Being an unbelievably small star in an unbelievably large galaxy
Q: What’s the most common mistake that you see startups making around growth?
Eric: A lack of focus - trying too many growth initiatives and not landing any of them. As a startup, you are an unbelievably small star in an unbelievably large galaxy. And unless you point all of your light in one direction, no one will see it.
Find the “Efficient Frontier”
We think about these initiatives in terms of the “efficient frontier”. There's a certain point at which the returns from a growth channel start to level off — like a logarithmic curve.
The best way to have success is to do a smaller number of things — but to do them really well so that you maximize your chances of success with them.
Q: Any other common growth mistakes?
Eric: I know this sounds crazy, but I don't think a lot of growth leaders really understand the actual mathematical mechanics of their business. At RudderStack our marketing team is very rigorous. We look at the entire funnel from the very top, all the way through to revenue, data on closed-lost deals, etc. We understand sales cycles, and how they differ by channels and customer segment.
When you're really early on, it doesn't matter as much. But as you’re starting to scale, if you don't understand conversion throughout the entire funnel, then you can’t accurately predict whether you’re going to hit your numbers. And if a quarter gets tight, you’re just trying to pull a rabbit out of your hat.
So not understanding your numbers can create a very reactive growth organization.
Prioritizing growth channels
We put all our energy behind exploiting the one or two main advantages that we had over the incumbent.
Q: Back to your point on focus: what was your framework for prioritizing and sequencing different growth channels at RudderStack? Inbound, outbound, paid, content, etc.
Eric: This is going to vary from business to business, so let me just speak to the example of RudderStack. At a high level, we put all our energy behind exploiting the one or two main advantages that we had over the incumbent.
Our market's major incumbent initially targeted technical customers but gradually shifted to less technical ones. They also had a closed source product, which made it difficult for engineers to work with. So there was hunger out there among technical personas to learn about other ways to do the things that this incumbent was doing. Folks who wanted to “roll their own” data pipelines.
Enter RudderStack: the open source alternative to the major incumbent, for technical users who want more control over their data pipelines. So how do we reach those people? We create high-quality content on how to do the things that this persona is interested in doing.
Writing good blog content is hard and building up good SEO and distribution for it can take a really long time. But it pays off. There are posts that we wrote two years ago that used to get maybe 10 views a week. And now? It's 1000.
Q: Before RudderStack, you co-founded the largest in person code school in the world. If you could go back in time and give yourself advice at the start of that journey, what would it be?
This sounds so cliche, but that was my first big entrepreneurial venture, and I took it very, very seriously. I think in many ways, for good reasons. But that mindset can also go too far, right?
This company is expanding at a rate that's actually abnormal. 100% or 200% year-over-year growth – it breaks an unbelievable amount of things. It's very hard on the culture. People don't like certain things. There’s just this mountain of problems. Keeping that train on the tracks, it's crazy.
So I’d go back and tell myself, “Hey, this is normally abnormal. A normal business grows like 10% a year. You’re doubling every year. If everything wasn't breaking, that would be an even bigger problem.”
It rhymes a bit with the efficient frontier that I mentioned earlier. On that efficient frontier, there are some “fires” that you should let burn. If you always are putting out all of the fires, you’re probably over-optimizing.
Productivity & communication
Q: What problem you were looking to solve with Dispatch?
Eric: Before Dispatch, I was drowning and modern Slack craziness. It’s ironic because Slack was supposed to help you become productive. It reached a point where I was just spending hours trying to get through all my messages.
There are a million different contexts that I’m jumping between – customer channels, internal teams, this mix of synchronous and asynchronous communication. It’s a mess. I’d have all these little hacks just to barely stay on top of it all: to highlight the important stuff, and filter out everything else.
This just required too much brute force. And it had gotten to the point where it was untenable. So when I initially found Dispatch, I was like, “Oh my gosh, is this the answer for all these problems?”
And it has turned out to be!
It gave me a way to manage everything more effectively. I'm grateful to have found Dispatch as a solution.
“The productivity lie”
Eric: Getting through all your Slack messages can feel like productivity, right? But it’s not! It’s so easy to fall prey to this really pernicious lie.
You can probably limit more than half of your Slack volume to maybe like once a week, and still have just as much impact.
I was trying to figure out why my productivity was slipping. I realized, “Oh, because it feels like an accomplishment to get through all these messages, like literally just to read messages. But I'm not actually getting any work done.”
Q: How have you tailored your Dispatch setup to your current role and responsibilities?
Eric: I manage messages in Dispatch like an email inbox. I filter messages by context.
For example, I set up an inbox split in Dispatch called “VIPs”. When my boss messages me, it lands in that inbox. When my direct reports message me, it lands in that inbox.
So if a message hits that inbox I know to look at it ASAP. It's for more synchronous type communication.
What’s crazy is that you can't actually do that in Slack. You’d need to pull every single DM and group DM and channel into the right sections. It's outrageous that you can’t do it.
Eric: There are a few other category-based inboxes that I’ve made too — like I have one for all of our customer channels and customer-related communication: sales, support, etc.
Eric: When I’m triaging my inboxes, if something requires further action, I move it to my To-Do inbox. Then, every couple of days I’ll go through and process them - adding tasks to our project management system, etc.
I love this ability to separate out inbox triage from the actual work.