What's Driving Growth at the World's Fastest Growing Hardware Companies? Learnings from interviews with leaders at Mirror, Glowforge, EVBox, and AfterShokz

Episode 28 July 30, 2020 00:40:01
What's Driving Growth at the World's Fastest Growing Hardware Companies? Learnings from interviews with leaders at Mirror, Glowforge, EVBox, and AfterShokz
The Breakout Growth Podcast
What's Driving Growth at the World's Fastest Growing Hardware Companies? Learnings from interviews with leaders at Mirror, Glowforge, EVBox, and AfterShokz

Jul 30 2020 | 00:40:01

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Show Notes

In this episode of The Breakout Growth Podcast, Sean Ellis is joined once again by Ethan Garr to discuss what’s driving growth at the world’s fastest-growing companies. The conversation focuses on learnings from Sean’s interviews with companies nailing growth in the challenging world of Hardware. While Sean and Ethan expected growth for businesses building hard goods to be vastly different from their personal experiences leading growth for software and mobile apps, they found themselves pleasantly surprised as they honed in on learnings from hardware companies that are applicable for anyone seeking to drive breakout growth in their organization.

Iterating to product/market fit is often not practical for hardware companies, but innovative approaches to drawing out market signals have the ability to tap into the love consumers have for product ideas even when an MVP or prototype isn’t possible (1:59). While a hugely successful Kickstarter campaign informed Glowforge as to who would embrace their 3D Laser Printers for makers and crafters (2:44), Brynn Putnam, the founder of the Mirror, learned through a survey of her boutique gym clients that wall mirrors could provide the immersive experiences consumers hunger for in their connected-fitness devices for home workouts.

The conversation also looks at the interdependencies of growth drivers seen throughout these interviews. While EVBox, a manufacturer of electric vehicle charging stations and software, showcased how a focus on customer advocacy can drive referral and retention cycles, a look into AfterShockz, a manufacturer of innovative headphones, brought to life how video and other methods for simulating and showcasing value for users can play an important role in growth (20:44).

Even though experimentation can be difficult in the slower cycles of hardware development, Sean & Ethan discover how these companies are still able to use a test/learn culture in their approach. Although hardware companies have unique challenges to overcome, in this episode, you will find that the fundamental tools and techniques driving growth at the world’s fastest-growing companies can cohesively be applied across industries and markets.

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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 00:00:25 This episode of the breakout growth podcast. I invited Ethan Gar back to explore key growth lessons from the hardware companies that I've interviewed over the last few months, as a reminder of the hardware companies featured, I interviewed Bryn Putnam. Who's the founder and CEO of mirror, and they were acquired by Lou lemon, if you hadn't heard. So that was pretty recent. I also interviewed Marlo <inaudible> who's the VP of growth at Glowforge and Hugo Pereira. Who's the chief growth officer at Evie box and then finally Earl Smith from aftershocks and Jeff Goldenberg who's from her agency Abacus. So there's some really interesting lessons from these interviews. So let's go ahead and get started. Speaker 0 00:01:14 Hey, Speaker 1 00:01:15 I'm back. It's good to have you back on to explore another category. Yeah, thanks. The last one on B2B was a lot of fun. So I think this will be great. Yeah, I'm looking forward to it. I think, um, you know, hardware in many senses is, is pretty different from pure digital companies, but there are a ton of similarities. So as we, as we dig into them, I want to start with kind of the foundation of growth that we see in most companies and really talk about. Okay, well, how did, how did these companies reflect each of the topics that we're going to go into and then maybe where some of the differences. So let's start with product market fit. We know product market fit is such a critical driver of growth. If people don't love your product, if they don't stay retained on your product and engaged on your product, it's going to be really hard to grow in the longterm. Speaker 1 00:01:59 So let's explore a product market fit and what that looks like in the hardware world. So anything jump out at you specifically on that? Yeah. Two things. One is, I think obviously with hardware, you have to nail it, right? If you don't have it, you can't fake it and you can't, you can't sell what people don't want. So it was, you know, it's definitely interesting to see how these companies have approached this idea that they have to get it right. Um, and I think we've learned interestingly, that getting it right means not necessarily getting it fast and that's a little bit different. And then the second thing I thought was interesting is that I think there's new mechanisms today that are probably available to help companies get signaled for product market fit that didn't exist a while back. And I think that'll be interesting to explore as well. Speaker 1 00:02:44 So in particular, I assume you're talking about like crowdfunding there. Yeah. Like Glowforge, I think was a $30 million, uh, crowdfunding campaign. It was the largest one in 2015 and they, you know, they've launched this, this product on it. Um, and I think that gave great signal that this was going to have strong product market fit. But at the end of the day, until it's sitting there that white box has gets delivered and it's in front of your, you know, like, and people are feeling the love for it. You don't know if it's really going to be a hit or not, and that that's a lot of money to invest in a lot of time and you don't get a second chance to get it. Right. Speaker 2 00:03:17 Exactly. So one of the things I thought was pretty interesting that Marlo said there was, so they raised $30 million in a crowdfunding campaign. And then it was another two years before the delivered the product. How do you, how do you keep people excited and, and waiting around for two years and, and ready for the product when it, when it actually comes out. And so I thought that that was, you know, when you said it's not fast and that's, that's really not fair. Speaker 1 00:03:44 Yeah. But I think if you look at all of these companies, I mean, think about mirror, right? Uh, Britain, she, she came up with this idea for this product. Uh, as a matter of necessity, she was changing. Her own life was changing. She was pregnant and she had an apartment and she needed to, she wanted to continue working out. She'd been a professional dancer, an athlete, um, and her lifestyle of running this gym business wasn't working for her anymore. So now she was like, what can I do? She saw the world moving to these connected fitness apps and services like Peloton. And she thought what's the right solution for me. Um, and to find, you know, to really dial in product market fit the way she really did it was she took all of her experience, running that gym and speaking to customers and engaging with them to really figure out is this something that people are going to love and people are going to want. So I thought it was going to interesting. Speaker 2 00:04:36 And, and I think it's interesting, Brenda, in particular emphasize the, uh, you know, a rough prototype MVP is not the way to launch a hardware product. She wanted to have that fully baked and that there's a big emotional connection to what she wanted to put out there. And, uh, you know, since that interview, interestingly, they have been acquired by Lou lemon. I don't remember the exact name. I think it's like $500 million. And that was my recollection. Yeah. So really impressive outcome on that. But the fact that she's, she's not prototyping this she's, you know, as someone who had a studio, she was able to really understand how, how, uh, participants in yoga and other fitness sports in engage with a mirror and was able to use her insights to create something that was pretty revolutionary there. But it was interesting. Yeah. Speaker 1 00:05:27 Yeah. And remember she said that, um, it was really, she had done a survey one year and the thing that her customers and her gym FA said was the most impactful thing she did all year was to install regular mirrors in the studios because she said, they told her it was an immersive experience. And I think it was that language. And I think, you know, you always talk, you know, we we've worked together and in places where you've really talked about how important it is to sort of hone in on the language that is attracting that white, hot, hot core of, of passionate users, what is the thing that's making it a must have product. And I think she really, she had almost had product market fit before she even had an idea for her product. From that respect. I was saying that a little tongue in cheek, but, Speaker 2 00:06:13 But the fact that she, you know, in a studio is running surveys to really understand what she's doing to resonate, shows that she's tapped into really trying to understand customers. And it's not surprising that someone who's wired that way is going to actually have pretty good empathy for what people need and be able to put it out there. So again, they have to go with a lot more conviction because I light MVP is not, you know, minimum viable product is just not realistic in the heart. Speaker 1 00:06:42 Yeah. And it really speaks to the, it also really speaks to how important being data driven is in all elements of growth. And, you know, some in some, some ways you're going to have more, uh, visibility and today, you know, in some places you have more visibility than others into data. Um, but I think you use what you can. And I, um, I just took the go practice course that, uh, that you suggested. And, uh, and I think that was so much of, it was, uh, learning how to speak to your customers to get, you know, maybe qualitative questions, but you're really getting quantifiable data, quantitative data to then use and really analyze and really try to get it to the heart of what is, you know, what's at the center of, of the customer experience and what's going to drive it. So all of these things are really interconnected. Um, but I, yeah, I think all of these companies really showed us how product market fit is, you know, it, it's, it's super important and you really, you have to dial it in. Speaker 2 00:07:37 Yeah. And just to come back to one thing that you had said earlier about the two year wait for, uh, for Glowforge and how, you know, we were, we were talking about how, how would somebody stay excited about a product, but I, I remember my two year wait for the, or maybe even two and a half year wait for the Tesla model three. And, you know, the truth is that I got more excited over time that there's something, there's something about a gadget, something about the anticipation of hardware, especially when it's cutting edge that touches you on a different level than maybe the, um, the, the, that appears software product would, uh, resonate with you. And so I think that's something that we saw with each of these companies that they, they really tapped into that the love that that customers had for the product, try to understand that and really, really ride that love. So I don't know anything jump out at you in particular about that. Speaker 1 00:08:28 Yeah. Well, I just sort of have a question for you on that. Cause I do, I remember during that waiting period, how excited you were about getting that, that Tesla, um, do you think it also connects back to the, just the higher value, you know, higher price point of these? I mean, aftershocks is a little bit of an exception. It's like 80 to $160, but like Glowforge is 6,000, you know, three to $6,000 even boxes. I'm sure very, very expensive, you know, that, um, and, uh, a mirror will cost you $1,500 before you pay the $39 a month for two years. So these are, these are expensive products, so you're making an investment and I think it, like, do you think that ties into it too, is just that it's because of the higher value it drives, you know, drives that love, Speaker 2 00:09:10 Like to some degree. Yeah, probably to some degree. I mean, you have to be, you have to be pretty excited to throw down the money for something you're gonna wait a few years for even, you know, in the case of Tesla, it was a refundable deposit if I changed my mind, but it was something that, you know, over time, I'm watching different videos of how autopilot's going to work and try and trying to essentially make it so that I can hit the ground running. When I finally do get this thing and almost couldn't find enough, enough material on, on how I'm gonna get value out of this. But I think, you know, as we, as we explored each of these products a little bit and kind of leading up to this, um, uh, discussion that the, you know, so many like, like mirror, no one's out looking for a mirror, even, even like aftershocks. Speaker 2 00:09:56 I don't, I don't think I would have thought, Oh, I need headphones like aftershocks, but every one of these products, as you got to know him more, I personally wanted to buy all of them. I think I got to the point where, um, you know, Glowforge was the, one of the last interviews that we did. And I, I think my wife would have killed me if I brought home one more thing. But you know, the first one that I did was aftershocks and that's, uh, yeah, around a hundred dollar product that was pretty easy to, to, to throw down on that. And I loved it. And actually my wife tried it and said, Oh my God, I want these to mirror. I, you know, once I, once I heard about that product again, I would have not really thought about it, but of course we went into the pandemic, everything's shut down family, can't go to the gym. Speaker 2 00:10:45 I bought this thing and I wasn't even sure I almost have buyer's remorse while I was waiting for it. But there was a 30 day money back. Yeah. If I changed my mind, I could send it back afterwards. When that thing arrived, my family was fighting over it. My, my, um, daughter was, was, uh, you know, spending time with my, uh, parents. And so they were there kind of isolating together. And when my daughter went back to college, she wanted to bring the mirror. My parents wanted to keep the mirror. My wife wanted to bring the mirror to our house. Um, it's something that, you know, there was a ton of passion and people got really excited about it. So, you know, all of these, there's a, there's a ton of love behind them. And, uh, it's, there's, there's something different there. And I don't know if it's the price point or if it's, or if it's the tangible piece. Speaker 1 00:11:29 Yeah. I think they're probably, I think it's, I think it's both is probably the answer, but, uh, yeah, I think the love is something we, we saw over and over again is that, uh, there, the mission of these companies is about tapping into the, into, into love for something it's about getting people excited about, about, about, uh, a community. Speaker 2 00:11:49 Yep. And I almost feel like each of these products, again, it's between this tapping into love and the product market fit, but it's, um, that they, a lot of them sort of have a lifestyle and a mission that's so associated with them that whether, whether it's fitness for, for aftershocks and for mirror and you, you know, you want to really probably wear that, or it's a, you know, being green and protecting the environment, um, you know, or even, even being a maker that there's, there's like a close personal identification that comes with these things that maybe it's a tangible piece. Maybe, maybe it's, it's a function of what the companies have done really well and building community and passion around their products. But somehow that, that seemed to be some fuel that was really helping to drive the growth of each of these companies. Speaker 1 00:12:35 Yeah, for sure. And I think it's, you know, when you look at like mirror and you see that they they've been testing three retail outlets, um, and after is all about getting headphones on heads is how, uh, how, uh, REL, uh, explained it. It's really about getting out in the community, getting these products in front of people, because again, you know, these are big investments and most of the time for most people, they'll never see one before they buy it. Uh, and even though, and referrals a huge part of, of a lot of the growth of these companies, um, you know, Glowforge for sure, but a lot of people, I think the referral is people talking about it and seeing videos of it. And it's not necessarily that they ever got to actually experience it. So I think building that community around it is super important. Otherwise, it's going to be hard to get that sort of flywheel of growth going. Speaker 2 00:13:23 Yeah. But as I did mention, like my, my wife saw the aftershocks try them on. She wanted, she wanted to wear them. My daughter has the mirror now up at college, she's, she's kind of having in her little circle of people that she's isolating with. They're kind of doing almost exercise classes together with it. That one is when it's a physical piece of, you know, like, you know, and make maker parties. That was something that, uh, uh, Marlo talked about, you know, she's like post pandemic, but, you know, trying to get people coming together and, and having parties around there around their Glowforge, uh, three D printer. So I do think that there's, there's definitely something to be said for, you know, you know, that, that, that there is some level of trial that maybe is happening there. Um, a little bit more, but moving on. Speaker 2 00:14:11 I mean, I, I do think the one area where there's maybe a little less advantage in the hardware space is, is kind of in the data and insights that you might have in a pure software product where you can track everything from how someone finds out about it to, to, you know, have the first time they use it, how frequently they use it, traditionally in hardware, people didn't even know who the heck bought their product that was going through a retailer. And you're lucky if you could even collect your customer list, how, how is data different here, do you think than, than how it was in, uh, in, in traditional hardware products? Well, I think we have now connected Speaker 1 00:14:52 Devices, right? All of these products with the exception of aftershocks are connected devices, right? So Evie box knows who's, you know, they know who's charging at their charging stations. They're, they're really, uh, all of these companies with the exception of after socks are really, you know, hardware's the shiny thing we see, but they're really more than just hardware companies. Evie box is a hardware and software and services company Glowforge is hardware and software. In fact, the interesting thing is a Glowforge, which I think, you know, the design is probably now four years old. They haven't touched the design of the, the hardware yet that everything is about building the software and making the software better and better, which I think going back to your Tesla, um, um, uh, that's really a big part of it. And then mirror is, you know, Brynn was talking about how she's really a hardware software and content company. Speaker 1 00:15:39 Um, so I think because there's so much connection between these things, there's the ability to then tie data together. Um, and it becomes, that becomes super valuable in the process. I mean, with aftershocks, you know, we spoke to, um, uh, Jeff from Abacus, her performance marketing agency that they're working with, and it was so specific about it. He was so specific about how they're using data to track as far down the funnel as possible. Um, and you know, he was talking about this matrix, which had, you know, the, the, each persona, uh, that they were marketing to, to against each place in the funnel that they were marketing against. And they were speaking to each group, each person almost on an individual level. So if they figured out that you were a cyclist, they stopped sending, you know, showing you videos that were more general and said, here are cycling videos that show you that this is a great way to, to use this product. And you can now listen to music safely while you ride your bike. And I thought, uh, that's only something you can do because of data. Speaker 2 00:16:38 Yep. And I, I think the other thing is interesting that you look at like an aftershocks and B, even though it's not a connected device, if you compare it to the traditional days of I, for what it's worth, I actually went into a best buy and bought mine. Cause I was, once I made the decision, I was too impatient to wait the day for it to be delivered through Amazon prime or wherever else I could get it. And, uh, you know, so even if they didn't have my exact, uh, customer information, enough people are buying via direct to consumer today that I think even, even companies that don't have connected devices probably have a lot more insights and connection with their customers than, uh, than traditionally they would. But I think that so data and insights is probably, um, particularly as you said, for the connected devices, it's almost no different than being able to see engagement are people continuing to use, but, um, it'll be interesting to see, you know, let's take a look at kind of how, what does the growth model look like for hardware then if it's a connected device, is it, is it almost then exactly the same as, as software since you can track kind of all parts of that customer journey or are there differences? Speaker 1 00:17:53 I would S I think it's very, I think it is very different. Uh, I think, you know, there's certainly similarities. And I think one thing we learned through this process is just how it all comes down to, if you can delight the customer, which we see every, you know, throughout all over your interviews, if you can delight the customer and really focus on value delivery to that end stakeholder, uh, you have your best chance of driving, you know, sustainable growth. But with that, I think to get there, you get there in very different ways. Uh, one thing that was interesting across all of these companies is how important video was in the process. It was, it was a re like, which makes sense, right? You, you have this, this hardware product in many cases, you're not going to see it before you buy it. And trying to drive that, that sort of first loop in this process, uh, begins with getting people excited. And a video is a great way to do that because you can start to show the use cases. Um, but like, what did you, what did you find in terms of, uh, what'd you find an interesting in terms of sort of these interdependencies? Speaker 2 00:18:56 Yeah, I think that probably the biggest difference is, is the aha moment. So I just talked about the, you know, the weight of like, I didn't want to wait for aftershocks, even if it was just one day, I didn't want to wait for that for me. Or we had to wait probably two weeks for it to be delivered. Um, you know, and, and we, we talked about for Glowforge or for, by my Tesla, you know, it could be years that you're waiting and, you know, so, so that's where I think the role, as you said, a video kind of fills in a little bit of that aha moment. So traditionally the aha moment for a pure software online service is can I get them to an experience where they experience is the key word, the point at which they engage in the product in a way that they say, Oh my God, I get this and I want to keep using it. Speaker 2 00:19:43 And so it may be a function of how many people are connected, like in the case of a, of a Facebook or Twitter, but, you know, for, so that would delay it. But for a lot of companies that can be on an initial decision to purchase, they're there to that aha moment pretty quickly. And then if they couldn't get them to that aha moment and it, and it meets the need and everything else continues to go well, the chances of longterm engagement retention are pretty high. So that little bit of a disconnect between that purchase decision and ultimately being able to experience the product is there's kind of a danger zone that clearly we're talking about fast growth companies here. So each of these companies has, has overcome that barrier of how do I build enough enthusiasm and momentum, so that someone's still enthusiastic when it arrives. And they don't just hit the return, uh, you know, re return guarantee that most hardware products need today. And so I think that that to me is probably the biggest difference that I've seen. Now. What about referral? I thought thought referral was pretty interesting between these companies. Speaker 1 00:20:44 Yeah, for sure. I think, um, especially with Glowforge, uh, you know, they, they were actually, they have an incentivized referral program you get, and it's, uh, it's, it's a big incentive, it's $500, uh, for, uh, cash or $600 credit if you refer another user. Um, but I think it comes down to it doesn't matter how, how big the incentive is. If people have to be excited about the product, if they're going to refer. Um, and I think that's where these companies really shine. I mean, ed box, you go from ed box talks about consumer advocacy advocacy over and over. It was like, you know, the recurring theme for him. I mean, he basically said like the most important question for him is how well, how easy is it to work with us? Like, that's what matters to him. And I think it's that mindset which we see across. I think we're seeing across different industries in different sectors, um, is the focus on the consumer, the customer experience and really nailing it. Right. Um, is, is becoming more and more important as we, as we, as companies evolve and in the more data driven times. Right. I think, um, I think we definitely saw that with these companies, referral is absolutely critical. I think after shock, she said 31%, uh, of their purchases come through referral. I think Glowforge was higher. It was even higher than that. It might've been 50, 50% if I recall. Yeah. Speaker 2 00:22:11 And that was actually through the referral program. So those are incentivized referrals, 50% of all new people. And, and when you look at, I mean, as you said, I think it was a 3000 to $6,000 device. Um, if your customer can account for 50% of your new customers, that's, that's a pretty powerful channel. Speaker 1 00:22:30 Yeah. I mean, and it takes, you know, one thing that, um, Arielle from aftershocks talked about was when she described the aha moment, she, she kind of redefined it as, um, the, uh, what can I do now? Moment, it's the, what can I do now that I couldn't do before? And I think when we talk about like, Glowforge, and like the video and video, what we're really trying, what they're really trying to do is get people to this moment where their imagination goes, Ooh, what w what can I do? What can I unlock with this product that I couldn't unlock before? And that's sort of the magic of it. And I think that's really what drives a referral processes in another interview, not re not a hardware product, but finder.com, uh, the person you interviewed, he talked about how his aha moment, wasn't the moment when someone discovered and got the information from finder.com. It was when they shared it, not whether they referred someone, but it's when they owned it. And they said, now I get it. And I think that's what we're seeing is really sort of this evolution of the aha moment. It's the moment when people really get it Speaker 2 00:23:38 Right. And we also touched on a little bit on mirror, how my daughter's now got groups of people coming over, small groups of people that are in her circle coming over, staying six feet apart with a windows open to their outdoor yard. Um, uh, the, basically one of the things that I thought was interesting with Meir is pretty early on my daughter's got pretty decent, um, uh, Instagram following, not surprisingly. Um, she posted a picture of herself using the mirror on Instagram, and they reached out and said, Hey, would you like to do that on some kind of, uh, some kind of repetition, and we'll give you, uh, your, your mirror subscription for free. And she said, why would I do that? My dad's paying, no, but anyway, no, she didn't. She, she cared enough to tell me about it. So she went, she played, it was child, but influencers in general has been a big part of mirror strategy from pretty early on. Speaker 2 00:24:42 And I think like with any time there's, whether it's incentivized referrals or, or yeah, definitely for incentivize referrals that only works if organic natural referrals are happening and then you can accelerate with, with, uh, incentives. And so Glowforge with 50%, I'm not, I don't think we've got a number from mirror of how many of their new people come in through referrals, but it's, I think it's important for each one of these companies. And because your, because these are physical devices, it's just much more discussion where they, and it's easy for someone to see it and ask about it and, and for what it's worth. I mean, the same thing with, um, with Tesla, even though there's more, I think Tesla model three is on the road now than, than probably just about any car in my area, Southern California. I still have people all the time say, Hey, what do you think about this car? Speaker 2 00:25:31 You like this car and, and still see people looking in the windows when it's, what is parked, the places that I'm walking up. And so I think there's something about just even a referral that somebody is not recommending it, that just seeing it is the trigger that makes someone think maybe I want one of those. Yeah, absolutely. I think, you know, going back to, when you originally interviewed me about robo killer, I remember telling you like our answer bots are robots that would talk back to the human, to the, uh, the human spammers. The robocallers, what I thought was so valuable about those is that when people, I would meet people and they'd say, Oh, I know your product. And they would hold up their phone and they'd play these answer bots back to me. And I was thinking to myself, like, that's not a referral that we see, but that's happening all the time. Speaker 2 00:26:17 People are in bars saying, you gotta hear what this, what this robot did to this scammer, you know, like, so I think, you know, it comes back to like, you know, there's like you said, it's not always like this tangible, like direct, like I said, you know, I told someone, you should go buy this and they bought it. It's about building sort of that groundswell of interest for things. It's the flywheel that ultimately when, when you kind of go back to the beginning, that strong product market fit that tapping into the love on the product. I think hardware products have the ability to trigger more conversations are in a sense, more discussion worthy. And if the person hates the product, that's a pretty short conversation. They're going to probably say, you don't want this thing, this thing, you know, a total dud, but if they really love the product, then they may not have brought it up themselves. Speaker 2 00:27:05 But if someone asks them, they're going to advocate on behalf of that product. So I think that's one of the advantages that you have in the hardware world that you might not have as much in the software world. Alternatively, one of the disadvantages is probably around experimentation. It's some of the areas I think you can experiment probably just as well. Other areas are, are probably a lot harder to experiment. And what would you say in these interviews compared to everything else besides these companies we've referred to here have been, have been primarily software companies. Um, how do you think these guys talked about experimentation compared to some of the other companies that I, that I've interviewed? Speaker 1 00:27:44 I was pleasantly surprised that experimentation was a big part of what they were talking about and who they are. Um, I mean, yes, we were talking to growth people, but like every one of these companies has a dedicated growth team and growth teams are about rapid experimentation. So clearly that mindset has moved into hardware. Um, you know, which I, I am assuming I guessing that 20 years ago that wasn't the case. In fact, I can tell you just, I have a couple of friends who were working in hardware, you know, bending metal on CAD programs, as they say, um, and you know, growth was not something they talked about. Like that, wasn't how, you know, you didn't have growth teams. So I think experimentation is an important part of it, but they do think about it differently. I think, um, it was, I think Marlo from Glowforge was saying that, you know, it's less of ruthless experimentation in their mindset as opposed to continuous experimentation. Speaker 1 00:28:37 And the experimentation is sort of around ness is not necessarily directly on the product that's around the edges of the product. I mean, aftershocks, like one of the things that I thought was sort of very like growth minded was they were talking to customers getting feedback and they found that customers were losing their, uh, their charging cables and that led them to put another charging cable in the box so that you get to with it, with the product instead of one. And that's essentially, you know, an it, I think it was an outgrowth of an experiment. You can't necessarily change the product overnight, you know, a Glowforge, you know, they can change software, but they can't change hardware overnight. And E-box certainly, you know, they're not changing the, how the hookups are every day. Um, so I think it really is important that you find the places to experiment that you can. Speaker 1 00:29:26 And I think that's what they're doing. They're really there, they're at least putting that mindset to work wherever they can. And you see it, uh, as an organization, it's not just, here's a growth team that experiments in little packages it's, Hey, we're experiment. This team is experimenting around brand. This one is experimenting around influencers. I think nerds, by the way specifically, I mean, I think she was experimenting around the whole orbit of her, of her product and that whole idea of we're not just a hardware company, we're hardware, software, and content, every bit of that, where she could experiment, she was finding places to do it. Speaker 2 00:29:58 Yup. Yeah. And that's, that was my big takeaway as well, that I think you said around the edges, it's, it's essentially on the acquisition side, whether that's, whether that's in video or in just, you know, how, how everything's presented on the website and just being able to really study how people engage and learn about the product and iterate on that side of things. And then on the referral, as we talked about, I mean, a lot of them, uh, did, did some good testing around referral and referral programs, but then also again with these software rollouts and updates, being able to study the data, if a new update doesn't get the engagement, once people try it out, that they were expecting pretty easy to tone that down, that, that, that, that the software side of the product allows that experimentation. I think my, my overall take though, was that their conversation about experimentation, they referred to experimentation, I think less than the other companies, but probably more than I expected to. Speaker 1 00:30:57 Yeah. Yeah. I think that's a fair, a fair way of explaining it. Speaker 2 00:31:02 Perfect. Well, why don't we end with, you know, the, the big part of the fastest growing companies tend to have tightly aligned teams that are super passionate about growth, that they have the shared mission for growth there they're working all in concert. Everyone understands the importance of experimentation and the importance of impact on customers and, um, you know, so that, that alignment and, and, and really trying to rally around a North star metric, how did, how did that look in these companies versus Russia? Some of the other companies that I've talked to in the past, Speaker 1 00:31:35 You know, I think we still have that sort of mixed bag with the North star metric, right. Where, uh, some teams really get it and really embrace it. And some teams sort of are working around the edges. We still get the, uh, well, we use OKR, which is, you know, uh, not, not a North star metric. And I think they both have, have their place, but I think they're different. Um, they, yeah, they, they try, they try to get you to the similar places, but I think the North star metric is this actionable metric that ties the, the work you're doing to the mission of the, of the company and how that's the value delivery to the end user. And I think it's really important. Um, definitely, uh, you know, we saw with, uh, with Glowforge that they were looking at at print volume as their North star metric. Speaker 1 00:32:19 And I think that's, uh, that makes sense. It's something that, you know, the more people are using and engaging with that, that Glowforge the more value that they're getting out of it, the more they're they're connected to it. Um, so I think that's, that's important. It was interesting that, um, uh, you go from Evie point, uh, ed box was saying that charging was this North star metric that they were working towards, but he said it was sort of unspoken, uh, that they, it was, it was what they were using as their North star metric, but it wasn't something that, where they were tangibly saying, this is our North star metric, but they're trying to get to 1 million charging points by two 20, 25, that's their goal. And they're actually, they're actively working around that and collaborating as a, as a 600 person company towards that goal. So I think it was, it was interesting to see that I think, Speaker 2 00:33:09 Yeah, just if I could just touch on that, I thought it was interesting that one of the points that I made to him is that just because you don't use the jargon of North star metric, more importantly, you're, you're applying the principle of it, which is, which is something that's tightly aligned with their mission about making better air for everyone to breathe. And just out of that, that green mission that they have and maximizing the number of charging stations. And then again, correcting himself that they are actually connected charging stations is better because they may not really be, you know, still active if they're, if they're not connected. And so I, I felt like he really subscribed well. So that would be my kind of takeaway on each of these companies at the, that they all felt like they had such strong, um, mission guiding their day to day execution. Speaker 2 00:33:59 Some of them had, you know, North star metric, tightly, tightly aligned with that mission. But yeah, at the end of the day, if everyone's pulling in the same direction, whether they use the concept of North star metric or not, I think that these, these companies, um, probably, you know, particularly after socks might be a bit of a question Mark, just because, you know, they, they, they were from upstate New York originally. They've just recently relocated to Austin. And so, you know, I, they, they may be a little bit more traditional in their approach, but, uh, and, and I don't know for sure in that sense, but I, but I definitely feel like the other ones had a very clear mission and a, and, and metric associated with that mission and the team pulling in the same year. Speaker 1 00:34:45 Yeah. A hundred percent. And I think, especially when you look at UV box and you look to think about breakout growth, uh, they they're breakout growth incarnate, right. They went from Hugo started, they were 10 people in 2014, there's 600 now managing that growth is a huge challenge, right. And alignment just become like, becomes a constant battle as you, you know, you're running into your own headwind, basically the faster you grow. And he keeps going back to how, you know, they there, they still have this startup culture and that's a startup culture. That's made it through an acquisition by one of the largest energy companies in the world. How do you do that? He keeps saying how important it is to be this a mission driven company. The, the line he used that really stuck with me. He said, it's where people powered by purpose to build the right products. Speaker 1 00:35:32 And I thought that was him really saying, like, it's all about this mission. You know, they have this, this lofty goal of getting the world to zero mission society. Right. And it sounds like, it sounds like almost like too big, right. When you hear it, but then you start hearing how he describes what they're doing. And like COVID-19 is impacting them. It's, you know, it's, instead of the hundred percent growth that they were expecting this year, they're, you know, they know it's going to be, you know, less than that. And yet to some degree, they're still excited because less people are driving. Uh, you know, and they're getting closer to their mission. I mean, it really, you can tell that it's embraced throughout the organization in a way that really, uh, it matters to the people there. So I think absolutely it's um, these companies really understand that their, their mission is how they're going to get there, how they're going to get to where they want to go as a growth company is by really doubling down on their mission all the time. Speaker 2 00:36:29 Yeah. And I, I think just the, the V box example that you were talking about, the, you know, when they've had these growth stalls throughout the years, where they dropped to 20% annualized growth, you know, which some companies would kill for, but the fact that three or four years later, they're back to a hundred percent annualized growth just shows that they definitely have these fits and starts. And a lot of it was again on that international expansion, they're there, they're growing the market as they're fulfilling the market and to do all of that, you need a really strong sense of mission to, to kind of blast through all of those challenges. And so, as I kind of get into the key takeaways, that was one of my biggest key takeaways is that, um, you know, w whether your hardware, your software, you're an online service that if you have that strong sense of mission and everyone's pulling in the same direction, and you have a good, strong Norstar metric, you can sustainably grow over time. You can, you can work your way through COVID challenges. You can work your way through other fit and start challenges that every, every company has. And if you just keep coming back to passion for that mission, you're going to be able to do pretty well with it. Speaker 1 00:37:36 Yeah. All of these companies are, are not just trying to be, as you go said, they're not just trying to be the market leader. They're trying to be an industry leader. They're trying to really guide where these industries are going. And as you said, I think it was, uh, Marlo said, uh, grow the market as you sell it. I mean, think of every one of these companies has to do that. I mean, mirror has to expand the world of connected fitness apps, which I think, you know, is a growing market. Eve ed box has to do that with, with electric V you know, they want more electric vehicles makes what they do more valuable. All these products have to do that. Um, but I think they do that because their mission is bigger than just the growth of their own prop. Speaker 2 00:38:21 And, and of course, you know, just, just go right back to the beginning, they need strong product market fit and parts, challenging and hardware. You're going to have to have that sense of faith. As you, as you come out with something that's not an MVP, that's actually a pretty orchestrated customer experience. And hopefully you've done a lot of customer development upfront. You're really familiar with customer needs. And, you know, because those, those iterations are going to take a long time. If you don't nail it the first time out, maybe, maybe you go out of business and those are the companies I never ended up interviewing, but the companies that had that conviction built it right, had that product market fit. These, these are for companies that are doing a fantastic job of leveraging that product market fit to really drive breakout growth. Yeah, absolutely. It's there really, it's exciting to see, and I think it applies to other to other sectors too. I think there's a lot of good lessons here that we took out that go well beyond hardware. And just in terms of how to really, you know, this idea of getting the execution right along with your product market fit, making those two things sync together. Absolutely. Well, thanks, Ethan. I appreciate you, uh, taking a deep dive on these companies with me and, uh, helping to drill into what's different about hardware and how do you drive breakout growth with hardware companies? It's been a fun conversation. Yeah, absolutely. Speaker 0 00:39:43 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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