Consumer products 101 | Sriram Krishnan

Transcript

[Music] thank you so the official title of my talk is consumer products 101 but that's a lie we're going to talk about something else so over the next few weeks and months you're going to have a lot of amazing speakers just like Chris come and talk to you about the ins and outs of crypto right everything from the most technical to you know to the business side you have a bunch of like amazing stuff we have planned for you this is not one of those there is nothing here for about the next hour about crypto right and you might be wondering why are we doing this on the first day and hopefully by the end of this hour it'll actually make some sense

so what I'm actually going to do is actually not talking about consumer products I'm going to talk to you about this building great products using something I call the hero's journey so before that who am I I'm sriram Christian uh uh I'll give you the books a little bit of a backstory because I think kind of it's kind of important for all of this I grew up in a small part of India uh very very far very very different from anything that we are we see over here through a bunch of crazy incidents which I will talk about I wound up getting a job at Microsoft which was really my entry into the technology industry uh that led to a role at Facebook as it was called then now meta in uh 2013 and for the next 10

years from Facebook the snap to then Twitter I kind of you know held a variety of sort of roles running ads and products I was kind of a nerdy Thanos collecting the infinity contract of social media companies kind of like just going them across them and ultimately wound up here and what I kind of wanted to do was you know when you know when some of the folks are put into this event like Jeff another said hey come see them come talk to you come talk to us about the lessons you have learned over the last 10 years oh it was a struggle I was like well there's so many crazy things that I've seen or you know I tell people over drinks from my time at Facebook from my time at Twitter how do I kind of package it all like what's sort of the unifying theme to all of

this that might be useful to the people here and what a what a kind of Hit Upon is something called the hero's journey how many of you have heard of the turn the heroes Journey here wow okay this is a smart crowd all right okay uh I was going to surprise you with that but all right uh now the hero's journey is basically the archetype of pretty much any story that you or I would have seen from books to movies to TV shows uh and you know the kind of the foundational work is from this guy named Joseph Campbell uh he came with something called the monomith which is his idea that any story from the beginning of time can be deconstructed into a few foundational elements and it

this could be literature this could be Shakespeare this could be top gun Maverick whatever you see you can you find these elements in any great story and what I'm going to try and convince you of over the next hour or so is that all great consumer products also fall into the hero's journey so work with me here the fundamental element to the hero's journey and we'll dig into all of this is first there's a call to Adventure there's a crossing of the threshold there's a road of Trials and then there's a climax so what's the Call to Adventure now this year you know and this might be easier for some of the folks in the front is

the opening scenes of two movies which two movies The Matrix and what's the other one showers right historic iconic opening scenes you see Neo here taking a nap he wakes up or you see Luke climbing out onto the desert planet of Tatooine and he's like man I want to go on an adventure I don't want to hang out with my uncle or not right amazing historic openings everyone here seeing the Matrix and Star Wars everyone okay I actually test on this someday they haven't seen it and then I was like well this whole thing's not gonna work okay so amazing historic opening scenes right agree actually no these were not the opening scenes of those movies right the very first scene in The Matrix is well you get this little terminal prompt and then you get Trinity show up and she kick some butt

and then in Star Wars the opening scene after the whole scroll is you get the cruiser show up and then you get Darth Vader now why is it that Lucas and the wachowskis choose to use these in the first few seconds of both movies and not actually those other things which you all know any ideas why because George Lucas was taking a huge risk when he made Star Wars and he had no idea whether you would be patient to go see who Luke was who this guy was what this planet was so within the first 30 seconds to a minute he knew he had to tell you what kind of movie you are going to watch right before you could

get into it so in the first 30 seconds you have space you have a big battle cruiser you have lasers you have like laser swords you know you have Darth Vader it's all been in the first two minutes of the movie So within the first two minutes all the Great Movie Makers try and tell you what kind of movie you're going to watch almost a trailer within the movie itself before the movie actually gets underway right he actually sees them pretty much every great movie and in my experience all the great consumer products that I have dealt with do the exact same thing so again I'm going to kind of maybe read some of this because it's maybe small for the folks in the back this is the opening screen of facebook.com for many many years for over half a decade now probably tens of

billions of dollars of Facebook's market cap can be attributed to this screen and an enormous amount of work goes into the screen but there are a couple of folks who actually x Facebook here the I think I know the French guys and some others who actually know what I'm talking about so because on this screen the minimum first when you go to facebook.com what do you see it tells you what Facebook is go connect with friends post photos stack Etc but then if you go look at the right right there is almost no way you can mess this up do you enter your first name your last name it doesn't matter whether your phone number email it'll take it that's not even a confirmed password you there is no way you can hit this screen and not know the answers to every single question and

then Facebook has you right so uh this is this is by the way foundational Facebook I can't tell you how much effort huge teams at Facebook put into this now the contrast uh by the couple of folks with x Facebook here who are they yeah so you know what I'm talking about right here right now this is Twitter's Opening screen from 2010 to 2013 2014. I'm going rough or take so I'm gonna read it out there is a full name there is a username there's a password there's an email ask you accessible term of service there's a fatal flaw in this screen what is it yes why yes right because what happens is people show up at the screen they're very first thing to see when they enter Twitter

right I know my name I know my email but then username they pass out to be funny I have to pick something nobody knows do I pick my real name or do I pick something in Avatar they don't know and the moment they start thinking boom they're gone right they are no longer they're no longer to watch the rest of your movie they're bouncing out so you know when you think of building a consumer product uh when you're or actually really any product what you want to do is in the first immediate minute second that somebody hits your product you want to make it so they can't fail they actually can actually go use you and they know what you're about so that's number one next up is something I call crossing the threshold now this is where we get the really fun parts so again in any movie there is a moment

it comes about 20 30 minutes within a movie where the hero or the heroine sets off an adventure right and Star Wars is Obion Kenobi shows up and he takes off Luke and they go off with the robots in Harry Potter Hagrid shows up uh in the matrix it's with uh Morpheus there's always a scene when the hero can no longer stay in his previous world he has to go set off on an adventure and what that's telling you as an audience is okay we are get we are now off We're Off to the Races right shit's gonna get real and for a product there is actually a very similar dynamic in every great consumer product there is something and a lot of names for this right some people call it the aha moment some people call it the magic moment it

doesn't really matter but that is a moment it doesn't happen immediately it kind of happens a little bit after when your customer your user goes from not being retained to being a retained user they're going to come back they figure it out they have crossed the threshold and they're not going to leave you now the key thing for you to do when you're all building this and it's different for every kind of consumer product is to figure out first where that moment is now Facebook that moment was you have to get 10 friends in 14 days so what that meant for Facebook was if you got to 10 friends in 14 days you had enough people where when you posted something they would react uh you were not alone you

were not posting something into the abyss it was over 14 days people ran out of patience and if it was less than 10 friends there was not enough kind of people for you to kind of chat with so that is kind of like you know it was a rule of thumb it's kind of a good round number and people like Facebook was like 10 friends in 14 days and by the Instagram even to this day has something similar now I'm sure all of you probably heard of something like this the magic word the aha moment right this is not new but what is new is that inside Facebook or inside a great tech company what they're trying to do is they're using every single lever they have at their disposal to get you to that magic moment right I'll give an example so uh on facebook com or Instagram how many of

you have seen people you may know this place where it gives you suggestions for people you should follow everything very often you're going to see somebody there where you don't really know them you don't really have a lot of mutuals right and you might wonder why they are being suggested to you and the reason is not because you need a friend it's because they need a friend to go hit those 10 friends in 14 days so what Facebook is actually trying to do it is trading off your experience to basically throw everything it has to get this person to this aha moment like the other thing I like to do is if you want to get a little spicy and political it's actually called it like Ubi for new users like what do you do to basically pull every lever you can to get your new

customer very very quickly and it is usually a matter of days it's not many many weeks or months to get across that threshold now this is true of every consumer product not just for social networks so uh for example if you go to say Uber right the magical moment if you talk to Folks at Uber is when you press a button and the car shows up next to you now the folks you're young here don't realize this but in 10 years ago this was magical like if you lived in San Francisco like a cab was never going to show up and there's going to be a whole thing you know it like you know the old people here know what I'm talking about right uh but when you press a button and a black card pulled up next to you you were converted

and so what Uber would do or other companies would do was they would throw everything they had well the first time you press that button to get you a card for example and that might mean a you know maybe giving that driver an extra incentive that might mean prioritizing you over somebody else who's already hit that magic moment because all that matters is getting a new person to that magic moment so the idea here is not so much that you know to get people to the Magic Money sometimes you have to make trade-offs you may you might have to actively make somebody else's experience worse because you want a product for a new user and all the great companies whenever doing that now finally pretty much every dating app also has this I was going to tell that story but I was

told I had to keep this PG-13 so there is a magic moment in there so yeah yeah we'll skip that now now if you hit these magic moments you have crossed the threshold right you have 10 friends you have some followers you have you know you're using your product your your your kind of weekly in there you have crossed the threshold you are now in business uh with your customers now comes kind of like the meat of the challenge of every single company and in in kind of like in Joseph Campbell's uh framework this was called the road of Trials now what I'm going to try and do here is try and tell you some of these trials that you might face the idea is I actually don't have the

answers actually I might have some which I'll get to later but pretty much every consumer company faces some version of these questions so the idea here is actually the questions are actually sometimes more interesting than the answers itself the first one is I like to call it the tangibles versus the intangibles uh how many of you have read the book seeing like a state okay a bunch of nerdy Folks at the back now in in pretty much in a lot of places in human history you have an example where some set of people garments large tech companies uh institutions try and build a system to capture influence human behavior and those systems usually

have metrics they have numbers but often what they are missing is that human behavior is complicated and messy and it's hard to capture all of that and it's a fantastic book and in every great in in every second and I can see this across Facebook across snap across Twitter I've often been in meetings where you have some version of this where you have one bucket of things which are mathematical which are quantifiable where you have a dashboard you can see numbers go up you can turn an experiment you can see statsig results whether this mood your numbers or not you're thinking in terms of transactions you're thinking in terms of Dau you think in terms of you know for example active wallet you these are all measurable quantifiable right that's one bucket and these have some great advantages because when you have those

what this means is you can track them you can measure them you can run experiments on them you can be like I'm going to ship this thing I'm going to ship a new button I'm going to ship a new feature my marketing team is going to try out something new you can immediately see whether this had any impact on these metrics right you run a new ad campaign did this your Dru go up did you you know uh uh did you threw a lever if you're an Uber did your number of Drive riders or drivers go up these are great because they are measurable no I also made a bunch of other meetings where different kind of issues have come up and in these cases you have questions like do people trust us do people think we are cool is this fun is this simple

and the problem with these things is they seem to exist in a totally different realm like these exists in the kind of the right brain they exist in the realm of emotion feeling perception there all sorts of real challenges because for example they are much harder to track you can't run an experiment on them like Nike can't an experiment where it makes you feel differently with a different ad campaign that is just not possible these things take a long time to play out they exist more in the world of creativity emotion art rather than engineering and something quantifiable now by the way if you want to kind of go even further uh you can even have like companies and cultures which follow these buckets I want to broadly stereotype but the express agree with me

Facebook falls in the former bucket right like if you have a discussion of Facebook or Amazon internally people don't ask you what is the metric what is the data on the other hand there are entered amazing companies where you're always talking about emotion and feeling apple is a great example or if you go to World of luxury look at lvmh right it's all about feeling like nobody ER is tracking an okr and running experiments now the point I'm trying to make here is not that one or the other is better I've been an endless debate where you kind of debate what this is that they are both valid and they're both amazing ways to build companies but the real flaw is when you don't know which bucket you are in right when you think you're in bucket a you're in the realm of math and

metrics and but you're actually uh you're actually dealing with something perceptively emotion related so or vice versa let me give you a couple of examples where a couple of companies have shot themselves in the foot by not knowing which bucket of things they were playing with so uh about six seven years ago our Twitter was going through a bunch of challenging times and it had a series of leaders come in and out you know there's a bunch of stuff in there which I'll lead I'll let you folks uh read in the press and what every leader would come in and do is they would come in and they would be like hey we're going to launch this new product because we think it's the right thing to do it's going to take a year we don't really have great maybe data but a lot of our users seem to say

so and it feels right and so there's a bunch of products which are launched there's something called Twitter moments which was launched there's something called Twitter music we just launched and maybe they're all amazing people who worked on them they're all my friends and they would actually agree with what I say but the challenge which a lot of that was these were big swings and they had no metrics or data involved and so when when they were at launched like nobody knew why they should work and nobody could tell when they didn't work also so what Twitter was actually trying to do was to build something which would reignite growth which was meant to be in bucket one but actually using tactics from bucket too where they make trying to make people feel something different and then they fail and once you fail and you don't have a metric you're kind of

really screwed right so that's an example where they were actually in the wrong bucket and they didn't realize it the reverse actually happens I think at Facebook where for many many years right like you know Facebook uh didn't know how to track how people felt about it when it came to privacy now how many of you like I've heard stories like Facebook doesn't care about our privacy Facebook you know we can't trust Facebook data we all heard these stories yeah what was actually happening was Facebook was launching a bunch of product but there was no graph no dashboard which was telling Facebook how did people feel about you do they feel that they can trust you do they feel that you make them secure there was nothing so what meant was people are

starting to kind of build up perceptions about Facebook that we couldn't trust them we couldn't trust Zuckerberg whatever but those who are not reflected or accounted for you so you're accumulating debt in the realm of emotion without actually being able to account for it and so even to this day you know if you what is the number one joke about Facebook I can't trust with theater even to say Facebook's paying the price because they were hurting perception because they are only looking at metrics a different example is okay I have water from something I think I was an amazing company we all played Farmville CityVille sent invites to friends Etc right but an amazing company Market is amazing founder but if you talk to some of the people from singer The Challenge they had as a company was their culture was so oriented towards metrics right making the invites go up

making the usage go up but the challenge was when they were doing that they weren't focusing on making games which were fun and when the The Meta shifted wait that's in games went from canvas on Facebook to mobile they couldn't actually adapt and actually make games that were fun so that was an example where they were way too much in the first bucket and totally missed on the second bucket so now you might actually be wondering well what does it mean for me and what does it mean by company I have some ideas theater but you I every single company I've dealt with usually deals with both of these and crossing the streams as they stay in uh Ghostbusters is a fatal flaw they have okay next up making things easy versus making things difficult how many of you if Facebook's a big who knows what that photo from a

game is at the top anybody else yeah what is that yes and what is that photo right there oh that's the yes great so uh that photo is from Elden ring uh best gamer 2022 by the way highly recommend it also one of the hardest games people can ever play this is something you see in the first few moments after you actually start playing the game it's one of the first things you see you don't have you know much of training you just get in there and that character that you see over there is something called the tree Central doesn't really matter the only thing you need to remember is like you can't beat this guy right like you try he will wipe the floor with you again and again and again and crush your spirit and every

player who's ever played Ellen ring goes into that now let's think about this for a second we are all taught as product people to make things easy to make things fun to get somebody over the hump as quickly as possible but right here you have a consumer product where in the first few seconds they are crushing your soul why do you think they're doing that in the game yes that's right one they try and tell you whatever game it is but they're also trying to do something else right they're trying to tell you that this game is going to be hard they're going to tell you that a lot of things in this game are you can't overcome right away but they're also doing something else like many many days later or weeks later when you do come back and beat this guy it is the most satisfying thing ever

you're like just stab him let's die die because you're spent weeks just being crushed by him and it feels so emotionally satisfying when you have that payoff so but if they admit it easy if they just shown up there and you're like well that guy's gone never care about whatever again you would never have that emotional satisfaction when you actually get there and actually kill them now a bunch of you might wonder well what does this mean I'm actually being consumed product I'm not building a game turns out this principle of actually injecting difficulty to make something valuable holds through across a lot of consumer products so for example up there uh to the right is one of Snapchat's original screenshots from our Circle 2011 2012. so right now pretty much everybody use face filters you can put things on your face but

Snapchat really innovated the idea of having a lens which shows up on your face and you can actually post content with it it's actually one of the first companies which ever did that and the interesting thing about this is that if you use this there was no tutorial in fact Snapchat actually made it deliberately hard for you to use and there are a couple of interesting reasons why number one since it was hard you need to figure it out and often older people could not figure it out so snap was like only for young people so it kind of excluded people they didn't want that was number one but the second part was when you figure it out and you often had to do it with a friend like and maybe it was a good looking somebody in class that you had an eye on right

but you had it figured it out with a friend and all of a sudden you had a moment of Mastery you were like aha I have done something I have accomplished something and you felt ownership you felt Mastery and I think it's such a valuable tool for a lot of consumer products where a lot of people I think you know think about hey how do I just make things easy but sometimes as you take people on a journey there's often more value in making things harder another great example like right now any of you can go to Facebook and try and create an ad in the original version of that UI that was one step you show up you give your name money whatever Facebook on ad for you seems reasonable right but that actually don't be a really bad move and if you go right now

there's going to be many many steps before you can actually run an ad and the reason is Facebook figured out that when you had multiple steps people got more invested they got more committed they felt like oh wait I'm actually I'm gonna have to run this ad campaign now and I'm gonna really really make it work and so when they actually did run the ad company are much more likely to be successful so when you think about the building consumer product UI think about how to make things easy or difficult as a tool and you can move that up and down you've seen other places too for example you know in if you go to your you know I'll use a crypto example right I think one of the interesting problems that a lot of you know original wallets had was the the UI which could say like hey I

want to do something very lightweight on this website was also the UI which said like you can take all of your money and nfts from inside my wallet right and there was no sense of like something should be light and something should be hard so making things difficult is a very interesting tool to denote the heavy weight of the weight of the action as well as you know making someone feel Mastery and feel emotion so make things difficult that guy is very satisfying to kill next up and this actually I love this for this group because cryptos actually the best one let's talk about when you make something scarce and when you make something abundant so how many of you ever have a Snapchat streak okay a few of you okay a bunch of folks in the back great a Snapchat streak is when you message your friend and if you

message your friend every single day it's going to tell you hey these streaks are alive by far the most the the feature that grows the most growth of Snapchat was just this streaks was the reason Snapchat Grew From almost nothing to having over tens of millions of users because people would come back every single day and be like hey I want to keep my sleep alive the second feature defined are interesting was something called best friends which is you go to any single person and you could see who their top three best friends were you can see four you can see five you can only see three right and that meant something you can't imagine the amount of drama that happens in High School classrooms because somebody's like wait I am not your best friends anymore like you know the internet meme like you're

now dead to me Sajid is now my new best friend like you would see this play out in real High School classrooms but because it's only three it had real meaning it was very scarce the reverse of this is LinkedIn how many of you have been endorsed on LinkedIn okay now if you go to my LinkedIn profile there are a lot of people who said very kind things to me and I'm very grateful right they said I'm good at VC social media but also these people who say I'm gonna react native nobody should trust me on react native ever or cloud computing and and the Reason by the way and I love the people at LinkedIn and they will agree with me too is there is no scarcity for you to hand out endorsements like right now you all

could endorse me for pretty much anything you choose and linkedin's not going to stop you right and you can have the next person next person next person right now let's imagine an alternative World Imagine LinkedIn said hey you can only nominate one person as the best engineer you've ever ever worked with ever right and by the way then you reverse it and you say hey sriram has been nominated by 10 people as the best engine they've worked with now we're going to pay attention Okay because that has scarcity that has meaning now for years I've been telling the story right I used to tell you every single product manage ever met but with crypto and Eddie Lazada you know sometime later you know not today but he's going to do a talk on this right with crypto this is super interesting because you can actually build these ideas into you know

the network itself into the way you structure your protocol into the very nature of your product itself so for example uh you know the idea of scarcity is no different from saying that hey they're only going to be 10K nfts right there's going to be the what the Rarity is so these are actually fascinating concept discussing crypto because these actually be encoded inside code in a way when I should talk to like my old product managers it was like somebody could make a decision now the really uh interesting thing to remember here is whatever you pick as cashier appendix is fine the only thing you can't do is to change it the enemy follow the news about Twitter making blue checks uh paid for yeah a lot of people got mad why did they get mad theories ideas

yes yes people had status right uh with the blue check you as someone you meant something in the world you were happy with yourself and then anybody could pay eight dollars now by the thing I love about this whole thing is nobody actually wanted to come out and say that they really care about the status but that's what they really really meant they were like I really cared about how hard it was but they couldn't actually say it because it makes them look Petty so you kind of had this alternative battle so and when our meta is going to do the same thing but they're going to make blue checks paid for uh staff by the way announced last week they're going to make streaks also paid for so these make people really mad because what you're doing is you're taking one notion of scarcity and yes it is about

status but it means something to people and you know applying inflation right and people really really get mad at you so what do we do you can pick you can pick where you want but if you change it you're going to get people really mad at you it's not the fun way for me to talk about this story now maybe one of the last bits on this section is listening to your users versus top down mandate so the top screenshot is from 2006. uh a lot of you probably you know too young for this but when Facebook first launched the news feed there was a huge Revolt before Newsfeed Facebook you had to go you had to go to every single how many of you on Facebook in 2005 okay all the old people here all right yeah I know I know we're all creaky and

you know our knees don't work as much but back in the day before your new speed you would go to Facebook and what you would do is you have to go stalk every person you would go to page by Page you would see what classes this person attending and there was no idea of a feed where you could actually see things you know pushed you and I watched 2006 Facebook launched adfp news feed because people didn't want to go to every single page there was a huge reward in fact at one time I think 70 of Facebook's users were part of a group which said don't launch Facebook news feed right but Facebook was like we're going to go with this because the reason is that the people who had high status the power users of Facebook didn't want it but this was important for regular

people because regular people were missing out on Friends updates and they needed it and you see this pattern over and over again where people with high status in your networks in your communities in every product are going to push back against product features you want to build but you sometimes will need to do things for the good of the comments I'll give you another example the screenshot to the right is from 2016. it's from Lin mandrel Miranda they don't know who Lin Manuel Miranda is yeah he wrote Hamilton he's a musical genius he was very active on Twitter and that week Twitter decided to announce the algorithm before that you went to Twitter it was reverse chronological you saw everyone's tweets who you followed towards College account Twitter said hey we're going to launch an algorithm and

we are going to decide who you should see rip Twitter started a trend by the way it's not one of Twitter is one of these weird products where people yell at you using your own product like I don't think I don't really any people have the dynamic like there's your own stuff to tell you you know how much of an idiot they think you are uh they might do stronger language and Linda actually wrote a poem about how he was going to leave Twitter it was kind of pretty bad but it turned out that that feature was the single biggest thing that Twitter did at the time to help save the company because what was happening was Twitter was catering only to the powered users and without the algorithm they could not get new users content they could not get them discovered they could not pull the

10 friends in 14 days levers they didn't have any tools so they needed to do it and even to this day the best feature Twitter has ever done was launching the algorithm which at the time was very painful because every single power user of Twitter was against it so you see this across the board uh you were there for Facebook uh Messenger right Facebook Messenger did this uh very very unpopular thing where they split the a messenger app into a separate app you see this pattern again the power users hate it it's actually good for everybody else you see the same across Uber where in every city in every region Uber or Lyft will have to pick hey in this city do we want to cater to the drivers or the Riders some cities may be Supply constraint some cities may be demand constraint and you'll have to

choose and the key here is you will never be able to make all of your users happy to any given time you'll have to figure out which side of the marketplace you want to prioritize and how do you actually get to whatever wherever you want to go which is kind of the question I think all of you having when I was kind of rehearsing this talk a bunch of people listen to this and they'd be like okay this is all great we have all these challenges and you know blah blah blah we get it it's all funny but what what is the answer like what do we do how do we actually know what the right answers are and by the way some of you might also be thinking hey we're still getting early we start getting started in our companies trust me or you're down the

road two years around the road you're gonna have five million users 10 minutes you'll all be hitting some version of this especially on the consumer side so how do you actually know what the right answer is well I hate it disappoint you but I don't know because these are all hard complicated questions and they're so dependent to the kind of product but I do have two tricks right and these two tricks you know if Chris fires me today and I have to go back to you know uh uh you know like trying to get young people to text each other on Snapchat like these are two tricks I would use the first one is something called the UDA Loop anybody who has heard what the UDA Loop is great one person so or two people so the order Loop comes from this guy uh that good looking you know Air

Force guy over there his name is uh John Boyd so he was a colonel in the air force uh a few decades ago he kind of had like an okay carrier but what he did was after he retired he started studying fighter pilots and he started studying why certain fighter pilots won dark fights and others did it and he invented this whole school of thought for basically winning dog fights were basically you know winning like top gun fights if you're Tom Cruise but it turns out exactly broadly applicable to all schools of life and business and he came with something called the UDA Loop which stands for observe Orient detect act so you're a pilot you know you're Tom Cruise right uh you see another fighter plane you first observe what that person

is doing you Orient yourself like what is your speed your direction the wind whatever what is that that Enemy Fight pilot coming at you Orient yourself third you decide what you want to do are you going to run away are you going to you know uh you know switching to guns out of missiles right you're going to make a maneuver what you decide what you want to do and then finally you do it you press the button you make the turn you you know you shoot the missile you do whatever you want to o o d a observe oriented side act right kind of makes sense but here's the really important takeaway for all of you the key to winning fighter pilot battles and also building great consumer product is your UDA Loop has to be quicker than the competition so for Facebook the singular

thing Facebook did right for all these years was they would iterate on products so quickly right so they would observe or even decide act so quickly so every time they did something they would get feedback they'd be like well this thing works this thing doesn't they would learn they'll do something again and what happens is when your Loop is faster than your competition your advantages start compounding which is kind of a very simple way of saying if you don't know what the right answer is try and build a system where you can iterate and experiment and learn very very quickly because then you will start converging on what the right answer is because failure mode is having a bunch of meetings in a conference room and trying to decide what the leversible those never end well you want to start iterating you want to start get feedback

from the field you want to get empirical data qualitative data and decide what to do get your UDA Loops fast as you can and your companies will do really really well the second trick I have is something called availability Cascades also known as maybe 1000 true friends how many of you heard the phrase 1000 true friends great okay so Chris by the way is kind of popular this popular is a lot it comes from a guy named Kevin Kelly who helped uh found uh wired the idea is that any great product you want to find a thousand true fans it's kind of a you know kind of a nice round number of a core community of people the idea being if you can kind of find that core Community you can start building off of that you have something real it turns exactly there's a bunch of you know kind

of research around this uh I highly recommend this paper by a guy named Timur Quran which uh uh which Mark Andreessen uh the founder of the firm I work for uh help also kind of talk about a bit which basically says that you want to create a shelling point of focus of a bunch of people using your thing right so a lot of these decisions that we've been talking about for the last uh 20 minutes they are really hard like I don't know what the right answer is do you listen to your power users or not I don't know should we launch you know uh should we make it easier for a driver or Rider I don't know like we can have a lot of discussions after this about the specifics but if you have a core Community right that is representative of what you want to be you can use them

because you know like how they how are they reacting uh uh use them for feedback and then you can start building from there so if you have nothing else like what I often wind up telling startups is get to a thousand people who love what you're doing because if you can do that you can probably have something where you can find adjacency you can be like who are people similar to this what are use cases similar to this and you can start growing from there I've never seen the reverse where somebody has never found a thousand people who love the product but they somehow have tensor Millions users that has never happened you always have to start with the core engage rapidly uh you know faithful engaged Community sure one thousand true fans are availability Cascades all right that's the end of the road of

Trials and finally my favorite part the climax so these are two scenes from the climatic scenes from The Matrix in Star Wars so folks you know what the scene is on the left with Neo what happens here stops the bullish okay that other scene is from the Trench Run uh the last sequence of Star Wars episode four what happens there yeah yeah he's like well this death star has a design flaw boom and you know uh uh well uh we have a whole backstory there so these are really important because the real secret to storytelling and this three-act structure is not that the hero beats the enemy it's not that the hero you know wins in the climax

that's not really it the real secret is that the hero overcomes his inner demons and becomes who he needs to be and in doing so actually overcomes all the obstacles so for example in this case Neo realizes he is the one right and he's been fighting that throughout the movie but he realizes he's like well now I can stop bullets you agent Smith can't do what I'm doing I can beat you same it's look what does he do what does he realize that that he can use the force right and because of using the force that's how he's able to kind of get down the trench and actually blow up the Death Star so in both these sequences they really I mean the meaningful part and that way these scenes work is not that they beat the bad guys it's because they become

what they were always meant to be what they were always meant to be so this is maybe a good segue to the final part of my story so when I was at Twitter they were going to a very challenging time so folks can see this graph at the back but Twitter was basically losing users year after year from Circa 2016 to 2018. but just to tell you this is really really bad if you're a consumer company Because the Internet is growing every single year so so if you're losing users you have to be extra terrible right because by just growing along with the internet you would be getting millions of users you're not even doing that you're actually declining so this is really really bad and the reason behind this the a lot of by

the way you know we haven't touched on kind of cultural or you know organization there's a lot of reasons behind this but one of the reasons was Twitter didn't know what it needed to be Twitter was like should we completed Facebook should accompany the Snapchat Rd for teens are we a social network are we a messaging product or all these are kind of reasonable ideas but it was not one of those and what Twitter did so the second part of this graph is it actually started growing again was it realized what it was as hard so in 2017 2018 right uh we got new leadership and we said hey Twitter is going to be number two things number one it's going to be about real-time events when something's happening it's about talking about it right now and the second part it's going to be about

conversations and what's interesting is not that this is what Twitter decided what's interesting like this saved the company and growth started going up because what Twitter did was like this is what we needed to be just like Neo realize you need to be one this is manager here by the way here I'm trying to connect this yeah okay some of you are impressed thank you right uh you know just like neodes like we are going to be able to real-time news we're going about conversations and growth started turning around so finding sort of what is at the soul or the heart or the time or the heart of the transcription you folks need to do is often at the heart of what makes a great consumer company now I lied when I said that was the end you folks uh there's actually one more

bit in every story it's called denuma which I think is my butcher my friends and in every great story this is when all the pieces kind of come together and hopefully they're mostly meaningful way so I want to go back to the very bad first slide I showed this was my story and the part I kind of skipped over was when I grew up in India we didn't have much resources you know my dad couldn't afford a lot so we bought a PC and it was the internet which was the reason I was able to get out like without the internet on my dinky little PC like 99 or 2000 I would have a career at Microsoft I wouldn't got an attack I wouldn't be in front of you folks right now and it was because I could get on a chat room I could get on IRC I could

contribute to open source I could like use all these like open internet products that was the difference between me having there's a Multiverse version of sriram who has a very different life and a very different career and one who's been here so I went through my old trials and tribulations over the next 15 odd years but the realization I have and was that the open internet and what the spirit of the internet meant was the only reason I ever made it out and was so meaningful to me so in a way that brought me to crypto so a lot of a lot of motivations to get into crypto right I allowed the founders that we work work with right uh and and I love all the people you work with but at the heart of it for me this was like this was the reason I was able to have life carrier

any measure of success and in a way just like every one of these Heroes need to figure who they really were meant to be for me I was like this is what I was truly meant to do right I was truly you know I had to come back here right and obviously an early journey and Chris talk about how much we have left to rebuild but actually make crypto a thing because in for me this represents the original promise of the internet and to be honest you know I was trying to think about what I wanted to say to all of you because I was like well these all is this a crypto startup school like why am I here talking about consumer products right and the secret or the lie in this talk is like this stock is really not about consumer products it's

really about life and building companies and each in every one of you have crossed the threshold because you're right here right there's been a call to Adventure you started your company and you're now here and to be honest I don't know what you're going to face on this road right they're going to be Adventures bad guys you know I don't know and I hope that we all work together for years and years and I wish you all the best success but the one thing I maybe wish all of you the most is that you find who you and your companies are really meant to be because on that path lies greatness with that welcome to crypto Saturday school thank you so much [Applause] thank you for sharing that was a lot of

fun I'm Lucas from Clear grid and my question is in your own hero's journey what was your Magic Moment uh specifically for crypto oh yeah great question um well okay I'm just gonna release in public I think there's a few right one is a lot of people involved uh uh you know one is like I'm not saying this just because you know we work with him but like I think Chris is really you know if there's a hero's journey you know Chris was kind of Gandalf being like hey you know hello Hobbits off coming off with the fireworks and stuff so clearly it's kind of a big part of it but for me it is a little bit of uh trying to set right what I have caused so you know I mean a lot of people when they think of a crypto VC I think they

think well you know they're here because they may be here to make money or you know maybe they're here for great being building great technology no these are true right no I hope they make a lot of money and I hope I build creative technology but for me the last 10 years I was a part of these large centralized companies and so in some way and I went in great hope I thought you know this is the way the internet should work and I built a lot of these systems and over the last few years I kind of grew disillusioned with how these companies worked what they meant for the internet like who I don't know who asked about Apple or Google and you know um you know the app launched like earlier today right like like those are that was not how the internet was supposed to work we

were not supposed to have Gatekeepers through which we go through everyone so for me you know it was I sometimes say crypto is like a religion where you kind of find your own church or your path and for me this is about how do I help set right the things that I might have caused because I do really believe in the open internet I do really believe and I think it's a combination of things I think it was definitely Chris I think you know some of the early Founders that I got to work with one of the best parts about being a VC is kind of meeting all of you because you know the secret sauce nobody tells you is like you basically get some of the smartest people in the world and they come talk to you um without you having to do much that's

amazing it's like it's such a it that's the best part of it and I got to work with such amazing Founders uh uh and we're gonna actually hear from uh Brian later today uh or like Donnie or pitsky or so many folks so there was a bunch there's not one moment but there was a lot but I did realize I think Circa like a year and a half two ago I was like uh this was it a movement that I needed to be a part of and not from sort of any some career aspirational mode but just because it was something that the internet and Humanity really needed hopefully I don't sound too crazy no that makes sense thank you anyway I think maybe a lot of people here probably have the same Journey too hey it's uh will from web3 analytic so my question is you talked about magic

moments how do I you identify your own as a company yeah good question um and I would say the answer to all of this is first of all it's very company dependent which is very uh unsatisfying uh there's a few things right like you can take a quantifiable approach and then you can take a qualitative approach if you're taking a quantitative approach right I have a bunch of metrics tools uh we can talk about you want to see you want to track different cohorts of users you want to see when which cohorts are most retained at what point what let me back up what uh who are your best users and what have they done and at what point can you predict whether someone's going to be a great user or not that's the question that you're often trying to answer which is like we know these are

great customers we know these were bad customers what made these customers great and at what point could we tell they were great customers right it's that kind of there in English that's kind of a question you're trying to answer so if you start with that question then there are a bunch of quantitative tools you can use and qualitative tools you can use the quantities are obviously you can start building cohorts you can be like well how are these people different from those people that are they different in gender are they different in what browser they use or you know whether how they showed up like for example Twitter had this whole problem where people would come in because of press stories but they were never great users because they would come in only because of press and they would bounce out so you kind of

have to split it all away but that's the card question you get trying to answer part of it also very quality if you talk to Airbnb branchesky will tell you that they figure out that aha moment was when somebody went into an Airbnb and they were like oh this is amazing right like oh this is actually very cool like and that moment when you open the door and you see the room and you're like it's kind of cool and that was the aha moment and you might think these are obvious but these are not right like for example somebody could use that the aha moment is when you book an Airbnb and that came from Brian and his Nathan and these co-founders talking to a lot of people so but I think the question you often try to answer is who are your best customers and at what time can you

predict that they become a best customer so that's kind of a genetic framework I have a lot of thoughts on this for different kinds of companies so like anybody here by the way I don't see anybody here we should all grab drinks chat and and I can sort of break down more specific but that's kind of the question I'm always trying to answer great thank you yeah hey sure I'm Murat here from primeav um we're doing really like hardcore infrastructure so I've been trying to like map some of the things you say to what I'm doing obviously you've worked with infrastructure companies at these consumer companies and you've had to map your thinking to what they're doing and their goals to some degree one do you have any kind of General kind of mental models around doing that and two how do you think about kind of baking in some

of these kind of systemic biases that you can do in web 2 to kind of get your product better but in kind of open ways in web 3 where you know if I built some bias into my system to make sure like the newcomer user gets some advantage that would probably be seen as bad in crypto but I still want some of those benefits for my product actually let me in the Uber lots of friends with that caveat like there is no version of uber where the drivers or the Riders are represented on the cap table of uber same with Facebook or Instagram so one of the I think the big things that happened in the last five six years was six seven years ago the agreement you had at any social

network was you come in you give them content and they give you eyeballs that was the deal that was the compact but the last two three years that has changed even before web 3 right with Cameo or with the adult world with only fans the dynamico as well that's fine but we now have creators and we want to make money we want to make a living and like Chris would say we don't want to give you know 30 40 of what we are doing for your platform over to you so there was no internet so web3 actually fixes this so for example you know uh what you can if if your if the people who use your platform right are incentivized in terms of governance and you know how they own the platform itself it is in your best interest for new users to show

up because if you're a power user of Twitter and Twitter when you had a thousand and people it would die right so if you had like an ownership on sort of the cap table of Twitter that would not be good for you the challenge is right now you are not on the capital of Twitter so if you're a power user your incentives are misaligned with Twitter because Twitter can do really well but it wouldn't be good for you I mean kind of good because you don't want to really die but you want to have a direct impact the second part is you don't have a direct say in it right like you don't have like real governance you don't have a weight kind of like represent your voice really I mean you could kind of do it in the Press so I think web3 fixes

both of this structurally this is actually my favorite example to talk about web3 because all these Marketplace Dynamics you can be like instead of some set of people sitting in Menlo Park or something to make a call addition you can have real governance and the second you know everybody who uses the system now you know has a stake in it and I think those are very very uh uh profound so I think web3 is actually one of the best uh things about web3 um on the first part it's a hard question I think one of my favorite Steve Jobs slides of all time is when uh after the iPhone keynote he has a slide where he talks about great companies at the intersection of technology and Arts and Sciences so folks have seen that like slide that's kind of there's a highway or you know a road Street

crossing sign there and I think the best companies are one where the infrastructure team understands what the incentives are um and they're able to convey what their limitations are like for example the iPhone right like there's a iPhone systems in your team when we're doing stuff at Facebook we had amazing infrastructure teams and it would be a collaboration with the infrastructure team knew what the incentives were for the product team and the product team also knew what the limitations were the infra team now honestly I don't have like a silver bullet like a lot of this comes out of having great people you know people trusting each other knowing what the capabilities are and building on top of each other but it's it that it's somewhere in there it's not an easy answer that helped me contextualize it so thank you thanks hi uh Jay from ethernet ID uh just just

the way that you're describing the the hero's journey it seems like there's a very uh artistic uh like emotional design process where it almost seems like you have to storyboard each scene of your product I'm curious if there are different uh parts of your background or certain strengths of your traits that make you force sensitive towards uh seeing this slide of product design well it's a great question I first of all I have no artistic skills or story skills um but what I did see is uh you know I think I first been my former to use a material in Facebook then I went to Snapchat and Facebook and Snapchat could not have been more different from each other culturally for example um and the EXP folks we ever know there are entire reviews and meetings at Facebook where there are only numbers and graphs not

even Dental Works right you go to zoc and you'll be like here you know here's what's happening blah blah blah and we're going to run this experiment we're going to change this then I'm going to snap and there are entire meetings where there are no numbers or graphs it's only images right and it was like a big culture shock for me so I came up with two things like number one is that there are multiple ways to build great consumer products so if somebody tells you hey this is the one hero's journey this is the one school of thought that you take from Amazon Facebook that is not true because I've seen two totally contrast contrasting cultures all build products with like hundreds of millions of people so that's uh one uh takeaway the second part of it is I think this can be built right like you know and uh

you can either for example look at through metric lens or often the answer just go talk to people so for example in snap when you go talk they spend a lot of time talking to teenagers and you could sort of Intuit out like how people were feeling I'll give you an example like one of snaps key things was that uh when you were Facebook in 2013 it was like people are like well I don't want my dad and my high school friends all to see this other new person I have become but if it snaps since everything disappeared after 24 hours you could say come from a small town and then you go to New York and you've reinvented yourself we've all been through that some of us you know you kind of you know you left school and you're like well I'm no longer person I get a new haircut

I've changed my sneakers I'm like new me and snap really lean into that because they could talk to people so I think it comes from just talking to people uh and then there's a bunch of metrics but there's no one right way I see thank you hey Matt from narvel um I was wondering if you could talk about the listening verse mandate in yes the perspective of web3 because if your power users are also owners of the network who have governance rights how do you reconcile like some of the most impactful product decisions have been made against what power users wanted this is a hard hard problem and like to be honest even in web 2 a lot of great

companies have not survived this like I told a bunch of these stories where you went against your power users and your server on the other end there's a lot of stories where you went against your power users and that was a graveyard uh I of course I think that's not a great answer uh I think the answer lies somewhere one with incentive alignment I think that phrase is you know often the secret to things which is all your power users incentivize along with you instant device along with the rest of the network and often when you have debates what is actually happening is there is incentive misalignment like for example at Twitter the power users and including for example like famous VCS would be like really grumpy at these changes because they just wanted followers and they want to read that stuff they didn't really care about Twitter growing right

but if they had been incentive aligned there have been probably better off the second part of it is I think you know figuring out what the right representative you know Democratic systems are where everybody has a say in how the network is done but this is a hard problem um you know and instant element comes the answer but these are we can chat later about the specification but this is a bit I don't have an easy answer for uh uh this situation cool thank you hey it's Emmanuel from Shield um you talked a lot about basically weighing between listening to your users versus listening to your mandate so how do you think about when you have competing uh customer requests or demands and maybe they're conflicting

or you might just not have the bandwidth to fulfill them how do you prioritize yeah good question so for obviously all these answers are very situation dependent and you know we can kind of talk about I mean if you're a B2B SAS company versus you know a game versus these are all very different Dynamics but I think the first one is it really goes back to the last part I said which is what is the core thing that is at the heart of your uh uh company like and by the way those core things usually map to some sort of a North star metric for example a Twitter I'll give this folks a story uh everyone here what knows what Dau is daily active users right for many years at Twitter we started measuring we were measuring also on daily act users turns out daily ad uses a very bad

metric for Twitter because to your point it acted a lot of competing elements like you could have daily active users who are really angry and really toxic and they just yelled at people all the time you get a daily active user who just talk about their favorite artists and music right and they're all merged in and the problem was when somebody were like hey I want to make a product decision right I want to maybe downplay the angry folks and I want to play up the positive folks it was very hard to like how that actually mapped to your actual metric and the answer there which was we kind of when we answered your question was like when we hit up on conversations people talking back and forth to each other now that gave us a much better rubric like for example the angry folks didn't really engage in

conversation much I mean Twitter is still very angry so pretty they succeeded but it was more about okay if you're talking back and forth between people odds are you're probably having a more positive conversation so I think the answer to that and this is like really the rubric is uh do you know what the core thing you're trying to do is and then do you have some sort of a North star metric tied to that core thing right and if you have that you can use that to be like for example two competing um sets of requests or two like well which one is going to map closer to this metric that I really care about so like somewhere in there lies the answer clear thank you hi um this is locha from fuel we're

building a affiliate marketing protocol I wanted to learn more you of course work with these huge companies that build their own ad networks I wanted to know a little bit about your vision for the future of you know at the ad ecosystem yeah uh right so I feel a lot of my attack in both uh some of these companies and to be honest I thought attack was dead uh and it would never come back but exactly come back in some ways in Webster in a bunch of ways because I think what ads are at the heart is you are trying to say hey I want to spend some Capital Social Capital Financial capital and in return I want to give you something that you might be interested in and I want to reward all the people in the middle who

want to get it to you right and a lot of web 3 web 2 ad Tech was about who are all the parties well Google is somebody you're kind of searching for and then you find the exact ad to buy your mattress or buy your airline ticket and then connecting the dots along in the middle and I know I of course this is something you folks are working on too and I think web3 going to see a lot of this which is hey if you have an influencer and you're running a referral campaign right or if you have a game which wants to send people to some other game how do you deserve how do you attribute credit how would you attribute causality so that then you as sort of a marketing person or you know somebody who has a resource is the configure value after different resources like I

think that's going to be very it's really super important or interesting to webpage so this is something we we think a lot about we talk to a lot of people about so I think you know I'm very excited for this in web3 awesome maybe one or two more questions hi there this is ash from lockbox for streamlining crypto treasuries uh one thing that you've touched on a lot is finding like the core like soul of what your company is uh could you elaborate a little bit more on like a framework that's helped you in your career maybe in your time at Twitter for finding that like real-time news and conversation was like the core thing that they should be focusing on like any sort of rubric or tips when let's say you're juggling between like two or three different features to prioritize that yeah um I think these questions have like

brought some Art and Science to it like the science part of it is somewhat easier right what you're trying to do is who are your best users best in the sense of like who represents the kind of people where if you could kind of Clone them like a million times you'll have an amazing company and you want to see like what are they doing on the platform and for example Twitter it was like they're often engaging in healthy conversations they were you know publishing contents people want to read etc etc so and a lot of metrics and mid you know Frameworks where you can be like well uh what kind of cohort do they represent how are they dissimilar from other people how they're similar to other people and this you can do that so look at your best customers like oh your thousand true fans and

figure out where to build it up there is also kind of an artistic part where you kind of just go talk to a lot of people you talk to a lot of your customers you see how they live where they live um and then you kind of put an interview to understanding of what it is they are trying to do so for example uh with SNAP right like I'll give you an example from snap um one of the things about snap lenses you know folks have seen like the puppy lens or the dog lens which originally came out the real secret behind those lenses was not that they made you good looking or they were funny that was good but the real secret behind those lenses was that people wanted to post a photo of themselves but if you post a selfie of yourself online other

people judge you like all of you are listening to me right now I'm saying I seem like a reasonable person with really fancy shoes that's great but if I go on Twitter right now and I post 20 selfies of myself okay what's up with that guy right because it's kind of broke a social contract so with a lens you know snap intuited that they were like well all these books just want to post their own photo but they when they post a photo they're afraid of being judged right and once they kind of have their interview understand talking a lot of people they were like well okay let's go build something which gives you a license to post yourself free and which is by the way it's not kind of tried but this is really at the heart of Snapchat which was like you can post the lens and

nobody would judge you because that's the lens right it's really an excuse to post a selfie so the kind of the roundabout answer is one you look at your best customers and you see how are they different what are they doing and you extrapolate from there and you obviously have thousand true friends or whatever you can you have a base to build off so second and honestly mostly you just spend a lot of time with them you talk to them you see how their lives are what are their core motivations and you'll often build an intuitive understanding of what they are trying to accomplish and then you put them together and that's that's a secret to us like how you put that together that's the magic all right okay thank you everyone thank you [Music]