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In JC’s Newsletter, I share the articles, documentaries and books that I enjoyed the most in the last week, including a must-read.
Let’s talk about this together on LinkedIn or on Twitter. Enjoy!
You should only invest in virality if you are confident that virality will be your primary growth engine for your product. As opposed to (1) performance marketing, (2) content, or (3) sales.
A complementary approach is to think about reinforcing loops. Is having a virality year power-charge the CAC to LTV of your sales? That is a really powerful place to be in when you build reinforcing flywheels in your business.
At Alan, we believe that each new company that joins us should become an ambassador for us, and create virality around us.
Content is a natural fit for your product if your users naturally generate public content (e.g. reviews or answers to questions) when using your product, which you can use to attract new users.
Content has been something that we did because we believed in sharing with the community with no big expectations. We are starting to see that it builds differentiation over time and really compounds.
Virality of often measured by something called the “K-factor” which is a fancy term for measuring the number of new users that each existing user drives: k=i*c, where i = number of invites sent by each customer and c = percent conversion of each invite
What are the different types of virality?
1. Word-of-mouth virality: Hearing about it from friends or colleagues. (i) Offline: While chatting with a friend or colleague (e.g. Airbnb) (ii) Online: Seeing it mentioned on social media (e.g. Clubhouse)
2. Invitation virality: Being actively invited by friends or colleagues. (i) Social/Collaboration: To connect with friends or colleague (e.g. WhatsApp, Figma) (ii) Incentivized: Because one or both sides will benet (e.g. Pinduoduo) (iii)Utility: To accomplish something on-o with friends or colleague (e.g. Calendly)
3. Experiential virality: Seeing the product in action. (i) Passively: Seeing the product as you go about your day (e.g. Citizen). (ii) Actively: Being sent a piece of content from the product, which leads you to the product(e.g. TikTok)
The Pinduoduo model is really fascinating!
To optimize organic word-of-mouth virality:
1. How might you create a remarkable experience for your users?
2. How might you get non-users with a large following to experience your remarkable product? e.g. free accounts for influencers
3. How might you make your users feel special or high-status by showing o they have the product? e.g. waitlists, invites
This is often overlooked, while I believe it is clearly a good way to kick-start your approach.
Incentivize word-of-mouth and inviting:
1. Pinduoduo: The more friends you invite, the higher the discount
2. Robinhood: Move up the waitlist by inviting friends
To optimize incentives virality:
1. How might you create a selsh incentive for users to bring in new users? e.g. free money, free storage
2. How might you create an altruistic incentive for users bringing in new users? e.g. save your friend money
3. How might you create FOMO which motivated users to send invites? e.g. a limited number of invites like Gmail, Clubhouse, Spotify, Superhuman, OnePlus
Other questions to ask ourselves:
How might you make the user’s life easier if their friends or colleagues were also using it? e.g. easier to share content, a secure communication channel.
That is the core principle of network effects.
How might you enable your users to create remarkable content, e.g. TikTok creator tools
TikTok has been a master at building creator tools and adding new filters every week.
How might you create remarkable content for your users yourself, e.g. Spotify Wrapped
How might you publicly show that a friend or colleague is using the product? e.g. inline signature block, pink mustaches
How might you allow users to share interesting information from the app? e.g. their location
🏯Building a company
In addition to selected articles, I share one of Alan's leadership principles every week - the same one that I share internally and with our investors every Wednesday.
It is very important as a team to transform what could be a "bad news" into an incredible learning opportunity that makes us stronger.
Encountering problems is not considered a weakness at Alan. It is viewed as a way to open the conversation, to discuss what elements are blocking the process and, eventually, sharing problems helps everyone go further in their work and achievements. All opportunities start out looking like “snakes” 🐍.
Companies that scale fast typically have low margins, and their primary feature is (wait for it) their low margins. Walmart, Amazon, and Dell pass along the savings to their consumers and, at critical mass, become difficult to compete with, as to achieve a similar scale requires exceptionally cheap capital.
Enter Microsoft, Google, and Facebook, which defied gravity and brought to the markets the chocolate and peanut butter combination of margin and growth. IP, network effects, brilliant execution, flaccid regulation, and deft acquisitions resulted in firms that grew shareholder value faster than many in history.
👉Bob Pittman - Lessons from Building Media Empires: about plans (Founder's Field Guide)
I think everything's uncertain. I actually think plans are funny because I think we invent plans to reduce our anxiety about the future. [...] I do a weekly operating committee. We used to meet every Monday and the purpose, to adjust the plan because I find even a week sometimes is too long before we adjust the plan. If we wind up hitting our numbers for the quarter, we probably did it in a way we didn't intend to at the beginning of the quarter. If you're really going to run a business, you've got to run the business, which means understand that because you planned it doesn't mean it's going to come true.
So, I think plans are silly in a sense. I think you have to build them, but I think it's better of just saying, "Look, this is the best guess. I've got it right now. But if you wait till tomorrow, I'll have a better guess, and if you wait till next week, I'll have a better one." But I think the best managers, the best creative people really look at this as, it's always changing. There are way too many variables for us to ever be predictive.
The plans don't matter. It matters what's right today, that's maybe different than yesterday. And by the way, none of us are Nostradamus.
🗞In the news
📱Technologies
👉 Facebook Ad Prices Signal Digital Ad Rebound Is Far From Over (The Information)
Ad prices are rebounding on Facebook.
The cost per a thousand impressions rose to a daily average of $8.16 in November, after falling to $1 last spring.
👉 Google’s AI reservation service Duplex is now available in 49 states (The Verge)
More than two years after it initially began trials, Google’s AI-powered reservation service Duplex is now available in 49 US states.
Adapting to local legislation is one of the reasons Duplex has taken so long to roll out across the US.
👉 YouTube is social media’s big winner during the pandemic (CNBC)
Pew Research reported that 81 percent of US adults used the platform this year, up from 73 percent of U.S. adults in 2019.
YouTube’s popularity is especially high among 18- to 29-year-olds, with 95% of them saying they use the service. Of that age group, 71% said they use Instagram, 70% said they use Facebook and 65% said they use Snapchat. The study surveyed 220 people in that age group, and the margin of error was plus or minus 7.3 points.
👉Intel Unleashed: launching their foundry business (Stratechery)
Today I’m announcing our plans to be a world-class foundry business and a major provider of U.S. and European-based capacity to serve customers globally.
To deliver this vision, we are establishing Intel Foundry Services, a fully vertical, standalone foundry business [...] This business unit will be completely dedicated to the success of its customers, with full PnL responsibilities.
And a great speech:
I’ll say one of the themes to my young CEO tenure: execute, execute, execute. We’re bringing back the execution discipline of Intel.
I call it the Grovian culture that we do what we say we will do. That we have that confidence in our execution. That our teams are fired up. That we said we’re going to do ‘x’, we’re going to 1.1x, every time that we make a commitment. That’s the Intel culture that we are bringing back.
The enthusiasm we’re seeing inside of the company, the passion to execute. The commitment to leadership. That competitive zeal.
And to collectively, as that emerges, we have confidence that we’re going to meet not just the existing customers, we’re going to be leaders in the market, and we’re going to satisfy the new foundry customers, because the world needs more semiconductors, and we’re going to step into that gap in a powerful and meaningful way.
Volunteers for vaccination can sign up to the platform to receive a letfover jab, to ensure "no dose is lost". The goal is to accelerate the vaccination campaign by helping vaccination sites gain time and be confident they can open vials without risking wasting doses.
Users sign up with personal data including name, age, address, contact details. Then, Covidliste explains: “When a dose is available, you are sent a link through SMS. Upon confirmation, you are put in contact with a vaccination centre.”
The technology was created by two engineers - Martin Daniel and Mathieu Ripert - and Dr Antoine Roux at the Foch hospital in Suresnes, Hauts-de-Seine; in partnership with vaccination centres.
Very proud that Maxence Aïci (Software engineer at Alan) is helping the project!
👉 Digital Health Startup Hims & Hers Goes Public In $1.6 Billion SPAC Deal (Forbes)
The company has performed nearly 3 million telemedicine consultations since inception. Teladoc Health, the biggest public player in the space, performed 2.6 million visits in 2020, but took nearly two decades to reach that number.
Revenue increased 67% year-over-year, from $83 million in 2019 to an estimated $138 million in 2020. More than 90% of that is recurring revenue from around 260,000 subscribers.
Members pay a subscription of around $20-30 per month to have 24/7 access to online physician consultation and steady supplies of generic medications.
As the company grows, Dudum is setting his sights on new markets, including partnerships with self-insured employers and health systems, whereby it will retain its own brand identity.
More than 80% percent of the company’s pharmacy business comes from prescription drugs
The main customer demographic “has no loyalty to the existing health care system,” says Dudum. “Healthcare to them doesn't just mean pharmaceuticals. And it doesn't just mean doctor visits. It means things like coaching, therapy, vitamins, supplements, yoga and meditation” he adds.
We are more than happy to announce our €185 million (€150m primary) series D fundraising at a €1.4bn valuation.
The round is led by Coatue, with additional participation from new investors including Dragoneer and Exor, as well as existing investors Index Ventures, Temasek and Ribbit Capital. We are thrilled and honored by the quality of our partners and the alignment with our long-term vision.
Subsequently, we will prioritise our 2021 investments on personal care guidance to access the right in-person or virtual care options, as well as direct-to-consumer products in Parenting (Alan Baby) and Mental Health for all our members. We will also accelerate our health services development in Belgium and Spain.
👉 Portag3 Perspectives - Culture In A Start-up: The Good, The Bad and The Ugly (Webinar). I was very happy to join a discussion on culture in startups, during a webinar hosted by Nick Hungerfold from Portag3 last Tuesday. I did my best to provide helpful tips and strategic advice for those who are very early in their entrepreneurial journey.
🙍 Featured in this newsletter
Casey Newton 🇺🇸 Founder, Platformer News | Twitter | LinkedIn
Ben Thompson 🇺🇸 Author/Founder, Stratechery | Twitter | LinkedIn
Nick Hungerford 🇺🇸Senior Advisor, Portag3 Ventures | Twitter | LinkedIn
Bob Pittman 🇺🇸Chairman & CEO, iHeartMedia | Twitter | LinkedIn
Scott Galloway 🇺🇸Clinical Professor of Marketing, NYU Stern | Twitter | LinkedIn
