How GAS app went viral and made $1M in 10 days with a team of 4

A former Facebook manager just launched an app that overtook giants like TikTok & Instagram to be #1 on the App Store.

He made $1M in 10 days with a team of 4 people.

Gas App 🧵

The Wall Street Journal calls it the “Hottest App right now”, after it went viral a week after its launch, mostly among high school teens.

The story is even more impressive as the app was only available to download in 12 states.

Crazy!

Gas is an app through which high school students can give each other compliments, anonymously.

So how did they go viral?

They targeted teenagers by creating Instagram accounts with the high school name included, such as “gas.georgiahigh”.

They made the account private, & then followed every student from these high schools.

These students requested to follow back to see the profile, but they wouldn’t accept anyone.

The good old fashioned ‘velvet rope’ approach.

Then on the launch day, they had guys park outside the schools.

When the end-of-day bell rang they accepted all the requests.

Every student got the same notification at the same time, & started showing each other & talking about it.

The Gas app team changed the bio of these planted accounts to direct the students to download gas, by saying “see who likes you.”

Things escalated so fast, that the app was adding 30,000 users per hour.

Not per DAY.

Not per WEEK.

30,000 users PER HOUR.

Nikita, who built TBH, a similar app that Facebook acquired in 2017, launched Gas with @daveschatz & @IsaiahJTurner in 2022 (after the expiration of the non-compete with Facebook).

They named it after an internet slang “Gas”, which means to “pump someone up” with a compliment.

The Gas app accesses your location so you can select your high school, add your classmates, and see what compliments are being dished out.

BUT, you can’t talk with or message anyone.

Instead, you are served with multiple-choice questions about fellow students with superlative-style answers.

So questions like:
“Who has the best smile?”
“Who will be the best DJ at the party?”
“Who is likely to be a millionaire?”

The answers to the poll questions are the names of their friends from school.

When someone selects a name, they receive flames.

Which are meant to gas them up and boost their self-esteem.

So how are they monetizing?

A user can see WHO answered the poll questions about them by purchasing ‘God Mode,’ which costs $6.99 a week.

That’s $28 a month which is almost double to Netflix’s standard subscription plan (!!)

All these things made the app go viral & become #1 on the app store.

Nikita broke the news on Twitter in classic style:

The app tapped into teenage psychology incredibly well and began getting praised all over social media:


But start-ups are NEVER all rainbows and unicorns…

After a few days, accusations that the app was involved in Human Trafficking began to surface.

Stories from teens on TikTok & Snapchat began coming out with claims that people were using the app to kidnap minors.

Police departments, local TV news, and school district officials began issuing statements encouraging parents to NOT allow their children to use the app.

Gas’ social channels were spammed day & night by folks claiming the app was a tool for trafficking and the company’s revenue PLUMMETED.

Google search was filled with news articles about “Gas app kidnapping” and “Gas app sex trafficking”.

Nikita confronted the problem head on, and spun up an internal task force.

He announced they had been targeted by two DoS attacks, with many IPs originating from China.

The big question I have…

Could it have been TikTok???

After all of this, the rumors turned out to be largely false and were manufactured to taint the company’s image.

Gas App continues to grow at a rapid clip.

Nikita just said yesterday that 1/3 of American teens have downloaded the app!

The Gas App is an incredible case study in:

>Achieving virality
>Fighting through the tough times to build a great business

Excited to see what Nikita and team continue to do with the Gas App!

Thanks for reading. If you’ve learned something, retweet the first tweet so others can too.

Follow @lukesophinos where I share my learnings from founding, operating, investing, and advising software companies https://twitter.com/lukesophinos/status/1593268198064824320

Follow: @lukesophinos

[Via]

FTX CEO SBF: Sorry, I fucked up

1) I’m sorry. That’s the biggest thing.

I fucked up, and should have done better.

2) I also should have been communicating more very recently.

Transparently–my hands were tied during the duration of the possible Binance deal; I wasn’t particularly allowed to say much publicly. But of course it’s on me that we ended up there in the first place.

3) So here’s an update on where things are.

[THIS IS ALL ABOUT FTX INTERNATIONAL, THE NON-US EXCHANGE. FTX US USERS ARE FINE!] [TREAT ALL OF THESE NUMBERS AS ROUGH. THERE ARE APPROXIMATIONS HERE.]
4) FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!).

But that’s different from liquidity for delivery–as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little.

5) The full story here is one I’m still fleshing out every detail of, but as a very high level, I fucked up twice.

The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower.

6) My sense before:

Leverage: 0x
USD liquidity ready to deliver: 24x average daily withdrawals

Actual:

Leverage: 1.7x
Liquidity: 0.8x Sunday’s withdrawals

Because, of course, when it rains, it pours. We saw roughly $5b of withdrawals on Sunday–the largest by a huge margin.

7) And so I was off twice.

Which tells me a lot of things, both specifically and generally, that I was shit at.

And a third time, in not communicating enough. I should have said more. I’m sorry–I was slammed with things to do and didn’t give updates to you all.

8) And so we are where we are. Which sucks, and that’s on me.

I’m sorry.

9) Anyway: right now, my #1 priority–by far–is doing right by users.

And I’m going to do everything I can to do that. To take responsibility, and do what I can.

10) So, right now, we’re spending the week doing everything we can to raise liquidity.

I can’t make any promises about that. But I’m going to try. And give anything I have to if that will make it work.

11) There are a number of players who we are in talks with, LOIs, term sheets, etc.

We’ll see how that ends up.

12) Every penny of that–and of the existing collateral–will go straight to users, unless or until we’ve done right by them.

After that, investors–old and new–and employees who have fought for what’s right for their career, and who weren’t responsible for any of the fuck ups.

13) Because at the end of the day, I was CEO, which means that *I* was responsible for making sure that things went well. *I*, ultimately, should have been on top of everything.

I clearly failed in that. I’m sorry.

14) So, what does this mean going forward?

I’m not sure–that depends on what happens over the next week.

But here are some things I know.

15) First, one way or another, Alameda Research is winding down trading.

They aren’t doing any of the weird things that I see on Twitter–and nothing large at all. And one way or another, soon they won’t be trading on FTX anymore.

16) Second, in any scenario in which FTX continues operating, its first priority will be radical transparency–transparency it probably always should have been giving.

Giving as close to on-chain transparency as it can: so that people know *exactly* what is happening on it.

17) All of the stakeholders would have a hard look at FTX governance. I will not be around if I’m not wanted.

All of the stakeholders–investors, regulators, users–would have a large part to play in how it would be run.

Solely trust.

18) But all of that isn’t what matters right now–what matters right now is trying to do right by customers. That’s it.
19) A few other assorted comments:

This was about FTX International. FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow.

It’s 100% liquid. Every user could fully withdraw (modulo gas fees etc).

Updates on its future coming.

20) At some point I might have more to say about a particular sparring partner, so to speak.

But you know, glass houses. So for now, all I’ll say is:

well played; you won.

21) NOT ADVICE, OF ANY KIND, IN ANY WAY

I WAS NOT VERY CAREFUL WITH MY WORDS HERE, AND DO NOT MEAN ANY OF THEM IN A TECHNICAL OR LEGAL SENSE; I MAY WELL HAVE NOT DESCRIBED THINGS RIGHT though I’m trying to be transparent. I’M NOT A GOOD DEV AND PROBABLY MISDESCRIBED SOMETHING.

22) And, finally:

I sincerely apologize.

We’ll keep sharing updates as we have them.

Follow: @SBF_FTX

[Via]

7 Facebook Ads ideas every businesses should use

Steal my 7 Facebook Ads ideas proven to work:

1. Us vs them
2. Founder story
3. Before and after
4. three reasons why
5. Press release screenshot
6. Static Image with the core benefit
7. Problem – Agitation – Solution UGC

Example of each ad-types with the breakdown:

1. Us vs Them

It’s easier to place yourself against a common enemy so that views immediately get it.

Here are some that have wor ked for me or on me.

2. Before & After

With paid social ads, you are selling a transformation.

What are you promising as a transformation? Make that an after image.

3. Press release screenshot ads

Why? Immediate credibility. Newsworthy.

An ad that does not look like an ad.

4. Problem – Agitation – Solution (PAS) UGC ads

UGC ads bring immediate social proof. They are relatable.

Full video is here: https://app.foreplay.co/share/ads/SSob0rbH1NwpXPqqjDKg?user=Aazar%20Shad

5. Founder stories ad

When founders can grab attention with their gripping stories — tell “why” it is valuable to viewers.

Idea credit and source: @mrsharma

@mrsharma 6. 3 reasons why ad (stepwise ads)

Gets brain and emotion working together.

Easy to understand and execute.

@mrsharma 7. Single image ad that make a problem “pop”

Sells one idea or problem solution. Gets the attention of viewers to learn more.

Usually they have the cheapest CPMs.

@mrsharma If you are looking to leveling up your paid social skills, I have a paid social mastermind where we get into each other secrets. It costs €19/month but folks are loving it. It’s something you won’t find on the internet. DM me for more info.
@mrsharma Want to get insights, mindsets, frameworks, and mental models and become smarter about growth marketing?

Join 2500+ other people learning from the best marketers: https://aazarshad.com/newsletter/

6. 3 reasons why ad (stepwise ads)

Gets brain and emotion working together.

Easy to understand and execute.

Follow: @Aazarshad

[Via]

Coinbase CEO Brian on FTX issue: We don’t engage in this type of risky activity

1/ First off, I have a lot of sympathy for everyone involved in the current situation with FTX – it’s stressful any time there is potential for customer loss.
2/ Second, Coinbase doesn’t have any material exposure to FTX or FTT (and no exposure to Alameda).
3/ I think it’s important to reinforce what differentiates Coinbase in a moment like this. This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities, and mis-use of customer funds (lending user assets).
4/ Coinbase has always strived to be the most trusted player in the space, and we don’t engage in this type of risky activity.
5/ We don’t do anything with our customers’ funds unless directed to by the customer. We hold all asset dollar for dollar, and users can withdraw their money at any time.
6/ We are incorporated in the US, and publicly listed in the US because we believe that transparency and trust are so important. Every investor and customer can see our public audited financials, which shows how we hold customer funds. We’ve never issued an exchange token.
7/ Part of the issue here is that regulators have been focused onshore in each of their respective markets, while customers have moved offshore to companies with more opaque and risky business practices.
8/ To take the US as an example, 95%+ of crypto trading has developed overseas because crypto regulation in the US has been hard to navigate. That’s bad for the US and Americans are still losing money in these overseas blowups.
9/ The temptation from events like these is to call for more heavy-handed regulation. This would just make the problem of crypto companies and crypto users going overseas worse.
10/ We should continue to work with policy makers to create sensible regulation for centralized exchanges/custodians in each market (as we’ve been doing for some time), but then we need to see a level playing field enforced, which hasn’t happened to date.
11/ Long term, the crypto industry has an opportunity to build a better system with DeFi and self-custodial wallets that don’t rely on trusting 3rd parties. Instead, you can trust in code/math and everything can be publicly auditable on-chain. This is a topic for another day…
12/ We decided early on to be the most trusted crypto company out there, and the events of the last 24 hours underscore why this has been so important. We’ll continue to work with regulators around the world and help build trusted and reliable products for the industry.
13/ Read more about our approach to transparency and risk management on our blog -> https://www.coinbase.com/blog/our-approach-to-transparency-risk-management-and-consumer-protection

Follow: @brian_armstrong

[Via]

Unfolding Binance-FTX saga: Binance CEO CZ went from investing in FTX, eventually becoming rival to finally acquiring it

Here’s the 30 second summary of the FTX drama that is blowing up in crypto.

1/ How FTX (a multi billion dollar co) almost died overnight

2/ And why this is a god tier strategic move by @cz_binance

OK so it starts years ago. Binance was an early investor in FTX
But FTX starts growing like crazy. They become the #2 biggest exchange

Steph curry, tom brady, they cut huge marketing deals.

SBF becomes the famous “fro of crypto”

They started as friends, now competitors.

Binance #1
FTX #2
(coinbase and others are smaller)

Binance decides to sell it’s stake in FTX.

As part of the buyout, they agreed to take $2B of it in “FTT” — a token that FTX created that it uses for trading fees.

So now – Binance and FTX are friendly competitors

Binance owns a sh*t ton of FTT ($2B)

There’s not a lot of FTT trading volume (this is important soon)

Two days ago, CZ comes out and says SBF has been talking sh*t about them to regulators

lobbying in a way that would hurt binance

So he announces publicly on twitter to his 7M followers that he’s going to DUMP his entire $2B FTT stash

Anyone holding FTT knows this is bad news.

$2B of sell pressure would crush price

So they start to panic sell

Price of FTT drops like 15-20% overnight.

Nobody wants to buy FTT (too risky, a whale is about to dump) and everyone wants to sell. Number go down.

Enter Alameda – the hedgefund/market maker Sam started before FTX

They are kings.

But news leaks showing the emperor has no clothes

They have ~$12B in assets, $7b ish in liabilities…but half their “assets” are in FTT token

which is plummeting & illiquid

Alemeda might die

If alemeda is in trouble, FTX might be too.

They are sorta sister companies. Market makers on FTX. And possibly hold/trade customer deposits. The relationship has been unclear for years. (achilles heel?)

But most people think of FTX as a blue chip company. Sam is famous. He’s a genius right?

They wait for he or alemeda to show they are in good health

*narrator* but they were not in good health

Sam tweets saying everything is “fine”

but it feels to all of crypto like a girlfriend saying “i’m fine”

but she’s not fine. https://twitter.com/SBF_FTX/status/1589598284322328579?s=20&t=s7SxL8xH3mRjISXjPOqbUQ

Alemeda’s CEO comes out and says they will “happily” buy the FTT token as it plunges

But something tells us that it’s not so happy, even with the exclamation mark

https://twitter.com/carolinecapital/status/1589287457975304193?s=20&t=s7SxL8xH3mRjISXjPOqbUQ

24 hours pass

if they had the financial strength, they would have shown it by now

This starts to feel like the “steady lads” moment right before luna collapsed

People freak out. start withdrawing funds from FTX

Ya know, just in case it collapses like celsius, blockfi, voyager, luna all did in the past year

$1B+ of withdrawals

FTX is facing a liquidity crunch

More silence (wtf), withdrawls paused on FTX (double wtf)
Then today – @SBF_FTX comes out and says they are entering a “strategic transaction” with binance

strategic transaction?

best code phrase since

CZ clears it up

“FTX was in trouble. We bought them to save them”

Binance basically started a rumor, made a threat, and ended up buying its biggest competitor overnight.

magnus carlsen approves

For now the drama ends

crypto crisis averted

if ftx failed…that would have been devestating for all of crypto

Sam had become the main character

you never want to be the main character

go subscribe to the @MilkRoadDaily if you like to get your crypto news in plain jane english like this
and now some of the high quality memes to dull the pain https://twitter.com/yuno0Zy/status/1590013905686106113?s=20&t=BU_z6drgXze4eqiYKQRQ1A
oh important thing I didn’t mention. The deal is not done. pending DD

more room for tomfoolery in the coming days

https://twitter.com/cz_binance/status/1590013613586411520?s=20&t=h6NMnv3aILnwQk73X8sGeA

Follow: @shaanvp

[Via]

Persuasion is what keeps Elon Musk going; 13 persuasion tactics he uses to take over Twitter

Elon Musk’s best kept secret? His persuasion skills.

I accidentally discovered how Elon uses persuasion when I was reading about his hostile takeover of Twitter.

Here are 13 persuasion tactics Elon Musk uses on Twitter:

Before I tell you…

I want you to take a look at the marketing spending breakdown major car manufacturers.

Did you notice it?

(hint: look at Tesla)

In 2018:

General Motor spent $3.4 billion in ads.
Fords: $2 billion
Volkswagen: $5 billion
Tesla? $0

Crazyyyyy

But how?

Look…

Let me clarify that adversiting is not marketing.

While Elon’s companies don’t spend money on ads…

They do market the hell out of their products using a few persuasion secrets I’ll be telling you about today.

So…

So taday I’ll reveal a 13 persuasion tactics Elon Musk uses on his Twitter account and businesses.

These tactics work even if you’re not rich – except for one 🤫

Let’s go:

Tactic 1:
Reciprocity

How it works:
Give something away for free. Get something in return.

How Elon used it:
In September 2017, Hurricane Maria knocked out the power in Puerto Rico. Musk sent help. He got free press.

Tactic 2:
Post your Ls

How it works:
Posting about your failures makes you appear trustworthy and transparent. It helps build trust and empathy towards you.

Tactic 3:
Create Controversy

How it works:
Post controversial ideas you truly believe in. It’ll help you build a rock-solid following by scaring away the weak and attracting the hard-core people.

Tactic 4:
Shit posting

How it works:
Post memes and jokes. Memes carry an emotional punch. It’s impossible to hate someone who makes you laugh. It makes people think “He’s one of us”



Tactic 5:
Delete your tweets

How it work:
Post something valuable. Then delete it. People will be asking for it in your DMs. Deleting tweets and threads creates a sense of urgency and scarcity.

(musk deleted these tweets)

Tactic 6:
Use scarcity

Explanation:
Let people know that there’s limited spots for your programs. This will make your followers jump over hurdles so they don’t miss the chance to buy.

Tactic 7:
Use social proof

Explanation:
When in doubt, people look at what others are doing. If they see the behavior is acceptable and common, they’ll be open to doing it too.

(30,000 people bought Elon’s “Burnt Hair” perfume and Twitter is usage is at an all-time high)


Tactic 8:
Reply to followers

Explanation:
Content is king. But engaging with your followers is what helps you build a repution. Connect with your followers in the timeline and your DMs.

Tactic 9:
Keep people informed.

Explanation:
Let your followers know about your future plans. Announcing your products pre-sells people.

Tactic 10:
Be yourself

Explanation:
People want to follow real people. Just be yourself.

Tactic 11:
Build in public

Explanation:
Are you creating something new? Post about your progress, learnings, and the challenges you’re facing. It’s a great way to build hype for your stuff and make people root for you.



Tactic 12:
Open a pre-order period.

Explanation:
Promote your products before they’re ready. That way, you can gauge interest.

(Elon Musk pre-sold 250K Cybertruck back in 2019)

Tactic 13:
Buy Twitter for $44 Billion Dollars

Explanation:
If nothing else works to make your account grow… buy Twitter

That’s a wrap!

This is thread 2/24 of the #HyperThread challenge.

So if you enjoyed this it:

Retweet the first tweet of the thread to share it with your audience https://twitter.com/17730766/status/1589950410609025024

“But GM and Ford makes moneiss”

Yup… but:
“In the first quarter, Tesla just reported a net income of $3.31 billion. By comparison, GM recorded a net profit of $2.93 billion in the same period. Ford […] posted a net loss of $3.1 billion”

source: https://www.thestreet.com/technology/tesla-makes-more-money-than-gm-and-ford

Follow: @joserosado

[Via]

How big businesses get people to spend more money? They use these 18 psychological tricks

18 psychological tricks to get people to spend more money.

Apple, Tesla, and your favorite creators use them to make millions.

Use them in your landing pages and branding.
/thread

1/ Use ‘You’ instead of ‘We’

It’s easy to get caught up in your own POV.

Therefore…

Use the words “you” and “your” in your copy…

To:
> connect with your readers
> empathize with them
> engage them

2/ Speak their language with typography

Fonts have personality.

Match your fonts to the intented tone of your landing page.

Sans Serif portrays stability and strongness.
Serif – tradition and formality.
Script – elegance and stylish.
Slab – bold and friendly

3/ Use colors that make sense to your market.

Imagine selling a “get shredded” product for men and making your landing page pink.

Don’t expect sales.

Therefore, understand the colors of business.

4/ Hick’s Law

Hick’s Law says that the more options a person has, the longer it takes for them to make a choice.

The longer it takes, the more likely it is that they’ll leave your page.

Make sure this doesn’t happen by giving your readers fewer choices.

5/ Visual Hierarchy

Visual hierarchy helps people find their way around your page.

It also help them process in the information in the way you want.

And finally, it shows which elements are related.

6/ Use the mysterious power of scarcity

Things appear more attractive when they are limited.

People move quickly when they feel it’s their last chance to buy something.

Now…

Never use fake scarcity.

And be clear about why your supply is limited.

7/ Always be telling what to do next

Bring your readers into the action.

Tell them what to do next.

Is it to click? Read more? Buy? Make an appointment?

Tell them what to do.

8/ Don’t make them think

In his book “Don’t Make Me Think,” Steve Krug talks about the 3 rules of usability:

Law #1: Don’t make me think

Law #2: Make every click an obvious choice with no need to think

Law #3: Half the words on each page, then half them again

9/ Make people reciprocate

Give away free stuff: trials, bonuses, free content, free services.

Doing so, triggers people into reciprocity mode.

Do a favor, and people usually pay you back.

10/ Abuse social proof

Most people scout for others’ opinions before making a decision.

Therefore, add testimonials to your landing pages to make you look more trustworthy.

Also, highlight popular options.


11/ Coffee hack: framing is king

“Join for less than the cost of one cup of coffee per.”

As soon as you read this, you knew you would be paying less the 5 bucks.

This is because people make comparisons before buying.

So frame your pricing in an unexpected ways.

12/ The final countdown hack

Trigger a sense of urgency by adding a deadline.

Add a countdown timer to make the deadline more obvious.

Some people hate these, but they work.

13/ Appeal to emotion.

The idea that people buy features is fake.

What they actually buy is the emotion and transformation you promise.

A simple way to achieve this is by telling a story with your headlines.

14/ F-shape layouts in your landing pages

People are hurry or just want to muddle their way through.

So use an F-shape in your designs and text layout.

An F-shape to makes your content easier to read.

15/ Appeal to Authority

Strengthen the argument that your product is a good one by showcasing authority figures who endorced it.

16/ Write for scanners

83% of people read only headlines.

Spend 80% of your time working on your headline.

Because if your headline sucks, your copy sucks.

Therefore, add tons of headline in your copy.

17/ Law of Commitment

Asking a girl to marry you at the bar is creepy.

So first, offer her for a drink.

Next, ask her to join you at your table.

Then you ask her on a date.

And so on.

Ask for a small commitment and then ask for a bigger one.

18/ The 100-year-old manuever

In the early 1900s…

Advertising legend Claude Hopkins revolutionize the sales of Schlitz beer.

He developed a new sales strategy.

He just described how the product is made.

Bring your process to life. Tell your story.

That’s a wrap!

If you enjoyed this thread:

1. Follow me @joserosado for more of these
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Join us ⚡️

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[Via]

9 copywriting formulas that can help you sell millions

Copywriting is easy.

It’s even easier when you have the right formulas.

Here are the 9 copywriting formulas that have helped me sell millions:

#1. Problem – Agitate – Solve

P → Identify a problem

A → Agitate said problem

S → Give a solution

#2. Picture – Promise – Prove – Push

(This is my go-to formula for newsletters)

Picture → Paint an attention-grabbing picture (story)

Promise → Make your promise related to this picture

Prove → Add testimonials/ case studies as proof

Push → Push readers toward your CTA

#3. Features – Advantages – Benefits

Features → Talk about the “what” (what does your service include?)

Advantages → Talk about the “why” (why is your service useful?)

Benefits → Talk about the “what’s in it for you” factor

#4. Star – Story – Solution

Star → Introduce the main character of your story (this could be you too in case of personal branding)

Story → Elaborate on the story

Solution → Show how the Star won (and pitch a related service/ product)

#5. Awareness – Comprehension – Conviction – Action

Awareness → Create awareness of the problem

Comprehension → Explain the consequences of the problem and pitch your solution

Conviction → Convince your reader to try out your solution

Action → CTA

#6. The 6+1 Model

1. Context → Start with a strong hook
2. Attention → Grab your reader’s attention
3. Desire → Show them what they’re missing
4. The gap → Show how you help overcome the gap between reality & dreams
5. Solution → Pitch your solution
6. CTA

#7. Before – After – Bridge

Before → Life with the pain points

After → Life after solving the pain points

Bridge → The “how” – aka, your product

(I use this strategy in sales calls too.)

#8. Star – Chain – Hook

Star → Talk about your offer
Chain → Keep the copy going by creating a chain of facts, case studies, testimonials, etc
Hook → CTA
+1: Credibility → Add testimonials & case studies

#9. The 4 U’s

Useful → Have something of value

Urgent → Create a sense of urgency

Unique → Showcase the USP of your product/ service

Ultra-specific → Be ultra-specific with the first three U’s.

That’s all from me — comment which formula you’ll try out first.

If you enjoyed this thread:

1. Follow me @joserosado for more of these
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[Via]

How Disney creates magic in Disneyland (Hint: Everyone picks up trash)

This weekend, team @Sequoia took our Arc cohort to Disneyland to experience one of the most iconic, delight-and-details obsessed, storytelling-oriented brands and organizations of all time.

some surprising learnings and observations I hadn’t stumbled across in my prior research:

1. Everyone is All In

It’s pretty clear to me how a small team maintain a strong culture, the quality bar high, & the vibes consistent.

It’s pretty shocking to witness 100k+ staff members constantly smiling and waving, picking up trash, and cheerily answering guest questions.

2. Better job titles

Ticket Takers are called greeters. Janitors are called Custodians. This helps clarify the role for outsiders *and* insiders.

@browsercompany’s user-facing teams work in “Hospitality”

@watershed’s account managers were originally called “climate advisors”

3. Everyone picks up trash

Everyone on the staff is expected to keep the park clean. Added benefit–Disney needs to employ far fewer custodians to keep the park clean.

This is a norm in the outdoor community. I found this this in high-functioning kitchens I researched, too.

4. Cleaning crew wears all white

They honestly look like they’re about to go golfing.

I really like the symbolism here.

I really, really like the way it forces the organization to build in systems/processes that ensures their cleaning crew can stay clean all day.

5. Power of nostalgia

I hadn’t been to Disney since I was was 7. I didn’t remember that I remembered anything about it.

But at the sight of certain iconic landmarks, warm fuzzy feelings of childhood wonder and happiness came rushing over me.

Some things should stick around.

6. Full-sensory guest experience

-Car horns make cute sounds instead of obnoxious ones
-There’s a popcorn production run every morning at 9am to get the smell in the air
-As dusk sets in, the faint sound of crickets starts playing over the speakers

7. Recycling Optics

The early parks team decided it would be best for guest experience and the environment if they sorted our the recycling from the trash on behalf of their visitors behind the scenes.

The problem? No one believed the sorting was actually happening.

The solution?

Disney introduced recycling receptacles along trashcans so the guests would have faith that recycling was happening…

and continued the sorting anyway because of course trash still finds its way into the recycling bins and vice versa.

8. The joyful details unfold slowly

I’ve always appreciated the discipline and maturity of teams behind Easter eggs.

I know how tempting it can be to create something wonderful and then want to point people to it.

But, it’s miles more delightful to uncover it yourself.

Disney has a bazillion examples of this.

Turns out, it’s also good for business because guests will come back an infinite number of times and have infinite little treasures to discover.

9. The Soft-Spoken Imagineer

We had the incredible privilege of being led around the newest world, Star Wars: Galaxy’s Edge, by one of the lead imagineers responsible for its creation.

She was pretty awkward in front of the group–soft-spoken, fumbled over words, and fidgety…

Looking past that was easy to do while literally standing in a world of her creativity and technical prowess manifested.

We can’t always do that with software or early projects, and this was a good reminder to listen to everyone.

sidebar: in their book, Talent, @tylercowen and @danielgross have a good bit about tapping into an overlooked population of geniuses by being willing to hang with people others would describe as inarticulate.

https://www.amazon.com/Talent-Identify-Energizers-Creatives-Winners/dp/1250275814

Lastly, if you want to learn more about the Disney magic, I love this thread from @SahilBloom

https://twitter.com/SahilBloom/status/1447181339535478790?s=20&t=KbLIQJD8MQAm_CSelT8Zzg

Follow: @zebriez

[Via]

These soft skills will help you grow in your career

For the next 6 months, set aside 40 minutes a day and learn these soft skills to unlock your full potential…
1. Learn persuasion

To get the best in life, learn the best way to ask.

Know;

• How
• The right words to use
• When and who to persuade

The lion’s share is negotiated.

2. Learn seduction

In life you’re either seductive or being seduced.

Here are books you should read;

– The mystery method
– The art of seduction
– The truth: A uncomfortable book about relationships.

Which one have you read?

3. Learn how money works.

99% of people are chasing money.

Be different and understand money is created;

You do this by;

– Buying assets
– Building business
– Investing in your health
– Hiring people better than you

The more you create, the more you have.

4. Learn how to stay updated

Know the current trends.

The world is competitive and you should know;

– What’s working now
– What’s best for you
– How to stay on the winner’s side

What worked then might not work today.

5. Learn different ways to invest in yourself

You get respect from;

• Your appearance
• How you talk
• Connections

Do this;

– Invest in clothes, shoes, lotion and sprays
– Have a killer haircut/hairdo
– Sharpen your communication skills

You’ll win over 99% of people.

6. Learn calculated withdrawal

No one will ever complete you.

Being alone shouldn’t translate to loneliness.

Spend time alone to;

– Understand the world around you
– Learn more about yourself
– Guard your energy

The more you spend time alone, the stronger you get.

7. Learn how to network

Success is more about;

• Who you’re
• Who you know
• How many people know you

Do this;

– Learn communication skills
– Talk to new people
– Travel

85% of your success is hidden in connections.

8. Learn how to defend yourself.

Self-defence is both mental and physical.

• Learn how, when and who to fight
• Set boundaries
• Stay humble

The stronger you are, the less you show.

9. Learn humour that works

How you talk and relate with people should be free and fun.

• Be goofy
• Tell jokes
• Be fun to talk to and about

Note: There’s a difference between being fun and funny.

You’ll only be bored if you’re boring.

It’s Monday…Let’s set the week on fire…

Follow @Copywriting_Dad and continue learning more on;

• Making Money Online
• Audience building
• Persuasive writing
• Copywriting
• Productivity
• Creativity
• Writing
• Virality
• Life

💕ILYSM💕

Follow: @Copywriting_Dad

[Via]

Everything you need to know about MARKET SIZING (TAM)

I consistently see founders get MARKET SIZE wrong in the early stage decks.

At the same VCs often they pass if they feel that the market is TOO SMALL.

Here is everything you ever need to know about MARKET SIZING.

🧵👇

1. SO, WHAT IS MARKET SIZE ANYWAY?

Market size is the amount of money your prospective customers spend.

For example, cloud computing market is $1,600 BN by 2030 => https://www.globenewswire.com/en/news-release/2022/05/13/2443081/0/en/Cloud-Computing-Market-Size-to-Hit-US-1-614-1-Billion-by-2030.html

Or Healthcare & Heath Ins in USA is $1.1 T https://t.co/zj2xMZK7U1.

2. WHY DO VCs CARE SO MUCH ABOUT MARKET SIZE?

VCs want to only invest in big markets. The reason is simple:

– Venture scale return company is > $100M in Revenue

– Say you are in $1B market, to get to $100M in revenue you need to capture 10% of this market

– That’s hard

👇

3. WHY DO VCs CARE SO MUCH ABOUT MARKET SIZE? – Part 2

– Also most markets are NOT winner take all. Think Uber and Lyft — they compete. Space X and Blue Origin — compete, etc

– Most markets are CROWDED

– In a crowded market, revenue opportunity shrinks – pie is split

👇

4. WHY DO VCs CARE SO MUCH ABOUT MARKET SIZE? – Part 3

– VCs don’t want to invest into a small market because it will likely be a small outcome.

– VCs rely on power law – big outliers – to make their math work

– Small outcomes aren’t good for them!

👇

5. TOP DOWN MARKET SIZE

There are two ways people look at the market size – TOP DOWN and BOTTOM UP.

TOP DOWN is what founders mostly put in their decks and it is typically incorrect for two reasons.

A) Its way too big
B) Its not even their market

Examples

👇

6. TOP DOWN MARKET SIZE – OVERESTIMATING

Say you are launching a new cloud based database for machine learning.

If you put entire $1,600 BN market for cloud tools as your market size, this is INCORRECT – you are WAY OVERESTIMATING it.

You are NOT proving all cloud tools.

👇

7. TOP DOWN MARKET SIZE – OVERESTIMATING – Part 2

Similarly, if you put $189B – size of ML tools, you are still over estimating it.

There are MANY tools for ML and data layer is only 1 piece of the puzzle, one slice of the market!

👇

8. TOP DOWN MARKET SIZE – WRONG MARKET

Even worse than over estimating is claiming totally wrong market.

For example, if you selling digital software to healthcare industry, NEVER put $1.1 T spent on Healthcare in US in your deck. NEVER.

It is completely IRRELEVANT!

👇

9. TOP DOWN MARKET SIZE – WRONG MARKET

If you selling digital software to healthcare industry, even $185B for Digital Health market IS NOT YOUR MARKET SIZE.

Your market is Medical Software which is somewhere between $10B and $20B, and thats not all…

👇

10. TOP DOWN MARKET SIZE

Ultimately your startup is going after a sliver of that market.

So you need to really drill down!

For example, if you are selling to dentists it is $1 – $2B market for entire amount they spend on managing their practice.

👇

11. TOP DOWN MARKET SIZE – HOW TO FIGURE IT OUT

In general, TOP DOWN MARKET SIZE is NOT VERY USEFUL, but …

– Google YOUR SPECIFIC MARKET
– Research revenue / market cap of larger companies in the space
– Trim down and be conservative

Estimate you can capture 1-10% MAX!

👇

12. BOTTOM UP MARKET SIZE

Bottom up is MUCH BETTER approach, especially for early stage founders who need to build credibility with investors.

It is also A LOT simpler.

Market size = # Of Customers X Revenue Per Customer.

Examples

👇

13. BOTTOM UP MARKET SIZE – EXAMPLE

There are 180,000 dental practices in US.
If you sell them software for $500 MRR or $6K ARR you are going after 180,000 X $6,000 = $1B opportunity.

To get to $100M in ARR you need to sell to 10% or 18,000 dental practices – and keep them!
👇

14. BOTTOM UP MARKET SIZE – EXAMPLE

Let’s look at another example – Netflix.

$20 a month or $240 ARR, assuming they sell to each of 120M households in US, Netflix can get $28.8B. Sanity check, it is currently at $7B in US or about 1/4 of total market.

👇

15. BOTTOM UP MARKET SIZE – SMALL MARKET?

So what looks like a small market?

Say we are selling SaaS tools to Universities in US at $100K ARR — which is nice size contract.

There are 5,000 universities so $500M market.

Most if not all VCs will consider it too small.

👇

16. QUICK HACK FOR MARKET SIZING

Go back to the formula:

Market size = # Of Customers X Revenue per Customer

Either there are A LOT OF CUSTOMERS who PAY A LITTLE or

A FEW CUSTOMERS who PAY LOT.

Hack – use Netflix as a baseline

100,000,000 households paying $10 a month

👇

17. QUICK HACK FOR MARKET SIZING – Part 2

Order of magnitude for Netflix is $10B – venture size market.

Learn to shift zeros from left to right.

Example:

100,000 restaurants in US =>
Each would need to pay you $10K a month to get the same $10B market – Impossible!

👇

18. QUICK HACK FOR MARKET SIZING – Part 3

VCs love > $10B+ markets.

VCs don’t like < $1B markets.

If you know how many customers you COULD HAVE (Google it!) and you know how much they would pay (ASK THEM!!!) then you know exactly where you would fall.

👇

19. BOTTOM UP MARKET SIZE – SUMMARY

There is NO EXCUSE whatsoever to not get the BOTTOM UP MARKET SIZE right.

Stop using TAM / some crazy out of this world numbers that have NOTHING TO DO with your business numbers in your decks.

Use BOTTOM UP MARKET SIZE & get it right!

👇

20. MARKET SIZING – SHRINKING OR GROWING

Also to know about the markets is are they EXPANDING.

For example, EV Market => Expanding, Gasoline based vehicles — shrinking!

VCs love quickly growing markets – forward looking.

VCs dislike shrinking markets – backward looking.

👇

21. MARKET SIZING – SHRINKING OR GROWING

This gets tricky…

Digital Health – Growing!
Traditional Health — Likely Shrinking!

Overall education – Growing!
Traditional education – Likely Shrinking!

VCs are going to get into the weeds!

👇

21. NOT A VENTURE SCALE MARKET? NO PROBLEM!!

Some founders get upset hearing that their market is too small, but the best founders DO NOT CARE!

Best founders are on a MISSION to solve a problem, not to generate venture scale returns. Those two don’t always align!

👇

21. NOT A VENTURE SCALE MARKET? NO PROBLEM!! – part 2

If you are passionate about small market you should still go and build a business!

You can still raise capital, structure it smartly, and grow through the best $ out there – CUSTOMER REVENUE!

👇

22. NOT A VENTURE SCALE MARKET? NO PROBLEM!! – part 3

VCs are NOTORIOUSLY WRONG about market size. Even Uber and Airbnb initially were told their markets are too small 😂.

The best founders can EXPAND MARKETS. They see the future the way others can’t.

Don’t be deterred!

👇

23. SUMMARY

– VCs are RIGHT to care about MARKET SIZE

– Avoid HUGE RANDOM TAM # into your deck

– Do research & use BOTTOM UP MARKET SIZE

– Even the market is small but your are passionate – GO FOR IT! What VCs think DOES NOT MATTER!

Good luck & follow @2048vc for more!

✌️

P.a. Tweet at me who you are selling to and what you think your bottom up market size is and why – and I will double check !

Follow: @alexiskold

[Via]

The most sought-after exec coach in Silicon Valley has 5 “MAGIC” questions for leaders

The most sought-after exec coach in Silicon Valley coached @naval.

Then went on to coach the CEOs of Reddit, OpenAI, Coinbase….even Sequoia Capital.

Here are 5 “MAGIC” questions he has all his leaders ask their teams:

You can’t actually hire Matt Mochary as a coach.

As @balajis would say, he is “post-economic.” He only works for the people he chooses.

His clients are either the fastest-growing tech companies or the top 5 VC firms.

Fortunately, he is very generous with sharing his techniques

Matt has a list of questions he asks execs to motivate their teams.

The questions are so effective they feel like “magic.”

He calls them the MAGIC QUESTIONS.

The magic in these questions is that they immediately get below the surface.

When asking these questions, you show your team:

1) You want them to get to their highest level of potential
2) They have great ideas about how to get there
3) You care about them

All of the questions use a simple follow-up and are based on the following scale:

1 – It couldn’t be any worse
3 – Meeting expectations
5- It couldn’t be any better

Let’s break them down:

1. HOW ARE YOU FEELING ABOUT YOUR LIFE AT WORK?

Why this works:

This question makes them feel seen and heard as people, not employees.

As a leader, you also get critical context on how to support them at work.

2. HOW ARE YOU FEELING ABOUT YOUR WORK-FROM-HOME SET UP?

Why this works:

If you are even partially remote, this helps you understand if there are any productivity blockers.

You’ll find out if there are any inexpensive items that could make a difference.

3. HOW ARE WE PERFORMING AS A COMPANY?

Why this works:

You get an assessment of company performance against THEIR expectations.

Their ideas about how the company could do better enters the conversation.

4. WHAT IS IT LIKE TO WORK WITH THE REST OF THE TEAM?

Why this works:

The day-to-day of what it feels like to be on your team gets a chance to be expressed.

The good and bad of team dynamics get the attention it deserves.

5. WHAT IS IT LIKE TO WORK WITH ME?

Why this works:

Most managers don’t know what it feels like to report to them.

You get direct feedback about what it is like to be in their shoes to work with you.

After each of these questions, it’s critical to ask: “What would get it to the next level?”

Most people have great ideas on how to improve things when asked in a structured way.

Every time I use these questions, I receive:

-incredible understanding of how my team is feeling
-fabulous, actionable insights on how to improve as a leader and a company

And for your team:

-When you can make the next level clear…
-And help them achieve the next level…

Motivation goes THROUGH THE ROOF

You might not have the ability to hire a world-class coach.

But you can give these questions a try and see what you notice.

The questions are free, but the insights from your team are invaluable.

If you enjoyed this thread:

• Follow me @mattschnuck for more threads on EQ, entrepreneurship, and growth.
• Retweet the first tweet to share these questions with a leader

https://twitter.com/mattschnuck/status/1579121739186872320

For more great content from @mattmochary, here’s a short video of him talking about the Magic Questions.

https://www.loom.com/share/97d678b26e2e475e94efa4d1f4ce36fb

Follow: @mattschnuck

[Via]

How to use reverse selling process to handle any sales objection:

Reverse selling helped me bootstrap a $3M/year business.

Here’s what it is & how to use it to handle any sales objection:

In sales, most people handle objections after the pitch.

But a mentor taught me how true sales Jedis handle objections BEFORE the pitch.

It’s called REVERSE selling & it makes the sales process unscripted & effortless.

There are 3 types of sales objections:

1. Uncertainty (unsure of results/timing)
2. Financial (can’t afford)
3. Support (unsold partner/spouse)

To avoid them:

1. Control the call
2. Have a natural conversation
3. Gather info to handle objections

…before you pitch.

There are 5 core questions we need to answer during discovery:

1/ What problem is the prospect experiencing?
2/ How badly do they want to fix the problem?
3/ What have they tried already?
4/ Can they afford your service?
5/ Are they the decision-maker?

Let’s them break down:

1/ What problem is the prospect experiencing?

Something pushed them to book a call.

What was it?

The answer they give you may not be the real answer.

Dig in, ask probing questions, & get to the root cause.

Asking these questions will help:

2/ How badly does the prospect want to fix the problem?

What’s the severity of the problem?

Are they ready to take action?

If they’re not, the call is ending with “can you send me some more information.”

Avoid that outcome by asking these questions:

3/ What has the prospect tried already?

Are they shopping around?
What do they think about your competitors?
Have they had bad results trying something else?

This information helps you craft a perfect pitch.

Ask these questions to avoid sounding like every other service:

4/ Can the prospect afford your service?

If they can’t afford your service, you’re not making the sale.

Asking a prospect about their budget seems obvious, but few small businesses do it.

Doing this before the pitch helps overcome price objections.

5/ Are they the decision-maker?

The final objection to overcome is “I need to talk this over with my partner/spouse.”

Always find out if there are others involved in the buying decision.

If there are, save your time by getting all the decision makers on the call.

Always ask these 5 core sales questions before you pitch.

Once you have, you’re ready to:
•customize your offer for the prospect
•handle objections before they happen

The result: a frictionless sale.

That’s a wrap.

Follow me at @JohnIsBuilding for more business-building strategies.

If you found this helpful, thank me by retweeting the first tweet. https://twitter.com/JohnIsBuilding/status/1578730522854846465

Follow: @JohnIsBuilding

[Via]

How to build a *sustainable* consumer SAAS business? Know the single most important concept: CARRYING CAPACITY

My cofounder @homsiT and I are increasingly being asked for advice on how to build a *sustainable* consumer saas business.

Let me share some thoughts on the single most important concept we wish we knew before starting @readwise.

It’s called 📈 CARRYING CAPACITY 📈

(Why listen to us?)

(We’re still early in our journey, but we have been working on @readwise for 5 years now, and we have created a sustainable business, so I like to think we’ve learned some lessons along the way.)

(Also, modeling saas companies is like underwriting cash flow businesses, which happens to be my pre-@readwise expertise coming from a 10+ year career in real estate private equity.)

(Excel is the *one* domain where I’m not a wordcel 😛)

We first learned of *carrying capacity* from our advisor @rahulvohra (CEO of @superhuman).

In a series of LinkedIn posts from 2015, he defined it as:

“The number of users where the rate at which we lose users equals the rate at which we gain users.”

https://www.linkedin.com/pulse/20121002124206-18876785-how-to-model-viral-growth-the-hybrid-model/

Carrying capacity is particularly important in consumer saas because you have true churn 😥

This is in stark contrast to enterprise where the best companies not only don’t lose customers, but those customers grow in size over time.

(This is referred to as “negative net churn”)

An enterprise biz like @superhuman might first land 2 users inside a company and then gradually expand throughout the org, increasing revenue from that account.

Sure, they lose some accounts, but the expansions more than offset the losses.

Negative net churn is actually growth.

In consumer, there is no land & expand, corporate inertia, true network effects, or even switching costs.

You *will* lose subscribers. Period.

It’s especially pronounced in consumer productivity (versus, say, entertainment):
https://twitter.com/scottbelsky/status/829733291175469056?s=20&t=i57RsmT1rfje53I6jq6XhA

Churn is best thought of as: “What percentage of my subscriber base will cancel their subscription each month?”

As your customer base scales, you’ll notice the number of subscribers cancelling each month steadily increases even though the percentage churn remains ~fixed.

Eventually, the number of existing customers cancelling each month will equal the number of new customers subscribing.

👆 This is carrying capacity.

It’s an asymptote. You’re done growing.

Unlike @eugenewei’s *invisible asymptotes* sneaking up on a business as complex as Amazon, you can see the carrying capacity of a simple saas business coming a mile away.

You can even calculate it as (a) average new subscribers per month divided by (b) monthly churn.

If you’re adding ~1,000 subscribers/mo with a monthly churn of 10%, your carrying capacity is 10,000 subscribers.

At capacity, each month you’re losing 1,000 subs (10,000 x 10%) while replacing them with 1,000 new subs.

The limit, sadly, does exist.

“But you’ve assumed growth is linear! Isn’t growth viral?”

I had a hard time believing this too, but @rahulvohra (as always) was right.

What you’ll discover is your consumer saas growth is surprisingly constant and linear.

There will be spikes here & there, but the trend is predominantly linear due to a mix of app stores, WOM, paid advertising, integrations, SEO/SEM, influencers, hustling, referrals, etc.

The subscriber growth shared by @substack influencers such as our friend @packym hammer this home.

This is exactly what the growth chart of a (successful) consumer saas product looks like in the 2022 era.

https://twitter.com/notboringco/status/1574825883969277952?s=20&t=FOxPl73UNR0bukgYzJ3T5A

We’ve now covered the basics.

Let’s apply them to a fictional but typical consumer productivity saas biz.

I’m basing “typical” on a half decade of talking to other founders in the space, reading everything I can (thanks @readwise), and, of course, my own experience.

Assume you spend your first ~2 years building a really good product that people will actually pay for.

During this free beta period, you accumulate 100,000 active users.

(For the record, this would be world class hustle & retention for a first-time founder.)

For reference, we launched the @readwise MVP in May 2017.

After 1 year, we had 3K users. (lol, yes)
After 2 years, 10K.
After 3 years, 30K.

These are onboarded users. Not active users. Not paying customers.

0 to 100K in 2 years would be a feat, but let’s go with it anyways.

Before charging, you have to decide between free trial or freemium.

Freemium will offer greater top of funnel growth, but lesser conversion. Free trial the opposite.

Assume you choose freemium to maintain growth and not alienate your beloved beta users.

https://twitter.com/lennysan/status/1323438313118736385?s=20&t=LgmpgjxEWTmW300hldVfew

Now you have to decide on pricing.

Pricing is an unbelievably hard decision, well beyond the scope of this thread.

For our purposes, let’s just assume you paywall a subset of premium features for $8.33/mo ($100/yr) comparable to other productivity tools.

You’re ready to announce your premium plan and officially start charging.

How many of your existing 100,000 active users will convert to premium?

Rule of thumb conversion rates on freemium are ~2% to 5%.

https://hbr.org/2014/05/making-freemium-work

You can assume your earliest users will convert the best because these are the users who love you the most.

So let’s use the upper end of the range (5%) for the initial paywall event.

100,000 x 5% = 5,000 subscribers paying $100/yr = $500K ARR

How will you grow from here?

You can look at your historical website traffic and signup rates to make an educated guess, baking in new growth initiatives.

For our example, let’s assume you’ll add 50,000 new signups per month (to be clear, this would be ~INSANELY GOOD~ 🤯).

How many signups convert to paid?

Let’s return to benchmark of ~2% to 5%.

Assume it drops to 3.5% as you’re spreading to less core users.

50,000 x 3.5% = 1,750 new subscribers per month

This is ~60/day, which any consumer saas founder will tell you is a huge day.

Now we have a starting subscriber base (5,000), ARPU ($100/yr) and monthly growth (1,750/mo).

The final number we need is churn.

We can look to @lennysan who’s compiled the best benchmarks around.
https://twitter.com/lennysan/status/1491082178201288704?s=20&t=LgmpgjxEWTmW300hldVfew

One caveat is that his GREAT numbers are for generational consumer cos like @spotify and @netflix.

A more down-to-earth assumption for your biz might be something like @duolingo which retains ~20% after 1 year.

Let’s use the GOOD churn midpoint: 4%/mo.

https://twitter.com/LiamKinney/status/1577915466399436800?s=20&t=LgmpgjxEWTmW300hldVfew

Now we can calc carrying capacity.

1,750 subs/mo divided by 4% churn/mo = 43,750 subs

At $100 ARPU, that’s $4.4M ARR.

This is as big as this consumer product will get.

We can also plot what the long slow saas ramp of death will look like for this co.

Building for 2 years, converting 5,000 initial subs, adding 1,750/mo thereafter, and churning 4%/mo results in a 5- to 6-year journey to asymptotic growth.

Sidenote: The term “long slow saas ramp of death” comes from a talk given by @Gail_Goodman about her journey building Constant Contact. Highly recommended.

This thread is really just a redux of that talk and @rahulvohra’s articles on carrying capacity.

https://www.youtube.com/watch?v=FJu0LKsirO4

This is truly what a *successful* consumer saas business looks like.

You can play with ARPU, steady state growth, and churn, but they’ll only stretch so much.

e.g., it’s hard to charge more than $20/mo (in consumer) or drive churn below 2%.

As an entrepreneur, the assumption you’ll push back on is growth: both the magnitude and the linearity.

Trust me. I get it.

But I would advise you not to expect to outperform the base rates unless you’re deep in the idea maze with a validated breakthrough. Growth is HARD.

Generally the way you grow your company from here is to go multi-product (eg @basecamp), but this is easier said than done.

In many ways, it’s like starting over.

(I now speak from experience thanks to @ReadwiseReader.)

https://twitter.com/buccocapital/status/1578737995582042112?s=20&t=LgmpgjxEWTmW300hldVfew

If you’re lucky, maybe you find a way to pivot to bottoms up enterprise (moving out of consumer) or find some kind of network effects / growth loop.

But these transformations are rare.

If you this is the outcome you seek, you should just avoid consumer saas from the get-go.

I know the idea of spending 5+ years to build a ~$3.5M ARR biz is a tough pill to swallow.

If you had explained all this to me before @readwise, I wouldn’t have believed you.

Even a few years in, I wouldn’t have because churn takes so long to notice! But this is how it goes.

Returning to the original question around sustainability:

If you have a consumer software product you want to work on, we advise you to plan to operate within the limits of this carrying capacity math.

Hopefully you outperform, but hope is not a strategy.

It should also be obvious now why VC is unsustainable for this type of business.

Why raise $10M to spend 5 grueling years on a startup that’s barely worth your liquidation preference?

If you want to go VC-scale, just go enterprise or consumer social.

Those are the ways.

I wish I had understood carrying capacity before starting my consumer saas journey.

I hope this thread helps you in yours.

https://twitter.com/deadly_onion/status/1578831165561049089?s=20&t=G4dfxCDKMg1MRe3mXyq2Rw

Follow: @deadly_onion

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Poor retention kills 90% of startups.Here’s how you get into the top 10% (and survive)

Poor retention kills 90% of startups.

Here’s how you get into the top 10% (and survive):

Before we dive in.

Do you remember Homejoy, Fab, or BranchOut?

3 companies that had:
• Talented teams
• Impressive high growth
• Heavily funded by top VCs

You probably don’t and for good reason.

These companies had all the right elements in their favor to be successful

So, why did they fail?

Retention.

They couldn’t hold on to their customers.

If we know retention is a critical part of growth

Why is it typically put on the back burner of a startup?

Couple of reasons:

1. Prioritize new user growth (shorter-term gains)
2. Easy to cover up poor retention metrics
3. Defined retention metrics incorrectly

From the companies I’ve worked with, the most overlooked mistake is 3/ defining retention incorrectly.

There are 3 mistakes to avoid:

1/ Choosing the wrong metric
2/ Choosing the wrong frequency
3/ Choosing the wrong core action

Let’s break down each mistake

And learn how to choose the right retention metric to set your startup for success.

1/ Choosing the Wrong Metric

Defining your retention metric is critical to get right.

It has deep implications for how you’ll run your business.

The metric should reflect your product’s core behavior, not outputs like revenue or # of transactions.

Select a metric that correlates most with the behavior that shows you deliver value to the user.

Word of caution: AVOID combining different actions into one metric.

Why?

Your team will always optimize for the action that is the easiest to move.

For example, back when Casey Winters was on Pinterest, they created a custom metric:

WARC = Weekly Active Repinner or Clicker

Highlight here: *or*

• Repinner – saves content on Pinterest
• Clicker – clicks to the source of the content

Both metrics, in theory, suggested that Pinterest showed you something interesting.

However, there were 2 problems:

1) Easy to focus and optimize for the easiest metric to move.
In this case, clicks.
This encouraged clickbait-y content and reduced quality.

2) Stopped encouraging the creation of new & different content because you double down on what works – making the content grow stale

To select the right metric, you need to focus on:

• Behavior – your product’s core behavior
• Frequency – the right frequency (natural frequency the user experiences the problem)
• User – the user we should optimize for

Credit: @reforge

2/ Choosing the Wrong Frequency

Ask: How often does my user need to engage with the product to be considered active: daily, weekly, monthly?

A frequency that’s too high = spamming your users

If you set the frequency too low = forget about you

Either option will lead the team to build features in the wrong direction.

Understand what’s the right cadence for the problem they encounter.

3/ Choosing the Wrong Core Action

Ask: Which action indicates that we have delivered value?

Similar to what we discussed in selecting the core metric

We need to know what underlying behavior that metric will be based on.

How are we helping users solve the problem?

To figure out the core action, think back to the problem use case your customers came to your product for.

For example:

People came to Pinterest because they were bored & wanted to find things around their interests.

What core actions could from that problem?

Several.

Write them down as hypotheses.

For example:
> Viewing feed
> Pin/Repin content
> Clicking on something on the feed

Now, let’s validate each hypothesis with quantitative data.

There are 3 steps here:

i) Group users based on the completion of each core action (view, pin/repin, click) + frequency

ii) Create retention curves for the different hypotheses

iii) Analyze the retention by comparing each hypothesis

To determine your retention metric, find the core action that leads to the flattest and highest retention.

Credit: @reforge

To recap:

Part I. 3 key components define your retention metric:

• Behavior
• Frequency
• User

This will influence what features you’ll build and actions you’ll take moving forward.

Part II. Avoid these common retention mistakes:

1. Prioritize new user growth
2. Cover up poor retention metrics
3. Defined retention metrics incorrectly
– Choosing the wrong metric
– Choosing the wrong frequency
– Choosing the wrong core action

References for this thread:
• The team at Reforge
• Casey Winters, CPO at Eventbrite

If you found this thread valuable:

1. Follow me @samanthalcc for more marketing insights to grow your startup
2. RT the tweet below to help your audience avoid critical retention mistakes https://twitter.com/1487096611/status/1578003683534594049

Follow: @samanthalcc

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How to generate 100 viral content ideas in 30 minutes even if you think you have nothing to say

How to generate 100 viral content ideas in 30 minutes—even if you think you have nothing to say:
This thread will give you a dead-simple system to:

1. Discover the topics you *want* to write about

2. Get *specific* with those topics so readers will trust you (even if you’re not an expert)

3. Come up with *engaging* ideas about those topics that go viral

Let’s dive in:

1 rule before we start:

During this exercise, do not judge the quality of your ideas.

The goal here is to generate a ton of raw materials, knowing you won’t write about 90% of them.

BUT—you will emerge with crystal clear clarity.

Let’s go:

Quick overview of The Endless Idea Generator:

Step 1. Use the 2-Year Test to find your topic ideas

Step 2. Add specificity to match your credibility

Step 3. Use the 4A Framework + proven approaches to generate ideas

Step 4. Choose 3 ideas to write about over the next 3 days

Step 1: The 2-Year Test

Finding the general topics you want to write about starts with 1 simple question:

“What are all of the problems I’ve solved and topics I’ve learned about over the last 2 years?”

Why 2 years?

Good question:

One of the biggest mistakes beginner writers make:

Thinking they have to be an “expert” to write about something.

But this is wrong.

The truth is, people don’t want to learn from experts.

They prefer to learn from those just a few steps ahead of them on the same path.

So over the last 2 years, what:

• Skills have you built?
• Struggles have you faced?
• Transitions have you made?
• Hobbies have you picked up?
• Problems have you overcome?
• Stories have you experienced?
• Topics have you learned about?

Write down as many as you can.

Now you should have a long list of topics—plenty to write about!

(Here’s my list from earlier this year, which I’m still referencing.)

Now, it’s time to narrow it down.

From that list, which 1-3 topics jumped off the page when you wrote them?

Lean into those and latch on.

To keep the example going, I emerged with 3 buckets:

• How to build a writing habit

• All things journaling and asking high-quality questions

• General golden nugget growth frameworks

You should have your 3 buckets as well.

Now, onto Step 2: Getting specific

Remember how I said you don’t have to be an expert?

That was only half-true.

It’s true you don’t need to be an expert in a topic to write about it.

But, you need to add specificity to match your level of credibility.

And there are 7 ways to do this:

You can add specificity in 7 ways:

• By price
• By problem
• By industry
• By location
• By situation
• By experience
• By demographic

And the goal with each of these levers:

Make the audience you’re writing to *the same person you were 2 years ago*

Here are examples:

To drive this point home, here’s how my topics evolved:

1. How to build a writing habit for beginner writers

2. Journaling for entrepreneurs who aren’t yet journaling but know they should be

3. General golden nuggets of wisdom for ambitious 20-somethings

I encourage you to dial these up until you feel *uncomfortably* specific.

Then, add 1 more level.

That’s when you know you’ve gotten specific enough.

From here, we move on to Step 3 where the real fun begins:

Using the 4A Framework to write headlines:

The basics of the 4A Framework:

You can write every idea in 4 ways:

• Actionable (here’s how)
• Analytical (here’s a breakdown)
• Aspirational (yes, you can)
• Anthropological (here’s why)

And here’s an example using the topic of personal finance:

Actionable:

These are actionable, implemental pieces of content.

The reader should gain some new insight or instruction they didn’t have beforehand.
• Tips
• Hacks
• Resources
• Ultimate guides

Take your core idea and help the reader put it into practice.

Analytical:

These are breakdowns involving numbers, frameworks, and processes.

Take your core idea and support it with numbers and analysis.

• Trends
• Reasons
• Numbers
• Examples
• Swipe files
• Teardowns

Help the reader unlock a new way of thinking.

Aspirational:

These are stories of how you or others put your core idea into practice.

• Lessons
• Mistakes
• Reflections
• Underrated traits
• How to get started

Help the reader understand the benefits they unlock when they see the world through this new lens.

Anthropological:

These are things that speak to universal human nature.

• Fears
• Failures
• Struggles
• Why others are wrong
• How you’ve been misled

Create a sense of urgency for the reader to fully embrace your core idea or be forever left behind.

As you can see, I had quite a few ideas here—24 to be exact (just for this first bucket, and I repeated this for all 3 buckets I generated which brought me over 100)

Now this brings us to the final step: choosing 3 ideas.

You’re sitting there with a ton of ideas on the page—and now you have the problem of potentially too many ideas to write about.

This is better than having nothing to write about!

But many writers will fall into the analysis paralysis trap here.

Here’s how to overcome it:

Pick 3 ideas.

That’s it.

Your next 3 days of content.

The 3 ideas that most resonated with you from that list.

And that’s all you’re allowed to take away from these ideas (for now)

Because here’s what’s going to happen:

When you start writing about your first idea (that idea that jumped right off the page), it’s going to feel effortless.

And in the process of writing, more ideas are going to jump into your head.

From there, your creative flywheel has started to spin.

And once you hit publish, you will generate *even more* ideas (when you listen to questions & feedback).

This is the whole point of the Endless Idea Generator—to get you started.

So take your 3 ideas and start writing!

The rest will take care of itself.

In summary:

• Start with a massive 2-year test brain dump

• Grab the 2-3 buckets that resonated most with you

• Tailor the specificity to match your level of credibility

• Use the 4A framework to generate ideas

• Pick 3 ideas, then get going and iterate from there

And that’s it—I hope you found this system helpful!

If you did:

1. Follow me @dickiebush for more threads like this on digital writing

2. Jump back to the top and retweet it so others can use the system too (and you can find it later!)

Here’s the link:
https://twitter.com/dickiebush/status/1577293282857582592

Lastly, there’s quite a bit to learn here all at once!

So if you want a deeper dive into this framework, sign up for this FREE Endless Idea Generator workshop with me and @Nicolascole77.

When: Friday at 1 PM ET.

Replays sent to everyone who registers:

https://lu.ma/endless-ideas

Follow: @dickiebush

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