20 Growth Shopify's VP of Growth on Why Standalone Growth Teams Operate More Efficiently than Integrated Ones, Why You Should Hire as Senior Growth Leaders as Possible and The Biggest Mistakes Founders Make When Making Their First Growth Hires

In the latest episode of "20 Growth," host Harry Stebbings interviews growth expert Luke Levesque, VP of Growth at Shopify, who shares insights from his extensive career in growth roles at companies like Facebook, TripAdvisor, and his own startup, Travelpod. Luke emphasizes the importance of focusing on a North Star metric, empowering growth teams with engineering resources, and the critical relationship between product and growth teams. He also discusses the value of leveraging advisors and ensuring growth leaders are closely connected to the CEO for strategic alignment. Luke's approach to growth involves deep understanding of core mechanics, continual learning, and the art of balancing high-level strategy with hands-on execution.

• Harry Stebings hosts the monthly episode of 20 Growth, aiming to provide benchmarks for hiring growth roles.
• Luke Levesque, VP of Growth at Shopify, is the guest, known for his extensive experience in growth and product development.
• Luke advises companies like Twitter, Pinterest, and Quora and has a history of successful ventures, including founding Travelpod and working at TripAdvisor and Facebook.

This is 20 growth with me, Harry Stebings. This is the monthly episode where we sit down with the best heads of growth in the world.

The quote establishes the podcast's focus on growth expertise and its intention to serve as a guide for hiring in growth roles.

• Debyte provides a financing solution for startups facing lending cutbacks and smaller funding rounds.
• The platform offers a corporate card with high credit limits and installment options for card purchases and invoice payments.
• Debyte offers a rewards program and a discount with the code "20 vc".

As banks cut back on lending and funding rounds get smaller, they have to show strong business growth while keeping cash burn low.

This quote explains the current challenges startups face in securing financing and the need for solutions like Debyte's offerings.

• WHOOP is a product that has changed Harry's approach to recovery and body temperature monitoring.
• WHOOP's recovery score influences Harry's gym routine and illness prevention.
• A discount code "vc" is offered for WHOOP purchases.

The WHOOP has single handedly changed how I think about two things, recovery and body temperature.

Harry credits WHOOP for significantly impacting his health management practices.

• Luke started as an entrepreneur at 21, founding the travel blogging network Travelpod.
• He learned the importance of growth during the acquisition of Travelpod by TripAdvisor.
• Luke's focus shifted to growth strategies, including SEO and viral loops, after realizing the significance of scaling a product.

So I originally started as an entrepreneur, kind of bouncing between product and growth for a really long time.

Luke's quote reflects his entrepreneurial beginnings and his journey towards understanding the balance between product development and growth.

• Viral loops involve users inviting others to a product, potentially leading to exponential growth.
• Successful viral loops are often integral to the core product, making sharing a natural part of usage.
• Shopify's growth is largely driven by merchant recommendations, highlighting the importance of product quality in growth loops.

A viral loop is basically where you have users on your product that are doing some kind of behavior that's inviting other users to come and register on the product.

Luke defines a viral loop and emphasizes its role in user-driven product growth.

• Luke was recruited by Mark Zuckerberg and joined Facebook, where he worked on various growth initiatives.
• He learned to view growth broadly, considering SEO, paid loops, M&A, and new product development.
• Building Messenger Kids at Facebook was a key growth achievement, targeting a new user segment.

It's about thinking growth broadly, really thinking about all the different ways of growing.

Luke's quote encapsulates his holistic approach to growth, considering all possible avenues to expand a product's user base.

• Successful growth teams are curious, humble, and open to being wrong.
• Luke's advising experience shows that effective growth teams question assumptions and are eager to learn.
• The ability to communicate years of growth experience quickly is a unique aspect of advising.

The ones that I've seen work the best, the commonality would be teams that are just constantly questioning assumptions, open to being wrong, very curious.

Luke identifies the traits of successful growth teams based on his advising experience with various companies.

• Growth is defined by the outcome a company aims to achieve and the activities that contribute to that growth.
• It is not limited to one specific method but encompasses whatever is necessary to move the key metric.
• The right growth metric is highly impactful and can initiate a growth flywheel for the company.

It's basically whatever it takes to move that one metric you're trying to increase.

Luke's definition of growth is outcome-oriented, focusing on the key metric that drives a company's success.

• Standalone growth teams are preferred by Luke, but the structure depends on the available talent.
• A standalone growth team should include as many functions as possible to support growth.
• Growth teams must collaborate closely with product teams, regardless of their structure.

Personally, I find that it works best when it's standalone.

Luke expresses his preference for standalone growth teams, which allows for dedicated focus on growth initiatives.

• Growth has a distinct culture that operates differently from traditional product teams.
• It is preferred to have the growth team operate separately from the product team.

"But growth has its own culture. It needs to build. It does operate a little differently than a traditional product, so I prefer to have it separately."

This quote highlights the unique operational culture of growth teams, suggesting that they should be separate from product teams to function effectively.

• Hiring as senior as possible is recommended due to the experience required in growth.
• Growth requires a lot of experimentation and pattern matching, which comes with experience.
• There is a limited pool of talent in growth, which can be a constraint for founders.
• If hiring someone senior isn't possible, consider hiring a more junior person and surrounding them with a set of advisors.

"I generally like to hire as senior as possible. You want to bring in somebody who's had a ton of experience."

This quote emphasizes the importance of hiring experienced individuals for growth roles due to the complex nature of growth strategy and the need for pattern recognition skills.

• Focus on hiring and leadership skills when building a team.
• Look for signs of excellence and past performance as predictors of future success.
• Examine candidates' motivations for leaving roles and their accomplishments.
• A strong signal of talent is when a candidate's previous leader hires them at a new company.
• Preference for ex-founders and individuals with repeated success.
• Trust in back-channel recommendations without caveats.
• Enjoyment of working with the person is also a consideration.

"So what I look for is what signals indicate past behavior and success that would be predictive of future success."

This quote outlines the approach to identifying potential growth leaders by examining their past behaviors and successes as indicators of their future performance.

• Determine how deeply candidates understand the craft of growth.
• Ask questions to tease out individual knowledge and experience.
• Use a series of "why" questions to test the depth of understanding.
• Look for candidates who can use their intuition to launch successful experiments.

"Tell me something I don't know about growth."

This question is used to gauge a candidate's depth of knowledge and ability to present unique insights into growth strategies.

• It's important to discern the individual's contributions from the team's achievements.
• The hiring process should reveal the candidate's understanding of growth beyond executing standard playbooks.

"But I don't know the difference in attribution between individual and team."

This concern expresses the difficulty in distinguishing a candidate's personal impact on growth from the collective impact of their team.

• The biggest mistake founders can make is hiring the wrong person for a growth role.
• Rapid promotion in growth might not always indicate excellence due to the limited talent pool.
• Public speaking and social media presence do not necessarily correlate with growth skills.
• It's important to investigate a candidate's actual impact and conduct thorough back-channeling.

"I mean, the biggest mistake you can make as a founder, hiring the wrong person for the role."

This quote stresses the critical importance of making the right hiring decisions for growth roles, as mistakes can have significant consequences.

• Involving the head of product and marketing in the interview process is beneficial.
• The relationship between the head of growth and head of product is one of the most important.
• Regular meetings and collaborative understanding of goals are essential for a strong relationship.

"We definitely want to integrate it with product and marketing teams, especially because the relationship between product and growth and marketing will be critical."

This quote underscores the importance of integrating the growth team with product and marketing teams to foster crucial working relationships.

• Ideal for growth teams to own all surfaces important to growth.
• Growth teams should be involved in product reviews if they do not own these surfaces.
• The level of involvement in product reviews depends on the company's structure.

"Ideally, you want the growth team to own all of the surfaces that matter the most to growth."

This quote suggests that the growth team should have ownership over areas critical to growth, which can streamline their involvement in product reviews.

• Ownership of relevant surfaces by the growth team can reduce friction.
• Collaboration and trust-building with the product team are essential.
• Involvement in the build process and reviews across teams helps maintain a good relationship with engineering.

"And then ultimately it's through a collaboration with the product team."

This quote highlights the necessity of collaboration between growth and product teams to ensure successful and non-disruptive growth experiments and initiatives.

• Emphasizes the importance of involving different teams in growth processes.
• Stresses the significance of not compromising on quality to achieve growth.
• Points out that growth should align with the goals of other teams and should not be detrimental to consumers.
• Highlights the role of relationships and trust, built through collaboration, in successful growth strategies.

"The whole thing falls apart, which is why it really comes down to keeping different teams involved, keeping them in the loop, building trust through making sure you keep different teams and different priorities in mind."

This quote underscores that growth efforts can fail if they are not inclusive of other teams and their objectives. Trust and communication are essential for sustainable growth.

• Growth reviews vary depending on team size and the stage of the project.
• Early stages involve getting buy-in and aligning on growth optimization proposals.
• Reviews focus on metrics, opportunity size, and belief in building the best possible product.
• Growth reviews evolve and should be metric-driven, with a strong conviction about what will work.

"Ultimately, they should be very driven around metrics and opportunity size and also a strong conviction around what we think will work."

This quote explains that growth reviews should be grounded in data, with a clear understanding of the potential impact and a firm belief in the proposed growth strategies.

• Continuous project failures, rather than a single failure, can harm team morale.
• Cultivating a culture of grit and strong leadership is essential for resilience.
• Celebrating small wins and focusing on learnings from unsuccessful projects are crucial.
• Reframing failures as learning opportunities can lead to bigger successes.

"But reframing it's not so much a failure. But if something didn't work and you've learned from it, that is also success, and you have to talk about it that way, recognize it that way, and build a culture that celebrates that."

This quote highlights the importance of a positive perspective on setbacks, viewing them as learning experiences that contribute to a culture of growth and success.

• Six months is a typical period to assess new projects.
• A new project should show potential levers for growth or provide hope through learnings within this timeframe.
• New leaders should demonstrate their impact within the first three to six months.
• Early wins and an increase in the speed of experimentation are indicators of a good hire.

"If you can go six months without hope or inspiration that something's working, that's probably a sign it can be longer. But generally, six months is probably a good milestone."

This quote suggests that six months is a reasonable period to gauge the potential success of a project, looking for signs of progress or valuable insights.

• Speed and progress in experimentation are critical for growth.
• Early tension between growth leaders and product teams can indicate future problems.
• The ability to build positive relationships and maintain a fast pace is essential for a growth leader.

"If there's tension in the first few months between either the teams or the new growth leader and the product teams, that's a red flag."

This quote warns that early signs of conflict between a new growth leader and other teams can be a significant concern, potentially leading to dysfunction.

• Building an exceptional team is the most significant factor in scaling growth.
• Hiring decisions can have a substantial impact, potentially leading to exponential growth.
• Focusing on bringing in top talent is a priority for growth leaders.

"Growth is one of those things where if you make the right hire, it's not a 0.5% increase, it's literally a ten or 100 x increase."

This quote emphasizes the transformative effect that the right hire can have on a company's growth trajectory.

• Growth leaders face the challenge of staying informed while also diving into details when necessary.
• Engaging with the team effectively without micromanaging or disempowering them requires skill.

"It's that trade off of how do you stay at the very high level and then zoom into all the different areas."

This quote reflects the delicate balance growth leaders must strike between maintaining a broad strategic view and engaging with specific operational details.

• Data and pattern recognition from past experiences are crucial in evaluating growth experiments.
• A sound logic behind the thesis of an experiment increases its likelihood of success.
• Lack of data and a well-founded rationale for an experiment is considered a poor approach.

"Lack of data is not good. You certainly want to start with a good data foundation. Equally important is what is the sound logic behind the thesis that will make sure that this works?"

This quote explains the importance of having a strong data foundation and a logical rationale when making decisions about growth experiments.

• It's important to constantly test and reassess knowledge and assumptions.
• Understanding the underlying reasons for past successes can provide transferable knowledge.
• Past experiences should inform, not constrain, thinking about new growth strategies.

"But you should have this set of knowledge, the deep, true understanding of what's going on."

This quote advocates for a deep understanding of the principles behind successful growth strategies, which can be applied to new contexts while remaining open to reevaluation.

• Identifying user intent and motivation is crucial for product use.
• Experiments to reduce friction can initially have a significant impact.
• Diminishing returns occur after a certain point, where further reduction doesn't move the needle.
• Seven iterations of the home page led to diminishing returns after the third.
• It's important to recognize the limit to how much friction can be removed.

What I found was we'd run a series of experiments to reduce friction from the sign up page, from the home page, and that had originally, at the beginning, had a lot of impact, but you basically bottom out, there's only so much friction you can reduce until it just stops having impact.

This quote emphasizes the initial effectiveness of reducing friction in user experience and the eventual plateau where additional efforts no longer yield significant results.

• SEO remains a significant source of traffic and conversions.
• Funnel optimization and product ease-of-use are still core principles.
• Paid channels have grown in importance due to changes in search engine policies.
• Onboarding and exit flow optimizations remain valuable.

There's a lot that haven't changed. They've changed a little bit, but they're still valuable.

Luke Levesque highlights that while some growth tactics have evolved, their fundamental value and principles have remained consistent over time.

• Black hat SEO tactics are no longer viable and can lead to penalties.
• Google's algorithms have improved, making it risky to use tactics against their guidelines.
• Founders should ensure their growth teams avoid these outdated strategies.

SEO that used to work, but was essentially against the Google guidelines, it's not worth taking that risk anymore.

Luke Levesque advises against the use of black hat SEO tactics that are against Google's guidelines, emphasizing the risks and potential damage to a business.

• Growth teams require engineering support for scalable solutions.
• Growth leaders should have direct access to decision-making, close to the CEO.
• Burying the growth function too deep in the organization can hinder critical and timely decisions.

Growth teams need engineers.

This quote stresses the importance of providing growth teams with engineering resources to execute growth solutions effectively.

• Focus is the most critical lever for immediate impact.
• Growth leaders should quickly identify and rally the team around a North Star metric.
• Saying no to tasks that don't align with the North Star is a crucial part of leading growth.

Focus is the number one lever that you can use at any point and have immediate impact.

Luke Levesque advises growth leaders to prioritize focus, which he considers the most significant factor for achieving immediate and impactful results.

• A short distance between the CEO and head of growth is beneficial.
• Regular weekly meetings are ideal to discuss strategy and flag issues.
• The head of growth can report to different executives, but a tight relationship with the CEO is crucial.

I think you want the distance between the CEO and the head of growth to be quite short.

Luke Levesque emphasizes the importance of a close and direct relationship between the CEO and the head of growth for effective communication and strategy alignment.

• Growth is a field with a small talent pool.
• More opportunities for learning and experience in growth are needed.
• Sharing knowledge within the industry can help expand the talent pool.

There's not a ton of companies out there. There aren't an infinite amount of companies that have that scale where people that are practicing growth can learn that high end growth and really become experts.

Luke Levesque identifies the limited number of companies where growth practitioners can gain high-level experience as a challenge in expanding the growth talent pool.

• Bounce's growth strategy is impressive due to their understanding and iteration of growth loops.
• Leveraging advisors and incorporating their knowledge has contributed to Bounce's fast growth.
• Founders should use advisors more to gain knowledge and achieve quick wins.

I was really impressed with their growth strategy.

Luke Levesque expresses admiration for Bounce's growth strategy, highlighting their effective use of growth loops and advisors.

• Aligning incentives with equity compensation is ideal for advisors.
• Founders should pitch to advisors similarly to how they would pitch to investors.
• Introducing advisors to top VCs can help validate the company's potential.

That's probably the right mental mindset to take here, is to think about how would you pitch the company to an investor?

Luke Levesque suggests that founders should approach pitching to potential advisors with the same strategy they would use for investors, emphasizing the importance of aligning incentives and validating the company's growth potential.