0:00:05 - (Matt Widdoes): Welcome to growth at scale. I'm your host, Matt Widdoes. This is a podcast for leaders who want to bring sustainable, predictable, scalable growth to their businesses. Every episode, I sit down with world class growth experts across product marketing, finance, operations, you name it. The hope is that these conversations will give you real, actionable advice for building and sustaining company growth. It.

0:00:33 - (Matt Widdoes): Thanks for tuning into this week's episode of growth at Scale. I'm your host, Matt Widdoes, and we have an awesome episode in store for you today as we are joined by none other than Malachi Rose, VP of growth at MAVAN. Malachi has been in growth for 17 years. He's led growth teams at digit, Zynga and several other mobile gaming companies. Malachi, welcome to the podcast.

0:00:52 - (Malachi Rose): Thanks. Excited to finally be on the podcast with you.

0:00:54 - (Matt Widdoes): Yeah, and we've known each other for a long time. For people who don't know you, tell us, who are you? Where have you been? What do you do?

0:01:01 - (Malachi Rose): I'm the VP of growth at MAVAN, so I have the pleasure of getting to work with you on a daily basis. And, yeah, my background. So I've worked across a few different industries. I started out actually in finance and biotech about 17 years ago, and that's where I learned the foundations of testing and analytics, working for a private wealth management company and then in biotech, actually in consulting. So I was on site at companies like Genentech and Gilead, setting up databases, building out email programs, and then I took a pivot in my career circa 2012, I think, where I had an opportunity to join a mobile gaming company that one of my friends was in. So I came in as an online marketing manager, I think was my title for Crowdstar. This is in the early days of mobile. The App Store really just became a thing.

0:01:50 - (Malachi Rose): Crowdstar was an early leader in Facebook gaming, and we're just starting to break into mobile. And I think within the first few weeks, my title totally changed and it just became mobile. Mobile. Mobile was the only thing that mattered. And that was just like a really interesting Wild west time, as you probably recall back then, too, where we just lacked attribution and we lacked any sort of formal structure in how you do acquisition. We were just inventing it as we went. We were spending massive quantities of money on personal credit cards back then. Then I shifted into more of a leadership role for a gaming company called Rumble. That was at least hoping to be like the blizzard of mobile. And that was my experience coming in, really as the only marketing person in the room and having to lay down a foundation, really manage, go to market across four different products and wear all hats, like all functions at the same time. Everything from partnerships to analytics. So I was doing that for a couple of years, and I had the opportunity to come into Zynga at around 2015.

0:02:52 - (Malachi Rose): Zynga public game company that probably many people would recognize was going through a lot of change at the time. The original CEO had just come back in. They were rebuilding some of their growth functions from the ashes. At that time, they didn't have a central growth team. They had many different silos of user acquisition pods in different countries under different studios. They'd acquired a bunch of different companies over time and were doing a lot of things in parallel that were highly inefficient. And so I was hired to bring some structure to that process and report into the CMO.

0:03:26 - (Malachi Rose): And then I think you probably remember better than I do, but I think within the next six months, you were hired into Zynga. And I remember being in the interview room with you, Matt, and getting to hear your background and being excited to have you join the team. And we were still a pretty small user acquisition team at that point. I think Central UA was what, like maybe six people, something like that, not counting all the siloed studios with 150.

0:03:52 - (Matt Widdoes): Or 200 million a year kind of budgets.

0:03:57 - (Malachi Rose): Yeah, massive spend, people kind of running around with their hair on fire just trying to figure out how to manage all that. And so it's funny, we could probably circle back on this, but it's like, funny always to come into these big companies that are seen as sophisticated, and then you get in the door and you're like, wow, there's a lot to do here. It's always like a reminder that companies can look more bundled up and perfect.

0:04:19 - (Matt Widdoes): Well, and not to interrupt too much on background, but I think it's usually the companies that were most successful early that have all of the scar tissue, because they didn't have the kind of luxury of making perfect choices in technology or in approach. They were growing so quickly that kind of like what you're talking about with zynga, where you have teams that are working on the same thing sometimes and they don't even know it, and then they're like, oh, you're working on that.

0:04:43 - (Matt Widdoes): We've made way more progress, or we already did that, or we did that before and it didn't work, and here's where it lives, but we deprecated it. And so they eventually reach some point where they don't necessarily plateau, although they often do, but they reach some point where they can kind of catch their breath and everyone's kind of looking around for stuff to do, or they're kind of past that initial insanity. And then that's what we oftentimes see is that scar tissue. And so for anybody, it's almost like the more successful they are early, the more there is to unwind later.

0:05:11 - (Matt Widdoes): So anyways, yeah, for sure.

0:05:13 - (Malachi Rose): And in other cases, they just bring on new leadership and they say, hey, something's wrong. Like, new leader come in and figure this out. New person comes in and wants to change everything. And so you've got this combination of a bunch of old processes and maybe like, technical debt and other sorts of problems, team problems that need to be rethought from the scratch, even though they're already operating at scale. And urgency is key.

0:05:33 - (Matt Widdoes): Well, and sometimes there's new leaders brought throughout the very quickly, and all of that kind of institutional knowledge is gone, or there's like one person left in the basement that has all of the lore and history and knows where things. Anyways, that can be another challenge. And then where'd you go after Zynga?

0:05:51 - (Malachi Rose): Yeah, quickly close out Zynga. So was at Zynga for four years as a director of growth marketing, and in that period of time, sort of oversaw the transition of this many siloed strategies for many studios into really a central growth team that had everything from creative and analytics and CRM and performance marketing all wrapped together into what was probably getting close to 100 person cross functional team by the time I left.

0:06:17 - (Malachi Rose): And after that, I had had enough gaming, I think, after eight years, and wanted to do something a little bit different. Had the opportunity to join a series startup that was very vision, mission driven called digit. And they were trying to solve the problem of people really just struggling to save money, which is like an extremely large issue in the United States. A lot of people, as we probably remember early on in the pandemic, were struggling paycheck to paycheck. And Digit solved that problem by using artificial intelligence to essentially sweep money into a savings account for people.

0:06:49 - (Malachi Rose): It was in the early side, it was on the early side of some of these fintechs that were coming in and replacing the bank account for customers. Right. As a lot of these new neo banking apps were coming into focus. And so with Digit, I came in as effectively the first marketing hire, and I had the mandate to build out a growth team, really like an entire. And so over the next couple of years, that's essentially what he did. I spent a lot of time on hiring had to build out the analytical infrastructure.

0:07:20 - (Malachi Rose): I took them from series b to series c. Digit ultimately ended up selling, I think, shortly after I left and had scaled, like, to about three x, where it was when I came in there. So that's my background in a nutshell. And these days I'm doing more of the same thing, which is solving growth problems just for many different types of companies at MAVAN.

0:07:39 - (Matt Widdoes): Yeah. And so I think maybe we should touch on growth and what it means to you, at least. I think I've certainly seen growth be defined differently over the last ten years. It's slowly evolved, I feel like, in some ways, but why don't we, just to kind of set the stage, tell us, what does growth mean? So if you're at Thanksgiving and a family member says, what is growth? You do growth. Are these plants? What is going on here? How does that shake out for you?

0:08:02 - (Malachi Rose): Yeah, I guess I might describe it differently to somebody at Thanksgiving table than I would through my own lens. I think through the Thanksgiving table view, growth is having a systematic, data driven approach to thinking about how to scale everything from customer acquisition to revenue in a company. And then through my own lens, I see growth as really a series of challenges, problems to solve. I like a very problem focused view of growth, even if it's an opportunity, even if we're like, hey, this company probably could unlock TikTok. They've never tried and all their competitors are doing it, I still see it as really a problem, which is where you are today relative to where you're trying to go in the future, and what is the optimum path for you to do that, and what is preventing you from doing that right now.

0:08:49 - (Malachi Rose): And based on talking to any type of company, I'm usually just trying to reverse engineer how they get to their goal and what's preventing them from doing that. And so if you take everything through the lens of we have problems, we have certain constraints in how we're bringing in customers or how we're converting them into revenue. It gives you a set of things to focus on. And then once you have identified your growth constraints, you can systematically start knocking them down. You can put a tiger team of people on activation to solve that problem, or get a performance marketing team and creative team to spend a bunch of energy bringing CAC down that customer acquisition costs down. So that's at a high level how I'm approaching it.

0:09:30 - (Matt Widdoes): Yeah, I think the other piece is when you zoom all the way back out, it's really about revenue. At the end of the day, one way or the other. And profitability. Right. Because revenue alone, if it's not profitable, you're dying. And so because there are so many inputs that could lead to that from hiring. Right. So, okay, let's bring in more people, which could also be bad to SEO or emails. And like, let's beef up our social program or any number of outbound kind of activities that you could have to further staffing even.

0:10:01 - (Matt Widdoes): Well, I would say further staffing a sales team, but also like sales enablement materials or a better CRM or automation or making sure we have data infrastructure set up to support all of that. There's kind of this really, truly never ending list of stuff like a treadmill of things that you could be doing. Challenge for most entrepreneurs or leaders or teams generally, is that everybody's got something to sell that is promising. It will improve your efficiency, your growth, your revenue, whatever those things might be. So I think one of the biggest challenges people have to think through, it's less about what to do because I think a lot of those are pretty well established and they're known, right.

0:10:38 - (Matt Widdoes): Most people would agree that SEO is a good idea for long term organic ranking, but really the question becomes at what depth and in what sequence, and so really trying to manage where that next dollar is spent most efficiently, and that's a big challenge. I'm curious on the point of growth evolving over time as far as what it means, do you have any take there on how that's evolved over the last 20 years?

0:11:02 - (Malachi Rose): Well, what you said a second ago, just to touch on that first, really resonates with me, is that it's like a sequencing issue. I think that's where most companies get held up. There's an infinite number of things you can do. This is why sometimes growth is seen as almost like voodoo magic from people if they're looking from the outside in. And when you sequence your problems based on what is going to be highest impact to the business, essentially, like what is the first priority that you can go tackle that's going to get you closer to your goal. Whether it's showing initial interest in a product so that you can launch your mvp out in the market, or it's fundraising, or it's reaching a certain customer acquisition target.

0:11:41 - (Malachi Rose): Ultimately, just tackling those one at a time is like the approach, and you build on that over time. So rather than trying to do everything in boiling notion and doing nothing well, you take a specific set of growth techniques and you apply them in order to unlock a part of that funnel. And so that's usually what I'm trying to preach to companies is like, let's not do everything, let's say no to many things. Let's pick the one thing that we could do right now that's going to be highest impact.

0:12:07 - (Matt Widdoes): Yeah, well, and that's the other thing is so many of those functions lean on each other and they need that support. So maybe a house of cards is not the right analogy, but if you think about that, you have to kind of get these two cards up first and then put one on top so that that is kind of like, stable. And then you're like, okay, I've got that. I can start to build off of that. The problem is if you just go all in on user acquisition with no data, well, okay, now we're just trusting everything to the platforms. We're not really sure on the tracking, where things are going or all in on that with no support, even basic support and lifecycle, so that we can clean up some of that with sms and email and push people further down the funnel, or even worse, going all in on SEO. And then she's just like, all right, I hope that works. So there is this kind of balancing act, and I think that that is, especially in the early days, making educated choices that are informed and are efficient, especially in a world where everybody's coming at you. Saying that my card is the card that's going to be the one that makes this is the linchpin to your success is a challenge.

0:13:09 - (Malachi Rose): And then to answer your question about what's changed, I mean, if you back 20 years, I don't think anyone would be you. Using the word growth even implied in talking about what's changed in growth is the concept that this centralized swim lane within a company called growth is now a thing, and it wasn't previously. If you went back 20 years, you'd probably have, like, direct response marketing, brand marketing, product data. And these are all very different functions.

0:13:35 - (Malachi Rose): Maybe if you're lucky, you're at a company that's adept at talking about them between those different departments. And so as we've evolved over the last, we'll call it ten years, maybe it really is longer than that. There's been this coalescence around the need for cross functional teams. And so what emerged was this concept of like a growth Tiger team that you might have a data analyst, an engineer, a product manager, a marketer, creative person or designer all on the same team, even though they have vastly different backgrounds and experiences, but they're all working on solving a single problem and a lot of these modern, really high functioning growth teams do that. They say, like, we're going to build an activation team. I would guarantee if you went to a Pinterest or a meta or something, they would have a team around a set of problems, a little pod of people who have all the resources they need to be able to set up a test, run it, push something out live, and drive impact end to end very rapidly without the overhead of having to manage politics and having to get all the way up to the CEO to approve things.

0:14:39 - (Matt Widdoes): Yeah, I think the interdependency there, and I think that piece that you had mentioned, if you go back, especially 20 years of how you'd have these disparate teams, all with the general sense of trying to improve the company, but with different metrics, different targets, not necessarily communicating super closely, or they would be at the highest levels. But that kind of interplay between those teams were sometimes at ods with each other, where you have product pointing at sales, sales pointing at marketing, marketing pointing at somebody else in the chain. And so it's been interesting to see. I think what I've observed is it used to, like, the first instances of growth that I heard were really focused on growth hacking and what are low cost ways that we can make big advancements in growth or some, maybe it's not at scale, but it's working and it serves some function there.

0:15:23 - (Matt Widdoes): And then that over time had morphed into, like, let's get marketing and product in the same room. And now that's come all the way down to let's get everybody in the same room. And kind of some of the setups that you're talking about, both sometimes, like, literally company wide, they have that culture where everybody's purely focused on the company and less about their kingdom building or the political stuff.

0:15:46 - (Matt Widdoes): And in some of those much larger companies, it's kind of impossible to avoid the inevitable political maneuvering and kingdom building. And so you end up with some of these kind of smaller tiger teams, like you mentioned, who focus on that. So most of the people that are listening are either, well, many are early stage founders, early stage, kind of going up to maybe series b. Some are experts in their own right in different functions and are managing large teams, I think. And you mentioned a moment ago about thinking of it through the lens of problems to solve, even if they're opportunities, but really thinking through what is the problem? What are we actually trying to fix here? Which is very similar to how doctors work. Right. It's like, what's hurting and what do we need to fix? And it's approached from that angle. With that in mind, I'm curious, when companies are kind of earlier, what are some things that you see data get wrong?

0:16:34 - (Malachi Rose): Yeah, good question. I mean, there's so many things that could probably go into that bucket, a few that call out that maybe I'm seeing more recently and that you probably won't see just show up in the common business books. Okay, so one that would come to mind is that I feel like maybe just due to the nature of having to do, having to manage a startup, founders tend to be fairly optimistic in nature. You almost have to be to be entrepreneurial, to take the gamble, to take the risk of starting a business.

0:17:04 - (Malachi Rose): And so in the early days, they have this strong vision, they have a hunch of how they're going to achieve product market fit. They've built a company around that, they've raised money and that suits them pretty well to get something off the ground that's really Silicon Valley in a nutshell. It's being able to have this wild idea and chase it. I think once they start to engage in a little bit further downstream into the growth process of thinking about, okay, I have this idea how to actually sell it.

0:17:33 - (Malachi Rose): I've seen them lean on that tool set that originally got them off the ground of creating a company where they're still leaning a lot on intuition. They know that they need to focus on customer acquisition at this point and they're ready to switch gears, but they're still kind of maintaining that original lens of, this is all going to work really well. The first time we get this out there and we start to turn on ads, on meta or we end up setting up a referral program, it's all just going to take off.

0:18:00 - (Malachi Rose): So I think what I see is that there's still too much reliance on intuition and the presumption of the success. And so many times companies will just rush into growth mode when they haven't really figured out some of the product health specifics. And I think in particular when we're getting engaged into a project with a brand new company and we actually open up the hood to look inside, it's not uncommon for us to realize like, hey, this is a leaky bucket.

0:18:28 - (Malachi Rose): We can't push people into this product, or there's any number of different things that are higher priorities than growth that need to be addressed and we have to quickly switch gears. We're now no longer in growth mode. We're in customer research mode, we're in maybe more product actual, actually, like, how do we develop a lower friction ui, ux that activates and onboards people so that we're not just driving a whole ton of people into a product that's not going to work? So that's like one of the things I'd flag and kind of piggybacking on that is that there's this underestimation on the time and effort it actually takes to do these things.

0:19:03 - (Malachi Rose): And so it's more common than I would think, I guess, that you have startups that are in such a rush to launch and get their product out in the world and think that from that point in time that they will just be generating enough revenue to fuel growth, and they don't really take into account the level of capital they need to do to that, particularly if they're entering a very competitive market. And Matt, you and I have seen that, right?

0:19:26 - (Malachi Rose): We talk to companies who are trying to break into really complicated, two sided marketplaces, or maybe just like markets that we know are going to be a tough nut to crack, and they expect it to work in the first two weeks. When you're taking that growth mindset, I think when we get into these projects, we have much longer time perspectives on it. We realize that you have to be willing to sit through quite a bit of learning, quite a bit of failure before you reach the success.

0:19:53 - (Malachi Rose): And that that's really the key to unlocking growth in these companies is like you get a progressively better understanding of your customer, of what they want, of how your product can achieve that, and also of how you actually bring that to your distribution channels, of what you're doing in your growth strategy. And over time, you're just sequentially unlocking those different growth levers. So those are a couple that stand out to me.

0:20:16 - (Matt Widdoes): Yeah, I think the underestimation of the time and complexity and cost is largely due to the fact that infinite knowledge about every function. Right? So I was way more guilty of that early in my career of like on the dev side, which I know very little about. Or I'm like, well, what is that, like a day or something? Someone's like, no, it's like two weeks. What are you talking about? It's like, how's that two weeks? Why is that two weeks? And it's like you don't realize all the QA, all the interconnectivity, all the design, all the spec, all the stuff that comes through. And then I think on the side of getting data back, particularly in things like pay, and you mentioned people expecting it or at least wanting it or hoping it would work in the first two weeks is another thing I see a lot, particularly in really early stage, but even mid stage, that are well funded, is that throwing out a number, but that kind of, no matter what size you are, whether you are brand new or you're at scale, $100,000 is a test.

0:21:11 - (Matt Widdoes): That is an amount of money that we use to test. And I oftentimes see particularly the very early stage stuff is like, okay, and that's our budget. That's our annual budget for paid. It's like you're going to have a really bad time with that because again, especially if you're in a high consideration product that's going to have CACs of $250 or something like that, you're not going to hit 250s until you've tested probably a quarter million at scale. Like consistent, lucky, hitting that target CAC, unless you're lucky or the product just rips and is way better or is totally new and everybody understands it, it's even harder when you're new and people don't understand it. So if you have competitors that also introduce challenge, but those get optimized over time. And so it's not unlikely that your first $25,000 in pretty much any new ad test is going to come back four or five x higher than target CAC, right. Because even the platforms are trying to figure it out, right? That's a lot of the stuff that's going on behind the scenes. They're trying to make sure that they're sending you the right mix and it just needs data. And so there are worlds where you can have at a king, we have that 100k feedback in a week, right. Because it's like, okay, whatever, it's small to us. We can afford to spend that 100. It's not a big deal because the overall budget is 200 and 5300 million. So the 100 is kind of marginal for a much smaller company where that might represent a 10th of their annual budget.

0:22:33 - (Matt Widdoes): Even at a million, which is a perfectly fine annual budget for acquisition, you still might be able to get those learnings back off that kind of initial hundred in a month, right? Or in a couple of months. And so I see a tendency to try to be too perfect with that initial capital where it ends up stretching all. They stretch that over six months to try to find the learnings, and they inevitably do, but that they could have actually really shortened that cycle because a lot of that is actually just volume and data that needs to come through and you don't want to just drop it all in a day because there's going to be all sorts of biases that are introduced there and it's unlikely to be super efficient. But I think that's the thing I see is people have to be ready and willing to if they're going to enter in or have paid acquisition as a part of their strategy. You have to be ready to have kind of the coffers and the stomach tolerate that. Early testing. I joked in the past that at Scorestreak, one of the first places I ran media, we could test anything. It just had to work the first time because every dollar was so important. And so it becomes really hard to test if you have really small media budgets, and that is a prerequisite to success.

0:23:39 - (Malachi Rose): I mean, maybe we can linger on this point for a second.

0:23:41 - (Matt Widdoes): Sure.

0:23:42 - (Malachi Rose): It's really an interesting one. I'm personally of the mindset that you don't want to be throwing hail Marys pretty much ever. So when you're thinking about growth, luck should not be a huge component of it. Sure, luck is a part of everything we do, right? But taking that out of the equation, how do you derisk what you're doing? And there's a lot of things that we have control over, from putting out customer research to running tests that give us a lot more confidence in what our approach is.

0:24:10 - (Malachi Rose): And essentially what you were just talking about a second ago, focusing really on learning in the early stages. I see that as being just absolutely key. There's this book called the Art of Learning by Joshua Whiteskin. He's actually the person that in search for Bobby Fisher is based on. So he's the young chess prodigy. He's brilliant at a very young age and suddenly struggles through hitting this wall of being like, well, what do I do with my life now? Essentially just peaked as like a ten year old in chess.

0:24:38 - (Malachi Rose): And he ends up running this test on himself, actually, to see if he can transition into the world of competitive Tai Chi, martial arts and totally different than chess. Right? And he has to teach himself how to learn again. And he essentially deconstructs the lessons he got from learning chess at an early age and applies it to this new thing and sees if he can repeat it. And I won't ruin the end for you, but let's just say that he's extremely successful at this entirely different, not mental, but very physical art form by using these techniques. And one of the things that he advocates for to bring us kind of back into the discussion we're having is this concept of investing in failure, and that it's critical early on.

0:25:23 - (Malachi Rose): You have to embrace the idea that you're going to suck at this in the beginning, you're not going to be good. There's going to be a period of time that's just dedicated to you getting through the thick of friction, of learning, of it being hard. And only through doing that repeatedly and just getting better at it with each turn do you actually achieve any sort of level of proficiency, mastery, success, whatever you want to call it.

0:25:46 - (Malachi Rose): And that's critical as a mindset, in my opinion, for companies to have that the companies who are really successful at growth embrace failure as part of the process, for sure, and know how to build on that.

0:25:58 - (Matt Widdoes): Yeah. And I think that's just true at the individual level. I mean, at Red Bull, when, I mean, it was 20 years ago, I started Red Bull, which is crazy to say, but one of the values, one of the core values that they had and they looked for in every single hire was they framed it as lifelong learner. And that's something I took early from Red Bull, is because it's such a tight way to say it. And it's something I've looked for ever since in people that I hire are people who have a passion for learning. And some of that comes with a resilience. It comes with a level of curiosity, it comes with a level of humility, it comes with a level of risk taking, because you have to be willing to fail.

0:26:33 - (Matt Widdoes): And it's something, too. I'm dealing with my daughter is that she hates failing. She plays a game, loses. She hates it, and she's not crazy about it, but she gets really kind of downtrodden or she tries something new, basketball, and she's missing it, she gets really hard on herself. And I have to kind of constantly reiterate, and that process of trying to help her through that kind of highlighted this to me, is that really one failure is just part of the process.

0:26:58 - (Matt Widdoes): It sounds so obvious or maybe even cliche that in order to learn, you have to fail, but it's so true. And that if you aren't failing, then you're probably not doing something all that special, because it likely means that it's easy, or it could potentially be that it's wrong, or it could potentially be that it is really basic and it's not like, the right way to do something right. And so an example that I've given her, particularly in games, is, like, if a game is really easy, if you just won the game every single time, right off the jump, nobody would play it. It's not fun.

0:27:33 - (Matt Widdoes): Right. And so the reason it's fun is because you get to have this arc of overcoming a failure and getting better. And so you look at something like golf that nobody is ever good at off the jump, ever, full stop. I think that's pretty widely. That's a bold claim. And yet you still have people that play it for decades and decades, their entire life, because it's this constant, minor improvement. And they've gone from, like, if you can shoot par, that's pretty much amazing.

0:28:00 - (Matt Widdoes): Right. And so it's like, until you're doing that or subpar. If you're subpar, ironically, you're professional. Right. In any other world, that wouldn't be true. But, yeah, I think that's a big piece. I think is people having that expectation and willingness to fail in kind of all of these efforts. And I think part of what, when you're at a point where you can bring in a specialist, you can kind of reduce that risk a little bit. But even then, somebody who's been doing something for 1520 years is going to continue.

0:28:25 - (Matt Widdoes): There should be opportunities to fail because you're trying something for the first time, you're still learning. You're not just doing it the same way you did it 15 years ago. So I think that's a great call out. Yeah.

0:28:34 - (Malachi Rose): And how you build that into the process on the growth side is you say, I'm going to allocate a certain amount of time and or a certain budget, depending on what we're talking about. Like, if it's a paid media channel as an example, you'll say, like, hey, let's say it's TikTok. I need $25,000 in ad spend and at least four weeks, maybe six weeks to run through this, to have any confidence that this channel is or isn't viable. And some people don't even stop there. It's a little bit of like a risk tolerance decision where you end up stopping, but it's usually when you've run out of really good hypotheses, you no longer have something that's very meaningful to test. So when you run out of really good hypotheses to test in front of you, you're feeling, I guess, lower confidence that if you continue to keep doing what you're doing, it's going to work. It's going to somehow move the needle and change the result.

0:29:20 - (Malachi Rose): And so whenever I'm trying to crack into something brand new, I structure expectations around this idea that there's going to be a period of learning. We can't guarantee that anything's going to work. I'm like, I've done this enough times in my career to, I guess I've gained the humility that I don't know if something's going to work ahead of time. I have a thesis and I either need to prove or disprove it with data, and sometimes I'm right and sometimes I'm wrong.

0:29:47 - (Malachi Rose): But what I can guarantee is that by going through this process, we're both going to be a lot smarter. By the end of it, we will have learned something meaningful and that it will have an impact on the business. And as long as you're doing that in the right way, you're structuring investments where each of them are mean, meaningfully, answering core questions about the company and what sort of growth channels work and what strategies they should build on that. Even if only one out of four of those things work, and you're consistently getting a 25% hit rate on some of these major growth experiments, you're actually doing really well.

0:30:16 - (Malachi Rose): You're starting to build a foundation that you're expanding on in each of those, and then the other end of it is just minimizing the impact of those failures so you know that you could digest them and they're not going to crash the business.

0:30:28 - (Matt Widdoes): Yeah, I think there's two things I pull from that to just double click on. One is that, and I think a lot of people miss this who haven't spent as much time in user acquisition, is that there are kind of, well, there are many purposes, but at least two that we could call out, which is you can leverage something like meta or Google to learn, and this allows us to quickly get people through our funnel. We're going to be looking at, we're not just necessarily measuring how the performance of the media, fact, we might not be concerned about the media whatsoever. We're just trying to get volume into this thing and see if it breaks or see it's a data thing. And then there's another major use case, which is to scale, and that's no longer meant to be a test. That is, we have figured things out and now everything is healthy. We have multiple things sorted, we are now scaling, and of course there's optimization within that. And you can always try and lower CAC, increase LTV with all sorts of different things.

0:31:14 - (Matt Widdoes): They're two very different functions. And I think sometimes people only see the second one, where again, to that previous point, I expect the first dollar should come back pretty quick. Again, if that was the case, then everybody would just start a business. And so it's much more difficult than that. And then the other piece is with that, having that intention, whether you're early or late stage, having that intention for what you would earmark as test or throw away, not throw away money, but money that we don't expect to come back. It has a different purpose. It is meant for exploration. It's meant for any number of things.

0:31:41 - (Matt Widdoes): And even at King, that was something that I brought in that they had not had prior, which is, and it's worth calling out because what you have is at scale, you have a bunch of media buyers whose heads roll if their roas isn't coming back. And so they're not actually incentivized to try too much stuff, because if they try too much stuff, it's going to decrease the efficiency of their overall, what they've spent. And so now all of a sudden, their numbers are going to look wonky. Meanwhile, we're asking them to expand. We're asking them to find new stuff. We need more volume, but we need it not at all costs. We needed it within this certain range. And so what I was able to bring in is saying, and it sounds so basic, but so many companies at scale that aren't doing this is separate that out and say, look, we have a different naming convention. We have a different place where we can run tests that are clearly earmarked as tests. And then when we're pulling weekly figures, we're not actually penalizing you for running that test. In fact, if you're not running tests, we're penalizing you because we can see that you're not. We've earmarked the budget. It's not happening.

0:32:35 - (Matt Widdoes): Let's get that up. But now you can't claim that we're not testing new stuff because it's going to make other things inefficient. And over time, we can actually see how those tests are performing. So if on average, let's say we have a target d seven row as of 10%, and on average, our testing bucket for the first six months is coming back at 1% because it was all a test and it averages out to 1%, well, it might be in the second six months that's averaging 1.7.

0:32:59 - (Malachi Rose): Great.

0:32:59 - (Matt Widdoes): We're getting a little bit better at testing. It's directionally better. And so just worth calling that out because you may be at a large scale company, you may be a CMO, you may be a CEO, you may be leading performance. And if you don't have that instilled, there is almost absolute certainty that your teams aren't taking as much risk as they could be because they are worried about their numbers. Because you're worried about their numbers. So split that out. Have the expectation that some of the money is going to be used in paid for learning and for exploration conquering. And some of it is meant to come back with some extra money on top.

0:33:33 - (Malachi Rose): And you can apply these confidence intervals to this process too. So that as you're running these tests and trying to figure it out, you don't necessarily have to get all the way to the end to decide that something's not going to work. It may be that something is failing so miserably in the first 10% of that trial that you can pretty confidently say that that test has failed. Statistically speaking, you don't need to keep running it.

0:33:56 - (Malachi Rose): And so that's like another thing to keep in mind is you can minimize loss while maximizing learnings. And someone who is relatively adept in growth gets pretty good at figuring out how to do that and knowing when to call something early and when to keep running something and when to flip the switch you described from testing into scaling the second that we're at a point where we're saying, hey, we're really excited about what we're seeing now we want to get more of this. How scalable is this? Let's try and scale this until it breaks. And that's still a test too, in a way. Everything in growth is a test. You never stop the test.

0:34:30 - (Malachi Rose): It's just you're testing something new. You're testing like, okay, this worked at this level. Now what if I two exit? What if I change the incentive? Does this hold? And so it is constantly like retesting and optimizing it. And those are maybe two useful stages to think about. Like which stage am I in? Let me locate which stage I'm in. I need to have a different mindset. I can't expect this to work right out of the gate. And then once you're in the next stage, you're really just trying to maximize. How do I maximize the revenue or whatever that KPI you want to move is?

0:34:59 - (Matt Widdoes): Yeah, and I'm curious, this applies to everything, not just early stage, but when thinking about companies that are at scale, what are some things that often are getting wrong that you've seen?

0:35:08 - (Malachi Rose): Yeah, as you were talking about, King, you actually reminded me of something which is like that user acquisition manager who maybe is just working in one area and is afraid to take risks. Their entire function is built around having a dedicated incentive to be really good at what they got brought in on. So if they're a paid search manager in user acquisition, as an example, they might not be really incentivized to go out there and take a huge gamble on something they don't know that much about. Unless that's something that, from the top down, is baked into the culture of the company.

0:35:38 - (Matt Widdoes): Yeah, it's got to be valued.

0:35:39 - (Malachi Rose): And so that's a form of siloing. And I think when, if I tried to distill down what I see at companies at scale almost across the board, because you constantly have to firefight, this is that they end up getting very siloed as they grow. They specialize, they bring on ahead of brand, they bring on ahead of analytics. Each of these captains creates their own fiefdoms. They now become really good at that thing.

0:36:03 - (Malachi Rose): And whenever you need to do something that's cross functional, you now have to dip into their realm and convince them to do something. And this is one of the major reasons why these companies move slow as they get big and become kind of this large boat that's difficult to turn because their strategy is siloed. They have different goals. Getting people on the same page with having a shared goal across two teams, like, shockingly hard to do in a big company. They have to overlay these huge processes, like not just an OKR process, but probably an OKR process that has multiple stakeholders feeding into building shared okrs to even attempt trying and break through some of these silos. And then you get a lot of siloed data, too.

0:36:45 - (Malachi Rose): So when you have two different groups that are trying to move a metric, maybe different metrics would be a good example. They're sometimes in opposition to each other. The acquisition team might be scaling to try and achieve a lower cost per acquired user, and that's hurting retention. And the retention team is trying to do stuff that's improving retention, but it's increasing friction in some other part of the funnel. So I think one of these learnings is whenever you're changing anything in a company, you're changing multiple metrics at the same time.

0:37:12 - (Malachi Rose): And these small companies are nimble enough, they're tight enough in terms of communicating between different people that they're able to think about this more as a holistic function, a holistic impact, whereas these big companies become so siloed, they just look at, what am I getting incentivized to move? And I'm just going to ruthlessly focus on that. That's what I'm getting bonused on, whether I get promoted and everything else to be damned, even if it's the best thing for the company.

0:37:37 - (Matt Widdoes): Yeah, I think that trying to maintain. I think no company starts with a culture of silos and everybody mind your own business. Right. And so challenge for companies to try to maintain that as they grow. And it really has to be valued at the core was talking with somebody who's senior at Apple and talking a little bit about how they've changed over the last decade, particularly as they've taken in more people from Google.

0:38:04 - (Matt Widdoes): And Google's a very different culture and has kind of had more of that siloed kind of fiefdom earlier than Apple did. And now Apple's starting to feel that. So it's kind of funny to think that a company of Apple size is doing that. And I've also, again, no defense to Apple. Another friend of mine was there years ago, and they keep everything super separate. Like, at the lunchroom, if you were to just casually run into somebody that you didn't know, sit next to them to eat, to ask them what they work on, like, well, what do you do here? Oh, I'm a project manager. Okay. Into conversation.

0:38:35 - (Matt Widdoes): What kind of project are you working on would cause the entire place to shut down. It's like, why are you asking me that? So it's a super secretive place that doesn't want to be. Siloed is also kind of a unique problem to have. But I think that ultimately, if you're going to avoid that and maintain, I think that as that kind of one of the fundamentals to growth at scale is having a team that is oriented around the same goals.

0:38:55 - (Matt Widdoes): Even if you're super large and doesn't mean you can't still grow. Obviously, the apples and the googles are doing fine, but it does slow it, and to your point of it, just being a bigger ship, but also a higher baseline. So, anyways, it's a balancing act. If anybody figures out how to solve that, let us know. But I think the more you can maintain that openness and that desire to improve, like, to focus on the baby, something we talk about a lot, but to really make sure that everybody's incentivized to do the best thing that they can in the spirit of growth versus the best thing they can for their career or their team or whatever, that might be, the better off you are.

0:39:27 - (Malachi Rose): Yeah.

0:39:27 - (Matt Widdoes): So I would love to talk about team building and design, but I think we should actually probably save that for another podcast, because we can go deep, and I know we are already a little bit into this one, maybe just kind of to wrap this one up, and we touched on some of that just a moment ago, but this is kind of a repositioning of what are the things that people get wrong. But if we kind of reframe that regardless of company size, any things that come to mind as far as setting up a company for success in growth that you think are worth calling out?

0:39:55 - (Malachi Rose): Yeah, I mean, one I think about often, because most companies are pretty bad at it, is just talking to customers. Sometimes that's under a function of user research or customer insights, but more often than not, companies have no such function.

0:40:07 - (Matt Widdoes): Yeah, I was going to say most companies don't have a, if they're lucky.

0:40:10 - (Malachi Rose): They'Ve done like a single survey at one point in time in their history or in the last year. And so they're not getting this continuous feedback from the very people that they need to in order to simultaneously improve their product and hone their marketing strategy. And so you see a little bit of this vacuum chamber effect of entering a company and having a bunch of internal opinions of what's going on that are just sort of bouncing off the wall, that aren't really rooted in any sort of reality. Wouldn't it be nice if a customer just told you, or potential customer just told you why they bounced off your website or why they used your product, were in a trial for one day and left?

0:40:47 - (Malachi Rose): That would seemingly be pretty high impact for the business, right. And companies just aren't really doing that. I think at the earliest stage would be like talking to customers. Sometimes it's a recommendation to companies who are just launching, like have the ceos talk to the first hundred customers on the phone, right? Get that feedback, that mechanism going. Just have that get baked into being a habit.

0:41:09 - (Malachi Rose): And even at Zynga, at scale, the consumer insights group stood out as being just a huge differentiator. And these game studios would come up in all hands meetings and say, hey, props to consumer insights. The reason why words of friends two is as good as it is is because we had incredible feedback and we were able to iterate on this until we got it right. So that's one thing I'd flag. Another is like this concept of mvping things like, to mvp almost anything that you do. So don't try to reduce the number of Hail Mary attempts going all in on something.

0:41:41 - (Malachi Rose): What is the smallest version of a quality product or of the thing that you need that you can put out into the world that gives you validation on the signal. When we're talking about company ideas in our venture studio, we bring that up quite a bit as well. Right? Like how do we get that signal early on? And how do you balance that against the problem that you don't want to put a customer into a broken, fragmented experience and then call it a failure falsely.

0:42:08 - (Malachi Rose): And so if you can get into the mindset of defining what an MVP is, something that is going to be pleasing to the end user to actually come into, and then as soon as you see signal that it's working, like double down really quickly, build on that. You can do that across almost anything. You do it across a growth strategy, you could do it across a feature, you could do it across a launch, really. It's running these betas.

0:42:32 - (Malachi Rose): It is testing things out before you scale them. Those are two big ones. The last one I toss out is so obvious, it almost doesn't need to be said. But it does need to be said, because again, companies are just really pretty poor at this, which is to have a measurement plan in place, measure everything. So when companies go into trying something and they don't have a clear understanding of how they're going to define success, then what happens when it doesn't work?

0:42:56 - (Malachi Rose): There's no plan b, right? Like, they can't go back in and dissect why it went wrong or what to do next, or how to try a different approach, a different hypothesis that gets them out of that state that they're in. And so I think if you were to combine even just those three things together and you did very little else, you would be making huge gains within a company at any scale.

0:43:16 - (Matt Widdoes): Yeah, I think a big thing is, it's easy to lose sight of. But one of the big things that people have to balance for is their own bias and following intuition too much. We talked about it a little bit at the top, but really there's such a. I don't know, it's so natural to go to that and say, like, this is just, I can tell that this is going to work and nothing will break that habit faster than running paid acquisition and looking at creative and being like, I'll bet that creative does better than that. Creative.

0:43:39 - (Matt Widdoes): And to your point, on consumer insights, that helps break that. That's one of the many things that can help break that, because so often, even just in basic communication, you can send an email and somebody totally misunderstands that. Right? You can say something 15 times, like, everybody bring a bucket on Friday and nobody brings a bucket and you're like, well, we said it like 50,000 times. How does nobody not hear that? And it's like, well, I don't know.

0:44:02 - (Matt Widdoes): Obviously it was lost. And so the odds that somebody is going through your product, looking at your website, or even the benefits they're getting from your product are likely very different than what you told them the benefits would be, or why you think they're using it, or why they're not using it or that they even know about it. Right? So the importance of using data, which again, this is not a hot take, but so many people still don't do it. To use data to drive decisioning and to infer what you should be doing next from a test or what might be happening in that, and then testing that again, something we talked with rich skinner about. But really it's so fundamental and basic as scientific method of like, this is what we think is going to happen.

0:44:42 - (Matt Widdoes): This is how we're going to try to build a test so that it's not dirty and we believe the results. On the other side, this is the level of data that we're going to need to feel good about it. This is what we expect to see. If we see something else, this is what we might sanity check about the test itself to see if we got something wrong there. Or if we see something else, then this is what we would probably test next. And having some sense of a plan for that testing tree. In a world where you can test anything at any time across any function, it's also really important to kind of call the shots and have an abundance of things that you're going to test or that you'd like to test, but have the time set aside to really plan on what that sequence should be and what's the best bang for the buck. And across a number of functions, from how much time you're going to have to put into it, to the cost of the time, to the measurement, there's so many things that go into that. So it's kind of like parting thoughts or high level advice to anybody building out a growth team or making their first hire, or they're just thinking about growth as a function and maybe they already have a few people in it.

0:45:38 - (Matt Widdoes): Kind of think about this all the way around, from the person who's just made their first hire, and that could be any number of types of people, or to the person who's got a growing ten person team or something like that, or, I don't know, CMO of a 200 person or something. Like that. What advice or high level parting thoughts might you have for somebody in that? If they're just wanting to have one or two key takeaways?

0:46:00 - (Malachi Rose): Yeah. To build on the topic we just talked about, I think something that every single person could leave with is find a way to reach out to customers right now and get useful feedback on how your current strategy is working or how your current product is working that you can then plug back into what you're doing today. Another one that I would toss out is pick a single area of focus. Pick an area that's going to be high impact to the business and treat that as a joint goal that exists across teams that you are trying to drive impact in. And so if everybody is focused on the day one customer experience for the next three months and you have everybody from growth and marketing teams, design teams, and product teams all working on that, it's kind of like shocking how much progression you can get. And that's actually fairly unusual. A lot of companies are just structured to do everything all at once and try and move things forward slowly. But often I see the biggest improvements, the biggest impact of the business happens when everybody's working together at the same time on the same problem.

0:47:01 - (Matt Widdoes): Cool. Well, thanks again for taking the time today. This is great. It gives us a reason to meet again to talk about growth teams at a later date. But thanks for joining today.

0:47:09 - (Malachi Rose): I look forward to it. Thanks, Matt.

0:47:10 - (Matt Widdoes): All right, cool. Thank you for tuning into this episode of growth at scale. We hope that you enjoyed the discussion around growth with Malachi Rose, and we look forward to seeing you next time.