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AMA about "How Does A Startup With Little Funding Grow To 100 MILLION USERS?" Talk with the Founder of the first publicly traded social media company and first online dating app that ultimately grew to 100 million users.

Clifford Lerner
Apr 12, 2018

How Does A Startup With Little Funding Grow To 100 MILLION USERS?

Cliff Lerner's online dating startup, Snap Interactive, was running out of money when he bet the company's fortunes on a then-unknown platform called Facebook. The app (called AreYouInterested at the time) achieved explosive growth getting, and soon after the stock price skyrocketed 2,000 percent, setting off an extraordinary chain of events filled with sudden success and painful lessons.

In November, Cliff published Explosive Growth.  This compelling and inspiring narrative gives you a step-by-step playbook to achieve explosive growth, combining lively and often hilarious storytellingproven tactics, and numerous case-studies to help your startup achieve explosive growth. Explosive Growth is described as "Brilliant… essential reading for every entrepreneur and leader seeking innovative solutions for their industry.” 

Learn how to:

  • IGNITE EXPLOSIVE GROWTH by creating a remarkable product
  • Identify the ONLY 3 METRICS THAT MATTER
  • Explore valuable VIRAL GROWTH strategies to grow rapidly
  • Execute the GENIUS MEDIA HACKS that helped us acquire 100 million users
  • Create a thriving culture of PASSIONATE EMPLOYEES and constant INNOVATION

The tactics that helped us succeed are all in this book for entrepreneurs including insights as to how companies such as TinderBumbleFacebookTwitterApple, and Dropbox achieved explosive growth.

Cliff is a leading social media and online dating visionary and spokesperson, and has appeared on CNBC, Bloomberg, Fortune TV, Yahoo! Finance's 'The Final Round', and many other top tier media outlets. He is also a Top Writer on Medium in Business & Entrepreneurship with his articles frequently being featured.

Links:  Explosive Growth Entrepreneur Book Website

Explosive Growth Business Book On Amazon

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Conversation (82)

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How much do you feel that you are responsible for what someone does with your product, or do you think you supply the product, and what people do with it is out of your hands?
Apr 19, 10:20AM EDT0
How much does media and the public eye effect the growth of a project? To what extent can this be influenced?
Apr 18, 8:23PM EDT0

How can a minnow writer build up a superb blog?

Apr 18, 12:56PM EDT0
Can you give some information on what your start up is going to be, at least in what area?
Apr 17, 5:15AM EDT0
How much would you say luck plays a role in the success of a business? What are some things you can do to raise your chances of shooting off?
Apr 17, 12:33AM EDT0

Luck is absolutely critical, but as the waying goes, luck happens when preparation meets opportunity.  

I'll give an example.  We were certainly 'lucky' that Facebook apps started when they did in May of 2007, as were didn't have much cash left to stay in business and Facebook was our turning point.  

However, our strategy, instincts, and foresight, are what propelled us to go all in on facebook.  We knew the current strategy would not succeed in the long run, so we drastically reduced our burn-rate in order to live another day while we pursued our 'growth rocket'. 

Also, our philosophy of building and rapidly testing and iterating on MVPs to validate/invalidate as many ideas as possible (known as Lean Startup Methodology), and commitment to analytics, enabled us to quickly test and understand the magnitude of the opportunity on Facebook.  

So, yes luck was certainly important, but you definitely create your own luck.  

Last edited @ Apr 17, 7:13AM EDT.
Apr 17, 7:10AM EDT0
If this endeavor had not been a success, do you think you would still be trying, or do you think you would have ceased your pursuing?
Apr 16, 10:30AM EDT0
What are some differences your company experienced from before the popularity to after?
Apr 16, 4:02AM EDT0

Almost everything changed:

Financially:  We were able to raise $8m which enabled us to grow rapidly (new hires, new offices, etc)

Talent:  We could now afford top talent, and they were coming to us instead of us chasing them.

Competition:  It became difficult to test new features and products 'under the radar', as competitors and the media were paying attention to us.

Investors:  The expectations to deliver results increased tremendously.  Also, since we were publicly traded, there were lots of new investors who didn't understand social media well at the time, and their short-term time horizons did not match our long-term goals.  

Apr 17, 7:04AM EDT0
How did you get into the business of start-ups? Was it by accident or was it always a plan of yours?
Apr 15, 7:38PM EDT0

Thanks - I was working on wall street, and the early and long hours working for the man were getting to me.  I knew I had find ways to be more creative and make a difference on my terms.  

Apr 16, 9:43AM EDT0
What are some of the mistakes people make with regards to online dating profiles and what are the consequences of such mistakes?
Apr 14, 8:46PM EDT0

A few common pitfalls people make:

Photos: 

-Try to have photos that show your personality and interests

-No group photos

-Have photos that show your face and body

-Update your photos

Profile Content:

-Be interesting and original.  Make it easy for people to contact you.  

Apr 16, 9:42AM EDT0
Do you have any weird or unusual rituals you follow whilst on a date, if so, what are they, if not, what has been one of the weirdest things you have experienced on a date?
Apr 14, 6:07AM EDT0

Thanks - I'd prefer to keep this to the business of startups and online dating.  

Apr 14, 3:42PM EDT0
What are some of the precautions that one must currently take with regards to online dating?
Apr 13, 8:43PM EDT0

Certainly use common sense, and let others know where you're going, who you're with, and meet in public places.  

Apr 14, 3:43PM EDT0
Do you believe in the concepts of true love and soul mates, why or why not?
Apr 13, 8:43PM EDT0

Has success changed you and how if so?

Apr 13, 5:09PM EDT0

Thanks Jessica,

My experience at Snap was certainly successful on many levels, but not so much financially (hence the subtitle of the book).  

Apr 14, 3:41PM EDT0
Are you a co-founder of your business or did you do all of these on your own?
Apr 13, 9:11AM EDT0

I started the company with my brother, but we raised seed capital and quickly took it public, so there were many investors.  However, I did maintain a control ownership (more than 50%) the entire time.  

Last edited @ Apr 13, 10:18AM EDT.
Apr 13, 10:14AM EDT0
Do you still plan on building more businesses like PeerStream in the future?
Apr 13, 6:08AM EDT0

I plan on having another startup soon, but it won't be in online dating.  Meanwhile, I'm advising high potential startups.

Apr 13, 10:13AM EDT0
How did you come to realize that Facebook would be successful? Was it a lucky gamble?
Apr 13, 5:56AM EDT0

There were a few reasons that gave me confidence that Facebook was the right gamble. 

I believe that you your startup has a really good chance to be successful if you can take a result people are trying to achieve, and provide new solutions to accomplish similar or better results, but much more efficiently - at least 10x more efficiently - called the 10x effect.  

It was clear that Facebook's API would provide this elusive 10x superior user experience for online dating in not just one, but in several ways:

1) 10x Better/Faster Sign Up Process:  Creating a profile and uploading photos on other dating sites was a several minute and tedious process, with Facebook it was 1-click.  This was more like a 100x better experience.

2) 10x Better/Detailed Profiles:  On other dating sites, users weren't creative and the profiles were boring and get stale.  On facebook, with 1-click you could import all of your interests, photos, etc, and it updated regularly.   

3) 10x Better User Experience With Friends:  On existing dating sites, the concept of showing mutual friends didn't exist.  However, most people in real life meet their significant others through a friend.  So, the ability to take an action that people were doing in real-life, and use technology to make it 10x better and more efficient was very compelling.  This was also a 'purple cow' at the time.  

However, we still weren't willing to go all-in, so we needed to build an MVP to prove this.  We gave it one week to have a basic site built and on the first day, we got 5,000 users, which was more than the last few months in total.  With that data, I decided to go 'all in.'

Here are some Explosive Growth Startup Tips from the Explosive Growth:  

#ExplosiveGrowthTip 1: Find something that people are doing inefficiently and create a solution that makes it substantially easier (10x easier) to achieve the same result. Does your product accomplish this?

#ExplosiveGrowthTip 6: Learn how to validate an idea with as little time and financial investment as possible. Do you have a plan to validate your ideas cheaply?

Last edited @ Apr 13, 10:02AM EDT.
Apr 13, 9:06AM EDT1

I saw below you love trading and wall street. Have you invested in Crypto Currencies and if so, how's your experience with the space, thoughts about the future of crypto and blockchain?

Apr 12, 9:32PM EDT0

Thanks Dennis.  Yes, I believe blockchain technology is the most disruptive technology of my generation, and crypto will be the first killer app.  I talk a little bit about this in an interview where I predict Bitcoin could reach $100,000 by the end of this year.  

Although blockchain and crypto technology still has a way to go to live up to its promises, cryptocurrency checks the two major boxes for me in terms of if something that will be massively disruptive: 

1) Crypto is 10x Superior Than Existing ‘Money’ In Solving Its Limitations

2) Crypto (will) Impact 2 Billion People In An Unimaginably Positive Way

Crypto Is 10x Superior To Existing 'Money'

Cryptocurrencies will provide (10x) superior solutions to inefficiencies plaguing existing currency and financial transactions including issues of:  efficiency (no middle-man needed), transaction costs, processing times, eliminates double-spend issues, inflation concerns (bitcoin is capped at 21 million and can't be inflated out of existence, which is how most fiat currencies historically fail), control (governments/banks would have trouble confiscating/freezing it), trust (no need to verify if you have the money via 3rd parties, escrows, etc), and many more solution to existing problems.

The Social Good Impact of Crypto Is Staggering: It Will Put 2 Billion+ People On The Global Financial Map

Furthermore, with over 2 billion unbanked people globally and the majority living in poverty and corrupt countries, Crypto is their path to 'financial freedom.'  This will enable a higher quality life with less corruption and a path out of perpetual poverty. 

What's interesting is that studies show that the majority of the unbanked will have a mobile phone with internet access within a few years, which is all that one needs to create a cryptocurrency wallet.  And I believe that having a wallet to store, receive, and send crypto, is the catalyst for them being able to massively improve their quality of life.  

Blockchain technology itself will provide similar 10x effects in efficiency and costs reduction in nearly every industry including property and title rights, voting, healthcare, logistics, etc.

So, yes I'm very passionate about Blockchain and Cryptocurrencies ;)  

 

Last edited @ Apr 13, 10:25AM EDT.
Apr 13, 9:45AM EDT1
What are the mistakes people make most often when it comes to user acquisition? What about retention?
Apr 12, 9:22PM EDT0

Thanks, great question.  For user acquisition, too many startups are obsessed with growth at all costs (usually to appease investors), which creates several problems:

-the product becomes spammy

-focus on growth comes at the expense of building/enhancing the product to become remarkable.  

Retention:

Similarly, on retention, startups become very focused on 1 or 7 day retention.  This usually means lots of emails, push notifs, etc, which may help reach the short-term goal, but with long-term consequences.   

Also, understanding what key user action(s) are tied to long-term retention is critical.  Without this insight, you have no chance.  I call this your 'Aha' moment',

Facebook achieved explosive growth when they realized that when a new user got 7 friends within their first 10 days, they stuck around.  This was their 'Aha' Moment which I discuss here.  

Ultimately, focusing ruthlessly on long term retention, and creating a remarkable product are the best ways to create a growing sustainable business.  This can be achieved by focusing on the only 3 metrics that matter for startups - Long Term Retention, Net Promoter Score, and Unique Selling Proposition.  

#ExplosiveGrowthTip 46: Marketing a product with a low NPS is essentially saying to potential customers, “Hey, my product sucks, come check it out.”

#ExplosiveGrowthTip 47: Your 'Aha' Moment - Do you know what single user action or experience compels users to come back to your product repeatedly? If not, figure it out now, because this could be the most important insight you need to grow your business.

Last edited @ Apr 13, 10:37AM EDT.
Apr 13, 9:52AM EDT1
How can you maintain a team culture if most of the team is remote?
Apr 12, 7:02PM EDT0

Almost all employees were on-site, so I don't have any good insights into that.  What do you think?

Last edited @ Apr 13, 10:38AM EDT.
Apr 12, 10:19PM EDT0
How did you lose the 78$ million?
Apr 12, 6:37PM EDT0

The company was publicly traded and in December 2010, an article came out about us touting our growth.  The stock price went up from around $0.10 to over $4.00 over the next couple of weeks and stayed around those levels for a while.  I never sold a share until several years later after it had declined over 95% all the way back down.  The value of my holdings at its peak was well over $80 million.  

Here are some more details about in the blog post, The Wildest Startup Story You’ve Never Heard Of — Until Now.

Apr 12, 7:42PM EDT0
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