Retention and user engagement are crucial for growth in internet marketing, and companies should focus on optimizing their product market fit, identifying their North Star, and achieving viral growth through user invites and retention.

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  00:00

  Retention is key for growth in internet marketing, analyze your retention curve to determine product market fit and focus on getting it right.

  • The speaker studied physics at Cambridge but paid for college doing online marketing direct response.
  • The speaker started with a paper airplane site in the 1990s and learned SEO by using white text on a white background, which led to creating a successful cocktail site and mastering SEO techniques for Google's launch of AdWords.
  • Retention is the single most important thing for growth in internet marketing, as it leads to customers spreading the word and staying on the site.
  • Retention curve is crucial for determining product market fit and viability of a business, and can be analyzed using a methodology that predicts growth and value of advertisers.
  • Analyze the percentage of monthly active users on each day after registration to determine the growth curve of your product and decide whether to focus on virality or growth tactics.
  • Focus on getting product market fit because without it, executing well on growing a product won't matter.
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  06:40

  A physicist used dimensional reasoning to determine the power of the US atomic bomb, while calculating the energy of an atomic bomb requires determining the dimensions involved in the problem.

  • A British physicist named Jeffrey Taylor was able to determine the power of the US atomic bomb by using dimensional reasoning from a picture published in Life magazine in 1950.
  • To calculate the energy of an atomic bomb, you need to determine the dimensions involved in the problem, such as mass and volume, and use that data to figure out the power and ratios between different bombs.
  • Facebook has around 2 billion users on the internet and dividing that by their announced 1.3 billion active users can give a close enough estimate of their retention rate.
  • Retention is the most important thing for growth and success in different verticals, and it comes from having a great idea and product with good market fit.
  • Startups should not have a separate growth team, instead the whole company should be the growth team with the CEO as the head of growth.
  • Mark Zuckerberg used monthly active users as the number to measure Facebook's success both internally and externally, and Yan has followed a similar approach with WhatsApp by publishing the sends number.
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  12:24

  Having a clear North Star is crucial for growth, as demonstrated by Airbnb benchmarking against hotel chains and eBay's focus on gross merchandise volume.

  • Airbnb benchmarks themselves against the largest hotel chains in the world based on the number of nights booked, while different companies have different North Stars such as eBay's gross merchandise volume.
  • Having a clear North Star is critical for growth as it helps define the most important thing for a company, especially when managing a team of over 100 people.
  • The gross merchandise volume and percentage of e-commerce that goes through the site are what really matter for the company, not revenue or registrations.
  • eBay changed their payment model for affiliates in 2004, resulting in a loss of 20% of confirmed registered users being driven by affiliates.
  • To drive user engagement and retention, it is important to focus on creating a "magic moment" that hooks users on the service, as demonstrated by examples from experts in the field.
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  17:05

  Identify and connect users to the magic moment of your product quickly, optimize notifications for the marginal user, and focus on getting new users connected to at least 10 friends to improve growth.

  • The magic moment for Facebook users is when they see their friends' faces, which is the most important thing for social media sites to connect people and keep them engaged.
  • The magic moment on eBay is finding that unique item you really care about, while on Airbnb it's discovering a cool house to stay in or getting paid for listing your own house, and it's important to identify and connect users to the magic moment of your product as quickly as possible.
  • Connect people with what makes them stick on your site and avoid optimizing for growth for yourself, as many companies get wrong, such as with notifications.
  • Optimize notifications for the marginal user, not the power user, to drive growth.
  • Focus on getting new users connected to at least 10 friends to improve growth and think about the North Star metric for the company.
  • Choose a metric that aligns with your mission and values, but realistically, daily active users and amount of content shared are highly correlated, so have a North Star and focus on the marginal user.
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  22:13

  Facebook's growth tactics included finding a niche market, internationalization, and focusing on getting users to add 10 friends in 14 days.

  • To operate for growth, everything must come from the top and important tactics include finding a niche market and recognizing the value of marketing.
  • Internationalization is a crucial tactic for long-term growth, as exemplified by Facebook's late adoption and the challenges posed by clones in various countries.
  • Facebook faced barriers to growth when expanding internationally and beyond colleges, but overcame them to reach over 100 million users.
  • The growth team at Facebook focused on getting users to add 10 friends in 14 days and reaching the "magic moment" to drive initial growth.
  • Internationalization was successfully implemented in a scalable way despite being launched late.
  • Facebook built a scalable translation infrastructure that enabled them to translate over 100 languages, including community translations, and prioritized the right languages for their global audience.
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  27:52

  Viral growth is driven by high conversion rates, not high frequency or payload, and can be achieved by removing friction and avoiding creative exhaustion in online marketing.

  • To measure the virality of a product, consider its payload, frequency, and conversion rate.
  • Hotmail used viral marketing by adding a link at the bottom of every email that said "sent from hotmail get your free email here" to gain a new audience without spending much on traditional advertising.
  • High conversion rates, not high frequency or payload, drove the viral growth of Hotmail and PayPal.
  • Facebook's growth was purely viral through word-of-mouth because it was an awesome product, and the payload of viral campaigns grows as more people send and share.
  • Removing friction from the flow and avoiding creative exhaustion are crucial for successful online marketing, as hitting someone with the same promotion repeatedly decreases their conversion rate.
  • Lower conversion rates occur when the same message is repeatedly presented, and virality can be achieved by focusing on getting people to send imports and increasing the number of clicks.
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  36:33

  Focus on user invites and retention to achieve virality and a high K factor for your product.

  • To achieve virality, it is important to focus on getting users to import their contacts, send invites to all of them, and have a high k-factor, which can be calculated by multiplying the percentages of open, click, sign up, and subsequent import.
  • To achieve a K factor over one, focus on retention rather than viral marketing and analyze invite flow to determine conversion rates.
  • Keyword research is crucial for SEO success, as it determines what people search for and how valuable it is for your site.
  • The most important thing for SEO is to get valuable links from high authority websites and distribute that love inside your site by internally linking effectively.
  • Adding a directory to the website allowed Google to quickly access every page and distribute link love internally, resulting in increased traffic.
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  41:33

  Email is less popular among young people, so it's important to avoid spam and ensure delivery for success with email, SMS, and push notifications.

  • Email is not popular among young people and instant messaging apps are more effective for targeting teenagers.
  • To ensure email deliverability, avoid sending spam and be respectful of server feedback, retrying only once or twice for hard bounces and striving to be a high class citizen in email communication.
  • To achieve success with email, SMS, and push notifications, it is crucial to ensure delivery and avoid spamming power users.
  • Notifications are the most effective type of email, SMS, and push notifications, and creating great triggered marketing campaigns is key.
  • Border trade email campaign had high click-through rates due to its timely and contextual nature, with a focus on trigger-based notifications being crucial for success.
  • Move fast, break stuff, run experiments, be hungry for growth, work hard, and execute fast to achieve success.