I listen to 10 hours of podcasts a week, so you don’t have to.
This is the 49th edition of Best Business Podcasts, featuring Lenny’s Podcast, 20VC, and Marketing Against The Grain.
What you need to know
🛞 Stop reinventing the wheel
📸 Instagram co-founders’ big lesson
⏱️ It’s time to focus on what you have
🛞 Stop reinventing the wheel
🥉 Third place (4 min read vs 1 hour 13 mins listening)
Shiny object syndrome. We all have it. But some of us cope with it better than others. The best leaders know when to pursue something new and when to focus on the boring stuff.
Patrick Campbell bootstrapped Profitwell to a $200+ million exit. He sat down with Lenny to share his top 10 lessons in business. One of those is a term he coined ‘tactical retention’, aka do the basics right.
What they say
Don't ignore tactical retention
Strategic retention is all the stuff that great product leaders do: your ideal customer profile, your time to value, your feature roadmap.
But leaders are so biased towards this that they miss out on this thing we call tactical retention.
These are things like payment failures, term optimization, cancellation flows, off-boarding.
If you're past product market fit, tactical retention is typically about 25% to 40% of your churn problem. That's a significant amount.
Product leaders don't really look at it because they're like 'I've got to focus on features'. Product leaders are so entrenched in that thinking.
Tactical retention problems can be solved with 2 months of work. It's not that much effort to put in a marketing funnel when people's credit cards fail.
Patrick Campbell
Off-boarding cheatsheet
We looked at 2 million cancellation flows and found you have about 18 to 30 seconds of someone’s attention when they hit the cancel button.
We found you should ask two questions. (1) 'Why are you leaving?' It should be multiple choice. Don't do free text responses - you'll only get 1/100 great responses that way.
(2) The other question is 'What did you like about the product?'
The reason that works so effectively is because that person's on a freight train to cancel. The minute you ask what they liked, you're tapping into the nostalgia effect and you're stopping that freight train.
This information is great for a product team to figure out what's working, what's not, and what they should do more of.
Based on the respondent’s engagement data, their plan, their firmographics, plus their answers, I could offer up a salvage offer or a pause plan or a maintenance plan.
Patrick Campbell
What I say
Why it matters: Many companies focus on customer acquisition and overlook the importance of retaining existing customers. Not only is it more cost-effective to retain customers than acquire new ones, it can also lead to increased revenue through upsells, cross-sells, and referrals.
None of this is news to you. Customer retention has been a hot topic recently. To take this a step further, Patrick has a spicy take on the best way to tackle churn. It’s not strategic retention. It’s not tactical retention. It’s stop-discounting-your-product retention. This is a must read.
Between the lines: People avoid working on churn for a myriad of reasons: it’s hard to know what good looks like, it’s painful to see the numbers, or they simply have shiny object syndrome. If a product leader sees churn as an afterthought, start identifying the most common reasons for customer cancellations and deliver this to them with a bow on top. Include a list of tactical retention ideas. Share real experiences from real customers. Do anything to make it easier for them to act.
📸 Instagram co-founders’ big lesson
🥈 Second place (3 min read vs 1 hour 4 mins listening)
The cost of a bad hire can be substantial, especially for startups. In addition to the financial costs, a bad hire can lead to a toxic work environment, decreased morale, and wasted time and resources. Kevin Systrom, co-founder of Instagram, says firing fast can help prevent these negative outcomes and keep a startup on track towards success.
What they say
Firing fast
It's so hard to screen in a few interviews whether someone is the right person for this chapter of the company.
You need to realize your hit rate with hiring is not going to be 100%. That's okay. Instead, optimize for minimizing the chance of getting it wrong.
If it's wrong, move really quickly about making the change. This is the part people have the most problem with.
This is something a 2nd time founder will do that a 1st time founder has a lot of trouble doing.
Kevin Systrom
Kevin's music analogy
Researchers figured out how much of a clip of a song they have to play before you can form a very strong opinion of whether you hate it or love it.
I'm going to quote this wrong but it seemed the difference between 5, 10, and 30 seconds was very, very small.
All you need is 5 seconds and you're like 'I've got it. This is great'. Or 'I've got it. This is not great'.
With talent you can tell very quickly if someone is going to work out or not.
Getting a better spidey sense for detecting that will keep you from having all of this pain.
Kevin Systrom
What I say
Why it matters: Nobody’s perfect. We all have areas we can improve. However, some skills are harder to develop than others. When assessing potential or recent hires, make a list of skills that are important to you and don’t compromise on them. If someone doesn’t meet expectations and it’s in your red or yellow column, you’ll be better off without them. Make your own version of the Topgrading Ability to Change Chart and use this as your North Star.
Between the lines: You’re being shot at. You’re experiencing the biggest adrenaline rush of your life. Now, ask yourself: How do US Marines make decisions? Given it’s a matter of life or death, they use something called the 70% rule. Take action when you have 70% confidence in the success of a decision.
We can learn from Marines by using this concept not only in hiring, but also in firing. You can often tell quickly when someone isn't good enough. It’s important to balance impulsiveness and perfectionism. Don’t wait for 100% information. Take action at 70%. You’ll be better off in the long run.
⏱️ It’s time to focus on what you have
🥇 First place (3 min read vs 35 mins listening)
I love a good list. Especially lists that help me do my job better. Kipp and Kieran ranked the top 6 marketing strategies for Q1 2023. After accounting for all of the major trends - from ChatGPT to a post-Covid world - they shared what channels they’re most bullish on and how you can leverage them.
What they say
2nd place - Conversion rate optimization (CRO)
Do not be the team that takes 3 months to ship a single experiment that's going to increase conversion rate by 1%. Do not be the person who tests things that are marginal.
Make sure you ship quickly and ship meaningful things.
It's a great year to invest in getting more from the traffic you already have. You want to make sure you've efficiently turned that traffic into customers.
Kieran Flanagan
The winner is… ???
You are completely right. CRO is a short term here and now strategy. We're in a short term here and now world with a lot of the economic pressures that businesses are under.
CRO has to be at the very top of our power rankings but it wasn't number one. Drum roll please... we have our top strategy for Q1 2023: brand marketing.
If you look at all the trends, storytelling is going to be more important in a world of AI disruption.
People make decisions emotionally not rationally, so when you're trying to increase your close rates you need to educate customers. You need a great emotional story and that's what brand marketing does.
If you get really great at your positioning and then ramp up your brand marketing, you're going to come out of these uncertain times better, healthier, and stronger than ever.
Kipp Bodnar
What I say
Why it matters: For businesses looking to survive in the current economic climate, it's essential to prioritize strategies that deliver results quickly. CRO can be an effective way to increase revenue in the short term, but it also pays dividends over the long term - even when you’re working on other marketing strategies.
Between the lines: While CRO and brand marketing may seem like opposing strategies, they can be complementary. Some tactics will improve CRO but also build a greater affinity and trust with your brand.
Case in point, check out Built To Birth. Bridget uses VideoAsk (a Typeform product) to build rapport with the viewer while taking different user groups through different funnels. I love this tool. So much so that we’re creating no less than 4 different VideoAsks at Medicspot to address and solve different customer problems. Give it a go yourself!
Shoutouts
When I find newsletters, podcasts, or books worth sharing, I’ll feature them here:
Looking to build high-income skills you can deploy for yourself or for clients? Check out The Gig. It's a daily freelancing newsletter with news, tips, and tricks on how to work with clients and get better at copywriting, paid ads, and more.
Join 1000s of travelpreneurs and receive a weekly collection of paid opportunities and useful resources for people who want to create a remote lifestyle.
Note, these quotes were pulled at different points of the episode. Some sentences were left out to make the narrative clearer and more concise. Podup is not associated or affiliated with any podcast (unless otherwise stated). All roundups are independently written and do not imply any sponsorship or endorsement by the podcast.
Good set of pods Adam.
Have you used Artifact? I’ve used it for the last 9 days and can see the use case Kevin and Mike are going after. I don’t yet see the engagement hook that they’re known for.
I like how direct Kevin was. Many aren’t on 20vc.
Whenever I recommend how companies should build deliberate products I recommend no filter book by Sarah Frier & a couple of Kevin’s podcast appearances.