Andrew Chen - What's Next in Growth?

[Music] how's everyone going so it is my first time in Sydney it has been awesome so in last week I've been spending time with a bunch of the startups here in the city everything from Atlassian and canva and hanging out with the Blackbird folks it's been really fun so thank you for for welcoming me and that's awesome to see this great group of people brought together so today I want to talk about you know something that I think all of us in technology in the shared global culture we just have this like obsession with what's next right and you can see that you know when you have dinner in San Francisco with somebody who's been super successful they've sold their company and you know once you kind of bask in the glory of that a little bit everyone just asks you what are you doing next what's next and so the same thing happens when it comes to growth right that's this is one of the most common questions that people ask me which is you know what's next in the industry what are the next big opportunities that all of us can be part of and so there's a couple things I want to talk about today which is you know I think you have to really zoom out and think about like the history of what's come before us and really start to connect the dots so so that's what I'm going to do today because when you look at what technology is has has evolved over the last hundred years you see some really remarkable things so this graph is the the y-axis here is is the penetration of US households and these are all these different technologies over over the years and what you see is over on the Left sizes telephone the car the stove the refrigerator these are technologies that actually took not five years or ten years but actually have taken 20 30 40 50 years to penetrate the majority of US households amazing right and you can see this closed clothes washer I think we're still like working on that one but when you look at the internet and you look at the smartphone what you see is that these are technologies that are emerging so quickly and they're spreading so fast that in a smaller span of than than ten years they're penetrating and if we could put Instagram up here if we could put whatsapp if we could put uber up here you would see a straight line up to the top right and so it's a remarkable time to be working in technology to be working in marketing because you can just see how fast everything is evolving it's creating some really incredible opportunities for all of us so what I'm going to do today is I'm going to talk through three little stories of you know different kind of marketing growth technology you know phenomenon that's that's happened you know over a hundred years ago and connect with technology that's happening today and I think what that will do is that will offer some clues on where the whole industry is going where growth is going it can be great so I'm going to publish a copy of the stack on my blog so this is where you can find it the first thing let's talk about getting customers refer friends now this is like one of the most scalable really really important strategies out there and it's really simple right if you can get people if you can get your customers to refer their friends and they go on to refer more friends well this just goes on and on and on and so this scale so some of the very important successful huge companies out there Dropbox Airbnb Facebook etc have all spread this way and what you have to do is you have to answer some really fundamental questions you know why are people referring their friends who are they referring are they referring coworkers their families you know their acquaintances where you know what's actually happening and what channels is happening on right are the invites happening via snail mail which we're going to talk about or are they being shared as links over Facebook which we'll also talk about and then finally you have to think about you know is this whole effort is it going exponential what's the viral factor you know what's actually going on and and although these are things that obviously all of us in the industry we think about and work on every day the interesting part is that this has been around for a really long time how long this is one of the first chain letters that we have a photo of and it's called the prosperity Club and in it this is just so great I just love reading these so this chain was started in hope of bringing prosperity to you within three days why three days is just you know just cuz make five copies of this letter and send it to your friends right and what ends up happening is you know there's some extra instructions on how after you've done all this you'll then receive over time fifteen thousand letters with money attached to them sounds amazing right but when you look at this you can just feel even though this is a hundred years old that somebody a very smart copywriter had to think about okay well you know God I give them three days you got to have some instructions there's got to be a value proposition right and when you look at this this this is being sent over snail mail so it's really slow right but these works they work so well in fact that the US postal office had to ban chain letters because it was literally clogging up all their mail it was like crazy because people like love these things and you can look at this and you can look at something like the Airbnb referral page and you can see that yes over a hundred years we've made a lot of advancements right you have a unique tracking URL so you can figure out you know you can do all the attribution you can share on messenger you can share on Facebook you can grab this link you can put it you know anywhere you want right but the fundamentals are still the same you want to do this because not only do you get something for it but your friends do as well now this of course focuses on money this is the drop box example which they've used to now grow to over 400 million users and I mean advisor to the company you know great folks and again the same thing here you know you can import your gmail contacts you can show on Facebook it's all the same ideas like these same concepts that worked a hundred years ago they are working today right different technologies but fundamentally it's all about the same human being here I'm going to talk about the second little story which is spreading viral content this is something that's you know very timely right now as you might imagine so in the early 1800s they invented this thing called the penny press which was a set of newspapers that you could actually buy for one penny and it was enabled by a brand new technology that created a dramatic incredible shift in costs which was the steam-powered printing press and so you can now create newspapers sell them for a penny before you know everything was like 10 times more expensive and so this revolutionised news and media at the time because what it meant all the sudden news wasn't just something that could be consumed by the elite it was something that everybody all the way down to the middle class lower class could start to read news and what was actually happening right there's a radical transformation of media starting to sound a little similar maybe while I was researching this deck I found this really great quote I just have to share with you guys which is when a dog bites a man that's not news because it happened so often but if a man bites a dog that is news so this is the quite the philosophy and at the time and and so the son was one of the preeminent penny press companies at the time the other one was the New York Daily Times which again over 100 years has become the New York Times so this is you know super super interesting area so let's say you run one of these media properties and it's really important to you to grow your circulation to grow your business so what do you do well there's a great example the son ended up publishing a six-part essay series called the great astronomical discoveries lately made by Sir John Herschel and it chronicled how an astronomer had built an amazing powerful telescope and pointed it at the moon and on the moon they discovered unicorns they discovered bison they discovered people whole civil as a with people with wings flying around amazing and it was hugely successful it doubled circulation it was something that was copied into pamphlets all their competitors started copying these ideas everybody started printing the story over and over and over again and of course this whole episode the six part series was eventually renamed to the great moon hoax of 1835 which is very silly and what's amazing is that people fundamentally the reason why this all worked was because of the fact that people fundamentally believed that this was actually true was actually true they actually had discovered life on the moon and they wanted to believe and so they talked about it and they bought all the stories in the reddit and they thought it was news and on one hand that's ridiculous completely ridiculous but of course this is where we are now 100 years later in fact things are so bad this was published on on Twitter a little while ago or sorry on Facebook we're in market Mark Zuckerberg update on how he was going to handle all the fake news on Facebook look to the right you know you have Tiger Woods of looking like he's going to leave the PGA right supposedly published by ESPN also CNN reporting that Congress has decided to disqualify Donald Trump not true you can't hide affair a trip so where we are now though is we have used the same human behaviors but now we can actually a be test these fake news headlines we can build landing pages with really sophisticated analytics we can you know add these little widgets that capture you know people's sharing intent better etc etc etc so we've we've supercharged this right we've supercharged this behavior that has already existed except that we amplify it to an audience of a billion daily users right crazy powerful super powerful let's talk about bootstrapping marketplaces so marketplaces often have the same structure which is you have i side you have a cell side and you have to figure out how to connect them you have to figure out which side is constrained how do you grow the by side how do you grow the cell side right whichever side is more constrained you have to put your focus there and then you have to bring people together in such a way that they can find each other they can find safe prices they can transact right grocery stores used to be a key part of this kind of marketplace and the reason was because in in the early days of consumer packaged goods these grocery stores would not actually stock your product because they would say look people aren't coming into the grocery store asking me for toothpaste right so why would I why would I actually stock it and on the flip side of course nobody knows what toothpaste is so what do you do there's a great book this guy named Claude Hopkins who wrote in 1905 a book called my life in advertising and he talks about everything that he did in order to popularize toothpaste in America right and he had such a clever strategies there's a couple things I want to know here number one this is a long form style medium style post write with a bunch of content on there the second thing is that on the bottom right is a coupon so Claude actually invented coupons believe it or not super interesting and what he did was he basically said look if I create an incentive for you to get toothpaste then what's going to happen is as a customer you're going to start going to all of these grocery stores and you're start asking for toothpaste right and so you go to all the grocery stores so he ended up going to the grocery stores and say look you're about to get a flood of customers in here and they're going to be asking for toothpaste and if you don't have it they're going to be upset there and go to another grocery store right and so he figured out how to do this bootstrapping process of how do you deal with you know how do you go 0 to 1 on a new on a new product in a new market place that requires you to figure out either the buy side of the sell side and you figured it out the other thing I want to just quickly mention here because there's so many so the book is actually amazing I definitely recommend it is you can't quite see it but on the top right of the coupon there's actually a number it's like 1 0 6:3 so that was actually a tracking number so when people clip that coupon and sent it in he could do attribution right pretty cool right and then he actually would start doing different versions of this ad in different magazines and different newspapers and track the attribution and then you could actually figure out you could actually start a be testing you know so anyway so these ideas are old I flew from San Francisco so this this was this was a screen shot that most excited me so Kickstarter of course is is a marketplace that is solving exactly the same problems which is you have an idea you want to get it out there right and so of course as soon as you do then the great part about it is you can aggregate all the buyers these you give them discounts you say if you're one of the first hundred backers you get ten ten dollars off right if you're the first 500 you get more off and so they can start aggregating all this demand so that then they can then go to investors to retailers to the manufacturers and they can get these things built and sold and so now we've seen a bunch of really interesting companies like pebble you know which was a Y Combinator company had a really hard time raising capital and they used Kickstarter to then be able to you know break this logjam really great so obviously we could go we could talk about a bunch of these example there's actually some really great ones the other ones I'll just quickly mention you know the Michelin Guide being created by the Michelin tire company right so early kind of content marketing trying to convince people like hey you should drive around and like you know visit a bunch of places that super interesting a lot of examples in early Hollywood of influence or marketing right and the reason why these things have been around for such a long time is because you know we've been trying to convince people to buy stuff for a really long time right but the central point that I want to make is that technology changes but people say the same and we work in an industry that is of course obsessed with technology right but at the same time and this is one of the great things about working in growth working in marketing is that we sort of bridge the two sides both the sort of classic human behavior human psychology aspects that are part of our brains that have evolved it'll you know last million millions of years but also technology which is just evolving super super quickly and so what that means is that when it comes to all the strategies that we've talked about through the course of this conference referrals morality publicity stunts a be testing all that stuff you know these things were all created like a hundred plus years ago but they're relevant today the relevant will be relevant a hundred years from now they'll be relevant a thousand years from now like this stuff is is just going to be around and so going back to the original question what's next for growth well these opportunities are happening all the time and the reason is because these classic strategies that tie into human behavior the tie into human psychology well they're just going to be around forever right and the things that we can control as folks that are working in in the industry number one is thinking about in embracing new platforms and there are a bunch of new platforms coming on I'm going to run through a couple of them and of course as all of us to execute intelligently and diligently to make this work but it is an incredible time to be in technology why is that we're building new kinds of computer companies all the time right for the first time in a long time like you know we have internet connected home we have computers on your face we have a whole new set of platforms that are coming around video more computers on your face and it's funny you know because I'm actually I have an HTC vive and I have it set up in my living room and I'm and I like to use it and it's interesting is we're both so excited about VR technology and AR technology at the same time the next level discussion hasn't even happened yet right how is customer acquisition going to work in VR right is it going to like this does pay-per-click does that make sense of paper install makes sense right that next level of conversation hasn't happened yet and I think for the folks that really dive into it and really figure it out it's going to be going to be really big smart TV wearables self-driving another really interesting area because imagine creating a class of companies that is just assume transportation is free right it's going to fundamentally revolutionize retail e-commerce etc etc and these platforms these are all new kinds of computer companies that are happening and going back to this graph the amazing thing about it is they're just coming faster they're coming faster and faster and faster and they're hitting a hundred percent penetration in in ways that we've never seen and so for all of us that work in the industry I have a couple things that I want to ask you know my challenge to all of you is first and foremost the study of the classics how have marketers been persuading customers to buy stuff for hundreds of years right because the same techniques still fundamentally work we need to have a really systematic way of thinking through all these new platforms that are coming out because that's going to be you know the big new thing imagine understanding the dynamics of the internet before the internet came out or understanding what the mobile ecosystem was going to look like before the smartphone got popular right when you're the first to one of these things well that's when all the response rates are going to be higher that's when it's going to be the least competitive and so when you're first to the game that's where a lot of the really great opportunities are and so what that means is really we have to think like technology companies we have to understand you know what are the api's that we can hook into what are the ecosystems that are out there and really like think ahead and then obviously to execute thoughtfully and iteratively on here and the important part is you know that's why these kinds of conferences exist right because you know fundamentally there are there's such a breadth of different concepts different strategies different things out there there's just so much noise and so I think that's a really key component here which is that there's so many there's such a desire for companies to just publish kind of all they're like tips and tricks hey by the way if you turn these buttons orange you'll get you know an X percent increase and I think one of the interesting parts like you know that people ask me all the time is they will often come up to me and say hey what are the newest like tips and tricks right they always want the easy right but I think the most interesting part about this whole industry is that actually all the things that work have worked a long time ago and the innovations come from getting close to the technology in a way that you know is like hard right it's about you know I'll give a quick example you know so for example the the Facebook platform when it first came out all the folks that were able to build the the apps that grew to tens of millions of da you my friends that were PMS and folks that were that were working on this stuff well you know they were taking a lot of these kind of classic you know human psychology ideas they were looking at reciprocity they were looking at people wanting to compare each other sending quizzes like all these different ideas that again have been around for a really long time but then they were combining that with actually reading through the Facebook platform api's right they were really getting in there and trying to figure out like okay how do I master this new channel this new platform that's actually come out and so they went on to then figure out like okay great how do you use Open Graph like how do you use you know how do you use all these different viral channels that are out there that's really important because like I said technology changes and people stay the same so I found this photo of these guys taking selfies and and I was pondering if I wanted to use this set of tourists taking selfies are there's actually really great one where Obama actually has a selfie stick and he's like posing and taking taking a couple so I was I was going to I was going to use that but yeah I think I think that's why you know when it comes to you know investing and identifying the startups are going to be the most successful and I worked in venture capital you know prior to over one of the first things that we would think about is you know what are all the pre-existing behaviors that indicate that this is going to happen right and if you take uber as a great great example of this you know all it's doing is it's taking something that is really low on the Maslow's hierarchy right you need food you need water you need a place to live but as soon as you have those basic things you need transportation right you need to get to your job you need to get groceries you need to be able to you know hang out with your family and so by making that a lot easier like you could you could imagine how you know taxis already existed like that behavior already existed and you just all you do is you figure that out and then you study okay how does technology sort of you know make that even easier and I think this is like a good rule of thumb when it comes to consumer technology because you know fundamentally humans have just been been the same for such a long time and so we have to study humans right which is so funny because again all of us are so obsessed with tech you know in engineering and we have such a you know sort of businessing mindset towards all the stuff when at the end it's the human behavior and personality that really makes us work thank you you [Music]

Channel: StartCon

Views: 14,480

Keywords: startcon, sydstart, technology, tech talk, startups, growth, andrew chen, uber, growth hacking, growth hackers, customer referrals, product growth, scalable marketing, viral marketing

Id: 7Uhu2PEJ2Yk

Length: 23min 50sec (1430 seconds)

Published: Wed May 24 2017