Adam Fishman: Takeaways from Lyft and Patreon; How to Build Viral Loops | 20VC #897

Adam's Career Trajectory

• Started as a "quantitative marketer" pre-Google Analytics, focusing on web analytics, experimentation, and front-end coding in Excel.
• First major career jump was joining Zimride as Head of Growth, which pivoted to Lyft within four to five months.
• Learned to scale businesses at Lyft and shifted to a "product-led growth" practitioner model at Patreon, overseeing marketing, sales, ops, and customer success.

Key Takeaways from Past Roles

• Lyft: The primary lesson was the impact of speed on decision-making and maintaining a healthy relationship with failure.
  • High velocity allowed for rapid reversal of decisions, reducing the permanence of mistakes.
  • Established a personal benchmark for new roles: measuring the organization's speed to move.
• Patreon: The critical lesson was respecting and revering the customer (specifically creators).
  • Growth teams risk being "bulls in a china shop" with a "growth at all costs" mentality.
  • Creators have powerful megaphones; ignoring their feedback on product changes leads to severe backlash.

Managing Failure and Decision-Making

• Learning from Failure: Growth requires a "thick skin" as professionals will be wrong more often than right.
  • Failures are acceptable only if post-mortems extract lessons about the customer, growth model, or business.
  • Experiments and failures must be documented and shared broadly across the organization.
• Data vs. Intuition: Rarely rely on gut instinct, but also avoid over-rotating on quantitative data.
  • Mistakes often occur when data suggests a course of action without validating it via qualitative customer discussions.
  • Optimal strategy blends quantitative assessments with qualitative prototyping and customer feedback.

Defining and Structuring Growth Functions

• Definition: Growth is the function that identifies how a company grows, tests levers to accelerate scale, and connects more people to existing value.
  • Core pillars include Acquisition (finding new customers), Retention (activation and keeping customers), and Monetization (conversion to revenue).
• Role Structure: The Head of Growth should typically be a "manager of managers" rather than a solo practitioner.
  • Hiring strategy depends on whether the company has a defined growth model, known necessary skills, and the founder's desired level of involvement.
  • Recommended hiring sweet spot is a mid-level (Director) "player-coach" who can execute while building processes.
• Org Placement: Growth teams can be standalone or embedded in Product/Marketing; the choice depends on the growth loop.
  • Viral/referral-heavy products require embedding growth in Product.
  • Paid acquisition-heavy products may prioritize growth in Marketing.
  • Most standalone teams eventually fold into other functions, though temporary standalone structures can drive focus.

Growth Loops and Models

• Definition: A growth loop is a self-contained cycle where inputs become outputs that feed back into the system (e.g., a user invites a friend, who then invites another).
• Complexity: Loops should be simple (3–6 steps) to avoid over-complication; excessive granularity hinders prioritization.
• Scaling Strategy: Companies should focus on one or two core loops until they hit a "max scope" plateau.
  • User-generated loops (referrals) generally have higher ceilings than company-generated loops (paid ads).
  • Strategies to extend loops include sequencing into new loops or expanding the eligible population.
• Common Pitfalls:
  • Misclassifying non-loop activities (e.g., business development) as loops.
  • Focusing on too many loops simultaneously rather than extracting value from core ones.

Case Study: Failed Referral Loop at Wyzant

• An incentivized referral loop (similar to Lyft) failed for the US tutoring marketplace Wyzant.
• Root Cause: Cultural stigma in the US regarding needing a tutor; parents refused to refer friends to avoid signaling their child's academic struggles.
• Contrast: The strategy succeeded in Asian markets where tutoring is normalized and culturally embedded.

Hiring and Onboarding Frameworks

• Interview Process:
  • Pre-work: Define the growth model to identify necessary skills (e.g., quantitative generalists vs. marketers).
  • Quantitative Exercise: Analyze a dummy dataset to test cohort analysis and insight generation.
  • Prioritization Exercise: Sort tactics based on impact, confidence, and reach under changing constraints.
  • Behavioral/Situational Interview: Assess risk tolerance, humility, and ability to recover from failure (e.g., "Tell me about a time you were wrong").
  • Communication Test: Present a business analysis in plain language to simulate stakeholder management.
  • Final Step: Hands-on working session (e.g., roadmap brainstorming) and reference checks.
• Onboarding: Treat new hires like "activation experiences" for customers.
  • Implement a clear 30-60-90 day plan aligned with the wider org.
  • Month 1: Learning and relationship building.
  • Month 2: Strategy iteration.
  • Month 3: Long-term planning.
  • Success is determined by momentum and "chomping at the bit" to build within the first 60 days.

Cross-Functional Communication

• Core Principles: Over-communicate until clarity is achieved; adjust communication style to the audience (e.g., 1:1s for C-suite).
• Tactics:
  • Establish reliable, predictable communication streams (e.g., Adam's weekly "Ship It Friday" email).
  • Use visual aids and prototypes over text to convey concepts.
  • Maintain transparency, candor, and kindness to encourage feedback.
  • Embrace imperfection; it is better to send a draft that invites questions than to wait for perfection.

Rebranding and Repositioning

• Process:
  • Seek external expertise if internal knowledge is lacking.
  • Bring skeptical stakeholders (CEO, engineering) along by framing the rebrand as a future-proofing necessity.
  • Validate changes through qualitative customer interviews and blind positioning tests, as A/B testing a full rebrand is often impossible.
• Execution: Launch brand changes alongside new product features to deliver on the new promise.
• Post-Launch: Shield the team and customers from immediate negative social media reactions (which often fade within two weeks).
• Critical Error: Creating "neutral" brand messaging that does not stand for anything specific.

Foundational vs. Evolving Tactics

• Evergreen Principles: Psychological drivers like loss aversion, scarcity, and status remain constant.
• Declining Efficacy: Incentivized referrals, social graph leveraging, and company-generated content marketing have become harder due to market saturation and productization of these tools.

Common Foundational Mistakes

• Expectation: Viewing growth as a quick fix rather than a compounding system.
• Timing: Hiring growth leaders before achieving Product-Market Fit, which risks damaging product sentiment and internal culture.

Personal Insights and Preferences

• Regrets: The Patreon "payment fee shift" experiment, which quantitatively looked good but triggered a massive trust crisis with creators due to a lack of qualitative customer feedback.
• Inspiration: Locket (L-O-C-K-E-T), a photo-sharing app utilizing iOS widgets and scarcity-based invite loops for high virality.
• Management Parallels: Views management and parenting as identical frameworks (growth mindset, empathy, goal setting), with the exception that one cannot "fire" their children.