20Growth: Inside Kraken’s $1.5BN Growth Playbook: What Works, What Doesn’t and What No Founders Understand About Growth That Will Change Their Company with Mayur Gupta

25:15Because theoretically I can see a lot of things. But reality is you pick the ones you can measure more directly and easily. Start there. Because I feel that spending on growth or spending in a product like company is like it's like your oxygen supply. You have to be able to prove what you are getting back. You are taking almost all your spend and putting that on the lower funnel, which is more directly attributable. And within the lower funnel, you're picking channels that you absolutely know are lost touch because you assume that you have some demand out there in the category. You were just not capturing it.

25:48So start on channels like page search, you look at some display and so on. And ASA, you will you see channels that again are more digital users are converting and you can absolutely prove with very little ambiguity on what they're bringing back. Before we move to the next, what sort of channels are those? That's Facebook, Google, Insta. Not Facebook. I won't, not Instagram because they are the second layer of paid social platforms where attribution isn't all that straightforward. So I will bring them in the next wave of channels so unlock. So what's the first wave then? website directly. Yes, more paid search, App Store, ASA.

26:25I mean, those are the ones which are more last touch models typically. So you've seen your ads, you're being influenced, you're being softened, but where do more people convert? These are typically the last touch channels, right? And Okay, so we've got one which is like directly attributable. What's the second phase? The second phase is which are attributable, but they're not last touch. Like that's where paid social, your display ad networks come in and then gradually audio, you know, audio and OLV. Those are the ones where you now need to suffice create a more sophisticated attribution and measurement model.

26:57If we just look at, oh, how many people came from paid social, the answer will be maybe none, but that doesn't mean it's not working because all the credit is being given to paid search. So you start to get smarter and build more advanced measurement and attribution models to understand the role that each of those touch points are playing. How do you think about concentration versus diversification across some you can pick one from each and go down it kind of drilling in that way or you can do all of them in each a lot more expansive a lot more diversified How do you think about that at any point at scale you don't want 80 to 90 % off all your paid growth coming from one channel because too much at risk right I would say back in my D to see days we used to obsess over it, but we would say no more than 25 to 30 % in any single channel outside of organic.

27:43Also because it's not just channeled of a specification, it's also a different type of audiences. Because in crypto, for example, we live in breathe on social, crypto lives and breeds and grows on social. So the people that I will find on Discord or Reddit and Twitter are very different from the people I will find on Meta and Instagram and also it's also diversifying the audiences because not every audience and product type is gonna make sense out of all these platforms and channels. Do your cracks get better cheaper over time because you have a bigger brand, more people know you, they care about you, or do they get more expensive as your core audience saturates and you have to expand to a less obvious ICP.

28:26Yes, so now we're talking about brand and brand and growth, brand and performance. That's the fun, challenging, but never dying dilemma. So lot to unpack there. First, I would say whoever came up with the branding of brand and performance marketing made the biggest mistake and did the biggest injustice to labeling them because the moment you call one type of marketing performance and the other type, something else, which is aka brand marketing, it, it, it, what it means that one performs and the other doesn't, which is absolutely incorrect and wrong. And for founders and CEOs and companies that haven't spent in this, their foundation is based on that because a lot of their marketing understanding is from 30 years back, the age of the magmen, where it was a cost center.

29:12It was spray and pray with great marketing and people would come. But I feel that first of all, there's a fundamental flaw in our thinking that one type of marketing works in other dozen. They both work and both are absolutely must in the long terms to build a long term sustainable growth model, the differences are, they play different roles. One is needed to your point. Let's say you saturate your demand. There's no more demand out there. Doesn't matter what level of discount and scientific, lower funnel targeting you are doing, there are no more people. You have to create new demand by being part of culture, by creating inspiration, educating them about the value you bring.

29:49You just cannot give an offer and expect people we convert. That's what this upper funnel, which is the phrase I like to use more than brand because otherwise brand as a phrase gets bastardized and the most hated word Right now in the world of marketing and growth. So I think that upper funnel more upper funnel efforts are needed to create new demand When your lower funnel efforts have saturated whatever you had on the table That's why you as a business have to think at what point do you need both fly wheels to be running the magic is if you have a hundred bucks How do you define and identify how much am I investing in which fly view and depending on what stage you are So if you're in the early zero to one stage or one plus stage I would suspend very little on brand you don't have to because your product is your brand users your brand Invest all the money you have to bring people in but once you've scaled if you're not investing in upper funnel and you're not differentiating yourself, unless you're Tesla, where the product has differentiated itself from the clutter, you are just gonna be a commodity, because you have nothing that differentiates you from the pack.

30:53First, you mentioned that kind of channel saturation. How do you know when you've saturated a channel, when additional dollars won't yield the same performance level of output? Yes, we do a lot of experiments to look at, because when the cats looking good, and we don't just always look at cat, in our world, we look at CAC and OLE, LTV, then we look at paybacks, but you will see, when it's looking great, you tell the team, don't worry, just keep pushing, and you start to see a cliff in CAC, then you know, look, you reach a saturation point, right? So you pull back and you normalize there, and then we challenge and we do test and experiments to see, now as you unlock upper funnel in that market, in that particular market, can it unlock higher velocity, higher throughput?

31:36So can you expand the pipes through which new users are coming in by creating upper front and that is how you prove incrementality of the upper front as well. In terms of when to spend on brand, when we think about that, how do you think about when is that right time to spend on brand when we have enough performance marketing? You know what I'm saying? You said it was a dirty word brand. I had Nikon from Ravallute and Nik is a performance to the fucking max. This guy was born with a Lucas Aiden in his hand, okay? And he's gonna listen and be like, fuck you. And so he was. And he's like, my biggest realization is the importance of brand marketing.

32:18Yes. I've had the biggest realization, the same biggest realization too. But it's not at the cost of performance. So the way I think about it is, I'm gonna use an analogy because this is the same question we discussed at every forum at, you know, many team meetings is, how do you make a choice? is how do you think about both the way I say in product led companies, non -CPG again, in product led companies, you have to first think about growth and performance along lower funnel effort as oxygen. You don't have that, you are dead. You do not have a chance to come back the next day. You have to know your numbers and you have to move the numbers.

32:52So if you have 100 bucks, make sure you're using enough of the 100 bucks or all of it to hit the numbers you need, that's your oxygen. Then I think about this upper funnel spend, I'm reminding myself not to use the word brand, the upper funnel spend is nutrition, is good food, you know, or just food for them matter. You won't die if you didn't have it. You will eventually die. The difference is the size, the scale and the pace of the fly wheels are different based on who you are and where you are and the rest of the category, your market penetration, your code product differentiation. But in the long term sustainable growth, you cannot not have the flywheel of your upper funnel spend that helps build demand and build your brand.

33:36How do you think about it when your competitors are doing Super Bowl lab first? Yeah, absolutely. So the epitome of brand marketing is I know they did cool stuff with the attribution. I just need it like scan your screen. But like, yes, when they're doing Super Bowl advertising, you're like, yes, yes, yes, absolutely. And we look at that all the time, but I can tell you that there is a reason why Kraken can come out and share our numbers with a lot of confidence, which we did last week. I don't know if you saw like we shared our revenue in the volume, not every single, but we shared our first ever.

34:09But didn't say it. What was the right? Even pre IPO, in 2024 numbers, we shared a billion and a half in net revenue, not gross. Net revenue, hopefully I'm back here next year. I can, we can talk about 2025 growth. We shared our pool. We shared the number of funded accounts. Currently, these are not lifetime funded accounts. We shared assets on platform, close to 50 billion. We shared our volume, which is almost three quarters of a trillion dollars on the platform last year. So all I'm saying is, first of all, of course, then there are coin bases of the world, which are public companies. So we all know their numbers.

34:43Also, it's a strategy that could very well work for some of them. It is not like two three hundred million dollars or upper funnel spend is wrong. I'm not saying that at all. I'm just saying in our world. We believe a strong balance is needed and our strategy. The wave. If you give me a hundred bucks at Kraken, the way we think about it is the way we'll break apart the hundred dollars is first. We are not going to leave any growth on the table. That's our ethos now at this stage of a growth. If you spoke to me 18 months back, I would have said something very different because not many people around the world knew Kraken.

35:16That's why we also did a lot of partnerships. We are now sponsoring Boughtonham Spurs. How much she's spent on that? I can give you the exact number. What I would say is in terms of percentages of my overall spend, it was single digit percentages. That tells me you have a big budget date. Relative to the competition where they have shared where we see the numbers publicly. We are extremely calculated. But at the same time, we will spend as much as possible as long as we keep proving payback. How do you think about proving efficiency with that? Proving attribution. How do you answer that? It's hard or, but it's possible.

35:56What we do, Harry, is not just the partnerships. We have a whole portfolio of upper funnel spend video audio video digital display and if you think about what the difference is between that and lower funnel is just messaging by the way same channels just a messaging is different we are talking more emotionally culturally relevance versus formal action offer that's the only difference sometimes we create this you know really complex difference between all this is brand versus performance well. Well, same platforms. I can use TV to run a lower funnel DR campaign. I can also use TV for a very inspirational moment that really makes you step back and think about and remember me as a brand.

36:34So the way we think about attribution and quantifying the impact, which by the way, we get rightly so, get challenged every day, every week. We spend the Sunday with our gym four hours, hurdle to tell him exactly how we are proving every single dollar, which is truly fascinating and a great discussion. The way we do it is four different ways. One, we do match market tests, very simple because in crypto, the categories across the world, it gives us a great benchmark. So when we are unlocking uprofen in market A, but not in market B, we're Bitcoin price is the same. I can show differences. So that's a match market test.

37:06We do a lot of control group tests. We get a lot of brand -lived studies. And most importantly, we have a sleuth of short -term proxy KPIs because in today's world, in a product -lit company, we don't have six months to prove the impact of X million that you already spent. So you've got to give early signals. So we look at share of search, we look at direct traffic, we should look at lifts, is it fluctuating and so on. And then the last two levers, one we've unlocked the other one we haven't fully yet is we also use MMM because MTA is is no longer relevant. So we use MMM, we use a couple of different partners and we have an environment.

37:41It's like a modern version of a marketing mix model that basically use AI machine learning in different ways to attribute, they look at your or your growth and sales data to look at what for you doing in those moments. They look at all kinds of signals to tell you that you think that all the magic that's happening is because of the last touch the user had. Well, guess what? The reason why the user got there is because they were inspired because they saw you on their team's jersey, which got them curious and three days later, you know, they they looked for you and etc. So we use that model too to understand that in a non -last -to -chattribution model, here is a role that all the other touch points play.

38:21But there's nothing more magical than doing experiments and proving fair enough I saw that signal. But now let me prove it to you by turning on and turning off. So we have moments, we do tests where I would have upper and lower funnel running together and I will only have lower funnel running and I can show you whether I see an impact or not. Now it's also possible in a market, one last point Harry. in a market, it may not have any impact because guess what? Everybody knows you already or doesn't care about you, so it doesn't matter how much you spend on upper funnel, you are not seeing incrementality, then you should pause.

38:57So, do you see in North London an increased cracking account adoption rate sign upright post -tortinum? We've seen it, we haven't been able to attribute it back to just one activation, which is But we have seen a lift. The reason I'm saying that is we haven't done a test which is isolated to just that partnership, but we have proven that the combination of our upper funnel has driven incrementality. What we are doing now is answering that question, which we just said now what about at a channel and partnership level. Tell me what was the best growth decision you made and what did you learn from it?

39:34I can give two, the fundamental learning and experiment is how you think about the engine itself. Like, have you built the engine? And for me, the biggest turning point at Crackin and my go to Jactri is what we did last year where when Audun came on board, we decided that we want an end -to -end growth engine. We don't want it to be isolated between marketing, design, product. We want a growth engine that has end -to -end accountability and ownership that is collectively thinking about are three very simple things. How do we bring the most relevant crack and client into our ecosystem and remove as much friction as possible to make them experience the magical movement for crack.

40:12That's one first, most primary goal, which by the way, marketing and my product growth themes work hand in hand, they are paused, they live and breathe together to solve these problems. The second is figure out whatever way that we can actually build habits so you bring users back to the platform. and together with product build utility that gives them more reason to come back to the platform than just coming back to trade. So that's the evolution that we are going through now as we expanding the aperture of workracken is. And third and most important is do one and two with strong unit economics.

40:45Building this engine and giving this very clear mission I think has been the biggest and most successful experiment. What's been the most tactically successful growth experiment channel spend. The easiest one is our SEO team. We tried a phrase on a landing page, which focused on the traditional ELMR framework. And it said, back in the day, we would say, come to us because this is what a product does, to really changing that, to respond to their psyche. And we changed that to a phrase called trade like a pro. This is what a pro product. And we saw substantial basis point lift. because we were now connecting our core message to the desire that our users had to achieve a status to be part of a tribe.

41:32So like trade like a pro. So there are tons of them like that in our onboarding flow. The decision to partner with an external partner that can shrink six steps into one single step. A single decision to take in the phone number and autofill everything else because you're using a service that can use that as an identifier to bring all your information. In other words, tons of experiments, Harry, that we've done, which I call drive convenient value. So they give convenience and remove by removing friction, but you're able to prove incremental value. Because if you do one, not the other, you don't grow.

42:05If you give value, but it has too much friction, people will not use it. If you remove friction and it's very convenient, but it's not incremental value, then it's still going to be hard for you to use it. It's gross about 1 % improvements, lots of them. They add up, or is it about needle moving swings, new product. Bam! It is 90 % basis point movements, you know, with compounding impacts and many of them, but keep 10 % to still try the next big swing. And that's what we are doing. We're literally two weeks back, Spanoffer, TinyPod, whose entire job is to experiment ideas that otherwise would take months to try and see can we get proof points in three or four weeks.

42:45And the expectation is eight or or a 10 -year fail, but keep trying. But 90 % of our focus, though, is still on base's point movement at scale. Okay, you mentioned like the time to wow. How important is time to wow? It is very important. The user that's coming to you has five other options. And if you're taking, if they're waiting too long, they've already tried. Also, it also depends on the category. Like if you're buying the house, you're only gonna do this once, twice, twice in your life. And if you're a real estate platform, you've got more time. But in a category like ours, people are moving, making decisions by the minute, if the market's moving.

43:21And if you're not there, and if the friction is too much for them to go through, in order for them to experience it, they've already made a choice somewhere else where, you know, there was much less friction. So it's very important to shrink that, whether that is your core experience and onboarding, to activation, or something like referrals to. We were just, you know, we are about to activate our referral program again. But one of the things we were discussing yesterday is it's not just about how many users refer, but it is very important to know how fast does it take for that user to for that new user to refer more users and and how do we create that excitement and incentivize them to do it much early on in their journey.

43:58Final one, we do a quick fire. What do most people think they know about growth that they get totally wrong? That whatever work for anybody else would work for them too. This is what work for Dropbox. That's what work for Kraken and that's what work for Spotify so it's going to work for me too. But if they could look at the underlying playbook, that'll be exciting. The hard thing I find with Kraken's brand, sorry, just inched it by, is that Kraken was always the brand for me for like crypto insiders, for the people in the know. Sure. Coinbase was the one for everyone. Yes, that's spot on. That was the reality.

44:30And I don't know if that's what you want. Not anymore. But that is what our zero to one, zero to two was we were platform of choice for the advanced crypto Dgent trader. That is how we grew. That's why when you look at our numbers, our RPU, the quality of our user is 20 .5, 3 times more than the average retail focus exchange because they're brought retailers. Nothing wrong, but see what's happening though now, Harry, in the 14, 15 years of the category, there's very much like the Metas and the Amazon's and the Google's. They all started with a different starting point. Amazon, you know, with the bookstore, Google with the search and social platform, but they're all converging.

45:07Same thing happening in crypto. We all starting at a different place with a different product market fit. We're all converging and then diversifying now. Final one for a quick fire. What's your North Star today? Number of accounts means jackshad. What's the North Star? Yeah, for the North Star for the growth theme right now, what we call number of transacting clients, step change to our number of transacting clients across the world with strong payback period. And we have a very quantified target for that payback period. And when I say payback period, it's an outcome of LTV retention, habit creation and all of that, because you can't hit an aggressive payback until all those early habits and early signals are humming very well.

45:47Dude, I could talk to you all day. I do want to do a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Oh wow, yes, I didn't get the memo for that. Yes, let's go. The joy of podcasting, dude, is you're going to edit the silence. So just chill. And so if you have TV, it's terrifying. So number one, what growth channel has died a death? Problematic, problematic display DSPs because when it came on, this is my CPG days 2011 2012. That was the thing. But I think it's been the amount of traction and the conversion you get. I don't see that as much as as in other places.

46:25I would have said TV, But on the contrary, I feel it actually works. What is the growth channel with the most opportunities today? Organic social and paid social. YouTube, I change it. YouTube, that's the most under leveraged social platform in the world. Most under leveraged, even though I think it has a highest number of miles. How does AI change the world of growth? Makes it faster, more competitive, more nimble. What is the ideal background of someone coming into growth? engineer, consultant, designer, a combination of all of those things that were isolated skill sets earlier, an engineer who's a dreamer and a doer, a product, a builder, a marketer, a storyteller, and absolutely, you know, a data ninja and an analyst who's obsessed with outcomes.

47:11They can choose to go deep in one or two, but they can't be one or the other. It's an end. What about coin take. Nothing. They are doing great and well and we love the competition. I want everything that we have rooted in crack and to scale and grow and just enjoy the competition because I think at the end of the day it's great for a grateful community. Final one for you. What are you most excited about today? So for me, my mother's got our masks. I'm very excited about what AI does for drug discovery and prevention of relapses. I think it will make something that was previously the incurable, curable?

47:52Yeah, I was struggling because there's so much mess happening around the world, man. It's so tough. I'm a Buddhist and I spend a lot of time every day chanting in the morning and thinking about how we accomplish world peace based on the principle that cause an effect. But if I have to be true to what I dream and think about every single day, outside of my family and my life philosophy of Buddhism, I would say it is to create a world of financial freedom where access to wealth is not limited to a small subset of people around the world. And I'm obviously very grateful that I have an opportunity to live in this part of the world.

48:28I grew up in India and more of the world is not like US and UK. Well, for us, a movement like crypto is a diversification strategy. It's an asset class. For a big part of the world, it is a way to survive and live. So I hope that there is more impetus and focus on the substance of this movement and not the superficiality and the surface. Love this conversation. It's so great when you have like, you know, these schedules and they just mean nothing and you then just have a great and organic chat. It's been fantastic. So thank you so much. And I really appreciate the time, man. Thank you. Thanks for having me, Harry.

49:03Like I said, I've been a fan. Yeah, I'll look forward to staying in touch and keep talking. My word, it was so great to have Maya on the show there. I'm just sad that he sponsored the wrong sports team. If you want to see the full episode, you can find and on Spotify by searching for 20VC, that's 20VC. But before we leave you today, Secureframe empowers businesses to build trust with customers by simplifying information security and compliance through AI and automation. Thousands of fast -grown businesses, including NASDAQ, Angel List, Doodle and Coda, trust secure frame to expedite their compliance journey for global security and privacy standards, such as SOC2 and ISO 27001, CMMC, NIST standards and more.

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