Slides from Business of Sofware 2018 - covering the usual stuff + some new material on consumer surplus and the economics of a mission driven startup

1. @nilanp
Building a high
growth startup
sustainably

2. @nilanp
What I’ve learned ….
1. Marketing in early stage startups
2. Word of mouth growth
3. Economics of Mission Driven business

3. @nilanp
What I’ve learned ….
1. Marketing in early stage startups
2. Word of mouth growth
3. Economics of Mission Driven business

4. @nilanp @cataflu

5. Revenue

6. Revenue

7. Revenue

8. Death Zone

9. Revenue

10. Marketing

11. Loss

12. @nilanp
The logic of marketing led growth

22. Revenue
Marketing $$$$

23. Revenue
Marketing $$$$

24. Revenue
Marketing $$$$

25. THE INFINITELY
SCALABLE
MARKETING CHANNEL
DOESN’T EXIST
Revenue
Marketing $$$$

26. @nilanp
There are no short cuts to growth…

27. @nilanp
…its all about creating value for customers

28. @nilanp
… but what does that MEAN ?

29. @nilanp
What I’ve learned ….
1. Marketing in early stage startups
2. Word of mouth growth
3. Economics of Mission Driven business

30. …First a bit about TransferWise

31. TransferWise was started
to solve a problem
@nilanp@nilanp

32. What is TransferWise
What is borderless

33. @nilanp @cataflu
> £2 Billion per month

34. @nilanp @cataflu
> £60m per month

35. @nilanp @cataflu
> 1,000 TransferWisers

36. @nilanp @cataflu
Profitable for 2 years

37. @nilanp @cataflu
Evangelism is the biggest
driver of growth

38. What have we learned about WoM at
TransferWise ?

39. Why do people recommend our
product ?

40. @nilanp
Would you recommend us to
your friends?
1 2 3 4 5 6 7 8 9 10
Detractors Neutral Promoters

41. @nilanp
Would you recommend us to
your friends?
1 2 3 4 5 6 7 8 9 10
Detractors Neutral Promoters
Total
Promoters - Detractors
= NPS

42. @nilanp
The NPS Richter scale

43. @nilanp
1 2 3 4 5 6 7 8 9 10

44. @nilanp

45. @nilanp

46. @nilanp

47. @nilanp

48. @nilanp

49. @nilanp

50. @nilanp
If promoters >
detractors you WILL
grow

51. @nilanp
N.B. This is hard.

52. It works !
(But barely)

53. It works !
(But barely)
It works with
no significant
issues !

54. It works !
(But barely)
It works with
no significant
issues !
It works. Wow
that was slick

55. It works !
(But barely)
It works with
no significant
issues !
It works. Wow
that was slick
You’ve just blown
my socks off that
was incredible

56. RATIONalRational Emotional

57. RATIONalProduct Mission

58. RATIONal
Speed
Price
Convenience
Coverage
Mission

59. To achieve advocacy your product
needs to be an order of magnitude
better than the alternative

61. But don’t do this as “growth hack” do
it because its the right thing to do

62. RATIONal
Speed
Price
Convenience
Coverage
Mission

64. Money without borders.
Instant, convenient, transparent
and eventually free
We’re powering money for people and businesses:
to pay, to get paid, to spend, in any currency,
wherever you are, whatever you’re doing

65. You can’t copy
that !

66. So…
10x product
+ Cause driven marketing
= Word of Mouth growth
@nilanp @cataflu

67. ONE question:
@nilanp @cataflu

68. So how you do build a 10x product ?
@nilanp @cataflu

69. @nilanp
Singapore

70. @nilanp @cataflu
Bank of England
@nilanp

71. How does this scale ?
@nilanp @cataflu

72. Autonomous
independent teams that focus
on KPIs that make a
difference to customers and
drive growth
@nilanp

73. Autonomous
independent teams that focus
on KPIs that make a
difference to customers and
drive growth
@nilanp
Regulated
and
available
Instantly
and almost
zero cost
IdentityOnboarding Worry Evangelism
Problem
awareness

74. Autonomous
independent teams that focus
on KPIs that make a
difference to customers and
drive growth
@nilanp
Currencies OperationsVerificationConversion Experience ViralityMarketing
Regulated
and
available
Instantly
and almost
zero cost
IdentityOnboarding Worry Evangelism
Problem
awareness

75. @nilanp
So in summary.
Building a sustainable high growth
business is slow hard work.
It starts by working on hard problems.
Solving these takes time but creates a
huge amount of value for customers -
which translates to growth

76. @nilanp
What I’ve learned ….
1. Marketing in early stage startups
2. Word of mouth growth
3. Economics of Mission Driven business

77. @nilanp
!
I need to transfer £2000 to Europe

78. @nilanp
!
5%

79. @nilanp
!
7%

80. @nilanp
!
3%

81. @nilanp
!
5%
Price to extract
maximal value from consumers

82. @nilanp
!
£100
Price to extract
maximal value from consumers

83. @nilanp
!
£100
Slow
inconvenient
Service

84. @nilanp
!
£100
😡
Unhappy customers
looking for alternatives

85. @nilanp
!
£100
😡
Challenges with retention, organic
growth

86. @nilanp
!
0.5%

87. @nilanp
!
0.35%

88. @nilanp
!
0.2%

89. @nilanp
!
£7

90. @nilanp
“I’d hate to think we could have a business twice as valuable
if we charged twice as much and didn’t lose any customers”

91. @nilanp
!
£7
£93 - Consumer surplus

92. @nilanp
!
£7+♥♥♥
£93 - Consumer surplus

93. @nilanp
!
£7+♥♥♥
£93 - Consumer surplus
!

94. @nilanp
Valuation = f(growth rate, profitability)

95. @nilanp
Create more value for your customers
than you capture

96. @nilanp
…the consumer surplus you create turns
into consumer goodwill + profitable growth

97. @nilanp
… and economic value

98. @nilanp
What I’ve learned ….
1. Marketing in early stage startups
2. Word of mouth growth
3. Economics of Mission Driven business

99. @nilanp
But what about marketing ?

100. @nilanp
50% ⬇
Marketing
Spend
New
Users
10% ⬇ 1% ⬇
Revenue

101. What is the problem
marketing is solving ?

105. Viral growth.

109. SEO.

112. Marketing teams can also focus on
helping customers understand the
value products create

113. @nilanp
What I’ve learned ….
1. Marketing in early stage startups
2. Word of mouth growth
3. Economics of Mission Driven business
… marketing can help if done properly :-)

114. @nilanp
Building a high growth startup
sustainably ?

115. @nilanp
Create value for customers sustainably

116. @nilanp
Onwards
Jobs.TransferWise.com