On day 2 of Lightspeed’s Extreme Entrepreneurs Program, the 8 teams interacted with Farid Ahsan, COO & Co-founder of Sharechat (a Lightspeed portfolio company) in a masterclass which I moderated. Before we go into key learnings shared by Farid, here is a brief overview of Sharechat:
Sharechat is one of the fastest growing social network companies in India. It has close to 20 Mn+ monthly active users and has been in the business for around 3.5 years. Farid shared that he along with his co-founders (Ankush Sachdeva and Bhanu Singh) started the company straight out of college and have completely grown organically as a team and learned the lessons the hard way. They iterated on 14-15 different projects before doubling down on Sharechat. He believes that in India there is a significant gap in how a technology savvy individual uses internet, versus a new internet user. The satisfaction of contributing to the progress of these users by allowing them to leverage technology in the best possible fashion is the biggest motivational driver for Farid.
Below are key takeaways I have captured from the session, hope you find it helpful in your entrepreneurial journey!:
Be data driven vs. gut driven
Farid emphasized the importance of having a data driven approach in 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 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 channelizes gut and creativity by pushing you to have 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. At Sharechat, the team has transitioned from doing 3 experiments per week in early days to close to 95 experiments per day at present.
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 capital availability and needs 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?
Some interesting points came up during the Q&A session with the teams. I have captured a few below:
- Growth hacks need not be exclusive to your start-up. If someone uses your growth hack you’ll still grow.
- It is easier to grow and create virality by leveraging existing distribution channels. Instagram leveraged twitter, Facebook leveraged e-mail, Sharechat leveraged WhatsApp.
- When asked about growth versus retention, Farid mentioned that Sharechat disproportionately focused on growth at every stage, 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.”
Monetization is linked to market size
A lot of social or content start-ups struggle with the monetization versus scale dilemma. Farid shared that founders need to look at the right time for monetization relative to market size. As an example, if the market is 100 Mn users and you have reached 20 Mn then it is the time to start thinking about monetization. But if you believe the market is 500 Mn users then stay focused on growth. Opening up multiple fronts of focus on creates issues but it’s the laser sharp focus that will give you results in long term.
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- let them know certain insights, let them know what we were thinking. Probably not everyone will be able to work with you in the same way you would like but some of them will start believing in you, they’ll be ready to take the plunge, they’ll understand where you are coming from and mostly will be entrepreneurs themselves.”
I hope you find the series of blogs from Lightspeed’s Extreme Entrepreneurs program helpful. To stay updated, follow EE on twitter here and the official Lightspeed India handle here.