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Raman Malik: Inside Perplexity’s Growth Machine: What Worked, What Did Not Work | E1226

Raman Malik is the Head of Growth at Perplexity where he is responsible for growth marketing, onboarding, activation, retention, and monetisation. Prior to Perplexity, Raman, was an early member of the growth team at Lyft and joined Perplexity earlier this year after his own startup journey. ----------------------------------------------- Timestamps: (00:00) Intro (01:22) From MBA to Startup Founder (02:43) From Founder to Team Member at Perplexity (04:17) What is a Head of Growth? (05:56) When to Build Out a Growth Independent Function (08:25) Is Growth About Micro-Optimizations or Big Swings (10:35) The Role of A/B Testing Today (14:55) Balancing Hitting Growth Metrics with Ensuring Real Value (17:35) Lessons from Partner Programs (19:17) Mistakes in Acquisition (21:50) What Good Retention Is? (25:44) The Biggest Needle-Mover (29:27) What CAC-to-LTV Metrics Were Crucial (32:13) Why Perplexity Does Adverts? (37:09) About Brand Marketing (39:54) The Biggest Challenge with Paid Acquisition at Perplexity (43:31) What Channel Could be Better (45:34) Hiring Growth Team (49:20) Interview Questions (52:30) Hiring Mistakes (53:49) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Perplexity’s Head of Growth: 1. Inside the Perplexity Growth Machine: - What have been the single biggest needle movers in the growth of Perplexity? - What has not worked? What have they learned from that? - How have partnerships driven growth? Lessons on what makes a good vs bad partnership? - Why does Raman think paid acquisition is a drug and Perplexity do not do it? How does Raman -advise other founders when it comes to paid acquisition? 2. Acquisition, Retention, Churn: Mastering the Basics: - Why does Raman think that brand marketing is BS? When does it become more important? - What are the simplest things startups and product teams can do to drive retention up? - How do Perplexity count an “engaged user”? What metric suggests they have a retained user? - What is the good, the bad and the ugly when it comes to A/B tests? 3. How Perplexity Built a Growth Machine: - Why does Raman advise all founders to hire more former founders? - How does the way you manage founders turned employees differ from employees who have never been founders? - What is the must under appreciated growth channel today that has worked for Perplexity? - What growth channel has been the biggest flop for Perplexity? What did Raman learn from losing money on the channel? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Raman Malik on Twitter: https://twitter.com/ramanrmalik Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #RamanMalik #Perplexity #Google #founder ##hiring #futureofwork #Lyft #openai #venturecapital #SamAltman #BillAckman

Raman MalikguestHarry Stebbingshost
Nov 15, 20241h 0mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 1:22

    Intro

    1. RM

      We can go out and scream from the mountaintops about Perplexity, but it is a lot better when someone else is telling you to use it, or it is being bundled into an existing product of yours. You need someone to hear about your product three to seven times before they're gonna give it an honest trial. If I can get a user, through our Perplexity specifically, to three queries in that first session, well, now I know I'm really onto something. Everyone in growth is looking for alpha. There's no middle ground if you're not first. It literally just means your only other option is to just be a lot better than everyone else.

    2. HS

      Ready to go? (upbeat music) Ramen, it is so lovely to finally do this. Thank you so much for joining me today.

    3. RM

      Thank you for having me. This will be so much fun.

    4. HS

      Dude, I wanna start with, you mentioned before you were brought up in Alabama. Like, how the fuck does a kid from Alabama-

    5. RM

      (laughs)

    6. HS

      ... get to being head of growth at Perplexity? Like-

    7. RM

      Oh, god.

    8. HS

      ... not obvious.

    9. RM

      I, I have no clue. I have no clue. I had a great family that, that, uh, really pushed all of us to get out of Alabama to go do cool stuff and, you know, here I am in San Francisco working at a really, really fun company.

    10. HS

      I love that. But you were in an MBA program, and

  2. 1:22 – 2:43

    From MBA to Startup Founder

    1. HS

      a lot of people in MBA programs who wanna move into startups. You founded a startup. What happened there? What's your advice to others in MBA programs wanting to get into startups?

    2. RM

      Yeah. MBAs have such an interesting reputation in tech. Most people just absolutely hate them. I personally, even though I left a year early in the MBA (laughs) , I had a great experience, right? Like, I got there. I came to tinker with ideas. I never took an interview. Started playing around with all my different ideas. You can get funding from the school, so it's essentially like a pre-pre-seed, and you're just tinkering full time. And investors start, conversations start flowing, and it became very clear, like, I'm gonna learn a lot more, I'm gonna have such a better experience if I just go full steam ahead on this idea, and, and that was it. I mean, it was, it was amazing.

    3. HS

      Would you recommend MBAs to others?

    4. RM

      I think MBAs make a lot of sense for people who are trying to break into a specific industry. Like, if you are trying to break into private equity, or you wanna be a PM at Amazon, or go into McKinsey, then MBAs have, like, your preset path, and you just follow your guidelines. You have a community to work with and prep for, and you'll hopefully get in. So it's a very, like, expensive bridge to breaking into one of those fields. But for, for many people, that's an incredibly valuable, valuable

  3. 2:43 – 4:17

    From Founder to Team Member at Perplexity

    1. RM

      journey.

    2. HS

      Totally is a very valuable journey. It's, uh, uh, the other kind of difficult journey that you make is from founder to Perplexity. That's a different thing when you run your own shop to when you join a team. Can you just talk to me, how did that happen? Does Arvin come and say, "Hey, like, we need a head of growth. You wanna come?" Like, just take me to that.

    3. RM

      You know, I go to business school. I go take a swing for three years and just grinding up against startup life, and there's nothing easy about it, right? Like, when you're, when you're a founder that, you know, month after month, pivot after pivot, nothing is moving, there is nothing more demoralizing than, than those moments. And, and, you know, when we, when it came down to the final straw, we end up shutting down, I'm chatting with different companies, I'm chatting with Arvin, Dennis, Johnny, Dmitri, everyone, and it became very clear, like, this is a company that is moving crazy fast, is having so much fun. I'm gonna go do that. But it's different when you're going from the founder's seat, right? You know, y- one, you are now well aware of how freaking hard startups are. Your ego is bruised, right? You just got your ass kicked, so it's a total adjustment in terms of framing. And then you're basically de-scoping yourself, right? I, I was... I'm brought on to just drive growth. So, you know, founders enjoy the variety of, "I gotta go work on 100 things, and I gotta steer the ship," but now you're hyper-focused on, "Okay, I am here to drive growth. I am de-scoping myself just to go do an excellent job at this." And that's-

    4. HS

      Mm-hmm.

    5. RM

      ... an adjustment as

  4. 4:17 – 5:56

    What is a Head of Growth?

    1. RM

      well.

    2. HS

      Okay. So you're here just to drive growth. Head of growth, it kind of means so many different things. It's a very ambiguous term.

    3. RM

      Yeah.

    4. HS

      How do you specifically define head of growth?

    5. RM

      I see growth as in- independent function that bridges product and marketing. Okay? So there's growth product, and there's growth marketing. Growth product, let's start there, is a product team, engineering, design, data science all working together. But your core product, the product you're obsessing over, is the user funnel. So acquisition, activation, retention, monetization. So growth is not just about let me fill the top of the funnel with new users. It's about getting those users to become retained, to develop into power users, so that you can eventually monetize them. So you just obsess over that journey that facilitates that user life cycle. That's growth product.

    6. HS

      Okay. That's growth product, and then we've got growth marketing.

    7. RM

      Growth marketing, your goal is the exact same as the growth product team, right? Drive that user funnel from acquisition down to monetization. But your tools are just different, right? You're not taking it... You're not approaching it from a engineering, design, or data science angle. Your tools are marketing channels. They're life cycle communications. It's community. It's marketing campaigns. All these things need to live closely together, right? Like, I can't work on an onboarding experience without a product team iterating on every flow and without the marketing team thinking about copy, thinking about email drip campaigns. Everything comes in as one cohesive unit to bring this funnel to life.

  5. 5:56 – 8:25

    When to Build Out a Growth Independent Function

    1. RM

    2. HS

      Okay. I have so many questions for you, uh, that I'm writing in my little notebook here.

    3. RM

      (laughs)

    4. HS

      Uh, I used to write on my hands, and then I b- got promoted to a notebook-

    5. RM

      There you go.

    6. HS

      ... for always being EA. Um, so my, my question to you there is these are quite, um, built-out teams. Like, that is full resources and a lot of resource allocation. When is the right time to build out...... a growth-independent function?

    7. RM

      It's, it's gonna be very dependent on type of company, on stage, on founder makeup, and so on. The easy, the easy thing to say is post-product/market fit, but, like, what does that even mean? I-

    8. HS

      But, like, not re- not really do because, like, that, that team costs millions actually for growth pro-

    9. RM

      For growth...

    10. HS

      For, yeah, for growth, growth product and growth marketing, and then what they're gonna need on top of that. If you are at, like, two, three million in ARR and got product-market fit, doth butter know fucking parsnips. You need 25 million in ARR for that team.

    11. RM

      Yeah. But, I mean, I think as soon as you see that you have early signs in retention, like, we're seeing, like, you know, if you see 30% retention in month three or four, you have the kindling in your fire where it is now worth it to go put gasoline on it. Go make that investment. And it doesn't have to be, "We're gonna go turn on marketing channels and spend a bunch of money." It could just be, "Okay, can we get that 30% retention to go to 40%? Can we make it really easy for... to convert all these users through the funnel?"

    12. HS

      So when you were brought in, did you have this team built out or did they say, "Hey, we want you to build it out yourself"?

    13. RM

      It's a very flat organization, so there was nothing built out, but there were resources to pull from, right? You, you know, there are, there are engineers that are ready to jump in on, "Okay, let's go hack onboarding," or, "Let's go really iterate on deeper retention," or, or anything like that. But... And it, it depends on when you are starting, but a lot of times it's, "Well, what even exists today?" And your first few weeks stepping into growth is you're just turning over stones. You're trying to build the map of the world. "Okay, what's happening in acquisition? What's happening in engagement? What's happening in monetization?" And usually when you ask those questions, you don't get any answers and you just get 100 more questions that you have to now go figure out. So then your job becomes, "Let me build the right infrastructure so we can actually measure and understand the world," and that's where you start getting into engineering logging, attribution, do we have first-party cookies,

  6. 8:25 – 10:35

    Is Growth About Micro-Optimizations or Big Swings

    1. RM

      all of that.

    2. HS

      Is growth a game of micro-optimizations where you are moving from 30 to 35% retention on D90?

    3. RM

      Mm-hmm.

    4. HS

      Or is it big swings on a new product that could change the game?

    5. RM

      I think micro-optimizations are seriously underrated. I think anyone that has, like, built a growth model for their company... So, you know, you, you... Imagine you, you open up an Excel sheet, okay? You have new users, you have retained users, you have resurrections, and you have churned users, right? New users plus retained users, plus resurrections, minus churned users, that's your weekly actives or monthly actives, right? And then if you assume, like, a new user growth rate or a retention curve, you can now play around with, "Well, if I increase retention by 10%, what happens to my weekly actives? What happens to my monthly actives?" That 10% small change in retention or in new user activation, you see the entire water level of your active user base just increase. Like, that small micro-optimization just raised the entire water level of the company. And so that's huge. Like, I'm gonna go after that if the opportunity is there. To hedge that, though, micro-optimizations have diminishing returns. At some point, I'm not gonna get to be able to squeeze out an incremental 10, 15% without a lot of wasted experimentation time. And that's why, like, my rule of thumb is once a quarter we have to be taking at least a couple massive swings, right? A big new feature, a big marketing campaign. It has to be high risk. It has to be high reward. I have to be able to stand in front of the company and say, "I'm gonna do something," and be willing to fail there, and then you de-scope it down.

    6. HS

      What should your success rate be on those big swings?

    7. RM

      The... It, it depends on how much time you're willing to put into it. I'd say 25% would be pretty great on these big swings, so maybe, like, one a- once a year, we have just a banger campaign or banger new feature that is now really driving growth or really opened-

    8. HS

      Mm-hmm.

    9. RM

      ... up a new audience for us. That is, that is

  7. 10:35 – 14:55

    The Role of A/B Testing Today

    1. RM

      huge.

    2. HS

      We said about optimizations, about kind of squeezing as much value out as we could, a cool way to do that is in A/B testing, determining what works, what doesn't, and then doubling down. What is the role of A/B tests today in your mind in growth? How do you think about that?

    3. RM

      You know, I'm coming from a data science background. I'm pretty biased here. Uh, there's a good, a bad, and an ugly. The, the good is we, we are using A/B tests to understand impact, to understand how every metric changes. Are we accidentally bringing down certain metrics? Do we really understand what is incremental and what is not incremental? That is, like, a well-scoped A/B test teaches you what you should work on next. It adjusts your direction. It adjusts your cadence. A bad A/B test is poorly scoped. You're not gonna get any information out of it. It, it's, it's a messy thing with a low minimum detectable effect. You're gonna run it and you're not gonna get anything out of it. You just wasted a week of your time. And then the ugly, the ugly is, "I'm running an A/B test so that I can put something in my performance review about a number I moved, or I can, like, say something to my manager." And, and you see that. As companies get bigger, right, we're running A/B tests just to, like, be able to say, "Oh, I increased activations by 12%."

    4. HS

      My question to you is, is that fair? And do you think actually good PMs need A/B tests because it is very clear when it's working and when it's not?

    5. RM

      Yeah, I, I think if your goal as a PM is to optimize direction, are we working on the right thing, are we poking at the right part of this product that can drive impact, an A/B test give you a quick response to it. I think... And I think that is, like, core to understanding are we working on the right thing, are we moving fast enough, are we really moving the needle on this? That being said-You should go into an A/B test with a pretty strong confidence of what's gonna happen, and this is where our, like, intuition comes in of, like, "We're running this, and, uh, here's what I think is gonna happen. I think we're really gonna move this metric, but we might see that other metric go down a bit, and that's what we need watch out for." If you don't have that intuition, then you're just flying blind.

    6. HS

      Have you ever had an A/B test mislead you?

    7. RM

      A lot of times you see A/B tests with mixed results, so... And that, those are the trickiest ones to navigate. So let's say we're working on, okay, I wanna get a user to hit their, you know, fifth query in the session, then I'm gonna show them a sign-in opportunity. Well, I'm showing a sign-up opportunity, I'm now juicing activations, great, but a lot of people saw that sign-in gate and they hated it. They were like, "Screw this, I'm out of here," and now I'm hurting query volume, I'm hurting searches happening in Perplexity. So now, I have two different metrics to, to hold on to. How do I value those two things down the road? That is where it gets really, really fun for some of us, where it's like, "Okay, well, how, how do we value this?" Will that activated user retain? And over time, those retained metrics, if I think about this on a 30-day timeframe or a 60-day timeframe, will make up for that initial loss in query volume. I'm not gonna go run that A/B test for 60 days and then come back and tell the team, "Okay, we finally made a decision." You kinda have to make a decision right there, or figure out how to optimize and, like, protect that downside.

    8. HS

      You said there about, uh, getting to your fifth query. I always think to Facebook in this case, where they really wanted you to get to, like, I think it was five friends and then you had a much higher likelihood of retention.

    9. RM

      Yeah.

    10. HS

      Do you have a metric internally that is designated as like a, "Hey, post this, we have a much higher likelihood of retention"?

    11. RM

      Yeah. I call these milestone metrics. So can we go take anyone who's retaining at 30, 60 days and then look back into their first couple sessions and say, "Okay, what did they do differently? What is unique about their experience?" And from that, can we establish a working metric? It's not perfect, right? 'Cause it's not deep retention, but if I can get a user for, on Perplexity specifically, to three queries in that first session, well, now, I know I'm really onto something, 'cause that is what a lot of great people do. It's enough time in product where that user now understands the value of Perplexity and they're gonna more, like, there's a high likelihood that they're gonna come back and retain.

  8. 14:55 – 17:35

    Balancing Hitting Growth Metrics with Ensuring Real Value

    1. RM

    2. HS

      You said there, two to three in the first session. I had Alex Schultz, one of the OGs of growth, on the show-

    3. RM

      Yep.

    4. HS

      ... from Meta, and he said that the biggest problem of growth is that every goal or metric goal can be gamed. And if you-

    5. RM

      Totally.

    6. HS

      ... want that one, we can put in a load of recommended searches that you click, which technically get there, but doesn't actually mean you got what you wanted. How do you think about setting the right goal if every metric can be gamed?

    7. RM

      One is monitoring. Does this still correlate down the road once we're done with gaming it, once we're done with tinkering with it? And if it, if we're seeing it, that correlation start to break, well, okay, I'm, I'm, I'm not being honest with myself around if we're actually helping retention here. The other thing is to, to take a rounded approach. You can't just stare down one metric. I need to stare down number of queries, but also time in first session. Did that first-session timing hit that 10-minute period? Uh, and not just-

    8. HS

      Why would you want that? Don't you want shorter time in because it means time to value is super high?

    9. RM

      Or you had so much great value early on that you're now rabbit holing into Perplexity. Harry, you mentioned a, a query you and your family were putting in yesterday, last night-

    10. HS

      Yeah.

    11. RM

      ... what if, like, if that can lead to a bunch of follow-up questions, that's awesome. You're now deep in the Perplexity experience, learning and exploring, and that's great for us.

    12. HS

      I'm not sure I want to explore that query much more. (laughs)

    13. RM

      (laughs)

    14. HS

      For ve- if everyone listening, it was the query of how many times does a human fart in a day, and so your recommended searches were, were not that attractive, bluntly, to me at dinner-

    15. RM

      (laughs)

    16. HS

      ... but I appreciate the sentiment entirely.

    17. RM

      Thank God that AI exists so we can answer that.

    18. HS

      Uh, thank God. Um, th- my question to you is, when we think about acquisition, what have been your single biggest lessons on effective acquisition since joining Perplexity, and what does Perplexity's acquisition makeup look like?

    19. RM

      AI companies have a ton of curiosity traffic right now, which is awesome. Anyone who launches something that shows a little bit of magic or has a magical demo, they are going to get traffic, they're going to get quick usage. All of our growth, most of our growth has been organic word-of-mouth, and that's, um, like, and we're, you know, two years in, and we're still riding this incredible wave of organic traffic, and that's amazing. That's the best channel you can ever have. So the question for us is, how do we keep nurturing that? How do we keep this organic magic still happening?

    20. HS

      What does the acquisition makeup look like now? Word-of-mouth, is that 80%?

    21. RM

      Word-of-mouth, yeah, uh, about 80%. It's gonna depend on priority, countries, or international. We do a lot of big partnerships to drive distribution.

  9. 17:35 – 19:17

    Lessons from Partner Programs

    1. HS

      So we have 20Growth, which is a WhatsApp group with, like, the biggest growth leaders in the world.

    2. RM

      Yeah.

    3. HS

      I'd love to have you in it after this. I'll, we'll chat about it. Um, but I said like, "Hey, uh, uh, you know, I've got you coming on the show." The most popular question was aggressive partner deal strategy. LinkedIn, Xfinity, Lenny's Podcast, all give away a year for free to paid members. What have been your biggest lessons from those partner programs?

    4. RM

      They are incredibly effective at driving distribution. You, we can go out and scream from the mountaintops about Perplexity, but it is a lot better when someone else is telling you to use it, or it is being bundled into an existing product of yours. That's gonna drive a lot more trial. We have a phenomenal partnerships team. They are absolute sharks.

    5. HS

      Does that change the unit economics quite a lot though?

    6. RM

      It, to a certain extent, but that's acquisition cost, right? We're willing to trade off...... a month of Pro. 'Cause if you don't use Pro, it's pretty variable, right? If you're not using Pro, we're not losing money on you. But if you are using it, well, now we're capturing you as a user. You're really starting to understand why Perplexity is magical. And then the game becomes, can we convert you to that paying user after?

    7. HS

      Mm. I get you totally. Okay. No, I get that. What partnership do you not have that you'd most like to have?

    8. RM

      Ooh. I mean, we- (laughs) we had some pretty great partnerships. I think I'd- I'd- I'd think about more audiences, so what audiences do I wanna reach, and what partnerships can we get to there? So, I think a lot about the student audience. And so there's some partnerships in that student world that I really wanna break into, uh, to help drive distribution within students at scale.

  10. 19:17 – 21:50

    Mistakes in Acquisition

    1. RM

    2. HS

      Can I ask, what have been your biggest mistakes in acquisition that you've learnt from as a result?

    3. RM

      I mean, there's so many. If we're not making mistakes, we're not learning fast enough. The- I think I came in really interested in influencer marketing, and then really wanting to test this channel. Creators, how do we work with creators to share Perplexity? And I totally underestimated the amount of effort it is to work individually with creators on specific content, and making sure they get the right messaging. And Perplexity's not a simple concept to explain. Like me saying, "AI search engine," means nothing. And so to manage a bunch of these creators creating content, long-tail creators, it ended up, A, falling flat, and B, taking up a ton of time, ton of time. And so I think where we're moving very quickly is we'd rather work with fewer creators and just develop a really good relationship with them.

    4. HS

      Can I ask you, when you came into Perplexity, um, I spoke to Aravind before the show, and he said that actually you very quickly diagnosed this is not an acquisition problem. This is a retention problem. Can you just take me to what you saw and set the landscape there?

    5. RM

      So if you come in, you turn over all the stones, you're trying to get a sense of, through this end-to-end funnel, from acquisition down to monetization, like, "Where should I spend my time? Where is there- the biggest opportunity to drive growth?" And, you know, we had Dmitry and the business team running these big partnerships. We had tons of traffic coming in from the top of the funnel. My- my eyes went straight to that early activation rate, that week one, week two retention. None of it was bad. It was actually, like pretty healthy consumer retention, but that was where, if we can move that number early on at the top of the funnel, we're increasing the water level of all activated users and weekly actives. That's where I need to hang out. That's where I need to spend time.

    6. HS

      What's- what's a good activation rate?

    7. RM

      Very, very dependent on the company. So keep in mind, Perplexity, you don't have to sign up to start using it, and that's- that's amazing, right? It's- it gives us the opportunity to have quick trials. People can just put in their- a question and immediately see the value of it, but that logged out visitor to logged in activation rate is tricky to navigate. And so, like from that logged out experience, we- I'd love to push that into like the 30% of users are hitting my milestone metrics and- and we're converting them to- to signed in users.

  11. 21:50 – 25:44

    What Good Retention Is?

    1. RM

    2. HS

      On the retention side, bluntly, I think it's a bit murky. I think a lot of people don't know. Can you provide some clarity on what good retention is?

    3. RM

      So, consumer's hard, man. Consumer's really hard. And so what you wanna see is that- that retention curve stabilize. I think it was like by month six, you want 45% is really, really, really good. That's- that's the target, right? That's where we wanna push to. Especially when you're not a social product that has more of like that smile retention curve. You really need to figure out, how can we drive retained value and increase frequency to get to that 45-plus percent?

    4. HS

      So 45-plus percent on the seven? The-

    5. RM

      Oh, no. Month- month six.

    6. HS

      Month six, you want 45%?

    7. RM

      Yeah.

    8. HS

      (sighs) I don't know.

    9. RM

      Are you blown away by the drop-off amount?

    10. HS

      No, I think that's- that's pretty good. I mean, that's high. Speaker 1: Oh, yeah.

    11. RM

      But that- I mean, that's how you know you're providing value.

    12. HS

      I think Duolingo's 365, they're at 50%. And that's like-

    13. RM

      Yeah. And that's- that's 12-month retention at 50%'s world-class. And then they- the engine they have built is incredible. It's- it's a world-class way of retaining users.

    14. HS

      So we identify that retention's the problem then. We've got amazing acquisition. We've got these partnership teams that's driving top of funnel. What do we do then when we know retention is the problem?

    15. RM

      There are finite- there are finite ways to move retention. Um, one, you are setting up your milestone metrics. Okay? What correlates with deeper retention earlier in the funnel, right? So that three queries in your first session, and now how am I really trying to move that? But at a higher level, honestly, playing with mix shift, right? So, one, you can optimize channel distribution. So organic and referrals is always gonna have higher retention than paid acquisition and partnerships. Okay? That's- you know, because of so much of our growth is word of mouth and partnerships led, like we don't have much channel distribution optimization to make. Two is you can target different audiences. Perplexity is incredibly horizontal. My grandmother uses it, my doctor uses it, everyone uses it. So can I find different segments, different audience segments that have really high retention? And then can I specifically go after them? So I'm changing the mix shift of new cohorts to that new audience, which increases that retention for those cohorts.

    16. HS

      Which cohort has the highest retention and which has the lowest?

    17. RM

      Well, you see a lot of trial users that like are coming in from like curiosity traffic, like the weekenders that are putting in, you know-... how many times does someone fart in a day, that's little bit lower retention. If I'm here to solve a knowledge gap, like I'm using Perplexity for work, specifically, or I'm a student using Perplexity to find sources for a paper, that is really, really sticky retention, 'cause we are solving knowledge gaps for you. It's not just curiosity that we're bringing you.

    18. HS

      Okay. And so we have that. I, I saw Arvind on, uh, TV the other day. I can't remember what channel it was. You have so many CNNs, CNBC, MSN, bet- fucking all these ladders, ridiculous. Uh, but on some o- one of these channels, and he was like, "Actually, the amazing thing about Perplexity is the length of query is much longer than on Google." It's like nine words, I think-

    19. RM

      Yeah.

    20. HS

      ... was the average.

    21. RM

      Yeah.

    22. HS

      What does that tell you? And does that influence how you think about targeting acquisition retention?

    23. RM

      Totally, yeah, 'cause you- you're getting more information from the user around what they're looking for, which means we can provide better responses. We can reformulate that query to give you broader search results and then use that to, to drive our answer. The more information we have in that query, the better the result

  12. 25:44 – 29:27

    The Biggest Needle-Mover

    1. RM

      we can provide.

    2. HS

      What has been the single biggest needle mover? A- Arvind said that you drove the numbers up by 10 to 15%. What has been the single biggest needle mover in doing that?

    3. RM

      I think there, there've been a couple. We've worked on a lot of different things. One is can you mix shift audience? So we've done a lot of audience targeting-

    4. HS

      Mm-hmm.

    5. RM

      ... around specific high-quality cohorts. Two is can you mix shift platform? I don't want you just on the web app, or I don't want you just on the mobile app. Can I get you across multiple devices? And that cross-device conversion is really, really strong for retention. 'Cause now you're using it on weekends. You're using it during the day. We're everywhere. We're integrating into your life. Those are the two really big ones. And then you never can just underestimate driving product improvements is always going to dri- drive retention.

    6. HS

      What retention strategy did you think would have a big difference and didn't?

    7. RM

      I mean, and this is something we're gonna never stop banging our head against, but how we tinker with the messaging as soon as you land on Perplexity, it's critical for us that people understand that Perplexity has up-to-date data, that we show sources, and that is the inherent value of it. And so you're gonna see a lot of experimentation on how can we drive the message so people understand what they landed on and can figure out how it can drive value for them.

    8. HS

      So I, I quite like doing this game-

    9. RM

      Yeah.

    10. HS

      ... which is I did this with, um, Glen Coates of, of VP of Product at Shopify, and I basically went on Shopify's, uh, website when we were doing the show, and then I tore it apart, uh, literally, very embarrassingly, uh, uh, like-

    11. RM

      Yeah.

    12. HS

      ... how rude of me. Uh, and he was like, "Oh, this is awkward. It's live in a show." Uh-

    13. RM

      (laughs)

    14. HS

      ... and then he tweeted, like, a year later, "Following Harry's ridicule, he was right, and so I've changed the whole Shopify page." And I was like, "Yes!"

    15. RM

      Yep.

    16. HS

      Uh, but Perplexity is a free AI-powered answer engine that provides a-

    17. RM

      (sighs) (laughs)

    18. HS

      Oh dear, it's fucking hell. Did you swallow-

    19. RM

      It's more than you're giving it.

    20. HS

      ... a thesaurus? That provides accurate, trusted, and real-time answers to any question. What would you score that out of 10?

    21. RM

      I give us a six right now because-

    22. HS

      It's a bit, it's a bit wordy, isn't it?

    23. RM

      It's a bit wordy. Is that, um, is that our Google description, though?

    24. HS

      Mm-hmm.

    25. RM

      Mm, well, I mean there's some SEO optimization happening there as well.

    26. HS

      But when I go onto perplexity.com or .ai, it just comes up with, like, ask anything, discover anything.

    27. RM

      Where knowledge begins, yeah. And that, that's the fine balance, right? How much information do we need to slap in your face? How functional should it be? How brand-oriented should it be? This is where we spend all of our time tinkering in terms of what does someone need to hear to understand how Perplexity can help them and what are the key differentiation points for us that we need to highlight?

    28. HS

      So you can have it be anything? It's yours to own, just you are the one who decides. What would you have?

    29. RM

      (laughs) Uh, on, on the, the homepage?

    30. HS

      Yeah.

  13. 29:27 – 32:13

    What CAC-to-LTV Metrics Were Crucial

    1. HS

      a reason. Uh, the, so I, uh, want, J- Arvind also said, uh, "Usual growth PMs would ask for marketing budgets, they'd slam ads on TikTok and Instagram." He said that you first wanted to ensure that you had good CAC to LTVs before throwing money at acquiring users. What did you want to see in the CAC to LTVs that was important to you?

    2. RM

      I think there are a couple pieces here. One is, like, should we even be focusing on monetization right now, right? Do we, do we want to think about paid acquisition as a lever that, that needs to bring in users and then we see that payback happen immediately? And my answer early on was no. I, I think we just need to go focus on top of funnel new user growth and getting incredible sticky retention. And if we do that, guess what? We're gonna be able to figure out how to monetize these users. Whether it's through a consumer subscription, whether it's through ads, whatever it is, we're going to be able to figure out that monetization. So let's put down CAC to LTV for now, and let's, the only metric I'm gonna just yell about all day is our activation rate and our retention rate, and hold me to moving that.

    3. HS

      When did you decide that you were gonna have CAC to LTV as a more important metric?

    4. RM

      I, I think that's happening a little bit now. Like, you look at Perplexity, it is completely unoptimized for driving subscriptions. We want people to use-

    5. HS

      How c- how could it be more optimized?

    6. RM

      Well, w- we could add more gates. We could add more usage gates, where you run into, "Okay, I really wanna use Pro Search or File Upload more often." And, "Well, you know, you... As a free user, you only have three per day, but we know you love this, so why don't you consider upgrading to our Pro plan, where you get basically unlimited of both?" That was, those are the optimizations where we can tinker with the limits. We can tinker with how we are showing you upsells in that moment.

    7. HS

      CACs and LTVs are very variable. They, the CACs change so significantly over time with maturation of cohorts.

    8. RM

      Mm-hmm.

    9. HS

      LTVs, you need quite a lot of data for to understand true LTV. If you're advising a founder, how do you advise founders on how to think about CAC to LTV in your importance metric stack?

    10. RM

      It depends on stage, right? Do they have... Are they at the scaling period where it is now turn on these channels and drive growth? Because we feel really good about where we are in terms of retention, or any incremental work we're gonna do on trying to move activation or mve- move early retention is hitting diminishing returns. Then it's, "Okay, let's now go move our focus to attacking these channels and maximizing the efficiency of them, maximizing these CAC to LTV ratios." That's, that's when I think, "Okay, we're, we're seeing diminishing returns on retention. Now it's time to move to CAC to LTV optimization."

  14. 32:13 – 37:09

    Why Perplexity Does Adverts?

    1. RM

    2. HS

      Why do you do any paid? I know you do adverts and you do some paid, but you just have such a good acquisition flywheel. Jensen says h- you're, like, his favorite-

    3. RM

      (laughs)

    4. HS

      ... search tool. Like, why bother doing adverts?

    5. RM

      We, I mean, we don't really. We barely touch pai- paid acquisition is a total drug. It makes everyone feel good 'cause top-of-funnel numbers move up. And once you see those, you know, weekly activation rates, well, no one wants to see that go down. But it's going to underperform on retention, and maybe most importantly, it's most likely not gonna be incremental. You know, I, um, I basically started my career on the paid acquisition team at Lyft, right? Spending millions and millions of dollars on these channels. And I'll never forget this, our head of growth at the time was basically just like, "Go turn off every single paid channel for new passengers." Okay? And like, we're spending... Like, channel was... Like, paid acquisition was driving a good amount of passenger acquisition. And so the growth marketing team turns off every single paid channel, and installs and signups barely move. They go down by, like, maybe 5, 10%. I don't remember what it was. And what did go down, it was all low quality. So, every marketing dollar that was being spent to acquire these new passengers was just cannibalizing organic traffic. None of it was incremental. So maybe it pulled those users forward by a few weeks, but overall, it was just... Lyft had enough organic word-of-mouth traction, where once you factored in the incrementality of the channel, it... Which wasn't efficient. It made no sense.

    6. HS

      So, why do paid, period? Why, why do people do paid?

    7. RM

      Well, okay, let's, let's flip that Lyft scenario. So then you've the passenger side, not incremental at all. The supply side, it's really hard to get drivers in a ride-sharing network. And guess what? You're a marketplace. You need to balance supply and demand. You need to acquire the drivers. And so I think this is where we did run a lot of paid at Lyft to acquire the supply side. And part of that is, well, if we acquire the supply side, we can balance the marketplace. Balanced marketplace is gonna be much more efficient. Lyft will grow because of it, and that spend will pay back much faster. So, I think it makes sense as, like, a very intense balancing lever for marketplaces. And then if your unit economics, like, support it, I, I do think there are advantages to using paid acquisition to go after audiences that you're underindexed in. So right now, like, the only paid acquisition we've ever touched, and it's so lightweight, are some just, like, simple TikTok ads testing different value propositions with 18 to 24-year-olds. Very specific marketing.

    8. HS

      What have you learned from them?

    9. RM

      (laughs) It's hard, and TikTok's a crazy beast of a place. My God. Um, but, but-

    10. HS

      Why do you say TikTok's a crazy beast of a place? I agree with you, and I can share thoughts around that. But why do you say that?

    11. RM

      You know, the, the algorithm is so different than how we think about traditional algorithms, where it's built for virality. Uh, so if you're trying to do organic TikToks, you're comfortable with, you know, 10 failing but one hitting seven million views. And like, that's almost like... It's, it's such a crazy power law. Um, on the, on the TikTok ad side, like, I think we are learning a lot around how AI companies need to be positioning themselves with new audiences that don't care about AI. Like, you can't walk up and be like, "Well, we're an AI search engine," and people, people are gonna be like, "Oh my God, that's what I've been waiting for my entire life." Like, you need to abstract away this whole AI piece and just go straight to the value prop of get answers immediately, backed by sources.

    12. HS

      Yeah, 100%. I think we've got to the stage now in product marketing where, like, AI has become almost a negative.

    13. RM

      Yeah.

    14. HS

      Like, my toothbrush is now AI powered, and so it-

    15. RM

      (laughs)

    16. HS

      No, it really is. It says on the box, "AI powered." I have no idea how. Uh, but-

    17. RM

      Hey. (laughs)

    18. HS

      Yeah. Uh, thanks, Oral-B. Uh, but my, my point there is just, like, bluntly, I think it loses value from having the AI sticker on it at some points.

    19. RM

      Yeah. And it, and it worked really well early on, right? It was kind of like a magician pulling a rabbit out of a hat, of like, "Look at this magic." But now it's-

    20. HS

      Do you find conversion shit on TikTok?

    21. RM

      Conversion is pretty good. We're still very early in testing this. Conversion is solid. Like, top of funnel.... campaigns do well. I'm still waiting for some of this retention to bake-

    22. HS

      How much are you willing-

    23. RM

      ... to see how this will actually

    24. HS

      ... to spend on tests today?

    25. RM

      Not much at all. You don't need to spend much to really understand what that attention is gonna look like.

    26. HS

      Is that, is that like 10K, 20K, 50K?

    27. RM

      Yeah. 10K a week. And the amount we can learn is, is pretty great in terms of what messaging is working, what messaging is not working, or what use cases really, really resonate with people, whether it's travel planning, studying, solving something at work. There are a lot of different things we can test 'cause we're so horizontal.

  15. 37:09 – 39:54

    About Brand Marketing

    1. RM

    2. HS

      Do you like brand marketing?

    3. RM

      Uh, I really subscribe to the concept that you need someone to hear about your product three to seven times before they're gonna give it an honest trial. Like, I, I really do believe in that, and I think it's incredibly hard to measure the value of it. And just because we can't measure it does not mean that it's, that it's useless.

    4. HS

      What brand marketing thing do you not do today that you'd love to do? Sponsor a stadium? Be on a shirt for a football team? Be on an F1 car?

    5. RM

      I get a lot of these emails (laughs) all the time. Um, you know, I mean, we're, we're doing a lot. Y- What's cool about Perplexity is we don't have a, a marketing department. So we're, we're doing so many cool things, and all of these are just someone on the team had a passionate... was really passionate about an idea that we believe has viral potential, and so if so, like, go execute and make it happen. And, and the metric that matters in brand marketing for me is there's an expected number of impressions that anyone will tell you you're gonna see if you go run a TV campaign or, or sponsor a jersey. And what really matters is what is the incremental impressions you're getting from that. Can that moment go viral where, okay, we may be paid for X amount of impressions, but we're getting a lot more on top of it because people are reposting about it, because it has gone viral across social. That is where brand marketing can be really interesting.

    6. HS

      I totally agree with you. One of my friends and a portfolio founder of ours started a, like, recruitment platform years ago, taking people out of, like, big banks like Goldman Sachs and put, putting them into startups.

    7. RM

      Yeah.

    8. HS

      And they basically took out a billboard right outside of Goldman Sachs's headquarters in London and said, "Goldman, really? I bet your-"

    9. RM

      (laughs)

    10. HS

      "... parents would be proud..." Uh, and-

    11. RM

      (laughs) That's a good one.

    12. HS

      ... every newspaper in London wrote about the startup that was basically sticking the middle finger to the big banks. And the incremental, to your point there, was enormous.

    13. RM

      And especially when you're hitting net new audiences. So we ran a, uh, a TV ad with Jim Harbaugh, m- like, great football coach, American football-

    14. HS

      Mm-hmm.

    15. RM

      ... in the U.S. And, you know, the, the, the commercial goes live, and we have tons of influencers, reporters in sports retweeting it, commenting on it, and this is a new audience, right? For all the sports fans sitting at a bar watching the game who have all their niche questions about what's happening in the game, like, "Who won this game 12 years ago?" Perplexity is perfect for that, and we are now introducing them to this net new audience that we're not really reaching right now. And that's amazing. It's very effective.

  16. 39:54 – 43:31

    The Biggest Challenge with Paid Acquisition at Perplexity

    1. RM

    2. HS

      What's been the hardest thing about doing paid for you at Perplexity?

    3. RM

      There's so many different channels to test.

    4. HS

      Yeah.

    5. RM

      And I don't wanna, I don't wanna lose my focus spending on channels where I'm not gonna learn much. And I think I got burned. Like, a good example of another area I got burned was newsletter sponsorships. It's like, okay, like, there, there's some interesting audiences here. I wanna try this out. But I think it, it, it's really hard unless you have a really crisp product that you can put into a really simple ad placement that is, like, two sentences of text, and that's it, right? Newsletter placements are really hard. And so, like, again, that's another one where we came up flat, and I don't know how many learnings I walked away with there. So I kinda just spun my wheels for no reason.

    6. HS

      So you're happy to spend if you get learnings?

    7. RM

      Oh, absolutely.

    8. HS

      Like, even if it doesn't work, you're fine with that. But the ones-

    9. RM

      And growth, growth-

    10. HS

      ... where you just get-

    11. RM

      ... is a game of intuition, right? All we have to do is just keep learning to figure out the right direction, and then just work on cadence to just keep driving in that specific direction as we learn.

    12. HS

      Dude, when we spoke before, you said to me, "Be first to a growth channel or just be better." (laughs)

    13. RM

      (laughs)

    14. HS

      Which I liked a lot as a hedging strategy, to be honest, 'cause it's not like-

    15. RM

      Yeah.

    16. HS

      ... you know, first always wins. Uh, but can you just unpack that for me? I just want to understand that.

    17. RM

      Yeah, I mean, there's no middle ground. So everyone, everyone in growth is looking for alpha, right? Find the untapped channel, beat everyone to it, right? Dropbox, Dropbox like with the referral program, Groupon in email, Pinterest in SEO, Duolingo in just like a totally unhinged social media, right? All of them were kind of first to this concept, and it really, really worked. And so as a growth person you're constantly looking for like where is this opportunity? What are the channels right now that are kind of green field? Now, the problem right now is like channels are a little bit quiet right now. Facebook and Instagram are really expensive. Apple updates have made it hard. Organic social is really, really hard. Notifications are so crowded. Everything feels really crowded right now. There's no middle ground if you're not first. It literally just means your only other option is to just be a lot better than everyone else. And that's like where we need to hold ourselves to.

    18. HS

      What channel do you think the world doesn't appreciate that should be appreciated more?

    19. RM

      This is a controversial one. I think community and how you can unlock your power users to share the value of your product to their own miniature communities is incredibly powerful, incredibly powerful.

    20. HS

      How do you, how do you do that?

    21. RM

      So let's take, let's take students. There are students using Perplexity and getting tons and tons of value, but we underindex in awareness with students relative to ChatGPT.... so then the question is, well, how do we take our best students and give them everything they need, marketing budget, swag, whatever they want, so that they can go be on the ground, on these campuses, and drive growth for Perplexity and build density on that campus? Let's arm our troops, our power users, with everything they need to grow for us, and that's, it's a, it's an in- an incredible strategy because they're on the campus, and these are not big campuses. You can build density very, very quickly. And as soon as you have that initial density, then you see word of mouth start to come alive.

    22. HS

      Who do you consider your biggest competitor?

    23. RM

      I mean, they're the obvious ones, Google and ChatGPT.

    24. HS

      Yeah. Which one?

    25. RM

      I think search is a massive market to go after, and so if there's somewhere we wanna live, it's, it's going up against the big guy.

  17. 43:31 – 45:34

    What Channel Could be Better

    1. HS

      Where could you be better? What channel are you on now where you're like, "Mm, but we could be better"?

    2. RM

      I mean, luckily for us, we aren't on many channels. We, we are still so organic, growth-driven, partnerships-driven. I do want to really, really try and figure out how we can unlock creators and tastemakers in a more efficient way, and that, again, is building relationships with fewer of them, and working with them not where we're just, you know, throwing a sponsorship placement on their, on their newsletter or, or in their podcast, but, like, finding really creative ways to bring it to life.

    3. HS

      I, I totally agree with you there. I always say, like, a piece of content has to do one of two things. It has to educate or it has to entertain. Uh-

    4. RM

      Yeah.

    5. HS

      ... and if it doesn't do that, then doesn't have any place in any of our things. Uh, so many people's social postings, like, "Thrilled to announce Perplexity's new product."

    6. RM

      Yeah.

    7. HS

      No one cares. Uh-

    8. RM

      And you don't learn anything from that. Like I-

    9. HS

      Nope.

    10. RM

      ... I would rather try and entertain and come up short because, okay, like, that one didn't work.

    11. HS

      Sure.

    12. RM

      But if we're just trying to, like, go in the middle and say, "Here's Perplexity," like, that's not never gonna work.

    13. HS

      Before we discuss this team, I have to ask, what growth tactic have you done that you wish you hadn't done?

    14. RM

      I mean, I s- I'm think I'm still kicking myself for those newsletter sponsorships.

    15. HS

      What did you not do that you wish you had done?

    16. RM

      This is an in-product one. So I think, I don't think sharing is inherent to the Perplexity user journey or user flow. Like, I don't think that we have an inherent viral loop where someone does some research and then shares a thread or screenshot to another person, but there's a lot of sharing happening on Perplexity right now, right? Take an answer and put it on Twitter or send it to Harry. Whatever it is, we see a lot of traffic come in through sharing. The mo- I really, really wanna get my hands on that experience and just drive sharing and find creative ways to promote sharing of this knowledge that you are curating as a user.

  18. 45:34 – 49:20

    Hiring Growth Team

    1. RM

    2. HS

      Listen, dude, I wanna discuss, like, building the team before we do a quick-fire.

    3. RM

      Yeah.

    4. HS

      It's really hard, like, hiring for growth. What is the right first hire in a growth team?

    5. RM

      It depends what you need. Do you want a marketer that can juice the top of the funnel but can still get in the weeds, run experiments, think about onboarding flows? Or do you want a product person that can run marketing campaigns? I, I obviously fall into more of the latter, right? I want to, like, spend time in the data. I wanna be turning over stones. I wanna be holding onto that data. It depends on the makeup of the current team and the founders. If you're feeling good from a top-of-funnel perspective, and you have a complex funnel that is cross-device, go for the product person that has built these funnels before.

    6. HS

      Do founders make good hires? You obviously were a founder before. Rippling, another obviously very successful company, has a huge amount of founder hires. Do founders make good hires, and what are your lessons from that?

    7. RM

      We have a lot of founders here, and I think the best part about hiring founders is that they are much more comfortable at taking very big swings and being willing to fail. Like, it is by nature, if you're going down the founder path, you have to be a little bit more comfortable in that world than the average. And the average person is not willing to fail. They're not willing to go stand up in front of the company and be like, "We're gonna try this out, and it might not work." And so the more people you can get like that... You know, Mike Maples at FloodGate has this incredible analogy that early startup teams need to be like a jazz band, right? Like, throw out the sheet music. This is not what it's about. It's like, no, you are here to just riff off of each other and make it work, and that's where founders, I think, are great. It can go sour, I guess, as things scale, and you start to need that sheet music. You start to need a lot more coordination as the company grows, and some founders just don't wanna... They, they miss the jazz band, and they're gonna jump quick to the next jazz band.

    8. HS

      Do you have to manage them in a different way? Maybe they're a little bit more larger egos. They like to feel like they're in control. Is there any different elements in how you manage them?

    9. RM

      Yeah, I mean, I think you have to let 'em cook. I mean, (laughs) you, you wanna give 'em enough ban- If you, if you hired them and you trust them, and they can execute, get out of their way. Let them go experiment, right? I mean, you don't wanna put guardrails over their ability to experiment and try different things. Guardrails is gonna hurt everyone. It's gonna make everyone think a little bit smaller. You remove those guardrails, everyone's thinking big. One person at the company goes, takes a big swings, runs a TV ad with Jim Harbaugh, everyone's now thinking at that level of, "Okay, how do I, how do we go bigger?" And that's the kinda culture you wanna create.

    10. HS

      As a European, I know guardrails very well. Uh, 'cause I-

    11. RM

      (laughs)

    12. HS

      ... specialize in them. Uh, (laughs) you know, cookies, uh, allow, allow, fu- fuck, okay. Uh, what do you mean when you say about hiring for taste? What are you looking for? What are you not looking for?

    13. RM

      Taste is the ability to understand what good looks like. I'm convinced that I don't, I'm not actually that good at anything, but what I can do is go look at what's happening in the world, understand what good looks like, and then try and reverse engineer it. So that's all, uh, that's that, that's the game.... if I wanna recruit-

    14. HS

      How do I, how do I know if someone knows what good is? Do I put different product in front of them and ask them to analyze it? W- how do I know?

    15. RM

      I, I mean, I think it comes down to, like, what are the questions they are asking that shows the depth at which they are thinking. Right? I mean, I'm a pretty open book when I'm interviewing about what our challenges are, and we kinda just jam on them. And you can tell very quickly how deep someone is thinking about your challenges and their experience with it, that, okay, they, they're asking the right questions. They're trying to reverse engineer how to make this good very, very efficiently.

  19. 49:20 – 52:30

    Interview Questions

    1. RM

    2. HS

      What questions do you always ask in an interview? I always have some similar ones.

    3. RM

      I love to trade war stories, especially for people with a little bit more experience of, "Okay, you were at, you know, Lyft. Tell me, like, tell me about the war stories around when times were really hard. What didn't work? Tell me about your biggest, you know, just total flop, and let's go laugh about this flop together."

    4. HS

      I always ask about, like, "What was your first entrepreneurial endeavor?" Great entrepreneurs always start young.

    5. RM

      Yeah. Yeah.

    6. HS

      High, high correlation between the amount of activity you have in early entrepreneurship and how successful you'll be later on.

    7. RM

      Yeah, 'cause it's almost a personality trait, and you're trying to evaluate that personality trait, 'cause that's something they probably had early on.

    8. HS

      Do you do take-home assignments for candidates in growth?

    9. RM

      I do, um, for every, every role. It's a big ask, so I am cognizant of trying to keep it well-scoped.

    10. HS

      What is an example of a take-home assignment, and how do you run it?

    11. RM

      We, we give, we give different scenarios, usually two or three different scenarios, and, and it's, uh, they're all fairly open-ended, so you can go into as much depth or... But, but the goal is to walk us through your thinking of how you would approach it and all the different areas that you need to consider along the way. It is really hard.

    12. HS

      Do you do it, do you do it for Perplexity, or it's a different company?

    13. RM

      For Perplexity.

    14. HS

      So, like, you'll give them an actual talk? 'Cause some people say it's unfair because you have asymmetric knowledge, and they don't know it, and you know it, so it's gonna be hard.

    15. RM

      I think that's fine. Like, that's a, that's a fair argument. In the end, like, we give them a hypothetical about Perplexity, like, "We're considering launching X. Now walk us through your thinking of how you would approach this launch," or something like that. Um, so it's not, you know, something that we have done. We're all in the room brainstorming together, and you can kinda get a sense and feel of, like, what is it like to jam with this person and brainstorm with them when it's that hypothetical, but still related to Perplexity. How quickly are they gonna ramp up and fit in?

    16. HS

      How quickly do you know when you've made a mistake on a hire?

    17. RM

      I think fairly quickly. My rule of thumb is if they truly need an onboarding doc, we're in trouble.

    18. HS

      Why?

    19. RM

      Like, if they, if, 'cause if they need me to say, "Here are the 20 things that you're gonna do over the next 30 days, and, like, this is your checklist," I want someone who can come in, turn over stones, and build their own onboarding doc very quickly. Like, I have, uh, very high trust in the, in the amount of rope I wanna give someone to go in here and, and start working on the area of ownership that you have and go make it really, really great. I, I'm gonna have perspectives on how we should be implementing it or what we should be working on. But I wanna see them come in and very quickly be able to figure out and have the motivation or the drive to say, "This is what we need to work on, and here's why."

    20. HS

      I do get you. I always find the best employees start before their day one. Do you know what I mean?

    21. RM

      Oh, yeah.

    22. HS

      They come in, and they're like, "I've done all these things." You're like, "Whoa, okay."

    23. RM

      Yeah.

    24. HS

      "Great."

    25. RM

      Yeah. We, we, like, you know, I got my laptop on Friday and was gonna start on Monday. Like, I was in every single dashboard we have, and part of it is just pure excitement. But, like, you want someone that is just, like, obsessing about the problem at day one.

  20. 52:30 – 53:49

    Hiring Mistakes

    1. HS

      Final one for you. What are your biggest hiring mistakes, and how did that change how you approach hiring?

    2. RM

      This is something I'm still working on. I'm, I'm slow to hire, um, and I'm-

    3. HS

      Cool.

    4. RM

      ... trying to get faster at it.

    5. HS

      Why are you slow to hire?

    6. RM

      I care a lot about team. You know, I th- I, you know, people say that, you know, they quit the manager, not the company. Like, I think people quit the team. And if you have an incredible team that is just, like, well-oiled machine of mutual respect and everyone loves working with each other, it's really hard to quit that. You're just having too much fun. And that's what I want to try and create. I want everyone at the company to be like, "Man, I wish I could, like, work on the growth team for a couple months." Like, that's the thing to, like, that's the goal to have. To find someone that can fit into that, that I believe is gonna jump right into this and play an amazing part and have the mutual respect of everyone and, and be a great teammate, it's hard to find, and you can overthink it sometimes. So I'm trying to be a little bit quicker to the punch on evaluating and taking risks with hires.

    7. HS

      The only thing I will say to you is, uh, the biggest mistake that most people say on the show is they've hired too fast, and they wish that they could let fires burn, so to speak. And so I'm not sure. I think sometimes it's better to wait for the perfect person.

    8. RM

      Yeah. It's trade-offs.

    9. HS

      Yeah. That part.

    10. RM

      It's, you know, trade-offs.

    11. HS

      Dude, I love

  21. 53:49 – 1:00:23

    Quick-Fire Round

    1. HS

      doing this. I wanna do a quick-fire, so I'm gonna say a short statement. You're gonna give me your immediate thoughts. Does that sound okay?

    2. RM

      Sounds great.

    3. HS

      First most common expensive irreversible mistake you see founders make when it comes to growth?

    4. RM

      Assuming the users' pain points when they're just straight-up faults. Like, really, really not understanding what does someone actually need to learn in that first session. It, it, it's the most common, uh, you end up running up the wrong wall.

    5. HS

      What's the most polluted growth channel today?

    6. RM

      I mean, I think especially with all the latest Apple changes, I don't know how anyone is going to make Instagram or Facebook Ads efficiently work at scale as, like, a core growth channel.

    7. HS

      You've got a friend, and they've just been given a head of growth role, and they start tomorrow. What advice do you have for them pre their starting this new role?

    8. RM

      Obsess about every single number in the dashboard.... get your hands in, on as much data as possible. You know, when I started at Lyft, I was literally, like, entry level, nobody role. But, like, my one thing was, like, "I'm just gonna know the numbers better than everyone else." And, like, you start to learn how the machine works when you see how all these numbers start to correlate with each other. And then when you start knowing the numbers better than everyone else, you get pulled into all these incredible meetings 'cause you're just the numbers guy. Like, "Ye- ye- we have to have him in the meeting 'cause he knows these numbers better than anyone." And, and I think that is the ultimate way to just build intuition of how your growth machine works, where are the friction points in it, and that is what's gonna help you make the better decisions in terms of what you should be working on.

    9. HS

      What is the single biggest lesson that you took from Lyft that was successful first?

    10. RM

      Don't need to run paid ads, focus on, focus on retention, focus on iterating on product.

    11. HS

      What did Lyft do terribly that you vowed never to do?

    12. RM

      We overestimated how much better we could make the ridesharing product. I think we started to hit di- Like, when you look at ridesharing four or five years ago versus today, how much has the product changed? Not that much. So if you don't believe... Well, sorry, if you believe that you can keep making the product better and better and better, and which that's gonna unlock new markets, well, that's one thing. But if you're wrong about that, well, then you should be pivoting to, you know, meal delivery and stuff like that because you've hit your diminishing returns, and I think we underestimated how quickly we hit the ridesharing diminishing returns on the product side.

    13. HS

      So the, the takeaway there is understand where the moment of diminishing returns is?

    14. RM

      Exactly, yeah. And it's tough in AI right now because the world is changing every second, but it, it's critical to s- to be honest to yourself of what is the true TAM of this? Are we still seeing unbelievable growth in product iteration?

    15. HS

      What would you most like to change about the world of growth today?

    16. RM

      Just clarity of what the hell it is. Um, you know, you, you, you put 10 growth people in a room and everyone has a slightly different answer of what we're working on, but it's growth product and growth marketing, and I think the more people that understand that, the better.

    17. HS

      What have you changed your mind on in the last 12 months?

    18. RM

      When I joined Perplexity and was writing out my pro/con list, I think the one that was, like, up there was, like, can the application layer capture and monetize value, uh, or is it all just, you know, one big pass-through cost? And now, you know, fast-forward not that long, I love (laughs) being at the application layer. Like, this is awesome. (laughs) And so I think that's really changed my mind, where I think the application layer's an amazing place to be. I think that's where so much of the value is gonna emerge and, uh, yeah.

    19. HS

      It's so funny, it's so funny how the whole ecosystem re-centers and re-shifts their mindset around where value accrues. I remember doing this show where literally everyone was just saying, "How does any value accrue-"

    20. RM

      Yeah.

    21. HS

      "... on top of these models? It's just wrappers." And that was like the... It's so agreed.

    22. RM

      And, I mean, it's crazy that, you know, eight, nine months ago, that was a big question. It w- it was very... It wasn't clear where there would be value, and today, we're getting a little more insight into people who crush at the application layer, who go really, really specific on high-TAM areas can make a lot of money.

    23. HS

      What's Aravind's biggest strength?

    24. RM

      He can go from a very high-level company strategy of what direction do we need to go very quickly, two seconds later, down into incredibly specific weeds of, like, what a user funnel should be. He can jump at these layers like no one I've ever seen, and this is all in one meeting.

    25. HS

      What's his biggest weakness?

    26. RM

      You know, I think Perplexity's his first big swing at a company, and so there's a lot of intuition that he's picking up on the fly. And it's, it's awesome to see how quickly he is to pick up on whether it's growth intuition, whether it's partnerships, whatever it is, but he's learning on the fly 'cause he is a first-time founder.

    27. HS

      Totally, uh, 100%. Well done there. That's a really hard question to ask, by the way, dude, so, like, really just nailed that one. Uh, final one, what's the boes- gr- best growth strategy outside of Perplexity that you've been like, "Wow, that is really amazing," in the last 12 months?

    28. RM

      I'm a huge fan of products or features that are built that can drive viral sharing with users. I think, like, Spotify Wrapped, right, was, like, the first one to just, like, "Oh my God, this is going cr- Everyone's sharing this." And I think that strategy is now adopted by so many AI startups, whether it's image generation, whatever it is, but create something that is very, very shareable or very unique and people wanna put out into the world, and now everyone knows who you are. It is the fastest way to growth by letting your users do it for you.

    29. HS

      Why didn't Perplexity do a Perplexity Wrapped? How many searches, favorite topics you searched on, biggest person you shared, to... Quite cool.

    30. RM

      Who says we're not doing that?

Episode duration: 1:00:23

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