How Chamath Palihapitiya put Facebook on the path to 1 billion users

Now a VC, Chamath Palihapitya’s claim to fame was starting the original growth team at Facebook. He’s also said that he has cracked the code for making startups grow. He recently gave a talk called “how we put Facebook on the path to 1 billion users”.

This is the talk here:

These are the key takeaways from his talk.

Don’t focus on ‘virality’

At Facebook, they tossed out virality’. All they wanted to focus on was:

  1. How do you get people in the front door
  2. How do you get them to their ‘a-ha’ moment as quickly as possible
  3. How do you deliver core product value as often as possible

After all of that is said and done, only then can you propose how you are going to get people to get more people.This was the most important thing that they did.

You could argue that #1 is acquisition, and #2 is retention, but I believe the point he is making is that your focus should be on long sustainable term growth.

Companies that scale successfully understand that principle on some level. Companies that don’t can have an amazing steep rise and fall off the cliff.

It takes discipline to not optimise for the thing that gives you the shortest and most immediate ROI, because that is never sustainable enough to allow you to build something useful, and instead all you build is a spammy product with no value.

Core product value is really elusive and most products don’t have any – but they can have some.

Go back to the question: do you really know what you’re building and why? Do you really understand how to marry things that may be non-intuitive for people, but are the important things that people need?

You are not part of the equation

Eliminate the ego – a lot of Silicon Valley types and “growth hackers” live the lifestyle of a startup entrepreneur, rather than actually living the life of product development. People make assumptions when running marketing experience to convince themselves that “users will want XYZ” when in reality, no one cares!

Only a humble marketer or product developer can remove their reliance on ‘gut feeling’, and focus on the data.

Find your success metric

Start with a broad cross section of engaged users and work backwards from those, and if you’re smart enough to figure out the different pathways in which they got to that place, you can probably tease out what those simple things are. You can then path people into those same click flows that allowed them to get to that state.

They knew they were going to beat My Space when they only had 45m users and My Space had 115m users, because they had found their a-ha moment and success metric.

What was their ‘a-ha’ moment? Get a user to reach 7 friends in 10 days.

It’s a simple elegant statement of what it was to capture core product value, define what it meant to be able to onboard into a product that allowed you to communicate, to get into a network, to find density – and then iterate around that.

It was the single focus and allowed the team to drive towards a clear objective. They reframed the entire experience around that one simple premise because they had defined it in a way that expressed it as a function of product value.

At the Growth Hackers Conference in 2012 Chamath said that they discovered this by looking at groups of users who became engaged, and groups of users who did not become engaged, and the pattern that emerged was that the engaged users had reached at least 7 friends within 10 days of signing up.

Focus on long term optimisation

Extracting growth down to low level things is not right.

The person that runs growth on any team has to be strategic and capable enough to engage on the core strategy of the product.Then you allow yourself to up-level the conversation and allow it to become the most important framework in which your organise an entire company.

How equity is given. How expenses are generated. What is prioritized. Who gets hired, who gets fired.

When you understand core product value and you can create loops that expose that over and over again, this becomes obvious. Focusing on short term optimisation never works. You have to work backwards from “what is the thing that people are here to do?”, “what is the a-ha moment that they want?” and giving that to them as fast as possible.

It starts with looking at an engaged user, not just thinking about how many emails can I send and how do I trick everyone to ‘not unselect a select all’.


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