📈 Secrets behind product led growth, franchises are the new MBAs, ...
I listen to 10 hours of podcasts a week, so you don’t have to.
This is the 29th edition of Best 3 Podcasts of the Week 🥉🥈🥇, featuring This Week In Startups, The Next Generation, and Lenny’s Podcast.
What you need to know
🎲 Don’t bet against Zuckerberg
🎓 Franchises are the new MBAs
📈 Secrets behind product led growth
BONUS segment
✍️ How to use novelty in your writing
🎲 Don’t bet against Zuckerberg
🥉 Third place (2 min read vs 1 hour 18 mins listening)
Everyone’s hating on Zuck. Many people argue the rebrand to Meta was a PR play to shake off all of the negative sentiment surrounding Facebook.
At first, I joined the hecklers. I fell into the habit of recency bias and disregarded everything Zuck had achieved. I judged Meta entirely on Zuck’s cartoon avatar.
Now, I’m watching and waiting with intrigue. Zuck’s master plan is emerging. It’s clear he had a trick up his sleeve - AI. We’ve seen a glimpse of this with Make-A-Video. If Zuck pulls the metaverse off, he’ll be regarded as the greatest entrepreneur of our generation.
What they say
Zuck’s grand plans get revealed
They’re terraforming. They’re gonna use AI to terraform the metaverse.
This is why Zuckerberg is so drunk on this. The reason that Zuckerberg has so much conviction is that he put these three things together.
He understands the social graph and he’s mastered how to surface things that evoke emotion in you. He’s the engagement master.
He’s also the advertising master. He knows how to get those clicks for advertisers. He’s built one of the top two ad networks ever built.
Put those two things together, [engagement and advertising], you get social media. Now you add the virtual reality piece. The ads you’re going to see are going to be nuts.
Jason Calacanis
What I say
Why it matters: This is a great life lesson. You’re often missing out on a ton of information when making decisions. In this case, many of us had no idea about Zuck’s AI plans and assumed he’d gone a bit crazy by going all in on the metaverse.
The important thing is that’s ok. It’s ok to make decisions without knowing the whole picture. You must be self-aware of this fact. Being aware of this encourages you to constantly seek new information so you can adapt your view or strategy at any time.
Between the lines: If you told me 6 months ago that Zuck could build entire new virtual worlds using AI, I wouldn’t believe you. Now, I would. We’re visual beings and sometimes you have to see something to believe it. This is especially true for AI generated text, images and videos. I now realise how powerful AI will become, and believe AI will be the next seismic technology shift after mobile.
🎓 Franchises are the new MBAs
🥈 Second place (4 min read vs 56 mins listening)
Franchises don’t get enough attention. Society views MBAs as the golden ticket to success in corporate America, but I believe traditional MBAs are way too expensive and way too theoretical. The best way to learn is by doing. Franchises offer you the opportunity to do exactly that. You get paid to learn, rather than paying to learn.
What they say
How to find the right franchise for you?
If there’s an easy button, everybody would do it. What I would recommend is going on sites that rank franchises.
The Franchise Times lists the Top 400 based on a bunch of rankings. Almost all of them are legacy brands that have been around for 20+ years.
I would create a Google spreadsheet, take that list and filter it down by category: is it retail, home services, automotive? I would filter to say what I want and what I don’t want.
Then you can start to look at the names. A lot of people don’t even know that something is a franchise.
The next step is to go to BizBuySell which is a broker site for buying businesses. You filter by State, City, the keyword that it’s an existing franchise.
It will show you existing franchises that are for sale. I would start looking through those, talk to the seller, look at their financials, download the FDD (financial due diligence) and see if there’s fragmented ownership for rollup opportunities.
You have instant value creation by rolling up franchises. Part of that is because you’re willing to deal with all of the bullshit to rollup single shops, clean it all up and fix it. If you’re a big private equity, they don’t want to do that. That’s why they’re willing to pay for the turnkey operations.
Brian Beers
What’s better: an MBA or a franchise?
Learned knowledge is better than book knowledge any day. If you go out there and do it, you’re going to learn a lot more a lot quicker.
A couple of years ago, I was running 6 locations. Everything I’ve learned I figured out along the way.
I don’t have an MBA. I just surround myself with smart people. I join masterminds.
Today, I run a $36M company that we’re going to continue to grow. I could probably grow this thing to $100M if we desired to.
You can read all the management theories in the world but at the end of the day it comes down to execution. Wealth is built through execution. There’s no better way to learn than going out and doing it yourself.
Brian Beers
What I say
Why it matters: I’m not advocating that you start a franchise tomorrow. It’s definitely not for everyone. If you’re an operator, franchises are a recipe to print money. If you’re a marketer, designer, engineer or product manager, you’d probably quit after a week because of the creative restraints forced upon you by the franchisor.
The key takeaway here is to learn by doing. If you’ve wondered what it’s like to work at a startup, join one. If you’ve wondered what it’s like to be your own boss, start a side project. If you’ve wondered what it’s like to live in Austin or Miami, fly there.
Between the lines: Books, courses, and even podcasts only get you so far. The same way you don’t truly learn a language until you live in the native country, you don’t truly learn business until you roll up your sleeves and apply the theory in practice. Even something as small as writing a newsletter counts - take my word for it!
📈 Secrets behind product led growth
🥇 First place (5 min read vs 59 mins listening)
Tech folks love a shiny object. Product led growth is the new toy in Silicon Valley. Julian Shapiro was a guest on Lenny’s Podcast and talked all things product led growth (or as he puts it, product led acquisition).
What they say
Why is product led acquisition important?
Product led acquisition (PLA) is absolutely the best way to grow any startup. There’s zero marginal cost by having users invite other users. It’s scalable. It creates moats as well as the ability to acquire more customers quickly.
People mistake product led acquisition for referral programs, which it is not. Referral programs are a tacked on incentive to encourage people to invite because they are otherwise not inviting.
PLA is when you inherently get more value from the product when you invite others. You don’t need to incentivize them with anything artificial.
The other interesting thing here is there are far fewer dependencies.
Let’s say your company primarily grows through content and SEO. You’re at the mercy of Google releasing an algorithmic update twice a year, which occasionally will absolutely tank your traffic.
Or if you’re a paid acquisition led company, meaning you’re running Facebook and Instagram ads, you’re also at the mercy of the volatility of CPMs and whatever targeting options they suddenly remove. Your entire acquisition strategy is completely out of your hands.
Julian Shapiro
The 4 types of product led acquisition
Here are the categories of product led acquisition that I’ve identified.
(1) Users inviting other users to settle debts. When I use a product to pay you money, whoever is collecting the money from me is going to create an account to claim their money.
(2) You’re inviting someone to join the product you’re using to partake in a conversation that they otherwise cannot access. Inviting people to critical, social or business conversations in an app is an almost guaranteed way to grow very quickly.
The business version of this is Slack. You invite all of your coworkers and even all of your vendors via Slack Connect. This was a brilliant feature to encourage you to invite people who aren’t using Slack who are outside of your organisation.
(3) Billboarding is when the use of the product is inherently visible to the people around you. The product advertises itself.
I got the term from the billboards above the highway. The company that hosted the billboards advertised their own logo while also showing whatever ad they were being paid to show.
(4) UGC is user generated content. I make content and the platforms brand the content. People often overlook Quora, Reddit, Stack Overflow or Trip Advisor. They’re encouraging users to create content in the form of conversations that then surfaces itself on Google.
Ask yourself if users use your product to create content in any way. If so, what type of content should you encourage them to then share? Then how do you make the page that they use to share the content as easy to consume as possible?
Julian Shapiro
What I say
Why it matters: Product led growth / acquisition really is a game changer. If you have aspirations to grow your company into a unicorn, you’d be hard pressed to do this without it. Pretty much every big company fits into one of these buckets.
Here are a few more examples to help you think about how to leverage product led growth at your company:
Settling debts (PayPal, Monzo, Venmo)
Conversations / work collaboration (Google Docs, Figma, Asana)
Billboarding (Amazon packaging, Visa credit cards, Apple AirPod design)
UGC (LinkedIn profiles, Sent from Gmail, Spotify playlists)
Between the lines: This episode gave me a few ideas for how to incorporate product led growth at thepodup.com:
Conversations (fan forums to discuss different podcasts and topics)
UGC (community writers who publish their own roundups on the site and share with their audience)
I’d love to hear what you think of these ideas (the good, the bad, and the ugly) and if you have any of your own to help grow Podup!
BONUS segment
✍️ How to use novelty in your writing
What does novelty look like? I’ve identified different categories for it. This is the backbone of how I write.
(1) Counter intuitive information. If you tell people something, they’re like ‘Wow, I never realised the world worked that way.’
(2) Counter narrative information. People respond with ‘Wow, that’s not how I was told the world worked. I’ve been lied to and now you’re telling me the truth.’
(3) Pure shock and awe. People say ‘That’s crazy, I would never have believed that to be true.’
(4) Elegant articulation. You take complicated rich thought and boil it down into a very concise sentence. The reader goes ‘That’s beautiful. I couldn’t have said that any better myself.’
Julian Shapiro
Do you ever struggle with writer’s block? If so, this is a good lens to help you push through the fog.
Two of my biggest writing lessons include (1) Write like you talk and (2) Start with the emotion you want to leave the reader and work backwards.
The later aligns very closely with Julian’s novelty framework. He weights his writing toward a feeling of wow / surprise, but you can also target different emotions, like disgust (improves social sharing), fear (improves conversion), and happiness (improves engagement).
Shoutouts
When I find newsletters, podcasts, or books worth sharing, I’ll feature them here:
Karen Cheng wrote a great thread about using AI tools to generate fashion
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.