Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20Growth: How to Use Influencers to Scale Growth Insanely Fast | How to Optimise User Onboaring for Growth | How the Best Growth Teams Create Organic Growth and Community | Why LTV/CAC Models are BS with Ketty Slonimsky About this episode Ketty Slonimsky is Chief Growth Officer at Palta, the platform behind apps like Flo (the #1 female health app with 77M+ MAU), Simple, and Zing AI, where she leads a centralized growth function across the portfolio. She was previously first VP Product & Growth at HeliosX (£900M+ ARR, bootstrapped D2C healthtech), has advised companies like SonderMind, Runna, Guardio, Cheddar, P&G Digital Ventures, and is a board advisor at HeliosX. AGENDA: 02:33 What is Growth and When to Hire For It 06:04 Three Profiles of Successful Growth Leaders 10:07 Challenges and Learnings from Failed Ventures 21:17 How to Optimise User Onboarding for Growth 26:14 Biggest Lessons on Retention 30:25 How to Artificially Create Organic Growth and Community Building 32:10 Why LTV Models are BS 37:35 How to Use Influencers to Grow Insanely Fast 47:07 The Metrics that Matter in Growth 49:48 Push Notifications and Engagement: What To Do vs What Not to Do? 51:57 Quick Fire Round
Transcript 10,224 words · 2 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Harry Stebbings? This is 20 Growth with me, Harry Stebbings. Now, in 20 Growth, we analyse how the best growth leaders build growth teams, run growth experiments and execute at the highest levels when it comes to growth. Today, we have one of the best joining us in the form of Ketty Slonimsky, Chief Growth Officer at Palter, the platform behind apps like Flow, the number one female health app with 77 million MAU, Simple and Zing AI, where she leads a centralised growth function across the portfolio. Before that, she was the first VP of Product and Growth at Helios X, a 900 million pound ARR bootstrap D2C health tech business.
0:40 Harry Stebbings? And she's also advised companies like Sondermind, Runner, Guardio, Cheddar and many more. But before we dive into the show today, SecureFrame empowers businesses to build trust with customers by simplifying information security and compliance through AI and automation. Thousands of fast-growing businesses, including NASDAQ, Angel List, Doodle and Coda, trust SecureFrame to expedite their compliance journey for global security and privacy standards such as SOC 2 and ISO 27001, CMMC, NIST standards and more. Backed by top-tier investors and corporations like Google and Kleiner Perkins, the company is among Forbes' list of the top 100 startup employers for 2024, G2's best software awards for higher satisfaction products
1:24 Harry Stebbings? and a recipient of the 2024 Cyber Security Excellence Awards, something I definitely never got in school myself. Learn more today at secureframe.com. And once SecureFrame locks down compliance, Pendo makes sure your product truly lands with customers. Whether it's the software you build or the software you buy, your tech stack should be creating results, not creating roadblocks. Well, Pendo's no-code software experience management platform makes your software better with tools to see where users get stuck, guide them with in-app messaging and constantly improving your UI. It's so easy that over 14,000 businesses use Pendo to increase revenue, lower costs and reduce risks. Businesses love the control, engineers love the freedom, everyone wins.
2:08 Harry Stebbings? Start for free today at pando.io/20product. You have now arrived at your destination. Kety, I am so excited for this. I've heard so many great things. I'm also an incredible fan of some of the apps that you've been a part of building. So thank you so much for joining me.
2:24 Speaker 01 Thanks for having me. It's a pleasure.
2:26 Harry Stebbings? We were talking before about growth being kind of this weird discipline. I just want to start with like, when did you realize you were in growth? And what was that, ah, I'm actually a growth leader and I love it?
2:37 Speaker 01 I started in marketing, switched to product led growth before they even called it product led growth. It was called a conversion optimization like fifteen years ago. Then I did monetization, then I did some core product roles, and at some point, I started to go wide and broad. This is where one growth guru gave me an advice. You can't do marketing and product, you should fit to one of them. Like, luckily, I didn't take that advice. And I said, I'm gonna do just wide and broad roles. So I started to take user acquisition, product analytics, product led growth as like one big discipline. And I called it growth. And I don't care how other people call it, but I call it growth. You can grow
3:20 Speaker 01 through product, you can go through marketing, you need data, you know, to get all those insights to grow through both. And this is what I call growth.
3:29 Harry Stebbings? Because before we were just chatting, and you said, a lot of people say they're in growth, but actually they're kind of in marketing. So for you, just so I understand, growth is user acquisition, it's monetization?
3:39 Speaker 01 I'll call that product led growth, which consists of activation, onboarding, monetization, pricing, packaging, paywalls, all that stuff around, Sarah, which is like a part of marketing, and product engagement could be easily a part of growth. In my previous job at Hello Sex, I owned product as well.
3:58 Harry Stebbings? My question, when I hear that in terms of the onboarding, the paywalls and everything that you mentioned there, is growth a game of incrementality, moving one to two percent in each of these different levers? Or is it a game of, we should try something totally crazy and totally move the ball out of the park?
4:16 Speaker 01 I think it really depends on the stage. At the very beginning, you need to nail your core use case and build a growth machine around the core use case. Then you start the optimization phase and those small optimizations, they're gonna compound. And you need to make it really at speed. At some point, when you feel you nail that core use case, you need to build defensibility. And defensibility, you cannot build through those small moves. You really need to make a moat of this defensibility. Build a great product with clearly defined broad need that can expand into multiple use cases.
4:53 Harry Stebbings? Do you think anyone has defensibility on day one? A lot of VCs are like, oh, I'm worried that, you know, X could do this or Y could do that. Yeah, of course, Google could do it on day one. Do you think anyone actually has defensibility? And is it built through process and?
5:06 Speaker 01 I think it's built through process, like think about current companies in AI space, right? They built much of the defensibility through data loops. They sharpen that within communities, within their product. Users make prompts, they create things, they sharpen the mechanism of how this whole AI thing works. And if you nail that use case, you're gonna become defensible. Cause other companies need to run after you and after their data. And if you make it at speed and at scale, you can win the game.
5:40 Harry Stebbings? When we go back to this conversion and optimization, and you said data multiple times already. I think very much of science, being in the weeds and being a very technical mind. When we chatted there just now and I was like, no, no, we need to actually just like go to the show because I don't want to have this chat outside of the show. You said something really interesting about the profiles of people that can succeed in growth. Who do you think can succeed in growth, given what we just said?
6:05 Speaker 01 I believe in people who are hungry, smart, proactive. They want to win, they're self reflecting, cause you can miss lots of opportunities if you don't do that. Smart people can figure it out. I think growth is about being analytical and salesy at the same moment.
6:24 Harry Stebbings? Why salesy? That's interesting.
6:26 Speaker 01 Think about onboarding and web onboarding that Palta nailed years before this space got overcrowded.
6:34 Speaker 01 It's basically a long funnel where I warm you up to purchase a product that you have never seen. And only after that, you download the app and start playing with it, right? So what is it? It's a long sales process up to one hundred landing pages, right? You need to nail sales in order to warm up those cold leads to make them purchase.
6:59 Harry Stebbings? What do you think most people get wrong when they think about that process?
7:03 Speaker 01 Most of the people, they just copy what exists and think that works for them, that probably gonna work for us as well. They don't think about the value and the uniqueness of their specific audience and product.
7:18 Harry Stebbings? It's it's so interesting. I hear so many times and we we've chatted about this again before, like first principles and frameworks. In quite a mature, well articulated industry like consumer subs and growth both are in different respects. People think that you can take frameworks off the shelf and just apply it. To what extent is that true versus not true?
7:39 Speaker 01 Good luck with applying frameworks to mature products. It won't work. The way Paltor operates, for example, we're commonly gonna take something that works for one of our companies. Apply that in like just the company we're incubating currently. But then we're gonna test the hell out of that to make it work.
7:59 Harry Stebbings? Paltor is this kind of weird beast in a respectful way. It's amazing. But like, what is Paltor for those that don't know? And then we can dive into the machinery of how you build incredibly successful.
8:10 Speaker 01 So Paltor is a builder. We are venture builder. It sits in the intersection of parent company and venture capital. We create the ideas and then we partner with founders to make those ideas happen. And we give them everything from the very beginning to make it scale really fast. So we give them growth, analytics, data infrastructure, finance, legal support. We build such category leaders as Flow, Simple, Lave and Zing. Palt is going to hit five hundred fifty million this year in revenues. We grow. Each year fifty percent and even more. We raised around two hundred million from top tier investors. One of them is V N V Global and Palt is avocado in Spanish.
8:55 Speaker 01 So we are building health tech, B two C, mobile subscription.
9:02 Harry Stebbings? Got you. Okay, fantastic. And so when we think about that, I'd love to know, you go through lots of different ideas when you're creating new ones. How do you know, and you said about testing really incessantly. How do you know when to really go all in versus discard and let's move on to another idea?
9:19 Speaker 01 So the way Palt operates, we look at red ocean categories. Where there are already players that are doing more than one hundred million in R R. And then figure out how to outplay them and to outbuild them. So we're going to create great products and scale really fast. Put lots of capital so they can become the leaders in the space. Each company that cannot hit less than one hundred million were not interested. So at the peak, we had nine apps and at some point we killed some of them. They either didn't nail the product market fit or they were too narrow and couldn't hit one hundred million. So now we stayed with four leaders.
10:00 Harry Stebbings? Can we go with one that didn't hit product market fit and what did you learn?
10:04 Speaker 01 Let's go into a different example. Let's do the example that hit product market fit, but was super narrow.
10:11 Harry Stebbings? Let's do it.
10:11 Speaker 01 So one of them was called Weatherwell. It's a product that could basically foresee how you're gonna feel based on the weather around you. Can be mood swings, headaches, everything. So we had terrific long term retention. But we nailed just a very narrow segment of those who suffer from really tough migraines. And like cannot get out of the house for three days because of the weather. We couldn't scale it ever to one hundred million. It had a product market fit. We were frustrated of killing something with rather high retention, but we need to do that.
10:50 Harry Stebbings? Okay, so many things to unpack there. Number one, respectfully, why do that business? That doesn't feel like there's many categories. You said red ocean, people making a hundred million. I don't know anyone making a hundred million telling you about kind of emotions tied to weather.
11:05 Speaker 01 We said weather is huge, health is huge, let's blend.
11:10 Harry Stebbings? Why the hundred million? That feels like a bit of an arbitrary number. If you can get it to ten million and it's super efficient and profitable, why is that bad?
11:19 Speaker 01 Because each business gonna be compared to flow. And when you have flow in the portfolio, which is a more than seventy five million more, six million active subscribers, second year retention of eighty percent and more than sixty five percent organic traffic, the numbers that companies can just dream about, you need to match those numbers with the new kids that you're raising, right? We have Simple. Simple is a weight loss management tool. They are going to hit two hundred million in ARR. We have Zing, which is AI-powered fitness coach with hyper-personalized and super-engaging workouts. They're gonna hit around fifty million in ARR.
12:02 Speaker 01 They grew four times since last year. And we have Lavi. Lavi is an AI cosmetologist making face care accessible. They're gonna hit around twenty million in ARR this year. They're growing thirty percent month over month.
12:17 Harry Stebbings? These are actually really interesting products and really interesting stories. Zing, for example, again, sorry for like going off schedule. I'm just too interested. It's such a crowded market. And I'm always pushed, all of these different products. And, you know, I'm pushed ladder to the extreme and fifty others. How do you succeed in a market where there's seemingly complete commoditization and no differentiation?
12:41 Speaker 01 So it comes to the way how we basically launch products and how we run the whole play. The way we operate, first, we're gonna UXR the area and see like if there is something there worth our attention. Then we're gonna do some fake door tests. We're gonna send SCAC willingness to pay, how the unit economics might look like at scale. If it's there, we're green light. We'll bring a tiny team of two founders, commonly a tech founder and business or product founder. We're gonna put a lean crew behind them. We're gonna launch an MVP and build the core use case. This is where Paltar Growth comes in. Gonna literally scale very fast the first use case. How we do that?
13:25 Speaker 01 We start with paid user acquisition. Commonly one channel, it's gonna be meta. We scale to three, five K daily. This is where the algorithms start to optimize and this is where you see true unit economics. Once it's there and we nailed it, then we're gonna expand to the next use cases. We commonly start with web on boardings because you avoid thirty percent fee. There is attribution there, which makes user acquisition more efficient. But there are things that people commonly don't talk about. The nature of credit card payments drive higher retention and on web you can charge more. This is how consumers perceive pricing on web versus mobile. Now there is a catch around funnels.
14:09 Speaker 01 If you over invest into the funnels and start obsessing about that, instead of over obsessing about product, it gets you to the funnel business and that's fine, but most VCs won't back that business. It's probably not a business that gonna go to IPO and build a multi-billion valuation, right? Though if you're really great in that, you can run killer UA machines and funnels at scale and get to tens, even hundreds of million in ARR.
14:40 Harry Stebbings? How do you think, if we go back to the start of that where you said, hey, we like to go to one channel, we like to do paid and we like to see what works there and like just test out that unit econ in that first testing phase. I'm always taught that actually, if you need to grow your product early through paid, it's not good. It's not a good product. It should be word of mouth, it should be viral. To what extent is that complete bullshit?
15:02 Speaker 01 I think the times have changed. So when Flow was born, they ran on purely organic. We do just product. We don't do monetization. Monetization UA came years after. Within the current products in the red ocean market, I don't think you can live just with organic and organic is very hard to get. So you need to start with paid, bring users in, see how the whole unit economics look like. And if you may even scale that use case and if you have PMF and then see how you grow that business further.
15:38 Harry Stebbings? What is good unit economics? I know that's a really hard question to ask, but like, you know, is a two to one LTV to CAC ratio good? Does it need to be five to one? What impresses you versus doesn't?
15:49 Speaker 01 Again, it comes to like, do we need to match floor numbers? Or we're talking about standalone businesses? So if we're talking about standalone businesses.
15:57 Harry Stebbings? Yeah, if you imagine me being like an early stage founder.
15:59 Speaker 01 Yeah.
16:00 Harry Stebbings? Thinking through this, needing your help, that's how I think about it.
16:04 Speaker 01 I think when you just run paid, you need to think about payback around three months. And you can run with one hundred forty, one hundred eighty percent for us. This is probably what I would be looking for. If you just do paid at some point and very early, you need to get to organic. And this is what we start to discuss. You better build that an anchor into shareable loops. Well, for example, wife law partner mode exists because women want to share their insights with their partners, right? Why running app might be super successful as they're basically built around the habit of running marathons in communities?
16:49 Speaker 01 If you thrive into tribes and communities, you amplify organic far more than with single use apps. Think about natural retention. So Flo has that natural retention where users come back month after month. Since being teenagers to like perineal and postmenopause. And this is huge. This is how you become villain business.
17:15 Harry Stebbings? It's also unique, though. And again, I'm kind of going off script, but in the way of like, the use case is enduring for obvious reasons. Dating, on the other hand, sucks.
17:27 Speaker 01 Absolutely.
17:28 Harry Stebbings? Do you agree then that there are just inherently shit categories like dating? Where you go in, out, you get married, now you're, I mean, you're gone.
17:37 Speaker 01 You want to outsmart, think about categories and product first. And then think where and how you build your products. Instead of just, you know, fantasizing of building a business where there is no natural retention.
17:51 Harry Stebbings? What are other categories that have this enduring retentive feature that people don't think about?
17:59 Speaker 01 I think currently it's coming to workflows. If you're embedded into the workflow and each piece of your workflow, think about ChatGPT. Think about other companies in the space. This is what builds your defensibility and that really tremendous retention. You are becoming very hard to replace. Think about work or something, right? And if you see it like in your email and search and other different tasks that you are performing during the day and you use just that one tool, which is hugely embedded, knows everything about you and sits deep inside your data. This is what gonna bring you retention and defensibility.
18:41 Harry Stebbings? How do you think about the painkiller versus vitamin? When we think about those, you know, you said there about kind of weight loss management app with, um, what's simple?
18:50 Speaker 01 Simple.
18:51 Harry Stebbings? Simple. People don't like losing weight. It generally is like diet, exercise, change of habit. It's much easier to sell chocolate than it is carrots in many respects.
19:02 Speaker 01 It's much easier to sell GLP ones, you know, I'm board advisor at Hello Sex, which is GLP one company. And when you compare GLP ones to habit management, it's unbeatable. People are lazy. People want to sit on their cultures, to eat junk and to become lean. It's a hard business of trying people to work out and to eat healthy. You need to have this inner motivation that most of the people don't have.
19:34 Harry Stebbings? So we were talking about the paid in the early stages there and actually the payback and the ROAS fantastically helpful. I'm a founder listening to this and I'm going, okay, but I'm in a red ocean category. And I'm competing against a simple or a flow or one of these apps.
19:49 Speaker 01 You don't have a chance.
19:51 Harry Stebbings? Yeah. How, how?
19:52 Speaker 01 We, we built unfair advantage, like we built growth one hundred million hour plus machines from day zero. What the age of Palta is cross pollination synergy between the apps. For example, simple playbook will double flows conversion. The shared acquisition strategies that we use help us to scale new ventures with the same ROI. We get fantastic terms with all ad networks.
20:19 Speaker 01 Brace, PayPal, it's something that small size and mid-size players cannot even dream about.
20:25 Harry Stebbings? So you have cross referral networks between the apps. So basically you get cheaper customer acquisition because a Flow member will become a Simple member and a Sim. No?
20:34 Speaker 01 It doesn't work like this. The way it works, so basically we can take tactics and playbooks from one app to another, think that Flow is running thousands of experiments per year. We're gonna learn out of that one thousand experiments and apply them to other apps. Flow is rather big and they don't take big risks. So we can do something more risky in a small company, take those findings and roll out in the apps in the group.
21:03 Harry Stebbings? Is there an example that comes to mind of one way it was a risky experiment and it worked and you took it to another one?
21:11 Speaker 01 We introduced upsells, second subscriptions and third subscriptions and we rolled all of that in the whole group. By the way, second subscription and third subscription, I don't mean here tiering. In the world where CPMs are very high and user acquisition is super expensive, you don't make a living from one subscription. You introduce additional revenue streams embedded into the product like extra value that you sell a second subscription and third subscription. We do lots of upselling as well and we use all that, those strategies in all the apps in our portfolio.
21:47 Harry Stebbings? So just so I understand that, and I'm a venture capitalist, so we're inherently naive and ignorant, which is why we do what we do. A first subscription is like, okay, I'm a premium Flow member, okay? And then a second subscription is adding my partner to it, adding insights. What is that?
22:03 Speaker 01 So for example, you're subscribed to get personalized workouts, right, Zing? But we also sell a body scanner and you can get a subscription for a body scanner in addition to various upsells of workouts, of recipes and other stuff that you're gonna purchase from us at the very first minute you open the wallet.
22:25 Harry Stebbings? Got you, got you. So basically, your first subscription does the payback and makes me neutral in terms of spend. And then your second and third is basically profit.
22:34 Speaker 01 Absolutely.
22:35 Harry Stebbings? Got you. How much of revenue do you want to be from second and third?
22:39 Speaker 01 Not sure I can answer that, but let's say, let's put it in a different way. All the upsells gonna add around twenty percent to the LTV.
22:47 Harry Stebbings? And you don't worry about like, I feel a little bit pissed off when this happens. Sorry, Kessi, but it's like, you know, I've paid to come, it's like private members clubs. I've paid to come in some ridiculous amount. And now you're charging me a ridiculous amount just to eat there. The restaurant's free to go in. Do you know what I mean? It's like, I'm hanging.
23:04 Speaker 01 But I'm doing that after a long web onboarding where I warmed you up. And you're ready to open the wallet and you're already there. And it's just a small another feature that I want you to purchase in order to be successful.
23:20 Harry Stebbings? Do you think people are doing the second and third subscriptions well today?
23:25 Speaker 01 No.
23:26 Harry Stebbings? Why?
23:27 Speaker 01 Palta has nailed all those tactics around web onboarding's payment infrastructure. And the whole sales piece of paywalls, interpricing. We almost don't do free trial. We do interpricing, which is different. Upselling bundles and second and third tier subscription. Not many players in the industry are doing that. Some players that are, Noom, they nailed that as well, Betromi and Valtech.
23:57 Harry Stebbings? Sorry, you said you don't do free trials. Why not?
24:00 Speaker 01 Eh, with the free trials, you bring free trial lists, which is a very weak signal. You want to bring payers, people who have higher willingness to pay, and this is how you want to optimize your algorithms.
24:14 Harry Stebbings? But I'm really put off by the like, enter app, paywall. And I'm like, oh, well.
24:20 Speaker 01 It's not, it's not an app. We do web onboarding.
24:22 Harry Stebbings? How much of net new subscribers is web onboarding?
24:26 Speaker 01 So eighty percent will be coming through web in all our companies apart from Flow where it splits fifty fifty.
24:34 Harry Stebbings? That's amazing though. Well done. Cause the cut is just brutal. I mean, the Apple cut is insane.
24:39 Speaker 01 Absolutely.
24:40 Harry Stebbings? We invested in a company that does like rooting away from Apple, just to like, it's, and it will be a great company.
24:46 Speaker 01 There are some pros and cons to do web onboarding. Think about web onboarding. And if you don't have a free tier, you might never grow to become a Flow. So it's like a game with pros and cons. It's a game of you can bring pairs with high willingness to pay and nail this whole unit economics and user acquisition, but you won't get now. You won't have that word of the mouth. So better to blend both tactics in both worlds. By the way, Flow is still doing the free trial. Flow is a different product.
25:16 Harry Stebbings? I'm so interested. You don't do free trials because it brings like lower quality people who don't have the willingness to pay. When we see the paywall, there's many different options for paywalls. Do you have like a strong opinion around it's good to give people four options? Just give people one option, highlight one option and put most recommended on it? Any lessons around paywall optimization or preference?
25:40 Speaker 01 The best lesson gonna be put a P M nails monetization from day one and test the hell out of that. You need to test probably to run like one thousand experiments on the paywall to get what's right for you.
25:54 Harry Stebbings? So you use paid to get a shitload of traffic in, see what the traffic does.
25:59 Speaker 01 We apply best practices from Paltor Portfolio and then we test the hell out.
26:05 Harry Stebbings? They pay, they come in, and the trouble with most A I apps today is if they do get there, they just churn within like seven days. Is there anything that you've learned in terms of onboarding and retention in those first user actions that people don't think enough about?
26:22 Speaker 01 I think it comes to the nature of the product. You need really to solve the need to do that in a fascinating way where you nail the first use case. You build a whole onboarding and activation around that use case and not something fluffy and broad. And only after that you expand to more use cases. The second one gonna be the whole activation, what most of the teams many times forget. I just sell premium. And then what I care about is how to improve cancellations and churn, but what happens in between? You need to activate your users on the subscription. Users don't remember what they really managed to buy. They don't remember your features.
27:06 Speaker 01 You know, we run a super interesting survey at Flow where we asked our paying customers if they use feature X or they use feature Y. If they engage with that feature, if they enjoy that feature. And you know, the answers were around. I don't really distinguish between the doctor's report and this and that insight. Oh, I couldn't find it. Oh, I didn't know it really exists. So if you don't do a good job around taking the user and really explaining them why you should be enjoying your premium and what you paid for. Then don't be surprised why the users churn. And now let's do like something truly amazing to get them back when they just are pissed off of your product.
27:50 Harry Stebbings? I I think it's one of those ones where it's a bit like email newsletters where people often don't send them very much because they're afraid that when they do, they're going to churn. And it's like, people don't like to actually show you the depths of the product because they're afraid the more that they hassle you and go, hey, look how amazing it is. The more they remind you of the subscription that you have. Do you know what I mean? And that's the worst thing ever. I find when it's like, oh, I don't want to remind them of the subscription. It's like, ah, that's not a good thing.
28:12 Speaker 01 You want to remind them that they have a problem and we are the best solution for their problem. This is what you want to do, really.
28:18 Harry Stebbings? I totally agree with that. When we think about going back to this kind of, hey, we test and we iterate and we use performance marketing to get a lot of people in. And then you said it's about that ability to transition to shareable loops, organic shareable loops. How do you know when it's the right time to go from paid, let's smash matter with three to five, well, I'm not smashing matters, to be honest, with three to five grand a day. But you're spending on matter with three to five grand a day to, hang on a minute, we need to shareable loops and it needs to be more organic.
28:49 Speaker 01 It needs to run parallel. Once you nail your first use case, you'll have that like unit economics. You start to scale, you need to start working on your product and those shareable mechanics within the product. But you cannot get any mechanics if the product is weak and if it's not built on the natural loop. Otherwise, just the road to nowhere.
29:13 Harry Stebbings? What do you think about growth loops? Everyone talks about a growth loop. And I'm like, is this just another Silicon Valley-ism of frameworks? And what does that actually mean to you? And if I'm a founder trying to build a growth loop, what does that actually mean?
29:28 Speaker 01 You know, I'm a big fan of that theory. When I work with founders and I work with founders for like more than twenty years and with different founders, I find it very hard to explain. And I find myself very much talking about funnels and creatives tailored to the use case. And this is what easy and simple, basically, to deliver the message that I manage to deliver. And that at the end, it doesn't matter how you call that. It's like building that UA engine that can scale.
29:59 Harry Stebbings? When you build a UA engine that can scale, most for the last few years or twenty years, uh, has been SEO. We're seeing that really move and change. Given the dominance of web for you, how do you think about the transition away from SEO? And how that changes your strategy?
30:18 Speaker 01 Part of it don't do SEO. First of all, the best organic you can get is word of the mouth. And this is where you should aim. It's like building the great product that solves the problem and brings other users in. This is what PLO does. With the rest, I believe the current opportunities lie within communities. Building those communities where the users are, Discord, Reddit, YouTube following. I'm not a fan of talking about like, you know, SEO, AO. If one gonna replace another, probably yes, probably no. Not all the companies are built for SEO and for good SEO. You need to be in a specific niche, probably to build some programmatic SEO.
31:00 Speaker 01 For B two B SEO or AO can work. In our niche for health tech, this is not a strategy to go.
31:08 Harry Stebbings? Watermouth does wonders for your unit econ. When we go back to the cat to LTV and trying to understand that unit econ. The hard thing is, we're an early stage company, as you said, but testing one channel, three to five K. I don't have LTV. Like, how do I figure out unit econ when I'm really early and when you're testing new ideas? You don't have twelve month cohorts. What do you do then?
31:31 Speaker 01 We use the chords we have, apply Paltos LTV models and try to figure it out. But we keep that space, meaning I know that if currently I'm looking at, let's say, Rose one hundred and forty. Tomorrow, when the real numbers come up, it can become one hundred and ten or even ninety percent. You need to think how you make it really smart. And don't like try just to be the surface of one hundred, because tomorrow it can be much lower.
32:03 Harry Stebbings? Can you take me to a time when you use powder models, but way overestimated where it would be? And what did you not see?
32:10 Speaker 01 So we did it with one of our companies. We thought that we are someone in the area of one hundred and fourteen. The real data start to come, we realized very quickly, we're around one hundred and ten. We start to bring different channels in and different channels can change a lot your LTV. For example, TikTok, that brings like very different type of users. That we realized in a few weeks can go under one hundred. And we start to rethink how we make this whole thing work.
32:44 Harry Stebbings? You said TikTok brings in very different users. We find this too, just for our core shows. Given they bring in a lower quality, much more high churning user. And actually often have zero impact at all. We have videos with twenty five million plays and they bring in like twelve subs. I mean, like, and we have videos with two thousand players that bring in fifty. I mean, is it not worth then doing this kind of junk food short form of low quality?
33:13 Speaker 01 I think it's worth, Palta commonly works with Meta, Google and TikTok. Those are three channels we try to nail within each company. Sometimes it takes us a while to nail that. For example, with Flow, it took us a year to unlock TikTok, which we scaled tremendously this year.
33:31 Harry Stebbings? What did you do to scale it and why did it take long?
33:34 Speaker 01 TikTok is a game of creatives. With TikTok, you need to launch around thousand of creatives per week to make it successful.
33:44 Harry Stebbings? Whoa, pause, a thousand creatives a week, what do you mean by?
33:47 Speaker 01 We are, we are playing a very different game in order to scale the way Palta scales. And Palta spends hundreds of millions as a group on user acquisition. So as a centralized growth function, we build a creative factory where we launch around hundreds of creatives per week. And with A I, it becomes thousands.
34:07 Harry Stebbings? Can you talk, what does actually hundreds of creatives a week mean? Does that mean hundreds of short form videos?
34:12 Speaker 01 We're probably gonna split it into seventy, thirty, where seventy gonna be like the permutations of the old concepts that work. Thirty are new form creatives.
34:24 Harry Stebbings? Fascinating.
34:24 Speaker 01 It can be videos, it can be static. Don't underestimate static. For example, Flow is fifty percent, I think, static.
34:34 Harry Stebbings? What do you mean, sorry, what do you mean?
34:35 Speaker 01 Static, static creatives, like static ads, not videos.
34:38 Harry Stebbings? Wow.
34:40 Speaker 01 And it's much easier to produce those, much cheaper as well. And you can produce that with A I.
34:46 Harry Stebbings? That's so smart, though, that you do the permutations on what worked before.
34:49 Speaker 01 Of course.
34:49 Harry Stebbings? Yeah, I've done this on LinkedIn a lot. We basically have like my top twenty LinkedIn posts. And then you can just do, I mean, obviously, put it in Chat G P T and say, hey, give me three variations. And then schedule sixty days worth. And it's basically guaranteed viral-ish bangers.
35:05 Speaker 01 So basically, the creative and the ad is the hook, the body and the C T A, right? And you can play with the hooks. So you can just take the body and think about thirty hooks for the same body. And then like thirty permutations of the C T A. And this is how you get to that crazy number.
35:22 Harry Stebbings? So.
35:23 Speaker 01 Then you get like all the mentions possible, and this is how you win. So on TikTok, you need to have three times more creatives than Meta.
35:32 Harry Stebbings? Wow.
35:32 Speaker 01 And you need to work really with like T T T C or their creators marketplace, do creatives in-house, blend them, and this is how you win.
35:42 Harry Stebbings? How do you use A I to take a hundred creatives and use to get a thousand?
35:47 Speaker 01 So basically, we work with like, you know, Midjourney, V R, and it changes a lot.
35:53 Harry Stebbings? It does.
35:53 Speaker 01 Of course, like, you know, on a weekly basis, you can replace the tools. Basically, the idea is to have a very strong team that amplifies those tools. Someone here who is like on it, someone who is saying, cool, so now let's test this. Let's try this. Let's see if that bring us into a different speed. Those are more growth themes where you have like people who are A I native. And this is their job. You know who I'm dreaming to bring into growth themes?
36:26 Harry Stebbings? Hmm.
36:26 Speaker 01 Prompts, like the people who gonna just prompt and build growth machines. Like literal growth machines as, you know, probably in two years' time, it's not gonna be relevant. So you build a growth machine where it can learn the trends on TikTok of the last five days. And your performance on TikTok and recommend you like what you should apply tomorrow in the creative. And watch your company's performance blended together with creative performance and tell you what to do.
36:57 Harry Stebbings? I'm worried that in a world of A I and creative, the value of content goes down because the supply is infinite. And so when you go from a hundred to a thousand and you use V R and Midjourney and there are five million other tools that there are. It goes down in value. Do you share that concern?
37:15 Speaker 01 No, because I think it's about diversity, velocity and volume. At the end, the creatives will find the way to the right audience. And if the audience is not right, then your creative sucks.
37:28 Harry Stebbings? Do you use influencers?
37:30 Speaker 01 We do. We never manage to scale the channel. It can go to, let's say, up to one million spend and for us, it's like nothing.
37:38 Harry Stebbings? Do you think people waste a lot of money on influencers today?
37:41 Speaker 01 Absolutely. But I do believe when talking about organic, there is an opportunity in the market to hack it, to bring like, you know, again, TikTok AI native person who gonna like launch thirty thousand videos per day and see if he can get to great influencers or build brand out of that. Probably this window won't be open for a long time, but can be super interesting.
38:08 Harry Stebbings? How has your role changed as a growth leader in the last eighteen months? You've been doing this for twenty years in different form factors.
38:16 Speaker 01 I think we should talk a bit about Palta and like how I got the role.
38:19 Harry Stebbings? Sure.
38:20 Speaker 01 Four years ago, Palta decided to build centralized growth function and they decided to centralize even more functions such as data analytics, finance and legal. And I was brought in to build the growth. Palta is a decentralized ecosystem with independent companies where they have their own leadership, their own teams, their own growth teams and roadmaps. And there is no top-down control. Yuri, the CEO, said, hey, this is Katty. She knows growth. She gonna support you. No mandate, no seat at the table. And I love those challenges. I love ambiguity. I love chaos. I love building from nothing, big and sparse.
39:02 Speaker 01 So I understood that I need to treat myself as a product and to deliver value fast.
39:08 Harry Stebbings? Is it hard though, when you're not involved in the company day to day? Cause the teams are like, well, you don't know what I'm dealing with. You don't know what I'm going through. You don't have the data that I have.
39:17 Speaker 01 Absolutely. I took a plane. I spent weeks with founders and their teams to understand what they're doing, to dig into their data, into their experiments, into their ways of working. And this is where trust start to click. They basically invited me to do like bigger bets with them together. What I tried to do is not to tell them what growth is and how they should be operating, but basically solve their immediate challenges and help them to scale, help them to win.
39:51 Harry Stebbings? Do you think growth operates best as a separate function or as an integrative part of a product team, a marketing team, a sales team, you name it?
40:00 Speaker 01 It really depends the way Paltor operates. At the very beginning, we incubate those companies and we launch the products. We hire one UA manager and one PM, PM that nails the funnels. Basically, when the company hit around three, five million RR, before that Paltor runs the show.
40:18 Harry Stebbings? So up to that point, just one, so if Paltor runs a show, we're doing performance marketing, we're getting to see if we have PMF, and then we're hitting three to five million?
40:25 Speaker 01 Absolutely. And then we hire UA and PM.
40:28 Harry Stebbings? For every 10 ideas that you have, how many get to that stage? Like, was it, do we have a lot of fails?
40:35 Speaker 01 Nope. We also don't tend to launch too many ideas in one quarter. So it can be like one idea or even one idea in six months.
40:46 Harry Stebbings? Okay, got you.
40:47 Speaker 01 We never wanted to become a factory of apps. So we never wanted to have more than, let's say, 10, 12 kids. Otherwise, it becomes unmanageable. And you want that cross-pollination and synergy. This is the edge of Paltor.
41:01 Harry Stebbings? So we get to this UA?
41:02 Speaker 01 We get to the, we get to the stage. And this is like your first lean growth team, which is commonly sitting under the founder. At some point, like when they scale to, let's say, five, eight million, I want to hire the leader for that team. I don't hire for titles, don't have fluff. I don't hire managers that just can manage. So I'm going to bring someone who can lead the team and be hands-on at the same moment. At that point, they still can operate like a separate team sitting on the founder. They're rather lean. Once they scale, what the rule of thumb is one UA manager per one channel, matching the number of growth
41:42 Speaker 01 PMs, and it becomes like a department. At that point, Paltor becomes fractional. It means that I'm still deep in their numbers and their experiments. Like, I know everything that is going on there. I approve their board plans. I run with them weekly meetings. But they become like a standalone and independent beast.
42:04 Speaker 01 Where do they sit? I don't think it's about the perfect place. As at the end, it's about people, company's DNA, product and marketing leaders' skill set. And you cannot bucket people into frameworks. It's all about efficiency and the processes. At flow, product growth is a part of product, where marketing is a separate function that consists of marketing, growth marketing, brand marketing, product marketing. At simple, growth function is a standalone function that works great with product and marketing over the years. And Zing and Lavi, since they're like the youngest kids, they're still a part of growth marketing,
42:47 Speaker 01 including funnels, commonly sitting under the founder.
42:51 Harry Stebbings? When we think about building out that growth team, there's a lot of founders who'll be listening to this. And I'm thinking of several of our portfolio companies that should be listening to this and they're going, okay, I need to probably, I've hit that five to eight million stage. I need to start thinking about this as an independent function or as like an independent role, so to speak, within the team. Should I hire a head of growth, a stellar Silicon Valley badged person and spend a lot of money on them? Or should I try and hire someone young, someone fresh, but maybe who doesn't have that experience? How do you think about that?
43:22 Speaker 01 I probably would not hire that Silicon Valley.
43:25 Harry Stebbings? Why?
43:26 Speaker 01 I think what you need to bring to the table is hunger, is lots of dignity, lots of dedication, lots of experimentational mindset. And you cannot get there when you basically worked for like best in class companies, seeing how growth runs there. And you come into a small company, what are you going to do there? You don't have the motivation to work in a lean team. You don't have the motivation to do the dirty job, basically, and to run like those, you know, basic experiments, to build the infrastructure. I believe it should be someone young, fresh, with the skill set of being a builder
44:10 Speaker 01 and doing that over and over again. Because in one quarter, you build and optimize for X. In another quarter, you need to rewrite the whole thing and like rebuild what you have built because it doesn't stick anymore. This is the mindset. You need to be ready and open for the changes all the time.
44:30 Harry Stebbings? Why did growth people most often not work?
44:33 Speaker 01 I think it depends who you hire. At Palta, they work.
44:36 Harry Stebbings? How many people are in the centralized growth function within Palta?
44:40 Speaker 01 So basically, the way I built the centralized function was around setting common standards, cross-pollination, making the process efficient. And I looked at three pillars of growth: user acquisition, product growth, CRM engagement. I put a leader.
44:58 Harry Stebbings? So what's the final one? CRM?
45:00 Speaker 01 CRM and engagement.
45:01 Harry Stebbings? CRM and engagement.
45:02 Speaker 01 And then I put a leader for each pillar. This is how we run it. We integrate with the companies and we can act as fractional C G O, fractional V P U A, execute the project inside the company or even outsource that. And with small companies, we are basically incubating them. We are currently five people, but it goes like to direct level and we don't hire P M's, copywriters and basically the execution functions inside the central function. I would never do a better copy than Flo can do, of course.
45:37 Harry Stebbings? Can I ask you, I'm always struck by, does CAC get better or worse over time?
45:43 Speaker 01 CAC can get worse over time if you scale not efficiently, but if you build a growth machine with creatives and funnels tailored to your use cases, you can keep CAC stable.
45:57 Harry Stebbings? What's been the biggest growth decision you made that turned out not to work? And what did you learn?
46:03 Speaker 01 One of the biggest decisions were to start centralizing the U A function, where we analyzed that each company is very unique, their creatives are unique. And we cannot build it as like holistic function that just gonna provide like a chunk of creatives and assets and campaigns to the independent companies. So we pivoted very quickly and decided that all growth should stay within the companies and we're just gonna support the scale.
46:38 Harry Stebbings? And so you're like, hey, there's commoditized functions like finance, like legal, like.
46:42 Speaker 01 Absolutely. We even were thinking about doing that with CRM function and realized it won't work either. We can do economies of scale for data, vendors, resourcing, talent, but we cannot really replace the growth functions in the companies.
47:00 Harry Stebbings? One thing we haven't talked about, which is probably criminal of me, but it's actually retention. You know, we've mentioned Alex Schultz before the show. He says to me all the time, and retention, retention, retention is the only thing that matters, the only thing that matters. And, you know, I think Duolingo has been so successful because they have such good retention numbers. I think their D three sixty is like thirty five percent. Which, given the category they're in, well done. How do you know what is the right retention metric to go for? Is it D seven, D thirty, D three sixty?
47:31 Speaker 01 At the beginning, you optimize for D seven and you look at D one and D three. Cause you cannot really optimize for D thirty as you don't understand like what is happening in your activation process. So let's say the first six month up to twelve month, you're gonna be optimizing. You're annailing your activation and onboarding, and only after that, you're gonna be watching like your further metrics. Having said that, you should have in mind, you need to build that defensibility and you need to see that flattened retention curve. Which we are seeing with the products that have a very strong PMF in our group as well.
48:11 Harry Stebbings? Yeah, a hundred percent. You see that with flow, I'm sure.
48:13 Speaker 01 See that with flow, we've seen that with other products as well.
48:17 Harry Stebbings? How much do you care about like D thirty retention, say, versus usage? Do you get what I'm saying by that? So it's like for a flow, for example, people may not need to check it every day.
48:29 Speaker 01 Absolutely.
48:30 Harry Stebbings? And so it's like not an engagement game, but retention is fundamental.
48:34 Speaker 01 Absolutely. I think, again, it comes to the nature of the product and what are you solving for and what is the solution?
48:40 Harry Stebbings? Does that differ across your portfolio?
48:42 Speaker 01 Absolutely. You aim probably for a couple of workouts throughout the week, right? But from like a woman who is tracking her period, the natural use case gonna be monthly.
48:54 Harry Stebbings? Does that suggest success, like checking monthly? Is that a close enough gauge of whether you would have successful user?
49:01 Speaker 01 No, I think this is what can tell you that you nailed your natural use case. And now you need to start building on that. Meaning you need to build content and content loops. How basically I bring women to check in flow like the content. The guidance to see if today, for example, it's safe to have sex. If today I have a desire to have sex with my partner. This is what many floor users are coming to. They're not just coming to track their period. They want to get the insights about their health and the whole life around their period.
49:42 Harry Stebbings? Push notifications are a kind of drug for engagement where it's like, hey, we can just push notify and boom. And we saw that in the first 10 years of probably iOS and app engagement.
49:53 Speaker 01 At scale, by the way, it can be very expensive with brace and other tools.
49:56 Harry Stebbings? Talk to me about that. Like, is push notifications a overused, overhyped way to engage an audience?
50:03 Speaker 01 Absolutely. When we just start and scale and build the products. We commonly have like basic email flows and not pushers. Within the time, like, let's say, six months after, we start to build basic journeys with push notifications around the user journey. When the company really scales and like they nail the unit economics and the use case, we start being harder on CRM, push and email together. The more is not the best way to go here. But if you don't have enough, it's probably not gonna work as well. You need to find that balance and it's just about testing.
50:46 Harry Stebbings? Do you find there's a wide variance in conversion depending on copy?
50:50 Speaker 01 Absolutely. Copy, timing, and it has nothing to do with creative and design, so you can just screw it.
50:58 Harry Stebbings? Anything on timing that's interesting?
51:00 Speaker 01 Absolutely, like you need to find the hook, the real, the best timing. It's not about the hour of the day, it's about the best timing for the user to get that notification. It should, it should be relevant, it should be tied to some kind of event. This is how it's gonna work and not just send a ten A M push that today is gonna be a great day for you.
51:23 Harry Stebbings? Why did you not decide to build your own brace or push notification technology within Palter?
51:29 Speaker 01 So Flo does that and within the rest, we use brace, which becomes very expensive at scale.
51:36 Harry Stebbings? Yeah.
51:37 Speaker 01 To build our own solution, it's also super expensive. For example, we did it for payments and it took a year and a big team to make it happen. Though we have like one of the best solutions in the industry.
51:49 Harry Stebbings? Listen, I'd love to do a quick fire round. So I say a short statement, you give me your immediate thoughts. Does that sound okay?
51:54 Speaker 01 Yeah, sure.
51:55 Harry Stebbings? So what is the most overhyped channel today? Where everyone's super excited and you're like, uh-uh.
52:01 Speaker 01 Meta.
52:02 Harry Stebbings? There's many channels within Meta.
52:04 Speaker 01 At the level of the channel, we don't really distinguish if it's Facebook, Instagram or whatever. And I think it's overhyped as it's getting really tough to get to good user economics there. You need to try really, really, really hard with creatives and with the funnels to get it right at scale. And when we're talking about hundreds of millions in spend.
52:29 Harry Stebbings? What's underhyped? Why are not many people?
52:32 Speaker 01 YouTube, absolutely.
52:34 Harry Stebbings? You see great return on YouTube?
52:36 Speaker 01 I think YouTube can be great when we think about Google ecosystem. So Google search is like overhyped. The whole demand generation piece of Google is underhyped and YouTube is a huge part of that. We just started entering YouTube with like short term and long term videos and it can become huge. It can beat all discovery channels.
53:00 Harry Stebbings? So funny, the people who've done it so, so well, it's actually Monday dot com.
53:04 Speaker 01 Absolutely.
53:04 Harry Stebbings? Yeah, I had Aaron, the founder on, he was, it was a real game changer for us. And the scale of Monday, that's pretty fascinating.
53:11 Speaker 01 But I think B two C companies are underestimating YouTube. It can be great, it can be like really big.
53:18 Harry Stebbings? What have you changed your mind on most in the last twelve to eighteen months?
53:22 Speaker 01 I think how the growth team should look like.
53:26 Harry Stebbings? Unpack that one.
53:27 Speaker 01 I think if we were talking about user acquisition managers and growth P M's, you need to bring native A I people, like seventeen years old teens who spend their time on TikTok like twenty four hours a day, who can bring you real leverage there and their native A I tools. I think this is like a natural addition to all U A teams.
53:54 Harry Stebbings? I get you. I've just got, uh, having worked with many of them, the challenge that they bring is unreliable. Listen, and that's a very general statement, but like they are just inherently very unreliable. They have very little respect for things like time. Like you'll say, I'll meet, we'll meet, meet at ten. They'll rock up at ten forty five and text ten minutes before being like, where are we meeting again? It's a completely different world. And it's like, oh, I didn't do that. We agreed that you'd do that.
54:23 Speaker 01 I would probably run one hundred interviews, find the best one who can do it on time and hire one.
54:30 Harry Stebbings? My hard thing with these guys also and girls is the really good ones know they can make a shit ton of money doing it for themselves.
54:38 Speaker 01 I know.
54:39 Harry Stebbings? So why would it?
54:40 Speaker 01 I, I think you bring them for a very short time period. They enjoy working for like a big brand, getting some recognition from their friends, wherever. And after that, they're gonna leave you, but it's fine.
54:53 Harry Stebbings? Actually, yeah, one who's amazing is Zaria Palvats, who's um Duolingo. I actually had her on the show because she's done all of Duosocial. And she stayed for five, six years, which is amazing.
55:04 Speaker 01 Six years is like incredible for any growth person in any company.
55:09 Harry Stebbings? Insane. Are ninety percent of growth leaders full of shit?
55:12 Speaker 01 Yeah.
55:13 Harry Stebbings? What's the biggest B S that you hear from growth leaders on podcasts?
55:18 Speaker 01 What best frameworks look like? And how a different heads of growth share their best failures and best wins, which is commonly fluff and very, very, very far from the reality and how you run the operation in the reality. The metrics and the benchmarks, which are average and average, commonly absolutely misleading.
55:45 Speaker 01 Or the benchmarks that you need to at least be looking at. But then like your product is different. How you even look at those metrics and benchmarks? You know that Flow doesn't have real competition. So we look at Duolingo metrics and benchmarks. Is it really comparable? Not really. And when others compare to Flow or to best players in the market, are playing the same game? You don't have your own value and leverage. But then like, how are you comparing to that median?
56:19 Harry Stebbings? Help me out, growth advisors. I always want internal. I just think it's better to have things internally done. How should founders think about the decision to have a growth advisor? Versus I should hire a growth team that's internal and 24 hours a day?
56:34 Speaker 01 I think the way you think about it is you need an internal growth team, fully integrated. And then you hire like a couple of hands-on people who can run the show. And as we said, like, young, hungry head of growths, who can manage the show by still being hands-on. You will miss that big strategic perspective and experience and knowledge from the industry that the growth advisor can bring. But then it's probably a matter of how you integrate them and how you work with them. They can give you everything and they can give you nothing. It really depends on what is your ask? How do you work together? How do you set the whole processing and mentoring thing around that?
57:19 Speaker 01 For example, the way I work, I commonly mentor the head of growth. We solve weekly challenges. I'm being fully integrated into the team. I learn the founder, I learn how they think, how they create. So I can like be fully integrated and support the growth and understand their product and their challenges. As opposed to, you know, just come in, tell a couple of fluffy, smart sentences, let them break their heads around the execution and go away.
57:51 Harry Stebbings? Yeah, six months, well paid, thanks guys. Yeah, and then by the time, by the time it's done, it's like, ah, I don't know if it was really successful.
57:57 Speaker 01 Absolutely.
57:58 Harry Stebbings? What do you know now that you wish you'd known when you started in growth?
58:01 Speaker 01 That one hundred experiments at the end compound into something very big. And even if ninety five percent of them gonna be a failure, you're gonna win big after getting all those insights and knowledge.
58:16 Harry Stebbings? Which company would you most like to be head of growth for that you haven't worked with? Because not because it's like a sexy company or a cool company, but because you think they would most benefit from a growth playbook that you would bring.
58:31 Speaker 01 OpenAI is huge. They have a very interesting playbook of consumer virality going upmarket currently to enterprise.
58:40 Harry Stebbings? Hmm.
58:41 Speaker 01 I would love to lead growth there and see how we can complement the playbook that they're currently running.
58:48 Harry Stebbings? Kathy, listen, I love this. I I I guess you saw my tweets. I hate it when people are fluffy or bring first principles or just bluntly don't answer the question. Uh, you've been fantastic. I've so enjoyed this. So thank you so much for doing this with me and it's been awesome.
59:02 Speaker 01 Thank you, that means a lot. It was a pleasure.
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