Sean Ellis, a pioneer in growth hacking, discusses PMF, activation strategies, AI's impact, and more from his career at Dropbox and Eventbrite.

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	Forwarded this email? Subscribe here for more   Lenny's Podcast: Product | Gr… The original growth hacker re… 0:00 1:44:25 The original growth hacker reveals his secrets | Sean Ellis (author of “Hacking Growth”) Sean Ellis, a pioneer in growth hacking, discusses PMF, activation strategies, AI's impact, and more from his career at Dropbox and Eventbrite. Lenny Rachitsky Sep 5   READ IN APP   Listen now on Apple, Spotify, and YouTube. — Brought to you by: • Gamma—A new way to present, powered by AI • CommandBar—AI-powered user assistance for modern products and impatient users • Merge—A single API to add hundreds of integrations into your app — Sean Ellis is one of the earliest and most influential thinkers and operators in growth. He coined the term “growth hacking,” invented the ICE prioritization framework, was one of the earliest people to use freemium as a growth lever, and, most famously, developed the Sean Ellis Test for product-market fit (which a large percentage of founders use today to track if they’ve found PMF). Over the course of his career, Sean was head of growth at Dropbox and Eventbrite; helped companies like Microsoft and Nubank refine their growth strategy; was on the founding team of LogMeIn, which sold for over $4 billion; and is the author of one of the most popular growth books of all time, Hacking Growth, which has sold over 750,000 copies. In our conversation, he shares: The proper use of the Sean Ellis Test for measuring product-market fit How to increase your activation and retention rates How to select the right North Star metric for your business Case studies from his work growing Dropbox and other products How growth strategy has changed over the past decade How AI is impacting growth efforts Much more Find the transcript at: https://www.lennysnewsletter.com/p/the-original-growth-hacker-sean-ellis Some takeaways: The “Sean Ellis Test” is a leading indicator of product-market fit. Run it by asking your users, “How would you feel if you could no longer use this product?” with options: “Very disappointed,” “Somewhat disappointed,” “Not disappointed,” or “Not applicable.” If 40% or more respond with “Very disappointed,” you have a strong indication of PMF. Dig into the users who would be “very disappointed.” Use the insights to reposition your product, refine your messaging, and add/remove features, aiming to grow your “very disappointed” user group to 40% of all your users. Sean recommends focusing on growth investments in this order: Activation/onboarding Engagement Referral Revenue model Acquisition To increase customer activation, first identify the root cause of low activation rates. The simplest way to do this is by asking your users directly—through surveys, messages, or even notes via the customer service team. Often the issue is that users lack an understanding of your product’s functionality and benefits. To address this, focus on improving your positioning and messaging. Choose a North Star metric that reflects the core value your product delivers to users. This metric should be actionable, not a ratio, and capable of scaling up over time. It should correlate with revenue growth but should not be revenue itself. Ensure that it provides a clear direction for the team and aligns with customer value. The ICE framework, developed by Sean, stands for “impact, confidence, ease.” It streamlines the prioritization process by concentrating on these three essential criteria. This method helps you assess tasks or initiatives based on their potential impact, your confidence in their success, and their ease of implementation. To use ICE, rate each idea on a scale from 1 to 10 in these categories, allowing for a systematic comparison and a clear focus on the most promising initiatives. Where to find Sean Ellis: • X: https://x.com/seanellis • LinkedIn: https://www.linkedin.com/in/seanellis/ • Website: https://www.seanellis.me/ • Substack: https://substack.com/@seanellis Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Sean’s background (02:18) The Sean Ellis test explained (06:28) The 40% rule (08:06) Case study: improving product-market fit (12:34) Understanding and leveraging customer feedback (16:50) Challenges and nuances of product-market fit (22:22) When to use the Sean Ellis Test (23:46) When not to use the Sean Ellis Test and other caveats (27:13) Defining your own threshold and how the Sean Ellis Test came about (36:13) Tools for implementing the survey  (37:30) Transitioning from surveys to retention cohorts (39:13) Nubank’s approach (40:18) Case study: Superhuman’s strategy for increasing product-market fit (45:18) Coining the term “growth hacking” (48:24) How to approach growth (57:25) Improving activation and onboarding (01:05:17) Identifying effective growth channels (01:10:28) The power of customer conversations (01:12:43) Developing the Dropbox referral program (01:14:47) The importance of word of mouth (01:15:23) Freemium models and engagement (01:19:21) Picking a North Star metric (01:24:30) The evolution of growth strategies (01:27:12) The ICE and RICE frameworks (01:30:11) AI’s role in growth and experimentation (01:32:52) Final thoughts and lightning round Referenced: • Hacking Growth: How Today’s Fastest-Growing Companies Drive Breakout Success: https://www.amazon.com/Hacking-Growth-Fastest-Growing-Companies-Breakout/dp/045149721X • The Sean Ellis Test for Measuring Product-Market Fit: https://productcoalition.com/using-sean-ellis-test-for-measuring-your-product-market-fit-c8ac98053c2c • Xobni: https://en.wikipedia.org/wiki/Xobni • LogMeIn: https://www.logmein.com/ • Hooked: How to Build Habit-Forming Products: https://www.amazon.com/Hooked-How-Build-Habit-Forming-Products/dp/1591847788 • VistaPrint: https://www.vistaprint.com/ • VistaPrint Acquires Webs for $117 Million: https://www.inc.com/courtney-rubin/vistaprint-acquires-webs.html • Strategies for becoming less distracted and improving focus | Nir Eyal (author of Indistractable and Hooked): https://www.lennysnewsletter.com/p/strategies-for-becoming-less-distractible • Wix: https://www.wix.com/ • Weebly: https://www.weebly.com/ • Shreyas Doshi on pre-mortems, the LNO framework, the three levels of product work, why most execution problems are strategy problems, and ROI vs. opportunity cost thinking: https://www.lennysnewsletter.com/p/episode-3-shreyas-doshi • Brian Chesky’s new playbook: https://www.lennysnewsletter.com/p/brian-cheskys-contrarian-approach • Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google, Quantcast): https://www.lennysnewsletter.com/p/be-fundamentally-different-jag-duggal • Qualaroo: https://qualaroo.com/ • SurveyMonkey: https://www.surveymonkey.com/ • Nubank: https://nubank.com.br/en/ • Kissmetrics: https://www.kissmetrics.io/ • Charles Kettering: https://en.wikipedia.org/wiki/Charles_F._Kettering • Zynga: https://www.zynga.com/ • Bounce: https://usebounce.com/ • Dropbox: https://www.dropbox.com/ • Jamie Siminoff on X: https://x.com/jamiesiminoff • Albert Ni on LinkedIn: https://www.linkedin.com/in/albertni/ • Choosing Your North Star Metric: https://www.lennysnewsletter.com/p/choosing-your-north-star-metric • ICE Framework: The original prioritization framework for marketers: https://growthmethod.com/ice-framework/ • Prioritizing: https://www.lennysnewsletter.com/p/prioritizing • Introducing DRICE: a modern prioritization framework: https://www.lennysnewsletter.com/p/introducing-drice-a-modern-prioritization • Presenting to Win: The Art of Telling Your Story: https://www.amazon.com/Presenting-Win-Telling-Expanded-paperback/dp/0134093283 • Oleg Yakubenkov on LinkedIn: https://www.linkedin.com/in/oleg-yakubenkov-a5710850/ • Paris 2024 Olympics: https://olympics.com/en/paris-2024 • BlackBerry on Hulu: https://www.hulu.com/movie/blackberry-f8e5eede-b43a-41db-b5b6-df9f4233bd4b • Tetris on AppleTV+: https://tv.apple.com/us/movie/tetris/umc.cmc.4evmgcam356pzgxs2l7a18d7b • Pack Gear hanging suitcase organizer: https://www.amazon.com/Pack-Gear-Portable-Luggage-Organizer/dp/B07XCY72G7 Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Lenny may be an investor in the companies discussed. You're currently a free subscriber to Lenny's Newsletter. For the full experience, upgrade your subscription. Upgrade to paid   Like Comment Restack   © 2024 2443 Fillmore St., #380-8231, San Francisco, CA 94115 Unsubscribe