Growth with Alex Schultz (How to Start a Startup 2014: Lecture 6)

Thank you! So thank you! Cool! So you guys, this is awesome. I've been watching the lectures in this course. Isn't it absolutely amazing? Good content! And now you're stuck with me.

So, unlike Paul when he was talking in the Q&A and you guys asked him what he'd do if he was in college today and he said physics, I actually indulged myself! I went and I went and did physics. Did physics at Cambridge! I think physics is an amazing class to give you transferable skills that are really useful in other areas. But I guess that's not why you're listening to me today. Like, physics isn't the class.

So, I paid for college doing online marketing, direct response marketing. I started with SEO in the 1990s. I created a paper airplane site. I had a monopoly in the small niche market of paper airplanes globally! Which, you know, when you want to start a startup, also see how big the market could be in the long term. It wasn't great, but what that taught me was how to do SEO.

And back in those days, it was AltaVista! The way to do SEO was to have white text on a white background, five pages below the fold, and you would rank top of AltaVista if you just said "paper airplanes" 20 or 30 times in that text. And that was how you won at SEO in the 1990s. It was a really easy, easy skill to learn.

When I went to college being a physicist, I thought paper airplanes would make me cool, but I was actually the most nerdy person in the physics class. So I created a cocktail site, which was how I learned to program, and that grew to be the largest cocktail site in the UK! That really got me into SEO properly.

When GUI launched, so with Google, you had to worry about PageRank and you had to worry about getting links back to your site, which basically at that stage meant one link from the Yahoo directory got you to the top listing in Google if you had white text on a white background below the fold as well.

When Google launched AdWords, that's when I really started to learn how to do online marketing! That was buying paid clicks from Google and reselling them to eBay for a small margin of like 20% using their affiliate program. That was what really kicked me into doing what everyone nowadays talks about: growth or growth hacking or growth marketing.

In my mind, it's just internet marketing using whatever channel you can to get whatever output you want. That's how I paid for college and how I ended up going from being a physicist to marketer, transitioning to the dark side of the force.

So what do you think matters most for growth? You've had loads of lectures and people have said it over and over. So what do you guys think matters most for growth? Someone give me an answer!

Are you, brother? Great product! I agree, great product! What does great product lead to? Customers! And what do you need those customers to do? Spread the word!

Someone said "stay on your site." Someone said "packaged." That's it! Retention, retention is the single most important thing for growth.

Now, we have an awesome growth team at Facebook and I'm super proud to work on it! But the truth of the matter is we have a fantastic product. Getting to work on the growth of Facebook is a massive privilege because we're promoting something that everyone in the world really wants to use, which is absolutely incredible! If we can get people on and get them ramped up, they stick on Facebook so many times.

Like, I've advised multiple startups. My favorite was working with Airbnb, but with Coursera I've worked with other ones that haven't done as well as those guys. But the one thing that is true over and over and over again is if you look at this curve: the cent monthly active versus the number of days from acquisition, if you end up with a retention curve that asymptotes to a line parallel to the x-axis, you have a viable business and you have product-market fit for some subset of market.

But most of the companies that you see fly up who talk about growth hacking and virality and all of this other stuff, in a trice... so hard not to swear but it'll happen... their retention curve slopes down towards the x-axis. And in the end...