Interview, Fireside Chat
Luc Levesque: The Biggest Mistakes Founders Make When Hiring for Growth | 20VC #906
- Luke Schoenmaker's career entry into growth occurred during the acquisition of his first venture, TravelPod (a travel blogging network), when the CEO of TripAdvisor asked deep technical questions about SEO and traffic sources, prompting his realization that product excellence alone is insufficient without a scalable growth loop.
- His early products, the Traveler IQ Challenge (100 million users) and TripWow (65 million users), achieved massive scale on the Facebook platform primarily through viral loops integrated directly into the core product experience.
- At TripAdvisor, he built a sophisticated SEO growth engine that scaled the platform to become the largest travel site on the internet.
- His transition to Facebook involved a 15-minute meeting with Mark Zuckerberg that extended to an hour, culminating in an offer extended during a dinner where they played Oculus Rift before the device's public release.
- Schoenmaker defines a "viral loop" as a mechanism where existing users perform a behavior that invites new users to register, ideally baked into the core utility of the product (e.g., photo sharing) rather than added as an afterthought.
- At Shopify, the primary viral mechanism is merchant recommendations, where the high quality of the product drives organic referrals, creating a baseline growth engine that is continuously iterated upon.
- A key takeaway from his tenure at Facebook was that growth strategy must be broad, encompassing not just SEO or paid loops but also M&A and the creation of entirely new products, such as Messenger Kids, to engage new demographics.
- He identifies the most critical success factor for advising companies as hiring growth teams that possess curiosity and humility, specifically a willingness to be wrong and constantly question assumptions.
- Schoenmaker defines growth broadly as "whatever it takes to move the one metric" that represents the primary outcome or North Star for the business, rather than a specific set of tactics.
- He advises founders to select a North Star metric that has the highest leverage for their specific product model, noting that for Facebook it was Daily Active Users (engagement), while for Shopify it is merchant success.
- His preferred organizational structure for growth is a standalone team, though he acknowledges that success depends on the specific skill set of the leader and the ability to hire talent; integrated models can work but require distinct culture and processes.
- He strongly advises hiring the most senior growth leader possible because growth requires pattern matching and intuition built over many experiments, though junior hires can be viable if surrounded by advisors.
- To identify "signs of excellence" during hiring, he looks for three specific signals: a leader being poached by a former employer to another company, a history of repeated success across multiple ventures, and strong, caveat-free back-channel recommendations.
- During interviews, he asks candidates "tell me something I don't know about growth" and follows with multiple "why" questions to test depth of understanding and the ability to explain the mechanics behind results rather than just reciting playbooks.
- He warns that common hiring mistakes include overvaluing quick promotions (which may result from a lack of talent in the market) and the "social media halo" of public speakers, prioritizing actual past impact and back-channel references instead.
- He recommends integrating Heads of Product and Marketing into the hiring process for growth leaders to ensure alignment, as the relationship between product and growth is critical for preventing conflicting goals.
- To ensure growth teams can test without degrading engineering quality, he advocates for carving out specific "surfaces" (services) owned entirely by the growth team or fostering deep trust and collaboration where growth engineers and product teams work side-by-day.
- Growth reviews should evolve based on company stage, moving from proposal validation in early stages to metric/opportunity size reviews later, always driven by data and strong conviction.
- To maintain morale after failed projects, he suggests reframing failures as "learnings" that lead to future unlocks and celebrating small wins to build a culture of grit.
- He sets a six-month timeline to determine project viability, looking for a clear line of sight to levers that can move the needle; for new leaders, he expects an impact or early win within 30 to 60 days.
- Red flags in new growth hires include a lack of speed/velocity in experimentation and early tension with product or marketing teams.
- At Shopify, his primary focus remains on building an elite talent pool, as the right hire can result in a 10x to 100x increase in growth, making recruitment the highest-impact activity.
- He balances high-level strategy with "getting hands dirty" by staying connected to specific data points, though he notes the difficulty of doing this without disempowering the team.
- He emphasizes that data without a sound logical thesis is insufficient; experiments must be backed by signals and pattern matching (e.g., competitor analysis) rather than random "spray and pray" tactics.
- To prevent past intuition from hindering future projects, he stresses understanding the "why" behind why an experiment worked, as this root knowledge is more transportable than the specific tactic itself.
- He notes that friction reduction has diminishing returns; after seven iterations of homepage changes on a previous product, three iterations yielded significant impact, but subsequent changes produced negligible results.
- He identifies black hat SEO and tactics violating Google guidelines as methods that have "died" and are now dangerous risks that can destroy a business, unlike evergreen tactics like standard SEO, funnel optimization, and paid search.
- He advises founders to avoid the mistake of under-engining growth teams, providing them with direct engineering capacity to build algorithms and systems rather than relying on spreadsheets.
- His top advice for a new growth leader is to immediately identify the North Star metric, rally the team around it, and ruthlessly stop work on anything that does not directly contribute to it.
- He recommends a weekly meeting cadence between the CEO and Head of Growth, with the Head of Growth ideally reporting directly to the CEO to ensure a short decision loop.
- He identifies the small talent pool in the growth sector as the industry's biggest challenge, caused by a lack of formal education and limited opportunities to gain the necessary "shots on goal" for experience.
- He cites the investor-backed company "Bounce" as a recent example of impressive growth, noting their success stems from embedding growth loops throughout the entire company culture and effectively leveraging advisors.
- He suggests founders pitch advisors using the same logic used to pitch investors, offering equity to align incentives and demonstrating the valuation path and growth mechanics.