In this episode of the Mobile Growth and Pancakes, Esther Shatz is joined by Saulo Marti, Marketing Director at Olist. With a passion for testing and conversion rate optimization, Saulo shares strategies for early-stage growth teams, communication between growth and other teams, paywalls, and how Disney+ helps him put his newborn baby to sleep.
Check out all the other episodes of Mobile Growth & Pancakes here.
00:47 – Introducing Saulo Marti
04:41 – Understanding Growth KPIs
07:06 – Three key components of Growth
09:39 – Assigning budgets in early-stage companies without visibility into the ROI.
12:20 – Fundamentals of a testing structure at early stages
15:27 – Companies should be data-informed, not always data-driven
17:54 – When priorities of Growth collide with several internal teams
21:35 – How to get stakeholder buy-in for Growth Marketing goals
27:20 – How to use psychology to get customer commitment and increase subscription rates
33:35 – How Spotify & Disney+ have created “sticky” apps
40:15 – Retention-focused vs Growth-focused Features
43:00 – Quickfire round
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“If you don’t have a growth mindset across all departments, you shouldn’t even have a Growth department”Saulo Marti
- Saulo Marti has been in the mobile growth space for 10 years. He led growth teams at Blinkist, 8fit, hibooks and is now the Marketing Director at Olist, a platform that empowers online commerce.
- Saulo has worked in growth marketing in several industries and markets and believes in setting realistic growth KPIs according to the funding available for growth, the desired speed of growth, and the efficiency of growth.
- Saulo also believes that balancing all three numbers is tough unless you are a product-led company where the product provides immense value to its customers or requires more people to continue using it (like Clubhouse).
- Saulo believes that early-stage companies – with limited marketing budgets and limited visibility into ROI – must optimize on the platform where they find their ideal customer profile (ICP).
- Saulo’s testing framework includes creating a hypothesis document to record all aspects of proposed growth tests. This document must describe how to move forward when the test is positive or negative.
- Saulo believes that companies should be data-informed, but not always data-driven because data may not be consistent over multiple tests.
- Saulo believes a growth marketing team should proactively communicate the advantages of a positive test (via the hypothesis document) to get stakeholder buy-in from all teams.
- Saulo believes that the head of growth (or marketing) is responsible for helping stakeholder teams develop a growth mindset.
- Saulo advocates having early paywalls (with limited free trials) in sign-up flows because a late paywall is only going to frustrate users if they have been using the product for a while.
- Saulo believes product catalogs are powerful motivators to retain customers for streaming apps like Spotify & Disney+.
Ten actionable tips for increasing App Store CVR
Esther Shatz: Welcome to Mobile Growth and Pancakes. I’m joined today by Saulo Marti. Saulo, do you want to introduce yourself a bit? Tell us a bit about you, about your time you’ve been in growth for over 10 years now. Give us a brief intro.
Saulo: Sure, sure. Well, first of all, thank you for having me. It’s a pleasure. Like you said, I’ve been in growth for a little bit more than 10 years now. I started my career, I guess, not expecting to get into growth, I didn’t know I was indicative of growth. I started my own startup, very early on when I was like 21, 22. When I started my own startup, it was like no one knew anything about growth. Well, no one knew anything about anything. We figured, let’s all just use our superpowers and our abilities to try to figure out where we fit in the scale of this startup that we’re building.
It turned out that I just had a little bit more knowledge regarding marketing and I understood things a little bit better when it came to marketing and growth. I started going in that direction, not because I liked it just because it’s better with the team we were on. Then as we started growing we started, getting more mature. I eventually sold my startup, I joined a CMO at another startup in Brazil, a very big startup today called Contabilizei.
Eventually, I decided that I wanted to leave Brazil, wanted to go to Europe and explore and learn more in Europe, I just wanted to get a different dose of reality, I guess. I joined a startup called Blinkist, which is very mobile-first. In the mobile industry, people know it quite well. When I was doing all the mobile acquisition, eventually, I left Blinkist to be part of the founding team for a startup called hibooks. hibooks was one of the top three audiobooks, subscription apps for about a good year and a half.
Then we were acquired by a Chinese company. After that acquisition, it didn’t really make sense for me to continue. I decided to transition, thought about where I wanted to go, and I joined 8fit, which is one of the biggest mobile apps, out in their fitness apps in the world with more than I think 25, 30 million users.
Esther: I’m one of them. I love my 8fit, I got a lot of good recipes there and many active [crosstalk] from there.
Saulo: There you go. It’s a great app, I always highly recommend it. Then after about four years in Berlin, or three and a half years in Berlin, six months in Silicon Valley, my wife and I, we decided like, “Hey, it’s time to go to a place where we speak the language, so we’re done with Germany.” It’s just a very hard language to learn. I was like, yes, let’s just try something different. It ended up making sense that we came back to Brazil, and I joined a company called Olist, which it’s probably out of all the companies I’ve worked at, the one that’s least related to mobile growth because it’s more B2B software platform, so traditional sauce, but more platform. However, we did launch two mobile products that are very, very important to us and growing very rapidly.
In general, just a quick overview, Olist is an ecosystem of solutions or a platform to help small merchants succeed online. To sell more, be more impactful, be more– In general, we say our mission is to empower commerce. I joined their CMO, to make the Series-D company already, so recently we raised Series-D from SoftBank [unintelligible 00:04:22] group and a bunch of other really great investors. Yes, it’s been great. Like I said, from the beginning, I didn’t know I was going to get into growth. I just realized I had a knack for it as my career started going, so I guess that’s it.
Esther: For someone who didn’t originally intend to be in growth, you’ve had quite a range. I mean, both in terms of mobile-off-mobile, but also in terms of the genre. So you’re in a ton of different industries and definitely different markets, different goals. Could you talk a little bit about how you set growth KPIs? Do they look different company by company? How does that process look?
Saulo: Sure, I would say that it definitely looks different company by company. It looks different stage by stage. Depending on the stage that you’re in, you’re going to want to set your KPIs first of all, realistically, I don’t think anyone comes in, launches an app, and puts their growth target at a million users in one month. It may happen. Yes, you may hit viral, like growth speeds and whatnot, but it’s unlikely.
Anyway, I think you have to set your KPIs to not only your realistic goals, like smart goals but also to the stage of the company that you’re in. Some companies just don’t have massive budgets to work with. You don’t have infinite cash to throw at performance marketing campaigns and branding campaigns and brand awareness campaigns and influencers. You don’t have the ability to test all these different channels and see which one works best for your audience, and things like that.
On the other hand, some companies, you’ve reached the stage where you’re spending so much money, but what you really do is figure out what’s the best return on investment for each channel? What is the goal for each channel? How do you attribute each specific point of the journey? I think it really depends not only on the business you’re in but also the stage of the company you are in.
If I compare all, let say, the B2B platform, sauce, mostly off mobile, to a company like Blinkist 100% mobile, and really focused on just rocket ship growth, and user base B2C, they’re very different. Like 30,000 clients in a B2B company is massive, 30,000 users in a B2C company, not so much. It really comes down to your growth goals based on the moment you are at, and things like that. What I like to do is, I always like to analyze three key components of growth. First one is your budget/money, how much money resources actually, and so it’s not just money, but resources. What are the resources at your disposal? That’s one part of your triangle, I’d say.
The other one is the growth speed you want to be. Sometimes you’re just going like growth, you want to blitzscale, you want to hit specific milestone numbers regardless of their efficiency because you’re in, I don’t know, maybe a fundraising moment or you’re trying to outpace your competition, whatever it may be. You have your speed, like the speed index, or growth levers or growth milestones you want to hit, you have your resources, and then you have efficiency.
These three need to, in some way or another, work together. You’re never going to be able to set KPIs, all three of these directly contradict each other. That’s the thing that to me, most marketers always make this mistake, I’ve made this mistake, every growth person I know has made this mistake, which is you want to spend less, growth more, grow faster. It’s not going to happen. There’s no magic step, you can’t just wave a wand and it’s done.
Then someone’s always going to be like, yes, but if you find that growth hack that can propel you to the top organically. This is when I say, yes, if you’re a product-led growth company. If you’re a product-led growth company, you can truly think about how to do this. Think about the companies that truly grew organically, they either hit viral growth because of just how great the product was or because they hit viral growth because, inherently, the product to be good required more people. Like, look at Clubhouse. Clubhouse’s massive rise has been because if you don’t have people there, it’s completely useless.
Esther: This is the harsh reality. I think for a lot of companies to accept, and I’ve heard it also that you look for the magic and you look for, well, have you tried this network, and have you tried this balance and you expect the magic to happen. Really, I think it generally comes down to smaller-scale efforts, which is optimizing towards, like you said, you’ve got to be realistic on your growth, expect something that’s tangible, that’s in reach, that’s not dependent, and comfortable with the efforts that you need to invest in it. I guess one of the questions that I have there is, especially when you’re in an earlier stage, you’ve been at an early stage, how do you assign a budget to efforts when you don’t yet know what that return on investment is going to be?
Saulo: This is one of my favorite topics because I think everyone makes mistakes here. I’ve made mistakes. I’ll probably continue to make mistakes, but this is where I see most of the companies I advise struggling. Here’s the thing, if you don’t have an infinite budget, how do you expect to be able to test 30 different channels? You’re like, “Oh, I want to test programmatically. I want to test this network, that network. I want to use Facebook, Instagram. I want to do Messenger ads because they now seem to be working. I want to do stories. Twitter might work for me, Quora, Pinterest,” you name it. You just have a plethora of possible channels that may work for you.
The thing is, all of these channels can be optimized for success depending on your success goals. Not all of them may be the right channel for you to hit your growth levers in the early stages. What I always say is, what’s your ICP? What’s your ideal customer profile, the person you’re targeting, where do they live, what do they use, what are they doing? That network is most likely your best network.
Like for most early-stage consumer subscription apps, I always say, why not start on Instagram? Why do you think you’re going to be smarter than everyone else and just crack the curve on a different channel that no one has done? You might be able to do it, but chances are, your most ROI or ROIs-friendly channel is going to be like Instagram, or maybe Google depending on whichever products you have. I always like to tell companies I advise, stick to the basics, learn the fundamentals of your messaging, of your creative direction, like the buckets that work for you, tests, and then you can scale these tests to different channels. Plus, always focus where you have more control.
Esther: I think you definitely hit. Maybe it comes back to your previous point if you have this hope that you can reach more while spending less while converting more, and that has to come from some magic other network because you know Instagram is not going to bring you that secret recipe. Let’s focus on the testing side a little bit more. It’s at every stage, so you’re testing different networks, you’re testing creatives, you’re testing that entire flow. Even if you could take a specific example from one of the campaigns that you’ve really tried, how do you put in a successful testing structure without getting lost in the mass amounts of testing that you could be able to do, you don’t have the ability when you’re to scale like that?
Saulo: I think I’m quite proud of the framework that I use. It’s the same framework that I pitch to every company I advise. I always see the [unintelligible 00:13:01] in it. I don’t know if it’s the best, but it’s definitely the simplest and that’s why I like it. Essentially, there’s several different components to this framework. One component is making sure that everyone understands what a hypothesis document is and what it looks like. Whatever tests you run, whatever it may be, it has to be able to be described on what I call a hypothesis document.
This hypothesis document is essentially what test you want to run, why do you want to run it, what’s the hypothesis behind this test, how do you run this test, exactly how do you apply it? Is it through Facebook, is it through this, through that, what channel, what network? Is it a creative test, whatever it may be? The variables in this test that are actually going to be tested, how you’re going to measure success or failure, and what’s the outcome, if it’s positive or if it’s negative? What do you expect it to reach? If it’s positive, what’s the next step? If it’s negative, what’s the next step?
Usually, this is where people fail. They forget to do this last step, where if it’s positive, you have it go to plan like you know what you’re going to do next, whether it’s a positive experiment, or if it’s a negative experiment. If you don’t know what to do after a positive experiment, don’t even run the tests, don’t even waste your time, don’t waste your breath, don’t create a document. Don’t do anything because if you don’t know what comes next, there’s no point in doing it.
I think, to me, this is one of the key levers that makes this framework simple, because it kills so many tests at the idea stage because when people come in, it’s like, “Oh, I want to test this creativity.” It’s green background versus blue background. Great, what’s the next step after it’s done? “Oh, everything is going to be green.” Is that really going to be that impactful? Most likely not. If you don’t have a direct plan of action after the confirmed hypothesis, don’t even run the tests, just forget about it.
Esther: It sounds maybe simple if you haven’t gone through the testing at scale, but I couldn’t agree more. I think a lot of the times we’ve gotten so used to the idea that– I think every company aims to be data-driven, and of course, you should aim to be data-driven because data doesn’t lie, it’s much more straightforward. In that process, you end up with a lot of– any internal debate, the answer goes straight to, “Test it”, which is great in theory, but in practice, it’s exactly like you said, if you don’t know what it means, practically, it’s not just about, “Okay, she’s looking this way,” or, “She’s looking that way,” there’s got to be something behind it that drives you.
Saulo: I disagree that everyone should look to be data-driven. I think companies should be data-informed, they shouldn’t be data-driven. The key difference there lies in how you react to data. For example, if you run a test where you launch a creative where it’s the same image but the person is looking to the left, or the person is looking to the right, like the example you gave, and let’s say looking to the right is successful, for whatever reason it may be, got the better CAC or whatever it may be, is this something you can reproduce at scale? Is every single creative you launch from now on going to be looking to the right? Probably not. The answer is no, like most, 99% certainty that it’s no.
You’re always going to be testing different things, you’re going to be looking for different solutions and things like that. This test, by definition, is the positive result that does not warrant a next action. If it doesn’t warrant a next action, it doesn’t need to be run. What I say that you need to be data-informed is, for example, if you run an A, B test of no paywall versus paywall for a subscription app, which one’s going to get the highest subscription rate? Obviously, there is no paywall.
Do you need to run a test to know this? Do you need to confirm this by test? Obviously, you don’t. You’re going to get a higher subscription if you don’t charge anything for it. However, will this meet your bottom line goal? Will this help you meet your ROIs goal, your revenue goal? Can you turn those free users into paying customers down the line, et cetera? That’s where your testing is actually going to lead you. If you’re data-informed, you don’t need to run that first test, you can take it at face value.
Esther: I like that. I like that, data-informed. How much control do you have over that as the person in charge of growth, meaning you end up in usually a lot of department crossfires for whatever reason? Where do you balance the idea that there’s growth KPIs and there’s things that you know from the growth side, and there’s maybe a different sense from product, something different going on with the brand? Where do you draw your line? What do you control?
Saulo: I’ve been very fortunate that I controlled most of the companies where I was at, but not all the time. I understand sometimes you’re going to have some conflicts. The thing is, if you’re in discussion– I always hear people saying, “Oh, my product doesn’t want to test this,” and then I think if they don’t want to prioritize this test in the testing like in their development cycle on their development sprint, I always think, “Did you explain the outcome of this test? Does everyone understand the impact it could have on the company’s North Star metric?”
If the answer is yes, then there’s just simply a problem in prioritization and this just needs to be hashed out between directors, between CEOs, whatever level of hierarchy there is. If you haven’t, then it’s quite obvious that no one’s going to want to run a test just because you want them to. This is where I say that a lot of people fail because they fail to explain why it’s important to run that test. This is where the hypothesis document comes into play.
If you write this document, and it’s not clear to you why it’s important, you shouldn’t run it. If you write that hypothesis document and it’s extremely clear and you know why it’s important and you know how it impacts, be it your North Star metric, be it your major company’s KPI, be it your quarterly KPI goal, whatever it may be, how it impacts that number, then people will understand and it becomes more critical.
Different companies will use different methodologies to be able to prioritize testing. Some are going to use the rice and then measure the impact and how feasible it is and blah, blah, blah. Some are going to be a little bit more like a crazy horse and just let it run, just run everything, do whatever tests that people want them to run. Some are going to be very, very, very strict about testing because they value– It depends on what the mindset is within your company. I always say, if you don’t have a growth mindset across all departments, you shouldn’t even have a growth department. It should be that ubiquitous.
Everyone in the company, every department, should have a growth mindset. If they don’t, it’s your job as head of growth, chief growth officer, head of marketing, whatever your title may be, to instill that in the other teams. I think that a lot of the time the chief growth officer’s job is to make sure people understand why it’s important to seek growth in alternate routes, through testing, through data, being data-informed, and things like that. If you’re not really a data-driven company, how can you expect people to take you at face value when you say this test should be run. Like I said, you have to be able to have the ability to influence people and you only do that through numbers or experience, there’s no other way.
Esther: Do you have an example of it? You passed the hypothesis document, you got something that really felt like a good test. Take us through the real-life process of how that looks.
Saulo: Right. Without naming companies, I remember specifically one company that I was at. We had just launched a new version of the product, it had a lot of new features, a lot of really cool things, things that weren’t in the product before. The product never had a signup flow, it didn’t require users to sign up to use it, you could just download the app and just begin using it. It saved [unintelligible 00:22:17] information on your device. Then I came in I was like, “This isn’t what I like, this doesn’t work for me.” Why does this not work for me? Because it seems to me that we’re never going to be able to retarget these users and upsell them anything or get them to convert to a paid subscription. We just don’t have the ability to talk to them.
I said, we do offer the ability to sign up, but they’re not required to do so. What’s our signup rate? Our signup rate was 35%. Out of all the users that we had, only 35% actually signed up. Then I remember I said, “Look, I wanted to test putting the signup flow as the first thing.” It seems obvious, but not to everyone. Then I said, “I just want as soon as they land in the app, they download the app, they see a splash screen and the first thing we do is ask for their email and password, that’s it.” Then the product team is very reluctant. They’re like, “We built this product that’s super machine learning-driven and it’ll tailor the person based on their device and their experience. We don’t need their email. We don’t need them to sign up.”
I’m like, “Great.” Then it just brought one piece of information, it was like, “Hey, in the country where we’re most relevant in, the average life cycle of a cell phone, of a mobile phone, mobile device, is roughly a year and a half.” We’re looking at 18 months turn maximum, that’s the maximum we’ll be able to retain our users because once they change their phones, it’s very unlikely that their history saved there is not saved anywhere else. It’s not based on an account.
They’re like, “Okay, but still we can tailor this to the app, to the account, once they download their iOS and just get their apps back, we can still do it.” I’m like, “Okay. Great, but how do you retarget these users? How do you get them to subscribe and pay to the subscription we want? What are we supposed to do? We have these users using the product, we should be able to hit them with emails and push notifications. Instead, you’re suggesting I take these devices, create Facebook audiences with them and spend more money to reacquire them again, that doesn’t make sense.” It was met with a lot of resistance.
Then what I did was, “Okay. Great, let’s do this. We’re going to run this test.” 50% of the audience is going to come in the regular way. 50% of the audience is going to come in and we’re going to request that they sign up immediately. We’re going to look at the signup rate at the end of both of these funnels. What’s going to determine the success is if the signup rate does not drop or the conversion rate post signup increases. I think that was it, conversion rate post signup.
In theory, we had a 35% signup rate if we didn’t put in as the first step, once we put it in the first step, this jumped to 85%. We only lost 15% users technically. Then the guys were like, “No, but we’re losing 50% of our users. It’s terrible. They’re downloading the app and they’re not using it.” I said, “Well, these 50% are probably the ones who downloaded the app and deleted it almost immediately.”
Then we looked at our post-install deletion and started seeing how many people were deleting the app after the install, and it lowered. So there was less people deleting the app afterwards because the people who did sign up were more engaged to test the product, found more value. We started bringing the value up-front as much as we could. This became our de facto journey from now on. Once we launched the subscription, the same battle kind of happened where it was, let’s just let users come in and test the product, use it for free, and then we’ll try to get them to pay or we’re going to put a hard paywall with a free trial and see what happens. Again, common sense was, let people use the product.
This should have had a higher conversion rate. They use the product, the test that if they like it, they pay. Putting a paywall directly upfront without ever using the product or at least starting a free trial without ever using the product, seems like it wouldn’t make as much sense. I had to drop this document. I had to drop this hypothesis explaining why I thought this was going to increase our average revenue per user.
Then I put all my metrics down, put my KPIs, put my targets and goals, and convinced the team this is going to make us more revenue. We launched it, it turns out that our subscription rates, actually becoming a paying customer, almost tripled and doubled like it was 2.5X. Then it was very clear, this is a de facto journey. We can test against this, but the test was very, very adamant about the results.
Esther: It’s a pretty insane difference. How do you explain it? Is it that you’re kind of making sure that you’re either filtering for serious users early on or you’re kind of forcing them to make that commitment to actually try it out by putting them in that place?
Saulo: I think, yes, it’s more of the latter. I think that you’re forcing the user to make a commitment to actually use the product and engage with it because they’ve made a decision to start a free trial. Again, it’s a free trial, they can always cancel, but everyone knows the hassle of canceling, pre-iOS 13, at least. What I was told was that, I don’t remember, but pre the deleted cancellation flow that Apple launched.
Previous to this, everyone knew the hassle of it, so it was kind of like, “If I decide to start a free trial, I’m actually going to engage with the product and try to test it and try to use it.” I think it’s Andrew Chen, let me actually just double-check just so I don’t quote anyone wrong. Yes, it’s Andrew Chen, the psych points from Andrew Chen. I really liked the idea of this methodology. I remember I had this psych framework, this is kind of old by growth standards now, but I still believe it to be true. I still love it. I think it’s one of my favorite frameworks, where you attribute psych points, positive and negative, to different steps in the journey.
If you have a product that is just so inherently amazing that everyone is going to touch it and fall in love with it and want to pay more and more and more and more money for it, by all means, simplify it the most. One good example, Tinder. Tinder’s a great example. You get value immediately. You don’t need to pay for it before you start. You get value immediately. It’s amazing. It’s great. You get what you want as soon as the first screen shows up.
Take a product like Blinkist, Audible, hibooks, Netflix, the value is always there. If you were allowed to browse Netflix’s catalog before paying, you might not want to pay. You might be that person who’s like, “You know what, I didn’t find anything I liked.” Once you pay, start a free trial, you’re automatically thinking like, “Okay. I need to at least find something I’ll enjoy,” because you’re in that trial mode. If you just look over the screen once and you’re like, “Nothing seems to buy,” you don’t even give yourself the chance to like the product. I truly believe that having paywalls, having hard paywalls as early on in the process, you’re going to take advantage of the highest point possible before killing it with a paywall. Paywalls always kill your [inaudible 00:30:29]. Paywalls are always that moment where you’re, “Oh, fuck.” And it’s like– Oh, sorry.
Esther: It’s okay, we don’t have children listeners here, you’re safe.
Saulo: It sounds good. It’s like, “Oh, fuck this, I don’t like this product. I don’t like this.” It’s always going to be the moment where you frustrate users the most when you ask them to pay. Then a lot of people are like, “Oh, the more committed you get them to be, the more likely they are going to pay.” That’s true if you’ve created a product that that commitment generates that there’s a reason for that commitment. If you just made them go through long-ass funnels and then at the end gets full paywall, they’re just going to get frustrated and say no. If you put it really early on, people are still at that moment where they just click the ad, they just see the reason, they just put it in their minds that they want to test this.
Take fitness apps. If you didn’t have paywalls coming up early on, no one’s going to pay for it. This is why free trials are short with most fitness apps because people will give up very early. People blame the apps for their lack of commitment and that’s normal. The language apps, the fitness apps, all the apps that require heavy lifting from the user, they will blame the app for their lack of discipline. So they will cancel, which is why you need to generate as much commitment as possible. Nothing says commitment like putting your credit card information in and generating as much commitment as possible because they will be less committed to using the product they will disengage and it’s just normal.
Obviously, the product needs to work their ass off to make sure that you continue to get people engaged. You get CRM looking at all the engagement funnels and things like that. At the end of the day, the reason why I always believe that putting the paywall early on works is because you’re then at that moment where it’s an impulsive purchase. If you think about psychology, you think about why people buy, what they buy, and things like that. Why are all the really easy to carry, really easy to buy items, always at the counter? Because it’s impulsive. You’d make the decision at that moment.
It’s the same thing with subscription apps. If you let the user’s browser their ass off and just try everything, they’re going to realize that, “Hey, maybe this isn’t for me, but if they make that impulsive purchase, they are then committed to making that work because they already paid for it. At least they think they paid for it. That’s the thing. It really depends on your app. There’s some apps that I love so much that I’ve been a paying user for such a long time. That I’d be, “I don’t care where the paywall is. I don’t care what funnel they make me, but I hope they make me go through to pay for it. I’ll just do it.” Spotify is one example for me.
Esther: As bad to say, I think music apps can get away with that a lot of the time, because you build so much also, you invest in that whole listening.
Saulo: That’s the thing, and this is why you create retention. Why does no one leave? These are for Spotify, Spotify for Deezer, Deezer for YouTube music, and so on. You don’t really leave one app from the other. You might actually get both. Then you might actually use multiple because maybe your one specific artist is only on one platform or whatever it may be. If you’re a heavy user, like I’m a heavy Spotify user. There is absolutely nothing YouTube music and Deezer can throw at me to make me leave with maybe the exception of recreating all my playlist, importing all my data, and making me not pay for it. Then I’m a very low value for them.
There’s nothing they can do. Every single time I see YouTube like, “Oh, I’ve gotten so many different coupons and discounts to try YouTube music and I think that their app is actually better. They have better UI. I love the experience when you start the product. The recommendation experience is amazing.” Deezer’s recommendation algorithm is much better than Spotify, that’s my opinion, doesn’t matter. My lists are there. I have like 40 different playlists that I’ve made. I have my wedding playlist that I made that I love to go back to and listen to that. I spent three weeks building. This is why there is no way to export a playlist through Spotify as an API because this would be the only way for you to actually get users like rob users.
Esther: I think that I’m with you. I think part of the challenges are so many– You’re releasing a new product and when you’re so involved in it, for you, it is viral. For you, it does have that stickiness. I think the example you brought up is really good, which is Netflix, you think of Netflix as this incredibly powerful sticky product and, of course, it is. Not because you have– I’ve had Netflix since it was DVDs on the mail, so I can’t pretend to enter that mindset but when I look at other streaming platforms and you think about making that commitment, anytime you were browsing to that extent, you can usually browse yourself out of actually making a decision. It’s something paralysis. There’s a word for this.
Saulo: It’s decision paralysis. I signed up to Disney+ without looking at the catalog just because I knew all the Marvel movies were going to move there. At the moment I signed up, I had a baby on the way. Now I have a baby girl who’s recently arrived and I know she’s going to want to watch these movies.
Saulo: Thank you. I know she’s going to want to watch Disney movies and I’m going to want to watch them with her. I want to review and re-watch a lot of the movies that I haven’t seen in many, many years. Disney for me was like I don’t care if their catalog is exactly what it is right there because all the movies that they have are movies that I’m going to continue to re-watch. I don’t require it like recently.
Like I said, my baby girl is a newborn, she’s very recent. She’s 22 days old at time of recording. I spend most of my midnight to 5:00 AM awake trying to get her to go to sleep or just holding her in my arms and shushing her, et cetera, blah blah blah. What I watch while I have her in my arms is I binge watch something that I’ve already seen because I know that I can just simply look away, deal with her, and it doesn’t matter what I miss. I’ve recently just re-watched the entire Marvel catalog in the last 10 days.
Esther: I have to tell you, when my oldest was born, she’s seen all of The Sopranos since she was maybe the tiniest girl, but it’s so true. It doesn’t matter if it’s riveting, you need it there. It’s the background.
Saulo: If you’ve ever tried to burp a baby without something to watch, time just does not move. If you’re holding a baby with nothing to watch, two minutes feels like 30 minutes, and your arms are just like jello, but if you’re watching something, you can get by quite easily. This is my hack. This is my parenting hack. This is the thing that most people don’t realize is that depending on the product that you have, your catalog does not have to be overly invested in.
This is the case for Disney+. For Netflix, it’s not the case because Netflix does not have that library of originals that people just want to re-watch over and over and over again. Most of their movies suck. Most of their series are great, but they have to continue. I don’t know if there’s any series on Netflix that are just super re-watchable because they’re not that long in any way.
Esther: They have The Office but not anymore.
Saulo: It’s not there. They had the office, et cetera. The problem is that when Disney launches their own, when HBO launched their own, all these different players are launching their own and taking that catalog. You have two types of catalog, and this is why you see Netflix investing so much in stand-up comedy in reality shows in low-budget productions with high entertainment value over repetition.
I don’t know this for a fact. I’m not a Netflix employee. Never have, been, don’t know anyone there, but I am certain that they have a metric of some show lifetime value over repetition. I’m certain they have something like this. Because like hibooks, we used to have costs per listened hour, and this cost per listened hour is the most important metric for us and any audiobook company. You want to look at this metric where it’s like, “Hey, how much did we invest to make this show or this whatever it may be?”
It doesn’t matter if it’s one person watching it a billion times, or a billion people watching it once, it doesn’t matter. Well, in this case, it doesn’t matter because it’s Netflix because you have subscriptions. The thing is, you want to look at what’s the lifetime value of that product over time. If it’s a retention play, or if it’s the growth play. When you launch [unintelligible 00:40:28] season four, that’s a growth play.
You’re trying to tap into new markets, or when they launched season two and three, then now four, that’s a growth play because you’re trying to tap into new markets, into Latin American market, different types of shows, lower budgets because they’re not American Hollywood-made budgets, but still great quality, amazing quality. Whereas if you acquire Friends, that’s a retention play. Friends is not a growth play, it’s a retention play. I’m certain that they look at their catalog that way, just like people should look at their apps, their product, is this feature a growth feature, or is this feature a retention feature?
Or better yet, an acquisition feature or retention feature, because they’re both going to be growth. You cannot grow with a leaky bucket, that’s the most traditional sentence growth people use. It’s so true. If you don’t think about features that are retention-driven and then features that are acquisition-driven. If you look at a company like 8fit where I was at, there are certain things that are 100%, retention-focused. Like the recipes, some of the recipes, et cetera, they’re very retention-focused.
The more you use the app, the better it is, and things like that. Most people don’t sign up to 8fit for the recipes. Most people sign up to 8fit because they want a fitness app, they want a quick workout, they want to lose their gut, they want a seven-minute workout, whatever it may be. These ads suck because you acquire people, they come in, they fail because the value proposition of losing X in 30 days, losing Y in seven minutes a day is just not true. The value proposition is not met if people will leave. Then you need the other features that are the retention features that add value as you go along.
Esther: You brought it full circle very nicely. The custom metrics going from what’s relevant in hibooks could never have been relevant at your other ventures. I think you’re so right. I think part of it also just takes that honesty which comes into really justifying the things you do. You’ve got to be honest with yourself. We’d all love to have the most viral product on the planet, but you have to actually make sure you can back it up. I’m going to finish you off with the quickfire, are you ready?
Saulo: Go for it.
Esther: First of all, if you could give just one tip to somebody who’s just entering into the world of growth, what would it be?
Saulo: Learn to ask questions.
Esther: Favorite mobile growth resource?
Saulo: Favorite mobile growth resource? I’m not sure if this is–
Esther: I’ll make it grow. I’ll go over, you can take mobile out of it, just growth.
Saulo: I’m not sure this is fair. Reforge is by far my favorite. I know it’s expensive and not really accessible for most people. Usually, you have to have your company pay for it. I’m going to go with something that’s free. I absolutely love Reid Hoffman’s podcast, Masters of Scale.
Esther: Amazing. Let’s say COVID ends and you get to see people again and then that all those are normal, who’s the person in the growth industry that you’d most want to take for lunch and why?
Saulo: A person in the growth industry I’d most want to take for lunch and why. At this moment, probably Kieran Flanagan from HubSpot just because I’m diving into B2B for the first time in the last 12 months. I don’t think there’s anyone better.
Esther: Most important question. What is your favorite type of pancake?
Saulo: My favorite type of pancake, blueberry.
Esther: Nice, classic. That was quick. Most people take a minute but I’m impressed. This was amazing. Where can people find you if they want to learn more and see what you’re up to?
Saulo: They can find me on LinkedIn. It’s LinkedIn.com-in-SauloMarti, very easy. You can find me on Twitter at Saulo_Marti and I think that’s it. I’m not a huge social media person, which is ironic.
Esther: You’re affecting other people’s ability to grow but also I’m not good at it. Thank you so much for taking the time. This was awesome.
Saulo: My pleasure. I really enjoyed it. Thank you very much.
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