- The video features Ed and Gustav, who have experience in building growth teams for companies like Uber and Airbnb.
- They discuss the heyday of social viral growth and the key lessons they learned during that time.
- Ed shares an example of a viral Facebook app called Zodiac Photo Album that reached millions of users quickly.
- Gustav talks about the importance of growth on new platforms, such as mobile, and how they optimized user experience for the Voxer app.
- Ed discusses the transition from experimental growth to a more mature growth team at Facebook, where retention and engagement were prioritized.
- They also discuss the structure of a growth team, with different functions like product, engineering, analytics, design, and marketing working together.
- The discussion highlights how companies like Uber and Airbnb applied digital growth technology to traditional industries like hotels and transportation.
- The role of growth teams has evolved, with more companies now focusing on metrics and experimentation in decision-making.

- The role of the growth team at Airbnb has evolved to focus on evangelizing and helping the rest of the company improve product development.
- Uber's growth team faced challenges with being a two-sided marketplace and had to define a North Star metric that accounted for both riders and drivers.
- The real-world component of Uber's business added challenges in measuring and influencing user behavior.
- Paid acquisition is important for growth teams, especially as free growth opportunities on platforms like Google and Facebook become smaller.
- Calculating the value of riders and drivers in a two-sided marketplace is complex and varies by market and time.
- Building a great product and focusing on product-market fit is crucial for growth, as it allows users to share the product with others.
- Long-term investment and leveraging channels with true scale are key for successful growth.
- Engineering and data science are critical for growth team success.

- The speaker mentions that Instagram app install ads are underpriced compared to Facebook.
- They discuss the importance of setting up city teams for growth and customizing strategies for each city.
- They share an example of using a WeChat bot to help drivers sign up in China.
- The speaker emphasizes the importance of translation and identifying product gaps when expanding globally.
- They talk about the value of experimentation and the need for counterintuitive results.
- The speaker gives advice on keeping users logged in and making small tweaks for big impact.
- They share examples of copy tweaks that increased viral growth in Japan and the effectiveness of changing language from "invite" to "add".
- The speaker explains how the focus on growth metrics changes over time and the importance of retention and re-engagement.
- They mention the challenge of getting drivers to overcome nervousness and share an example of an experiment conducted to address this issue.

- The company conducted experiments to improve the first experience for new drivers, such as providing guidance and tips for their first trip.
- The question of whether all teams should be growth-oriented or if there should be a separate growth team was discussed, with potential conflicts between different teams.
- At Airbnb, the entire product team is considered a growth team because they use data to make decisions and validate experiments.
- The goal is to get everyone in the company to use the experimentation frameworks and tools.
- Uber merged the product team and the growth team to focus on engagement and retention.
- The merging of teams and the orientation towards growth and marketing as one entity is emphasized.
- No specific crazy hacks or discoveries from Uber's growth in China were mentioned.

- Ed and Gustav, experienced in building growth teams for companies like Uber and Airbnb, discuss lessons learned during the heyday of social viral growth.
- They talk about the structure and functions of a growth team, including product, engineering, analytics, design, and marketing.
- The role of growth teams has evolved, with more focus on metrics and experimentation in decision-making.
- Challenges faced by growth teams include measuring and influencing user behavior in a two-sided marketplace and the importance of paid acquisition.
- Building a great product, focusing on product-market fit, and leveraging channels with true scale are key for successful growth.
- Engineering and data science are critical for growth team success.
- The importance of customization for different cities and global expansion, including translation and identifying product gaps, is emphasized.
- The value of experimentation, counterintuitive results, and making small tweaks for big impact is discussed.
- The importance of retention, re-engagement, and overcoming user nervousness is highlighted.
- The question of whether all teams should be growth-oriented or if there should be a separate growth team is discussed, with examples from Airbnb and Uber.
- The merging of product and growth teams and the orientation towards growth and marketing as one entity is emphasized.

Gustaf Alstromer, YC’s newest Partner (formerly product lead for Growth at Airbnb) joined a panel with Ed Baker, (former Head of Growth at Uber), to share tips on growth experiments and team dynamics at a scaling company.

What's pretty cool is we have 2 guys who've been living the center of building up these growth teams kind of for the past 7 or 8 years.

Ed joined Uber to start the growth team when it was 5 people, and then over the 3 and a half years, became kind of VP of both product and growth for kind of all of Uber.

And Gustav joined, and the Airbnb growth team was him and 2 other people when he got started a few years ago.

So it's fun to scale up off-site to talk about scaling.

We've mostly been talking about scaling organizations.

This is a chance to talk about how do you scale the organization that continues to scale your users.

What's fun for me is I've known Ed and Gustav now for most of a decade in this growth world.

And we were all started back when sort of this idea of a growth team, this idea of a team that's focused on this sort of intersection of product and marketing to build stuff was pretty novel and almost didn't even really exist.

And we were all kind of doing it in the social world.

And I remember Ed started a company in 2008 called Friendly, or it was Domingo and then Friendly.

Gustav started a company in 2007 called Haysan and then went over to Voxer.

And these were like, how do we get to millions of users in the early days?

So I'm curious if you could just kind of talk about this heyday of social viral growth explosion and sort of what are some of the key kind of crazy things you learned then that have really helped you as you think about growth today?

Sure, so yeah, I guess 2007, summer of 2007, when Facebook launched the platform, was I think part of that explosion of just crazy viral growth, spammy apps on the Facebook platform.

That was actually the first, those were the first apps I built that reached tens of millions of users, you know, within months' time.

And I think it was a great platform on which to just experiment with a lot of different ideas because it was so easy to build these simple Facebook apps and just run lots of A-B tests.

And so much of, I think, figuring out how to grow something is it's a combination of an art and a science.

And by running lots of experiments, you start to build an intuition for the types of things that work and don't work.

What were some of the early tricks you found that made you go super viral.

You were pretty famous back in those days.

Yeah, I mean, you were at Facebook back then, right?

So I think Facebook created new rules after I found some loopholes.

There was 1 I remember, I think the most viral Facebook app, I'm hesitant to even admit this, but it was called Zodiac Photo Album, and the way it worked was literally with 1 click it would create a photo album with 12 photos in it, 1 for each zodiac sign, and then show all of your friends who had that zodiac sign in each of the 12 photos, and tag all of them.

And I think we were allowed to tag like 20 people per photo, So it would show up to 20 of your friends per zodiac sign times 12.

So with 1 click you'd tag 240 friends and all 240 people would get an email saying Ed just tagged you in a photo So that has a very high response rate people kind of want to see when they're tagged in a photo.

They would go, they'd see, oh, it's a Zodiac photo album, create your own with the Zodiac app.

Within, I think within 24 hours, we had tagged tens of millions of people in photos.

I think including Zuck, and then I heard the platform team shut it down shortly after that.

Now, I wonder if those days are over of kind of those crazy viral pops.

And then Gustav, you were really central to a lot of the early experimentation on mobile.

I remember we first met when Voxer was blowing up, and you guys had figured out some really unique ways to blow up using notifications and inviting.

Can you remind us, how did you get to this world of growth, and how did you figure out stuff in those early days, especially on mobile, which people think is a lot harder,

So before Voxer, I was at a company called Heisan, which I co-founded, and it was a product, like a messaging product on mobile that we couldn't grow, so we spent a lot of time trying to learn how to grow.

When I joined Voxer a couple years later, the first kind of approach, the first thing I kept in mind is like, we need to think about growth.

And at the time, so back to the early question, I think there's a couple of like growth kind of becomes important when they have new platforms.

So you have Facebook platform, you have the mobile platform, you have Google, SEO, there's a bunch of larger platforms that makes people actually care about investing in them.

At Voxer, the iOS platform, which key to those things were the Address Book and push notifications.

Those are the things that kind of like weren't there in the very beginning.

Once they started happening, people started exploring what you can do with those things.

With Voxer, when I joined, the most important thing, so Voxer was a walkie-talkie app on iOS and Android.

You push a button, you start speaking on the other end.

We found that the amount of friends that you have when you open the app that were there for the very first time on the app and how you display them was absolutely key to whether they were going to use the app or not.

So we spent basically the first year optimizing those things.

Like basically, how many people do you have when you open up the app for the first time?

And how do you get to a list like that right when you open the app?

Well, you match phone numbers with address books.

Spend a lot of time investing in matching phone numbers with address books, not that different from Facebook platform.

And we kind of tried to optimize how many address books and how many phone numbers we got from people.

And we're doing this in the best interest of the users.

Like, you wouldn't end up using the app unless you actually saw friends on the app.

This was all in the best interest of the users, and sometimes you forget why you do things.

So, Ed, I remember your company got acquired by Facebook, and you kind of jumped into a little bit more mature growth team at Facebook.

You've been kind of virally hacking and building these things on the platform.

What was sort of the adjustment to go from kind of being in this sort of experimentation mode to something that was a little bit more mature?

But what did you see when you observed kind of that mature Facebook growth team?

Yeah, so, well, 1 thing I saw was I was finally working at a company that had an amazing product that people loved.

And I had just never actually built that myself before, so that was pretty cool.

And with that came amazing retention, amazing engagement.

And Facebook was already at a size where retention and engagement were bigger drivers of the North Star metric MAUs than new user acquisition.

So kind of everything I had worked on in the past was all about how do you get those first million users.

At Facebook it was how do we keep the users we've already acquired, keep them engaged, minimize churn, and to me that was 1 of the biggest differences, and most of the growth team at Facebook at the time was actually focused on friending, because we discovered at Facebook that friending was the number 1 driver of retention and engagement.

So then there were teams on the Facebook growth team that were basically focused on things like PYMK, people you may know, and other ways of causing people to form more connections.

The other 1, we can talk about it later, is just the way the team was structured.

Anu got into that a little bit, like their different functions as the team grows.

Now's actually a good time to kind of think about how was that structured?

Because then I want to get into this transition to these sort of different real world companies.

Well, so 1 thing I learned at Facebook was I really liked how the growth team there was structured with all functions.

So, product, engineering, analytics, design, and even marketing.

So those 5 functions were all critical to work together kind of all within that growth org.

And When I was at Facebook, I think the growth team was about, around 500 people or so.

And, but across all those different functions.

In fact, all of analytics back then was part of the growth team.

And I kind of took a lot of those learnings when I went over to Uber and started our growth team there with just initially a five-person team, kind of picked 1 person for each function.

But yeah, I think that was 1 of the big takeaways from Facebook.

Well, and you know, that's a perfect transition because when I've been talking to a lot of people about sort of what the real success of Uber and Airbnb, I mean, Joe gave a great talk about sort of why Airbnb has become so important in the world, but a lot of people have said it's kind of, we took these hotels and transportation, which were sort of old world, real businesses, and applied a lot of these digital growth technology and learning to them.

And so kind of talk a little bit about what it was like going into Airbnb and starting the growth team with 2 people and Uber and starting the little growth team.

What did you see there and how did you start this sort of practice from what you'd learned before?

I think the initial idea of a growth team is that there is some function of a company that really cares about metrics, they're really optimised for the goals, and some time ago, this was unusual in start-ups.

Most people did not look at metrics when they made prior decisions, they did not experiment, so instead of making everybody responsible for that, you made 1 team responsible for that, and that ended up being the growth team.

I think really great companies today, they have everyone kind of carrying by metrics, using experimentation, and doing all those things that growth teams do to make decisions.

So I think things have changed a little bit, and the role of the growth team as the team that evangelizes those things have changed a little bit.

When I joined Airbnb, a lot of people joined at the same time that had experience from all those things.

So Pretty quickly, I got a lot better set of tools than I had ever had a Boxer around experimentation, around support from data science.

And that just, I would say, in some sense, made all the infrastructure of doing a growth team at Airbnb really, really easy compared to my previous experience.

And I learned a ton from all those people, and it's been pretty incredible.

But yeah, in the very beginning, we, like everyone else, Airbnb had always been an incredible product.

And as a company, we along those years have learned to identify and optimize every single step of that experience.

A lot of it is, of course, offline, but of the stuff that we do online, it's a lot of things that we can do to just measure and make the user experience better.

But I think, yeah, the role of the growth team have changed from being that evangelizing team that do all of it to kind of evangelizing to the rest of the company so that everyone can do product in a very similar way.

I'd say at Uber there were kind of 3 big differences from Facebook when I went over there in terms of forming our initial growth team.

So the first was it's a two-sided marketplace and When we came up with our North Star metric, I remember having conversations with that small team of 5, 1 of whom Mike Powell is sitting in the audience here.

I think that's actually really important for sort of the growth discussion.

So at Facebook, it was monthly active users.

It's basically the 1 metric that if you talk to, the way I like to think about it is if I talk to anyone on the growth team and ask them what number are we trying to grow, they would be able to say it's that number And if they're not working on something that ultimately is growing that number, they're probably working on the wrong thing.

So that's kind of how I like to think about it.

We'd set every half, we'd kind of have, this is our six-month goal.

But then we'd track our progress every week and see, are we on track?

And there's, of course, seasonality and stuff.

It's not just a straight line, but you could kind of see, like, how are we doing versus our goal?

So at Uber, when we Came up with our North Star metric.

We had to consider their 2 sides of the marketplace.

So it's not just monthly active riders ultimately, we decided on trips weekly trips as the North Star metric because for every trip to take place You need riders and you need drivers.

And so by having trips as that North Star metric, you could then break that down into the supply side and the demand side.

And you need more riders, more drivers, and you can do growth accounting on each side of the marketplace to say, well, to get more riders, you need more new riders, re-engaged churned riders, and you know, minimize churn of your existing riders.

So that was 1 thing, was kind of agreeing on this is our North star metric in a two-sided marketplace.

So that was a bit different from Facebook.

I'd say a second thing was because it was, Uber is a real world company, there were several parts of that funnel that You can't just measure online.

Whereas on Facebook you can track every click, every pixel, all of that stuff.

With Uber there are steps of that funnel where it involves a driver going in and getting their vehicle inspected or uploading their documents and ultimately downloading their iPhone app, going into their car and doing that first trip.

And for me it was super eye opening when I did my first trip as a driver.

I walked back to my house because I got so nervous about doing that first trip.

And that's when it suddenly hit me, this is why so many of our drivers who are activated never do that first trip.

So that real world component added kind of some extra challenges in terms of 1, how do you measure it?

And 2, what are some things you can do to influence the way people behave in the real world?

And then the, let's see, I said 3 things and now I mentioned 2.

So two-sided marketplace, the real world component to it, and I'll come back to the third when I remember it.

Well and so as these teams have scaled now, you know, way up, you know, you said, talk about data analytics, design, product, sort of internet marketing.

Oh, that was the third, by the way, paid acquisition.

So Facebook, we didn't really do very much paid acquisition, but at Uber, we had an entire performance marketing team.

Well, initially it was a one-person team, but ultimately became a team where we would actually spend money to acquire both riders and drivers.

Well, actually, I was going to, that's exactly right.

In our social worlds, we're all about these organic, how many people can we organically get into our products?

And if we spend a dollar on user acquisition, we always consider a dollar too much.

And you know, the boards are like, how do you get more free virality?

But I think, you know, both Uber and Airbnb, because your businesses, people actually pay for, how do you think about paid acquisition differently than this sort of organic acquisition?

How do you train a team to sort of understand that and think about that differently?

I would say a lot of those platforms that you are doing growth on, Google, Facebook, they are turning kind of the opportunity of doing free growth there is getting smaller, and the opportunity of doing paid growth better is getting larger.

So most good growth teams should invest in paid marketing.

I think that, and my experience of seeing, looking at other companies, what they've been doing, large companies that do paid marketing, they tend to integrate that with the product team and engineering team.

So there are engineers and product managers supporting those teams.

They call it ad tech or something like that.

And I'm sure both Ubuntu and Beast is at that stage right now where basically most of the leverage you'll have at scale is gonna be through engineering, data science, and product management.

That's a different world than when you start off.

When you start off, you have a smaller team.

Yeah, I mean, I'd say the way I think about paid acquisition is it can just further accelerate growth.

So Uber would have kept growing even if we had never done any paid acquisition, but especially in a competitive market, it kind of makes sense to pay up to what that rider, that driver is ultimately going to be worth when you're in a situation where the faster you grow the better, because as you get bigger and bigger, there are a lot of other efficiencies that kick in.

So the whole network becomes more efficient once you have more liquidity.

So there's value to getting there as quickly as possible.

It's kind of tricky to know exactly how to calculate the LTV of a rider or a driver in a two-sided marketplace because the riders pay the drivers and some of that money goes to Uber.

So how much is the rider worth versus the driver worth?

And we had a team actually focused on that exact question, team of data scientists, and it was more complicated than I understood, but basically there are certain markets that are more supply constrained, where a driver, the incremental driver's worth a lot more.

Other markets that at a certain time of year might be more demand constrained, where you might be willing to pay more for the rider and that varies over time and by geography.

A quick comment on that, I would say most companies that go really, really large, they do it on figuring out 1 platform.

So they are really good at online marketing, they're really good at SEO, they're really good at virality, or the Facebook platform or something like that.

It's rare that you have, like I figured out all the platforms.

So I would think about the product that someone have, the product that you have, and which of these platforms is it the most suited to?

It really depends on the product, I would say.

And where do you guys see any upside right now in sort of the marketing or growth world?

I mean, it seems like a lot of these channels have gotten pretty saturated.

Facebook's gotten relatively expensive to be buying on.

Google's various platforms and video, I've heard a lot of people talking about video ads are sort of the new place.

Even people are actually going and advertising on TV.

Where do you guys just think about sort of where those growth opportunities sit out there now?

I mean, I come back to build a great product.

Because if you have that product market fit and the people using your product love it, all of the channels are out there today that will allow people who love a product to share it with their friends.

So I think that's actually the most important thing.

Yeah, I mean, I would, I don't think there's anything short term that will remain like successful for a very long time.

So the best advice is invest for the long term, whether it's SEO, whether it's paid marketing, whether it's morality.

Take a couple of years to look out and see where do we want to be.

And aim for, Like, look for channels that actually do have true scale.

Like channels that have hundreds of millions of people discovering products through those channels and then invest for the long term.

And engineering and data science is critical to be successful in my opinion.

I'm surprised neither of you mentioned Instagram.

The tip I got yesterday at F8, talking to a bunch of Facebook folks is, they think Instagram app install ads are significantly underpriced relative to Facebook.

So if you guys go back and start buying on Instagram, you might be surprised at how it does.

So 1 of the unique things, Again, in the social viral world, we kind of grew scaled on the internet.

What are some of the things that you did to kind of set up teams for growth that could actually do growth in a city that could sort of customize it for the city?

Or how much did you try to make it sort of a centralized playbook that you'd control from the mothership?

So I mean every city would have its own city team beginning with a launcher.

He was a launcher then was our general manager in Boston and then started basically headed up product for the growth team.

So it was really valuable to have the person who was running product for growth be 1 of these ex-operations people.

And working with all the city teams was really important in terms of just making sure that product and operations were integrated.

And we now have a team at Uber called Product Ops, and it's basically a team that kind of is that bridge between the product team and the operations team.

But as much as possible, we tried to just have a playbook.

And 1 thing that was helpful with Uber being a global business, and I'm sure you guys see this as much, if not more so, at Airbnb, is When we would launch in a new city, there would already be a lot of pent up demand.

We'd see a lot of people trying to use Uber in a city before we'd launch in that city.

So there were certain things we could do to kick off that flywheel.

But I'll share 1 example of something where we actually did something very different to the product in another city, and this was back when we were in China.

We found that it was hard for drivers to sign up to become Uber drivers in China.

Because of the firewall, there were latency issues, and just signing up online, and a lot of drivers had phones but didn't have computers and it was just hard for them to sign up.

So 1 of the engineers on our China growth team built a WeChat bot.

WeChat is like the messaging app or the Facebook of, sorry, the Facebook and also the internet of China, really.

And so we built this WeChat bot where as a driver you could take a picture of a QR code and then it would just start asking you questions.

And people would quickly be able to sign up to become a driver, and we'd have these onboarding sessions with hundreds of drivers, if not even more than that, showing up in 1 room, all on WeChat signing up, which was amazing until WeChat started blocking us, because they were owned by Tencent, which had invested in our competitor.

So that's 1 example of something we had to do very differently in a different market.

I would say there's 2 things I would call out.

So absolutely key to have a way that you can translate content across languages.

It's often overlooked and it's like a huge growth driver.

Like a lot of people don't speak English and need the experience that you're offering in different language.

The second thing is what I call product gaps.

So if you look at your product globally, there are some parts of your product that won't work in some countries, whether it's authentication like Facebook Connect, whether it's payment mechanisms, search SEO, and just identify those gaps.

There are not that many countries, in my experience, that are dramatically different.

There are maybe 5 or 10 that are quite different than US, but most countries are not that different.

And just last thing, because growth is all about experimentation, and often experimentation against instincts.

What is 1 great case where you and your growth team really either believed something was going to make a huge impact and then were disappointed when it didn't, or where someone just did an experiment and even you, you were like, oh, this is never gonna work, and then it blew you away.

See all Y Combinator transcripts on Youtube

Scaling Growth | Gustaf Alstromer, YC Partner (formerly Airbnb) & Ed Baker (formerly Uber)