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  • Thank you for coming.

  • >> Move us all, thank you.

  • Cool, so you guys this is awesome,

  • I've been watching the lectures in this course,

  • isn't it absolutely amazing the content?

  • And now you're stuck with me today.

  • >> We'll, so how that goes.

  • Unlike Paul, when he was talking in the Q and A,

  • and you guys asked him what he would do if he was at

  • college today and

  • he said physics, I actually indulged myself.

  • I went in, I went and did physics,

  • did physics at Cambridge and I think physics is

  • an amazing class to give you transferable skills that

  • are really useful in other areas.

  • But I guess that's not,

  • that's not why you're listening to me today.

  • Like, physics isn't the class, like, so I paid for

  • college doing online marketing.

  • Direct sales marketing.

  • I started with SEO in the 1990s.

  • I created a paper airplane site.

  • I had a monopoly.

  • In the small niche market of

  • paper airplanes globally which you know,

  • when you want to start a startup also see how big

  • the market could be in the long term it wasn't great.

  • But what that taught me was how to do SEO.

  • And back in those days it was Altavista, and

  • the way to do SEO was to have white text on

  • a white background five pages below the fold.

  • And you would rank top of Alta Vista if you just paper

  • airplanes 20 or 30 times in that text.

  • And that was how you won at SEO in the 1990s.

  • Like it was a really easy, easy skill to learn.

  • When I went to college, being a physicist,

  • I thought paper airplanes would make me cool, and

  • I was actually the most nerdy person in

  • the physics class, so I created a cocktail site.

  • Which was how I learned to program.

  • And that grew to be the largest cocktail site in

  • the UK.

  • And that really got me into SEO properly when

  • Google launched.

  • So with Google, you had to worry about page rank, and

  • you had to worry about getting links

  • back to your site.

  • Which basically, at that stage,

  • meant one link from the Yahoo directory.

  • Got you to the top listing in Google if you had white

  • text, on a white background, below the fold, as well.

  • When Google launched AdWords that's when I

  • really started to learn how to do all my marketing.

  • And that was buying paid clicks from Google, and

  • reselling them to eBay for

  • a small margin of like 20% using our affiliate program.

  • And that was what really kicked me into overdrive

  • into doing what everyone nowadays talks about is

  • growth, or growth hacking, or growth marketing.

  • And in my mind it's just internet marketing.

  • Using whatever channel you

  • can to get whatever output you want.

  • And that's how I paid for college and how I

  • ended up going from being a physicist to a marketer and

  • transitioning to the dark side of the force.

  • So what do you think matters most for growth.

  • You've had loads of lectures and

  • people have said it over and over, so

  • what do you guys think matters most for growth?

  • Someone give me an answer.

  • >> Great product.

  • >> Great product.

  • I agree, great product.

  • What does great product lead to?

  • >> Customers.

  • >> Customers.

  • And what do you need those customers to do?

  • >> Spread the word.

  • Someone said stay on your site.

  • Someone said that.

  • That's it. Retention.

  • Retention is the single most important thing for growth.

  • Now we have an awesome growth team at Facebook, and

  • I'm super proud to work on it.

  • But the truth of

  • the matter is we have a fantastic product.

  • But getting to work on growth at Facebook is

  • a massive privilege, because we're promoting something

  • that everyone in the world really wants to use.

  • Which is absolutely incredible.

  • If we can get people on, and

  • get them ramped up, they stick on Facebook.

  • So many times I go advise multiple startups,

  • my favorite was working with Airbnb, but

  • I've worked with Coursera, I've worked with

  • other ones that haven't done as well as those guys.

  • But the one thing that is true over, and over, and

  • over again is if you look at this curve.

  • The sentiment, the active,

  • versus number of days from acquisition.

  • If you end up with a retention curve that

  • ascentotes to a line parallel to the x axis.

  • You have a viable business, and

  • you have product market fit for some subset of market.

  • But most of the companies that you see fly up,

  • we talk about growth hacking and virality and

  • all of this other stuff.

  • I'm gonna try so hard not to swear, but it'll happen.

  • Their attention curve slopes down towards the X-axis, and

  • in the end intercepts the X-axis.

  • Now when I show this chart to

  • most people they say that's all well and good.

  • You had a million people a day in terms of

  • growth when you started the growth team at Facebook, or

  • you were at 50 million users.

  • You had a lot of people joining the site so

  • you had a ton of data to do this.

  • We used this same methodology for

  • our B to B growth.

  • Getting people to sign up as self-service advertisers,

  • we used this analysis to understand how much

  • growth we were gonna have in that market as well.

  • And in that place,

  • when I joined Facebook, the product was three days old.

  • And within 90 days of the product launching,

  • we were able to use this technique to be able to

  • figure out what the one year value of an advertiser was,

  • and we predicted it for the first year to 97% of

  • what the number turned out to be.

  • So I think it's very important to look at

  • your attention curve, and this is how we did it.

  • If you see here.

  • This red line is number of users,

  • who have been on your product for

  • a certain number of days.

  • So, a bunch of people, that should say zero,

  • a bunch of people will have been on your product,

  • all of your users will have been on it at least one day.

  • But, if your product's been around a year, or whatever,

  • you will have zero users who've been on it 366 days.

  • Make sense?

  • The curves sensible?

  • Cool.

  • So what you then do is look for all of your users,

  • who have been on your product one day.

  • What percentage of them are monthly active.

  • 100% for the first 30 days obviously,

  • because monthly active they all signed up on one day.

  • But then you look at 31.

  • Every single user, on their 31st day after registration,

  • what percentage of them were monthly active, 32nd day,

  • 33rd day, 34th day?

  • And that allows you,

  • with only something like 10,000 customers or

  • whatever, to get a real idea of what this curve is

  • gonna look like for your product.

  • And you're gonna be able to tell does it asymptote.

  • And it'll get noisy out towards the right-hand side.

  • Like I'm not using real data.

  • It'll get noisy out towards the right hand side, but

  • you'll be able to get a handle on,

  • does this curve flatten out or does it not.

  • If it doesn't flatten out, don't go and

  • do growth tactics, don't go and

  • do virality, don't hire a growth hacker.

  • Focus on getting product market fit.

  • Because in the end,

  • as Sam said in the beginning of this course,

  • idea, product, team, execution.

  • If you don't have a great product,

  • there's no point executing well on growing it.

  • Because it won't grow.

  • Number one problem I've seen inside Facebook for

  • new products, number one problem I've seen for

  • startups I ever devised has been, they don't actually

  • have product market fit when they think they do.

  • So the next obvious question that people ask over and

  • over and over again is okay, so

  • what does good retention look like?

  • Sure I can have five percent retention but

  • I'm guessing that Facebook had better than that, so

  • that's not gonna be a successful business.

  • And I get really pissed off when

  • people ask me that question.

  • Because I think you can figure it out.

  • And I love this story, and this is like my one

  • gratuitous story that I love that I'm throwing in here,

  • so the rest of it may not be as gratuitous.

  • But this is a picture that was published in

  • Life magazine in 1950 of

  • one of the Trinity nuclear bomb tests.

  • And there's a guy,

  • Geoffrey Taylor, who's heard of Geoffrey Taylor.

  • Awesome.

  • Yes.

  • Someone's heard of him.

  • Geoffrey Taylor was a British physicist,

  • who ended up actually winning the Nobel Prize.

  • And he was able to figure out from looking at

  • this picture, what the power of the atomic bomb was,

  • the U.S. atomic bomb.

  • And Russian's were publishing similar pictures,

  • just using dimensional reasoning.

  • And dimensional reasoning is I think,

  • one of the best skills that I learned during my

  • time studying physics back in the U.K..

  • And what dimensional reasoning is, is you look at

  • the dimensions that are involved in a problem.

  • So, you wanna figure out energy?

  • Newtons, meters, newtons are kilograms, meters are second

  • to the minus 2, so you've got kilograms,

  • meters squared, seconds to the minus 2,

  • and then you try and figure out how you can get each of

  • those numbers from what data you have.

  • So, the mass.

  • Is the volume of this sphere.

  • So, that's a meter cubed you throw in there.

  • So you've got meters the 5 over seconds the minus 2,

  • and he was able to use that to just figure out

  • what the power of this atomic bomb was,

  • what the ratios of the power between the Russian and

  • US atomic bomb, and essentially reveal one of

  • the top secrets that existed in the world at that time.

  • That's a hard problem.

  • Figuring out what

  • Facebook's retention rate is not a hard problem.

  • How many people are there on the internet?

  • Give or take someone throw something out.

  • >> 2.4 billion, 2.3 billion.

  • Something like that right?

  • Okay, Facebook's banned in China.

  • So.

  • What now?

  • >> About a billion.

  • >> About 2 billion?

  • 2 billion. So

  • 2 billion people on the internet.

  • Facebook in their last earnings call

  • said something around 1.3 billion in

  • terms of the number of active users.

  • You can divide those numbers by each other.

  • And yeah, that won't give you the right answer.

  • Course it's not gonna give you the right answer.

  • But it's gonna give you

  • close enough to a ballpark figure.

  • Of what the retention rate looks like for Facebook.

  • If we signed everyone on the internet up, and

  • then you will know it is higher than that.

  • Similarly if you look at Whats App, they've announced

  • six hundred million active users.

  • How many people have smart phones?

  • You can figure out that number.

  • That number is out knocking around.

  • It can give an idea of how many users there are.

  • Amazon has had a pop at

  • signing up almost everyone in the United States.

  • You know how many people are online in the US, and

  • you've got a good idea of how many

  • customers Amazon are from the numbers they throw out.

  • Different verticals need different terminal retention

  • rates for them to have successful businesses.

  • If you're in e-commerce and you're retaining on

  • a monthly active basis like 20, 30% of your users,

  • you're probably gonna do pretty well.

  • If you're in social media, and

  • your first batch of people signing up to

  • your product are not like 80% retained,

  • you're not gonna have a massive social media site.

  • And so, it really depends on the vertical you're in,

  • what the retention rates are.

  • What you need to do is have the tools to

  • think about who out there is comparable.

  • And how you can look at it and say,

  • am I anywhere close to what real success looks like in

  • this vertical?

  • So retention is

  • the single most important thing for growth.

  • And retention comes from having a great idea, and

  • a great product to back up that idea and

  • great product market fit.

  • The way we look at whether a product has great retention

  • or not is whether or not the users who install it.

  • Actually stay on it long term,

  • when you normalize on a cohort basis, and

  • I think that's a really good methodology for

  • looking at your product and saying, okay, the first 100,

  • the first 1,000, the first 10,000 people I get on this,

  • will they be retained in the long run?

  • So now how do you attack operating for growth?

  • Let's say you have awesome product market fit.

  • You have built an e-commerce site and you have 60% of

  • people coming back every single month and

  • making a purchase from you.

  • Which would be absolutely fantastic.

  • How do you take that and say now it's time to scale?

  • Now it's time to

  • execute was the last thing in your thought.

  • Right?

  • And that's where I think growth teams come in.

  • Like my contrarian viewpoint, or

  • whatever is if you're a start-up you

  • shouldn't have a growth team.

  • >> Damn it.

  • So close.

  • Halfway through and I failed.

  • You shouldn't have a growth team.

  • Start-ups should not have growth teams.

  • The whole company should be the growth team.

  • The CEO.

  • Should be the head of growth.

  • You need someone to set a North Star for

  • you, gratuitous shot of the, you know, NASA page.

  • You need someone to set a North Star for

  • you about where the company wants to go.

  • And that person needs to be the person leading

  • the company, in my opinion, from what I've seen.

  • And Mark is a fantastic example of that.

  • Back when Facebook started lots of people were

  • putting out their registered user numbers.

  • Right? You'd see registered user

  • numbers for MySpace.

  • You'd see registered user numbers for Compact.

  • You'd see registered user numbers.

  • Mark put out monthly active users as the number both

  • internally he held everyone to.

  • And said we need everyone on Facebook, but

  • that means everyone active on Facebook.

  • Not everyone signed up to Facebook.

  • So monthly active people was the number internally.

  • And it was also the number he published externally.

  • It was the number he made the whole world hold

  • Facebook to as the number that we cared about.

  • If you look at what Yam has done with What's Up I

  • think it's another great example.

  • He always published send numbers.

  • If you're a messaging application,

  • sends is probably the single most important number.

  • If people use you once a day.

  • Maybe that's great, but they send one message.

  • They, you're not really their primary messaging

  • mechanism, so Yan published the sentence number.

  • Right?

  • Inside AvianB they talk about nice book, and

  • they also published that in all of the,

  • like, infographics that you see inside Tech Crunch.

  • They always benchmark themselves against how many

  • nights booked they

  • have compared to the largest hotel chains in the world.

  • They have, each of these companies,

  • a different north star.

  • The north start doesn't have to be

  • monthly active users for every different vertical.

  • For eBay, when I was there,

  • it was gross merchandised volume.

  • How much stuff did people actually buy through eBay.

  • Everyone externally tends to judge eBay based on revenue.

  • Actually, Benedict Evans has

  • done this amazing breakdown of Amazon's business.

  • Which is really interesting.

  • To look at their marketplace business versus their

  • direct business.

  • EBay is all marketplace business, right.

  • So eBay's being judged by its revenue when it

  • actually has ten times, or whatever more

  • gross merchandised volume going through the site.

  • And that was the number that eBay looked at when I

  • was inside there, and optimized for.

  • So every different company when it

  • thinks about growth needs a different north star.

  • But when you are operating for

  • growth, it is critical that you have that north star and

  • you define it as a leader.

  • The reason this matters is.

  • The second you have more than one person working on

  • anything, you cannot control what everyone else is doing.

  • Right?

  • I promise you,

  • having now might have hit 100 people I'm managing,

  • I have no control.

  • It's all influence.

  • Yes, I can say to one person, do this one thing.

  • But then the other 99

  • are gonna do whatever the hell they want.

  • And the thing is, it's not clear to everybody what

  • the most important thing is a for a company.

  • It would be very easy inside eBay for

  • people to say, you know what?

  • We should focus on revenue.

  • Or you know what? We should focus on

  • the number of people buying from us.

  • Or you know what? We should focus on

  • how many people list items on eBay.

  • And Pierre and Meg and John.

  • Those guys, those various leaders, always said no,

  • it's the amount of gross merchandise volume that

  • goes through our site.

  • It's the percentage of

  • e-commerce that goes through our site.

  • That is what really matters for this company.

  • Which means when people are having a conversation and

  • you're not in the room, when they're sitting in front of

  • their computer screen and thinking about how they

  • build this particular product or

  • this particular feature.

  • In their head,

  • it's gonna be clear to them that it's not about revenue.

  • It's about gross merchandise volume.

  • Or it's not about getting more registrations.

  • Registrations don't matter unless they become long term

  • active users.

  • A great example of this is when I was at Ebay in 2004.

  • We changed the way we paid our affiliates for

  • new users.

  • And affiliate programs are a bit out of fashion these

  • days, but

  • the idea of an affiliate program is essentially you

  • pay anyone on the internet.

  • A referral for sending traffic to your site.

  • But it's mostly about getting access to like,

  • big marketers who do it on their own,

  • like separately and

  • some really good stories from this.

  • We were paying for confirmed registered users.

  • So all of our affiliates were aligned,

  • they're out getting confirmed registered users,

  • to the base site.

  • We changed our payment model to pay for

  • activated confirmed registered users.

  • So you had to confirm your account and

  • then bid on an item, or buy an item or

  • list an item, to become someone that we paid for.

  • Overnight when we made that change,

  • we lost something like 20% of confirmed registered

  • users that were being driven by the affiliates.

  • But the ACIUs only dropped by about 5%.

  • The ratio of CIU to ACIU went up, and

  • then the growth of ACIUs, massively accelerated.

  • The cause of this was if you wanna drive CRUs if

  • someone searches for

  • a trampoline, you land them on the registration page cuz

  • they think they have to register and

  • confirm, before they get that trampoline.

  • If you wanna drive ACRUs you land them on the search

  • results page within eBay for trampolines so they can see

  • the thing they want to buy, get excited about it and

  • register when they want to buy it.

  • And if you drive just CRUs people don't

  • have an amazing,

  • magic moment on eBay when they visit the site.

  • And that's the next most important thing to

  • think about, is how do you drive towards the magic

  • moment that gets people hooked on your service?

  • So in the lecture notes for

  • this course I've stuck in a bunch of links to people I

  • think are brilliant at all of this stuff.

  • That retention curve I showed earlier,

  • there's a link to this guy Danny Ferrante

  • whose incredible talking about retention curves.

  • The magic moment, there are two videos linked.

  • One is Chimoff talking about growth,

  • who was the guy who set up the growth team at Facebook.

  • And one is my friend Naomi and

  • I talking at F8 four years ago about how we

  • were thinking about growth back then.

  • And in both of those mem,

  • both of those videos we talk about the magic moment.

  • So, what do you guys think the magic moment is for

  • when you're signing up to Facebook?

  • You hit that big green button,

  • what is the moment when users are like ha?

  • Mark even talked about it at the start up

  • school a few years back.

  • >> See your friends.

  • >> See your friends.

  • Simple as that.

  • And usually it is very simple.

  • I talked to so many companies, and they try and

  • get incredibly complicated about what they're doing.

  • But it is as simple as just when you see that

  • first picture of one of your friends on Facebook.

  • You go, oh my God, this is what the site is about.

  • And Zucks talked at Y Combinator about

  • getting people to ten friends in 14 days.

  • That is why we focus on that metric.

  • The number one most important thing in

  • a social media site is connecting to your friends.

  • Because without that,

  • you have a completely empty news feed, and

  • clearly you're not gonna come back.

  • You'll never get any notifications,

  • you'll never have any friends telling you

  • about things they're missing on the site.

  • So for Facebook the magic moment is that moment when

  • you see your friend's face, and

  • everything we do on growth.

  • And if you look at the LinkedIn registration flow,

  • or you look at the Twitter registration flow,

  • or you look at what WhatsApp does when you sign up,

  • the number one thing all these services look to

  • do is to show you the people you want to follow,

  • connect to, send messages to, as quickly as possible.

  • Because in this vertical, that's what matters.

  • When you think about Airbnb or you think about eBay,

  • it's finding on eBay that unique item,

  • that PEZ dispenser or broken laser pointer that you

  • really, really cared about, and wanted to get hold of.

  • Like when you see that collectible thing that you

  • were missing, that is the real magic moment on eBay.

  • When you look on Airbnb and

  • you find that first, you find that,

  • that first listing that's like a cool house that you

  • can stay in and

  • when you go through the door, that's a magic moment.

  • And similarly on the other side,

  • when you're listing your house,

  • the first time you get paid, is an amazing moment.

  • When you're listing an item on eBay,

  • the first time you get paid is a magic moment.

  • You should ask Brian what he thinks,

  • cuz they've done these amazing storyboards which I

  • think has been shared, of like the journey through

  • a user's moment on life on, on Airbnb and how excited.

  • Isn't, he's talking in three lectures time?

  • The guy's awesome at talking about the magic moment and

  • getting his users to feel love and

  • joy and all this stuff.

  • So think about what the magic moment is for

  • your product, and

  • get people connected to it as fast as possible.

  • Because then you

  • can move up where that blue line has asymptoted.

  • Then you can go from 50% retention to 60% retention

  • to 70% retention easily, if you can connect people with

  • the thing that makes them stick on your site.

  • The second thing to think about is everyone in

  • the Valley gets wrong, that we optimize when we

  • think about growth for ourselves.

  • So my favorite example is notifications.

  • Again, talk to lots of companies, advise lots of

  • companies, every single company when they

  • talk about notifications, goes, oh I'm getting too

  • many notifications, I think that's what we

  • need to optimize for in notifications.

  • Okay, are your power users leaving your site

  • because they're getting too many notifications?

  • No, then why would you optimize that,

  • they're probably grownups and they can use filters.

  • What you need to focus on is the marginal user.

  • The one person who doesn't get a notification in

  • a given day, or month, or year.

  • Our experience of our products, and

  • by the way like building an awesome product is

  • all about thinking about the power user, right?

  • Building an incredible product

  • is definitely optimizing for

  • the people who use your product the most.

  • But driving growth,

  • people who are already using your product all the time,

  • are not the ones you have to worry about.

  • So, in this Danny Ferrante video there's also this link

  • from the lecture page,

  • there's also talk about our growth accounting framework

  • that we use to think about for growth.

  • And we looked at new users, resurrected users,

  • people who weren't on Facebook for 30 days and

  • came back, and churned users.

  • And the resurrected and churn numbers for

  • pretty much every product I've ever seen,

  • dominate the new user account.

  • Once you reach a sensible point of growth,

  • a couple of years, and whatever.

  • And all those users who were churning and

  • resurrecting, had low friend counts.

  • And didn't find their friends, and

  • so weren't connected to

  • the great stuff that was going on, on Facebook.

  • And so the number one thing we needed to focus on

  • was getting them to those ten friends, getting them to

  • the whatever number of friends they needed.

  • So think about the user on the margin,

  • don't think about where yourself when

  • you're thinking about growth.

  • So, operating for

  • growth, what you really need to think about is,

  • what is the north star of your company.

  • What is the one metric where,

  • if everyone in the company is thinking about it and

  • driving their product was that metric and

  • their actions towards moving that metric up, you know in

  • the long run your company will be successful.

  • And by the way,

  • they're probably all correlated to each other so

  • it's fine to pick almost any metric.

  • Whichever one is like the deepest, like, that you feel

  • the best about, that aligns with like your mission and

  • your values, probably go for that one.

  • But realistically, daily active users

  • fairly correlated to monthly active users.

  • We could've gone with either one.

  • Amount of content shared, also very correlated to

  • how many users there are because, guess what,

  • you add a user, they share content.

  • So, lots of things end up being correlated.

  • Pick the one that fits with you and

  • that you know you're gonna be able to stick with for

  • a long time, but have a north star.

  • Have a north star and know the magic moment that when

  • a user experiences that, they will deliver on that

  • metric for you on the north star, and then think about

  • the marginal user, don't think about yourself.

  • Those are, I think, the really important points when

  • you're operating for growth.

  • Everything has to come from the top.

  • So the last area here is tactics.

  • And my hope was that I could hit a few of these and then

  • I've got a list of tactics I wanna go through that

  • I'm better talking with a whiteboard and whatever on,

  • but you can ask me questions as I'm going through on

  • those about how they work and what goes better.

  • But the important tactics that you need to think about

  • this is great guy by the way,

  • Tom Fishburne, he lives, he lives in the Bay Area and

  • he does these really cynical cartoons that I love.

  • So let's say you found your,

  • your niche market that you're gonna have

  • a monopoly on inside the mousetrap market.

  • It's a silenced mousetrap that's sitting under beds so

  • that if the mice come to your bed overnight,

  • like they can be killed without waking you up, so

  • that's your niche market.

  • And your, your mousetrap is better than anybody else for

  • that market.

  • What typically happens in Silicon Valley is,

  • everyone think mar, thinks marketers are useless.

  • Like I thought marketers were useless when I

  • was a physics student, so I'm

  • sure as engineering students you must thing we're awful,

  • awful people who aren't useful to have around.

  • Like, build it and they will come.

  • That is something that is very much the mantra in

  • the Valley and I don't believe it's true.

  • I believe you actually have to work.

  • There's a good article, again, in the lecture page,

  • from interviewing Ben Silvermann where he

  • talks about how the growth of

  • Pinterest was driven by marketing.

  • It's a really good article to read into.

  • I'm biased, of course.

  • So, the first tactic I

  • want to talk about is internationalization.

  • Facebook internationalized too late.

  • Sheryl said it broadly in public and

  • I definitely agree with that.

  • One of the biggest barriers to our long term growth and

  • one of the biggest things we have to deal with was

  • all the countries where there were clones.

  • Famously Studeveldt said had Fakebook.css in their,

  • in their HTML.

  • And there were a ton of sites like that out there,

  • whether it was Studeveldt site as a clear clone,

  • Vkontakte, Mixi, Cyworld, Orkut, there were all these

  • different social networks around the world that

  • grew up while Facebook was focused on the US.

  • And so internationalizing was an important barrier we

  • needed to knock down, and knocking down barriers is

  • often a very important to think about for growth.

  • Facebook started off as college only.

  • So every college that it

  • was launched in was knocking down a barrier.

  • When Facebook expanded beyond colleges to

  • high schools I wasn't at the company, but that was a

  • company shaking moment where people questioned whether or

  • not Facebook could actually survive,

  • the culture of the site could survive.

  • Then expanding from high schools to everyone,

  • that was like, just before I joined and

  • that was a shocking moment and

  • that spurred the growth on to 50 million and

  • then we hit a brick wall.

  • And when we hit that brick wall that was

  • the point when a lot of existential questions were

  • being asked inside Facebook about whether any social

  • network could ever get to more than 100 million users.

  • Which sounds stupid now, but

  • at the time no one had ever achieved it.

  • Everyone had kind of tapped out between 50 and

  • 100 million users and

  • we were worried that it wasn't possible.

  • And that was the point at

  • which the growth team got set up.

  • Chimoff brought a whole bunch of us together.

  • It was he said very publicly that he wanted to fire me on

  • multiple occasions, and he probably should have done.

  • But, without Chimoff I

  • think none of us would have stayed at the company.

  • We were a really weird bunch of people, but

  • it worked out.

  • And, the two things we did, I think, that really,

  • really drove growth initially, was number one,

  • we focused on that ten friends in 14 days and

  • getting users to the magic moment.

  • And that was something Zuck drove,

  • cuz we were all stuck in analysis paralysis,

  • saying is it causation, is it correlation.

  • Zuck was like, you really think if no one

  • gets a friend that they'll be active on Facebook?

  • Are you crazy?

  • The second thing was internationalization.

  • It was knocking down another barrier.

  • And when we launched it, I think there were

  • two things that we did really well.

  • Number one was, even though we were late, and

  • we were stressed about being late,

  • we took the time to build it in a scalable way.

  • We moved slow to move fast.

  • And you can actually read,

  • hear the full story from Naomi in one of

  • the videos linked from the lecture page.

  • But what we did was we wrapped all the strings in

  • the site in FPT which our translation script, and

  • then, or translation extraction script, and then,

  • we created the community translation platform.

  • So that we didn't just have

  • professional translators translating a site we

  • could have all of our users translating a site.

  • And we got French translated in 12 hours, but

  • we managed to get to this day we are now at

  • 104 languages translated by Facebook for Facebook.

  • 80 plus 70 of those are translated by the community.

  • And we took the time to

  • build something that would enable us to scale.

  • The other thing is we

  • prioritized the right languages.

  • So back then the right languages,

  • the big four languages were French, Italian, German and

  • Spanish, figs and Chinese, but

  • we were blocked in China.

  • >> So we focused on French, Italian, German,

  • and Spanish.

  • Now look at that list,

  • that's today's distribution of languages.

  • Italian isn't on the list anymore.

  • French and German are about to fall off.

  • In the last year we quadrupled the number of

  • people on Facebook in Hindi, quadrupled.

  • And so building for

  • where the world is today, is an easy mistake to make and

  • it's what a lot of the other social networks did.

  • We built a scalable translation infrastructure

  • that actually enabled us to attack all of the languages,

  • so we can be ready for

  • where the future is going to, is gonna be.

  • And you'll probably be able to see some stuff

  • from our Internet.org Summit in India about where we

  • want to go with language translations later today,

  • cuz I think they're talking about that stuff there.

  • So these are the tactics I wanna go through now, and

  • I'll stick with the white board for that stuff.

  • But I'd really encourage you guys as I go through these,

  • if you've got any questions about them let me know.

  • I think this should be like,

  • a more free form time anyway.

  • But I think some these

  • tactics are quite interesting.

  • So Virality.

  • Yes, I think there are two ways to look at virality.

  • There's a great book whoops, the book on the right here,

  • by Adam Penenberg, Viral Loop,

  • goes through a bunch of case studies of companies that

  • have grown through viral marketing.

  • And I strongly encourage you, if

  • you're interested in viral marketing, to get that book.

  • I think Ogilvy on Advertising's great as well

  • because chapter seven he's like if you can't think of

  • anything else stick a car to a billboard with

  • super glue and people will buy your super glue.

  • And he's got some really,

  • he's got some really good creative tips in there.

  • >> Like the, the guy's been dead 20 years and I think he

  • still, I, I buy everyone on my team gets both of these

  • books when they start on my team.

  • So virality.

  • So Sean Park has this model that he taught or he

  • told us about when he, when, when I joined Facebook.

  • Which is to think about virality for

  • a product in terms of three things.

  • First is payload.

  • So how many people can you hit with any

  • given viral blast?

  • Second, he had cooler words for

  • these, I'm not quite as cool.

  • Second is conversion rate, and third is frequency.

  • Payload frequency and

  • conversion rate, whatever, that order.

  • So, how many people can you hit at once is payload.

  • How many times can you hit them per blast is frequency.

  • And what are they gonna convert at?

  • And that gives you

  • a fundamental idea of how viral a product is.

  • So Hotmail is like, the canonical example of

  • brilliant viral marketing, right?

  • Back when Hotmail launched,

  • there were a bunch of mail companies that had

  • been funded and they were throwing huge amounts of

  • money at traditional advertising.

  • How many people know the Hotmail story, of virality?

  • Awesome, great, new audience, sorry.

  • Those two or three people will be bored.

  • But Hotmail back in, back at that time.

  • People couldn't get free email clients,

  • they had to be tied to their ISP.

  • And Hotmail and a few other companies launched and

  • their clients were available wherever you went.

  • You could log in via library internet or whatever,

  • school internet, and be able to get access to that.

  • Which was a really big value proposition for

  • everyone, who wanted to access it.

  • Most of the companies, went out there and

  • did big TV campaigns and billboard campaigns and

  • newspaper campaigns and

  • things like that forced a lot of advertising of Yahoo,

  • all of those things.

  • But the Hotmail team didn't have as much funding, and so

  • they had to scrabble around to figure out how to do it.

  • So, what they did was add that little link at

  • the bottom of every email that said,

  • sent from Hotmail, get your free email here.

  • Now, the interesting thing is that meant

  • the payload was low.

  • Right, you email one person at a time,

  • not necessarily gonna have a huge payload.

  • Maybe you send around some of those viral spam emails.

  • But then I'm not sure I'll click on your link.

  • The frequency is high, though because you're

  • emailing the same people over and over and over.

  • Which means you're gonna hit them once,

  • twice, three times a day with that same link and

  • really move up the impressions.

  • And the conversion rate was also very high because

  • people didn't like being tied to their ISP email.

  • And so Hotmail ended up being

  • extremely viral because it had high frequency and

  • high conversion rates.

  • Another example is PayPal.

  • PayPal, PayPal is interesting because PayPal

  • has two sites to it.

  • PayPal has the buyer and the seller site.

  • The other thing that's interesting about PayPal is

  • its mechanism for viral growth was eBay.

  • And so you can use all kinds of things for

  • virality that may not look necessarily obviously viral.

  • So PayPal, if you sent money,

  • if you said to a seller, I am going to send you money.

  • Like, I can't think of a higher conversion rate.

  • Frequency was low, payload was low, but

  • PayPal did this thing, where they gave away money when

  • you got your friends to sign up for PayPal, and

  • so that's how they went viral on the consumer side.

  • They didn't have to do that for sellers,

  • because if I said I'm gonna send you money via this,

  • you will take that.

  • And even on the consumer side they

  • went viral because someone said sign up for

  • this thing and you'll get 10 bucks.

  • Why wouldn't you?

  • So, they were able to go viral, but

  • in both cases it was because their conversion rate was

  • incredibly high on the buyer and the seller side.

  • No.

  • Because their payload and frequency was high.

  • Makes sense?

  • So this is a really good way to look at virality if

  • you wanna say, is this product viral?

  • Facebook was not viral via email sharing or

  • anything like that.

  • Facebook was purely viral by a word of mouth.

  • Because the interesting thing about PayPal and

  • Hotmail Is to use them the first person had to

  • send an email to someone who wasn't on the service.

  • With Facebook there's no

  • native way to contact people who aren't on the service.

  • Everyone thinks of Facebook as viral marketing success,

  • and that's actually, not how it grew.

  • It was word of mouth virality, because it was an

  • awesome product you wanted to tell your friends about.

  • How's everyone doing?

  • Is this interesting?

  • Great, question, yes.

  • >> So when you're talking about this low pay

  • load in both of the examples.

  • In the later rounds as this sort of campaign or

  • whatever you want to call it gets going.

  • Aren't you going to have a much higher pay load as

  • more and more people are sending Hotmail] to more and

  • more folks, and that way your pay load grows and

  • grows and grows?

  • So, the question is in the first round it

  • makes sense that it has a low pay load, but

  • in later rounds, aren't you gonna have higher pay

  • loads as people send more and more and more emails.

  • I guess in my head, well, first and

  • foremost, I think you actually,

  • only send emails to a small number of people.

  • So, compared to like the massive viral engines that

  • exist today,

  • where you import someone's entire contact book.

  • And send them all.

  • Send them all an email, or

  • where you post to everyone's friends on Facebook.

  • The actual payloads are still very small.

  • Even if it's everyone that

  • you email on a frequent basis you hit.

  • I'm also thinking really per email sent out.

  • How many people are on it?

  • But it's a fair point, like yeah, as more people get on,

  • get on Hotmail they'll send more emails,

  • as more people use email.

  • The product actually, grows more and more successfully.

  • So, that's a fair point.

  • Go for it.

  • >> Doesn't, like, point of conversion also matter?

  • So, like, when just click and sign up.

  • But if you skip the goal ad it's

  • >> Completely agree,

  • that's why, oh I'm sorry.

  • Doesn't point to conversion matters as well, so

  • on Hotmail, you click to sign up, but on a billboard

  • you have to remember that the URL goes to the website,

  • type it in, find the registration button,

  • click register and sign up.

  • Yes.

  • Yes, anything you can do to move friction out of

  • the flow.

  • And going from an offline ad to an online ad removes huge

  • amounts of frictions from the flow.

  • Obviously.

  • Totally agree with that.

  • One more at the back.

  • >> Aren't frequency and conversion related?

  • >> Aren't frequency and conversion rate related?

  • Absolutely.

  • If you hit someone with the same promotion,

  • I repeated that.

  • Aren't frequency and conversion rate related?

  • If you hit someone with the same email over and over and

  • over again.

  • All the same banner ads, this is one of the things

  • that's fundamental about online marketing.

  • The same rules apply to every channel.

  • If you hit someone with the same Facebook ad over, and

  • over, and over, the more times you

  • hit them with the same ad the less they'll click.

  • That's why we have creative exhaustion you have to

  • rotate creatives on Facebook.

  • Same with banner ads, same with news feed stories.

  • The fiftieth time you see the IQ story in

  • your news feed, you are not gonna click on it.

  • If you haven't clicked on the 49 before,

  • you're not gonna click on the 50th.

  • The same is absolutely true with these emails.

  • So, if you send the same email over and

  • over and over to people for an invite.

  • Or if you send the same little link at

  • the bottom over and over and over to people for Hotmail.

  • Or I mean the PayPal one's

  • different because people just signed up.

  • But yes, you will get lower conversion rate.

  • And the more you hit someone with

  • the same message the less they convert.

  • Is fundamental across every online marketing channel,

  • every online marketing channel, cool.

  • Second way, to look at virality,

  • which I think is awesome, is by this guy Ed.

  • And Ed runs the growth team at Uber now,

  • he was at the growth team at Facebook.

  • And he was a Stanford MBA student, and

  • did a class similar to this,

  • where they talked about virility.

  • And they all went and built viral products.

  • And there was a bunch of press about that actually.

  • And these brilliance of these stuff.

  • The interesting thing about Uber.

  • If you look at there growth team

  • they're incredibly focused on drivers.

  • Because it's a two

  • sided market place they need drivers.

  • That's a huge, huge chunk of their focus as a team.

  • Even they've got like probably the best viral guy

  • in the world at the company.

  • So, with virality,

  • you get someone to contact import, let's say.

  • Then the question is,

  • how many of those people do you get to send imports?

  • Then the question is, to how many people?

  • Then, how many click?

  • And you can put extra steps in this.

  • You could put how many open, how many click, whatever.

  • How many click, how many sign up.

  • And then how many of those import.

  • So essentially, you want people who sign up to

  • your site, to import their contacts.

  • You want to then get them to send an invite to all of

  • those contacts.

  • You want to get.

  • It to all of those contacts, not just one of them.

  • Then you want to get a percentage of those to

  • click, and a percentage of those to sign up.

  • If you multiply out the percents at every point in

  • this, this is essentially,

  • where well this isn't a percent, this is a number.

  • If you multiply those out,

  • that's essentially, the point where you

  • get to the question of what is the k factor.

  • So, if you have, when someone imports if on

  • average they send invites to 100 people.

  • Sorry doing that wrong, let's say 100

  • people get an invite per person who imports.

  • And then of those 10% click.

  • That gets you to 10.

  • And then, of those, let's say, 50% sign up.

  • That gets you to 5.

  • And then, of those,

  • only 10 to 20% actually, subsequently import.

  • You're gonna be at a point where you're at 0.5 to 1 as

  • your K factor.

  • And you're gonna not be viral.

  • So, a lot of things like Vidi are very good at

  • pumping, or were very good at pumping out stories.

  • They got the cave factor over one, and it's perfectly

  • doable to get the cave factor over one, but

  • if you have something that doesn't have high retention

  • on the back end then it doesn't really matter.

  • So, you should look at your invite flow and

  • say, what is my equivalent import?

  • How many people, per import, are invites sent to?

  • How many of those receive clicks?

  • How many of those convert to my site?

  • How many of those then import?

  • To get an idea of your k factor.

  • But the really,

  • important thing is still to think about retention, and

  • not to think about virality.

  • And only do this after you have a large

  • number of people retained on your product per person

  • who signs up.

  • So, couple more things we were gonna touch on.

  • SEO, email, SMS and push notifications.

  • So, in SEO,

  • there are three things you need to think about.

  • First one is keyword research.

  • People do this badly all the time.

  • So I launched this cocktail site that I

  • talked to you about.

  • I spent a year optimizing it to rank for

  • the word cocktail making.

  • Turns out in the UK no one searches for

  • cocktail making.

  • About 500 people a month.

  • I dominated that search term.

  • It was awesome.

  • >> I got 400 visitors a month.

  • It was amazing.

  • Everyone searches for cocktail recipes In the UK.

  • And in the US, which is the biggest market,

  • everyone searches for drink recipes.

  • So I optimize for the wrong word.

  • So you've gotta do

  • your research first about what you're gonna go after.

  • So, research consists of what do people search for

  • that's related to your sites, how many people

  • search for it, how many other people are ranking for

  • it, and how valuable is it for you.

  • Supply, demands and value.

  • Simple economics I guess.

  • So you do your keyword research.

  • You figure out which keywords you

  • want to rank for.

  • There are great tools out there to

  • enable you to do that.

  • Honestly the best is quite often the Google AdWords,

  • keyword planner tool.

  • Really.

  • Once you've done, that

  • the next most important thing is links.

  • So, page rank is how all of SEO is essentially,

  • is driven and Google is based on authority.

  • Now there's a lot of other things in Google's

  • algorithm now like do people search for your website?

  • There's a lot stuff about the distribution of what

  • the anchor text is.

  • That's send to your site.

  • So, if you abuse it and

  • spam it they can pop up with spam.

  • White on a white background five pages below the fold

  • doesn't work anymore.

  • But, the single most important thing is to

  • get valuable links from

  • high authority websites future ranking Google.

  • Most important thing.

  • Then you need to distribute that log inside your site,

  • by internally linking effectively.

  • And when I joined Facebook.

  • We'd launched SEO in September 2007,

  • which was before I joined.

  • I joined November 2007.

  • And we'd launched it, and we were getting no traffic from

  • the pages we'd launched, public user profiles.

  • So, when I went in and looked at it.

  • The only way you could get to any public user

  • profile was to click on the footer of the page, for

  • the about link.

  • Then click on one of the blog articles,

  • then click on one of the authors, and then spider out

  • through their friends to get to all their friends.

  • Turns out that,

  • Google was like they buried these papers,

  • they're not very valuable, and

  • we're not going to rank them.

  • We made one change.

  • We added a directory so that Google could quickly get to

  • every page on the site.

  • And we 100 xd SEO traffic.

  • Very, very simple change drove a lot of

  • upside about distributing the link love internally.

  • And then the last thing is there's a bunch of

  • table stakes stuff, HML sitemaps,

  • making sure you have the right headers, it's all

  • covered really well online for what you wanna do.

  • I'm gonna stop now and make sure, cuz we have

  • a few questions, but, what other questions are there?

  • Go for it.

  • >> We're going to email actually,.

  • >> Let's go into email.

  • Okay great.

  • Email is dead for people under 25 in my opinion.

  • Right? Young people don't

  • use email.

  • They use WhatsApp, they use SMS,

  • they use Snapchat, they use Facebook.

  • They don't use email.

  • If you're targeting an older audience, email is,

  • pretty successful.

  • Email still works for distribution, but

  • realistically, email is not that great for

  • teenagers, especially, and even people at university.

  • You know, how much you use instant messaging apps and

  • how little you use email.

  • And you guys are probably,

  • on the high end of the scale for email,

  • because you're in Silicon Valley.

  • That being said, on email the things to think about.

  • Email, SMS, and

  • push notifications all behave the same way.

  • They all have questions of deliverability.

  • So to finish first, first you have to finish.

  • Your email has to get to someones inbox.

  • So if you send a lot of spam and

  • you end up with dirty IP's, or you send spam from

  • shared servers where other people are.

  • Or if you send email notifications, from shared

  • servers where other people are sending spam from,

  • you are gonna end up being put in the spam folder

  • consistently, and your email will fail completely.

  • You may end up, being blocked and

  • have your email bounce.

  • There's a lot of

  • stuff around email where you have to look.

  • When you receive feedback from the servers you

  • are sending email too.

  • 500 series errors versus 400 series errors,

  • you have to be respectful of how those are handled.

  • If someone gives you a hard bounce, retry once or

  • twice and, then stop trying.

  • Because if you are someone who abuses people's inboxes,

  • the email companies spam folder you and

  • it's very hard to get out.

  • If you get caught, on a Spamhaus link, or

  • anything like that, it's very hard to get out.

  • It's really important with email,

  • that you are a high-class citizen,

  • that you do good work with email because you want to

  • have deliverability for the long run.

  • That counts for push notifications and SMS2.

  • With SMS, you can go and buy SMS traffic, via gray routes

  • with people with their having phones strung up.

  • Attached to a like computer and pumping out SMS's.

  • That works for a time but it always get shut down.

  • And I've seen so

  • many companies make these mistakes.

  • Where they think they're gonna grow

  • by using these kind of tactics.

  • If you can't get your email, your SMS or

  • your push delivered.

  • You will never get any success from these.

  • Push, you spam your power users, I know

  • that's slightly different to what I said earlier.

  • But you actually, spam your power users and

  • give them notifications that they don't care about and

  • make it really hard for them to opt out.

  • So, there's no settings where they can opt out,

  • and they start blocking you.

  • You can never push them once,

  • they've opted out of your push notifications.

  • And it's very hard actually, to prompt them to

  • turn them on once they've turned them off.

  • So, number one thing to think about about email,

  • SMS, and

  • push notification is you have to get them delivered.

  • Beyond that,

  • it's a question of open rate, click through rate.

  • So, what is the compelling subject line you

  • can put there.

  • So, that people are gonna open your email.

  • And how can you get them to click when they visit?

  • Everyone focuses towards doing,

  • marketing email that are just spam.

  • In my opinion Newsletters are stupid.

  • Don't do newsletters, because you'll

  • send the same message to everyone on your site.

  • Someone, who signed up

  • to your site yesterday versus someone,

  • who's been using your product for three years.

  • Do they need the same message?

  • No.

  • The most effective email you can do is notifications.

  • So, what are you sending?

  • What should you be notifying people of?

  • And this is a great place where we're in

  • the wrong mindset.

  • As a Facebook user I don't want Facebook to email me

  • about every like I receive, because I receive a lot of

  • likes cuz I've got a bunch of Facebook friends.

  • But as a new Facebook user,

  • that first like you receive is a magic moment.

  • Turning on that notification across all of

  • of our channels, increased the click through rate

  • on our email, SMS and push-notifications.

  • But we only turned it on, for low-engaged users who

  • weren't coming back to the site so

  • it wouldn't be spamming them.

  • So, it was a great experience.

  • To think about that.

  • What notifications should we be sending

  • is the first thing you need to think about on email,

  • SMS, and push.

  • And then the second thing you need to

  • be thinking about is.

  • How can you create great

  • triggered marketing campaigns?

  • So, when someone creates their first,

  • cross border trade transaction was one of

  • the best email campaigns, I was ever part of at eBay in

  • terms of click-through rates.

  • It was awesome.

  • Because it was really timely,

  • really in context the right thing to do for the user.

  • So I'd say, make sure you have deliverability.

  • Most important thing.

  • Focus on notifications and trigger based email,

  • SMS, and push notifications beyond that.

  • So, I think we're out of time.

  • There's one thing I wanted to finish with which is.

  • And if you guys have any questions, I guess, like,

  • you can reach me and

  • if I get spammed, I just won't reply.

  • We have great spam filters,

  • no, my only favorite quotes is from General Patton,

  • and it's so cliche it's crazy but it's awesome.

  • A good plan, violently executed today is

  • better than a perfect plan tomorrow and

  • one of the things the most instilled in us.

  • And Harvey still instills in us and Mark instills across

  • the whole of Facebook is this move fast and

  • don't be afraid to break stuff ethos.

  • If you can run more experiments than

  • the next guy, if you can be hungry for growth.

  • If you fight and die for every extra user.

  • And you stay up late at night to get those extra

  • users to run those experiments to

  • get the data and do it over and over and over again.

  • You will grow faster.

  • Marcus said he thinks we won 'cause we wanted it more,

  • and I really believe that.

  • We just worked really hard.

  • It's not like we're crazy smart, or

  • we've all done these crazy things before.

  • We just worked really, really hard,

  • and we executed fast.

  • And I strongly encourage you to do that.

  • Growth is optional.

  • Thank you.

Thank you for coming.

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