjoying and using it. Even though this viral spread was accidental, ultimately I was pleased that my friend had effectively proven to me that my product was ready.
This was a special case of someone who knew me well, the fact that he forwarded it without my consent and that it was re-forwarded so many times implied that my soon-to-be released product will be able to generate word of mouth referrals when I do launch. This was particularly poignant, given that this was a B2C product. Like most impulse buys, books (on their own) tend to be low $ value products. There is little margin for error with a high customer acquisition cost, yet you need to be great at generating awareness and discoverability. So you can only use channels that have a fixed cost up front but little additional variable cost of reaching another person.
Going Viral
While virality seems “free” from a financial point of view, it’s expensive in terms of your time. The idea is to create enough product (content in my case) which people naturally want to share. Once you have their attention, you include some kind of call to action which then turns into a conversion , like a sale. Or at least a micro conversion, like getting an email subscriber.
Once people hear about your idea or your product, then they decide whether to buy it or not, and also whether to share it or not. Nowadays, it paradoxically seems easier to convince people to buy an inexpensive product than it does to get them to share it (at least for me). ????
Why virality can be an engine of growth
Matthew Lieberman, author of “Social: Why Our Brains Are Wired to Connect” and professor of psychology says:
We always seem to be on the lookout for who else will find this helpful, amusing or interesting, and our brain data are showing evidence of that. At the first encounter with information, people are already using the brain network involved in thinking about how this can be interesting to other people. We’re wired to want to share information with other people. I think that is a profound statement about the social nature of our minds.
The main reason viral growth can be a massive growth engine is the fact that once you get beyond a certain tipping point, the sharing be comes so extreme that it reaches disproportionately many people. Numerically, if you see it as a coefficient, it will be multiplied with each person (or step), and that number can quickly get disproportionately large.
My high school math teacher had a good example of this compounding effect. Would you prefer to get $1 mln today, or one penny today, two pennies tomorrow, continuing to double that amount for the entire month? This is, of course a trick question, designed to put teenagers in their place. The compounding penny option ends up being a much larger amount than the initial million.
This metric of 37:1 was my viral transmission ratio on this particular event. Basically anything above 1:1 will lead to geometric growth, if it sustains at that rate. At a rate of 2:1 on a daily basis, you’d be at 2147483648 within 31 days. It’s just raw arithmetic: 2^31. So if the true long term viral transmission rate settled at 2:1 that would still mean the book had a captive audience with high latent demand-and that I needed to get it out there.
The good thing about a viral growth engine is that it’s costless growth. As you don’t spend any money on building initial awareness, any revenues you do make are fully yours. If you do have financial constraints initially this can be a good place to start.
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The main drawback of viral growth is that results tend to be highly unpredictable and difficult to manufacture deliberately. Depending on how effectively you make your content unique and engaging, people will be more or less willing to share it. More often than not, all it takes is one share from someone with a large audience, and it will give you a big spike in traffic. It’s just that it’s difficult to get those initial share, particularly if no one knows who you are.
Manufacturing Engagement
The hard part is writing content good enough that people want to share it with their friends. To some extent, you can pre-test this by using what Andrew Chen’s twitter technique. He writes potential headlines as tweets, and then sees if anyone interacts with it. Once the idea is proven, via a favorite or a retweet, he uses that as a basis to write a longer piece on that topic. As a result, his growth hacking essays tend be highly focussed on his target audience’s needs. As a result of forwards, he effectively “clones” his existing audience. The content people forward tends to attract other interested in the same type of content.
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
Another approach is to repurpose a backlog management service like uservoice or a kanban tool like trello combined with audience interaction. You can create a backlog of writing ideas, and then have your existing audience vote on them. This way you are naturally spending your time writing things which is attractive for them. It’s effectively a vetting and prioritization system for content, similar to prioritizing features in agile software development.
If you’d like more ideas of how to experiment with growth, take a look at Your First startup experiment my book on getting you to that first experiment. De-risk your startup idea and figure out how to grow, grow, grow with Your First Startup Experiment.
Key Takeaways
Virality can be an engine of growth because it rapidly raises awareness at a low per-user cost
The key is that you have each person refer more than one person to your product
While the best way to get and keep this effect is to build a great product that addresses a market need, you can experiment with some tools to help engineer in virality
Recently I’ve been revisiting the launch and pivot process in my research, in an effort to help founders and innovators change strategic direction in their business. Here is an old piece I wrote that should give you concrete metrics to track your progress. These were specifically chosen to be relevant, independently of what budget is available (and thus hopefully make it more relevant nowadays.
VCs and startup investors often say they’re looking for hustle in early stage founders. But that feels vague. And honestly, on its own, it’s not particularly useful feedback. More of a sophisticated way to end a pitching session they don’t want to be hearing.
Until now.
There are a few leading indicators you can use to keep yourself accountable, and to make sure you actually are hustling (and you’re not falling for your own PR).
The following four operating metrics say a lot about an early stage startup’s chance for success.
1. Number of pitches
A critical leading indicator metric of early stage success is how many pitches are you making each day (even if you aren’t trying to sell)? By “pitch”, I mean any attempt at asking someone for something, even if it’s just information. For example, this could mean approaching prospects for customer discovery or customer development interviews.
If you are making them, then you are learning more about your audience and iterating towards something that is likelier to work. Also, you are converting some people, which means that you can then continue to build on that as time goes on. This includes:
both outbound pitches, whether for sales or for customer interviews,
inbound marketing, such as free content you create which you need to put in front of your target audience.
advertising (impressions)
With inbound, unless if you already have an audience, usually requires some form of gatekeeper pitching or payment. You to pitch media owners, journalists, editors to get coverage. Or you create content and just pay for advertising.
And then pay attention to any response you get.
At some point after you’ve done this for a while, you’ll know what people want and how to reach them and roughly how to sell them. At that point do it yourself a little bit and then it makes sense to delegate it to a professional salesperson to improve your closing ratios (if you need one).
That’s actually a pretty good metric, because it’s a leading indicator for all learning. And learning is the #1 goal of startup, in order to stop being a startup, and to discover a business model which works.
Notice how I’m not really including the “number of failures” or “failing fast”. That’s repeated so often in tech circles it’s become hollow and meaningless. I think being able to deal with rejection is possibly more important than being able to deal with “failure”, certainly in the tech startup world. Because even in technology the most important decisions that affect your startup or are made by people (customers, prospective co-founders, prospective employees).
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To be fair, not every founder is a natural salesperson. But every serious founding team needs to be willing and able to face lots of rejection in order to go after their vision. In fact, the number of rejections a founder is willing to take is a good measure of how strongly they believe in their vision, product, or goal. If you have a goal you believe in, but you’re only willing to be rejected 10 times before you give up on it, you can easily end up being a genius in your own mind but giving up almost immediately once you start doing anything related to marketing.
2. Number of experiments
Another related metric is how many experiments are you running each week? If this is not at least 1, you are not going to get very far. Or other startups who are will run circles around you. Or you are trying to cram too much into one test, not really telling you anything useful.
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
This is more of a product or operational metric. Basically, the more thorough and organized you are with this, the faster you will learn what you need to know. It never ceases to amaze me, how documenting my own hypothesis and metric before running an experiment is very useful, when interpreting the result. Because it’s so easy to twist the results into what you want them to mean.
Most of the major technical breakthroughs result from lots and lots of experiments. They explore an area or technology with a lot of unknowns, including “unknown unknowns”. That’s why they’re surprising for everyone outside the founding team. Here’s a breakdown of roughly the number of experiment trials required to create a certain type of invention, based on patent filings.
numbers of experiments needed to achieve a breakthrough product
While this looks only at technology, the same principle is true in the case of proving the business model and finding a growth engine. By focussing only on tactics, you end up using exactly the same tactics as everyone else. So if everyone is reading the same 3-4 sources for ideas and trying exactly the same tactics at the same time, the tactics tend to quickly become useless. This the law of shitty clickthroughs happening–one growth hack a time. It’s so difficult and yet so vital to differentiate, if you are using exactly the same tactics as everyone else in your industry. Growth or business level experiments, and lots of them, are the only way to really discover an effective way of growing a startup.
Also, if you aren’t running any experiments, you are only delaying “learning moments”. And if you do ultimately fail for one reason or another, it’s because you’ve delayed so many “learning moments” for so long, that reality comes crashing down on you. And usually this results in the Dunning Kruger effect. You are just clueless, and being confident in what you’re doing only makes it harder to discover you are actually clueless. It’s also a different way of looking at cycle time, which is an important indicator for people like Sam Altman of YCombinator.
3. Back to basics with customer empathy
Many of the pivots required by the crisis require a change of customer type. Or at minimum a focus on a particular niche that currently have a lot going on. Like hospitals. Or Supply chains. Or Agriculture and food.
In that context, do you really understand your audience as well as they do themselves? Do you know their needs? Wants? What they dream about at night? Who they’re influenced by? What questions they have? What media they consume? What they typically do? What obstacles they struggle with?
Do you as the founding team empathize with the customers? Do you gather and systematize data on what they say and how they behave (as an indicator of subconscious needs)? Do you have a system for doing so, like Adrian Howard’s iterative personas and/or a hero canvas?
If you really have this covered, it will help you build something people want. It will help you do channel testing to discover how to reach them cost effectively. It will resolve many types of conflict among your own team, if you agree to formulate a test, and then gather data to prove which approach, option, or decision is right.
Your entire business model depends on it.
Most frequently, either founders aren’t aware of how important this is, or if they are, they only use this if they think it will further their own agenda (for example improving the user experience, regardless of the wider business context).
4. Goal setting and delegation
Probably another really big one is lame goal setting as a founding team, which impacts your ability to ship anything, particularly at the early stages. Knowing what you want to accomplish and giving your team deadlines. This is kind of related to:
succumbing to distractions (bight and shiny object syndrome)
indefinitely being stuck in learning mode
inability to delegate work.
Drifting along indefinitely is not good. And this is often left implicit, avoiding difficult discussions, and ultimately festering and resulting in things like cofounders leaving, etc.
If you really want to build a startup, at some point, you need to finish stuff as well as just learn. Which means you always need target completion dates, or at least timeboxes. In the early stages, these will tend to be very tactical and short term, because you are learning and you don’t want to commit to a “five year plan” if you don’t have any reason to do so, like revenue or traction.
Even if it means have a clear goal of what you want to accomplish in the next 2 week sprint and what that matters, that will help a lot. And also having everyone on your team agree that this is your goal, and how you will track it (so that it is objectively observable).
Admittedly, at first your only goal is to learn. But shifting slowly into execution mode, is inevitable as you start proving parts of your business model.
Most of the internal problems that I see with early stage startup founders boils down to variations of one of these four factors.
Key Takeaways
The 4 key areas to achieve a successful pivot during the lockdown are:
Number of pitches or contact points with new customers
Number of experiments you are running
Revisiting your customer segments and re-establishing empathy
Setting clear goals you and your team can work towards
In his confessional expose, Ramit Sethi (@ramit) publically admitted and explained why he killed a $2mln product.
It seemed to be doing well on the surface. There were hundreds of meetups around the world. People were getting value from the product.
But the product’s churn hovered around 10%. Which meant that they would lose all of their customers within 10 months, if they stopped acquiring new customers.
Ramit summarizes:
Imagine your job is to fill up a large bucket with water. You spend thousands of dollars choosing a clean well, testing the water quality, and painstakingly ladling each cup of water… only to discover you’ve got a massive hole in your bucket!
They poured another $100k into the product and tried a number of changes, ultimately the churn wouldn’t budge. Because his best customers consistently outgrew the program. And their friends left. Consistently.
So even though the product was earning $2mln/year, the profit margins were thin, and most importantly, the churn was a sign that something was broken.
Pirate Metrics to the Rescue
500 Startups (@500Startups) came up with the idea of Pirate Metrics, as the key high-level numbers that are related to rapid growth:
Acquisition
Activation
Retention
Referral
Revenue
Startups that figure out how these numbers interact and clear all bottlenecks start experiencing explosive growth. Because most of these numbers have exponential effects, if under the right conditions. It is a really useful troubleshooting framework for businesses that want to achieve high growth.
Looking at Ramit’s numbers, it seems to imply that retention was so low, that the lifetime value of a customer didn’t really justify the acquisition cost. So the core tension in his case was between acquisition and retention.
Turns out overmarketing is a very common problem…
If customers don’t stay with you for very long and don’t refer your product, that implies your product doesn’t quite work for your market. Most new ventures overspend on marketing and underspend on product validation and development. Product. Operations. Support. Full alignment across the company is critical, to get retention and referrals. It doesn’t make much sense to spend a lot on marketing if you don’t have retention. A product your customers care about. This is why design matters a lot.
There are examples of this in lots of different industries: mobile, SaaS, hardware, biotech, etc. The list goes on. Anecdotally, this rings true. Here’s an example from mobile:
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The average cost to a brand for every app install has reached $2.51 on Android and $1.78 on iOS [in 2016]. But 70% of those new users may be lost just one day after install, and retention rates drop to 4% by the third month. That high churn rate means that the cost of acquiring users that are still engaged with your app three months after install is 25 times higher than just acquiring new users.
In this case, increasing your marketing budget only gets the word out about a product that doesn’t satisfy customers. Which is counterproductive.
A much better use of your budget is to double down on the product. Improve your customer and user experience. Make sure that you are helping a small pool of customers achieve their goals, before you go out and trumpet your product to the world at large. And a great product will retain happy customers who want you to produce more for them. It will also generate word of mouth, lowering your average customer acquisition costs and increasing your referral rates.
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
Beyond initial market tests, with landing pages for example, there comes a point where you really do need to invest your resources into your product or service. It’s in your best interest.
Discovery, at the product level, makes a lot of sense. You need to figure out exactly what product needs to be built, so that you build something that will hit a sweet spot for your customer. However, what that customer cares about is NOT your product. It’s the outcome your product helps them achieve. Outcomes are clearest in a B2B context. Almost all enterprise sales are driven by 4 factors: increasing revenues, decreased cost, decreased risk, or improved customer experience. For consumers, this isn’t always clear cut. In many cases, though, there are specific objectives the customer is trying to achieve.
And yet, discovering client or stakeholder ideal outcomes is more important than discovering products. It might sound like an academic distinction that has little practical meaning. But actually shifting from products to outcomes is the most important step in moving from a “my company” focus to a “customer-centric” focus. Because a product is still something that only you and your team cares about. An outcome is the main thing your customer cares about.
The Copernican Revolution of focusing your product development around your customer
Instead, I think the core learning process my team goes through is how to achieve specific business outcomes for specific people as quickly as possible. Usually this is a case of being laser focussed on only what must be shipped first in order to achieve those outcomes.
All other ideas are added to the backlog and delayed until after the immediate next release. Any time spent analyzing them, developing them, testing them, or reporting on them delays your current release. And your highest priority outcome. Counterintuitively, this includes longer term activities like planning, estimation, or budgeting.
If you allow all of these other features to creep into your release, you are delaying the possibility of achieving your customer’s outcome. And your customer has to achieve their outcome before you can achieve yours. That is the true total cost of incrementally adding the extra features. Not just the extra product team time (regardless of how much more time it does require).
Let’s gather round the pork barrel and see who negotiates what
The fact of the matter is that it’s not worth aligning around big laundry lists of features that go into a release. Because it then becomes a case of pork barrel politics in favor of individual stakeholders in a larger company. If that is going on, the main goal or outcome of a release is already difficult to see. And everyone wants to get in their piece of pork.
When do you know you have a useful outcome?
Let’s say you have 200 possible features you can build and ship. Of that 200, you can combine them into subsets that achieve a particular benefit for one or more clients. These clients can be external or internal. So the goal of a release is to make that subset small enough to make an impact for at least one person. Possibly a few people. Or one client.
1. A Specific Person, Company, or Role in a Narrow Market Segment
You have one specific person or at least persona in mind. You can use the Hero Canvas, or not, doesn’t matter. But it’s important to frame discussions of value around people impacted.
Having a specific person in mind grounds your effort. Most of the meaning around products will be based on how they impact your customer’s lives. How it plays into the stories they already tell themselves about their struggles and efforts.
Also, by choosing a specific persona or person, you choose an angle or perspective. Similar to the Copernican revolution, you “choose your sun”. This is what gives life to your business, not the other way around.
New technologies can be applied in a number of different markets or segments. And the details will vary widely based on which segment you choose. For example, you invent a way for drones to collaborate autonomously. This invention can be used in agriculture, military, construction, oil exploration, or games. In each case, it’s the same base technology, but you will prioritize different first features for each one as you productize the technology for each application in each segment. Without targeting a specific market, all you have is a clever invention.
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You have an understanding of their motivations, metrics, and how they define their own success. Again this is often clearer in a B2B context. Here’s an example of different metrics with an HR department:
focus on the right metric–one which customers actually care about
The problem [our failed startup] set out to tackle, reducing turnover and improving new hire performance, was felt acutely by our buyers (CHROs / Heads of Talent). It was NOT felt acutely by our users (recruiters).Recruiters are measured against average time-to-hire, not new hire retention or performance.We were trying to improve outcomes about which users would pay lip service, but which didn’t impact their paychecks or promotions. –Sam Stone of @ansarotech
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
By choosing a person or group of people, they will be measuring themselves against particular metrics, such as the average time-to-hire for recruiters. By helping that person with that metric, you improve their life. Provide value. Whether you do that with a product, service, article, app, or anything else doesn’t really matter to them. It matters a lot to you. But to you only.
3. No side effects
You aren’t causing unintended side effects that matter to that person. To counter-balance the previous point, if you significantly do improve one metric but damage something else that matters to that person, then they won’t be interested.
Like taking aspirin for a headache and getting a stomachache as a result
Let’s say your product speeds up the average time to hire for recruiters, but it requires that they work 12 hours days in order to achieve that outcome. In particular, they need to stay at work for 4 extra hours per day, to maintain the information about candidates in your SaaS app. For many recruiters, this will be an unacceptable side effect, as they will have to sacrifice family time also, in order to achieve the outcome.
4. Easy to execute or confirm
If you are at a validation stage, it should be easy to validate what the outcomes are by talking to those customers.
Make it easy, so that it’s done quickly
If you are already building product, this implies you have built your product in a way that is cheap to release. In the software case, this means you are using a lot of automated software testing. So you are sure of exactly what is in the product and what is working. And you can release as soon as all of your tests pass. Better to commit to fewer features, but only release ones that work.
If you are in a big company, it should be easy to get alignment around a particular outcome. There can be multiple conflicting agendas of the stakeholders, and it may be difficult to agree what the intended outcome is. Figuring this out takes time, but it’s still relatively the fastest path to the outcome, if you want to work sustainably.
The challenge with outcome discovery is often that the #1 or #2 are unclear. And after they become initially clear, they often change.
Case Study
Sometimes you discover a smaller, nearer term outcome that helps align everyone as an incremental step. For example, in an enterprise software case, it can be worth helping a different stakeholder in the shorter term.
Giving a salesperson something to demo, before delivering an initial release only directly to a client. The salesperson has a lower bar. She only needs to build a picture and narrative around the product. She don’t need it to be fully functional, taking care of all edge cases and side effects.
What if my releases require Herculean efforts?
Release scopes need to be as small as possible, and organized around specific outcomes which you are trying to achieve. Because this means it gets out to customers faster. And you achieve the outcomes faster.
If releases are really big, then quite possibly, that’s the most productive outcome you need to address. It makes more sense to streamline your existing processes, before it’s even worth looking at creating new products. If you don’t streamline first, you’ll create resource locks among partially finished and unreleased products all over the place.
Actual time frames will vary significantly by industry. A good general rule of thumb nowadays is a maximum of a month, for any product that doesn’t have a manufacturing component. For example, you’re unlikely to be able to build an oil tanker in a month. But you could come up with a design prototype for one in a month.
Why discovering outcomes first matters even more than discovering product
The person being helped decides whether your help was valuable. It doesn’t matter how much effort or resources or blood you lost, if it’s not relevant to your target customer. Usually, product teams don’t spend nearly enough time to getting deep enough into the customer’s world. They don’t need to at first, but at that point they are relying a lot more on luck than they care to admit. Taking beta they don’t need to. Even using the word product already pre-supposes a solution. Namely, that it’s a product. As opposed to a number of other solutions, like a service.
Key Takeaways
True outcome discovery and alignment is even more valuable than product discovery at an early stage.
Outcomes focus you on people for whom you want to create an impact, as this will ultimately drive your success.
A well-chosen outcome needs: a clear person affected, a metric they use to evaluate the outcome, no side effects, and easy and clear path to execution
Next Steps
Get details of my hero canvas course over here, to help you narrow your focus on the outcomes your customers and users care about.