(2024-11-03) Rachitsky Just Evil Enough Subversive Marketing Strategies For Startups

Lenny Rachitsky: Just evil enough: Subversive marketing strategies for startups: Alistair Croll (author, advisor, entrepreneur). My guest is Alistair Kroll. Alistair is the author of Lean Analytics, which was one of the most influential early books on how to use data in helping you build your startup. He's also a multi-time founder

Alistair is about to release a new book that I am very excited about. It's called Just Evil Enough. And essentially, it's a study of loopholes and how to get people to pay attention to what you've built, which increasingly is the hardest part of launching a startup. (distribution)

Alistair shares 11 specific strategies for finding subversive ideas to get your ideas out, how to shift your mindset to think more subversively, why it's so essential for startups and founders to think this way these days, plus dozens of examples and stories that make this advice very real.

The product managers are in many cases missing the point. My sense is when you talk to a product manager, they're so consumed with the next feature and what to do. And that's the kind of concrete objective thing. I think many of them are doomed because they ignore go to market strategy. They ignore distribution of their peril.

And the reality is that the only thing that matters is do you have an unfair advantage? Have you figured out a way to capture attention and turn it into profitable demand?

So like an obvious example is Netflix, right? Netflix started out, they needed broadband. Streaming wasn't a good play at the start of the online video industry because people the penetration of broadband in the US was very limited. So Netflix got the US Postal Service, they misappropriated the US Postal Service and turned it into an on-demand partner. It wasn't, can I stream video? It was, can I get all of North America to receive a video in two days and use a website to order the next one?

I love the story of Whitney Hess when she was launching Bumble. She used the tactic we call the top shelf tactic where she put up these posters in universities as if it was made by the university. It basically said, no Facebook, no Instagram, no Snapchat, no Bumble... she's also sending this subversive reminder to people that she's one of the four top applications that the university doesn't approve of.

Do the things that work. The key is to go find your own. And I think that finding that go-to-market strategy, that unfair, unprecedented, we call them zero-day marketing exploits, is as important as... building the right product feature

the title of the book and the concept originated with when we were working on my startup and advice you gave me. Can you talk about that?

LocalMind was this product that would let strangers answer questions about a place. So, for example, where's a good place to get coffee in Times Square? And it was like 95% of people would answer, which was great. And then you found the problem was that people weren't asking questions. And you kind of hit a roadblock. And we were suggesting that you fake asking questions on the platform so people could get a sense of what it was like to answer questions. And as far as I remember the question, we had a conversation about whether this was evil... not being evil, but being just evil enough to provoke the change that's required for your product or startup to be successful

I was talking to Scott Belsky about Behance. I know you've had him on before. We were both speaking at Techstars in New York a little while back. And he said that for the launch of Behance, he reached out and asked all these influential designers to join his platform. And they said no. And then he said, oh, okay, pivot. Hey, I'd like to do an interview about you for my platform. And they said, oh, sure. And he said, by the way, is it okay if we go and grab your design content for the blog post? Oh, yeah, sure. But the added advantage of that wasn't just the social proof of having all these famous people on the platform. It was that people who then followed could see how these famous people had done their templates. And then so it gave the new users a sense of how to behave when they got there.

Your startup is a disagreement with the status quo. So you got to recognize what is the status quo, right?

The first thing that we talk about is this idea of system awareness, to be aware of the system you're in and understand it, and then to find a novel approach within that system. And then, and this is often really difficult for startups, To be disagreeable enough to be willing to do something others either can't or won't.

So we think that subversiveness is a skill you can learn.

One of my favorite examples of system awareness is a Stanford prof named Tina Selig. And she gave the Stanford engineering entrepreneur class $5 in seed capital, five days to figure out what to do and two hours to do it. And then each team in the class would come back for three minutes and present the class and say how they had turned that $5 into the maximum revenue.

Some of them went and got bike pumps and they offered to test people's bike pressure for free and then pump it up for like some money. And it turns out they made even more money when they asked for a donation. They did pretty well. They turned their five bucks into like 200 bucks.

Another class did a slightly different thing. They went to restaurants and stood in line at fancy restaurants and got the pagers and then sold their space in line during premium lunch hours. They made about $250, right?

I guarantee you people will suddenly realize how hard it is to go to market

The winning team made $650... The winning class sold its three minutes to a company that wanted to recruit Stanford grads. It's brilliant, right? They made an ad.

I think that's a great example of system awareness

And this is the second thing, which is like novelty. And there's a great example, Gymshark, which is a pretty big athletic wear company in Europe.... they're great with messing with social media. Right around the time that Cameo came out, they had a bunch of B-list celebrities wish a guy named Jim Shark a happy birthday. We noticed that our name was a homonym for some guy and people in North America don't know who we are. Is that silly?

Coinbase bought a 60-second Super Bowl ad where they bounced a QR code around the screen for 60 seconds. Is it stupid? Yeah. I mean, they were ranked the worst of 64 Super Bowl ads, but they got 20 million hits and their servers fell over

A lot of these sound like they're kind of these one-off marketing stunts

I kind of call these things turbo boosts

I'm giving you kind of funny examples for this, but the companies that do well are the ones that use this kind of thinking to change their value chain.

there's a difference here between people who are playing the game right and people who are questioning whether they're playing the right game. (Meta-game)

reminds me of my chat with Rory Sutherland, who's extremely good at this. And one very tactical piece of advice he had is like, spend a lot of time on doing the things everyone agrees on... And then once you've done that, set time aside to do the things that are very irrational and crazy

I would say once you've got the subversive mindset, which again is like system awareness, novelty and disagreeability, then you have to kind of scan the market.

And we have this framework called the Recon Canvas that splits the market up into the product, the medium, and the market

Another hot take of mine is I think the product market fit's overrated. You have to actually think about product medium market fit.

Two companies are the same product sold to the same market. One wins and the other doesn't. It's often because of their medium strategy. And the medium is both the platforms you're in and the norms of that platform.

If you want inspiration for some clever ideas, I think Burger King is better than almost anybody at this stuff. When they launched their mobile app... The thing you want for your mobile app is you want as many installs as possible and you want geolocation turned on. So they said, everyone can have a free Whopper. Just order it from the app, drive to the store and pick it up. But the catch is you got to order it from a McDonald's parking lot.

Another great example of their understanding of the medium, in 2019, they started liking all these posts from influential posters from 10 years before. And they offered no explanation. And people are like, hey, Burger King, why are you liking my old posts?

If Burger King had just liked that person's latest post, they would have missed it. Someone likes one of your posts. You have enough followers that it may get lost in the noise. Burger King says nothing. Influencers start getting upset. What's going on?...finally, the reveal, they say, hey, we've been liking some things from 10 years ago because sometimes the past is great. You know what else is great? Funnel cake fries, and we're bringing them back.

So this recon canvas, I know it's hard to visualize a canvas grid thing, and we'll link to it in the show notes, but just to help people get a better sense of what they're going to be thinking about to scan the market, there's kind of three columns.

the canvas actually has three rows. That's because there's an objective, a collective, and a subjective way to look at the world. And then it has a section for product, which we define in the features and the messages. A section for the medium, which is the platforms and the norms, and then a section for the market, which is the attention you capture and the actions you create.

When Ben and I wrote Lean Analytics, we came up with a strategy to announce the book. We found about 15 people that we knew who would talk about it and say nice things. Al Malik, Eric Ries, Tim O'Reilly. And over a period of about seven days, we sent each of them a scheduled message that with a click-to-tweet message. So each of them, about every 12 hours, one of them would tweet something about it. But each of those things had an analytics tag... more people are clicking Julian's, but more people are pre-ordering Tim's. And then these guys started competing with one another. So that's our second hack. And then the third hack was we documented all this. And then we wrote a blog post explaining how we hacked the launch of lean analytics. That was proof that we knew how to do analytics

Liquid Death has some hilarious marketing campaigns. And we can't tell you how. There's a bunch of things people told us that we can't actually attribute. But they do not go ahead with a campaign or an ad unless it gets 50% disapproval. That's like their North Star metric.

What we found was these 11 tactics that keep showing up again and again as patterns or meta patterns. And so you can't steal the tactic, but you can apply that tactic

then we have some rules for how to kind of prune through them and figure out the good one.

Salesforce.com is a classic example of bug into feature. Salesforce had a crappy product at the start of the internet. It was using this thing called Ajax that kind of made the web interactive a little bit if you reload it often enough. But it turns out that that also made them really simple.

Often it's not that you have to turn it into a benefit. It's that it's already a benefit for a target market you have ignored.

Product managers, I'm a product manager. Our tendency is to want to make the product just one more feature, right? And the reality is your product may already be a perfect fit for a market you're ignoring. In fact, one of the tactics is called buyer upgrade.

at Coradian, we used to make this web performance analysis thing. And it took me years to figure out we should stop selling it to operations and start selling it to the marketing department

access is another one. Now, this sounds obvious, right? Do you have access to something other people don't? Like take a step back and say, what can I do that other people can't in my personal network? Do I have access to a resource at a different price?

Bait and switch can be evil unless the buyer is delighted with the thing you've switched them for, or you also deliver the thing you promised. Just evil enough. Yeah. So a classic example of this is Tupperware... post-war America where women were being told to go back to the home after having helped out in the war effort and weren't very happy with that. Tupperware came to market. There was a huge number of people out there who wanted to run their own businesses. So the bait was, hey, come to a dinner party. And the switch was, oh, by the way, become a part of this multilevel marketing scheme

A company called Energage that does HR software. It's pretty hard to get people excited about HR software. So they launched this thing in conjunction with local newspapers to promote the best workplaces survey every year, use their tool for surveys. Now, every company wants its employees to fill out the survey. So now you have the survey, you fill it out... the newspapers publish the best workplaces. They get to sell ads to those companies.... then Energage gets to call the companies and say, hey, I've got all this data on your employees. Wouldn't you like to see what it says?

And the key again is they actually have to be excited about this thing that they, they came up out of nowhere

A combination is a big one. People overlook this often. Sometimes people are not buying your product because it's only half of the solution (whole product). David Ricketts, who's a Harvard professor of innovation, uses the example of mac and cheese. Kraft had figured out powdered cheese to support the war effort, but you can't really sell powdered cheese on its own. And then they found this sales guy who was putting the powdered cheese And a box of macaroni together with an elastic...

A lot of us don't look at our product and say, how is it being used? So I think a lot of us don't look at our product and say, how is it being used? There's an example, like 1-800-MATTRESS in the States. They used to have this thing where, what's the one thing you care about that should be added to your product if you are trying to sell mattresses to New Yorkers? Removal. It's really hard to get rid of a mattress in New York city

Often it's just before or just after the product that dramatically simplifies the offering for the consumer. (whole product)

Arbitrage is knowing something other people don't.

Rob also told us, I think it was him, he said, a hedge fund is an organization formed to discover something that will be illegal and do it until it is.

Aggregation. This is a pattern we see over and over again where one player in the market takes data from many places and then modifies it in some way.

One of the examples we think is too evil is Get Satisfaction. Get Satisfaction was a complaint site on the internet where you basically, you know, they went and crawled the internet for all the complaints about Sony. And then that's the first place you're going to complain about Sony. And then they'd extort Sony and say, unless you buy from us, we're going to tell the customers you don't care about them. Probably too evil

Almost every one of these tactics looks awesome in hindsight

one of the most basic marketing tactics, and Rory Sutherland can talk about this better than I ever could, is reframing. When you look at positioning, you're looking at two dimensions, right?

Reframing isn't just about competing on existing dimensions. It's about giving the customer a different set of dimensions.

Reframing would be one of the tactics for sure. Okay, awesome. And is it interchangeable with positioning or do you think of those two?

So we actually think that positioning is simply where you are on a grid. Reframing is re-drawing the grid.

Ah, no fluoride. (Alistair avoids fluoride.)

let me talk to you about regulation

In Germany and in Austria, you have organ donor cards. Austria's opt out. In Germany, you have to opt in. Germany has 12% organ donors. Austria has like 99.6. So all your growth hacks ain't gonna get you from 12 to 99.6, right?

it may be important for your business to change the regulations, either to allow what you're doing or to compel people to do the thing that's currently optional. But a lot of startups don't look at regulatory change as a viable strategy, and yet it can be. It's also a great way to find loopholes.

Earlier on, we talked about misappropriation with Netflix, misappropriating the U.S. Postal Service

the last one is sliding the window. And sliding the window is a bit more nebulous, but it's about the Overton window and the realm of what's considered acceptable.

the normalization of gay marriage through Will and Grace... There's a company in England, I think it's called Bodyform, that was the first to use red liquid in ads for female hygiene products and tampon products. Like for a while, it was literally illegal to use red liquids in those ads.

There is a tremendous advantage to understanding that one part of the market is already has an Overton window that's different from the mainstream market. And then you can appeal to that and they will respect you for it.

do you suggest people use this? Is it like get a room, get some people together, brainstorm

it takes a lot of time. It's a skill you can learn.

Spend some time thinking about how to be disagreeable, understanding the system you're in, then use the need for novelty and disagreeability to temporarily let yourself think like a supervillain

we have some tactics for this, ignoring the guardrails, uh, embracing absurdity, not pulling your punches on wording

Wes Kao talks about the spiky point of view.

TRIZ, which is a combinatorial way of overcoming obstacles by combining unrelated fields

Construal level theory, which is how you bring distant ideas closer to change how you think about them. (NLP?)

We talk a lot about like pre-mortems, figuring out how things might go wrong, asking counterfactuals, you know, is the opposite true? ... There's a lot of techniques for like, how well can you test this? What would convince you if you were wrong?

I will tell you, I've worked with four startups using this and every one of them has found a go-to-market strategy. It's been awesome

We will have done the right thing when I go to product management meetings and instead of people talking about their feature, they're alluding to their zero-day marketing exploit. But the dumbest thing in the world is to talk about it. So that's the thing you want to not tell anyone about.

But if you're talking to an investor and you don't have... a zero-day go-to-market exploit that creates attention and turns it into sustainable, lucrative demand, you are probably going to fail.

This makes me think about a tweet I just saw about how with GenAI, it's so much easier to just build stuff, just build a quick app, that the skill and the success, the chance of success start to shift more and more to distribution and growth because it's so much easier to try stuff.... if I'm building software, it may now be easier to use an LLM and Figma to build 10 prototypes, show them to citizens in government, see which ones they like, and then document the one that works... Because now documenting the thing well that works is the risky part. Like that's actually the harder part because that's what's going to get passed by legislators and stuff.

Each of the case studies in the book has a QR code next to it that takes you to a webpage that has much more content, but also like the video of the ad or the links to the resources. So we have a list of places where you can find weak signals to start looking for exploits.

One of the reasons that we couldn't just go with a traditional publisher because traditional publishers don't like it when you have a QR code. They don't like it when you own and retain the intellectual property rights to the book.

If people have examples of subversive thinking they want to share with Emily and I, we'd love to hear them

lightning round:

What are two or three books that you've recommended most to other people?

Dan Davies has a book called The Unaccountability Machine that I have literally made an entire conference theme out of this year

Jonathan Haidt's The Righteous Mind, which really made me lose faith in reason and rationality.

the best marketing textbook ever is Dan and Chip Heath's Made to Stick.

Is there a favorite product that you've recently discovered that you really love? This sounds silly, but yeah, I bought this like $100 folding LED second screen for my MacBook. They're like a hundred bucks now and they power off a USB-C cable that also is their HDMI thing.

Do you have a favorite life motto that you often come back to, find useful in work or in life?

My company, which is just me, is called Solve for Interesting because all my life when I've tried to solve for fame or for safety or for wealth, it hasn't gone as well as when I've just solved for what's interesting. (interestingness, see Art of Gig Venkatesh Rao)

But I think the motto that informs things the most that I work on these days is: "it's amazing what can get done when nobody cares who gets credit."