20 Growth: Shopify's VP of Growth on Why Standalone Growth Teams Operate More Efficiently than Integrated Ones, Why You Should Hire as Senior Growth Leaders as Possible and The Biggest Mistakes Founders Make When Making Their First Growth Hires

Luc Levesque is currently the VP of Growth at Shopify and also advises companies like Twitter, Pinterest, and Quora. At the age of 21, Luc founded TravelPod, the world’s first travel blogging platform. 10 years later, TravelPod was acquired by Expedia, where Luc led the creation of two award-winning products: TripWow and the Traveler IQ Challenge. Luc then served as an executive at TripAdvisor, where he built and led the growth team which helped TripAdvisor become the world’s largest travel site. Luc was then recruited by Mark Zuckerberg to Facebook where he was an executive and led the creation of Messenger Kids. In Today's Episode with Luc Levesque We Discuss: 1.) Entry into Growth: When did Luc realise the power of "growth" within every company? How did Luc subsequently make his way into the world of growth pose-selling his first company? What does Luc know now that he wishes he had known when he made the entry into growth? 2.) Growth and Viral Loops: How does Luc define "growth" today? How should leaders choose what is the right north star to focus on for their business? Should this north star change? If so, how often should the north star change? How does Luc define "viral loops"? What makes the best viral loops today? 3.) Growth: Building the Team: When is the right time for founders to start thinking about building a growth team? Should it be standalone or integrated into other functions in the company? Should the first growth hires be senior and tasked with hiring the team or junior and be more lean as a way to test growth as a new function? What are the signals Luc looks for when hiring for growth? What are the best questions that reveal the characteristics growth leaders need to have? 4.) Growth: The Action: What is a growth decision Luc made without data? How did it go? What are some growth tactics that have become stronger over time? What have died a death? How should leaders know when to kill a new project vs continue and keep testing? What are the biggest mistakes Luc sees founders make when building and scaling their growth team?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is 20 Growth with me, Harry Stebbings. This is the monthly episode where we sit down with the best heads of growth in the world. And so founders listening, when hiring for growth or growth teams, use these episodes as a benchmark for what truly great looks like in the role of growth and hire against it. Today, I'm so happy to be joined by a true growth OG, Luke Levesque, currently the VP of Growth at Shopify, and also advises companies like Twitter, Pinterest and Quora. And at the age of 21, Luke founded TravelPod, the world's first travel blogging platform. 10 years later, TravelPod was acquired by Expedia. Luke then served as an executive at TripAdvisor, where he built and led the growth team, which helped TripAdvisor become the world's largest travel site. Luke was then recruited by Mark Zuckerberg to Facebook, where he was an executive and led the creation of Messenger Kids.

• 0:45Harry Stebbings?

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• 1:27Harry Stebbings?

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• 2:10Harry Stebbings?

  Because my body temperature really spikes at night and I know that I need to take it easy, stay in and look after myself. Again, would never have had that without Whoop. You have to invest in yourself if you want to perform in business or sport. Whoop is a game changer. Go to whoop.com and use the code VC at checkout to save 15% and get free shipping today. That's VC at checkout for 15% off. But I'm now so excited to hand over to the one and only Luke Lavesque, VP of Growth at Shopify.

• 2:42Speaker 01

  You have now arrived at your destination.

• 2:45Harry Stebbings?

  Luke, this is such a joy to do. I heard so many great things before the show. I so enjoyed our chat before the show. So thank you so much for having the time to come on the show and I really appreciate you joining me.

• 2:55Speaker 02

  Thanks, Harry. Thanks for having me.

• 2:56Harry Stebbings?

  Not at all. I want to start there. You've got a pretty fascinating background. So I want to start with how you made your way into the world of some of the most powerful growth orgs with the likes of Facebook and most recently Shopify. And what was that entry into Growth V?

• 3:10Speaker 02

  So I originally started as an entrepreneur, kind of bouncing between product and growth for a really long time, which I think is pretty common for a lot of growth people. I originally started building my first product when I was 21. I built a travel blogging network called TravelPod that I sold to TripAdvisor. And when I did TravelPod, I really focused on building the best product in the world and not on growing it, which had its own issues later that I discovered. But what happened was during the acquisition process with TripAdvisor, the CEO of TripAdvisor, I remember he was asking these really deep technical questions like, what are your meta tags? What does the SEO configuration look like? How much traffic do you get from different sources like Google or Google Images? And I was really thinking, why is this guy, the CEO of TripAdvisor, asking so many technical questions about SEO?

• 3:53Speaker 02

  And this is quite a while ago and back when SEO was a dark art and growth in general. But that's a moment where I realized how important growth was. Realized that building a great product is important, but if you don't have a strong growth loop, it doesn't matter because you can't scale the product. So from that, that was a pretty pivotal moment for me and one where I really started focusing on viral loops and SEO and paid search and funnel optimization to grow the products that I was building. So after TravelPod, built a Facebook app called the Traveler IQ channel. That grew to about a hundred million users on the Facebook platform. Also built a travel photo product called TripWow, which grew to sixty five million users. Those products were very much about viral loops, growth on the Facebook platform. After that, moved on to growing TripAdvisor itself, which was mainly about SEO.

• 4:35Speaker 02

  We built a pretty sophisticated SEO growth engine and grew TripAdvisor to be the largest travel site on the internet. After that, went on to advise a bunch of companies. So I worked with Pinterest, Patreon, Twitter, and shared some of my growth playbook with them. And kind of through that, got connected with Mark at Facebook. Met with Mark, had a fifteen minute meeting that turned into an hour meeting and really hit it off frankly, and had a great chat. You know, originally, he was trying to convince me to come down to California to work at Facebook. I was in Canada, wasn't all that, not so much interested, but it was a difficult leap to leave Canada. So it took a while, had a long kind of discussion with him. The experience was actually quite the experience. We flew me out to California with my wife, we had dinner with him and his wife, and we ended up playing Oculus Rift all night, actually.

• 5:17Speaker 02

  And this is before the Oculus was released, so it's pretty cool. So I was just really having a good time there. And I remember after doing that, he just pulled an envelope out of his pocket with an offer, and I flew back home with an offer to join Facebook. And eventually ended up leaving Canada, coming down to California and working at Facebook.

• 5:34Harry Stebbings?

  Can I just unpack a couple of things here? Because there's so much and I don't want to lose like strings. First off, before we touch on Facebook, you mentioned the viral loops that were actually core to the early products being so successful. Just so we understand, I think viral loops is kind of thrown around as two words a lot. What is a viral loop and what makes one work and be efficient?

• 5:55Speaker 02

  Yeah, I think a viral loop is basically where you have users on your product that are doing some kind of behavior that's inviting other users to come and register on the product. That's simplest level. You can have, the best is when the core product itself has a viral loop. For example, a photo sharing product, using a photo sharing product and not sharing it is not a very useful product. So the viral loop is baked into the product itself. You can have kind of secondary loops baked into it, but ultimately, it's about users who are on your product inviting other users to come and use your product and convert. So there's different ways of doing this. It can be challenging and difficult to get right, but when you do get it right, it can lead to some pretty exponential growth.

• 6:31Harry Stebbings?

  What are the most prominent viral loops at Shopify?

• 6:34Speaker 02

  It's something we're constantly working on and iterating on. One of our best sources is through recommendations. Our merchants love Shopify and they mention Shopify to their friends and other merchants come in and join through that loop. So we're always iterating on making it easier for merchants to do that. But it's because we have such a great product and one of the highest cited reasons for joining Shopify is that somebody had recommended them in. That it's, again, it's kind of part of the core product where it would be hard to do if you didn't have a great product. But so for Shopify, it's we can start off that great baseline and it's an area we're constantly iterating on.

• 7:04Harry Stebbings?

  Now, you mentioned Facebook there. I do have to unpack this incredible journey that you had with Facebook. When you look back on that time, I love that playing the awkwardest riff story. But when you look back on that time, what was some of the biggest takeaways for you from spending the time you did at Facebook in such a pivotal moment for the company?

• 7:21Speaker 02

  Yeah, it was an interesting time for the company. I was hired to grow the product in different ways. Some of the biggest lessons that I took away from that were were things that I had already done. But it's something that I continue to keep inside the playbook. It's that not to look at growth or even product building as one specific thing. To grow your product, you can look at it in terms of SEO or paid loops or viral. But it's also about M and A and building entirely new products. For example, I had a variety of teams at Facebook, but the one that was the biggest win for us was building Messenger Kids and engaging an entirely new segment of the population by building this safe family messaging product. It's about thinking growth broadly, really thinking about all the different ways of growing.

• 8:04Harry Stebbings?

  When you think about also the advising that you said there, you mentioned some of the companies you've worked with from your Patreons to your Coors to your Twitters. When you think about commonalities between what made them so good, are there commonalities that stand out to you when you reflect back on those experiences advising them?

• 8:19Speaker 02

  Probably main commonality would be around where advising a company where there's a lot of success with the product and where there's a good engagement. Is that when the growth teams of sales are very curious and very humble and open to being wrong, which is not the case for all growth teams. But certainly when you have an advisor relationship with the company is very important. Some companies have done extremely well with this and advising is a Growth is an interesting thing where it may take fifteen years to learn something and ten different experiments, but you can communicate it very quickly. So it's it's a unique relationship with a company. And the ones that I've seen work the best, the commonality would be teams that are just constantly questioning assumptions, open to being wrong, very curious, and that's something that I've seen work really well.

• 8:59Harry Stebbings?

  I think the humility that comes with that understanding is also just in in a mutual understanding of what growth actually is. And it means a lot of things to a lot of different people, I think. So if you were to kind of put on like a fridge magnet, what is growth? How would you define growth today? Just so people have a shared understanding.

• 9:18Speaker 02

  Yeah, I start with the outcome. What is it that you're trying to do? What is the number one metric or activity you're trying to create as an outcome? Then it's all the activities and all the approaches that can lead to that growth. So I don't define growth very crisply in terms of it's this one thing. It's basically whatever it takes to move that one metric you're trying to to increase.

• 9:38Harry Stebbings?

  Pretend like you're my advisor for a hypothetical startup in this conversation. I get you. So it's about moving that one metric. Luke, how do I know what's the right metric to choose? This seems like an awful lot of pressure. How do I choose the right metric? And how do I know that I've got the right North Star?

• 9:52Speaker 02

  Yeah, I mean, you ultimately want to find the one that has the highest impact for the company. That'll be different in each case. So for Facebook, it was daily active people engaged on the product. Shopify, we care a lot about getting as many merchants to be as successful as possible on the product. So it comes down to how does the product work? What's the most important lever? And then making a very opinionated decision over this is the one thing that matters. And this one thing, if you get right, the fly will let it kicks off, will lead to a lot of growth in the right ways for the company.

• 10:18Harry Stebbings?

  So how do we think about attacking that in terms of the growth teams? Because the other big question I find is like, do you integrate growth teams into product teams, into marketing teams? Or do you have standalone growth teams like you had at Facebook? How do you think about advising founders when it comes to standalone versus integrated?

• 10:34Speaker 02

  Personally, I find that it works best when it's standalone. It really comes down to who you're able to hire and skill sets that that person, because that's the constraint. The constraint is going to be that who can you find to lead the team who's epic? And what are their strengths? And how can you build around that person? That's generally how I'd start, but I do find it works better. The growth org is standalone and that you put as many functions as possible within that that growth org. The bottom line is they're gonna have to work either way with the product team. And it's just a really important relationship between the product team and the growth org. But growth has its own culture, it needs to build. It does operate a little differently than a traditional product org, so I prefer to have it separately.

• 11:10Harry Stebbings?

  Okay, so it's separate. I know that I actually really wanna focus on this and have it as a priority for me as the founder. Do I hire a junior growth engineer and we start small and A B testing? Or do I go for a big stellar growth leader and build a team around them? How do you advise me there?

• 11:25Speaker 02

  I generally like to hire as senior as possible. You wanna bring in somebody who's had a ton of experience. Growth takes a really long time to build intuition around. So you need to have done a lot of experiments, tried a lot of different things. And growth is a lot about pattern matching. What have you seen work? What are you seeing in the data? And then how can you use your intuition to build other tactics that'll move the needle? So I try to go as senior as possible. That's not always possible. One of the problems with growth is that there's a limited pool of talent. That is probably the constraint that a founder will run into first. So one other approach, if the ability to hire somebody very senior is not possible, then you can hire somebody who's a bit more junior. But in that case, I would surround them with a set of advisors.

• 12:01Harry Stebbings?

  Agreed in terms of surrounding them with a set of advisors. Now let's think about the hiring process now, because we know that we wanna get these people on board. But I've never hired a growth professional before, so I have no idea how to do it, Luke. How would you literally structure the process for hiring as senior as possible growth person to join the team? What does that process look like for you?

• 12:21Speaker 02

  This is an area I spend a tremendous amount of time focusing on. As a growth leader, levers to pull, knowledge is all important. But if you're building a team and you're not a single person doing growth, the impact of your team will be the most important thing. So hiring and leadership become the most important skills in that case. The process itself can vary, but the way I do it, I try to look for what I call signs of excellence. Past performance is the best predictor of future performance. So what I look for is what signals indicate past behavior and success that would be predictive of future success. That's like the rough scaffolding. So ideally, you want signals that tell you that they're they're the best. So one signal, for example, I remember when I, a long time ago, when I started building teams, really sat back and looked. What are the signals that somebody who's amazing would be highly correlated?

• 13:05Speaker 02

  And one that that I use when I meet with somebody, I'll start at the bottom of their LinkedIn page and kind of get them to walk me to the top. And I just listen and ask questions along the way. And one thing I'm looking for is motivations for leaving role. What did they accomplish at each role? But one signal doesn't come up all the time, but is is just a great signal is when somebody's leader left a company and went to another company and came back to get them. And if you think about the social dynamic that takes place there, one of the only people that really knows how good a growth leader is, is their leader. They have left the company and have taken the social risks to come back and take that leader with them. So to me, that's such a great sign of that this person is high talent. So that's one signal I look for. I love ex-founders. I love people who have shown a certain degree of grit and had repeated success.

• 13:49Speaker 02

  So it's not that they've been successful once or lucky. They've had a pattern of repeated success. That's one thing I look for. But my slam dunk is very trusted back channel, somebody who's recommending this person that I'm evaluating. Without any caveats, I do find when a recommendation comes with, you know, they're great, but you have to be careful because sometimes people are trying to tell you something without maybe telling you the whole thing. So great people usually come without caveats, three signs of excellence and a sense of what I enjoy working with this person because it's such a critical role. But those are my three slam dunk things that I look for. And I have a kind of series of questions that I also ask.

• 14:21Harry Stebbings?

  What are those questions? Because my trouble here is like often people work in Facebook's growth team and clearly it's a fantastic growth team and it achieved a lot. But I don't know the difference in attribution between individual and team. What questions do you deliver to really tease out individual performance and quality of candidate?

• 14:40Speaker 02

  So for me, I try to get a sense of how deeply they understand the craft. Were they just executing a playbook they took off the shelf? If this person's from Facebook, they'll have a very specific set of knowledge because they're supported with a lot of scaffolding at Facebook. So you really want to get a sense of how deep did you go and how well do you understand the craft? One question I love to ask, tell me something I don't know about growth. And it actually doesn't matter if they tell me something that I already know. What it does, though, is it forces the person to dig into their knowledge and their experience and pull out the one thing they believe is the top of the stack in terms of this is something really clever. Or really, I know this, I experimented this, I learned this. Lets you kind of anchor their knowledge in terms of they come up with something really good. And even if you know it, it gives you a sense of, oh, wow, they actually know that. That's really good. That's my favorite question.

• 15:23Speaker 02

  So you're really trying to get a sense of, do they really understand why certain things work? I do like asking a question, then following up with a long string of whys to see if they truly understand what's happening. And that'll give you a sense of, you know, how quickly does that fall apart? If you ask why and we can't answer, like, can you go extremely deep down the knowledge stack to see if they understood it? And to me, that differentiates a good growth person from a truly exceptional growth person. Somebody who understands all the levers. Because that deep understanding is what will let you use your intuition to launch new experiments and drive new growth without having to to run another set of experiments. You can use that intuition to drive an experiment that you know eighty percent will work because you truly understand the mechanics of the levers.

• 16:03Harry Stebbings?

  Totally with you in terms of really digging deep on the why. In terms of the actual process, again, I have no idea. So I find this candidate, I have the first interview. They seem good. What next? Do I do like a test with them? Do I integrate them into the team? But literally, what does that actual meeting by meeting process look like?

• 16:22Speaker 02

  Well, first meeting, like I mentioned, I would start at the bottom of LinkedIn page, walk into the top, look for signs of excellence, ask some tough questions, try to get a sense from that first meeting. Do they truly understand growth? What have they done that's exceptional? Usually within twenty minutes of that meeting, how aggressively am I pitching this? And trying to get much signal as possible. If the call ends and I don't have enough signals to suggest that they're really good, that might just end right there. That might be the last call. A good meeting where I get a sense of like, this person actually has some pretty good signs. The next step would be, I would go to my network and back channel. Back channels are pretty important to me. At this point, you should really know. If you get a couple of back channels and you're getting a strong signal and you see signs of excellence and you've got a good sense of what they've done and that they actually understand the levers, that's pretty good at this point.

• 17:07Speaker 02

  If you still don't know, you can go off to ask to do a test. I have done this, not always, because sometimes candidates won't want to do it. And it really depends how well have you sold the role? What is their current situation? How much do they want the role? So I'd say in A smaller percentage of times I get somebody to do a test, but also growth people are in very high demand. So many times candidates, if they're not really interested in the role, they just choose not to do the test. So the test isn't the thing I always do. I have done it. It's usually if I've got some, I'm just not sure about this candidate. I want just like, I don't have the back channel or person's been in one job. They've been at Facebook the whole time. Can they actually survive outside of Facebook? I want a little bit more color, but that's generally how I do it.

• 17:49Harry Stebbings?

  On reflection, where do you think most founders go wrong when assembling their growth teams when they're hiring?

• 17:54Speaker 02

  I mean, the biggest mistake you can make as a founder, hiring the wrong person for the role. It is very hard to get a sense of if the person is any good. So I think that's the biggest mistake. I'd say some common mistakes would be, and this is something that's unique to growth, is that in growth, some of the signals that may suggest that somebody's amazing in a different discipline might not apply to growth. I'll give you an example. In most professions, if somebody's at a company and they're promoted very quickly, that would be a good sign that this person is exceptional. In growth, because there's so few people in the space, it could suggest that they're exceptional, but it could also suggest that maybe they were the only person available, the only person this company could hire. There was a lot of historical knowledge. There's different reasons because there are so few growth people in the market.

• 18:36Speaker 02

  You know, there's other reasons with growth why somebody could be promoted, which so it can be a bit of a counter signal as well. Another mistake I've made is, is sometimes the social media halo or public speaking halo does not correlate with ability. I've seen people make hires for people that are on the stage often and great speakers and great evangelists. That doesn't always translate to somebody who's great as a growth person. So when it comes to that, you really want to, again, not just look at what somebody's doing on social media or public speaking. You want to look at what they've done, what teams have they led, what impact have they had and do a lot of back channelings. That's another mistake I've seen made before.

• 19:10Harry Stebbings?

  Can I ask you this? Should I bring in the head of product into some of these interviews? Should I bring in the head of marketing? They're obviously going to play a crucial role in working alongside them. Should I integrate the team into this process or actually do it myself?

• 19:21Speaker 02

  We definitely want to integrate it with product and marketing teams, especially because the relationship between product and growth and marketing will be critical. The relationship between the CEO and the head of growth. And the head of product, especially the head of product and the head of growth are two of the most important relationships.

• 19:36Harry Stebbings?

  Can I ask, as a founder, what can I do to make that relationship between my head of growth and my head of product? What can I do to make that as tight as possible?

• 19:44Speaker 02

  I think bringing them into the interview process and making them part of the selection team is a good start. Making sure that these two individuals have to be meeting regularly, have a good understanding of each other's goals and work in a very collaborative way. It's a bit of an art. I don't think you can tell both people to work well together, but having them work closely together, be aware of each other's goals.

• 20:04Harry Stebbings?

  As a growth leader, should I push for growth teams to be included in all product reviews?

• 20:08Speaker 02

  You know, I've seen it work so many different ways, Harry. I've seen it. Some companies, yes. In other companies, no.

• 20:15Harry Stebbings?

  Why did it work in some companies and not in others?

• 20:19Speaker 02

  Yeah, if you can carve out surface areas, and I think this is important. Ideally, you want the growth team to own all of the surfaces that matter the most to growth. That's the ideal state. Senior leader, multi-disciplined, they know how to do engineering, they know how to do growth, they know how to do product, and they have ideally all these functions, these surfaces as part of the growth team. So they don't need to sit inside of another product team's reviews because for any work happening in that surface, because they own the surface. That's possible where you can actually carve it out. That's very important and allows the teams to run independently very quickly. So there's less of a sitting on different teams' product reviews in that case. The surfaces are all owned by a product team, then yes, the growth team should be very embedded and reviewing all the work that's being done.

• 20:59Harry Stebbings?

  Question for you. Growth teams often like go into code bases, think around, A B test, and then fuck off. Like, how do you ensure that growth teams have the ability to test and iterate without pissing off engineering teams building sustainable, reliable, durable code?

• 21:17Speaker 02

  So there's a few ways. First, if the relevant surfaces are owned by the growth team, then that becomes less of an issue. And then ultimately, it's through a collaboration with the product team. So Shopify, we work very closely with the product team, day in and day out. Make sure we have reviews across both teams where there's overlap. We involve them as part of the process for the build so that we make sure that there's trust being built. It's when there's no trust that the whole thing falls apart, which is why it really comes down to.

• 21:41Speaker 02

  Keeping different teams involved, keeping them in the loop, building trust through making sure you keep different teams and different priorities in mind and you're not just going in lowering the quality bar. That's a common, I think, failure state where you build something that moves the needle, but the quality is terrible. It looks awful. It's bad for the other team's goals. It's bad for consumers. That's a failure state for growth. So there's a few ways to do this, but ultimately it comes through with relationships and trust that are built through working together, just showing this ongoing ability to build products in ways and growth optimizations in ways that doesn't affect other teams negatively.

• 22:13Harry Stebbings?

  Luke, how do you structure growth reviews? Who sets the agenda? Who's invited? How long's the meeting? How often are they? Help me understand what a growth review looks like and what a good one looks like.

• 22:24Speaker 02

  This is something we're always iterating on. It depends on the size of the team as well. I mean, a growth review is not really needed when you're a maybe a two-person growth team, but it also depends at what stage. If you're at an early stage, you want to look at just get by and on, hey, here's the kind of work we want to do from a growth optimization perspective. Does that make sense? Call that the proposal stage. And then when you, everybody's aligned, then we do a review around the the metrics, the opportunity size, and make sure that we all believe that, you know, this is building the best thing possible. And then there's kind of a an evolution of growth reviews. So it's they're not all made the same way. Ultimately, they should be very driven around metrics and opportunity size and also a strong conviction around what we think will work. But it really depends on the stage of the review.

• 23:05Harry Stebbings?

  Okay, so we have a project and it hasn't gone that well. How do you, as a growth leader, prevent morale deterioration across the team when a project doesn't go to plan and it doesn't work?

• 23:16Speaker 02

  One project not working doesn't generally tank morale, but it's when there's like a series of them. So there's a few things that are important, and I've seen this in a variety of of different areas, especially with new products that are looking for that growth lever, because you can go through a period of just iteration and learning. There's a few ways to do this. I think one is you do need a culture of grit. You need to have strong leaders that can keep the team together through those phases. I think it's important to celebrate all of the wins, even the smallest of wins, and really focus on the learnings, even though it might take a while to unlock certain levers and you have to have that grit to get through it through a series of failures, but reframing, it's not so much a failure. If something didn't work and you've learned from it, that is also success. And you have to talk about it that way, recognize it that way and build a culture that celebrates that.

• 23:59Speaker 02

  So I think there's some strong leadership required through those phases. I do think it's important not to frame failed experiments as failure as long as you're learning and it leads to an unlock that's even bigger. That happens quite often.

• 24:09Harry Stebbings?

  How long should one give new projects before determining whether it's a success or failure? You never want something to be too long and it drawn out. But you also don't want to cut something off before you have enough data to know whether it's a successful failure. How do you think about enough data to determine conclusion?

• 24:25Speaker 02

  Talking about projects, not people?

• 24:27Harry Stebbings?

  Either or, I mean, let's do both.

• 24:29Speaker 02

  Okay, so projects, six months is a good chunk of time. If you're not exiting six months with a sense of, okay, we have some levers. We see line of sight into some levers that could move the needle for an individual product or project. If you can go six months without hope or inspiration that something's working, that's probably a sign. It can be longer, but generally six months is probably a good milestone. Even if it's not about unlocking the growth, but just having learnings that are suggesting that there are better wins to come and giving you hope. In terms of people, I think within three to six months, if you have a new leader coming in, they should be able to demonstrate something. That gives you a sense of whether you made a good hire or not. We like to say that the best people come in and leave an impact crater when they land. So they get hired, so everything around them gets better.

• 25:13Speaker 02

  So within frankly thirty to sixty days, you should have a sense of whether you made a good hire. And they've either hired in their best people, the best people become kind of talent magnets. They pull in the best people with them. Within three months, they should have an early win. The speed of experimentation should increase. So within the first few months, you'll get a sense of whether you've made a good hire or not, and it should be pretty obvious.

• 25:33Harry Stebbings?

  What are some big red flags in those first sixty to ninety days? If that's like the things that they could do well. For me, as a founder of hiring my first growth leaders, what should I be nervous about or look out for?

• 25:44Speaker 02

  There are many. The two that come to mind would be first is speed, I think, is very important in growth. The cadence and velocity that you can experiment in and push new code out and run things is very highly correlated with your ability to be successful. So if I'm not seeing the speed and progress within the first few months or hearing a lot of excuses, I would be pretty nervous. That would be a red flag for me. You've kind of hinted at this a few times earlier around product teams working with growth teams and how do you structure them and have them working together. Because of how cross-functional growth can be, if there's tension in the first few months between either the teams or the new growth leader and the product teams, that's a red flag and that can go sideways pretty quick. So I'd look for early tension. How are the relationships working out?

• 26:27Speaker 02

  Is this new person coming in with a sense of humility, asking a lot of questions? And that can go sideways pretty quick. I would, speed and velocity can be improved. A relationship falling apart can be completely dysfunctional.

• 26:37Harry Stebbings?

  What's been your biggest challenge in scaling the growth org at Shopify, Luke?

• 26:41Speaker 02

  I mean, it always comes down to the team, to building an amazing team. I wouldn't say it's a challenge we're having. We were built an amazing team. I would say Shopify currently has some of the best talent in the world doing growth, but it's always something I spend a tremendous amount of time focusing on. Growth is one of those things where if you make the right hire, it's not a 0.5% increase. It's literally a 10 or 100x increase. So that's the area, I don't know if I'd call it a challenge, but it's the area I focus a lot of time on. Also, the area that literally making the right decision can be just a game changer for growth in all aspects. So if you look at whether it's in paid search or in funnel optimization or an SEO or in product building, or we have a product org and an engineering org inside the Shopify growth and just bringing in amazing talent is the thing that matters the most.

• 27:25Speaker 02

  So that's what I spend the bulk of my time on when I'm not in reviews and getting my hands dirty with the teams. That's the most important thing.

• 27:32Harry Stebbings?

  Where do you think you're weak as a growth leader? I really get to the heart of the question, say.

• 27:39Speaker 02

  I think it's always a challenge staying high and then going in deep. I do love getting my hands dirty. I really, really enjoy that. And as the team grows, that's becomes harder to do. So it's that trade off of how do you stay at the very high level and then zoom into all the different areas? That's a skill I'm always working on that I think I'm okay at, but I'm not something I'm always looking to improve and get better at.

• 28:02Harry Stebbings?

  I totally agree. I think with founders, actually, for me, the best founders have the ability to move from the 5,000 put meta vision to like last Wednesday's Facebook ad spend and how it converted. So I totally agree with you there.

• 28:14Speaker 02

  Well, a subtle tweak to that as well is that how do you do that without completely deflating the team? Because there's a way to go in, engage with the team and have get right on the beach and with the troops and do a lot of work to make things better, but done in the wrong way, it can be very disempowering for the team. So there's an art to how you stay high, empower teams, hire the best people, be involved, but also give them space to execute. So it's an art. It's definitely an art.

• 28:36Harry Stebbings?

  You said there about kind of getting hands dirty in the data, in the trenches there. Can you talk to me about a decision that you made without data? And how did it go?

• 28:45Speaker 02

  Data is very important, and especially when you pair it with like a pattern matching off of previous experience. So I focus a lot on what is the thesis that this experiment is likely going to work? What are the signals that you have that suggest that this experiment's going to work? Just throwing things on the wall. So you start with the data. What is the opportunity size? Is this worth doing? And then you try to look for signals in the thesis that will increase the likelihood of something working. So I remember one situation at a past company where somebody on the team wanted to make a change to the website to see if it would impact SEO traffic. And I asked them why? And they said, I just want to throw things against the wall and see if it works. That is a bad answer. A better answer is I did this experiment. It had this result, which would suggest that if we do these two things, because

• 29:27Speaker 02

  we also saw competitor increase in the search rankings based on a similar change, that will likely see positive impact from this experiment. So a lack of data is not good. You certainly want to start with a good data foundation. Equally important is what is the sound logic behind the thesis that will make sure that this works? And that's something that I think probably doesn't get spent enough focus on in terms of. Validating not just the data of the experiment, but the thesis behind it and what are the signals? And building up that stack of signals that we know those are so valuable in growth. When you build a set of, we call them levers essentially, a set of levers that you know will work or experiments that didn't work, you build this intuition over time. And I think that's frankly, the most important part of growth because it increases your hit rate as you're running experiments.

• 30:09Harry Stebbings?

  It's so interesting you say that because Bangali Kabir, formerly of Instagram, I know well. And then obviously Casey Winters, formerly Pinterest, who I'm sure you know. They both actually said that like past intuition has been detrimental to their performance because they've relied on previous experiences, expecting them to create the same outcomes that they did before. And actually it impacted their mindset in the wrong way moving forwards because it was different products, different circumstances. How do you think about not letting past experiences negatively impact how you think about future growth projects? Because it could be totally different.

• 30:45Speaker 02

  There's a few things you have to do. One, you have to constantly test your knowledge. It's one thing you know now may be different in a different context. And also I think it's important, it goes back to really understanding what's going on. So if an experiment worked, just knowing that experiment worked is interesting, but may not be repeatable. Most important thing is understanding the why behind it. Why did it actually work? It goes back to some of my interview questions. Easy for somebody to give me an answer that of something they've done that's worked well. But it's a little bit harder to dig through, you know, five whys deep to find out, well, why did this work? And why do you think? And once you know the root knowledge behind it, that's more transportable than the actual experiment result itself. But I think it's valid that you need to constantly retest these assumptions and retest these experiments.

• 31:26Speaker 02

  Counter to that, once you understand the deep knowledge of why something works a certain way or why a certain algorithm works another way. I mean, I've certainly seen cases where you can apply that very quickly to produce wins. And it's usually a really good starting point. You come in with your playbook, you execute the stuff that you know will work. And then the things that don't work, you just reassess your base knowledge. That's constantly evolving, but you should have this set of knowledge, the deep, true understanding of what's going on. Not so much that when you make change X to Y, that creates a lift. More importantly is why does it create a lift?

• 31:56Harry Stebbings?

  Can you talk to me about a specific growth? Decision that didn't go to plan and why didn't it go to plan?

• 32:01Speaker 02

  Yeah, especially at the beginning when you start a new lever, there's a huge failure rate. So when we were working on TripWow, this viral photo sharing product, one of the things we learned was that it was a viral loop. It's a consumer product and like most products, whether it's SaaS or consumer, the funnel really matters. And we spent a lot of time reducing friction, which is a common growth approach. You want to reduce friction and you want to increase motivation. In fact, that's one good mental model that I like to think about products through is that how do you reduce friction to use the product? And what is the intent of the user coming in? What is their motivation to use it? And those are two levers you can play with. What I found was we'd run a series of experiments to reduce friction from the signup page, from the homepage. And that had originally at the beginning had a lot of impact, but you basically bottom out. There's only so much friction you can reduce until it just stops having impact.

• 32:44Speaker 02

  So to answer your question specifically, I think we did seven iterations of the homepage. And after three, we saw a lot of impact, but then there was very much diminishing returns to whether it's button colors or changing the UI or adding free to the button. You get to a point where you've just removed enough friction proportional to the intent of the users coming through. And removing more friction is not going to move the needle. Going back to lessons learned from historical testing, that is one lesson that I think is important to take forward, which is there's a bottom to how much friction you can remove from the flow and you can spend a lot of time doing experimentation there. That doesn't move needle at all.

• 33:16Harry Stebbings?

  I do want to dive into my favorite though, Luke, which is a quick fire round. So I say a short statement and then you give me your immediate thoughts. Does that sound okay?

• 33:23Speaker 02

  Sounds good.

• 33:24Harry Stebbings?

  Okay. So what tactics have not changed over the last five years in growth?

• 33:28Speaker 02

  There's a lot that haven't changed. They've changed a little bit, but they're still valuable. So one is certainly SEO is still, it's changed a lot, but it's still a very big fire hose of traffic and conversion that you can get. So SEO is a good one. I think like the tried and true funnel optimization work or just product optimization of making a product easier to use, getting users to a delightful moment in the product as fast as possible. Those principles haven't changed and that's something that, you know, even though some of the channels have changed, doing work to optimize onboarding or exit flows, that type of work is still very valuable. And then paid channels in general have become more important because a lot of these surfaces, a lot of these engines like Google, moving away from showing organic results. And showing paid certainly paid search, for example, works very well.

• 34:12Speaker 02

  This is still a very large channel that has to be part of anybody's strategy.

• 34:15Harry Stebbings?

  Tell me, what tactics have died a death over the last five years?

• 34:18Speaker 02

  So I think SEO is an area that I've spent a lot of time in and one that comes to mind is, and you can put it under a wrapper of black hat SEO if you want, but basically SEO that used to work, but was essentially against the Google guidelines. It's not worth taking that risk anymore. It doesn't really work anymore. The algorithms have gotten so good that in many cases it doesn't work. I know it's still possible, but it's just not worth it because you can get penalized. Your entire business can be out the window, frankly. You can entirely ruin an entire domain because of that. So I would highly recommend founders to stay away from that. That's something that I don't know that is broadly known by all founders, but it's a question you should definitely ask anybody doing SEO on your teams, any of your growth leaders that is no longer valid and can destroy businesses it has.

• 34:57Harry Stebbings?

  What would you say is the biggest mistake that founders make when hiring growth teams? Other than hiring the wrong people?

• 35:03Speaker 02

  I mean, not empowering them. Growth teams need engineers. I like using growth tactics that rely on engineering approaches. Rather than using a bunch of spreadsheets to come up with changes to make and doing analysis, but building algorithms and systems to scale growth solutions. And you really need engineers to do that. So I think it's really important to give growth leaders the engineering capacity to execute quickly. Also, like I say, you need your growth leader to be as close to the sun as possible. You don't want to bury it too deep in the org. That's a mistake I've seen done because if there's something really critical to the business that is a decision, perhaps a controversial decision that needs to be made, sometimes a very time sensitive decision that needs to be made. You don't want it to be six layers from the CEO. You want to have a short loop there. So I think those are some mistakes that some founders can do.

• 35:45Harry Stebbings?

  What one piece of advice would you give a growth leader today entering a new role?

• 35:50Speaker 02

  I'm really big on focus. Focus is the number one lever that you can use at any point and have immediate impact by stopping the work on things that don't matter and starting to work on different work or work that does matter, that will move the needle. So I would advise a growth leader very quickly find out what your north star is. Find out what is that one thing that will be impactful for the business? Get everything on your team rallied around that north star and then stop doing all the things that don't matter. To me, that is the most important thing because it will increase the like. Having the right kind of impact very quickly and it's growth is something that can touch and move every lever and every metric in the company. So there's always this demand for, hey, can it grow this part of the business or this part of the business? Deciding which area that will be focused on and that the teams will focus their energy around is extremely important.

• 36:34Speaker 02

  Harder than it sounds, I think an important part of leading growth is probably saying no once a week or at least once a month to something that doesn't align with that north star. So it's very quickly determine the north star, rally the team around it and start showing wins as fast as possible.

• 36:47Harry Stebbings?

  Luke, I am your CEO, you are my head of growth. What does a good relationship between us look like? How often should we meet? What can I do to be the best CEO for you?

• 36:57Speaker 02

  So I've seen this work in a variety of different ways. There's different types of CEOs with different DNA. I think you want the distance between the CEO and the head of growth to be quite short. If I were designing from first principles, I would say the head of growth reports to the CEO meets weekly and is flagging issues. And also discussing potential strategy changes and approaches at a very high level. That said, I've also seen it work where head of growth reports to the COO or the president or another executive of CRO potentially. So it can work in in different ways, but in either of those scenarios, the CEO and the head of growth need a very tight relationship and ideally be meeting weekly if possible.

• 37:34Harry Stebbings?

  Luke, what would you most like to change about the world of growth today?

• 37:36Speaker 02

  I think one of the biggest challenges with growth, there's a small talent pool. There's not a ton of people doing it and there's a variety of reasons for this. The schools aren't really teaching it at scale yet. Also to learn growth, the most valuable thing is that, and this is probably a good signal for founders to look for. The best way to learn growth is to have a lot of reps, to have taken a lot of shots on goal. Cause that's the best thing you can do to inform your playbook, to inform your knowledge, to inform your intuition. And there's not a ton of companies out there, there aren't an infinite amount of companies that have that scale. Where people that are practicing growth can learn that high end growth and really become experts. So what you end up with is a small number of people who have that experience and who know what works and what doesn't work. Because there's just only so many companies where they can build that experience at.

• 38:19Speaker 02

  So what I would like to change is to grow the talent pool and have just more people in the industry who are good, who are sharing the knowledge.

• 38:25Harry Stebbings?

  Actually, one of my favorites, which is like, well, what One company growth strategy, other than Shopify, have you been most impressed by recently? And specifically why?

• 38:35Speaker 02

  One company that I'm an investor in, it's called Bounce. I was really impressed with their growth strategy. One of the reasons I invested was because they've been very good at their growth loop. Everyone in the company, from the founder to everyone else, very much understands it. I've been an advisor for a long time. The one thing that, it goes back to a lot of things we've talked about today, that I was very impressed with this company is the way they leverage advisors and have surrounded themselves with people that can help them learn and how they've been just incorporating that knowledge and iterating on their growth loops through what they're gearing. So I think that's something I've been very impressed with with this company. It's growing really fast and it has to do, I think, with how they've really put that growth lever in their growth channels throughout the bloodstream of the entire company, everybody in the company, and how they've leveraged advisors.

• 39:17Speaker 02

  I actually do think more people, more founders should leverage advisors. It's probably the fastest way to get wins and get knowledge, especially in this limited talent pool that's out there.

• 39:26Harry Stebbings?

  Final, final one. What can a founder do to attract the best advisors? How do they pitch? How do they prove it? What makes you say yes versus no?

• 39:35Speaker 02

  It's a good question.

• 39:38Speaker 02

  Different people are looking for different things. What I look for is, because it depends on the advisor, I suppose. But most advisors, and ideally you want to hire an advisor who you're aligning incentives, so you bring in an advisor and you compensate them with equity. That's the ideal. I know not all advisors would do that. That's the ideal, because then the advisor is incentivized in the same way as the founder. So if you're able to find advisors that would take on exclusively equity or the majority in equity, then really you want to convince them of the, in the same way you would convince an investor. That's probably the right mental mindset to take here, is to think about how would you pitch the company to an investor? Because an advisor who's coming in and taking equity is basically investing their time. That's how I think about it when I join a company, is what's the path forward? What are the growth loops? Do I believe that these growth loops will lead to the scale that we're trying to build?

• 40:22Speaker 02

  What are the valuation multiples? Where can this go? What are the comparables? One thing that I've always found helpful is for a founder to introduce me to their VCs, because the VCs invested their time and I'm investing their time and money, and I'm investing my time. The logic that a VC and investor would have taken is very similar to the logic that I'm using. So I'd say a founder, introduce them to your top VCs and basically pitch to the advisor the way you would pitch an executive coming in and to an investor who's putting their money in.

• 40:48Harry Stebbings?

  Luke, I cannot thank you enough for putting up with my quite prying questions today. I so appreciate it. I've loved doing this and thank you so much for joining me.

• 40:56Speaker 02

  Thanks, Harry. It's a lot of fun.

• 40:59Harry Stebbings?

  I mean, poor Luke. Many, many off-schedule questions there, but a huge hand to him for being so open and fantastic in that discussion. If you'd like to see more from us, of course, you can on 20vc.com. But before we leave you today, in this current environment, startup founders are in a difficult position as banks cut back on lending and funding rounds get smaller. They have to show strong business growth while keeping cash burn low. It's something that the financing platform, Debit, is on a mission to solve. Debit is the only superpowered corporate card with built-in installments tailored to early-stage and high-growth startups in the UK. Debit's corporate card has up to 20 times higher credit limits than traditional banks. Startups can use it to make installments on card purchases, as well as invoice payments for up to 12 months, all while enjoying a rewards program that

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• 42:26Harry Stebbings?

  me in the Whoop data. The Recovery Score is such a good motivator for this. And then, second, I know when I'm getting ill or potentially on the verge of getting ill because my body temperature really spikes at night, and I know that I need to take it easy, stay in and look after myself. Again, would never have had that without Whoop. You have to invest in yourself if you want to perform in business or sport. Whoop is a game changer. Go to whoop.com and use the code VC at checkout to save 15% and get free shipping today. That's VC at checkout for 15% off. As always, I so appreciate all your support and I can't wait to bring you a fantastic episode this coming Friday.