The Twenty Minute VCGuillaume Cabane: Why Your First Growth Hire Should Be a Former Founder | E1088
EVERY SPOKEN WORD
135 min read · 27,389 words- 0:00 – 1:52
Intro
- HSHarry Stebbings
What are the biggest hiring mistakes you've made?
- GCGuillaume Cabane
Hiring too senior. They tell me yes, I'm excited going back early stage and getting my hands dirty. (alarm sound) That has never came out to be true. What I care about is how many experiments can I have running at the same time where I learn whether this is a failure or a success? If you can drive value about mistakes, problems of the business you have discovered that your audience does not know, you will get engagement, guaranteed.
- HSHarry Stebbings
What's your craziest experiment?
- GCGuillaume Cabane
Hot coffee cappuccino on Segment's homepage.
- HSHarry Stebbings
Talk to me about that. What happened there? Gee, I am so excited for this. We last spoke in 2017, six years ago, which is just incredible. Uh, my word, I'm like Benjamin Button. But thank you so much for joining me today.
- GCGuillaume Cabane
I'm so glad to be here. It's been a, it's been a while, and I think we've got a, a ton more stuff to talk about.
- HSHarry Stebbings
Oh my god, we've got so much more to talk about. But I just wanna start with some context. Growth is a weird world. How did you first make your way into growth and what you think is your first growth role?
- GCGuillaume Cabane
Yeah. Uh, it depends how much time you have.
- HSHarry Stebbings
(laughs)
- GCGuillaume Cabane
But I think there's two, (laughs) uh, I think that, that there's two founding stories here that are important. One is a- I'm an, I'm an old man now. I started in the early 2000 at Apple. And if there's one thing you wanna know about Apple, especially, you know, I was based in Europe, is that it's a very centralized company, and so you need to ask authorization for everything, and you never get it in marketing. You just never get it. And so my boss was the head of, uh, marketing for Apple France. He was not running campaigns 'cause he was not getting authorized. He was running experiments. 'Cause for experiments, he did not need to ask. We're talking about 2005 here, 2004. He didn't need to ask for anyone. And then when he got caught, he said, "Oh no, we're just running an experiment to see if the audience or the market reacts well to that." I'm like, "That's smart," right? And the second founding story, couple years later, I was in IT security,
- 1:52 – 5:32
Early Growth Role and Segment's Expansion
- GCGuillaume Cabane
uh, consulting firm, leading marketing, uh, over there, and that's when I, I realized that leveraging engineers to build quasi-products, to build, uh, let's say, demand gen, drive people to the product that is different. So have people build something which is a quasi-product, works really well, especially for e- technical audiences, right? Both of those things merged, um, in 2014, 2015, when I joined Mention and I started using Segment. And I'm like, "Hey, I know I'm fairly technical now, and I know how to run experiments, and I know how to do technical marketing." And at that time, it had started to be called growth. And I just landed in the right place at the right time.
- HSHarry Stebbings
I love that in terms of kind of an alternate tool that drives demand gen to the core product. Uh, uh, you know, I automatically think of actually HubSpot and the Website Grader, which did it so well.
- GCGuillaume Cabane
Yeah.
- HSHarry Stebbings
Do you think that's ... I'm ju- again, fuck it, I had the schedule, sod it. Do you think that still works today? Or is it too commonly trodden path now where everyone's tried to do it?
- GCGuillaume Cabane
It's hard to, uh, come out with a really good product, um, that you're not monetizing directly.
- HSHarry Stebbings
Mm-hmm.
- GCGuillaume Cabane
Uh, first 'cause many people ha- if there is interest for a product, people have buil- built a better version of it and have monetized it. So like a lot of those niche have disappeared, right? And the second is that the quality has gone down and people have become desensitized when they say, "Oh, there's like a free, uh, you know, cost calculator, return on investment calculator," like one of those typical things, right? Or Website Grader. Like most of those are terrible now. And so people will think like, "Oh, I'm not gonna like sign up or put my info, my PII there because I'm not gonna get my value's worth of it." Right? There's like this, this negative effects there. But if you have something truly amazing, does it still work? Absolutely. Absolutely.
- HSHarry Stebbings
Yeah. No, I, I, I do agree with you. I think too many kind of used commoditized products that they kind of slap on as calculators. (laughs) You mentioned Segment there, you grew revenue for out of Segment.
- GCGuillaume Cabane
Mm-hmm.
- HSHarry Stebbings
I have to ask, what was your biggest lesson from your time at Segment?
- GCGuillaume Cabane
Segment is a, it's a technical product targeting a engineering audience. And you know, I often get founders who have a similar audience, wanna sell to engineers and, and they're telling me, "Gee, like, you know, outbound emails doesn't work. P- Engineers don't want to be sold to." And by and large, that's, that's true. That's absolutely true. Though I wanna say, if you're lucky enough to have a really good product, let's put aside those that have like a bad product. If you have a truly good product that is useful, you have an incentive to have a free plan, a startup plan, whatever you wanna call it, because engineers will stay engineers as they change jobs and they no longer are in startups and they join a real legit company, and they will bring your product along with them. That's what we found at Segment. Really crazy attribution logic where we found engineers across jobs by, and that's the unique lesson, keying not on the Link- not on the email, because you, the email changes, domain changes, not on the name, that's not relevant. On the LinkedIn URL. 'Cause unless you're a psychopath, you don't change your LinkedIn URL between jobs. It's the same like slug, right? And so we just took from Collabate all the LinkedIn URLs of all the people and we say, "Hey, has that person, um, came, uh, a few months ago, four, five months ago?" And if yes, did they come through a starter plan? And then we did reverse attribution that way. And we found that a lot of people coming for like, you know, mid-market enterprise deals had used the product quarters ago at a small startup that had died, and that attribution was worthwhile.
- 5:32 – 11:08
Balancing PLG with Enterprise Strategy
- GCGuillaume Cabane
So if you can do that, go for it.
- HSHarry Stebbings
Okay. If you can do that, go for it. The thing I find really challenging, I told you we were fucking up the schedule, but the thing that I find really challenging with that is like then you're doing kind of a PLG motion and an enterprise motion at the same time.
- GCGuillaume Cabane
Everybody does that.
- HSHarry Stebbings
And I'm always like, to startups, "You can't do both well."
- GCGuillaume Cabane
(laughs)
- HSHarry Stebbings
Do one, focus, and then move to another over probably three to five years, honestly.
- GCGuillaume Cabane
Who does it well?
- HSHarry Stebbings
Am I ri- Am I wrong?
- GCGuillaume Cabane
Who, who, who does it well, Hari?
- HSHarry Stebbings
Can you do both?
- GCGuillaume Cabane
Like t- name me companies that at the early stage really like-... like, are really good at PLG or enterprise. It's very rare that they have one of the two motions, like, pinned down perfect. And so most of the time, they try a bit of PLG, they try a bit of enterprise, they'll land most of the time in between. Segment, both PLG and enterprise sales land. Drift, ditto. Gorgias, ditto. All of the companies I worked for, I worked with, and we're gonna talk about CAC I'm sure-
- HSHarry Stebbings
Hmm.
- GCGuillaume Cabane
... but, like, f- mostly for CAC reasons, they optimize for efficient acquisition and selling and they'll land with both motions.
- HSHarry Stebbings
Okay. So they can k- so no one kind of does it well, and they kind of do both at the same-
- GCGuillaume Cabane
No, it happens. It's rare. It's extremely rare that you have, like, super strong virality of real PLG. We haven't... Most people who, like, say, "I want to do PLG," they don't do PLG. Right? They have a free plan. They have a self-serve plan. It does not mean there's virality. It does not mean that people invite each other. Right? Even the people I love and care about, we think of, like, something like a, a Ramp. I love them to death.
- HSHarry Stebbings
(laughs)
- GCGuillaume Cabane
Amazing company. Do you think there's PLG? Do you think CFOs randomly invite other CFOs to use Ramp? Hell no. It doesn't happen like that. It doesn't work like that. Right? Maybe there are some, like, there's some network effects we can talk about, but there's no PLG.
- HSHarry Stebbings
Yeah. Refer five of your friends and get a free credit card. (laughs)
- GCGuillaume Cabane
(laughs)
- HSHarry Stebbings
Yes, please. Do I get a, do I get an orange juice with that? Um...
- GCGuillaume Cabane
(laughs) .
- HSHarry Stebbings
That was hilarious. I agree. You know what worries me most though, actually, is the fact that a lot of startups that I work with today, don't insult me or my portfolio please, uh, but they essentially layer on the enterprise cost base of sales, marketing, customer success, onto a kind of PLG style price. And I'm going, "Shit, that doesn't work." Am I right or am I wrong? 'Cause they argue, "Well, it could scale."
- GCGuillaume Cabane
You're right, but there's worse. Th- you're absolutely right. Like, you c- if you, if you don't create the packaging, the pricing plans to support the high cost of the enterprise motion, then you're killing yourself. But there's worse. It's companies that are enterprise first with the entire, like, cost structure and product structure of an enterprise software and then want to open a PLG angle and says, "Hey, let's let people, like, sign up on their own." And like, nothing works. Like, the acquisition does not work. The product, like, does, is not self-serve. You can't, like, build, like, a self-serve, like, feature into, like, something was meant for your, like, CSMs to build the, the instance. Like, that, and that happens. I see those people come to me and it's like, "This is just not going to work. It's impossible. You can't pivot that way."
- HSHarry Stebbings
Does it matter? And what I mean by that is you got nothing to lose by opening that up. Do you, I mean, I'm n-
- GCGuillaume Cabane
Focus. Success, success in startups is being able to focus your efforts to g- grow faster than your competitors. If you lose focus, your competitors grow faster than you, you lose.
- HSHarry Stebbings
So if I'm a startup founder listening to this, and I hear or say, "Well, you kind of do both at the same time and try and make it work," how do I think about that? How do I think about messaging, resource allocation, marketing channels? They're so different. I'm torn between two worlds.
- GCGuillaume Cabane
Let's first talk like why d'you land in that situation. Generally, it's because you find one of the two motions. Generally, some, like, SMB. To be honest, like, most people start with the SMB market because you, you don't have what it takes to close, like, enterprise mid-market companies. You don't have SOC 2 compliance and whatnot. All right? And eventually, one exec at a larger company is more risk-prone than others and, like, is an early adopter and will come to you and will offer, like, a three, four, five times your current ACV, and you're gonna take it. Of course you're gonna take it, right? Absolutely. And then you're gonna wonder, are there more like that? Right? And so it just, it s- it happens, like, kind of naturally, like, it j- it just happens. You just start closing a few of those, and then you need to start layering the cost structure. You need, like, to support them, you don't want to lose them because the churn would look bad. You put the logo on your page 'cause you want to, like, that's an exciting logo, you put in your board deck. So you need to support that, prevent the churn. And so most of the time it happens ins- insidiously. The... It's very rare that have people tell me, "I do not want to do enterprise features, I don't want enterprise customers." I have one example. Zapier did that for very, very long. I talked to the Zapier founders, I talked to Mike when I was at Segment and I wanted enterprise features and he said, "Gee, we love you, but I'm sorry, we're not gonna build those fea- those features." I'm like, "Why? I'll pay you for that." He's like, "Yes, but we will lose focus of the huge market of SMBs and we want to close as many of those. Other people will take care of the enterprise markets. We don't want to d- to go there."
- 11:08 – 17:31
Startup Expansion: The 3-3-2 Framework
- GCGuillaume Cabane
That is like, I remember it because it's e- extremely rare.
- HSHarry Stebbings
I love that and I totally agree with you. I always think of narrow the focus, increase the quality. My question to you then is, how do you know when is the right time to expand the focus? How do you know when you should go from SMB to mid-market? And also, how do you think about diversification? Like I hear, sorry, I'm just ranting now, but I hate companies whereas like, "We're just selling to, like, high grade startups." And I'm like, "Yeah, there's that thing called a macro recession that's gonna impact spending and funding."
- GCGuillaume Cabane
(laughs) Mm-hmm.
- HSHarry Stebbings
You know? I, I, I don't like concentration on customers basically.
- GCGuillaume Cabane
I think often, and again, like, the exceptions to that rule, those where you would want to invest as an investor, but generally what you see is companies find one early adopters market, one audience where there was a brand built up before. There's like, there's a, a message to audiences or, or a product to audience fit. All right? And you start just maxing that out. You have a competitive advantage, your message resonates well, and eventually you're gonna plateau because you have convinced most of the early adopters, the people that are early, you know, that, that are easy to convince...... into your product, and the others have made the conscious decision they- they don't want your product. They are happy where they are. The friction increases, and you're gonna start looking for new audiences. You can think, "Hey, these- this small audience is too small for us. I can't raise my price. I can't convert more of those. I can't sustain my growth there." All right? "I can't do my 2X, my, you know, three, three, two, two, two." And so you're looking for new audiences. And those new audiences will be either in different industries, in different segments, generally. More rarely in different GEOs. So you tend to generally go, like, same, uh, company size, different industries. Then you go different segments, company sizes, and then you go into different GEOs. That's the- that's the way that you- that I see most companies grow.
- HSHarry Stebbings
You know this shit's getting real when I get my pen out. You said three, three, two, two, two when it came to growth.
- GCGuillaume Cabane
Mm-hmm.
- HSHarry Stebbings
For people who don't know what that framework is, can you just explain that for us?
- GCGuillaume Cabane
Yeah. I don't know that it's still, I'd say the- the golden rule, and I don't know who came, uh, with it, but I- I associate it in my mind with Jason Lemkin, uh, the godfather of SaaS here, 'cause he's the one who's always talking about it. It- it used to be said that to be in the top decile of startups in terms of performance, with us in terms of valuation and funding and outcomes, you would have to grow past the first million 3X the first year, 3X the second year, and then 2X for the next, uh, for every year for the next three years. So three, three, two, two, two.
- HSHarry Stebbings
Okay.
- GCGuillaume Cabane
All right? And if you do that, you end up at, um, $100 million plus in revenue in, um, in five years.
- HSHarry Stebbings
Uh, listen, I- as a Brit, I love simple frameworks. It helps bring a lot of clarity to the thought process. (laughs) When we were chatting before, thinking of kind of that growth mechanism, you said boards want... I'm just skipping to CAC. I love CAC. You said that boards want low CAC and high-scale growth.
- GCGuillaume Cabane
Yeah.
- HSHarry Stebbings
I just wanna kind of, uh, break that down. How do you define low CAC, G?
- GCGuillaume Cabane
Yeah. It's a good question. So at first, like, why do boards want that now? (laughs) Well, see, because we're in- we're in this, like, kind of recession or tough times, I wanna say, in a way where capital is scarce. And when capital becomes scarce, there's two ways to win. You either grow fast out of it. Well, that's tough. Or you reduce cost, all right? And founders try to do a bit of both, right, to de-risk. And so when you think of all of the people asking about PLG, for PLG, that's another way of saying they're looking for low CAC tactics. They're looking for customers that bring themselves or bring other customers for free that you don't have to pay for, because that sounds just great. If you go beyond that, if you can't do the PLG, which most can't, as we discussed, well, I'd say low CAC, if you look at the, um, you know, the KeyBanc capital deck that they release every year, look at the top quartile of startups in terms of, um, performance, um, post $5 million revenue, you're gonna see that the- roughly it's about a dollar of revenue... Sorry, a dollar of cost for a dollar of revenue. So you spend a dollar to get to a dollar. All right? That's the- that's- that's the top quartile, and that's fully loaded CAC. What that means is that takes into account, like, the marketing spend, the marketing headcount, the sales team, bonuses and whatnot. Everything but building the product, okay? Marketing generally represents about 30% of that, so about 30 cents on the dollar. All right? And so if you take, you know, on- on a payback time 12 months adjusted, like, one for one, then you- that's about four months of payback time. Four months of payback time is really good. It's really good. You pay back... You think about it, it's just like if you're doing a loan. Like, you actually loan four months to, you know, a third party, to your customer, and then y- after four months, you start being in the money. That's- that's how you should think about it. All the- every time a customer churns before four months is a loan that has not been repaid. It's a- it's a default on your debt.
- HSHarry Stebbings
Uh, I totally get that and I- I love that in terms of an understanding. Four months is very, very rare though. (laughs) I never see four months. When it's 12, it's like, okay. Like, what is a good payback to you?
- GCGuillaume Cabane
Anything below 12 I'd say is good.
- HSHarry Stebbings
Mm-hmm.
- GCGuillaume Cabane
Now, when you think of that, generally, like, that's a very simple framework. If you want to be a bit smarter, you go into like CAC two, CAC two LTV.
- HSHarry Stebbings
Yeah.
- GCGuillaume Cabane
Uh, again, going back into, um, I mean, fintech these days with Ramp, um, w- when people onboard a financial, you know, platform, global platform like- like Ramp, they tend to stay
- NANarrator
(Door closes)
- GCGuillaume Cabane
... stick for very, very long, multiple years. And so you can afford, let's say, something much higher in terms of payback time, because the LTV is huge. People stick for three, four, five, at the mid-market, eight years. So when they stick around for eight years, you can start being very aggressive. You can start spending, like, more than one year, maybe two years.
- HSHarry Stebbings
I ge- I get you. Can I just ask something? I don't- I don't like that, because we're being very assumptive on the future state of markets. In five years time, there may be a completely different financial protocol with... I-
- 17:31 – 23:42
LTV and CAC: Debunking Growth Myths
- HSHarry Stebbings
I'm- I don't know what it is, which is why it's an unknown, but the assumption that we can have eight to nine years as an LTV in the first two years of a company... I get it more for your Visa where we've got 50 years of data-
- GCGuillaume Cabane
(laughs)
- HSHarry Stebbings
... but like, it- for a startup, I just think LTV is bullshit. You've got no fricking idea. Am I right or am I wrong?
- GCGuillaume Cabane
I understand where you're coming from. On financial products, uh, you can see the rate at which companies have switched their financial, uh, their payment platforms and their, like, expensing platform, it tends to be, especially at the mid-market, very slow, and it's unlikely that changes because the cost of switching is super high. All right? And so- and that's the, you know, if you look at why, you know, Ramp but also Brex and others have raised so much money, it's because the VCs have made the same calculations.... and have decided, concluded that it is very likely that people stick for that long. That's the only reason why th- that c- those companies are worth that much, is because their churn is almost like (air quotes) s- lich.
- HSHarry Stebbings
(laughs) So then why do boards want now lower CACs? 'Cause th-
- GCGuillaume Cabane
'Cause most people don't have an eight-year retention timeframe.
- HSHarry Stebbings
(laughs)
- GCGuillaume Cabane
That's what it is. (laughs)
- HSHarry Stebbings
Okay. So, so then when we think about that, and we think about the CAC to LTV, what is good CAC to LTV to you? And I know they're generalized questions, but there is kind of rules of thumb, where you're like, "Oh, interesting."
- GCGuillaume Cabane
Yeah, three to one is really good.
- HSHarry Stebbings
Three to one is good?
- GCGuillaume Cabane
Yeah.
- HSHarry Stebbings
And great is five to one?
- GCGuillaume Cabane
Yeah.
- HSHarry Stebbings
When does that become relevant? Because I see it in seed fund decks with-
- GCGuillaume Cabane
You can't calculate it early anyways. So, (laughs) uh, I don't think that you can calculate or you can attribute how or why customers have come to you at the early stage. I don't think it's worth it. You don't have the scale, you don't have the diversity, and even if you have found s- one channel that works, it's unlikely that you can scale it that way, and so you can't, you can't build a tr- y- y- to speak in simple terms, you can't take this Google Sheet cell and, like, drag it to the right. It's (laughs) unlikely to, (laughs) , to be real. Uh, and so don't try. Just don't try.
- HSHarry Stebbings
Uh, well, you said about, you said about kind of just taking the Google Sheets and dragging it to the right. Do customers get more or less expensive to acquire from your experience? You've got one side which says more expensive. Your core audience is saturated, so you're going to less obvious people, and then another one is that you get brand marketing come into play, word of mouth, PLG, that makes it cheaper, which ... where does it go?
- GCGuillaume Cabane
In most successful startups that grow fairly well, the CAC will rise faster than the brand can compensate for that rise. As you said, like, every new audience is slightly harder to acquire and convert, because if not, you would have converted that audience sooner, earlier, they would have been of the first audiences, right? The people who have, as I said th- earlier, uh, seen your ad, talked to you, took a demo, and said no, can you really reach back to them, you know, after three months and say, "Hey, Harry, you told us no three months ago. Have you reconsidered your position?" Nah, you're not gonna do that. That just doesn't work, right?
- HSHarry Stebbings
(laughs) You have? Oh, well done. Fantastic. (laughs)
- GCGuillaume Cabane
(laughs) So, so eventually ... I'll, I'll give you an example, uh, Gorgias, a company that I love, all right, focusing on, you know, the e-commerce merchants. If you look at their total adjustable market, we're talking of a couple hundred thousand merchants, um, in the US and Europe, right? That's the market. By now, they touch each of those merchants at least once a quarter, at least every single merchant at least once a quarter. Okay? So once you do that, how do you grow? Well, you go by, you know, you, you've maxed out your typical demand gen efforts. You're touching the people. You go by increasing price, by adding new products to convince people on products you didn't have before, and by doing brand, by convincing them that their, uh, decision that they made prior is wrong, that is a entirely new, you know, orientation in your business. It's, uh, completely different. This is no longer growth. That's no longer growth. Once you touch everyone every quarter, what takes you to the next stage is traditional marketing, traditional product. Y- you're now an established business.
- HSHarry Stebbings
A- again, so jumping around, so how do you define growth then? 'Cause growth is so bastardized in terms of its thinking, people often just don't have product-market fit, and they're like, "I need a growth advisor," and then you need product-market fit.
- GCGuillaume Cabane
You need a growth advisor. I'm that guy. (laughs) No, I'm just joking. Um ... (laughs)
- HSHarry Stebbings
Uh, ca- call me. Uh, t-
- GCGuillaume Cabane
Mm.
- HSHarry Stebbings
... tell ... oh, oh, the jacket is coming off.
- GCGuillaume Cabane
Yeah, yeah, yeah.
- HSHarry Stebbings
Lady's and gentlemen-
- GCGuillaume Cabane
It's getting hot now here.
- HSHarry Stebbings
... this is getting serious. Um, yeah, I mean-
- GCGuillaume Cabane
So answer two questions. Like, when is growth right, and what is growth? Let's start with, what is growth? I'm an angel investor. All right? I do quite a bit of angel investing. I know you are one too. Like a, like an angel investor, like, like a VC, um, growth is a risk-adjusted way of creating value. Okay?
- 23:42 – 28:26
Common Mistakes by Growth Teams
- GCGuillaume Cabane
releasing features or campaigns.
- HSHarry Stebbings
Okay. Question for you. You said about the speed there, testing experiments you don't know. We were talking about the success we have in TikTok. It takes a lot of time often for new content initiatives to play out.
- GCGuillaume Cabane
Mm-hmm.
- HSHarry Stebbings
How do you know whether an experiment is failing or whether it just needs more time?
- GCGuillaume Cabane
Yeah. That's a great question. So first, th- the biggest mistake that I see happen in growth teams is, they undertake an experiment without assessing the cost, the effort, uh, or the audience size, and often ask, "Can we reach statistical significance here? Is the audience big enough for us to be able to learn the outcome?"... and often, when I dig, the answer is no. Absolutely not. Like, there's just not enough people. And that happens very often in B2B SaaS products, which is like my stuff, post-product. It's very hard to get stat sig post-signup in a B2B SaaS, 'cause you're gonna need like 1,000 users to be engaging with a product in a short timeframe. Who has that? It's rare. It's really, truly, it's rare. Even at places like Segment, in the early days, nobody log- logged into the Segment platform. Yeah, you install Segment and then you're out. It just works, right? Just think about that. So you gotta be able to, like, be ruthless and exclude those experiments where you won't be able to come out with a learning. What I care about is not so much the wins, because I can't predict those. What I care about is how many experiments can I have running at the same time where I learn whether this is a failure or a success? And I store that information.
- HSHarry Stebbings
How do you store it and how do you share it with the team? I think that's... You wanna keep that value and translate it.
- GCGuillaume Cabane
My good friend, Darius Contractor, uh, a while back, when he was the head of growth engineering at Dropbox, built this Airtable, um, database, um, that's called Evelyn for experiment velocity engine. Evelyn. And I've heavily customized it, um, with a focus on dollars revenue as the KPI. But that's where I've stored things for a while. And it... Just like you have the... Your whole queue, your whole backlog of ideas, all the things that are in progress and all of the outcomes or learnings in the knowledge base, uh, section. I wanna say these days, uh, Mercy Grace, who used to run marketing at Slack, uh, has launched a product called Panobi, uh, where I'm not involved for once. I don't have my hands in, in that one. It sounds amazing and sounds like a, uh, GrowthHackers.com version, uh, 2023 flavor.
- HSHarry Stebbings
A lot of people don't actually get good learnings, I don't think. What's that... And it's like, "Yeah, it didn't work." What's a good learning and what's a bad learning?
- GCGuillaume Cabane
A good learning is a statistically significant deviation from your, uh, status quo. It's hard. I'll give you one example, okay? People often change their onboarding email, their welcome email, you know, the whole sequence, like post-signup, to get people to use the product. And they test and, you know, they... It's hard to get a lift there. You know what I tell them? "Have you tested against a, uh, a holdout, a, a control audience?" And they tell me, "Yes," and they tell me, "Oh, the control is, is the standard email." I say, "No, you're wrong. The control is no email. Have you tried not sending a welcome email, not sending, you know, the f- the first three, four, five emails to get people to use the product?" And of course they haven't, and I tell them, "Try it. Take 20, 30, whatever it takes to be statistically significant, and don't send emails, and let's see what the true, uh, deviation in activation and retention, and retention is." And you know what happens, Harry? Most of the time, it's not statistically significant, so the people who are going to activate will activate regardless of getting an email or not, right? And so the email adds no value at all.
- HSHarry Stebbings
Wow. Did you do one where actually you changed anything and it did add a lot of value and activation went way up?
- GCGuillaume Cabane
That's the value of, of experience, and I think the... And the... I think it's Luke Levesque, who's the chief growth officer at Shopify, who said that. I think growth is one of those disciplines where the knowledge of something that has worked somewhere else and that is replicable is extremely valuable and rare. That doesn't really happen in products, like you've done a product really well somewhere else, you can't really replicate that in another company. It just doesn't work that way. It's also not true in, like, in marketing or in, like, engineering. But in growth, if you have something where you're able to, like, tickle, uh, human, uh, psychology just the right way, it's likely to work again in the next company because they're still those
- 28:26 – 37:52
Innovative Growth Hacks and Strategies
- GCGuillaume Cabane
same humans, right? Uh, I gave you an example I, I heard recently. Uh, one company, um, sent verification emails, but the product does not need verification emails. They, they... It's like you don't need to click to verify your email. But they just tried, "Hey, what if we ask people to verify their email? Does that bring the people back into the product? What if we do it regardless of whether they're in the product? And what if we send it twice, regardless if they verified the first time?" All right? It works. It works great. Now, is it insightful? A bit, absolutely. Can you find a spin on that? I'll let the audience decide. But it's interesting to find that that is s- an example of something that is very replicable in almost any SaaS business. It's very easy to implement and will drive your user retention up.
- HSHarry Stebbings
What are the biggest mistakes you see companies get, make, or do when it comes to activation?
- GCGuillaume Cabane
They take a working growth tactic like that one, and they tone it down a bit. I'll give you an example. You often see emails where they have this, like, almost tone in cheek personal from, like, the CS person or, like, a sales engineer, um, making it look like the text is personal. But it's wrapped in an HTML layer, which makes it very clear it's not personal. And I tell them, like, "You gotta pick, folks. Either this is a corporate email, and it's corporate looking, or this is a text-based email that's being sent through, through Gmail. Which behavior are you trying to, like, get your users to, to do?" Right? "What do you want them to believe? Is this coming from a human or is it not coming from a human?" And they haven't thought about... They haven't put themselves in the shoes of the recipient. They don't think, like, "What feeling am I trying to create?" So the biggest mistake is they don't think of the humans on the other side. They don't think of the psychology enough.
- HSHarry Stebbings
Okay, so they don't think of the psychology enough. It brings me to my biggest challenge, so actually with kind of growth and growth marketing, which is when you have horizontal SaaS products. It could be Airtable, it could be Dropbox, it could be any of these. Um...... they can be used by dentists, they can be used by product managers. And the use cases are so different. So to get messaging that resonates across that spectrum is so tough. How do you think about that horizontal product marketing being done well and resonating and getting in their psychology?
- GCGuillaume Cabane
You know what's fantastic? It's we live in 2023, and now you have AI products. You know, ChatGPT, you name it, all the ones you c- that you love. And you can build personalized content with a scale that you never dreamed of before, which is at a quality that was unachievable before. What people care, especially horizontal products, is that you talk about them, their problems, their challenges. I might go back when I said just earlier, you asked me what was the biggest mistake. Actually, it's probably bec- that companies, marketers talk of them and their product first. They don't talk about you, the audience, and your problems. They say, "Hey, here's my product, here's what we do, here's our customers, here's why we are great." And you know what? As a recipient, I don't care. I really don't care. I've got other things to care about in my day than, like, a random company I never heard about. All right? But if you s- if you reach out to Harry and you have context on his business, what he does, what he loves and care, what challenges you have a really good assumption that he's facing right now, like, it's much more likely that you can pique his interest. These days, with large language models, you... and injected data about, "Hey, is this a dentist? What's the size of the dentistry? Where are they based? Are they in the mission, in the SF? You know, what problems could, might they have?" Right? Is it, you know, you know, office issues, like whatever that is, right? You can start being extremely specific and relevant. And relevance creates reciprocity, reciprocity gets you responses.
- HSHarry Stebbings
Can you just unpack that for me? Relevance creates reciprocity, reciprocity gets you responses.
- GCGuillaume Cabane
Yeah.
- HSHarry Stebbings
Can you just break that down?
- GCGuillaume Cabane
There are, there are two things at work when you try to reach out to someone that you don't know, a, a prospect. All right? Whether it's like by email, by whatever, whatever the communication channel. True value, your communication, let's call it an email, contains something that's really helpful. I can give you an example. And the second is reciprocity for humanness. They truly believe it comes from a human, and thus they will feel compelled to respond 'cause somebody else has spent some time. Let's, let's unpack tho- th- those two here. Okay. True value. So, um, give you an example. Gorgias again, all right? Um, a support platform for merchants. Uh, merchants sell, you know, these days a lot, of course, on TikTok, but also on Instagram. Instagram is a major platform for merchants. All right? And what we found out is that sometimes some customers, potential customers of the merchant, of the brand, posted negative comments on a brand's post, and nobody took care of that. We said, "Hey, that's a miss from the brand. But wait, can we scrape that? Can we automate that?" We found out that we could. And so we started scraping and automating the detection of negative comments on brand posts on Instagram, sending it to the brand owner, to the company owner, to the marketing leader. And says, "Hey, Harry, love your products, love what you do, but just letting you know there's, like, a couple of negative comments here on your posts. And it's been 48 hours and you haven't responded, and really, you should." That's it. Don't talk about Gorgias, don't talk about the product. This works super. Why? One, it's public. I'm not doing anything like, you know, sneezy, like it's, it's just on Instagram, like anyone can see it. Two, you can see, can verify, can click on the post, you will find the negative comment, you know it's not me. And second, like, it's helpful. Absolutely, you should take care about it, you should respond if you haven't. Right? You see those three things? The only response you can have is, "Thanks. Thanks for catching it. Thanks." That's it. Of course I'll follow up to that email with an ask for demo. And of course you'll be compelled to give me your time, because you would really be a douchebag not giving me some of your time, given that I found some mistakes that you made in your brand. All right? So super high response rates there. Okay? That's value. I have million examples of that. If you can drive value about mistakes, problems of the business you have discovered that your audience does not know, you will get engagement guaranteed.
- HSHarry Stebbings
Did that scale?
- GCGuillaume Cabane
Absolutely.
- HSHarry Stebbings
Right? 'Cause it also makes-
- GCGuillaume Cabane
Instagram's big, man.
- HSHarry Stebbings
... 100% sure.
- GCGuillaume Cabane
Instagram is huge. (laughs)
- HSHarry Stebbings
No, but I'm saying, but that, like, takes a lot to craft each one, to pull in the different comments, to package them efficiently.
- GCGuillaume Cabane
It's all automated. These days you can build scrapers and automation for the efficiency. Uh, it's... the cost of doing that is not that high. And the challenge is finding those opportunities, those pockets of opportunity and scaling those. That's, that's a challenge, for sure. Okay?
- HSHarry Stebbings
Yeah. But that does actually... that does scale. I mean, that's much more scalable than say, like, paid, where you will see-
- GCGuillaume Cabane
But wait-
- HSHarry Stebbings
... 1000s and-
- GCGuillaume Cabane
... think of the CAC of that. That's why I love growth. All right? There is an upfront cost to finding that, testing it. Of course, we don't, we don't automate anything before we test it manually. We've, we've, we had, like, some GM people, like, send a couple hundred manually to see if it works. And once we knew the response rates were huge, we then, like, invested in doing it with our engineers. But once you've built it and you've amortized the upfront cost, the marginal cost of that email is zero. You're just running a few scripts. The acquisition cost of doing that is zero. And if your competitors are not doing it, you have, like, this, like, green ocean in front of you with, like, there's no competition. Zero dollar CAC. That's, that's competitive moat.
- HSHarry Stebbings
Are they still doing it today?
- GCGuillaume Cabane
I don't know that they're doing, still doing it today. You'd have to ask them.
- HSHarry Stebbings
That's... What was the response rate? It's like, just so I... is it like 50%? Is it like-
- GCGuillaume Cabane
No, it's more like 10, 12%. 10, 12%, which is about-... five X the, say, standard response rate of a good cold email. Reciprocity. You wanna go into reciprocity?
- HSHarry Stebbings
Yeah, yeah.
- GCGuillaume Cabane
What cr- the other thing that creates a response is. Now, here's the thought experiment I want you and the audience to have. At home, you have a mailbox, a physical mailbox. In that mailbox, you receive junk mail, right? Most of it is junk mail. You take that junk mail, you throw it away. You don't even think about it, you don't care. You have no personal feelings and you have no emotions with that junk mail. You feel maybe even lighter about throwing it away. Now, let's say you go through that junk mail as you throw it away, there's this one letter that's sealed letter up, that's obviously written by a human, obviously by an old person. And there's your name, Harry, on it, Harry Stebbings written on it, all right? And there's the return address behind and they even maybe, like, licked the stamp and put it on the envelope. You're very convinced it's a human. How likely are you, Harry, to take that envelope and throw it in the trash without opening it?
- HSHarry Stebbings
No.
- GCGuillaume Cabane
No way. No way, right? You would be a psychopath if you did that. I tested that thought experiment at SaaStr in front of hundreds of people. Not one person raised their hand. Not one. Which
- 37:52 – 42:32
Utilizing Sports Teams in Growth Campaigns
- GCGuillaume Cabane
makes sense.
- HSHarry Stebbings
But how do you do that with email? Because with physical you can do the nice stamp, the nice textured letter, whatever it is. How do you do that with email?
- GCGuillaume Cabane
Give you an example? I got, I can always get examples, right? Uh, Ramp. And all those examples have been made public, which is why I can share them. Ramp targeting financial platform, targeting CFOs. Notoriously difficult audience to engage with, all right? And almost nothing we can scrape about a company or a CFO is useful. They're not posting about the financial issues on Twitter, all right? On X. Right? This doesn't happen. What we did is we scraped the thing-
- HSHarry Stebbings
(laughs) I would love that. Would- wouldn't you love that? "Oh, we've got so much data that we just don't know where it is. We're really missing our payments right now. Um, oh."
- GCGuillaume Cabane
(laughs)
- HSHarry Stebbings
"This is so much better than LinkedIn to post it."
- GCGuillaume Cabane
Can you imagine?
- HSHarry Stebbings
(laughs)
- GCGuillaume Cabane
So what we did is that we scraped, very typical, their LinkedIn profile, their colleges. And here's the, here's the trick, because everyone does that, okay? The trick is, we thought about what's the commonality between CFOs? They're all well-educated, they all went to college, like, 100%, right, went to college. Okay? On the US, in the US, very specifically the US, US... people who went to a US college tend to be very passionate about the college sports team. Very passionate, right? Look at the games they love. So what we did is that we matched two datasets, the college where each CFO went and the upcoming games of that college against the opponent team. We then built a very simplified betting algorithm to see is that, is the CFO's team likely to win or lose? And we send that in an email and say, "Hey, Harry, your team, the Sharks, whatever, is going against, like, the Bisons or whatever, uh, next week, and I'm ready to bet 50 bucks that your team's go- is about to lose. If you win up on top, you, I give you 50 bucks, no question asked. If you lose, uh, I'll just ask for a 20-minute call." Now, that is a typical $50-for-a-call, um, email. But, and here's the but, the sophistication of the email with this upcoming game that you know about, the ability to be able to bet for free, what looks for free, on sports, which people love, makes it feel so human. Nobody believes this is automated, but it is. Nobody believes it's automated. People are like, "Hey, somebody actually researched, somebody who knows the upcoming game, somebody who cares about something that I care about too. This is fun." The response rate here is 12 to 15%, about the same as 1974 00:04:55,000 -- 00:04:57,000. Again, for a very, very small cost, and something that no one in their right mind would think of doing manually.
- HSHarry Stebbings
It's very smart. It's very smart.
- GCGuillaume Cabane
That is reciprocity. You see that, you immediately believe, "Hey, there's a human that, that cares. Like, at least I have to respond. At, at the, at the minimum, I have to respond."
- HSHarry Stebbings
Does AI make this much, much harder? Because cold outbound done well, like you've done there, people think that it's actually a human and it's not. Kind of the wrapper of AI makes people just inherently more cynical that everyone's a robot. Does it make it harder?
- GCGuillaume Cabane
It will. Or, or I should say, I have a conviction, I have a per- my, my personal conviction here is two things will happen in, that will be true at the same time. Um, some part of the population will start rejecting communication coming from anonymous people because they won't know if it's a human or not, and thus they will, by default, uh, think that it's a, a robot, and thus that there is no reciprocity that should be, uh, expensed. And some other part of the population, maybe the more tech-savvy people, will not care and say, "Hey, is this information valuable?" Right? The problem is that because the marginal cost is so low, high-quality text, high qual- quality communication about you will become, like, huge. It's gonna be all the time everywhere, and you just won't have the time for it. So you... it's very likely that we'll start ignoring messages from real humans at a much higher rate because the quality of AI will be better than the quality of humans.
- HSHarry Stebbings
Does that mean cold outbound's dying?
- GCGuillaume Cabane
It's not cold outbound. It's communications dying, like personal communications dying. It's not just cold outbound. You, that, the same is true on phone calls. Like, phone calls, text calls, like, blog posts, like, anything that is a human-written content is soon likely to be better
- 42:32 – 55:33
The Rising Influence of AI in Communication
- GCGuillaume Cabane
if done by an AI.
- HSHarry Stebbings
So then what do we do? Like, what, what replaces it? The existing channels and tactics just get bigger in terms of portion of sales? Is there net new? What, if that's a total pie of net new, what does it look like?
- GCGuillaume Cabane
I, I, I love the worry on your face about the future, Harry. (laughs)
- HSHarry Stebbings
Yeah, you don't like that.
- GCGuillaume Cabane
No, look, I think there's a few things. One is...... if you are on the cutting edge of tools and platforms, you will win regardless of what happens. All right? You will, 'cause the others, like, anyone who's not doing the things that I said is already losing right now. Okay? That's the first thing. Second, this, I'd say, um, negative pessimistic view of communication, A on humans, is a few years in the future. It's not a right now issue.
- HSHarry Stebbings
Mm-hmm.
- GCGuillaume Cabane
Okay? Uh, so you have a couple years to, like, handle it. Third, I think if you ask, like, a wild bet, don't hold me to it in three or four, six years when we talk about the next time, uh, I think it will be more about social proof, community, and relationships. I've seen a, a product, uh, the name escapes me right now, which, uh, instead of a chatbot on your SaaS homepage or pricing page, connects to your LinkedIn, your email connections, relationships, and says, "Hey, Jike, Harry is using this software. Do you want to ask him about it?" And I thought that's really smart, right? Instead of, like, doing random social proof about other companies, other people I don't know and say, "Hey, this, this connection of yours, this person you know and trust use this software right now daily. Just ask him about it." And because I have, I trust Harry, I know Harry, I'm like, "Yeah, Harry's a good guy. I know him. Just give him a call." Harry says, "Yeah, this is, this is legit." I'm like, "Okay, cool." (claps hands) Done. That, you can see, has the immediate opportunity of solving the problem we just created.
- HSHarry Stebbings
It does. It also makes it easier for incumbents and harder for startups, no? 'Cause it, to start that flywheel, it's just way harder.
- GCGuillaume Cabane
I think there's always people like, like me, like you who are early adopters, who just love technology and will be trying new things for the sake of, of being explorers.
- HSHarry Stebbings
I agree. I, I, I, I love that. Uh, can I ask you, when we think about kind of different channels and getting to, say, 50 million in ARR, I always think to Kipp at HubSpot who told me that it takes one channel to get to 50 million in ARR and two to get to 100. From your experience here, you've been at Segment, you've been at Drift, is that the case? Is there much broader diversification? How do you think about that when you hear it?
- GCGuillaume Cabane
I mean, I've talked to Kipp, and, uh, I'm, I'm a big fan of HubSpot and what they've been able to build in the past couple years. No one, almost no one is HubSpot. (laughs) And they have one of the biggest addressable markets in the world, so almost any business needs a CRM, okay, or an automation platform. That's one. Second, their market is almost an oligopoly. There's Salesforce, there's HubSpot, maybe there's, like, Freshdesk, Zoho. That's about it. There's, like, maybe th- less than five companies that are, like, that are decent when you look at the entire suite, okay, which is extremely rare given the size of the market, that is of so few players in that market. All right? And, like, you need to have one. It's not that you can say, "No, I'm good." Like, "I don't need a CRM. I don't need a marketing op-..." You need to, so you will buy one of those, okay? Which is why it's a great company, it's, it's, they're doing so well, right? Almost no one has the combination of those market attributes. And I have never seen companies I've worked with, neither at Segment or at, you know, Drift, Gorgias or Ramp, and not in one of the companies I engage with where we, we were able to get to 50 million on one channel, not one.
- HSHarry Stebbings
Okay, so the question I have from founders is like, "Hey, this channel's working. It's working well. Uh, how should I think about the other channels?" And I'm normally saying, "Hey, don't get too cute. Facebook ads is working. Just pummel it, keep going, keep going until it doesn't work." Obviously, you wanna transition quickly, but don't be too cute too early. Do you agree with that or do you think actually diversification is important early?
- GCGuillaume Cabane
I'm in between. I'm in a, in business, I don't like to be surprised. And what that means is, um, if I'm gonna raise a series A or B, whatever your stage is, um, I wanna know, like, can I actually spend that money? Like, do I have, like, more than, like, hypothesis that I know how to spend that money? And so I recommend increasingly as you go through the stages to just test the CAC and the depth of those channels. I'll give you one example. Let's, let's take how I get paid on, on, on Facebook as, as you named, right? Do you really know what's the depth of that channel? No, right? How do you do it? I recommend companies to 2X the budget every week until it flatlines. Just do it for, like, four weeks, six week. It's not gonna, like, burn your budge- your entire, like, capital, right? But just 2X on week two, 2X on week three, 2X on week four. Very quickly, you're gonna find out where the, the, wh- wh- where the cap is. All right? You're gonna find you're not getting more, like, engagement, more clicks, more revenue, and then you can scale back and can tell your board, "Hey, board, we've tested. We've pressure tested the depth of that channel, and we know how much money we can spend on that channel." And you then go and do the same on every other channel. I did the same for me
- NANarrator
(murmurs)
- GCGuillaume Cabane
... on emails. I was like, "What's the number, maximum number of emails somebody can receive before there's, like, negative outcomes?" Is it, like, once a year, once a quarter, once a month? Let's just take a small sample, and let's chook-chook-chook-chook-chook go down, and, like, obviously, like, there's, like, diminishing effects, right? And because, like, this has not been published, I can't tell actually the outcome, but you should test it. Test the same way in every channel and then go back to your board and say, "Hey, we know the depth of email. We know the depth of, like, paid. We know the depth of every other channel. This is why we need to raise money, and this is how we can spend it."
- HSHarry Stebbings
How do you know when you've truly hit it? Is it that obvious? Is that gray? Do you know what I mean? If we're doing p- Facebook and it's like, "Yeah, we're a couple of percent less effective," is that the depth? Or is it-
- GCGuillaume Cabane
Well, just 2X it again and you'll find it.... like, if- eventually, you won't be able to spend more money. There's a point where you can't spend more money or you're spending it more and not getting more engagement. All right? If you're not sure, 2X it again.
- HSHarry Stebbings
I think people worry about destroying a channel too quickly. Do you know what I mean? Like acceleration-
- GCGuillaume Cabane
Take a sample. Take a sample of- take- take a randomized sample of the audience. If you can't do that, it means your target market is too small and you should be doing ABM. You're not doing any high-scale stuff. If you have, like... Let's take Gorgias again. Like, if you have, like, 200,000 companies, can't you take 5,000 companies, 2,000 companies? Like, the smallest audience, uh, Facebook will let you have, like 2,000, and like, really increase the budget there. If you burn those 2,000 out of 200,000, burn 1%, and you've learned the outcome of the channel, is it not worth it?
- HSHarry Stebbings
I think it is. (laughs)
- GCGuillaume Cabane
You really-
- HSHarry Stebbings
It totally- it- it- it totally is. I- I- I hear you here and I'm like, okay, so we think about the depths and the returns driven, and that converts to sales. And I think the question I have is, you know, I spoke to Fabricio before the show, and he said that you're the master of aligning marketing KPIs to dollars. You mentioned it earlier with Evelyn in terms of that dollar. Can you just help me understand, how do you approach marketing KPIs to dollars? And just take me through it. Imagine I'm a founder trying to understand.
- GCGuillaume Cabane
Reject any KPI that is vanity. You don't care about traffic, you don't care about, um, any of those KPIs. The only thing you care about is weight adjusted pipeline dollars. So all of those KPIs, engagement KPIs, your growth team, your marketing team needs to convert them based on lead score, based on company size and stage, your c- usual close rate, what there. Every single logo that engages with your brand at any stage needs to be converted into a dollar figure. We then sum those and you have a pipeline by stage that is not just for your sales team, that is also for your marketing team. Your marketing team has a funnel, you know, from like TAM to MQLs, going truly down to SQLs, then over to your sales team. They should have a pipeline figure per stage. And based on the- your conversion rate, you should give them goals at every stage of that pipeline. The key learning is, what has worked for sales also works for marketers. If a marketing candidate that you're looking to hire does not own a pipeline figure, that is the wrong candidate, my friend.
- HSHarry Stebbings
Can I- can I ask you? A pipeline figure, I can give you bullshit though. I can feed your pipe with a lot of low-quality leads-
- GCGuillaume Cabane
Mm-hmm.
- HSHarry Stebbings
... and it's-
- GCGuillaume Cabane
Then you don't have a good lead score. Then your lead score is bad. If your lead score is good and your pipeline is adjusted with the lead score, that should not happen.
- HSHarry Stebbings
Talk to me about that relationship between lead score and pipeline and how founders-
- GCGuillaume Cabane
Mm-hmm.
- HSHarry Stebbings
... can and should use this.
- 55:33 – 1:08:55
Hiring Strategies for Growth Teams
- GCGuillaume Cabane
you're not gonna get the revenue.
- HSHarry Stebbings
(laughs) I love that. Okay, so no, listen, I agree. So it's, uh, this kind of couple of million narrow, we've got enough data, we've got a couple of channels maybe working. Okay. G, you're an, you're an angel, you're an advisor to my business, I'm the founder, we're in that stage. Should I hire a senior person who's got years of experience? Should I hire-
- GCGuillaume Cabane
God, no. Stay away from that. (laughs) Uh-
- HSHarry Stebbings
So who should I hire?
- GCGuillaume Cabane
... that is a former founder. You know what the good thing about start-ups? Most don't make it out. Like nine out of ten, like, die. That doesn't mean it's a bad founder. They... There's a million reasons for the start-up not to have, to have, like, survived, and most of the founders are amazing individuals. They know how to bounce back. They know how to pivot. They are focused on long-term outcomes on revenue. All of those things that are said are exactly the key attributes you want for somebody you, the, leading your growth team. If you don't have a former founder, go for somebody from, like, a, um, consulting background, one of the, you know, big five. Somebody who's really focused on, like, on data, on precision, on running hypothesis, and on running a process. Growth is about running a process, not about, like, being super, like, smart. It's running a process.
- HSHarry Stebbings
I get you in terms of running a process. So we hire a former founder, probably one that hasn't worked out in the earlier stages. Great. Uh-
- GCGuillaume Cabane
Yes.
- HSHarry Stebbings
... is that it? Do we just hire one at a time?
- GCGuillaume Cabane
You want, for a growth team to work out, first, it exists after your product team, obviously, otherwise you would, you, you don't have a product. Generally, after your first few marketers, right, who are doing the traditional campaigns, the, the core campaigns, and you're gonna create this startup-in-the-startup, this, this team-within-a-team, um, and they're gonna take risks, as we talk, as, like, a VC. Okay? What do they need to be able to do that? They need to be able to build and to ship. That means you have this former founder who's like the head of growth/PM running the process, you're gonna have at least one engineer, maybe a data analyst if the founder can do it, but u- usually, the, the head of growth is the analyst in the early days. So you have, like, head of growth, engineer, and one marketer/copywriter. That's, that's your team.
- HSHarry Stebbings
Okay. That's the team. Now we know that as a structure, if you're advising me on hiring for that team, I've never done this before, how on earth do I structure the hiring process for that first growth hire?
- GCGuillaume Cabane
You want to ensure that they can look at your data, which means you need to give them a take home that has some of your data.
- HSHarry Stebbings
Hm.
- GCGuillaume Cabane
I would recommend hiding a few Easter eggs in there, some outliers.
- HSHarry Stebbings
Mm-hmm.
- GCGuillaume Cabane
To see, have they looked at the data? Have they found the Easter eggs? And do they question those, like, the dataset and those lines? That's the first thing. Okay? And I always-
- HSHarry Stebbings
When you say, Ju- just, just so we're clear, when you say, like, "Easter eggs," this is like an anomalous number that is outside-
- GCGuillaume Cabane
Yes.
- HSHarry Stebbings
... of the pattern, right?
- GCGuillaume Cabane
Yes, absolutely. I will f- I will, I will put a couple of people, a couple of, like, logos that have, like, um, you know, m- very weird, you know, retention, revenue, acquisition, stuff like that, right? Behavior, things like that. C- c- do they see that, all right? If they don't see it, like, you g- like, can they really eyeball the data, uh, datasets? That's the first thing. What's their approach to risk, to making bets and coming out on top? How do they win? When they f- face interesting challenge, what's their approach? One of the key questions I always ask that is, um, really out there, people don't expect it, I ask them, like, "Have you played video games?" 'Cause I used to be a gamer before I had kids, all right? And they'd be like, "Yeah." Sh- like, most people have played games at one point in their life, right? I'm like, "Cool. Tell me about it. Like, what's the platform? What's the game? What's your strategy? How do you win?" All right? "Teach me, indulge me. Tell me about the rules, and tell me how you win. What, what makes a really good player in that game?" All right? Do they understand the rules, and can they think outside the box? 'Cause that is growth, is understanding the rules, thinking outside the box, and making interesting, valuable bets, risk a- adjusted bets. Again, as we said, the risk adjusted works for your pipeline, works for the growth, uh, experiments, works as a VC. It's the same logic. So I'm looking to find, are they reasonable risk takers?
- HSHarry Stebbings
How many of the candidates do you find can actually do that? I'm thinking of mine now, and I'm saying, like, you know, I played FIFA a lot when I was younger with my brother. I don't know, like, what makes me win, uh, particularly, and, like, there's very different styles. It's not like chess or a kind of formulaic game where maybe it's more black and white on what makes someone win. Do you see what I mean? So I'm like-
- GCGuillaume Cabane
Hm.
- HSHarry Stebbings
... "That's hard."
- GCGuillaume Cabane
Have you played a board game, like StarCraft?
- HSHarry Stebbings
Uh, I played Monopoly. What makes you win-
- GCGuillaume Cabane
What's your strategy?
- HSHarry Stebbings
... in Monopoly is survival.
- GCGuillaume Cabane
Okay.
- HSHarry Stebbings
Longer than anyone else.
- GCGuillaume Cabane
Okay. Good. So how, how do you, how do you do that? Like, what's your approach to surviving? How do you ensure you can survive? What's your strategy there?
- HSHarry Stebbings
I stay at the table when everyone else goes for dinner. (laughs)
- 1:08:55 – 1:12:42
QuickFire Round: Unique Growth Experiments and Techniques
- HSHarry Stebbings
That sound okay?
- GCGuillaume Cabane
Let's go.
- HSHarry Stebbings
What's your craziest experiment?
- GCGuillaume Cabane
Hot coffee cappuccino on Segment's, uh, homepage.
- HSHarry Stebbings
Talk to me about that. What happened here?
- GCGuillaume Cabane
It worked. We, when you came to the website, instead of asking on the chat like, "How can we help you?" Which is lame and not unique, we said like, "How would you like your coffee?" Right? And because it was like a reverse IP running, pre-COVID, we knew what the HQ was, the company domain, and you know, the city, and we would just ship coffee to you. We just asked for your first name. We knew you were Harry. Boom, ship a cappuccino to you. And while you were waiting for the cappuccino, that was run by Postmates, we would say, "Hey, do you have 20 minutes for a demo?" And of course you'd say yes.
- HSHarry Stebbings
And then it came to them at the end.
- GCGuillaume Cabane
Mm-hmm. Of course.
- HSHarry Stebbings
That's pretty good.
- GCGuillaume Cabane
Fif- $20.
- HSHarry Stebbings
And it worked?
- GCGuillaume Cabane
$20 for a demo? Good CAC.
- HSHarry Stebbings
It worked well?
- GCGuillaume Cabane
Yeah, it worked well.
- HSHarry Stebbings
That's smart. Uh, what tactics have not died a death over the last five years? What is strong as ever?
- GCGuillaume Cabane
Email. Outbound email. People have called the death of outbound email every year, and it's still s- going strong.
- HSHarry Stebbings
What tactics have totally died a death?
- GCGuillaume Cabane
Uh, the phoenix of tactics is, uh, cold call. Cold call was dead from like 2012, 2013, to 2022. And with LLMs now, and tools like Orum, cold call is back big time.
- HSHarry Stebbings
Huh. What would you advise a new growth leader starting a new role today?
- GCGuillaume Cabane
Uh, have strong connections to learn what others are succeeding. The key to success in growth is testing and learning. And so if you can outsource the cost of learning to other teams, either through advisory like I did in the early days, or through like good relationships, you are saving a ton of effort and capital. And you can then deploy those learnings through your business and look like a fucking genius.
- HSHarry Stebbings
(laughs) What's the worst strategy you've done, or worst growth experiment you've done which did not work, it sucked?
- GCGuillaume Cabane
Building bundles. Like, bundles are a terrible idea. When you start bundling different features, different products together into one, the size of the audience that cares about the entire bundle is smaller and smaller as the bundle increases.
- HSHarry Stebbings
What would you most like to change about the world of growth?
- GCGuillaume Cabane
The fact that it's not independent. Growth is not an in- independent function. It has to, um, wall up to marketing, or product, whatnot, and that, that creates conflicts which eventually leads into death of growth teams at late stage. There's almost no company at a late stage with a growth team, say, for like Facebook, Shopify, and a couple others.
- HSHarry Stebbings
Mm-hmm. Final one for you. We- we've spoken about Ramp, we've spoken about Gorgias.
- GCGuillaume Cabane
(laughs)
- HSHarry Stebbings
What growth strategy have you been most impressed by in another company?
- GCGuillaume Cabane
The one thing I've never had the opportunity to do myself and I always, like, admire is the typical virality. Like, think of the Dropbox of the worlds and like, you know, prosumer. Think of Zapier. I know those companies, I know the leaders, I know the, I know how they pull it off. And the combination for huge market are very viral product, very sticky, viral product, good products creates opportunities unlike no other. The ability to have people, customers bring other customers to n- of, to no cost to you? That I just wanna like sit back and relax and see the customers sign up. Man, I wanna be in that in the, in my beach chair and see that.
- HSHarry Stebbings
(laughs)
- GCGuillaume Cabane
And for me it's always been like hard work, and I always imagine like Darius, you know, at, at Dropbox and other places thinking like, "A million people just invited themselves last month. How cool is that?" Yeah.
Episode duration: 1:12:42
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