20VC: ElevenLabs Head of Growth on Why You Do Not Need PMs | The 7-Part Launch Playbook That Gets 700K+ Views Per Product | The Truth About CAC, Payback & Performance Marketing in AI with Luke Harries

24:02And then we turned that into like, what's the consistent messaging? What are those short lines we want to get across? So choose an example. We launch speech detects, which is the world's best transcription model. So you can say stuff like this and then they'll transcribe it super accurately. And the key messaging we wanted to get across is it's the most accurate speech detects model. It's feature complete. So it does diorization. It does character level time stamps. It supports 99 languages. That's actually what we spend a lot of time on is really nailing that messaging. How many messages can we have?

24:35If we want most accurate, fastest and fastest, is that too much? So we always have a primary one. So the primary one, which you'll hear me, Matty, the entire team, and all our messaging time and time again is the most accurate speech text model. And then there's secondary ones, so the three that I've said. We then take these core messaging and we turn those into the core assets. We always start with the tweet thread. What's the tweet thread? What's that core hook? That's what we make sure we nail first. And then we make the video as well, which corresponds with the messaging, with the tweet threads.

25:10Sometimes there's multiple videos, but particularly for tier one, we want a fantastic motion design video. We take normally that tweet thread. We also create a blog post, particularly for the more technical launches. and then the next thing we think about is distribution. The way that we see it is we like to cross -post absolutely everywhere. So we post on X, we post on LinkedIn, we post on Blue Sky, we post on threads, every single channel product and Reddit, how can you... Be real, I mean, that way. You're fucking going into the crowd. You have to... The biggest advice I give to like growth people is like, you need to be loud.

25:43You need to like get it across every single channel, and then we actually have an amplified channel in our Slack, where the entire team's in and when we do launch, we post all the different links for the different tweet thread, the LinkedIn, and everyone else will then share their like, their comment, they do them, their own threads. And the idea is we want a strong sound for that day, getting that core messaging across. And then I'm pretty certain the social algorithm see 30, 40 likes in the first five minutes and go like, wow, this must be good content we'll promote it to our larger audience.

26:15100%. And what's interesting is when I speak to new founders, They're like, oh, look, but this is easy for you. You have a 200 person team. You have top investors. You have Harry as a mate who will share your stuff. And what I'd put back to them is like, okay, chances are if you're like getting to launch a product, you've raised a bit of money, you have some friends, you know, a few people in the industry. You should be shameless. I ran this through with someone recently and we were like, let's take your Gmail. Let's literally get every single person you have sent an email to in the last five years.

26:46Great, you've now got 3 ,000 people. Then who's following you on Twitter? Who are you connected with on LinkedIn? Let's just manually go through and DM all of them to boost your launch. And you need to give your launch a big boost for these algorithms to actually care about it. I'm amazed by how nervous people are to ask number one. I'm amazed by how nervous people are to do things that won't scale. For the first 50 ,000 Twitter followers I got, I personally DMed everyone and I suggested that they follow on newsletter as well. Wow, I was cross advertising channels. Yeah, 100 % for 50 ,000. Wow, I'm going to do that after.

27:21On the end of every day, 15 minutes, you just continuously cross -promote other channels. Honestly, it's how we got to several 100 ,000 on each other. For founders that are maybe not as versed, what made us a good tweet throughout? What should they not do? How would you advise me? Yeah, so it's pretty simple. The first thing is like get the first word right. If you're doing a launch, use the word or introducing or where you're excited to launch, make it really clear that you're launching a new product, introducing the world's best feature text model. That's the first line, make it simple, one line get across exactly what you're launching with that keyword which flags it.

27:58Then have a space and then do either a bullet point list or a paragraph going into a bit more detail, maybe some of these secondary value props you want to get across, and then attach the launch video, which you spent lots of time working on. To the first one. To the first one. Yeah, so that's then your first tweet. Then you could do a thread going into more information, maybe adding supplementary videos. And then the way that Twitter works is when you do a tweet. What will go out there and other people will see on their feeds will be the first tweet. Then the others will actually be minimized and then the last two.

28:30So you should put the call to action and the link in the very last week. And actually you should make that second last week great too. Don't put the link in the first tweet because Elon Musk has even said they actively downrank people when they do that. We do them for every show. Yes. And it's a real science in that respect. On the blog post side, people are going, hey, no one reads blogs. There's still a point to blog posts. Yeah, 100%. So two main points. The first one is for technical audiences. You need to go into the details. You need to show the benchmarks. You need to give a little bit the secret source of how you put it together.

29:05Go into those technical details. And the second one is SEO. Lots of people think SEO is dead. but it's really not. And so every time you do a launch, you want to have a key blog post or landing page that you push and you get all the backlinks too, whether that's across press, whether other people linking to it, whether from socials. SEO is not dead. No. Will it be in two to three years? When we see the shift in terms of users and where they come from, more and more, I think, you know, Guillermo from the cell said it was one and a half, six months ago now, it's four and a half. In two to three years, do you think we will see a much reduced SEO presence?

29:40With the SEO, there's different types of SEO content. The first one is blog style content. This is, you know, long words, long form articles. That I think will increasingly die over time, but actually it's not dead yet. If you look at Zapier, over 70 % of their SEO traffic still goes to their blog. That's definitely not dead yet, but I think will die because you'll be able to have chatGPC, give you a really great response, it will have scraped it and gested it. But the part which I am confident or StackRound for at least five years are tool pages. And so this is where to give you an example, if you search Text to Speech Spanish, the first result would be 11 Labs Text to Speech Spanish, which is a text box where you can type in any Spanish you want, choose a voice and click play.

30:24And so that requires a match of Winch Nearing Work to make this text box, we do the same with Speech to Text. You create these mini tools, often with proprietary data sources, also match of Winch Nearing Work. And that's going to be a while before these LLMs are like spinning up whole dynamic pages. And by that point maybe even bets are off because they're kind of replacing your product on the fly anyway. How do you advise founders on mini tools to show the value of a product when it's actually an enterprise product? It's really difficult. If you have a lane enterprise product and honestly, people won't buy without some sort of try.

30:58It's pretty hard to try and commit the resources to doing that mini tool. How do you think about that? This is why I think right at the start you should hire a growth engineer, that's friend and focus that can independently be focused on building these and exposing these small bits of value out so that people can get and experience a value as quick as possible. If you go to the 11 lab homepage today, we have one text box where you can type in text, play speech, but we also have all our products are in these little text boxes. These are outside of the login and that people can try. So the challenge I give to you is don't expose your whole product, don't give it all away for free.

31:36But what are these small bits of value that you could give away for free so people can experience that while moments as quick as possible? You said about distribution and cross -posting everywhere. Yeah. Blue sky and wow threads. I mean, okay, I'm glad someone posts there. My question to you on that is, should we not choose one or two channels to absolutely crush and focus on versus spray do both. So first of all choose the channels where your audience are. So for us that's X and LinkedIn, make sure those are really great. But then after just repost it for the others because there are people on the other platforms who for some reason prefer threads or blue sky, you want to reach them too.

32:12And also because other people are overlooking those channels, you have a much greater chance that you'll be able to own them and build an audience there. Is it the same audience on X and LinkedIn in or different. Largely different. We see X as mainly for our creator and developer. We see LinkedIn mainly for our potential future employees, potential partners and enterprises. But we write the content in a way which tries to cater towards both. Do you have TikTok and do you think of TikTok as a guest? And we've actually just hired our first in -house creator, whose only job is to create TikToks, YouTube videos, Instagram shorts, YouTube shorts for 11 apps.

32:49And the way we actually hired this guy is if you typed in 11 labs on YouTube, he had the most viewed video above us. And so we were like, okay, he's creating fantastic content. Let's actually hire him supercharge him and particularly for this creator audience and having someone who can speak to them as a creator will release supercharge growth. When you look back at the distribution, the channel strategy, what mistake do you think you made? The mistake I think we made is not hiring early enough. We had super strong PMF right from the start, we had channels working right from the start, but we didn't actually have anyone focused on certain channels.

33:28So for example, affiliates, we set up over a year and a half ago, and that now is bringing in over, you know, tens of thousands of dollars of MRR per month, but this was set up a year and a half ago by one engineer in one week and then no one's touched it since. And what we should have done is, once we've seen signs of life, given we already have PMF overall, staff, one person who can focus on growing that one product, and those one set of KPIs, and nothing else, keep them laser focused. So yeah, overall, I wish we had staffed up more channels with more dedicated people sooner. When we think about a channel working, what does that mean?

34:04I had this conversation with our team because you know, we have, like, not a, I think 300 ,000 followers on TikTok and millions of views a month. Honestly, the conversion back to the main pod, not clearly attributable. Yeah. Maybe it's there, but not clearly attributable. Is that working? I think social channels are tougher for core performance marketing channels. It's very clear. Is the cat less than the predicted LTV of the person? So for say affiliates for different paid marketing, that's super clear. With organic and particularly enterprise marketing, trying to gauge that relationship is much harder overall.

34:39and instead the way I do it is you have to look over a longer time horizon and allow for more fuzzy attributions. So for example, we're going to be doing a big enterprise marketing push in San Francisco. We're doing billboards, we're doing podcasts, we're doing newsletters, we're doing events on the ground. And we're not going to measure any one channel in isolation, but instead we look over the campaign. What was the relative lift in number of leads in that geo compared to a comparable like New York or Seattle? So it's converted dollars, it's site visits in that geo. Yeah. How do you think about North Star, which actually determines value?

35:14What we've landed on for the marketing, so this is the enterprise marketing team with the enterprise part of our business. What we've landed on as our North Star metric there is number of marketing source sales qualified leads. Marketing has identified a lead, someone signed up for a webinar, an email or even signed up from the product. We've managed get them to book a call with an SDR and then that SDR has said yes this person's great And so that's our North Star metric and the entire marketing team is focused on how do we drive that number up webinars? Yes, that's the thing It is a thing it makes me think of like you know the like kind of phones for you customer support with the weapon We know hello, this is Krakki, Root your webinar So webinars do definitely work.

35:59The key issue with webinars is the name webinars. And so I would argue that what we're doing now is basically a webinar on growth. The only thing that actually we're probably missing is like one, we're not live streaming it, two, we're not doing email capture. But then you can then take this podcast and then you can repurpose it and push on all the different platforms. I think OpenAI did something quite smart recently where they called it OpenAI Academy, which is basically a webinar platform. They're putting on videos for businesses or videos for educators and they're doing email capture They're effectively doing webinars, but because you're calling it Academy and it's focused on giving value I think it goes down a lot better.

36:36So yeah, I think we'll be rebranding 11 apps webinars to something else soon I'm gonna throw out some bold statements. Yes, topics we mentioned you said cat to LTV. Yes. Does cat to LTV Matter because it's so inaccurate and transient and it's a reason being your cats go up and down very quickly over time. And your LTVs, as you expand product lines, can significantly expand. I come in as an entry product and suddenly I'm using 405. Does it really matter and can it not mislead you? Actually, the day -to -day metric and ratio we're really thinking out is cat -to -payback period rather than cat -to -LTV.

37:12We set different payback periods depending on which product line and how aggressive we want to be, but these vary between, say, 12 months, 24, maybe even 36 months for that payback period. And the 36 would be for the heavy enterprise. Yes, exactly. Where you know the customer's going to retain, there may be even signing multi -year deals. And the way we set it up is each different channel has a marketing lead, and they're thinking about this ratio. And if it's positive, that basically means they should be putting their foot on the gas as quickly as possible. You're exactly right though that over time you may be able to increase your payback period sooner.

37:47So for example, you may lay in an enterprise product and then you can sell your creators onto your enterprises. The way I would think about this for other companies and as well as for 11 lapses, you set this goal. If you're above that ratio, if the ratio is looking great, you should absolutely be putting your foot on the pedal and be trying to grow as quickly as possible. Some people go, oh, we're just raised our performance marketing spend by 20 % a week. Well, no, like take advantage of the opportunity, gross as quick as you can. On the other side, if it's actually below, you could give yourself more freedom, because maybe you've got a bet on the thesis of how it will play out, where still you're like, okay, yes, we are losing money over the first two years for this product, but that's a bet we want to make.

38:28But actually, if your marketing's going very well, which the lots of these great AR companies there are, then actually it's more just like clear permission to grow as quickly as you can. Do cats go up or down over time? When you think about it, from different purviews that you've had. Brand marketing becomes a thing, word of mouth, you can see viarality in communities, one would think it goes down, but then also you saturate your core audience and you move to a less defined ICP, maybe it goes up. Yeah, it would have been your observations on cat going up or down over time. So for specific channels, they do tend to go up, but when you look at it broadly and as you're adding new channels, when you're increasing the viarality, when you're improving your activation rate, your conversion to paid, Yes, you can kind of get that overall blended cat to hopefully even just stay flat but exactly as you said before, because you're able to layer in say enterprise products you cannot sell to.

39:19Or we actually have done this funky move that we've led in a consumer product which enables us to get the cat incredibly cheap and then people may move up to creator or even enterprise. Is the future of enterprise consumer entry? And what I mean by that is to your point there. At the end of the day we will forget that everyone is a consumer. Yes, every big enterprise user is a consumer at some point. Is the future of enterprise consumer entry? I actually really hate the word enterprise in general. Bolt. For a while, within 11 labs, does this phrase of like, we need to sell to enterprises. But who are the enterprises?

39:53And I was like, let's work together, let's refine who exactly they are. And we basically worked out, they're normally like engineering managers or product leads at these larger companies. Sometimes the CIOs or CTOs are involved too. But first step is like, okay, let's actually define who are we selling to. And then you do realize, okay, wait, they have so much overlap with our developer audience and our developer marketing. And maybe it's not about doing long white papers and executive dinners. Maybe it's actually more about this bottomed -up approach. But zooming out the bit we've actually landed on at 11 labs is, we want to grow super quickly, we want to try and get, and work with all the best companies in the world.

40:30Why not do both? And so what we've done is spin up separate teams. So we have an enterprise marketing team, which is just focused on going in on the top They're like how do I get these SQLs which are marketing sourced they're doing executive dinners. They're doing the events. They're doing the webinars which you love So they're doing a VM like personalized outreach very tailored. Yes very tailored and then on the other end We have a developer's team which is developer advocates which are focused on this much kind of broad -scale awareness We're doing hackathons, we're doing different events from the bottoms up And so they have completely different goals but kind of work in tandem with these roughly overlapping audiences You mentioned to push in billboards and in podcasts and all these How do you think about when's the right time to do brand marketing?

41:16Ideally, you're doing it right from the start if you're trying to build a massive company You want people to join you for your mission and now how that may look like over time may switch But right at the start, I'd really be thinking about engaging with your community. Like you said earlier, you're messing every single person on Twitter that follows you, that's you building your brand, that's you as a person being related to. So ideally you have right at the start and it comes from the founder of them putting themselves out there being authentic, then building it. And then yet, so the time you can scale that into different brand awareness campaigns.

41:49And I think you just need to choose that ratio of spend which you're happy with. Maybe that's 20%, maybe that's 70%. I think it depends how well your other channels are working. You said they're about kind of found out putting themselves out there. Yeah, how important is found at Brown today? I think it's incredibly important. It's also those super tough and very distracting. It's a commitment. It's what people don't recognize. It's not like I'll do a post. No, you post every day. You post every day, you're getting the dopamine of likes on your LinkedIn posts, likes on your ex -threads. I think it's quite risky because you can spend all this time actually then optimizing for the wrong thing.

42:27The way we think about it at 11 ads, it's like, what channels really naturally resonate with the founders and do they get really excited by? And so for us, Matty is fantastic in person at large speaking events at FASI chat, and so that's what he really leans into, equally he's not that excited about being active on Twitter or X. He naturally isn't that active on those platforms and that's fine. And the way that we've done it is we basically kind of have other people within the company, which are instead active and pushing. So I'm quite active. The developer teams quite active. And instead we're pushing the company mission through channels.

43:01We get really excited by. I also always think that just because you focus on one channel, speaking, say it if that doesn't mean you can't go multi -channel with that. And so I would be like, hey, how do we get video editors to go to every single thing that he does? Yes. get him speaking for 10 months and just fucking pummel TikTok Instagram YouTube Shorts with Matty speaking at different events. You could do that, but you then constantly see yourself going viral on these channels, maybe you're getting negative comments, largely positive comments, but still putting yourself out there. And so actually if you're not naturally that excited by it, it's a big distraction.

43:40And the way I view startups is their long -term games, their 10 year, 20 year long games. And so you need to stay in that and also recognize like, what do you personally get really excited by? Do you believe that there's no such thing as bad press essentially relevance is everything? I think that is such thing as bad press, particularly if you're trying to sell to enterprises. Deal would be bad. Yeah, deal. They're in a tough spot. Another good example is, have you seen this company which raised $4 million? Oh my god, the fight the eight. I saw it Lichy and what Roy something raised five points Yes, what's cool is the cheat on anything.

44:15Yes. Yes. Yes. So they've done gone for cheat on anything. Their founder led marketing is him getting offers for Amazon for palliative at Google and then telling them actually, oh, waste, I cheated on it using my tool. And that gets fantastic marketing. But he's also posting a big black ex on himself if he ever actually wants to sell to enterprise sales teams where you're like, ah, do I really trust this person? You know, I think it's a risky move. Do you think so? Do you think it's just a good entry point to build that brand? Because actually, do you know what? In six to 12 months time, when he's got experience sales reps in there who are actually selling real products going, hey, we work with Ripley and we work with the Lavender Arbs, you can get away from it.

44:55Maybe, but I think the core of your brand needs to be authentic and it needs to come from a place where like you really believe in and everyone is going to remember that company as the one which helps you cheat on their different tests. which is fine if he leans into, okay, I want to sell the more consumer type I help people in their day -to -day life. Maybe that's absolutely fine. But I think if you're trying to do like large -scale enterprise sales where you want to be seen as the trusted partner, which often you do and that's the differentiator, then I think it is a more risky play. People often forget how difficult it is to shift a tag being calm, everyone goes meditation company.

45:33Yes. And it's like, that is not what they offer them. and they really try and move away from that. And it's just very difficult when you become very well -known for something to lose that original tagging. So I think you need to be really intentional right from the start. What's the different messaging? Who do you want to resonate with? Who do you want to stand for? And for us at 11 ad, we want to be the super trusted player in the space, both for voice actors and the large enterprises. How do you think about competition and how do you advise founders on competition? I think it's a great way to counter position against other brands.

46:05Pretty much every space you go into, there will be existing large players. There's a couple of different options which works. The YC1 approach which often works really well is basically just kind of ignore them, put on your blinkers, speak to your customers, make an incredible product. I think that's really smart for product development. But I think what Ramp has done with their counter positioning against Brex is just genius marketing. So you've taken it into position twice. I love 7 pounds and so for me it's like, you know, incredibly exciting. But what is counter position in person? Counter position is where you take what someone else is like core messaging or core positioning in the market and you take the exact opposite and you use that as your strength rather than your weakness.

46:49And so the example where Brexit's Brexit really stood for like, hey spend as much money on your card as possible, we give you all these fantastic points. and it's kind of like, look how many extra points and rewards and stuff we're giving. And then RAM took the exact opposite approach, which was, hey, we're not going to give you any points. Points are a waste of money, points who end up spending on stupid things, instead we're going to punt that all back into software. As soon as they made points an actual bad thing, and got the whole market to think about points being bad, let's use it to invest in great software, and the focus instead being on saving money, and almost reducing the number of these imaginary points you're getting, They were really well counter -positioned to basically every time Brex would do something, they'd be able to ref off the other way.

47:31I'm just thinking how we could use counter -positioning effectively. Yes. I'm just in a world of really long podcasts, where it's three and a half hours of Joe Rogan pontificating about planetary evolution. You could do a three -minute episode. You know what I mean? Just the best bit. Yeah. Well, I think you did that right from this. You were 20 BC. You were short. You were concise. You were a counter -position at the start. The interesting thing is you're now kind of the incumbent and people have moved on or not moved on No, the amount of people I get the message me like we're gonna start the 19 minute VC.

48:04Yes. Yeah And you could keep going how to the 18 making I saw one great example recently was the I think it's TP And at the new TVPN. Yes terrible name, but great content and they were like this is interesting Yes, and I'm gonna get in trouble for this but fuck it. I think it's Clubhouse of our era and so they have brilliant channel market fit Yes, which is they crush it on Twitter for very specific clips when you look at any of their view rates Very little when you look at their retention on engagement rates Fuck all but they have brilliant and this is not a criticism then crush channel market fit They have brilliant for Twitter for certain types of videos, but they also do volume It's a spray game clubhouse.

48:51We will see, I think they're still evolving what their actual product is, but they found this as you said, like channel fit. And to jump out to the counter positioning, they've done the really the funky thing of their like, okay, they've counter positions against all in, where all in was like no ads, they're like we're gonna be all ads. And they're like tech crunch is going more the vibe or maybe not tech crunch, but traditional media is going more the vibe of being like anti tech, they're like no, we're going to be completely protect. Others are going like, oh, we're only polish button up the clean cuts.

49:21They're like, no, we're going to be like streaming live content, the raw stuff. So. And also they're like smartly dressed. Smart. Yeah, no tech bro. No decent stuff. They're like, sure. And they look really formal. I think they've been really smart. So I didn't mean that as it takes down. But I think it's interesting. Dude, we were breaking down the teams earlier. You have a weird element, which is, you said this before, you don't have PMs. Yes. That's why, explain this to me. This is like the only grail of product teams, no? And for context, Harry asked me this in front of an audience of about 1910.

49:54Only PMs. You know, only PMs. And then he raised your hand and it was like, oh my god. So the reason we don't have PMs is our overall thesis is that engineers are building the product and they should be responsible for the product. And with AI now, we're seeing much more like different traditional roles merging. And so engineers are going towards product engineers or engineers towards growth engineers. And what's fantastic is when you have product engineers and the engineers who are actually building the product they own the roadmap, they can go from idea and chances are their ideas are better and more right because they're the ones speaking to users and understand the context.

50:34So they can have better ideas, they then ship the product, they then get the results and analyze them and they do that in our loop without needing anyone's self permission or or anyone to slow them down. So that's why I think the ideal setup is engineers own the product and they're responsible for it. Now we then instead of having PMs or a separate marketing function, which is kind of like three separate functions, engineering product marketing, instead we've merged a lot of product with a lot of marketing and called that growth. And most of the team actually is XPMs who are now doing growth. And so they're responsible for the marketing as well.

51:11And so now each different product has an engineering lead, which is responsible for how great is the product overall and They partner with the growth lead which is responsible for particularly the awareness the acquisition and then they collab on the activation and retention pieces How do you prevent the growth role which is a lot for the PMs? Just slipping into a PM role again and trying to actively manage product and kind of over -engineer with the engineers We keep the growth teams pretty small. And so, frankly, there's just not enough time to be meddling in the different engineers work. You're not going to be doing wireframes or going to be doing large numbers of user interviews because you're too busy running the launches or running the channels for that particular product.

51:55So that's one is like, we keep it pretty busy and lean. And the other one is, if you hire great engineers, they just don't need it. And so the best engineers we hire, we put everyone through a product challenge, which is where we give them an imaginary product, And we asked them step one workout what features you should build like imagine I'm a customer imagine you're doing research They will actually go through on Google and find competitors and use that to shape the features So step one is workout what features to build step two They're then gonna turn that into the actual wireframes and they'll be sketching out in figmerv like okay This is why I think the product should look like and then step three is you have system architectures So they're like okay This is the different back end the API design and if you hire an engineer who one you know is really strong at coding because you've screened for that before.

52:41And two, you've then tested them through this full product loop. Like you have confidence that they're able to take those products and those features from idea to launch. Do you think we will see PMs reduces a role in future tech companies with AI becoming more and more prominent? Yeah, I think PMs move to either growth so you combine the PM role with marketing and depending on your size and how strong your engineers are, you do more or less of the PM. or many pms will actually move towards product engineering, which is their somewhat technical already. They can actually upskill themselves using tools like cursor or lovable and actually go and ship full end -to -end products.

53:19Can I ask you today, when you think about 11 labs code, how much of it do you think AI generated? So I still write code, probably 20 % at the time. The only code I write is through cursor, where I'm describing in the chat what I want done and then it executes on my behalf. And I'm probably more the extreme because I'm often doing like growth features which are adding on top of the core of the product. In terms of core engineering, I would say probably 60, 70 % of code now is AI written. So still like the majority where we don't do any AI written or AI generated code is our research engineering where it's just like research engineering and research where it's a very different style of work.

53:59And also these code bases are so sensitive when you think about the initial 11 labs launch and how quickly we got to a billion dollars of revenue That's pretty much Peter's models being world class and so that we just don't want to go through any sort of LL Was that a million dollars of revenue? I said billion dollars of valuation So and I think truthfully at that point it was like probably half the enterprise value of the company was Peter's model nuts. Unbelievable. Can't you, we mentioned, I'm really jumping around, but fuck it, I enjoy it so much. We mentioned like the enterprise discussions you had earlier, moving into enterprise.

54:34The big concern with a lot of essentially these Genai companies today is that they're sugar high revenues. They're unsustainable. We've seen them both. They hit 50 millionaire. Wow, wow, wow. But it's like, is it real revenue? How do you think about, do we have a generation of companies where it's pretty synthetic revenue or not. You know, it probably varies by product to product. But if they're solving a real problem and the retention is strong, I see no reason why these aren't real revenues. And the thing that I've spoken to a few VC friends, I don't understand why they're not upping the rate of their investing.

55:08They're seeing companies which are now they're like, oh, I was already on $6 million, MRA in like one year. And I'm like, why aren't you investing on it? And they're like, well, there's this other one, which is now on like 10 million dollars of emerald. You're like, surely now is the time. But the wrong time to be the Tiger Global Play of investing quickly was back in the COVID boom. The exact right time is now, when I think you have this unlock of capabilities with the AI models, which has meant new products which just couldn't success before. I think the hardest thing is before there were two to three competitors.

55:41Now there is literally 10 to 15 on everything. And so, Descerning winners is much harder when all of them have relatively impressive traction and right. Yes, but as long as they're solving real problems and scaling quickly and the customers are retaining, particularly if you're doing B2B or enterprise, you're going to get that cohort of customers for a while. And so if you're already on $10 million of revenue, if we think that it used to be the threshold for IPO was like, oh, let's get to $100 million of ARR, you actually have entire waves of companies which are now are reaching those thresholds.

56:16What is good retention? This is a hard point, which is like in traditional enterprise, it was like very, very high, very high. And you'd look at like a lovable with like I think they're 86%, I think Anton said on the show. In traditional SaaS, that's still shit. You're churning 14 % a month. I think people largely think about retention for consumer and pros to you move wrong. So for enterprise, it's very clear, which is you signed one contract, to say you sign a large enterprise, hypothetically Slack, and you land them one seat and then you expand and then you can look through and be like, oh, our NRR after one year is we're now on 150 % NRR.

56:57Great, that contracts are own. If you think about the way it's actually grown underneath, it's like seat expansion within Slack, and sure lots of those individuals have churned on an individual user, they're probably not growing their individual's users revenue more than 100 % instead of you're growing within that account base. And I think when you look at consumer and prosumer, yes, for that individual user, you may only be on 87 % revenue retention. But what then happens is you build a product unlovable, you then share it with a bunch of your friends, hand for more people sign up to lovable.

57:30And so when you take into account the natural virality rates, I think your overall LNRR of that one account you've grown may actually be a lot higher. You should still look at the individual like seat retention, but I think it's fine to have it below the hundred percent on the individual level. And then when you zoom out and taking into account the organic growth, which comes because of it, that you do want to be over a hundred percent. You know what was nuts is actually the fact that the revenues are growing so fast by the time the rounds are done. Yes. I mean, when we did loveable, I didn't travel this revenue by the time the rounder completed.

58:03and I was like, I would want to retrain on price. Like, if it was only a 10 out of 10, it's revenue multiple when we did it. Yeah, yeah. Fucking nuts. Yeah, we both invested in love all. And at the end of Q1 on 11 ads, we did very well. We had like our best call forever. We had more enterprise using it. We had more consumers, more pros, consumers, I was like, taffy myself on the back. You know, growth team was like, we did pretty well. And then we got the email from Loverball with their latest results. I was like, okay, we need to up I game a bit. Back to what, no one leaves the office. No one leaves you.

58:33Don't let Matty see the email. Don't let Matty see the email. What do you actually think happens there? Does loveable become a $10 billion company and change the way that we create websites? Does it do Squarespace, Wix, E -D -L -A, adopt similar process? What happens? I think there's a few ways they could go. Overall though, I'm just very bullish. I don't see a reason that the level of intelligence in these AI models will slow down. And so given that it will keep rising, I think you're going to see more and more engineering. We're already at say 60 % of all our code being AR generated. Then you have like the broader lifecycle level, the testing, deployment, infrastructure.

59:11There's no reason why any of that couldn't be all done by AI as well. And so I think loveables in a fantastic place to own that core stack. The tricky bit I think at the start is how do you make it super secure, how do you get enterprises to build it, how do you do for labs? and I think retool is kind of dead at the wheel at the moment. I don't hear the recent things they've been launching and so I could imagine that love ball going in that direction. You're cringing. No, I'm with you totally. I remember when they were the hottest company. Yes, yeah. I shouldn't have heard anything. Yeah, it's tricky.

59:44It's tricky. But I could imagine that love ball you sell to a large enterprise, you get behind their firewall, and you just keep as an intern lap, then you can massively expand within that with far less risk, Maybe make it read only seats as the primary use case, but I'm toned super smart. I'm sure her workout. I totally agree. I love lovable and I think they're fantastic. Do you enjoy angel investing? It's fun. I missed 11 apps. I'm not sure how good I am. We had Runner the running app and they just did fantastically well. That's my first exit. They just sold to Strava. Yeah, it's incredible team So I just find it as a really fun way to partner with people who I really back Dude, I want to dive into a quick fire.

1:00:23So I say a short statement. You give me your immediate thoughts. So that sound OK. Great. Number one, what's the most common or expensive mistake that you see early founders making? The biggest mistake I see early founders making, particularly for B2B, is doing paid marketing too early. Because if you don't have PMF yet, you're not going to get paid marketing working, and you're going to spend all your time and all your engineering time optimizing funnels and conversion and creating these different creative and ads and caring about your rankings and your meta metrics. None of that actually matters, and apart from just build an incredible product, and I think the core loop of do incredible launches and build an incredible product is enough that any B2B, your ProSumer product, to get our initial product market fit, and then you can start testing out different page channels.

1:01:11The caveat though, I'd say, is if you are consumer, distribution with B2B, you basically know if you build an exceptional product, you can start the sales team to it and they'll be able to scale it. So distribution is not as much of a risk. With consumer, it's very different, where distribution is a key part. You could create an incredible product, but if no one hears about it, then you can't scale it. And so instead, you may want to consider performance marketing earlier, but again, I would try and lead to other channels, but you also increase brand. I totally agree with you. The one thing I've paid really helpful for is if you're a strategic around how you use it for testing.

1:01:45And so if you use it for testing on different messaging. I've never seen that work. Have you? I mean, I've seen people waste a lot of time. It runs on a media business. Oh, I might do it in a title optimization. True. And different color optimization, different font optimization. But when you were making your first episodes, should you have spent more time ab testing different podcasts? And maybe Harry instead of 20VC could have lent more into product to growth earlier? No, it's just like... Brute Force more show. Yes, exactly. Build a better product first and then lean into paid. Totally, that was a shit suggestion, how I...

1:02:23What's the most underappreciated growth channel, Steve? What do people not do, do you like? The most underappreciated growth channel I see is organic LinkedIn. On Twitter, you're competing against the best writers in the world. You're competing against Harry Stebings running short. Bill Ackman. Bill Ackman. It's really tough. On LinkedIn, you're competing against Freddie from Deloitte who got a promotion. And so the bar to creating great content and standing out and being authentic is so much lower. That is so true. LinkedIn is unbelievable as a content engine today. I think 100%. 100%. What's the most polluted channel that you're like, oh, stay away.

1:03:01Actually, LinkedIn ads. So LinkedIn organic is fantastic. The bar's so low you can get stuff super viral. LinkedIn ads, the CPMs are so high. Yes, you can do great targeting, but actually I would argue, invest a lot more time into creating excellent content that you distribute organically. Maybe you want to lay around ads on top, but particularly the kind of people that are then running LinkedIn ads. You're doing enterprise, you're doing heavy products with long sales cycle. It's really tough to get that working and instead I would just focus on the organic side. What's your advice to someone starting a new role in growth tomorrow?

1:03:36The biggest advice I would give is get great at copywriting. When you think like the actual writing writing, writing words, how do you make something engaging, how do you get your message across? Is so fundamental to any bit of growth you do. So whether you're running a LinkedIn ad, if you're doing organic LinkedIn, if you're doing a blog post, a tweet thread, if you're doing copy, if you're landing pages, get great at copy, as that's the foundation for all other growth. It's fucking fantastic, podcast. You know why you're actually a brilliant podcast guest as well, and this would be a big advice that I should actually tweet.

1:04:11And I probably will do later. you repeat the question at the start of your statement, which is so helpful for shorts. Do you see what I mean? You say the distribution in mind. Totally. But you say the biggest problem people make with X. Yes. Because the worst thing is when people just go, oh, they do this. Yes. That's really hard to short formify. Do you see what I mean? Yeah, yeah, yeah. Many reasons why I'm single. It's because I get excited by that. What would you most like to change about the world of growth? I'd most like to... You've made me aware of now doing it. Come on. The thing I'd most like to change about the world of growth is you just should not launch products, which aren't actually ready.

1:04:49The biggest villain I see doing this at the moment is Apple. And so we've always held Steve Jobs in our mind as just like this beacon of marketing and product and engineering. And now you have Apple pushing that the reason you should upgrade to the newest iPhone or upgrade to the newest laptop is because of Apple Intelligence. Well, as no one actually knows what Apple Intelligence is or how to use it or get any value from it. And it's not coming out until 2026. It's still not out. So why are they pushing in their marketing? Instead, make sure your product is actually ready. That it performs great and then ship it and push it hard.

1:05:21They did kind of change their whole AI team, I think, as a result of that. What if you changed your mind on in the last 12 months? The biggest thing I changed my mind on in the last 12 months is whether voice AI agents or conversational AI agents actually work. And so when I joined at Leavenavs, we have this fantastic box where you could type in text, generate life like speech. And Matti was saying like, oh, soon you'll be able to have full AI agents that you can have natural conversations and they'll sound really human like. And you could use that for sales and for customer support and for relationship coaching.

1:05:55And I was like, that will never work. The latency will just be too high. You won't be able to have the sub 200 millisecond interactions. I was completely wrong. And so on about the 20th customer that us set to Levin Labs had helped build these conversational AI agents, we were like, okay, let's actually turn this into a proper platform and build conversational AI as a feature. And now it's, I actually prefer speaking to an AI customer support agent and a real person because they're more knowledgeable, they know exactly how to solve your problems, they can escalate, they know all the policies. You also don't have to be fake polite.

1:06:29You know what I mean? I know that you don't have feelings. So what's this? What's that? Yeah, I totally agree. When does the infrastructure layer become the application layer? And what I mean by that specifically is like, you could be Synthesia, you could be Hagen. Yeah. Why does the infrastructure layer not become the application? I think it does. But you as the infrastructure player really need to partner with companies and be very explicit around which areas you want to go deep on. We want to build the best platform to make these end -to -end conversational AI agents. But we explicitly don't want to be building full digital avatar platform.

1:07:06So that way we're able to be trusted partners to companies like Hey Jen, Synthesia, Captions who are customers, but we're able to build these fantastic infrastructure layers on top. You know, I invested in Captions. Really? Yeah. They're doing great. So I invested in Captions. This is the show's help. The theory driven by Amazon investor. And invested when it was basically a B -real competitor. Wow. And then a year later, a friend of mine texted me saying, like, we've got to invest in this company captions. And so I found the founder on LinkedIn. I messaged him, oh my God, it would love to find a way to invest.

1:07:39We love captions. And he's like, dude, you already invested. And I'm like, say what? And he's like, we're a pivot. You remember me? You remember me? I'm Guraav. And I was like, oh shit. Anyhow. But I'm sure you really helped him through that pivot. and it was very useful having your advice. Listen, I don't want to say I'm like a co -founder, but it was up there. Why is inbound SDR as a role dead? If you think about the actual function of most inbound SDRs, so with an enterprise sales cycle, someone fills in a form, they then need to speak to an inbound SDR who basically goes through bank screening.

1:08:19So they work out, do you have the budget? Do you have the authority? Do you have the need? Do you have the timing? If yes, they then book you into another call with the AE, which actually closes the deal. And so the function of an inbound SDR, I'm sure the best ones are persuasive and they're friendly, but really the function is data collection. And so instead, one, why don't you just add that to the form in the first place? But the reason is, people don't really want to go through this back and forth and go into more detailed questions and, you know, trying to design these complex flow charts forms and so instead you can switch out her conversational way iAgent which can completely replace that role and then get the people who should be booked in with AE's much quicker.

1:09:01You could even clone the voice of the AE's so it's like them almost pre -screening for their own deal flow. I love that as an idea. That'd be very funny to do. You could do a lot of very funny things with your promotional videos by the way. Yes, what should we do? Well I think you might also get in the realm of copyrighted problems. I guess. But like I didn't know if you're allowed to like use like Trump's voice and Obama's voice and like just rip. We're not. And actually we do a whole bunch of different safety work to make sure like it's explicitly used where people give permission for their voice on the platform.

1:09:32Don't do that kids. Yeah, I remember when I met Victor from Synthesia the first time like five, six years ago. He was like, imagine we could have like Trump declaring this and doing this and I remember being like, no, no, no, no, that's not right there. And I didn't invest in the seed. Oh, I know. No, well, he's done great and I know they've, they take safety very seriously as well. No, they do absolutely sorry, that sounds terrible. He's so good, I like him and stuff and a lot. Final one, what's the best growth strategy that you've just been really impressed by in the last like 12 to 18 months?

1:10:06Yeah. The best growth strategy I've seen is what Brian Johnson is doing. His marketing is so good that they made a Netflix show about his marketing and I do think Brown Johnson's actually being authentic. Like he really does care about longevity, about creating great products. But he's put himself, one is like, it's just super controversial what he's doing. If you look at the way he dresses, it's like definitely not normal clothes. And if the things he's doing, he's doing like bloodletting and blood transfers with his son. One, he's just generating a lot of controversy such that, you know, we're speaking about him now on this podcast.

1:10:43Two is they've really dialed in the messaging. So like the don't die is super catchy and they've built a brand around it. They built a community like their brand building is just fantastic. And then their distribution he's constantly on Twitter like anytime someone talks about doing a late night or eating junk food or pulling an all -nighter to ship a feature. He's there like telling them off. He's there. In the comments like wouldn't have done that if I'm you. Yeah, I saw that. Or he's quite sarcastically funny. Jason can I kind of sweet it like a bit of doughnuts? He was like, sign me up, I'll take the box.

1:11:16And it's just really funny to see him engaging in that way. Yeah, 100%. I mean, he feels it is really authentic. Like he genuinely does care. I think he's genuinely doing it in a good way. I have that longevity shake in the morning. It's a good. It's fucking brilliant. Wow. And I'm on a subscription. It's 60 pounds a month. Yes, yeah. So I'm 720 a year. No way I'm fucking sure. And I guess my cash, I take it when I travel. Yes. in a little, I look like a drug dealer, I've got like a cellophane bags of his stuff, but it's amazing, I'm totally with you. Dude, this has been so much fun. Thank you so much for doing this and it's been so good to have you in the studio.

1:11:53Cool, thank you so much Harry. I have to say the joy for me of doing vertical shows is just learning so much from amazing operators like Luke. If you wanna see the show, you can find it on Spotify by searching for 20VC. I always love your thoughts on the show. So you can let me know by emailing me Harry at 20VC .com. 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 secureframe to expedite their compliance journey for global security and privacy standards, such as Sokto and ISO 27001.

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1:15:38As always, I so appreciate all your support and stay tuned for an incredible episode coming on Monday.