SUMMARY
In Week 2 of Lightspeed Extreme Entrepreneurs, the 8 finalists spoke with Farid Ahsan, co-founder, Sharechat
Farid highlighted the importance of taking a systematic data-driven approach enabled by continuous experimentation
He advised early-stage startups to find frugal and innovative growth hacks, as opposed to just deploying capital
“Growth hacking methods cannot be solely linked to capital availability, and need to be extremely frugal, especially in early stages.”
For Farid Ahsan of Sharechat, going deep into the customer lifecycle, and using disconnected signals to understand what could make your funnel move, is the smartest way to identify growth hacks.
Farid was speaking during week 2 of Lightspeed’s recently launched Extreme Entrepreneurs (EE), an eight-week business series focussed towards exposing a selected group of eight startups to world-class people, ideas and practices.
Sharechat is one of the fastest growing social network companies in India. Only 3.5 years into the business, the company already reports a 25 Mn+ monthly active user base that is growing rapidly. The company aims to target new internet users in the country that are not as tech-savvy.
Here are a few edited excerpts from the conversation:
Be data-driven vs. gut-driven
Farid emphasized the importance of having a data-driven approach to problem solving. Founders typically tend to build a product, then get it reviewed from oneself (as a customer) or others around them. Based on these reviews along with some primary and secondary research they modify the features to make the product better.
“The problem with this approach is that even though it feels like data driven approach, it is not. It is a crowd sourced gut driven approach. Instead, data driven approach is taking feedback in a canonical fashion, where each user is looked as a data point.”
Giving an example of when data trumped gut, Farid recalled the time when the market was bullish on video content in social. However, Sharechat team found no difference in preference for a mixed feed (audio, video, posts etc.) over a video only feed. In fact, retention for mixed feed was much higher.
He also busted the myth that “data driven approach has no room for creativity.” In fact, being data driven channelises gut and creativity by pushing you to have the best possible A/B testing frameworks and thus captures insights faster.
For a company like Sharechat, being data driven becomes even more valuable as the users are mostly from tier-2/3 cities and understanding such users through feedback is extremely hard to achieve.
Growth hacking needs to be frugal
Farid believes that capital can give you the ability to invest in decisions you otherwise wouldn’t have. But in his opinion, growth hacking methods cannot be solely linked to the capital availability and need to be extremely frugal, especially in early stages. Using disconnected signals to identify what will make your funnel move faster will give rise to smart growth hacks.
For Sharechat, they identified their growth hacks by going deep into the lifecycle of customers. They started looking for patterns – What content is being consumed at what time? Which features are not being used? Is there a pattern in demographic profile and content consumed? Are there any categories users are liking across geographies?
In addition:
- Growth hacks need not be exclusive to your startup. If someone uses your growth hack you’ll still grow.
- It is easier to grow and create virality by leveraging existing distribution channels. e.g. Sharechat leveraged WhatsApp.
- Growth versus retention? Farid mentioned that Sharechat disproportionately focused on growth at every stage, and retention became one of the levers for growth.
“Many things can drive retention but you’ll never achieve it till you grow. For instance, network effects will come into play only when you achieve critical mass.”
Attract your investors how you would attract your team members
Start-ups who have no direct comparable often struggle with the question of how do I convince investors in early stages.
Recalling from his experience, Farid said, “Sharechat had no comparable in the Indian market. We attracted investors in the same way we attracted our team members – we opened up about certain consumer insights, and what we were thinking of doing. You only need a few of them to start believing in you and be ready to take the plunge.”
“Chances are they’ll understand where you are coming from since most would have been entrepreneurs themselves.”
This is an excerpt from the Week 2 of Lightspeed Extreme Entrepreneurs, a new age business series for founders. The team will be exclusively sharing these takeaways and knowledge in the form of weekly articles for the next 7 weeks with Inc42 readers. Founders, game on!
