I watched this video last night. Its actually the third time I’ve watched it. Its that good. Its Chamath Palihapitiya on “How facebook got on the path to 1 billion users”. He was the former VP of Growth at Facebook, and now is the founder of Social+Capital, a VC firm. Its easily the best talk I’ve seen about startups. Its a no-holds barred look at growth and product.

In essence, these are the 3 things a startup must do:

1) Focus on building core product value.

2) Get users to experience core product value as soon as possible. This is the “AHA” moment and it needs to happen in seconds.

3) Get the largest % of our target market to experience core product value as quickly as possible. This is the definition of growth.

For Facebook, the AHA moment is getting a user to 7 friends in 10 days. When this happens, the user can experience the magic of Facebook. When they have this minimum number of connections they will be an active user and it will tie them into the platform. Hat tip to my buddy Jason Allan for finding this video and his post on product is the key to growth hacking.

I also like this image summary by Brian Balfour which summarises it nicely  in “product vs marketing vs growth“.

Twitter AHA moment is…?

I’ve been reading about Twitter having issues with retaining users. They’ve been able to get 1 billion people to sign-up but only 25% are active. The biggest issue I see is around experiencing that “AHA” moment. When they on-board new users, its actually quite difficult to figure out what it does. I signed up and tried it out in mid-2007, but I didn’t get it. It wasn’t until 6 months later, I signed in again but I still didn’t have anyone to talk to. The AHA moment for me, was when a friend I was following posted a public tweet, and I responded to my friend immediately. She then responded back instantaneously. I was like I get it – you can post a public status update and anyone can respond. As you follow more people and see what they are saying, and start following brands, celebrities it builds more density in the network to tie you in.

Josh Elman, who worked at Twitter provided this insight on the “only metric that matters“:

“At Twitter, we found that if you visited Twitter at least 7 times in a month, then it was likely you were going to be visiting Twitter in the next month, and the next month, and the next month. And we decided this was enough initially to be “really using it”, though of course I think Twitter gets even better when people use Twitter every day or more.”

So not only does twitter need to communicate to you how to use the service and get you to that core value proposition in seconds of you signing up, it also has another focus – getting you to visit at least 7 times. Once it can do that, knows that it has you. You’ll come back again, and again because you’ve experienced core product value.

My Uber AHA moment

A user needs to experience that AHA moment as soon as possible, and as many times as possible. The best experience I’ve had regarding this was using Uber in San Francisco. Being able to connect my credit card, then order a ride at the push of a button. A car came within 5 minutes to pick me up. That is a killer AHA moment. To know that I have the power to be able to hail a cab whenever I felt like it. In essence, as Uber’s slogan prescribes “my own private driver”. The whole process was seamless from when I ordered the cab to getting inside and then to my destination. I didn’t have to pull out my wallet to pay for the ride. It was effortless.

I experienced this AHA moment multiple times whenever I ordered the cab and took a ride. In fact, I used it everyday, sometimes 2 or 3 times a day. I probably spent about $400 USD on Uber rides in my one month in San Francisco. Not only did I experience it, I wanted to share the experience with my friends. I invited my friend Kiran and referred him as I was able to get a $20 credit. I did the same thing with Lyft as well. We were part of the growth engine. Getting more users to experience the AHA moment. They in turn experienced the AHA moment, and referred more people to get the credit and because they loved the service.

Pixc’s AHA moment

One of the startups I’ve been helping out is PIXC which is part of Telstra’s Muru-D accelerator program. Its a service that removes the background in an image. Its particularly useful if you have an eCommerce store. If you look at any eCommerce store today, the background has been removed and it has a white background. Here is an example of ASOS’s pages for daily new products.

When I was helping Holly pitch her startup to Telstra, I had to test out the product. So I found the hardest picture I could find to remove the background. It was a picture of a bicycle wheel with spokes. I figured this would be a pain in the ass for someone to remove the background and a fairly good test.

Within a couple of hours, I received an email in my inbox with a link to download the image below. That was the AHA moment. When I looked at the new image and thought wow, someone did this so quickly. If I had tried to do it myself, it probably would have taken at least two hours if not longer. Images could be done for $2 a piece and I thought “well if I was doing this it would definitely cost more than $2!”.

I also tried out a few other variations like with this profile picture below.

 

Getting this image back in the same day made me experience another AHA moment.

More on the AHA moment

A lot of startups celebrate the fact that they have X number of downloads (thousands, millions), registrations, page views etc… But this is broken. Its a vanity metric. Savvy people know that it doesn’t mean jack. It does mean something – you can generate demand. However the rest of the experience needs to live up to it. Its a short term view to focus on things like downloads and registration, and getting more people to download. We need to be focusing on 1) building core product value 2) getting people to experience that value as soon as possible.

Its analogous to building up a line-up of people outside the opening of a new nightclub (hype). When you get inside, its dark, the music is bad, the drinks are expensive, decor is horrible, and worst of all its actually empty (wait…aren’t most nightclubs like this?). There’s no point shoving more people into the top of the funnel (i.e. getting more people to line-up) if the rest of the experience doesn’t match it. Those customers are likely to leave and never come back again, and will not refer anyone. In fact, they’ll tell people “I had a horrible experience with that product/venue/service and I wasted my time and money on it”. This will hurt you in the long run.

If we can get the user to have an amazing experience with our service, an “AHA” moment, we can get them to come back (retention) and to recommend it to their friends (referral). We need to be removing all barriers to getting to AHA, and enabling the user to get there as quickly as possible. Then get them to experience it as many times as possible, and having them spread the word about it.

I’m out like the Charlotte Bobcats in the playoffs,

Matt Ho