Hiten Shah cracks the code to 37 Signals Growth Playbook

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In this episode, we have Hiten Shah, founder of multiple successful companies, including Crazy Egg, KISSmetrics, and FYI. He shares the knowledge he has gained from starting the businesses and also how being curious about observing other businesses has helped him along the way.

Hiten explains the power of branding, highlighting three keywords: New, Different and Right. He also mentions the importance of setting the right intention with content as well as producing high-quality content which is in understanding of the market and its people.

He later mentions why identifying immature and mature channels and understanding the difference is key while scaling a business and also gives out the criteria he uses to evaluate channels.

Outline of this Episode

  • Content marketing - Hiten talks about the potential customer journey whether it's decisions around purchase or landscape of the product.
  • WebTraffic - FYI focuses on content that is specifically aligned with the audience.
  • The Audience - Hiten shares his experience on the selection and understanding of your audience.
  • Market research - FYI focuses on understanding the customer experience and sentiment analysis.
  • Channels - Hiten describes managing them and scoring channels.
  • Blog content - Hiten shares the importance of creating the structure and time needed to be put in before seeing results.

Hiten's Inspirations

  • Joel Gascoigne (Buffer)
  • Nathan Barry (Convertkit)
  • Matthew Kobach
  • Eric Yuan (Zoom)
  • Jason Fried & David Heinemeier Hansson (Basecamp, previously 37Signals)

Connect with Hiten




Elias Rubel (00:07):
Here we go. So super excited. HIten. Thank you for joining us on the show today. For those of you who don't know him, most of you probably do heat and started Crazy Egg almost 15 years ago, maybe more than 15 years ago now. Kissmetrics and now is working on a product called FYI. Super excited to have him on the show. He's an advisor and investor in more companies than I can count. Hiten, welcome to the show.
Hiten Shah (00:34):
I can't count them anymore either. Thanks for having me. I'm just an angel investor and no big deal. Yeah,
Elias Rubel (00:43):
Amazing. So as you know, this show's all about, you know, we're trying to obsess over that first sprint from when a company finds their initial product market fit around a million ARR and now they're trying to scale it up to that first big milestone of 10 million error. And even beyond your ability to pattern match at this point based on all of that experience that you have and the amount of time you've been in industry is pretty unprecedented. I'm curious when was the first time as you were working on all of these projects yourself, when was the first time you realized you were starting to take advantage of some of that experience and pattern matching for your own projects?

Hiten Shah (01:26):
I'm just a lifelong learner and I just literally like to learn from anything and everything I possibly can get my hands on, whether it's books, podcasts, audio books, other people. And I also have a hobby that is really just thinking about other people's businesses. So other businesses basically whether it's large, small or whatever. And so it just, to me it was just more of an extension of what I was already doing and being able to also be helpful and watch lots of different experiments happen, whether it's product marketing, growth, et cetera across many different companies is obviously super valuable. But really for me, it's just another set of inputs. And, and another set of learnings that come from those that that's kind of the way I think about it.
Elias Rubel (02:19):
You were actually, now that I'm thinking about it, you were the, you were the person who told me actually the way that you framed it, you were like, dude, what are you doing? You should not be listening to audiobooks at regular playback. It's all about that two X life. And you got me back into reading. But while air quotes, reading books because of that, because otherwise I was to add, I just could go off topic and start daydreaming. But w two X really keeps you focused. It really
Hiten Shah (02:45):
As, and, and even you can even go up to three acts if you're willing to spend five or 10 minutes to get accustomed to it. It's actually really possible. So yeah, I think, I think I was definitely early on that trend from what I can tell. And now even YouTube as a two X feature and stuff like that, for the longest time they didn't. So I'd have to use these like browser extensions and stuff. So that's, that's like a great life hack or learning hack. I'd love to deep dive now into maybe even, let's just start with crazy. I go start at the beginning. Looking back on your experience starting and growing that business are there any things that now are informing the way that you think about growing? A FYI, I'm going again. Yeah. I'm going to give my lessons learned across the board from each of these oriented around growth, specifically around getting from like, you know, six to really low seven figures to eight figures in revenue.
Hiten Shah (03:46):
And let's see where it goes. So with crazy egg, we launched in 2005 or actually started until the five might have officially launched it publicly in 2006. So it's about 15 years ago. And we, that business still exists@crazyegg.com. And we early on had a free plan. We were essentially one of three, you could say first to market at scale with the idea that analytics could be much more than just numbers. And so what we built was a way for you to look at your website, each page on your website in this like visual representation that was kinda like a heat map and not kind of, it was a heat map. That's what we called it. We, we really popularized the term. And even today, like I, I talked to our, you know, one person in sales at the company.
Hiten Shah (04:37):
I talked to many folks around and if you want like the best tool for heat maps, we are the best tool for heat maps. I can say that. Cause we spent 15 years getting that tech to be where it is today and nobody else has spent that kind of time because the companies that existed at that time no longer exist right now or are moved on to other types of things. We still are at the core as of right now, heat map tool. Now what that business taught me about growth and scale and those things is that is basically the power of brand. So one crazy egg is kind of a name where like you don't, you don't know what you're going to expect when you hear it or when you go to it. So someone has to tell you what is this thing?
Hiten Shah (05:17):
We came out at a time when, when this product was what I call new, different and, right. And so the way I think about it is if you're going to grow a business, you have to figure out what's new, different and write about it even if it's a copycat of something else new, different and right is what people want to buy. And it really gets to the crux of like when people say build something people want, or now in these days with these, this environment built something people need, it has to be new, different and right for them to really be pulled towards it. There's one other example of this, which is literally it can be cheaper than anything else out there. Any alternative and then you might be going into a race to the bottom, but there is value in building the cheapest thing possible.
Hiten Shah (06:00):
Examples of that are like Zoho even fresh, fresh works now which started out as a fresh desk. A lot of these products that can build cheaper cause you know, those two companies are located in India are able to have that value problem. Many folks who are not located in places where engineering talent is is cheaper or more affordable, let's say if you want to call it that, where they can lower their costs. Like you end up with this sort of a value prop and sale and it depends on the market. But the big thing from that one that I took away is like if you can build a brand and really like, like, like build something that's right for the market. It's different, it's new, it feels fresh and new people will talk about it. That to me is the basis of anything that's [inaudible] that blows up on its own without a lot of initial like efforts around marketing and sales and growth and things like that.
Hiten Shah (06:55):
And that really hits to the point why people say you need product market fit first, whatever that means. You basically need a product. People want to tell everyone they know about right or everyone that's relevant that they know about. You know, that they know about this product and it exists and it's like so awesome. And that worked really well for us with building something new, different and right in the analytics market with crazy. Then my, my next company that we ended up crazy Excel funded, we ended up raising money for Kissmetrics and kind of spun it out of crazy ed cause we were building a second product. We were really early on this idea that you can build a lot of traffic and do demand generation via blogging. We were definitely post HubSpot there. They were about I think, Oh six.
Hiten Shah (07:38):
We were we started out in 2008 with Kissmetrics. And what we learned there and what I learned and what I took away is that you can build a strong presence without actually creating a lot of your own content and by having people, guests posts content and just having a strict editorial set of guidelines. So the content is very compelling. So we ended up hitting a, I think one to 2 million page views a month, somewhere in that range just from a Google search. And with Kissmetrics before the company was kind of bought until one or two times. I don't remember. And, and so what I learned there is the ability to build a brand off of creating brand affinity to your content. We used to blog about everything marketing when there weren't as many really in depth pieces about marketing out there on like how to do something or the latest and greatest with Google analytics and how to like use use it to the like, you know, extent that like, you don't need any other analytics tool, things like that.
Hiten Shah (08:40):
So we were blogging a lot about things that marketers really cared about because the marketers were the ones buying analytics tools and Kissmetrics was an analytics tool. There's a bunch of different reasons why it was new, different and right. The high level reason was we actually tied the data to your customers so you could see what your customers were doing, which didn't exist in any analytics tool before us. And in a very easy, quick way and it did exist in the high end enterprise tools but D and it was very hard to implement but it didn't exist in sort of the more lower end SMB startup focused tools. And so really learn the benefit of being able to create a lot of content without actually having to write it yourself. And the power of blogging for getting, you know, search traffic.
Elias Rubel (09:24):
I'd love to jump into that for a second because it seems that there's always, there are always these, these waves in marketing and growth. Like if we think of inbound and content production starting perhaps with HubSpot, at least in mass and then Kissmetrics really helping pioneer that, that kind of wave. And then all of a sudden there are these people who pile on and they're like, shit, we need to create our brand. We need to create our content marketing strategy and, and end up producing. They go through the motions, they produce content, but not for the right reasons. Or they end up doing it for the sake of doing it because they think they're supposed to and it doesn't end up fulfilling that that purpose that you were describing, like the need to create a brand to break out. And I'm curious if you have any insights as to what separates the companies who do it well and do it right and it's beneficial and helps them grow versus the companies who see those companies and go, Oh, we need to do that too, but totally miss the Mark intentionality.
Hiten Shah (10:32):
So it has a lot to do with your intention, with the content and your ability to create really valuable, high quality content that people love. And it's not, it's not like something that's super easy to do. So I wouldn't say, Oh, you know, go out and decide, Hey, we're going to create a content engine or create a bunch of content and then learn how to do that really well and it's going to happen in a month. If you don't know how to do it, even if you hire someone, it's not necessarily what's going to happen. And a lot of this, ironically, the best content comes from a really deep understanding of your audience, your customer. You're going after the market and the opportunity and you're mapping the strategy to that. So where people fail is they're not very strategic about it and they're just super hyper tactical looking at what others have done, trying to write better content and then, but not really hitting the Mark.
Hiten Shah (11:26):
So it's like what a lot of people will tell you about this, which is basically that the key to great content is actually just basically being able to think through the journey that a potential customer goes through to make decisions. Whether it's decisions around buying your product or decisions around sort of the, the, the sort of landscape of your product. And what I mean by that is like if you're building a project management tool, you should know who the customer is and the landscape of that product would be all the different things and the tools that they use in order to get projects to completion. And it might not just be a project management tool, but they might be using a document app or they might be using Slack and other things like that. And so this deep understanding is where people miss out on.
Hiten Shah (12:17):
So I would, I typically would suggest that if you're going to start a content marketing strategy or evaluate one, evaluate it based on whether you think it's attracting the type of people you want it to attract. And if you don't have an answer to that, then you want to figure out what the answer is to that. And I don't mean to say that like, Oh, all you're trying to do with your content is attract your buyer. What I'm saying is you want to find a way to attract the people who really care about the category, the market and are always like different types of content that you can write that can help you do that. So it's, it's, it's one of those things where like, it's almost like turned into a checkbox strategy, which is we need a blog, we need to be blogging.
Hiten Shah (13:02):
And actually no, maybe you don't. Maybe there's a better strategy for you. Maybe you have scale and you have other channels that are worth pursuing that are more product oriented not necessarily as much marketing oriented channels. And that might be better for you depending on the type of business and products you have. I see so many companies, I have so much product opportunity when it comes to their marketing that they just don't utilize it because usually it requires like cross-functional coordination. So that's one of the biggest problems I see. And so then they just go, Oh, let's do a blog cause marketing and fully controlled at a without much, much if any input from other parts of the business. But then what can happen is like you still end up with a cross functional situation cause sometimes you need more content. You need the internal team to help you write it.
Hiten Shah (13:46):
You need the internal team to help you promote it. Internal team has opinions on what should be said for the brand and all that stuff. So like things get kind of complicated super fast actually, especially as you're trying to scale kind of your efforts. So like blogging is like a three, six, nine, 12 month effort before you really start seeing the fruits of that labor. And one of the things that people don't realize about blogging specifically in content marketing is that it's really about not writing content that pops off one time. It's really about finding the types of content that you think is so evergreen that it'll get ranked in Google or it'll get shared in channels continuously that are going to enable you to basically have continuous traffic from that content. The worst type of content is the ones that are like one hit wonders and there's most of the content if it's like when it does work are one hit wonders. Not like you're consistent. This is going to get your traffic, you know, hundreds if not thousands of visitors every month. You know, literally on a consistent basis. So it's, it's almost like you want to find the things that are both repeatable on your end to do but also repeatable in terms of the amount of traffic you can get from them.
Hiten Shah (14:58):
Perfect. That was a, that was exactly what I was looking for with that deep dive. So let's get you back on track to, this is Kissmetrics you guys were getting tons of page views. You're focusing on building the right content. Where'd you go from there? Yeah, we collected a lot of email addresses. We ended up doing a bunch of webinars up to like one, one a week, and we were using that for our demand generation and using that to basically get people to convert and buy the product and help them see kind of the light at the end of the tunnel around the product. And that was really fruitful at the time. I think one thing that I would mention is that like whatever market you're in, you have to really analyze the market opportunity for the different sort of product initiatives you have.
Hiten Shah (15:40):
In the same way you need to do the same with marketing. So oftentimes I just see a playbook and the playbook is repeated typically that that playbook doesn't get tweaked enough early on. And so I'm not against playbooks at all. What I'm more against is like if that playbook doesn't include context, and so what we learned is that there were marketers, a lot of marketers, most marketers were hungry for deep 1500, 2,500, 3000 word posts that would deep dive into a topic and help them understand it in one sitting. And so we started creating content like that, and that was like back in 2008 to like 2012. Now that strategy and marketing is what everyone's using. So you need to find those early, early things that you see patterns of but aren't like, haven't become commoditized or haven't become like ubiquitous and everyone's not doing it otherwise.
Hiten Shah (16:31):
You know, it's not that it won't work, it's just that it won't have as much attention and longevity as you might think because it's a mature strategy. So these days, you know, especially with FYI, which I can kind of go into how I've taken some of those lessons, but the big one I've taken is when I look at channels, I look at market, I look at the equivalent of user stories, personas, jobs to be done. Whatever your flavor is of understanding your customer. We do a lot of competitive research. We do it so that we can understand what customers are experiencing and what they think. We don't do it to see what features a competitor has. And so we do a lot of sentiment analysis around like customer reviews. Like on all the different like [inaudible] dot com and all the different review sites, including like the app stores, the mobile ones, et cetera, Chrome extensions, and really analyze what people are saying in the reviews about different products and use that to help us really figure out, well how do we position the product?
Hiten Shah (17:26):
Because one part of marketing is positioning and a lot of that has to do with this context about your market and opportunity and then mapping whatever channels and strategies you use to go after it. So I can't stress this enough, but like when you're scaling and you're going from seven figures to eight figures and beyond, you're, you have to think about what are the channels that are mature and what are the channels that are immature in our market, not necessarily in the world. So Snapchat is immature for a lot of different opportunities, but it's pretty mature for a few of them. And really being able to understand the difference there. It can be really helpful to see if you have an opportunity in that channel that's nascent or if it's a mature opportunity, excuse me. And the way you think about scaling channels and diversification around content, I think, and not just content but marketing I think.
Hiten Shah (18:14):
I think all content is marketing. All marketing is content. So that's why I keep entertaining them sometimes. But like overall one thing that I would say is that your, the number of channels you used in most cases increases double, triple a as you go from seven to eight. And that means you need to expand your horizons on like what channels are viable in your market that your customers are basically hanging out at and that you can go after them with. And I think like the more I think about some of these opportunities today and I think about our business at FYI, I mean we've got a blog, we write a ton of content, we've got a bunch of search traffic. We're going after a bunch of, you know, specific terms that we really think are aligned with the intent of our audience. And we're creating sort of a, a wide net so to speak, because the product is very horizontal.
Hiten Shah (19:04):
It, you know, you find your documents in three clicks or less. That's our value proposition whether it's personally or with your team or individually in a company. And then it, it sort of spreads inside the company. That's the, that's a play. That's how we think about it and the things we have to do there because if you need to find all your documents in three clicks or less as we connect to all these different document apps. So for us our strategies are really identifying what are mature and immature strategies. For example, in our space of productivity, having a referral program like a double a double referral program, very, very similar to like Dropbox basically who basically popularized the concept. That's a very tried and true strategy. We don't have that with our product today but it is one we might deploy later on.
Hiten Shah (19:48):
It's one we'll deploy like maybe a year from now, 18 months from now, maybe a little bit longer, maybe a little bit closer to now. Another one is like related to that is like this idea of giving away credits as people are doing things in the product, which air table and notion have done in the productivity space. And really thinking about how that works. Slack actually did it as well. So there's a number of these strategies that we've really thought of that are either mature or immature. So in some markets that strategy of giving away credits and double referral programs, they're not mature. It's not a strategy most people are doing. So it's probably a bigger opportunity to release that in that market because customers are just not used to it. Well, in our market, I wouldn't say it's table stakes, but it's become a popular strategy. And then the reason it's popular is it probably works, but it doesn't work as well as when Dropbox did it. So this is something to really think about when you think about channels and when you think about like which ones to go after is really thinking through the historical context in your market and because those are the things your customers have been experiencing and customer sort of sentiment around some of those types of features and ideas and things like that is, is really, really core to identifying what to do and how to scale.

Elias Rubel (20:59):
So I love this idea that you're sitting back and you're, you're looking at all the historical channels or levers that you can pull for FYI right now and we'll stick with the example that you gave of, you know, the, the double opt in or the double referral the strategy that Dropbox played and kind of popularized back in the day as compared to the points or credits that Slack and air table and notion have, have been taken advantage of. So you personally, when you're, when you're thinking through all of these different options that you could roll with, how do you decide, like, how do you, how do you go about, I know you said some of them are, you know, tried and true and some of them are newer but, but there's pros and cons to each of those. Right? So like how do you personally, what's the rubric or, or, or method that you walk yourself through to make that decision?
Hiten Shah (21:54):
Yeah, we evaluate channels based on criteria and the criteria is, is basically essentially based on our ability to execute and our ease of execution, which is what I don't see enough. The, sometimes you call it difficulty. So you're basically taking all these channels, reviewing them and, and, and figuring out how much, however much you can, are they mature, are they immature? You know, what's the context? So we, we write literally briefs on every channel that we choose, that we kind of entertain. And then we put kind of each run into a spreadsheet and really figure out how to score them. And so like this ease of execution is kind of a big idea for us, which is how easy will it be to for us to execute on that channel? Then it's like, just you know, equivalent to that for us is basically a score on like a tie. Basically it's like time to learning. And so how fast can we learn about that channel, for example. And this goes to the next point, but paid channels you can learn pretty fast, like in terms of learn about how viable they are for you. Not just from an analysis and all that. Let's say that analysis pans out and there's like keywords you can target or audiences you can target on Facebook or whatever. You, you, you would then try to try to basically figure out 
Hiten Shah (23:22):
What the, the next criteria is basically what the cost is. So it's basically ease of execution, speed to speed to getting the learnings of whether the channel is viable or not for you. So costs and stuff like that. And then the last one would be hypothetical costs. Like is the cost low, medium or high? Like for example, paid acquisition tends to be medium to high, not low in most cases, but then you look at content and you might be like actually contents more medium. It's not low unless the founders and folks like that are doing writing it. That being said, there's a trade off to a founder writing content compared to doing other things and you just got to weigh that trade off off for us, like the trade offs worth it. And we write our content and it works for us. And so I think, I think the thing folks don't do is figure out the criteria for each channel, score it on some kind of scoring and then use that to help prioritize which experiments they run on which channels.
Elias Rubel (24:15):
I like that as a as just a methodology framing for some, for some founders or operators who are trying to figure out the best way to approach making these decisions. So as we wrap up, I always love to ask this question, which is, you know, and especially for you, it's actually different for four people. Have a list, maybe, maybe formally or informally in their head of like the people that they look up to, the people that they draw inspiration from as they're working towards their own professional goals. And I'd imagine for many people you are on that list. So this is fun to get to ask you this question, but I'm curious, who are some of those people for you?
Hiten Shah (24:52):
Yeah, that's a really good question. I always have the attitude that I can learn from anyone and it doesn't matter who they are and what they've done in their lives. There's always something interesting and a learning there for me. I'm also like hyper critical when I, when I think about others and, and hopefully when I think about myself and what I'm doing in a hypercritical, in a sense of like wanting to know where, where the gaps are, where the holes are. So I think it's tough for me to give you a list of people or even single out a single person who, like I would say I get inspired by or look up to. And so, you know, it's, it's really, it's really a good question. And that, for me, honestly, that question changes so regularly. If the answer to it, I guess that like I would have to say that like, I, I, I tend to look up to almost anybody in everybody for something or another.
Hiten Shah (25:55):
And I can give lots of different examples and, you know, sometimes people have opinions about those people and things like that, but at the end of the day, I think like everybody has something to teach us no matter who they are. And I kinda, I kind of would just say that, like, if you, if you asked me today, who are some of the most sort of interesting people for me it's about who's interesting for what. And so I'll give some examples. So I look at Joel who started buffer or Nathan who started ConvertKit when I really want to think about it in a way like very opinionated about what they're doing. And also I'm able to scale a business that's either funded or just done in their own way, like buffers, not technically self-funded, but it was built in their own way and they have their own opinion.
Hiten Shah (26:50):
Now they're doing about you know, $20 million, $22 million in revenue per year. And I was early involved in the company as an advisor and then I became an investor later. And like, it's, it's an awesome company. There's a, there's a guy on Twitter his Twitter handles M Kobeck Kobach or Kobeck, so it's MK, O, B, a. C H. He is really great on social media, especially Twitter. And his ideas are very timely and even in some ways forward thinking when it comes to social media, specifically Twitter and advice on like how to do it. In fact, there are a lot of tweets that like that he writes where I'm like, I, you know, either I wish I said it or he said he's saying it better than I have, or I've thought about it, you know, or better than I could.
Hiten Shah (27:40):
And, or I've thought about it for years. And so if I want to be inspired about how to like, think about social media Matthew Kovak is who I'd look at on Twitter. And you know, the list kind of goes on. Like for example, if I really want to push on like a community and customer community and how to sort of build affinity with customers, I really think about Eric Ewen from zoom. And, and that's because he has been on top of any of the situations and problems, even the most critical of folks and just like literally like goes and responds and does his best as absolute best. And you know, he's genuine and means it. And then I got one last one, which is the folks that base camp I still like to call it 37 signals cause that's what their initial business was.
Hiten Shah (28:30):
But the folks at base camp, so this is Jason fried and DHH David. And the reason I look up to them right now in some ways is because I think that they have a very specific approach to marketing. Then I only more recently figured out, and they've always had this approach. So when they first started base camp, it felt like they were against camp charts and really heavy project management tools and they built project management for everyone and they had an enemy. Now email is, they're not enemy, but email providers that do all kinds of weird stuff are their enemy and weird stuff according to them that, you know, have tracking pixels in the emails. Well that's what almost every email provider has. And things like that. And they're building this product called hae that has some delays right now cause of coronavirus and stuff.
Hiten Shah (29:29):
But like it's, it's interesting, they, they create, you know, and then now anyone who's not cool with remote work is an enemy. So it's almost like they're using this and true strategy and they've always used it and just click for me of what they're doing as I observe them. And then I wonder why are they so angry, et cetera, because I really do wonder why they're so angry. Specifically DHH although I get it and I respect his anger at this point cause it causes, hopefully it causes so much change that it's worth it for him. But I don't know. But at the end of the day, they, they, they have this approach of a typical marketing approach, a little bit old school, but it's basically equivalent of marketing warfare. They really, it feels like they think about marketing as a warfare. It feels like they pick an enemy and go after that enemy and they feel like they're picking the right enemy.
Hiten Shah (30:19):
And you can see it in the tweets, you can see it in the copy. You could see it in the language. There's always this undertone of we are your savior from that enemy, but let me tell you about that enemy and how we're going to save you. And that's kind of like where I'm at with my sort of 20 years of observing them, maybe a little bit more, 21 or so and be like, Oh wow, who are these people? What are they doing? Why do they do it like this? And then I, it just dawned on me, it's pretty simple. They pick an enemy and they know how to do that and then they go after that enemy and they use that to get attention and do their marketing.
Elias Rubel (30:55):
Picking an enemy. You've, you've cracked the 37 signals code 15 years later. I don't know.
Hiten Shah (31:02):
No, I think so. But it really dawned on me recently cause like they've been very aggressive about it in more than one area recently. And so it became very clear that that's their strategy to me cause they're, they've been quiet for a long time about a lot of things and then all of a sudden you see them going after it. And then I thought about it, I'm like, wait, this is the pattern. The whole time I've been observing them and I've been privy to their work.
Elias Rubel (31:25):
Wow. Well Hiten- This has been fantastic. I think you've given us all a lot to think about and certainly for all of the founders out there and operators, you know, looking back at everything that you've done and the decisions you've made and more importantly, how you've made them. I think it's, it's great material for everybody to to take a, a trick out of your book and, and see how they can provide the right context, as you said, for their own business. So thank you so much for taking the time. This has been really fun.