Klarna, a $10B Fintech Unicorn, is Changing How People Shop Around the World

Episode 33 October 08, 2020 00:48:04
Klarna, a $10B Fintech Unicorn, is Changing How People Shop Around the World
The Breakout Growth Podcast
Klarna, a $10B Fintech Unicorn, is Changing How People Shop Around the World

Oct 08 2020 | 00:48:04

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Show Notes

Technically, Klarna is a Fintech company; a Swedish bank that provides online financial services such as payments for online storefronts, direct payments, and more. However, in this episode of the Breakout Growth Podcast we learn that Klarna is not an ordinary Fintech startup at all. Their breakout growth success, which has seen a valuation increase from $2.5B to more than $10B in just the past year and a quarter (5:40) offers powerful lessons on how growth is built on a foundation of strong product/market fit coupled with great execution, and a data-driven test/learn process. 

The company is driving innovation and making shopping simple, safe and smooth for millions of consumers, and in this interview, Sean interviews Jon Chang, Global Head of Shopping Growth Marketing, who joined the company in August of 2019. In that short time period, the company’s US operations have grown 10X and Jon describes that success as being an output of “doing a good job of preparing ourselves to be lucky” (14:10). We discover exactly what that means as Jon explains how he and his team structure and execute their approach to accelerating growth.

The company now has over 3000 employees broken down into 400 teams. More than 150 of those employees are focused directly on growth, and we find out that it takes very intentional culture-building effort to drive cross-functional alignment across such a massive and growing organization (24:06). Although the name Klarna may be new to you today, this is a company that is having a massive impact on the world in which we live.

We discussed: 

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Episode Transcript

Speaker 0 00:00:08 Welcome to the breakout growth podcast, where Sean Ellis interviews, leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here's your host, Sean Ellis. Speaker 1 00:00:23 In this episode of the breakout growth podcast, I interviewed John Chang global head of shopping growth marketing at Klarna, the most valuable private FinTech company in Europe, where the market cap that now exceeds $10 billion. Klarna is an app that allows shoppers to shop now and pay later. And then they have a number of other services layered on top that helped make it a smooth shopping experience. So John and his team have really helped to make a big push in the U S over the last year. And he explains what they've done, taking a very data driven and test driven approach to driving growth. And then John also talks about how the company transitioned from exclusively working through retail partners, to adding a direct to consumer growth engine and just the last couple of years. So really interesting story. But before we jump into it, I wanted to ask you to check out, go practice.io. Speaker 1 00:01:16 That's the immersive simulator that I built with Oleg. <inaudible> a former data scientist from Facebook. It's all about learning growth. So think about how a flight simulator is really impactful for pilots to learn how to fly planes. This is a simulator for learning how to grow a business. You're working with real data in amplitude to make decisions you're going through a scenario we've got built in mentoring. We've got weekly sessions that we're checking in. It's a, it's a really great way to learn growth. So check that [email protected]. And now let's jump in with John Chang from Klarna. Speaker 1 00:02:01 Hey John, welcome to the breakout growth podcast. Thanks for having me. I'm really excited. Yeah. I'm excited to have you on and tell the Klarna story. It's a, it's, uh, probably the most exciting story that, that no one has heard much about. And, you know, to be honest, I, I really prefer companies that don't have a ton of hype around them, but have, have really that substance of a lot of customers are getting a lot of value. And this seems to be almost the perfect case of, of one of those types of companies. So before we really dig into how you're approaching growth and, and all of that, why don't you give us a quick introduction to what Klarna is, what problem you're solving? Oh yeah, for sure. So Klarna is first of all, a Swedish term for clarity, it's a company that was founded in Stockholm and we make shopping simple, safe and smooth, smooth the three. Oh, is that that's our big brand right now. Um, and, and it's, I mean, maybe it's cause I have a product background, but I love Speaker 2 00:03:00 Explaining things by talking about the product first. No problem. Yeah. I mean, it was so we, this company is actually like 15 years old and if you ask anyone in Sweden, they're like, Oh, well, you know, you have a, you have a monopoly over the online shopping sphere. And then I'm doing marketing in the U S where, it's your point? It's, it's an uphill battle from the brand standpoint and what we do and how we entered the market just in March of 2019, which yeah. Wow. We haven't been here for that long for the consumer product. We have a mobile app that allows people to buy now pay later anywhere. And then we're also integrated with a whole bunch of merchants to power their buying out, pay later checkout processes. Speaker 1 00:03:43 And so part of, I think what, you know, as I kind of dug into the company a bit, uh, you know, in Europe it seems like people are much less likely to have credit cards. I know they have debit cards. Um, how have you found as you're, as you're in the United States, uh, you know, we're where people tend to have credit cards has, is the value proposition not as strong or if you had to tweak it a bit or what's, what's the difference that you're seeing there? Speaker 2 00:04:09 Yeah, I think that's exactly it. Um, the, I mean, all the culture, the culture is fundamentally different. The competitive set is also fundamentally different. So we, the beauty though is there's 360 million Americans, so we can find our, yeah, we can find our niche within here. So it w though positioning that we've been really trying to tackle is being synonymous with shopping. And so even though we're FinTech, that allows us to expand a lot, um, a lot broader. We, we talk about this internally a lot, and it's in our planning meetings, we ask ourselves, would a bank do this? And if so, we don't do it right off the board. Speaker 1 00:04:47 I love that. Yeah. Yeah. We're, we're FinTech can be kind of boring if you look at it simply from a bank perspective, but from yeah. Shopping, it's not boring. I mean, if you ask my wife, she would say, it's the greatest thing in the world. So I, uh, I, I may be slightly different there where I, um, I might not like it quite as much, but the, you know, the fact is that shopping is, um, is something that we all have to do. And, uh, if you can make that process easier and more enjoyable, there's, there's a huge opportunity there, which is clearly demonstrated by the $10 billion plus valuation that the company recently, uh, it's been reported at least, uh, with your most recent fundraising, which I think was Speaker 2 00:05:29 This month, or at least crazy. Speaker 1 00:05:32 Um, how, what, so you've, you've been there a little over a year. Speaker 2 00:05:36 You're right. Yeah. I started in August of 2019. Speaker 1 00:05:40 Yeah. And did you, I mean, was this like a massive step up in valuation or was it already pretty valuable? It's just people in the U S hadn't heard much about it Speaker 2 00:05:48 Kind of both. So, I mean, it's like, again, it's the entire population of Sweden and no knocking on Sweden is the same population size as New York. So even though having a monopoly there, um, and being in the UK and the small handful of countries winning the U S has just a massive opportunity. So I started in August and that was actually right after a, um, a big funding round. So I think we were around like 2.5 billion, um, right when I started in terms of valuation. And then, yeah. It's so it's, it's Speaker 1 00:06:21 Significant, that's a massive increase. So, so I mean, clearly, you know, a lot of businesses have been hurt by COVID. Um, I'm assuming that the shift to online, I mean, I look at myself now, you know, every time you step into a brick and mortar store, your risking you're risking exposure. And so, you know, I mean, I've, I find more and more excuses to buy online and I already bought a lot online before. Have you found that that COVID has, has added fuel to the business? Or is it, is it just that you you're kind of more protected against COVID or, or has it actually slowed it down? Some Speaker 2 00:06:57 It's all over. So, I mean, first and foremost, we, we, in our practices and our product and everything, um, at our core, we are not here to be a debt trap. We are not here to, um, have people buy now, pay later so they can spend beyond their means. COVID hit, we actually increased the risk, I guess, like our acceptance rate criteria. Um, so you can use that product and it wasn't to be like, and it wasn't to be like, Oh, we want a slower growth, but we wanted to just make sure that we were taking people in, who would spend a little more responsibly, um, because yeah, and that's, so we, and we also implemented essentially what we've been calling internally low and ground, so you can come in and then as you continue buying, paying up and stuff like that, you can increase your buying power with Klarna. Speaker 2 00:07:44 So for that matter, it did slow it down a little bit because there's just, if you're, you're whittling down the total addressable user base, but on the other side, we actually had a record amount of, uh, shopping volume the week after the stimulus checks went out. So it's been a real wild ride. One of the things that has helped us a lot is we're. So data-driven especially like that. That's a core principle for the teams that I'm running right now. And as we would look at the data like nearly daily and figure out what the shopping trends are, we would cater then our creative and advertising, as well as our email and so forth just around that, like beauty beauty took off almost immediately. And Speaker 1 00:08:28 I would expect the opposite. I would expect sweatpants to take off, Speaker 2 00:08:34 Well, that was another one athleisure. So we were making so much, I I'm. So, I mean, it's not like I'm tired, but I'm honestly kind of tired of the term athleisure so much of that, but I've loved looking at the trends. And then, uh, we, then we've seen a lot of millennials leave, uh, big cities and either buying homes, cars. And so we've leaned into the home category. It's one of the benefits of just owning, shopping as a whole. It's, I've been able to look at the data, um, pivot our marketing strategy and then look at the data and pivot, and it's, it's really taxing and tiring, but I have the right team to do it. And I think that's really like jettisoned our, um, our growth during COVID. Speaker 1 00:09:17 Wow. So what, what kind of size of transaction do you go up to in, in, in what you're supporting? Speaker 2 00:09:24 Yeah, for sure. I mean, it really depends on, so we do soft polls, like all of our competitors and really most FinTech companies. And it depends on, um, the, I guess like what we get back from that soft Paul and it's instantaneous to immediate. Um, so what does that actually mean? So I've been in this for so long now. I have such a hard time zooming out. I'm so sorry. Speaker 1 00:09:47 That's okay. Speaker 2 00:09:50 Well, when you, um, when you're using our mobile app, um, it's essentially, um, so I, I'm also totally down to talk about the growth hack that I love about this. We're, we're, I'm, I'm trying not to just, um, dive into it cause it's a slight tangent, but essentially softball is when you use the product, um, you, uh, you use the product, we, um, work with, um, some credit organizations and then we get your credit score and things related to that. Um, or it processes it, and then it qualifies you for a certain amount of spend within the app. Speaker 1 00:10:26 So in terms of like, like, I mean, would somebody potentially buy a car with this or is it more kind of consumer goods? Speaker 2 00:10:33 It's really more consumer goods. Uh, I mean, we're, we're not looking at like multi thousand dollar items, not necessarily. Um, and then also we're also not looking at like $5 items. So the average order value, which isn't a secret, um, is, is about like 113, $115. Okay. Speaker 1 00:10:52 That makes sense. And so it's, it's, it's those kind of Le a little bit of considered purchase, but, uh, it, it, uh, makes it easier to buy it and spread that cost over a bit of time so that it doesn't quite put the dent in the wallet Speaker 2 00:11:05 Otherwise would. Yeah, exactly. And I think that is kind of our target consumer behavior that we're looking for. Speaker 1 00:11:11 Okay. And then, so when you and I met, when you were speaking at the growth hackers conference, you were working at a Kickstarter and, um, clearly, you know, a really successful company, you were a digital marketing director there. When you compare these two, uh, opportunities, these two roles, what, what do you find are kind of the things that are really similar? And is there anything that's really different between them? Speaker 2 00:11:34 There's really only things that are very similar and things that are very different and nothing between, so, well, I mean, one of the things, and I've kind of done this with all of my roles somehow, but it's the, they're both organizations that in their own community and user base ha depend on the demand as well as the supply. And in this case, the demand for both organizations as consumers and then the supply then for Klarna is merchants because we're getting commission when they're integrated. And then, um, for Kickstarter was the project creators. So the kind of marketing deployed to maintain this line demand in growth is, is similar in the approaches and kind of the mentality what's real different though, is, um, I think just Kickstarter's a private benefit corporation. So they're held accountable for the growth of the creative community over profits. And for that reason, we actually did not focus so heavily on the consumers because, um, and we said this a bunch when I was working, they were like, we don't want to be QVC. Speaker 2 00:12:39 We're not there to have like the next small tech thing and then get like convince people to buy that. Whereas at Klarna, uh, one of the big approaches that we have been driven by in 2020 is we've been calling it the Klarna consumer network. And so thinking about the supply and demand, especially, especially with the effects of COVID on retailers, like you're talking about, we are seeing that what they want from vendors is not just technology. They're also looking for vendors that help bring consumers to their products for e-commerce. So we we'd made a strategic shift in like business to business marketing, and instead of necessarily finding like the biggest dollar deal at the very moment, we're also keep taking consideration how many consumers that merchant has on their own, because that would fuel this clarinet consumer network in addition to like our mobile app, which is nearing 6 million users. Wow. Yeah. Speaker 1 00:13:34 So, so when you, when you, um, kind of step back and mean clearly like a $10 billion plus valuation, is it isn't a category of its own, especially for a private company? What, what do you think has been really the key to getting there? I mean, was it, was it, you guys just hit the right opportunity at the right time? Is it, is it partly execution? I know a lot of that initial momentum may have been built before you got there. Um, but I'm sure you've, you've had that question as well. And even in deciding to join the team that you had to have been curious about that. So what, what do you think it is that, that makes, that has propelled this to be such a valuable business? Speaker 2 00:14:15 Oh yeah, for sure. I mean, serendipity is part of any startup success and a company success. Um, but I think that we do a very good job of preparing ourselves to be lucky and like all the companies I've been at that, uh, that it considered a success. I have done that same approach in a variety of ways, but the, if the quick story about our growth in the U S is that the mobile app, um, launched in March of 2019, it literally ingests the entire internet. So anyone can buy anything anywhere and pay later. And that was our direct consumer offering the way we were like, well, no matter what happens, and it's kind of like throwing spaghetti against the wall, we know that we have an offering for any kind of American. And I love that as an approach and as a growth hack, I really don't see too many growth hacks that are true growth hacks using technology in that way. Speaker 2 00:15:08 So we, and then our brand approach is that we do branded campaigns that are temporary monopolies on communities. So in, let's say like may June of 2019, we partnered with RuPaul's drag race. And we were like, you know, the drag community. Um, there's so many things we love about this community and how passionate they are. We did this branded campaign with them and immediately had 500,000 downloads. And that was during that funding round as well. So when I joined in August of 2019, we had 500,000 downloads and we just were like, all right, well, and then, um, we started thinking a lot about how do we test use marketing technology, automated, um, flows, things like that to then capture people as they come in because to grow as essentially a no name company that has pretty complicated offering compared to like most shopping organizations we still needed to aggressively get really, really, really cheap installs, which is a problem for organizations when you don't have automated onboardings really, really strong branded content and a story to tell. So I think that like looking at COVID again and how that's affected our user base, we don't really know who we're getting at this point because the economy, the culture is changing, but we do know when they come in and we have a super smart triggered onboarding and automated flows to get them to that first purchase. Speaker 1 00:16:36 And so with this app being direct to consumer, is that, how does that compare with sort of historically for the business? Was, was it, did it always have an important direct to consumer component to the business or was it primarily, uh, you know, uh, B2B that then, uh, you got the consumers via your, uh, retail partners. Speaker 2 00:16:58 Interesting. So, no, I mean, we, we only decided to go to consumers maybe three, four years ago. So that was after the company had been successful for about a decade. And yeah, so this is where that whole word smooth comes in. Uh, we launched with Snoop dog, who was, we coordinated him as smooth dog. Uh, yeah, but it, it was a real fun. I mean, I wasn't here at the time, but looking at the use case, it's a real fun, um, exercise in branding. We took a look at the industry and at that time Klarna, his logo was blue and literally every single fintechs company, FinTech company's logo was blue and we're like, Whoa, okay. Okay. So we launched, uh, we rebranded everything pink light. You've seen our logo at this point. And, um, and we've made a huge shift. And so I joined last of course, and the, we had, I think, 30 people who were doing growth marketing, we're now at 150 and it's just been accelerating because it's of course the mentality changes, but we've, we've also operationally made consumer growth, a big focus and quickly. So it's only been a few years. Speaker 1 00:18:07 Yeah, no, that's crazy. And so in your, in your role, are you primarily focusing then on, on the U S market or, um, you know, and, and only on the direct to consumer, just how, how would you scope your role? Speaker 2 00:18:20 Well, so if you asked me a month ago, the answer was yes. And now, well, so we do go through what I would consider forced existential crises, and then into adapt and grow, which I love. It's one of the big draws of the company for me, which stresses other people out, but I'm fine with it. Um, so, um, it's, it's been, uh, yeah, I mean, so in terms of like how things are growing and that kind of structure, I think that it's the, I've just trust our leadership team to make the right decisions and, um, push us forward to the next step. Speaker 1 00:18:58 And so, so, but for your, the scope of your role yeah. Kind of, kind of day to day what's, uh, what are your personal success metrics for example, and, and the areas that you can, uh, affect those success metrics? Speaker 2 00:19:12 Totally. So in that first year was just focused on the U S and now the team is, uh, w we went from app growth to now shopping growth, and we are focused globally on monthly active users, shopping volume and product feature engagement, whereas prior the number one thing was installs. Speaker 1 00:19:29 Okay. Gotcha. And that makes sense. I mean, I think installed, you're not going to have monthly active user growth if you don't have the installs. And so part of it is you gotta, you gotta kind of, uh, you got to build enough pipeline to then try to convert all of those installs into something that, that leads to longterm value for, for customers. Yeah. And I see actually Speaker 2 00:19:49 Similar growth curves when I don't, I mean, nothing's really aligned to like series a series B series C anymore, but in terms of like the overview overall valuation and cash in the bank, um, I think that we are at a point where it's like, okay, we've proven we can really quickly grab market share, but can you maintain it? And when I was at general assembly, for example, it was kind of a similar story where it was quickly grabbing market share. And then after a funding round, the investors were like, alright, well, can you sustain it? And that's what we want to see too. And that's what we're hoping you'll do. And that's why the valuation has jumped. Yeah, Speaker 1 00:20:24 No, that makes a lot of sense. And then the, um, more generally your organization, so you you've said it's really in growth marketing, you've moved from that 30 to one 50. Um, do you have, do you have a separate kind of brand marketing organization or, you know, who else has kind of in, in, in trying, are there other teams that Speaker 2 00:20:48 Are also working to move the overall growth metrics? Yeah, it's the, it's real interesting here. So let's say just rounding there's 3000 employees. I think that there's something like 400 different teams, um, uh, everything is, I call them tactical teams, taskforces. I don't really know, but, um, each team we try to keep to about eight people and they have a very, yeah, they have a very strong focus. So the team I'm part of is part of the growth functionality, which is like 150, some people, including engineers and brand people and so forth separately, we do have a whole, and we call them domains. Um, we have a whole domain. That's just, um, the, the brand people, but it's more than that too. It's like brand, you have the regional and the local marketing teams. Um, and that's also, I don't know. I mean, it's smaller than the, the growth, um, domain, but cumulatively it's it's well, over 200 people. Speaker 1 00:21:45 How has the kind of overall company growth, uh, in, in the year that you've been there? Has there been a lot more people added to the overall company or is it, uh, was it already pretty close to that 3000 when you joined? Speaker 2 00:21:56 There are a lot more, but particularly in the U S I mean, we, we did sign a new office right before COVID, uh, that I've never seen the office. We were, again, that story repeated a few times. I bet it's, it's crazy. So, um, one day we'll move into the office that we, uh, that has been built out for us, but the place where, like I was sitting before probably comfortably sat, like, I don't know, like 30 people. And, um, we, we kept trying to get another office and then what already outgrow it by the time we're supposed to move in, then we got another office and, and so globally, we've probably increased it, like in the, in the many hundreds and in the U S it's like, I don't, I am pulling a number out of my butt, but like, it really feels like we've had like a 10 X employee growth in the U S Speaker 1 00:22:47 Wow, that's crazy. And then what, uh, where is your office actually? Where, where are you based? Speaker 2 00:22:51 So I'm based in New York city and we ha and, uh, but we also have our headquarters in the U S is actually Columbus, Ohio. Speaker 1 00:22:59 Okay. How, how was that decision made? Speaker 2 00:23:02 I honestly don't know. I just, I really don't know. Um, I mean, Columbus is a nice place. I've been there for work, but Speaker 1 00:23:10 There could be like really strategic, like we want to appeal to middle America and we don't want to be overly techie and being one of the tech hubs. Like I could see that being actually a very deliberate decision or I could see it also being a we're moving from Europe. And this seems like a good place. And maybe not so deliberate. Speaker 2 00:23:30 I mean, I haven't been told explicitly, but I mean, the other factors there it's like, it is like a lot cheaper to have a headquarters around that area. It is centrally based, um, and like Victoria secret and I think American Eagle, uh, and there's a bunch of those companies that are headquartered there as well. Speaker 1 00:23:48 Okay. No, that makes, that makes a lot of sense. So, um, yeah, as you, as you said, you know, 3000 extending beyond 3000 employees, uh, obviously obviously, you know, as a, as a company grows, uh, you, you're going to get more specialized functional groups, and it sounds like you have a lot of them there. How do you, how do you think about, you know, in terms of like that specialization and then at the same time, having everyone pulling the same direction and kind of that cross functional alignment, do you guys do a lot to try to foster that? Or is it, uh, is it not really something you spend a lot of time thinking about? Speaker 2 00:24:25 I mean, I spend my entire day thinking about it. I, if you can imagine if we have 400 different teams, like just getting sinked on things takes forever. Um, and honestly, like when I was at IBM Watson, it was a very similar kind of thing because they employed. Yeah. Like diamond teams is similar to like kind of the Spotify tribes. So it there's, it's very intentional. And I think that's also why, uh, when we hire people, it's a very rigorous hiring process. And we, we need people who are strong communicators that are friendly while also like just completely getting shit done. So, um, the, the structure requires a certain kind of person to be successful in it. And I do think we, we, we lean on those people to be leaders. Um, otherwise the whole system could fall apart. Speaker 1 00:25:13 Speaking of which, how, how did you even come across this opportunity, given that it's a relatively low profile company? Had you heard of them before? Did you reach out to them, did a recruiter reach out to you or just how, how did that even come about? Speaker 2 00:25:25 No, it's, I mean, it's so great. So I'm an acquaintance and who's like really helped me out in my career. Um, he's now COO at swell and really wonderful person. So I was, um, just kind of like asking him if he knew about any open positions and his wife, um, his recruiter. And it was like, Oh, we have this thing, uh, Klarna. And I was like, I don't know. I've never heard about it before. Speaker 1 00:25:49 I don't want some fly by night operation. Speaker 2 00:25:51 Yeah, exactly. But I interviewed, and I remember I, and I interviewed with the VP of marketing operations and our 30 minute chat turned into like almost two hours. And I was like, like, I want to work here. Tell me more. And then as I kept going through the interview process, I eventually met with the CMO and I was like, the way you think is the kind of person I want leading our marketing. Speaker 1 00:26:15 No, that's awesome. That's, that's great when you, when you can, can click like that. So you, you know, you talked about this, this challenge as, as, as you get into these much smaller teams of keeping everybody sinked, have you, do you use a North star metric at all and as part of that process, or do you have, is it more individual metrics that people are trying to affect? And they're not really thinking about a centralized metric that brings everybody pulling in the same direction. Speaker 2 00:26:40 Yeah. I mean, the one that's supposed to keep us pulled together and I think it does a pretty good job of it is that, uh, the KCN, the client and consumer network. So the B2B teams, as well as co-marketing and DTC, and like all, like say any kind of marketing you want. Um, we all do align to that. Um, but then each and then like each group then has KPIs and then each individual team has KPIs. And then each individual member, like my team, for example, um, there is an analyst, a product marketer, partnerships, um, email marketer, uh, automation, and all of them have different KPIs to affect our total goal, again, like Mao shopping volume and so forth. And then that ladders up to, um, how well we're converting consumers and retaining them. And then, you know, and then the ladder going up and up and up. Speaker 1 00:27:32 Okay. And do you actually have like a, a formal OKR structure with that or is it just, you know, individual KPIs that ladder up? Speaker 2 00:27:39 So we don't deploy, um, OKR is which I find really interesting for a company of this size, not breeding structure, but, um, I would say we kind of do it informally, but it's not a formal structure at all. The way that I've structured my team in particular is we do operate on okay. Ours. And since we have a little more flexibility, since it's not a formal, like thing at the company, I try to make the objective a little more like inspirational per se. Right. Yeah. Speaker 1 00:28:06 That helps for sure. And then in terms of actually, yeah, you talked about that. There's been a couple of growth acts and other things that have, have been really effective. And it sounds like, you know, even just really good product market fit and timing and all the other things that have, have, have put a lot of, uh, a lot of tailwinds in the business that have moved it forward. But how much, how much are you using that data to drive testing? Do you guys, do you guys do a lot of, of kind of that, that test learn process to drive improvement across the business? Speaker 2 00:28:38 Yeah, we really do. Um, and, and that's not necessarily across the whole business, but from the growth teams, it's just so fundamental for growth to have really tight iteration cycles. Speaker 1 00:28:50 Where were the trucks Speaker 2 00:28:53 When I'm doing all of my analyses is that I'm like, all right, well, we know we're doing shopping, so we're competing against like Amazon. And then I'm looking at FinTech companies and we see that like capital one is coming out with, um, a buy now pay later solution. So it's crazy competitive. And the one thing that I'm like, you know, if we're going to control our own destiny as a marketing team, we can have tighter. Um, we can have tighter iteration cycles and given the way that this marketing org org is led, if we put the right data behind the use cases, we can try new things that these other companies probably aren't willing to try. Um, so I mean, even, so this, um, our, our highest amount of daily installs, um, has been about 27,000, but, um, we tried this new thing out and we hit 175 this past Tuesday, which got us the number one in the shopping category, in the app store. And it's crazy. So, Speaker 1 00:29:49 Wow. And does that feel like that thing that you tried out is repeatable enough, maybe not to that kind of a spike, but that it can, it can have a pretty significant step change in installs? Speaker 2 00:29:59 Yeah, I think so too. And all of these things, as we try them out also slightly shift the overall company culture, as well as the mentality around growth too, which so then it, it buys us, um, some more flexibility and autonomy. And so this was just a simple partnership. I mean, we, we have our rewards program, we have a cash back program we've partnered with organizations like that before. But what we did is we did something like never underestimate the power of an Amazon gift card. That's like right. All the time. We, so for anyone in the T-Mobile Tuesday app, they dropped deals every Tuesday. Um, we bought out ad space on there. And again, like we are on every other ad channel and we've been doing this very well testing, but we're learning and we'll look, we'll put an ad there and anyone who becomes a new user. So that's a full account creation, we'll get a $5 Amazon gift card. And we had 175,000 in one day. And even in addition to that, we have a loyalty program where you get points for shopping. We had 40,000 people sign up from that too. So it's yeah. It's it hit all the metrics I did not forecast. You would do that well. Um, yeah, Speaker 1 00:31:06 It's impossible to forecast, especially when, when things have that kind of a, an impact that you would be reckless to try to forecast that those kinds of numbers. Speaker 2 00:31:16 Yeah, exactly. And, and so there's that, and then for our advertising, we've, we've essentially trusted the AI and the algorithms on all the ad channels a little bit more. I mean, it's not like programmatic per se, but it's more so, um, this is where the brand comes in. We have really good brand, uh, really good branding. And we essentially were like, all right, well, what if we have, like, we assume that there's imagery and messaging that is perfect for all, all types of consumers and what will hyper target them. And then let's just, so what we did with like Facebook and Instagram, we just threw in like an enormous amount of, of, um, assets and imagery and reduced the amount of targeting. Uh, and it's worked really well for us because then it's all based on the initial interactions and then Facebook will use EDS rank and the affinity scores and then show it to more people like that. So it's really counterintuitive, especially cause like I'm teaching social media right now at NYU and I'm talking about all this targeting and then I'm not doing it myself. Speaker 1 00:32:18 Right. So in terms of, in terms of like obviously competing in something like Instagram and Facebook though, it just requires such deep expertise to outcompete other people in those channels. Is that, have you been really deliberate Speaker 2 00:32:34 About building some super strong social skills on the team we have? Well, um, so there's, we've done, we've essentially leaned into a lot more of this kind of like influencer work. Um, especially as we're trying to get into the older gen Z, the younger millennials, um, it's a key way to do that, but we also didn't want to just, um, do the, I guess what looks like the traditional influencer model, where they talk about you and that's where the relationship ends. So it's more so like, as we do all of these things, um, how do we make kind of a masterpiece of content that can be repurposed? Do we have the right licensing, um, for use and paid? Does it affect global? And it's like all these small considerations that do require deep understanding of social and the influencer kind of way to use it. Speaker 1 00:33:21 And then what, so I guess one other question would that is one, once you convert new consumers on the product, do you see a lot of word of mouth unlock from those consumers? Or is it primarily your efforts to acquire that that's driving a lot of the growth? Speaker 2 00:33:36 Well, we're seeing more word of mouth, but it's, it's still not where I would want it to consider it like viral growth per se. But, um, yeah, I mean, we're getting more of it that, uh, but in turn, one of the things we do measure is ad recall as well. So we do a lot of these brands studies. Um, over the summer we had our biggest brand campaign of all time and our ad recall, or like our, our brand name recall jumped from 26 to 31, which is pretty big for us. Um, and from there, I'm assuming, and this is from like all the studies I normally read is that there will be a tipping point, but I don't think we're there yet. Speaker 1 00:34:13 So what, in terms of, in terms of the brand side of things, do you feel like you need to spend more time in, in building that brand and that brand recall side of things because it is a financial product and people need a lot more trust there, or is it more of just being top of mind when they have the need for the solution? It's Speaker 2 00:34:35 For sure. Both because the, one of the primary reasons people decide to like participate in the service is the buy now pay later. But one of the reasons why people decide to stay with the service is the whole shopping thing. Um, we have so many shopping features, um, delivery tracking, so you can authorize your email client and we scraped that for delivery information. So you don't even have to buy using Klarna. We do like wish lists. Um, we do personalized, um, shopping lists. Um, we ingest tens of thousands of live deals every day from our affiliates. I mean, we've taken a look at what it means to shop and we've put it all in this app and that's what gets people to stay. And that's one of the reasons why the brand needs to be so strong on the shopping end. Speaker 1 00:35:19 It feels like you're, you're kind of almost curating that entire shopping experience so that it, it, it up up levels, all parts of it and integrates it into, into some kind of consistent experiences. Speaker 2 00:35:32 Precisely. Absolutely. Speaker 1 00:35:34 That's great. And then in terms of when somebody learns about Klarna too, to the point where they really get it and you know what we often call it like an aha moment or the, the point of activation, what do you, what do you feel like they need to get to while you maintain that enthusiasm and intention before they kind of give up and go, what the hell is this thing? Why am I wasting my time? Is, is there a certain point where they, where they kind of get that, that individual tipping point in terms of like, Oh my gosh, I really liked this. Speaker 2 00:36:03 I mean, honestly, that's what keeps me up at night a lot. Um, we're, we're doing a very extensive, um, study into that right now. We're internally just calling it our UX touch points project, but, um, it, it ladders, it, it builds on top of, um, the strategy that we agreed on in January that I took out, like, it's a feather out of my B2B marketing hat, the portfolio marketing, but it's called it beachheads. And we assume that since like, we're kind of a one stop shop for all everything, consumer shopping, that there's a reason why someone might come in and it will be different than other people. So I was like, okay, imagine this as like, everything that we have as an Island and each of our individual product features and USP is a beach head to bring people in. So we've been done a whole lot of conquesting, um, around specifically people who want deals or wishlist or cash back and so forth. And then afterwards, this automation cycle, I've been talking about reintroduces that value proposition and then slowly introduces all of the other ones in sequence. So, yeah, exactly. So the sticking point is actually different per user faster Speaker 1 00:37:15 Has made a lot of Dropbox where, you know, if someone was coming in through a shared file, you convert them on that use case. You don't want to introduce too much complexity by trying to sell the whole app. But over time, you're going to create a lot stickier experience once they understand that they can sync between their own devices set up collaborative folders, that there's, there's almost this kind of like sequenced marketing that happens to where ultimately, ultimately you have them forever, if you can kind of get them to fully understand what what's available. Speaker 2 00:37:45 Oh yeah. Well, Sean, I think about Dropbox a lot. I'm one of the projects I'm working on is, uh, is gamifying our experiences and I'm like, okay, well, like how did Dropbox do it? Speaker 1 00:37:55 Yeah, no, that's great. And so speaking of which, like, yeah, gamifying a referral that Dropbox was, was really effective. So we talked about like, do you have the ability to, you know, or do you, do you see that people are unlocking word of mouth once they start using the service? And then have you done anything to, uh, accelerate that through, through incentives or prompts or anything else? Speaker 2 00:38:20 Yeah. It's not where, where we want it to be yet for, with the technical functionality. So over the summer we ran a whole bunch of tests, essentially, just giveaways. If you refer someone, you have the chance to win X, Y, and Z, like we gave away, um, like a Nintendo switch, um, a, uh, what do we call it? We have the Yeti cooler things that appeal to different people. But what we really are trying to push out, uh, is the incentivized referrals where it's just like, it's automated every time that you, someone you refer successfully creates account, you get X amount of dollars. Um, so that's almost rolled out and I think that'll make a huge impact for us. Speaker 1 00:38:58 That's great. And then you get that trigger point that if, if it's automated, they get that, uh, referral incentive. And then they get a notification that they just got that referral incentive that can often trigger another referral. And that could be a pretty powerful. Speaker 2 00:39:13 Exactly. And then I got a big holiday thing that I'm trying to cook up. I'm finishing the brief up right after this. But, um, we again have like so many shopping functionalities and one of them is a user generated wishlist. And once you do that, you can turn on price, drop notifications, people can follow it. There's a social sharing component of this. And, um, I want to, I'm putting together a most followed wishlist competition. Again, everyone and their mom has done something like this in the past, but we have not. So, um, I, I want to make it as easy as possible for people to share by word of mouth and have that incentivize to win something. Speaker 1 00:39:49 Right. Well, yeah. Holiday seems like such a, uh, such a big boost opportunity for you guys. It makes sense that you want to try to try to do as much as you can around that, but even outside the holiday, di is there a kind of a typical usage cycle that you see on the product or is, is, is the goal that, that essentially you become a part of every online, online shopping trends? Speaker 2 00:40:12 Yeah. I mean, the goal is we're part of everything, but I think that what we're seeing is pretty normal for e-com. Um, we, we, we have people who have been inactive that naturally come back for Memorial day deals, July 4th deals and things like that. Um, but that's where, um, we have been trying to grow our key segments more than just like fashion and beauty and stuff worked really well. But, um, right now we've also been trying to grow like automotive and, um, home, like luxury home goods and things like that. So, um, we can hit actually multiple shopping cycles. Um, cause technology is great, but it doesn't, it's not like fast fashion where people are coming back and getting sticky. Um, so we were attacking this from multiple consumer segments, right. Speaker 1 00:40:57 This when, when, as you talk about it, I think there's so many, so many use cases you can onboard people into, which is what creates all these additional marketing opportunities, including via the merchants and, and then the direct to consumer activities. Um, I, it does seem like a, uh, a fantastic growth role opportunity, and the fact that you guys have grown so much from that 30 to one 50, I assume you're still in that growth mode. So is that if there's any listeners out there that are excited about what you're wanting, what you're doing and when they want to jump on board, is it that you're doing additionally with hiring in that area? Speaker 2 00:41:36 Yeah. So reach out to me, please do the, um, where it's like, we're hiring all over the world right now and hiring a lot of marketers, especially going in 2021. But, uh, the big question that we've been trying to solve and plan for for 2021 is so like, we, we literally 10 X our growth in 2020 and the goal then is how do we tend to X this? Um, and it requires it, it requires more people, of course, but then like people who think like that, right, right, right. Speaker 1 00:42:09 Or that are not so incremental in what they're trying to do, but they're, they're looking for those big step change opportunities and have the, the creative capacity that even dreamed them up. And then the execution chops to, uh, to, to, to test them and not everything's gonna work out, but when it does, it, it, it continues those crazy growth rates that you're talking about. I don't, I assume when you say you've 10 X in 2020, that you don't mean on the overall business, you mean probably more of the U S side or, Speaker 2 00:42:36 Oh, yeah. Sorry, just to be clear. My brain is, has just been us the hyper-growth here. Yeah. Speaker 1 00:42:48 No. Okay. So, um, just, just to clarify on that, so, ah, and then, yeah, no worries. I mean, I love the variety of, of roles. I think you, you said you were at IBM right before this, and, and as, as we've talked about some of the other roles that you've had, um, when, if you just take kind of what you've learned in the last year, since you've been there, is there anything that stands out as like a really kind of game changing, learning that you, that you've done, that you can share with the audience? Speaker 2 00:43:18 Yeah. I mean, I know I thought about that. I've been thinking about this a lot because it greatly affects my life and happiness, but it sounds fluffy, but it really is just the internal mentality and having a growth mentality, like a growth mentality. Um, and it's like, I I've been at a ginormous corporation that does not share this mentality and you, you see the resulting work and you see the resulting. Yeah. And, and again, like not, I'm really not trying to knock corporations because their goals are just so different, but like with what I want to do with my career and like how much I love taking things from, like, not that much to a lot, um, these, like, I just need to be surrounded by people who not only are willing to take risks, but do it in a very calculated way. Yep. Speaker 1 00:44:06 I think what you're saying there is that, you know, culture is a huge part of success and growth. If, if the business doesn't have that culture, it's gonna be really hard to be successful in growth. You're going to have a lot more people kind of almost like slapping your wrist saying, Hey, calm down. Don't, don't, don't break it. And, you know, and, and culture, I think for a lot of the corporations that have been around for a really long time changing, it's like changing the culture of a country. It just, it doesn't happen overnight. It's a slow, painful process and growth is a culture. And so, um, the fact that, you know, you have a business suspend, what is it, 15 years that, that the company's been, Speaker 2 00:44:45 Yeah, seriously. I can't even imagine what it was like 15 years ago, but we've, I think we've been profitable since the first year. Speaker 1 00:44:52 That's great. I mean, so, so it sounds like that it's been, it's built up around that culture and clearly starting out of Sweden, you have things like Spotify that have also started out of Sweden that have an amazing growth culture. And so, yeah, it could be something that just, uh, you know, their, their national culture is a little bit more wired to, to be able to do this. But, um, you know, as, as you've had all of the international expansion, it's, it's great that that's continued to go, and I'm not surprised that you're, um, seeing the benefits of that because you know, that, that's one of the biggest areas of feedback that I've had on my book is that people read it, they get really excited about, you know, growth and testing and metrics and all these things. And then they hit the friction of an organization that doesn't think that same way, and they get really frustrated. And so, you know, how half the battle is picking the right organization. And then if, if you're not in an organization that already has it having a game plan for trying to evolve the organization, um, and, and again, if you're a, if you're a hundred year old company, it's going to be pretty hard to evolve the organizational culture. But if you're, I've seen it in companies of five people that don't have the culture and it's still not easy to make that change. So the earlier you do it the better. Speaker 2 00:46:06 Yeah. Agreed. Okay. Speaker 1 00:46:08 Awesome. Well, you know, when I, when I, my key takeaway is as I, as I look at this, um, you know, overall the success that you had, particularly in the U S in the last year. Yeah. It does feel like just a great story of product market fit to some degree, but then, but then just that, that very data-driven test driven across all parts of that customer journey that you yeah. It's execution meets product market fit, driven by data, um, you know, kind of the classic story of a, of a breakout growth company. So good job on finding the right opportunity and making the most of it. Speaker 2 00:46:44 Yeah. Thanks. I mean, advice to anyone who's like, I don't know, like, even if you only have a few years on your, under your belt, um, like be really picky when you interview and find the place where you are interviewing with like minded individuals, it just takes you so much farther. Absolutely. Speaker 1 00:47:01 I think for, for marketing and gross success chemistry with the overall team, and then, you know, right product right market is 80% of your success. And the last 20% is what keeps you in great roles. And so you gotta make the most of it. But, uh, if you, if you put yourself in trying to grow a product that nobody wants in a market, that's not great, and you don't have the right team around you, you're going to fail every time. So I totally agree what you just said, be patient and find the right opportunity. So, well, thank you, John. Thanks for so much for everything that you've shared today and really appreciate it. And for everyone who's tuned in, thanks for tuning in. Thank you. Speaker 0 00:47:48 Thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform, and while you're at it subscribe. So you never miss a show until next week.

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