Explosive Growth: A Few Things I Learned While Growing To 100 Million Users - And Losing $78 Million

by Cliff Lerner

Find something that people are doing inefficiently and create a solution that makes it substantially easier (ten times easier) to achieve the same result.

one of the most common mistakes people make is massively underestimating the amount of money they need to start a business and get traction.

Once you’ve figured out how much start-up capital you need, double it.

Your first few hires will set the tone for your culture. Secure elite talent ASAP and hire carefully.

Take a hot button current event, combine it with some data relevant to your industry, arrive at a hypothesis that may or may not be crazy, and the result is massive publicity. That’s the formula for the concept we call newsjacking.

Seizing the opportunity to steal publicity, we piggybacked off this story and created controversy through our own press release that drove attention to our website. The press release stated that the shocking tournament loss made Duke students so upset and depressed that they flocked to online dating sites to cure their depression (misery loves company), and we provided some data to back it up. About a week later, we got an email from the school newspaper, the Duke Chronicle, asking for some more data around the Duke’s students’ online dating activity. They ran a follow-up story on it, and it quickly became a hot-button issue on campus. The story ended up getting republished all over the country,

A few fanatical customer advocates are worth more than hundreds or even thousands of casual signups. Fanatical users will supply word-of-mouth growth, while providing the necessary feedback to iterate on the product.

The 10X effect taught him that he didn’t need to recreate the wheel. He just needed to understand his users’ pain points, address them, and make the user experience ten times better than what the rest of the industry was offering.

“I’ve not failed. I’ve just found 10,000 different ways that won’t work.” —Thomas Edison, America’s greatest inventor

Dropbox, the file hosting service, achieved tremendous viral growth by offering users more storage capacity if they invited friends. One brilliant tactic they implemented was to offer the invited friends increased storage capacity as well as an added incentive for them to accept the invite.

“You need to identify social influencers in small areas, see who the influencers are, and target them. That’s how we spread throughout college campuses and other social scenes.” —Whitney Wolfe, former Tinder VP of Marketing and

As companies grow, the decision makers and CEOs often become disconnected from their users, as layers of employees are hired to address issues. Ironically, the lowest paid employees (usually customer service reps) know the most about the user experience and what customers want, with no ability to follow up on problems or user feedback. Make sure you don’t become disconnected from the users.

If your largest source of revenue stopped paying you or disappeared, could your business survive for at least six months? Come up with a contingency plan now.

As I flipped through the deluge of documents, I noticed an overflow of foreign terms that I knew nothing about. My attorneys were encouraging me to sign the papers, but they weren’t giving me adequate explanations about the potential ramifications of the terms. Those terms ended up being more than just foreign—they were toxic. Although I didn’t realize how dangerous they were at the time, I followed my gut, which was telling me if I didn’t completely understand the magnitude of the contract, I needed to put the pen down and walk away, regardless of what everybody else was telling me to do.

Don’t be pressured into making any decisions or signing any documents you’re unsure about. Rushing into a poor decision or agreement can be catastrophic, whereas missing an opportunity will not be.

The best time to raise money is when you don’t need to. Is the company financially stable enough where you can walk away from a bad or mediocre term sheet?

lack of resistance, pushback, or any questioning of my authority posed a real problem.

When we raised the $8.5 million, the bankers told me they would never be able to sell the deal if I tried to take some money off the table. They claimed that would indicate a lack of confidence in the company. I should have been able to sell some of my shares to new investors, which would take a few million dollars off the table. But I didn’t, because the bankers told me I couldn’t, which was not true.

Plus, I thought to myself, “Why sell now when the company is going to be worth so much more later on?” That notion, however, was a bit of youthful foolishness on my part. I didn’t need to let it all ride. I could have let most of it ride.

“However beautiful the strategy, you should occasionally look at the results.”

The old saying goes, “Perfect is the enemy of good,” and we lived by those words at SNAP Interactive. We knew it wasn’t in our best interest to build perfect features, but to push new features out fast, because our users expected a steady dose of new and interesting ideas to keep them coming back.

We became so singularly focused on increasing revenue to appease Wall Street and their enormous growth expectations that we lost sight of the ball.

What is the one sentence that best describes AreYouInterested? That last question was crucial, because it told us if the majority of our users were experiencing something magical about the product. Users must come away with a singular message they’ll share with friends, otherwise, the message will never stick and spread.

Have you asked your users to describe your product in one sentence? Did at least half of the responses refer to the same concept? Book Recommendation: Made to Stick: Why Some Ideas Survive and Others Die, by Chip Heath. The results of that one question were eye-opening. We got answers that were all over the map, which meant we didn’t have one magical thing—a truly unique selling proposition—that customers fell in love with. That result meant either everything was remarkable to some users, or very little was remarkable to others. In our case, it was clearly the latter. This explained why our growth, especially organic growth, was stalling.

The CIO concept put a simple process in place to follow every time we launched a new feature. Within two weeks after release, we would run tests, analyze the data, and take one of three actions: Celebrate it!: It was a huge win and surpassed our success metric! Iterate on it: We thought it had potential, but it didn’t quite live up to expectations yet. Obliterate it: It was a complete disaster and wasn’t worth our time to iterate it. That simple process forced us to remove a lot of features that weren’t adding enough to the user experience or didn’t work out for some other reason. This alone was a huge success as bombarding the site with new features not only slowed down the development time of each successive feature, but also diminished the user experience.

Some of my favorites were Good to Great and Built to Last, both by Jim Collins, Mastering the Rockefeller Habits by Verne Harnish, and a bunch of books by Patrick Lencioni: The Advantage: Why Organizational Health Trumps Everything Else in Business, Death by Meeting, and Five Dysfunctions of the Team: A Leadership Fable.

A few days later, we had a mission: “Eliminate Loneliness.” We further described it as: “We build innovative solutions to make it fun and easy to meet new people in order to enrich people’s lives.”

Creating this mission statement was very impactful and inspirational. It gave a lot of people a great reason to come to work every day. They felt like they were part of something greater than merely trying to improve marketing ROIs and getting more users.

We have a bias for action and speed over perfection. We prefer an ugly but accurate report today over a fancily formatted report tomorrow. The faster we move, the faster we fail, and the faster we learn.

Massage Day. This is a big winner—trust me, and it’s not nearly as expensive as it sounds. We simply hired someone to come in for a few hours every week or every other week, and we offered fifteen-minute chair massages to all employees. It takes very little time away from work and it isn’t very costly, but it’s something employees really look forward to. Plus, it’s a really cool perk to be able to advertise in your recruiting package.

Company Newsletter. As we grew in size, it became more difficult for employees to learn about each other on a personal basis. So, we began a quarterly newsletter where we’d include everything from company highlights and event pictures to employee birthdays and milestones,

Birthday Donations. As we grew, it became difficult to acknowledge birthdays on an individual basis, and it was also challenging to find a convenient time to gather everyone together for cake. Still, we wanted to continue celebrating employee birthdays, so we came up with the cool idea of offering employees $100 to donate to the charity of their choice on their birthday. Employees were asked to write a paragraph explaining what the charity was, who it helped, and why they selected it. Then we’d include each of these write-ups in the company newsletters for all to read. This is a simple “feel good” item that simultaneously helps good causes.

Timeline. We recreated the “History of SNAP” in a timeline that went across the entirety of one of our whiteboard walls. The timeline contained a picture of each employee right above their start date along with key company milestones.

Ping-Pong. Everyone loves ping-pong, but I never imagined what a hit this would be in the office. Employees would retreat to the ping-pong table for a quick game during the day and specifically stay late just to get in a few more matches. We even began holding tournaments to determine the office champ (the entire company would gather round to watch the finals), and I went so far as to order a custom-made WWF-style...

I surveyed my employees to discover what they believed our highest priorities and goals were, expecting everybody to know the answer. However, the answers were all over the map—another wake-up call for me.

Figure out what motivates every employee, and understand that their motivations may be different than yours. Are you asking each interviewee and employee what would make them more excited about coming to work every day?

The bottom line is that we got massive coverage in The Daily News and The New York Post from that article, because we localized the story to the New York Metropolitan area.

Have you made a list of fun, taboo, or controversial topics in your industry? Do you have a plan to get data to prove or disprove them? Issue a press release highlighting the controversial data and you’ll have an explosive growth story.

So, whenever a snowstorm was predicted, we would immediately provide data to reporters that showed how users flock to dating sites during a storm, likely looking for a “cuddle buddy.” We used data to show that messaging activity increased 340 percent during the prior year’s storm. Using this method, we were able to inject ourselves into a national news story about severe weather

I said, “Hi, do you mind if I ask what you’re doing that looks like so much fun?”

It would be just about impossible to effectively rebrand an existing product in the eyes of the user—we had to build an entirely new product.

Women are constantly bombarded with unwanted messages from men they want nothing to do with. An app that could screen out non-matches for women was a Purple Cow. Tinder completely nailed this unmet need for women in online dating, because its functionality made it impossible to message another user unless you were a match.

Make sure any potential investors are fully aligned with your strategy and vision.

Your Media Page Matters Understanding that press was going to be very important from the outset of The Grade’s launch, we were sure to incorporate a robust media page on our website that included some key items: An easy link to download the app Compelling product messaging about why the app is unique Data around the site’s impressive usage A story about the founders A fun story about the product’s origin High-resolution screenshots Video footage of how to use the product An entertaining FAQ Social proof (quotes from major media outlets) An easy to way to contact us Not letting the media page get static or bland was very important, so we kept updating it. Every time we got a social media hit, we added a reference to it at the bottom of the page, which provided verifiable social proof of our influence.

We got a lot more opportunities for publicity solely by making it easier for the press to find what they needed from us, including high-resolution images and video clips about the product.

Way to go guys. Not only are a lot of us creeps, but we’re also hopelessly needy—a dog in a female user’s profile pic resulted in a 19 percent decrease in likes.

Hacking Your Way into Large Blogs There were two publications, Refinery 29 and Elite Daily, with a predominantly female readership that shared a part of our core demographic: singles in their twenties and thirties. Those publications were very engaged with the dating world, but weren’t giving us much coverage, despite the fact that we targeted them heavily. Finally, one of our brainstorming sessions suggested that we try integrating those publications into a data story. Immediately, we thought to run some data that tried to quantify which blogs had the most attractive readers. Fortunately, our suspicions were correct; Refinery 29 and Elite Daily had the highest like rates among blog readers on our website, confirming that they had the most attractive readers. We ran with it, and Refinery29, Elite Daily, and every other blog that was mentioned featured the story.