Growth Hacks for Startups from Elliot Shmukler of InstaCart, LinkedIn and now Anomalo | E1926

Elliot Shmukler of Anomalo joins Jason to discuss growth tactics for businesses and startups. (00:00:00)

• Elliot Shmukler, former Chief Growth Officer at Instacart and VP of Product and Growth at Wealthfront, joins Jason Calacanis to discuss growth strategies for startups.
• Word-of-mouth is the most important growth channel for any product or service.
• NetSuite, Squarespace, and HubSpot are sponsors of this episode.
• Word-of-mouth is the foundation for all growth.
• There are no great products in the world that don't have phenomenal word-of-mouth.
• People telling their friends about a product is the number one growth channel.
• Elliot Shmukler is the former Chief Growth Officer at Instacart and the VP of Product and Growth at Wealthfront.
• He is currently the CEO of Anomalo, a company that helps businesses detect and prevent fraud.

A primer on modern-day growth for startups from expert Elliot. (00:02:33)

• Understand the concept of growth in modern-day startups.
• Founders should focus on getting initial users before worrying about growth strategies.
• Paul Graham's advice on "doing things that don't scale" is relevant in the early stages.
• Growth should only be applied after achieving product-market fit.
• Applying growth strategies before product-market fit is ineffective and a waste of resources.
• Without a clear understanding of the target audience and their preferences, growth efforts lack a solid foundation.
• Examples of growth strategies that require product-market fit, such as paid marketing and user amplification.
• The initial stage of a startup involves searching for product-market fit and experimenting with various approaches.
• Once a dedicated user base is established, systematic growth strategies can be implemented.
• Practical methods for acquiring initial users, such as personal interactions and direct communication.
• Uber's strategy of targeting specific events to find users with immediate needs.

Why referral programs are so powerful (00:06:20)

• Referral programs are powerful because word-of-mouth is the number one growth channel.
• About 20% of LinkedIn's growth was still word-of-mouth even after optimizing invitations.
• A referral program amplifies word-of-mouth through other means like invitations.
• Users who are willing to tell their friends about a product love the product and don't want to deceive their friends.
• Referral programs work best when referring people to the product is part of using the product.
• Examples of products with built-in referrals: LinkedIn, Slack, Dropbox, Notion.

NetSuite (00:09:59)

• NetSuite is offering a one-of-a-kind flexible financing program until April 15th.
• NetSuite is a cloud financial system that brings accounting, financial management, inventory, and HR into one platform.
• It reduces IT costs by eliminating the need for hardware and maintenance of multiple systems.
• It improves efficiency by bringing all major business processes into one platform, reducing manual tasks and errors.
• Over 37,000 companies have already made the move to NetSuite.
• The less a business spends on operations and delivering its product or service, the more margin it has.
• Margin is crucial in today's competitive market.
• Higher expenses on materials, employees, distribution, and borrowing are increasing costs.
• Smart businesses are graduating to NetSuite by Oracle to reduce costs and headaches.
• NetSuite is the number one cloud financial system that brings accounting, financial management, inventory, and HR into one platform.
• It provides a single source of truth and reduces IT costs by living in the cloud.
• It eliminates the need for maintaining multiple systems and the associated costs and inefficiencies.
• It improves efficiency by bringing all major business processes into one platform, reducing manual tasks and errors.

The 2nd best thing you can do for the growth of your startup! (00:11:39)

• Confer status to your users by providing a product or service that allows them to accomplish more in the same amount of time.
• Make your product brag-worthy by adding features that give users a sense of accomplishment or exclusivity.
• Instacart:
  • Heavy users of Instacart are usually families pressed for time.
  • Being able to do more in the same amount of time confers status on them.
  • Instacart users would brag about how they could easily put together a party by ordering everything through Instacart.
• Wealthfront:
  • Offered sophisticated investment strategies like tax-loss harvesting that were previously only available to high-net-worth individuals.
  • Wealthfront users could brag about their financial savvy by discussing tax-loss harvesting with their friends.
• Uber:
  • Uber Black car service was a status symbol in the early days.
  • Uber's "add a stop" feature was a viral feature that allowed users to pick up or drop off friends along their route.
  • Uber Eats, DoorDash, and Instacart now offer group ordering, which allows users to share their orders with friends and colleagues.
  • Group ordering exposes more people to the idea of using these services.
• Referral programs:
  • Referral programs like "give a free ride, get a free ride" or "get $5, give $5" can be effective in attracting new users.
  • However, it is important to monitor the effectiveness of these programs to ensure they are not resulting in a negative return on investment.

Exploring "Give to Get" programs with examples from Elliot’s success. (00:15:55)

• Referral programs offer discounts or benefits to users who invite others to join a platform, but can be abused through multiple accounts or fake referrals.
• Building virality into a product, such as group shopping or network expansion, can be a powerful growth strategy.
• Some companies offer referral incentives that can be abused, leading to users taking advantage of the system.
• Google ads can be challenging for startups to achieve a positive return on investment (ROI) due to limited control over user landing pages and sign-up processes.

Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain (00:20:36)

• Squarespace payments makes it easy for customers to make purchases, leading to increased revenue for businesses.
• Easy to set up and helps maintain revenue growth.
• Constantly releases great features like Squarespace payments.
• Asks customers for feedback and implements improvements without increasing the price.
• Build virality into the product.
• Flex and tell people about the benefits of using the product.
• Implement "give to get" programs.

Conversion Rate Optimization (00:22:13)

• Collect data on how users flow through a sequence of steps to take an action.
• Generate ideas to optimize the process and make it simpler, easier, and more compelling.
• The goal is to increase the number of people who complete the desired action.
• Typically, the product manager is the closest functional role to doing the right things for funnel optimization.
• Product managers are outcome-oriented and understand the worlds of design, engineering, and data.
• They can combine these perspectives to make effective decisions about how to achieve their goals.

The most effective sign-up in practice today. (00:25:45)

• Effective sign-ups should prioritize speed and simplicity, but in some cases, requiring additional information early on can increase user engagement and trust.
• Implementing friction points, such as requiring a LinkedIn account or credit card application for events, can help filter out unwanted attendees or service providers.
• Lengthening the sign-up process by asking detailed questions can increase user investment and provide valuable information to service providers.
• When negotiating a car price, state that your time is valuable and you have a meeting to attend, then give the salesperson your phone number and a time you can return to finalize the deal. This approach may prompt the salesperson to offer a better price to secure the sale.

Hubspot for Startups - Learn more and get extra benefits for being a TWiST listener now at (00:30:31)

• HubSpot surveyed a thousand early-stage founders on how they use AI to improve sales, marketing, and customer support.
• Key findings from the survey:
  • Using AI to segment customer lists.
  • Personalizing website content, SMS, and emails with AI.
  • Encouraging teams to get creative with AI.
  • Balancing investment in AI-trained experts and developing the current team.
• HubSpot offers a 70% discount for startups and powerful solutions at affordable prices.

The balance of adding friction in the user sign-up process. (00:31:52)

• The right level of friction in the user sign-up process can lead to success.
• Lowering friction and making things easier is usually the right approach, but there's a balance to strike.
• Merging accounts in multiple sign-ups becomes a significant issue at scale.
• LinkedIn was creating a million duplicate accounts per week and had a dedicated team to detect and merge them.

Growth hacks and challenges at different companies (00:31:52)

• Most unexpected growth hack: Word-of-mouth was highly effective and geographically concentrated.
• Most frustrating moment: Difficulty in predicting demand and ensuring enough delivery drivers in new geographic locations.
• Most brilliant growth hack: Leveraging LinkedIn's network effects to drive user growth.
• Most frustrating moment: Dealing with spam and fake accounts.
• Most brilliant growth hack: Using AI to detect and prevent fraud.
• Most frustrating moment: Balancing the need for growth with the need for security.

Elliot dives deeper into his best growth hacks and the most frustrating moments while at InstaCart, Wealthfront, and LinkedIn. (00:33:57)

• To achieve geographic expansion, focus on saturating the area around a successful launch city, leveraging word-of-mouth and simplifying sign-ups.
• Offering products with higher minimum investment amounts can drive growth, as customers who invest more tend to continue using the product.
• In professional networking platforms like LinkedIn, people are more likely to accept invitations from individuals they perceive as having higher social status, such as their superiors or well-known investors.
• To promote a job listing on LinkedIn, add people from the hiring team to the hiring ring, encouraging them to engage with the post and activate their networks, thereby extending the job's reach.
• Elliot Shmukler, formerly of LinkedIn and Instacart, co-founded Anomalo to address challenges companies face when working with data, such as incorrect or missing information.
• Companies utilize data for diverse purposes, including tracking user behavior, conducting experiments, analyzing usage patterns, evaluating marketing effectiveness, and generating recommendations using machine learning models.

Elliot discusses his new company, Anomalo, and its mission to solve data quality issues. (00:39:51)

• Anomalo is an AI-powered tool that helps businesses detect and resolve data issues in data warehouses before they cause significant disruptions.
• Data scientists and analysts use Anomalo to identify issues such as incorrect third-party data, missing data, and unusual product behavior.
• Snowflake and Data Bricks have invested in or partnered with Anomalo due to the increasing demand for data quality solutions.
• Anomalo helps businesses clean and normalize messy and constantly changing marketing data.
• AI tools, especially large language models, are becoming more powerful and can be used to summarize and contextualize data insights.
• Anomalo is best suited for large teams with tens to hundreds of people working with data.
• Elliot Shmukler, a former employee of Instacart and LinkedIn, shares growth hacks for startups on Anomalo's website (anomalo.com).
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