THE STARTUP CHAT

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Speaker 1: Come on in, from the startup chat, Steli Efti and Hiten Shah.

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Hiten Shah: Here we like talking about more than just sales and marketing.

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Steli Efti: We just want to bullshit and chat about business and life. And hopefully while we’re doing that we’ll provide a lot of value to people.

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Hiten Shah: The world’s best business podcast.

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Steli Efti: Oh shit, we got it.

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Hiten Shah: For people trying to get shit done.

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Steli Efti: Done, yeah. We don’t want to give you feedback that’s bullshit.

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Hiten Shah: We want you to do your best. Hi, I’m Hiten Shah.

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Steli Efti: And I’m Steli Efti.

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Hiten Shah: What are we doing here?

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Steli Efti: I don’t know. Apparently, we’re talking about why hacks are not enough for growth anymore.

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Hiten Shah: That wasn’t the topic we suggested.

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Steli Efti: What was the original topic?

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Hiten Shah: Why growth hacks don’t work anymore.

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Steli Efti: Don’t exist anymore.

[0:00:58]

Hiten Shah: Oh yeah, don’t exist, right.

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Steli Efti: Yeah.

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Hiten Shah: Yeah. It was a little aggressive. First of all, how many of you listen to our podcast already?

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Steli Efti: Raise your hand.

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Audience: Woo.

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Steli Efti: Woo. We appreciate you, wooing person. You are awesome, great taste in podcast. Who here has no fucking idea who we are? Just raise your hand real high.

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Audience: Woo.

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Steli Efti: Ouch.

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Hiten Shah: Perfect.

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Steli Efti: Ouch.

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Hiten Shah: You can Google us. Our names are so original, you can just Google us. So Google us, but pay attention to us right now because we’re going to say all kinds of dumb shit. I can cuss, right?

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Steli Efti: Yes, [inaudible 00:01:30].

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Hiten Shah: Kind of, sort of?

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Steli Efti: It’s not my conference, but you can cuss.

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Hiten Shah: Okay, thanks. I need people’s approval. [crosstalk 00:01:35].

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Steli Efti: There you go. You got my approval.

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Hiten Shah: All right, so where do you want to start with this thing?

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Steli Efti: Well, let’s start at the beginning. Oh, let’s actually start at the end. Let’s get the short cut.

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Hiten Shah: How about in the middle?

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Steli Efti: The middle? What was the original idea of saying growth hacks don’t exist anymore?

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Hiten Shah: Yeah. So, they asked us to come up with a topic. So we came up with a topic. We say they don’t exist anymore. We think they’re not relevant. And the reason for that, and I say we, but it’s really I, and I think Steli agrees because we tend to agree on a lot of things, especially stuff like this. And so I think the world has moved on. I think that’s a good way to think about it. And when growth hacking was first coined, it was actually about growth hackers, not even about growth hacking. And then it took on a whole new kind of thing with growth hacks and people talking about growth hacks and things like that. Even the talk we just had, I don’t think she mentioned growth hacks or hacking or any real tactics like that, because they’re all out there. These are all just like case studies now of things you could do. These are all ideas. They’re not necessarily like they used to be, where you used to be able to apply one of those to your business and it would just instantly magically work. Even though it was never like that, it was definitely a little more easier to take something that someone else has done, copy it, and maybe it works. And again, a lot of growth has been about getting more customers, getting them to sign up for your product and things like that. And now the world has kind of evolved because it’s been, I don’t know, quite a few years.

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Steli Efti: Almost 10 years.

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Hiten Shah: Almost 10?

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Steli Efti: Yeah, I think so. So maybe we cover the first half of this. Let’s talk about things people shouldn’t be doing. Right? Things people should avoid doing. And then we can, the second half, we can focus on a few tactical and practical tips on what we think people should do that want growth. Right? Because that’s the main reason we are all here today, I would assume, is because we all are interested in one thing, which is growing the things we care about. It doesn’t matter if it’s your product, your startup, whatever it is, your client’s business, you want to grow and you want to be able to grow things, grow companies, grow products. So we’ll talk about that. So, first, let’s cover the stuff that people shouldn’t be doing. And I’ll go first, and then you can chime in. So a lot of times when people think about moving certain KPIs up or making certain numbers explode or grow or look better. The biggest mistake that I think people make is not looking at the entire journey, the entire customer journey and the relationship that you’re creating with your customers. So here’s an example. All the time people email me and ask, “Steli, how can I improve the open rates of my emails?” I give a lot of advice when it comes to sales emails, specifically. So people come to me all the time, they’re like, “Well, our open rate is this percentage. How do we double it? How do we increase it?” And here’s my favorite question that I get, which relates to the conference and our topic today, which is, “What is the best subject line hack you’ve ever seen?” And always tell the same story. You know, the best subject line I’ve ever seen, or have received in my inbox, was this. I was actually on vacation for two weeks and when I came back to check my inbox, which was flooded, my eyes instantly zoomed into this one email that said, “Very disappointed.” All right? And I was like, “What did I do wrong? What the fuck did we do wrong.” So I instantly opened that email. And it continued, dot dot dot. So it’s, “Very disappointed, dot dot dot, that we haven’t been able to connect yet. I’ve left you three voicemails. This is the third email, but my web development shop could really help you with PHP.” And I was like, “Mother fucker.”

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Hiten Shah: You didn’t care, but they got you.

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Steli Efti: They got me. I actually gave that person a slow clap. I’m like, “Yeah, mother fucker. You got me. All right. All right. Fair game. Fair game.” Delete.

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Hiten Shah: You didn’t spam it?

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Steli Efti: I just deleted that shit.

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Hiten Shah: Okay.

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Steli Efti: Right. And so, just because somebody gets me to open an email, it’s not the end. Right? And it’s definitely not the beginning of a good relationship. When you lie to me to get me to do something, I don’t want more of you in my life. Right? I don’t want more people lying and tricking me into behavior that I don’t really want voluntarily. I always tell people, “You want the best open rate in a subject line ever? Just write, ‘I have your parents in my basement with a gun at their head.'” You’ll get an amazing open rate, even with people that have no parents anymore. I would open, I’m like, “Whose parents does this person have in their basement? And why do they think it’s mine?” Right? You’ll get a lot of people to open. But then what? Is that really a way to start a conversation that will turn into a true conversion and a longterm relationship? I doubt it. So whenever you try to improve a number or increase a number, think about it holistically. Is this really going to aid all the other steps in the journey, the relationship you’ll want to build with this human, with this company? Or is this just going to make the number go up so you can write a blog post that says, “How I increased the open rate by 4000%.” But who cares? Just open the email… The open rate is not the end goal. Growing your business in a way that’s sustainable longterm, that’s the end goal. That’s what we’re all working on, and what we should be working on. So that’s my biggest pet peeve when it comes to hacks when it relates to growth, is being too similarly and too short term minded.

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Hiten Shah: So, I’m going to give the equivalent on the marketing side. Because, for me, I get a lot of people asking me, “How do I get more customers? How do I get more signups from my website?” And so, my answer when they ask me that is, first of all you’re asking the wrong question, but let me start with my response to them. My response to them these days is basically take your homepage, remove everything on it, so give me a white page, and then put your sign up button and make it a third of the page and test that and see what happens. Because if you do that, you’re going to get more signups. Right? Because the only thing they can do is click on that button or leave. So you want to increase your signup rate. That’s my growth hack today. Make the button the only thing on the page, no logo, no nothing, just the button. Put it right in the center of the page and make it a third of the page. And you want to go double down? Go to duolingo.com, look at how they make you feel like you’re pushing a button, and add that, and make it so it feels like you’re pushing a button. And so, when people click it they’re pushing a button, they pushed a button, and then they sign up. I shit you not today, if you go do that to your homepage, you will get more signups. So, this is the problem. Right? We’re used to this world where things are that simple. You give a suggestion, someone like me does that. If any of you decide to do this, let me know. It’ll work. I guarantee it. This is guaranteed 100%. It’ll get you more signups. The real question though is, is you should be asking yourselves, “How do I get more engaged, retained, high paying customers?” That’s what you should care about. It doesn’t matter whether you want more signups, because if you get a whole shit ton of signups and they don’t become engaged, active, high paying customers, they don’t matter to you. So, you can have a really low signup rate for the right customer and make a ton of money from it. Or you could have a really high sign up rate, which is very likely from customers you don’t care about, people you don’t want. So your efforts should be put on getting the right type of customers and making sure that you’re able to do that. Your effort should not be focused on just getting more signups or getting more leads. It’s not going to work. It’s not going to do what you need it to do. And so this is my pet peeve. People ask me how do I get more signups. And my answer is, it’s actually how do you get more of the right customers? And then you figure out, you work backwards from there, and then you figure out what that looks like for you and your customer journey. If you look at my principle of just putting a button on the page, and I’ll give you an example. You go to my website of my new business, FYI, usefyi.com. Yes, this is a commercial for it.

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Steli Efti: Usefyi.com

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Hiten Shah: Thank you, Steli. You’ll notice our website, our homepage, is not too far off from what I just said about a button and it covering a third of the page. That being said, when you think about what we’ve written, the diagram we have on the homepage, how simple that homepage is, you’ll notice we’ve really thought about the customer journey and that’s why I want to give you that example, because it’s mine. It’s not something where I’m going to point you somewhere else. That being said, duolingo.com, I really love their homepage as well. It’s one of the crispest homepages. And so here’s the thing. I gave you a growth hack. I gave you two examples that are as close to that growth hack as possible, but yet they’re focused on getting retained customers, when you really start digging into the work that’s been done on those pages. That stuff isn’t easy. That takes a lot of effort. It’s not a growth hack. It’s something that you have to align with. Like, “Hey, I want to create the simplest page possible that gets me the highest retaining, most valuable customers.” And that’s how you think about it. Again, it’s a button on the page and it takes up a third of the page. So I want all of you to try that. That’s my growth hack and that’s my pet peeve.

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Steli Efti: Tomorrow, it’s going to be the entire web is going to be full of these buttons. And people are going to be, “What is this phenomena that changed all these companies to just have buttons?”

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Hiten Shah: I kind of want to test it myself.

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Steli Efti: Magically, the internet has doubled its conversion rate to signups by this magical hack.

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Hiten Shah: It would happen.

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Steli Efti: Yeah. I love it. All right, so there’s a million things that I would love to share in terms of things not to do, but I’ll summarize. I think a big part of our philosophy and a lot of the advice that we give to founders, to marketers, to salespeople, is the thing that I would advise most people to do is to fight excitement. What I mean by that is that oftentimes what we’re looking for, when you look for advice and when you look for ideas on what to do to grow whatever you’re involved with, you’re looking for something that’s an exciting idea, something you’ve never heard before, something that seems easy or fun, and you’re like, “Oh my God, this brilliant thing that I read or heard on this stage, if we do this, it’s going to explode and everything’s going to be amazing.” And the problem with that is that instead of asking ourselves, “What is the most fundamental way to solve this problem? What is a way that’s been proven over a long period of time? This was a true tactic 10 years ago, 20, 30 years ago. Will it still be true 30 years from now?” We’re looking for somebody that excites us into action. And the problem with excitement is it’s short lived, especially whatever you start, it doesn’t matter how crazy of an idea it is, it most likely won’t work in its first version. Most likely, you won’t implement this, you won’t work on something for like two, three, four weeks and then it just works, and you lean back and just, boom, growth, magic. You’re going to have to probably fuck around, iterate, fail, try again, adjust, get more advice, get more data, do another round of this. You’re probably going to be committed to figuring it out for much longer than you thought when you originally heard that idea. And that’s the number one reason why a lot of growth hacks, “don’t work,” is that the implementation is just too short term. Like they implement a version one and then they run out of steam and it never gets to a version two, three, four, five, six, seven, eight, nine until it really works, and works sustainably and for the longterm. And so, one of the things that I always say is that if somebody came to us and asked for advice on losing weight, not that we’re experts by any means, we would tell people, “Just eat broccoli and work out, motherfucker. Just move your body and put green stuff into it.” Right? It’s like-

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Hiten Shah: Don’t eat sugar. [crosstalk] no sugar.

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Steli Efti: Just simple stuff. Just simple stuff. But the reason why there is a million books out there and every year there’s five new disciplines and working out and losing weight and all that, and why it’s huge in just pills, surgeries. There’s a huge, massive industry helping people lose weight. Is that the move your body and eat healthy stuff is the piece of advice that I don’t want to do. It’s like, “Yeah, I know, but I don’t like broccoli.” Right? My sister-in-law, I went to the gym with her and she wants to lose weight and after five minutes on the elliptical, she stopped. She’s like, “All right, this was fun. Going home.” And I’m like, “What are you doing?” She literally said, “I’m starting to sweat. I hate sweating.” Think about that. That’s how we approach most of our problems, it’s like, “I want to accomplish this, but I hate what I need to go through to accomplish it, so I’m looking for a more convenient way to accomplish it, a simple way, a shortcut, a pill, something magical, something I’m excited and inspired about.” And more often than not, that’s not really any… Most shortcuts really never lead to a place you want to go to in the first place. So try to avoid the exciting shit and try to double down on the timeless shit. The things you know you need to do, but you just don’t want to do. That’s where I would… That will be my internal compass. Just whatever you’re like, “This is really inconvenient. I know we should do this, but I really don’t want to.” That’s what you need to do next, most likely.

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Hiten Shah: Yeah. And that comes with a lot of failure. So trying things is all you really have. I’m going to throw some benchmarks out. You probably have some too.

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Steli Efti: Beautiful.

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Hiten Shah: Because people like benchmarks as much as, you know, they’re okay. How many of you have a 20 to 30% sign up rate on your website? None of you. Right? All right. So that’s your benchmark. You’re aiming to get 20 to 30% of the people that visit a landing page or a homepage to sign up. That’s not going to happen overnight. You’re not going to come up with that. Although my trick I think would work, you know that third of the page, third of the size, big button, make it possible. It’ll work, it’ll get you 20 to 30%. But it won’t get you the right type of customers. So what I’m talking about is the benchmark is get a 20 to 30% signup rate from all your landing pages, all your homepages, and make it so that it’s getting you the retain people that you want. Again, that’s not going to happen overnight. That’s not easy. And many of you probably think I’m crazy because you have a 2%, 5%, maybe 10, 12% signup rate. And a lot of times this takes one to two years to get to those kinds of numbers, especially with smaller scale and the amount of testing you might need to do. But that’s the benchmark. And when you think about it like that, I think your whole perspective changes. You realize that there is no growth hack that’s going to save you or anything like that. So all the growth hacks that are out there or all the ways that people think about that are just ideas, and they are ideas that you can test if you want to, but you have to make sure that you know why you’re testing it. And so, the thing I’ll say related to these benchmarks is go study it, go think about it. Go look at all the examples that are out there. Go look at all the growth hacks. It’s not about not looking at them or not paying attention to them, but then realize what matters to your customer, what’s the value you need to drive for them? And how do you do that? How do you explain it in the simplest terms possible? Another thing I’ll say around these benchmarks is one of the reasons people don’t get 20 to 30% rates on their landing pages is one simple reason. They don’t think about what the one next step the person needs to do. What they think about is all the wonderful things your product can do for your customers. They lay it out on their sites and then all of a sudden the customer is confused and wants to read this and they want videos and you show them videos and all this stuff. When all you really wanted them to do is take that one next step and convince them to take it. When you think about it like that, you can achieve 20 to 30% signup rates.

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Steli Efti: Yeah. I’m not going to do benchmarks, just because I like to do the opposite of what Hiten wants me to do.

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Hiten Shah: Do it.

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Steli Efti: No.

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Hiten Shah: Do whatever you’re going to do.

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Steli Efti: All right. I want to actually share a piece of advice that I think rounds up our little episode today, which is that at the end of the day I truly believe that, and we both, I think, are on the same page on this, that whoever understands the customer best ultimately will win their business. So if you have a competitor that understands the psyche, the life, the challenges, everything around your customer, your desired customer-

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Hiten Shah: What they ate for breakfast?

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Steli Efti: What they eat for breakfast, how they sleep, what TV shows they watch, what their biggest fears are. If there’s a competitor out there that understands your customer better than you do, sooner or later it will be their customer, and deservedly so. And so, we all love to go and read about successful stories. We all love to imitate success. And that’s a valid strategy and tactic. And we all love to go to experts and ask for advice. And the two of us get a ton of these requests everyday and we help as much as we can. But the one source of true wisdom and insight are your customers. And that’s the biggest resource for knowledge that we’re not tapping into as frequently, as consistently, as we should. So instead of pinging me, this is something I tell people all the time, like sales emails is a big thing that a lot of people ask me for advice. And so they send me their emails to get feedback and I always tell them, “How about you ask your customers for feedback about this email.” Call a bunch of your customers that you have a good relationship with, send them that email and get feedback. Send a bunch of people emails and then just wait for those that open the email but don’t reply and call them, and say, “Hey, I sent you an email a few days ago. I realize I cannot sell, you’re not interested in my product, I just need two minutes advice of yours.” Everybody loves to give advice. And then just go, “I sent you the email. It obviously wasn’t interesting. Can you help me out here? Why? If you were my co-founder, how would you change my approach in getting in touch with you to improve the results I’m getting?” Ask people for advice that love what you do. The people that respond to your email and say, “Yes, let’s jump on a demo,” instead of instantly jumping on a demo and being trigger happy of like, “Let me show you the product and let’s try to close this deal.” Why don’t you take 10 seconds and ask them, “Hey, you’re a busy person. Before we jump into the demo, what made my emails stand out? Why did you read it and decide to respond and take the time to talk to me today.” Let your customers enlighten you. Let them give you ideas. Let them give you insights that will then help you grow your business and your company a lot further.

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Hiten Shah: I’m going to turn it into a benchmark real quick, because what you said is a benchmark.

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Steli Efti: Beautiful.

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Hiten Shah: What Steli said is basically the companies that win the market are the ones that understand more about the customer than anybody else in the market. That’s it. Sounding about right?

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Steli Efti: That sounds about right.

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Hiten Shah: That’s the benchmark.

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Steli Efti: That the best way to wrap up this episode of the startup chat. Thank you so much.

[0:21:05]

Hiten Shah: Thank you. Bye.

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