[WAMA] Sean Ellis - Founder/CEO of Qualaroo and GrowthHackers.com - Thurs June 26th 3pm PST/PDT

We're really excited to have Sean Ellis live with us here at Warrior Forum for a Warrior Ask Me Anything event. He is founder and CEO at Qualaroo and GrowthHackers.com and has worked in marketing at Dropbox, Lookout and Eventbrite.

Watch the Sean Ellis WAMA Replay Here.

Transcript of WAMA Event with Sean Ellis:

Alright, hi everybody I’m Sean Ellis, I am the founder and CEO of Qualaroo and GrowthHackers.com and so today I’ll be doing my ask me anything on anything. So some background I will be drawing on is I ran marketing for five years at two companies from Launch to NASDAQ IPO filings and then went and worked for Dropbox, event bright, a number of companies just in the early days to help them get started in growth. So I have done a lot of different things to drive growth and understand how different growth engines tend to work for companies and done some pretty exhaustive studies as well. So I will be talking about things I have learnt in my own experience from looking at other companies and talking to other people.

So that is the high level and I am just going to kind of watch for questions to come in and answer them as they come in. So this will be interesting. I have never done an ask me anything with video, so we will see how that all goes.

I see, I had to hit refresh on here and now there is a giant list of questions. Okay. Apologies for anyone who is standing by here.

[01:30]

Let’s see, “What were the biggest challenges you experienced when building Qualaroo and GrowthHackers.com?”

That is a pretty broad question but what I can say is that with, they are two very different properties to build. So Qualaroo is more of a tools business. Just a little bit of an overview on Qualaroo so you can kind of understand the context, but Qualaroo is a SAS business where people buy the product to run questions on their website to gather the voice of customers. So ultimately trying to understand what customers do on a website, what is preventing them from doing those things, and then they use that information for their AB testing efforts to improve the performance of the website.

So pretty specific use case and because it is a tools business it tends to be something that is relatively incremental to build so once the tool is good it is a matter of promoting it. We get a lot of promotion just through the presence of it on websites and some of those have “Branded/Powered by Qualaroo” on them and that drives a lot of awareness for what the product actually is.

I would say probably one of the bigger challenges with a SAS business is trying to keep a growth rate that is important for a venture backed company. You have got to be growing a SAS business 15% month over month in your monthly recurring revenue numbers and that is sort of considered a good SAS business that grows at those rates. So it means you have to both retain your customers and acquire new customers to maintain that growth rate. So if you lose 5% of your customers every month then you need to add 20% new customers every month. And that I think is a challenge anybody has. So we have to keep digging deep to come up with ideas and build a lot of efficiency and ultimately manage retention as well as customer acquisition as well as conversion rate optimization. But it is still a relatively incremental business that doesn’t require critical mass.

Growth hackers on the other hand was very different to get going. Growth hackers it essentially started with an idea, we built a platform that is not that different than really what Warrior Forum does or sort of any other community type website, but the hard thing is how do you get a community started from zero? For the first person who comes or the first five people who come there is not enough activity to really keep those people around. So for growth hackers we spent at least three months of every single day three or four of us were just piled in there every single day keeping the conversation going, making sure there was good fresh content, good fresh discussions, keeping our Twitter followers engaged in those discussions and really a full court press of priming the pump until we can get it big enough and popular enough to actually grow.

So it took us a few months to get there and now I can check out for days or weeks at a time and the conversation keeps going and it is something where all of us can drop in when we feel like it. And I tend to now want to drop in a lot but that is not because I have to. In the past on a vacation I had to do it a lot. So those are some of the biggest challenges. For GrowthHackers.com it was really upfront just priming the pump, getting it rolling. Qualaroo is more on just keeping that retention, keeping that top funnel new people coming in and just managing and scaling that full business and making sure that as the numbers get bigger and bigger to make sure you continue to try to grow at that same rate. It is pretty challenging.

So hopefully that answers your question Sarah. Feel free to post a follow up question if you missed something specific that you were looking for.

So there is a bunch more questions here.

[06:06]

I know Rama has a question. “What is the best way to learn growth hacking methods?”

So it is kind of like learning management or something else. You can pick up a book and you can read about stuff but you don’t really start learning it until you start doing it and through trial and error is kind of one of the important ways to know if you are any good at it. So that is the first thing just getting yourself in a situation where you can actually be responsible for trying to drive growth for somebody and working you know every channel you can think of, every creative idea you can think of to try do grow that business is the starting point.

And the next piece is where do those good ideas come from to start growth hacking and that a lot of people are just inspired to come up with ideas all the time on their own. Others you are going to get it through customer engagement, through spending a lot of time connecting with and talking to your customers. Others just study other fast growing companies in your space or even maybe related spaces and see how they are growing, and I tend to learn a lot that way. And then article and discussions with other people that are passionate. Read articles about how people are growing businesses, discuss with other people who are passionate. So that is a lot of what happens on sites like growth hackers and warrior forum and inbound.org and just this realization that the more you engage with other people who are figuring out how to grow businesses the more that you are going to get that flow of ideas coming in.

But the starting point is, you can read theory all day long and I don’t think you are going to learn very much. It is not until you start to apply that theory, start testing, have the systems in place to figure out if the test is actually effective or not and then start trying to grow a product. Now the other question is, is the product actually grow-able in the first place? That is another question and if someone wants me to tackle that, they can hit it.

But as far as getting started it would be have some growth responsibility and then look for ideas and start applying those ideas and measuring the effectiveness.

I’m going to jump to some other short ones first and then we will go back into it.

[08:41]

So Elisha is asking, “What are the best growth hacking resources?”

I would tend to say GrowthHackers.com is really an aggregation of a lot of the different resources that are out there so any guides and articles and white papers are submitted and discussed on growth hackers so you are going to find a lot of good resources on there. And growth hackers TV have some pretty good interviews with people. There are some guides and other things. And then any marketing article as well. A lot of people ask what is the difference between marketing and growth hacking and the difference is pretty subtle. I will wait for that question to come up before I kind of go deep on that but ultimately growth hacking tends to be focused entirely on growth and tends to include a lot of leverage deep within product that marketers perhaps don’t have access to or don’t have the skills to be able to access them.

And then marketing includes a lot of things that aren’t directly tied to growth. So, but again that is a really long answer if someone wants to hit me with that question later on.

[10:00]

So Arthur M. is asking, “How big was the Dropbox team when I joined? What was it like working there?”

So I joined the week Dropbox publically released its products and less than ten employees. I joined in an interim VP marketing role so it was predefined as a 6 month role but the idea being that when I look back at my two long term head of marketing roles from customer zero through IPO filings, when I look back at them I realize that the most important impact that I made was really the six months of public launching those businesses, of really getting the feedback from the customers, figuring out what worked about the product, what didn’t work about the product, optimizing conversions, putting the metric systems in place and then trying to build the early channels that would drive that growth.

And so that was the stage that I came into Dropbox and that was where I focused my efforts. Was a lot of just customer on boarding and I was also coming off log me in, where we spent tens of millions dollars a year driving growth. And what I found was as log me in got bigger and bigger that maintain those growth rates when your external channel dependant for your growth is really hard. So one of the things I was trying to do with Dropbox was to have that growth driven from the foundation, have that growth driven from your existing user base because you are just a lot less likely to run out of new growth channel ideas.

So to this day most of Dropbox’s growth is coming from its base through viral loops that they have built into the product, through natural word of mouth and just a great product experience. And then also a referral program that catalyzes a lot of that natural word of mouth and incentivizes and rewards it.

So that’s the time I was at Dropbox. What was it like working there? I was the only non engineer at the time so it was interesting. There was a lot of guys that just had their heads down, spent a lot of time coding and excited about what they were working on and what I was trying to do was just really plug into the market and understand why people loved the product, what they love about it and make sure the team was really orienting the product around that early feedback and building the on boarding around that.

And some of the engineers were going to be a little more skeptical. Engineers tend to not like marketers all that much because a lot of us are less concrete than an engineer is where they live in much more of a black and white world. There are a lot of sort of soft parts of marketing that they maybe don’t connect with. So for me a lot of early stage software startups what I was really focused on was how do I win their trust by talking about marketing being more math based and more testing based and some of the things they would be more comfortable with.

So that is a lot of the early days there was just trying to build that data driven culture and some trust in marketing but at the same time, not have them get the pressure from venture capitalists to just bring in traditional marketing skills but instead look to other fast growing start ups and make sure that they were building the right type of team and skill set to drive growth that is needed in an online company today versus companies of the past where it was much more of, spend a lot of money. Even like you know in the nineties obviously being more television spending and things like that. So keeping focused on what really mattered in a company like that.

[14:15]

So here I have a question from Larry that I kind of touched on in the past.

So Larry T is asking, “Growth hacking sounds like a new buzz word for viral marketing. How does it differ?”

So that was the one that I was expecting to get some questions like that, I get that a lot. So for me the idea of growth hacking really came out of, actually while I was at Dropbox, part of my role was to replace myself with somebody to run marketing going forward. And when I looked at a lot of the resumes I was getting a lot more of the traditional resumes for marketers that I just didn’t think were going to be able to bring the company to the next level. But when I looked at companies like LinkedIn, Facebook and Twitter and other fast growing companies much of their growth was not actually driven by marketing teams, their growth was driven by growth teams that sat in the product organization.

So those companies a lot of times do have marketing teams as well, but they have very product driven growth initiatives. And so yes those are often viral marketing and there are email components to them, and you could call a lot of the things that they were doing marketing. Even most marketing books would say, marketing breaks down into four p’s and one of those p’s is product, so growth hacking is not necessarily something that is entirely different from marketing. I think eventually it does all become the same thing but I think it is sort of a, what are the most powerful levers to actually drive growth in a company? I think it starts with that and it starts with who has access to those levers, and what type of skill set does it require to access and take advantage of those levers? And most people with a marketing title don’t have access to a lot of the most powerful levers, and even if they did they wouldn’t know what to do with them.

So rather than saying, “I want this special kind of marketer” I put a new name on it and said, “This is what the role is, this is what the name is and if you fit the bill please apply.” And I got a lot of different types of people. I never expected it to get as big and popular as it has today but it kind of took on a life of its own. And I think a lot of it is other people recognize that there is different skill sets that are required to build companies successfully today, especially online companies and that many marketers lack those skill sets.

So fast forward three or four or five years, I think marketers will equip themselves with the right skills and that the distinction between a growth hacker and a marketer probably won’t exist but ultimately the thing I care the most about is how do you effectively grow a business and what skills does that take? And if you want to call yourself a marketer, a growth hacker, some other name, I am a lot less worried about that than the actual result that someone is trying to drive.

[17:37]

So I have a question here from Zach that says, “What tools do you use for conversion optimization?

So conversion optimization for me is one of those tools that traditionally have sat in between marketing and products and so sometimes product organizations do it, sometimes marketing organizations do it. But whoever does it conversion optimization is super powerful, is something that I spent a lot of time working on in each of these short term VP marketing roles. It was what I did at log me in as well. I tried to grow log me in without doing conversion rate optimization, this was about 2003, 2004, and it was very frustrating we didn’t get much growth. But I looked at for everybody who signed up for the service; very few of them actually used it.

And so for me conversion rate optimization was about how do I actually get people who have the intent to sign up for a service actually go through, use it, have a great experience and buy it? So we had a free premium service, soothe buying it was less of an issue but I knew they wouldn’t actually buy it if they didn’t actually use it. So conversion rate optimization in that sense is about understanding what they are doing, why they are doing it, why they are not doing certain things and then ultimately testing to improve the people who do what I am trying to get them to do.

So there is a big set of tools you can use to do those things but the ones that I mostly break it down into would be, analytics or quantitative insights, and then qualitative insights would be another important area. So the analytics are telling you what people are doing. The qualitative are telling you why they are doing those things or not doing those things. And then there is testing and that ultimately…conversion rate optimization when done properly is I continuously improve my process, it is about continuing to collect those quantitative and qualitative insights and then using that to run smart tests. And then running as many smart tests as your traffic levels allow. And as you do those, what you find is more and more channels actually open up. So your traffic levels get bigger, you do even more tests and it is a huge part of growing any business.

So anyone who is not putting any eggs into the conversion rate optimization basket is probably not growing nearly as fast as you should or could be growing.

So, what tools specifically do I use? My preference is I use on the quantitative insight side, Google Analytics gives me a lot of page level activity, where people are abandoning pages and what are the key entry pages, what are the key referring sources. But I also like Kissmetrics. So Kissmetrics gives me a bit more full funnel analytics and I can track people over multiple sessions, but those two together give me pretty good quantitative insights.

And then on the qualitative side not surprisingly I use Qualaroo for that. And Qualaroo, kind of the two big areas are figuring out intent. I like to, every new source that refers people in, I like to intercept those people and ask them why they are coming, what is causing them to want to sign up for the product or not want to sign up for the product. And then find the top points across the site where they are abandoning the site and usually put an exit survey there. So as they go to abandon ask them what they were trying to do. And then use those insights. Basically what people were doing, why they were/weren’t doing them, plug that into my AB testing tools. And so I use optimizely for that. And so generally you keep growing though that.

With log me in we were able to see more than 1000% improvement in the people who hit the site, and ultimately used the product, ultimately became buyers of the product. So when you see that kind of improvement that means you can pay way more to get somebody to the sight. When you can pay way more to get somebody to the sight the channels that were viable for you open up and so log me in is more than a billion dollar company today and if we hadn’t done conversion rate optimization I think it would be a company that nobody would have ever heard of, it would have been a real little company. So, really important, thank you for asking that.

[22:47]

I’m going to hit refresh and see what other questions we have got going.

Okay so I have one from Farrah Z here that says, “I know Facebook is becoming less and less effective as a way to get your message out there. Where do you think the next big wins will come from?”

So one, I’m not sure that Facebook is necessarily less effective, I think it is just changing, and how you take advantage of Facebook…the rules around getting in the feed are very different than they used to be and some companies have taken advantage of exploits that were there and could grow very quickly. Zinga and all their games would be probably a big example of companies that grew quickly. Upworthy got to 80 million people I think or 88 million people in about a year, mostly off of Facebook. So there used to be some good feed exploits but it is not like it is getting any smaller in terms of the audience. It is still dominated on every age group from a social perspective.

So I wouldn’t give up on Facebook, it just means that you need to find new ways in there. But new channels, the emerging channels, it really depends on the business first of all but content marketing has been really effective in my category, so in the marketing tools category. Almost all of the companies in the marketing tools category are growing up with content marketing. I just like widgetized content.

So for me I think when you think about growth think about what does the internet offer that other things don’t offer? So the two things that the internet offers are connected experiences, so websites that are all connected together and connected people. Things can spread pretty quickly between people and in between websites, so one of the things we do with Qualaroo is that we spend a lot of time integrating with the rest of the ecosystem so that our data can feed into other products.

And then we also do a bunch of co-marketing with other companies where we, you know I did a webinar with optimizely the other day where we were able to provide good content. So it goes back to content marketing. So I think when you do co-marketing with another company what you are looking for is when you get into wide open channels, it is super competitive for attention, but your own customers you have really a monopoly on attention. You have a relationship, you can connect with them without competing with other messages and when you partner with another company that has that, you suddenly pull those two customer bases together, you essentially vouch for each other and it is a great marketing opportunity.

So we usually do two of those types of things a month and that is effective. We also do have branding built on our product that, so the bigger [26:29 _] the more that people actually see Qualaroo out on other websites. So that can be really effective. But ultimately it really depends on the category. Mobile is a good growth factor for a lot of companies and I know that Evernote for example and Dropbox a lot of their growth was accelerated when they plugged into different mobile ecosystems.

So it is a tough system and the truth is I don’t know what the future holds. I don’t know what new emerging channels are out there that are going to work. I know that my ability to be successful is a function of coming up with good ideas, testing those ideas and just having a good flow of ideas, testing the ideas and then just a good understanding of the principals of growth and the opportunities of how growth works and finding ways to exploit that. But it is not easy for me and I don’t think it is easy for anybody.

Email is still huge but any of the, from social to email to even just traditional ads, if you can make it work, if you can put dollars into something then it is worth doing. But as far as emerging channels I probably don’t have any more insights than anyone else does on that.

[28:03]

Iris is asking, if I was entering college with the goal of starting a business online, what would I major in and why.

So yeah I’m just not sure that college is going to teach you a whole lot about business. I think accounting and statistics could be important. If you look at like the actual foundational skill set of a lot of the founders of businesses online it does tend to be engineering skills because if you can build and iterate quickly and you don’t have to tell other people to do that as a leader, you are probably going to at least get that foundational success that you can then hire marketing people around you and hire finance and other people.

So, probably if I was going to say anything to major in, it would probably be computer science. But you know, on a marketing forum that is probably going to be a surprise to some people.

[29:18]

If you had come from a 5% completely self funded growth team tomorrow, what role skill set would you look for in each of the five members? What be the roles and skill sets for the next five after that?

So what I tend to look for, I basically what I look for kind of three sections. The efficiency group. So I tend to mostly start with conversion rate optimization as a set of skills that I would want to plug in and then I will tell you what kind of makes up each of these groups. And then there is channel discovery and then there is channel management. And when I say channel that is more of a traditional marketing term but it is really lever discovery and lever management. So I wouldn’t necessarily think of channels as only external, you might have internal channels through things you can build into the product.

But so the first three people I would hire, you can kind of get the channel discovery and efficiency together, so I tend to hire an analyst. So let’s start with say your head of marketing. And then analyst as somebody who is going to keep you really honest with the numbers. That person can be somewhat of a generalist. And then a design/developer. So this is somebody who can create anything from ads to landing page, to light development kind of prototyping of flows and then a copywriter.

Tools can help with some of those things. Optimizely can reduce your need for development skills but there is going to be certain things that you really can’t do with optimizely. So that would be the first four I would like at. Somebody who leads the whole thing, probably your ideas person, everybody can bring ideas but this is going to be the person who brings the most ideas probably. And then your analyst and your design/developer and your copywriter. And then this group primarily focusing on conversion rate optimization first because if you can get a doubling of conversions then channel discovery becomes a lot easier, viable channel discovery.

So once they have done that then this group is really also, you start actually taking that marketing leader and having them focus on figuring out new channels to get working and testing a lot of those channels, and they may not need deep channel experience to do that, maybe they can work with a consultant to gain some of that experience, but they ultimately once they validate a channel, then you want to start to build a team to manage that channel and to optimize that channel.

So ultimately how big the team gets is really how many channels you get. So if content marketing for example is an important channel for you, you are probably going to find to really scale content marketing that takes a lot more resources than scaling say SEO. Maybe, it depends on how broadly you can go with that scaling. SEO and content marketing kind of fit together too so it is maybe not the best example but ultimately if you just want to crank out a ton of content every single day you might need three or four people on a content team. If you have one person who is really good then maybe they can crank out that content at that pace, or I’ve also seen companies where you see somebody managing a lot of external people who are creating content.

But ultimately whether a channel is social, content, or SEM, once you have found a channel to be viable then you need to build a team to actually scale and manage that channel.

So hopefully that gives you a bit of direction as to how I would build and scale a team.

Focus first on efficiency, then on channel discovery and as you find leverage and channels that work then have teams that manage those levers and channels and make sure they continue to perform and scale to whatever they can do.

So there is really no kind of cap to how big that team can get. It is really a function…you don’t want to hire a big team around a level or channel that hasn’t been proven because you now have a bunch of expertise that maybe doesn’t apply to your business, because not every channel is going to be effective for every business.

Okay so hopefully have got a few more questions here.

[34:38]

So I have one that says, “What is your experience with Mexican companies? How to adapt your knowledge to this market?”

So this is from David P. Yeah I actually with Mexican companies in particular I don’t have a lot of experience, but I have lived abroad. I lived in Eastern Europe for seven years and worked in growth for a few different companies in Europe and even today Qualaroo, more than half of our customers are outside of the USA. So I think a lot of our process of testing and discovery is going to be the same for any nationality, especially for say optimization. Knowing why people are coming, why they are not converting, why they are converting, and then testing to improve those things. The answers are going to be different on the why they are coming or why they are not converting, but the process will be the same.

And then I think some of the differences, like I think copywriting is where you definitely want to have someone who understands local culture because they are going to know things that people respond to a lot better. So yes, international tat is probably the extent of what I can cover on that. Mexican companies in particular I don’t have enough experience to really give feedback on that.

[36:25]

What are some growth hacks for user retention for SAS start ups?

So somebody earlier asked about resources and I would say that Lincoln Murphy has some great resources for SAS companies around user retention. So sixteenventures.com might be his website where he has a lot of his research so take a lot of those. But ultimately SAS retention…so we did a case study on hubspot that I remember one of the things that really jumped out from that, they make the statement and I strongly agree with it , you retention in a SAS business is largely dependent on the effectiveness of your customer on boarding in the first place.

So if you can get someone to a great experience with your product while you are on boarding them, then the likelihood that they are going to renew on your product goes way up. If you can’t get them on a good experience then a lot of the tactical things of like following up by email or how you handle credit card expirations and a lot of these really tactical things are less important than just making sure somebody has a great experience with the product in the first place. So that is everything from targeting the right customers who are going to benefit from the product, setting the right promise about that product, and then if it is an expensive SAS product, investing the resources into actually training and getting somebody to use the product in the right way to get the results.

It is not necessarily a real exciting growth hack but I think focusing on on-boarding is a huge way to improve retention results in a SAS startup.

That actually reminds me, if you want to read that case study and a few others , I published today with Morgan Brown, we published on Amazon today, free for Kindle Users just for the next three or four days, so if you look or search on Amazon, Start Up Growth Engines, you will see a link to the book. It is a top seller today, which is a funny word for a free book but it is free right now, so you will see it as the top book in the start ups category and it is one of the top books in marketing as well.

So I would look for the hubspot case study in that one and you will see some great tips about retention in there.

So another thing for retention and lowering churn in a start up or in a SAS company is thinking about negative churn. So from a pure customer perspective, if you acquire 100 customers you are going to lose a percentage of those customers over time. It is like impossible to retain all of them. But if you have a system in place where you are constantly looking for additional products and services to sell into that group. Then you can have actually negative churn from a dollar perspective that you may lose two people out of that hundred but if you increase the rest of the people by say 10% in terms of what they are spending because you have upgraded them on average to other plans, then you have negative churn from a dollars perspective.

So that is another thing to kind of keep in mind around churn and retention in SAS startups.

[40:22]

So John T. is asking, “How can I use growth hacking to grow my affiliate business? I promote other people’s products to my lists and make money using JV’s and partnerships.”

So I think the affiliate marketplace that in itself is probably a channel. I know you guys are really good, and I’m assuming if you have got a business around it that you are going to be really good in the affiliate marketing business. So I’m not sure how applicable growth hacking is going to be for you if you can’t get into the products and build sharing and collaboration and other sorts of functionality in products that tend to be growth vectors that are really sustainable and scalable.

But some simple things you could do. You could build referral programs on top of a product so if you’re selling somebody’s product you could give them 20% off their next purchase if they post it on Facebook or on Twitter, that sort of thing where you are building the incentives for those people to share. But that is probably the extent off the top of my head of how I think an affiliate marketing business might work with growth hacking and...

So a lot of growth hacking is user get user programs or data integration programs. So the cliché one that a lot of people refer to is Airbnb with their growth hack into craigslist. But when you kind of step back it makes good marketing sense whether you call it growth hacking or marketing, if the majority of their customers were on craigslist, the majority of their potential customers were on craigslist then if somebody lists a property on Airbnb you can promote it to a very small group of people on there or through an integration populate that out to craigslist where there is a whole bunch of people and you are going to drive more demand for that property and you make money on the demand that is driven for that property.

That would be something that, a marketer could easily come up with the idea but a lot of times they are just not going to sort of even be thinking in the frame of things that would require an engineered solution like that to do that, to push the data into a different platform.

So that might be a little bit more information about where growth hacking may differ from what traditional marketing is.

[43:16]

What should be the top focus to scale a $250,000 a year revenue business to one million dollars?

Again that is very much it depends business. To me when you start to get into the hundreds of thousands of dollars or millions of dollars, its success and growing at fast rates is the result of doing a whole bunch of things right. So really efficient conversion, really tapping into why people love your product and making sure you are getting your messaging right to reflect those things. And then rapid channel discovery and experimentation externally and internally.

So without knowing more about your business that is a pretty hard question to answer.

[44:14]

“I am using content marketing and social to drive traffic so we get many sign ups. Question now is how to get users engaged with our platform when we don’t have time to reach out to them one to one? We are a B to B platform.”

So this is a classic conversion rate optimization in a sense but like when you think of conversion rate optimization like for a SAS business, converting from one plan to the next, converting from not engaged to engaged, it is really broad in how you define it. So a lot of people define conversion rate optimization in surface level landing pages. But the same principles apply. Even you are doing a viral loop it is a lot of the same principles that apply. It is basically continuous improvement process.

Baseline, figure out ideas for improving and then test and keep the things that work and drop the things that don’t, and just kind of keeping that process going. I would say the same thing here. So when you are talking about, you get many sign ups, essentially what I think you are saying is that you don’t really have the capacity to just have a sales person or a consultant or an internal person hand hold people through to get them more engaged on a platform. So what you kind of need to think about is what activities in the early days lead to people being more engaged further on?

So this is some of the classic growth stuff that companies like Twitter or Facebook have done is they know that engagement is ultimately their goal. When monetization wasn’t something they were even doing, they knew that people who signed up that never used were valueless. People that signed up that used a lot for a long time are valuable. So how do I create that habitual usage?

And so I’ll give you the Twitter example and I think you can find some proxies in your own business. If you look at, in Twitter when somebody follows, I don’t know if it is six or thirty, whatever that number might be but if somebody follows a certain number of people on the first visit, their likelihood of coming back and becoming a habitual user on Twitter long term goes way, way up and if they don’t do that the likelihood is really low.

So they found those proxy-metrics those early indicators of successful customers and then you can really prompt them to do that, so you can shape that early experience. In their case take out all the noise and just get them to follow x number of people and then they are much more likely to have that light bulb go off and believe the product is valuable to them.

So I would look for those same things on your B to B platform of just reverse engineer your must successful customers. What did they do first when they signed up for the service? What are the most common things they did in common and how do you prompt people to do those things?

And part of it is eliminating choices besides that, so really reducing the choices down to just those set of things that makes a more engaged customer and then testing different variations of that. You may have one idea that you just give them a nice big button that says go do that. But you may have another idea that if you give them a compelling reason to do something, then they are much more likely to do it. But when you test one versus the other then you are just looking at which one is more effective at getting people to take that early action that leads to longer term engagement.

So I know that is a fairly generic way of talking about it without knowing more about your platform. It is a little tough to speak other than generic but hopefully that concept is something you can apply more directly.

[49:09]

“After working at companies like Dropbox and eventbrite what made you go off and start Qualaroo and GrowthHackers.com?”

It is a good question; I ask myself that every day.

I’m joking. For me I think one of the things that has helped me become a better marketer is constantly stepping out of my comfort zone, constantly challenging myself to do, not even the next best thing but to do something that seems scary for me that seems hard and that in the process of doing that I tend to learn a lot more than if I just keep doing the thing where I’m really comfortable and it becomes easy for me.

So once I worked with companies like Dropbox and eventbrite and had those earlier IPOs’, my goal was no longer about just sort of financial, I had achieved a lot of my financial goals so then it became about just doing something that is interesting.

So I founded a company that is not Qualaroo or growth hackers and that company I learned a lot through it but I also learned that basically the model that I thought would be successful was not a viable approach. But I had enough investor money left that I had raised for that idea, that we then actually acquired something called kiss insights from Kissmetrics. And it was just the seeds of what growth hackers is today but there was some pretty interesting technology there and some early customers on it. And we saw a lot of potential that we spent the next year really building that up.

And then GrowthHackers.com originally was just a kind of a tactical thing for Qualaroo early on. I just saw a void in the market where I had challenges myself building my personal profile and other marketers that I talked to had trouble building their profile among marketers, and then just connecting and being inspired by other marketers. So I didn’t actually know Warrior Forum existed at the time or maybe I would have been able to draw on some of that from Warrior Forum. So I saw that void and I thought if we can fill that void it will be a very complimentary product to Qualaroo.

I also knew that if content marketing was effective for growing marketing tools what had happened was the content had been created by other companies. I just didn’t want to get into the game of creating a ton of content so I thought why not aggregate that content and then build a community to curate that content and just build a community around other people’s content and that it would be hard to get it going in the beginning but it would ultimately scale and be, I thought, a more interesting business or an interesting way to grow the business than creating a bunch of original content on our own. But it has evolved from there into something that to me is really a personal passion to do growth hackers. It is supportive of Qualaroo but it is something it will be interesting to see where we take it. I love the community on there and I just think there is a lot of really interesting things we will be able to do with it.

Hopefully that answers the question of why I would leave. But with Dropbox and eventbrite I actually knew I was only going to do six months because I was passionate about learning what is that right model of six months up front? But I did the company called Lookout, I did a bunch of companies that were pretty successful through that period of time. So it was a good thing to be doing but my learning started to flatten out and so I wanted to challenge myself in new ways. So that was the main reason I moved on.

[53:35]

“What do you see happening in the future for your company Qualaroo and Growth Hackers? For example heat maps.”

So I wouldn’t do heat maps mostly because I think companies like CrazyEgg do really well with heat maps and the world doesn’t need another heat map company. So for me I prefer to try to fill voids that I see existing and not just compete on the same thing somebody else is doing. So Qualaroo a lot of what we are doing with Qualaroo now, the next phase, when we run an exit survey, when somebody says the reason they decided not to buy their shopping cart …we will pop up a survey that says, “Why did you decide not to check out today?” and one of the answers for example is the shipping is too expensive. Then we have dynamic offers built right into that where we can give them a shipping code to do that, a code for free shipping.

So that kind of adaptive offer based on people’s responses. We just think there are some really neat things that we can do onsite, once you are engaging with people, once you are learning and gathering those insights we think we can drag conversions directly in unit and so we’ve got a few behavior based things that we are testing right now. You can sort of see the early stages of that product on nudge.Qualaroo.com. So it is not always even with questions, there is some behavior triggered overlays, email collectors that have been really effective for some people. But we are still in the early days of that. So some pretty interesting things if you want to play around with that.

Part of the idea too, if marketers don’t have the skill sets to run onsite programs that traditionally require a bit of engineering skill how do we enable marketers to do those things? So we have got some pretty neat things where it becomes easy to run some of the growth hacking programs. Say that Twitter or LinkedIn required some pretty heavy engineering resources to do, a marketers without any engineering background I see in the next few months they will be able to implement very similar programs to those, just directly through this product, something that is not very expensive, so that will be an interesting next path for us.

[56:25]

So Patrick T is asking about the best strategy for building quality back links to your site to rank highly on search engines.

I am really not much of an SEO expert, I work closely with SEO experts, but I think anybody who is strong in anything is amazing, I am just not one of them. So I don’t want to offer advice in an area where I am not particularly strong.

[56:54]

Benji is asking about the initial viral Dropbox video that kind of got Dropbox out of the gate. And then what were the major growth hacks that contributed to Dropbox’s success?

So Dropbox did this even before it launched into private beta and so it was before I was there. It was a clever group of guys, they made a compelling video about what they were trying to create and then they put some funny little Easter eggs in there that kept it entertaining. And then they found an exploit in Digg, that Digg is not that popular anymore, but the Reddit of its day, and they were able to get that video very popular and viral and get that initial big seed of users on Dropbox during the beta, which is huge for startup to be able then to get people using a product.

So it is not about growth it is about feedback. So when you get enough people on a product that you now can figure out what they love about the product, what they don’t love about the product, where they are having challenges, things that work really well, then you can start to iterate on that feedback and start to move the product towards something you can scale in a big mainstream way. And so that viral video was big out of the gate.

And then a lot of the things that we did while I was there, I’ve kind of touched on this a bit, but it is about understanding, so Dropbox is interesting because it has got multiple use cases to it. Like if you think about it you could call Dropbox even a backup product. So like I for example, the first time that my hard drive died on a computer I thought, why am I not just keeping all my stuff in my Dropbox because then I have a dumb piece of hardware that I don’t really, as long as I have good authentication into my computer I don’t really care if I lose it or not. My data is backed up into Dropbox. So back up was one use case.

Collaboration around files, setting up a shared file was another use case. Keeping your data synchronized between each of your devices was another use case. Sharing an individual file was another use case. So there are four different use cases there. So a lot of what we were trying to do was figure out which use cases are the most compelling, and then how do we build the on boarding for each of those use cases that maximizes the percentage of people who actually then become habitual users on the product. Because what we found was once people were habitual users on the product they were so excited about it that just natural word of mouth was very strong. But then all this collaboration that was built into it. The shared folders were important, shared files were important. Then you start optimizing viral loops at that point.

So then if it is...now one of the things they added in the last year or two, when I save things in my Dropbox I have the most three recent files saved and a share link next to those, where I can just click on that share link and now it is on my clipboard. And I can paste it somewhere and now somebody can directly access that file if I wanted to share that file out. So the easiest they made it to share, the more likely I am to share it.

And then one of the things that I think Dropbox is really good at, is that through that loop they could say, “Okay I got that sign up, that’s great I’m done.” But they are like the anti greed company that as a result has become really valuable. So they actually, even though I may not be opted into their referral program, when that file is shared and the person on the other end comes to claim that file they see a promotion for Dropbox in the frame of the page. And then if that person signs up for Dropbox, I get a notification that says I just got free space because someone signed up for Dropbox through one of my links.

So now they have just made me aware of that referral program and I am just much more likely now to proactively share things just so I can get more free space.

So it is basically a lot of, the initially thing we focuses don which was a great on boarding experience, once people are on boarded they are going to share, they are going to talk about it. You are going to unleash all of this natural organic growth. And then they built catalysts on top of that. Easier and better ways to share and then prompts and incentives and rewards for sharing.

So it is all those things piled together that have built the company to, I think their last published valuation is ten billion dollars, and really off of zero traditional marketing dollars spent. They definitely have spent a lot of money on driving that growth but they spent it on free space, they spent it on some things that ultimately are a little bit more defensible than just competing for attention out in channels that are already really saturated and hard to kind of break through.

So hopefully that answers that question.

It looks like we are just coming over the hour here, so I am going to refresh and see if there is anything else that jumps out at me.

[01:02:54]

So let’s see, somebody wants to know what the churn rate is for Qualaroo.

I am not going to tell you that. But I can tell you that we spent a lot of time working on negative churn and thinking about how do we make sure that every cohort of users doesn’t disappear but instead either stays as valuable as it is a year from now or grows in value through additional services and other things.

So definitely as I said early on, I would definitely say that is one of the biggest challenges for us and just about any SAS company is making sure that you can retain users to that ones you are acquiring are not just replacing the ones you are losing. And that makes a SAS business kind of challenging. If you are bleeding out customers faster than you are bringing them in you are not growing a business and you are probably going to be pretty frustrated.

So let’s see. Here we go.

[01:04:05]

Okay so there are some questions on the you stream as well, I am not sure where I can see those.

With Qualaroo and growth hackers going strong, do I aspire to have a four hour work week?

I kind of do but in reality I don’t. I like the idea of it, the idea of being able to cut work way down but in reality I like the pursuit of doing something important and interesting and challenging probably more than the idea of just kicking back and doing nothing. But for me I still do have family that is important to balance. I have two kids that one is in high school and one is in junior high. And I try to find time to coach my daughter’s soccer team. I try to find time to go surfing. But as long as I can have quality family time and take care of my health, then I feel like it is very sustainable to put every other ounce of energy into growing Qualaroo and growth hackers and just trying to do interesting fun stuff and building a team around me to do it. So that is my big focus there.

So somebody who was asking about the churn rate for Qualaroo, the same person. I just don’t want to disclose that sorry.

And is it in the hockey stick phase yet?

It is definitely not in a hockey stick phase and I am not sure that a SAS business ever goes in a hockey stick phase. I think that the challenge, as I talked about, like the challenge with a SAS business is figuring out if you can get a SAS business to a 15% month over month growth rate, and if you have got your MRR, your month recurring revenue at $100,000 do the math. Within a couple of years you have a pretty valuable company on your hands. So to me it is not about it ever getting easier. It gets harder every month because in a SAS business your churn rate is something you constantly battle against.

And so to me it is a very, SAS businesses are very interesting if you can maintain a high monthly growth rate for an extended period of time you could build a super valuable business.

Alright any other questions?

[01:07:01]

Thank you for saying that I don’t look as old as I am. I appreciate that. Maybe it is the balance that keeps me from looking my age. So everybody should be focused on getting some balance in what you are doing but being passionate about what you are doing too.

So I think I got through the ones there. And we are over the hour. I am going to do one more refresh and see if something jumps out at me.

[01:07:37]

So yeah the main things that I would ask everybody to take a look at is, get the kindle book while it is still free, there is a link in the forum for the book. I think you will enjoy it. I get a lot of inspiration around studying. So it has got the growth engines for LinkedIn, for Yelp. It is based on a collaborative effort with Morgan Brown and myself and some of the others on the team here where we have really looked at all of the different public inputs of how the companies are growing, and just been able to piece together a growth engine that shows… that hopefully everybody can learn from each one of these growth engines something that they can apply to their own business.

And so that was what we wanted to do was just real comprehensive study. And it is about 150 pages and ten or fifteen different growth engines that we have broken down. And there is good forum discussions on growth hackers about each of these growth engines too. So if you have some ideas as you read it come and contribute about that.

And then if some of the things you heard about Qualaroo are interesting to you, we have a free trial on there. It would be great to have you come and give that a shot. And hopefully that voice of customer will help you unlock some of your growth challenges by just being a little bit responsive to what people are actually trying to do on your site and what their challenges are.

So yeah my big parting quote or parting advice would jus t be put as much effort and time and resources into effective on boarding and conversion optimization as you do into channel discovery and you will find with half the time in channel discovery and half the resources, with the right conversion funnel you will actually find better and more effective channels more quickly. So the two definitely go hand in hand.

Alright, well thank you everybody it has been fun. I am sure you are as tired of listening to me as I am of listening to myself. So speaking for an hour straight is not easy.

So I appreciate everybody and feel free to post some question in the forum as follow up and I will try to drop in and answer anything that I missed in this.

Thank you.

[End Recording 01:10:12]

what is the churn rate for Qualaroo?
is it inthe hockey stick phase yet?

Post WAMA:

Thank you Sean, Alaister and all WF Owner/Management team.

This was a very informative presentation.

I did get the Book and I'm reading it.

I would venture to say there are a handful of members here who's businesses are already big enough to appreciate Growth hacking and there are a multitude more with smaller businesses who "get it," and then there are a LOT who think "Growth Hacking" is a new buzzword for a lot of other IM terms.

For me, this WAMA cleared a lot up.

Keep up the good work/improvements here. Liking it a lot.

George Wright, ever an Allen Says fan but still enjoying the WF.

This sounds great!

I thikn this game with bursty sound created by expert.

We're really excited to have Sean Ellis live with us here at Warrior Forum for a Warrior Ask Me Anything event.