Years before Tinder and Bumble were popular, there was Are You Interested?, the biggest dating app on Facebook and the brainchild of Cliff Lerner (@clifflerner). Cliff was able to grow Are You Interested? to more than 100 million users with very little funding.
Today, Cliff shares the secrets of how he was able to make his app go viral to the point where he was signing up 100,000 new users a day, without spending any money on advertising. As the author of Explosive Growth, Cliff cuts through the hype and gives readers a step-by-step playbook filled with proven strategies for growing startups from zero to explosive growth.
But Cliff’s story isn’t just about success. The most important lessons are often learned during times of struggle and Cliff certainly has his fair share of failures, including the loss of $78 million in one week.
Listen in to Cliff to learn:
- How to implement viral growth strategies for any product or service
- Why passionate employees are the key to continual innovation
- What metrics you should be measuring when trying to scale your startup
How did you first become interested in starting your own business?
I was working on Wall Street at the firm formerly known as Lehman Brothers and living in Manhattan on 13th and 4th. My job required me to get to the office very early.
I remember one particular morning I woke up, went outside to hail a taxi and literally got into a screaming match with a bunch of drunk kids who were coming out of what was one of the top nightclubs in Manhattan. This was at 4:30 in the morning.
On one hand, I didn’t want to be those kids stumbling out of a club at 4:30 am, but here I was, a 25 year old going to bed at 8:00 pm and waking up at four in the morning to fight with a bunch of drunk kids for a taxi.
“I realized that I wasn’t living the life I needed to be living if I was going to be in control of my own destiny.”
At that point, I knew I needed to get out. I had to start to thinking of a way to build my own business and come up with an idea.
How did you go about coming up with business ideas early on?
I realized pretty early on, just from talking to friends and reading a lot of books, that it makes the most sense to start a business in something that I would use myself. Something I would enjoy. So I kept my eyes and ears open. At the time, around 2004 or 2005, online dating was just starting to become a thing.
For those who can recall, not that I want to date myself, but Myspace was actually the site that everyone was using for online dating at the time. Facebook was just a blip on the radar for most people, if they knew about it at all. I didn’t hear about Facebook for another three years.
Anyway, at my job, I sat in between two very attractive women. Their job was in sales, they absorbed information from the analysts and traders all day long and then after trading hours they would go out with potential clients or existing clients and share the best trading ideas and information with them.
However, a lot of the time these meetings would be cancelled, so these two women who were all dressed up and ready to go out would have nowhere to go. Over time I noticed that they would frequently spend the last few hours of the workday on Match.com trying to get dates, but they were never successful.
“That’s when two things became immediately clear to me: 1) These very attractive, intelligent women were trying to find dates within a few hours and couldn’t do it, so there was obviously a need there, and 2) The best, most popular dating site in the world at the time was not fulfilling that need.”
So I asked these women, “If there was a dating site where you could get quality dates very quickly would you use it?” They both thought it would be perfect for them.
That really got the juices flowing on building a dating site that catered toward busy professionals.
What challenges did you face when building a dating app for busy professionals?
The idea I came up with was pretty easy. The process of getting a date on a traditional online dating site was very tedious then.
Back in the day, you would send an email to a potential date, three days later you might get a reply.
Then you’d set up a phone call and three phone calls and three weeks later, you’d have your first date. The process was incredibly time intensive, very tedious, and inefficient.
But what if there was a way to indicate to other singles when you were free to go out and a dating service would then match you with other singles who were free the same time? You would skip all of that hard work.
That idea turned into what I called “I Am Free Tonight,” it was a service that covered who, what, when, and where. You would enter some basic information including whether it was just you who was interested in going out, or you and a friend, your zip code for a location, what you wanted to do such as see a movie or go to a concert, and then a date.
That was it, then we’d start spitting out emails of people who matched your search criteria who were also free to go out on that date.
How did you grow your user base?
At the beginning, I didn’t have really a budget to work with, so I needed an idea that would go viral and grow on its own.
“I thought, ‘I have such a great idea, if I build it, they will come.’ I learned the hard way that’s not true.”
But in those days, good growth, if you weren’t paying for it, was a few hundred users a day. We weren’t getting that or when we did get that, usually because we were pretty good at getting press, users wouldn’t come back.
That’s when I started to say to myself, “Maybe this idea or product just isn’t as good as I think it is, but the clock’s ticking, the money’s running out. I need something better to grow a lot quicker and I need it really soon.”
At that point, I started looking around for other opportunities and cut all of our spending on marketing to buy a little more time so I could find what I call a “growth rocket,” an idea or concept that would massively grow our audience.
Then, just as our money was running out around 2007, I heard about this site that was calling on any interested developers to develop apps for their API platform. That site was Facebook.
I hadn’t even heard of Facebook and didn’t know what an API platform was.
“So, I took a chance and called up my programmer and I sent him the link to the API documentation. I said, ‘I want you to build a Facebook app,’ and he said, ‘What’s a Facebook app?’ I told him, ‘I don’t know, figure it out.'”
He locked himself in the bottom of a pasta factory, that’s actually where our office was at the time, for a week, and came back to me and said, “Okay, here’s what I figured out. I put our site, Iamfreetonight.com on Facebook so now users can see it, is that what you want?”
I said, “I think so, sounds pretty good” and the next day we got about 5,000 new users.
This was around May or June 2007 when the Facebook app platform just launched. There weren’t many apps in the app store and because the idea of an app that you could activate on a website was so unique to users, they just installed every app on Facebook.
I thought to myself, “Holy-Moley. We spent two years building I Am Free Tonight and the best we got was a couple of hundred users in one day. We don’t even know what Facebook is and in one week, we got 5,000 users.”
I told my programmer to shut down our website. We went all-in on Facebook. It was a huge gamble, but something about getting 5,000 new users in one week told me that Facebook was the way to move forward.
Was the decision to shut down your website after building it up for two years difficult?
To tell you the truth, my investors started calling me right away. I started my company with my brother, my family was involved, they all thought I was out of my mind.
How do you shut something down you spent two years and invested a few hundred thousand hours in for something you’ve invested a week in? But you know, that’s where your gut kind of takes over and when you see something that you’ve never seen before, you’ve got to go all in.
It was hard for me to explain it to everyone else including my programmer at that time who had spent the bulk of his two years building that site. I really didn’t have a great reason as to why I thought Facebook was the answer.
What I knew was that we saw a few other apps that weren’t big companies, they were just individual developers, getting 30,000 users a day. I said to everyone, “If I’m worth half of what I think I am and the rest of the team is as well, there is no reason we can’t do what they’re doing. If we can get 30,000 users a day, we’ll be the fastest growing dating site in the world, but to do that I need to eliminate all distractions, and our existing website is a distraction.”
Does a great growth strategy trump a great product?
You need a bit of both. If we look at the world of online dating apps, we have Tinder, Bumble, Plenty of Fish, and Are You Interested? In all honesty, there really isn’t that much differentiation between a lot of these apps and a thousand other apps but these are the apps that everyone uses.
Sure, they’re great products in their own right, but what truly places them at the top of the app store is a brilliant, unique growth strategy.
As soon as we got on Facebook we were getting all these new users; Facebook was our growth rocket that got our product in front of thousands of people that otherwise would never have found it. Of course, it helped that we had a solid product because then users were using our features for the first time and coming back.
Is finding a “growth rocket” as easy as following a formula?
When searching for a growth rocket I first like to first think about what’s not going to work.
What’s not going to work is building a great product and thinking that the press is going to write about it and users will come.
What’s not going to work is spending a bunch of money on paid advertising and hoping that users will come. Anything that costs a lot of money is out the door because as a startup, you need money to innovate, to be creative.
What’s not going to work is copying someone else’s growth strategy such as Tinder’s or ours.
What is going to work is saying, “I need to get a really large amount of users quickly. What can I try to really grow massively very rapidly?” After that, it’s just about trying a lot of things until one sticks.
One thing that I would advise startup founders to focus on is leveraging existing networks. We used Facebook as our growth rocket. So, try to build on top of existing platforms.
Even the large platforms, whether it’s Facebook, Instagram or Snapchat, there are still so many opportunities out there. Almost every time you read about and a new product they’ve figured out a way to integrate into these large platforms.
“Opportunities for rapid growth are increasing every day, so it’s really just about being hungry and being creative.”
At what point did you know you had made it?
Although our app was growing quickly, there were other apps that were growing even quicker that had even more users. I knew that this was a mad rush and at some point, something would happen that would make it a lot harder to grow.
That realization made us even more hungry to figure out how to get an even bigger lead before our competitors had the same idea to launch their own products on Facebook. That’s when we really learned how to use copy, or words, to boost our growth.
“The words that you use to communicate to your users have such a massive impact.”
So, we started to experiment with how we marketed our product to potential users. Selling the benefits instead of the features increased signups from 10 to 15,000 users a day to 100,000 users a day.
The best example of this is when Steve Jobs introduced the original iPod, the slogan he used was “1,000 songs in your pocket,” now that’s an incredibly powerful benefit. What he didn’t say was, “Five-gigabyte hard drive in your pocket.” No one’s buying something because the marketing says “Five-gigabyte hard drive.”
Once we nailed selling the benefits of our app over the features, signups skyrocketed and that’s really when we knew we had hit gold.
What are the three metrics that really matter for startups looking to thrive?
You bring up profitability, and everyone wants to talk about growth, but the problem with these metrics is that 1) you need to have a lot of users before they begin to matter and, 2) when things aren’t going well, they don’t give you any indication of what direction to go in or how to fix things. For early-stage startups, they’re just going to lead you down the wrong path.
The key thing about choosing a good metric to measure your success early on is that they really need to tell you the why. If you don’t focus on these metrics first, you’re ultimately going to die.
“The three metrics early-stage startups need to pay attention to are 1) your USP, or unique selling proposition, 2) retention, and 3) the net promoter score.”
Here’s why these metrics are so important:
The USP metric is one I came up with on my own and it really was inspired by Seth Godin and his Purple Cow concept.
If a product is really going to grow and achieve explosive growth, it’s got to be unique, special, remarkable, which means it’s got to grow through word-of-mouth. Now, in order for something to grow by word-of-mouth, there has to be something so unique about your product that nearly every user who interacts with it comes away with the same message within seconds.
I realized that there had to be a way to measure this kind of word-of-potential. Our USP early on was the fact that we were so integrated with Facebook that the user literally only had to click once and they had a profile complete with photos.
But we still weren’t sure if our USP was strong enough, so we asked our users. “In one sentence, how would you describe this product to your friends?” Now, if you’ve truly got a unique selling proposition at least half of the responses will say the same exact thing. In those early days, nearly all of the respondents said they would describe our product as “the Facebook dating app.” So we knew we had a strong USP.
When our usage metrics started to decline, we probably got 80 different answers when we asked 80 different people. So you can definitely can measure how unique your product is with that one simple question, “How would you describe this product to your friends?” If half of the users say the same thing, you’re sitting in really good shape. Your product is unique and it’s going to take off.
Now, going to retention.
So what does retention ultimately say about your product? It basically tells you everything you need to know in terms of what users feel about your product.
“You can spend money on marketing to get users to sign up. You can spam the crap out of them with notifications and emails to get them to come back once or twice, but you can’t spend your way to get them to come back one week, one month, or one year later.”
The only thing that is going to get users to come back and use your product time and time again is a quality product that users find useful and that they actually like using. Yet many entrepreneurs focus on growth at the expense of retention. That strategy might work for a while but eventually, you’ll wake up one day and everyone is gone.
If you focus on retention from day one and you succeed in getting users to come back again and again, growth will follow naturally because people will tell their friends about your product.
The last metric you really need to care about is net promoter score.
It’s amazing to me how so few people regularly measure this or are even familiar with how it’s measured.
To determine your net promoter score all you need to do it ask your users, “On a scale of 1 to 10, how likely are you to recommend or tell your friends about this product?” and you take the promoters, a promoter being someone who ranks it at 8, 9, or 10, and subtract those from the detractors, or someone who says 1, 2, or 3.
I actually argue you shouldn’t subtract promoters from detractors because the only thing that matters is what percent of your users are promoters. Net promoter score allows you to quantify the number of customers that love your product enough to tell their friends about it.
This is incredibly powerful because customers don’t tend to lie in these kinds of surveys, so if at least 50% of your customers aren’t giving you an 8, 9, or 10, well guess what? Your product isn’t good enough.
If you now go out there and start spending money on marketing, what you’re literally doing is saying, “Potential customers, come check out my shitty product that you’re not going to tell your friends about.”
“These three metrics are incredibly powerful because they can show you where you need to be spending your time, money, and efforts.”
If your net promoter score is really low, don’t go hire a better marketing team, focus on your product.
These are the three things I learned very early on that you need to pay attention to if you’re going to unlock really explosive growth.
Can you tell us one or two of your biggest successes in the PR world?
Yeah, we really had a lot of fun with the PR side of things.
We eventually created a sort of playbook internally where every two weeks we’d have a story that would go viral.
What we would do is we would look at our industry and our competitors and come up with something controversial or taboo that people talk about. It could be as simple as a stereotype, and then of course what I did is I would brainstorm with the whole company because you’ve got to leverage your whole organization.
“The best ideas are usually going to come from people who aren’t paid to do it. “
So I said to them, “What is something controversial? What is something taboo?” and a bunch of people in customer service said, “Huh, they always say in dating that blondes have more fun. Is there a way for us to measure that?” and then our data guy said, “Huh, yeah that’s easy! We can just see based on hair color how often people get liked or skipped and then run the data.”
So we just looked at what would make the most interesting or controversial data point and that became our catchy clickbait headline. In the example above our headline was, “Wow blondes have 28% more fun, it’s true!”
We also ran some numbers and found out that for guys, bald is beautiful. Bald actually isn’t a bad thing for guys, so that became one of our headlines that lead to a viral story.
From then on it really became just wash, rinse, and repeat.
We would brainstorm something controversial, taboo or interesting. We would run the data to see if anything interesting or catchy came up. If it did, we had a new headline.
Then if something caught on, we would just repurpose that story for a different demographic. For example, sticking to the hair color headline, what if we just ran that data city-by-city?
Now the story becomes relevant for every single city which has their own local paper and the answer for each city is generally different. So now, we have one story that worked nationally but we also have dozens, if not hundreds, of viral stories on a city level by just narrowing that story down.
Cliff Lerner, you had an opportunity to become very wealthy a few times but you said no. What happened?
It’s a little painful.
Being a public company, our stock had a value and I could very clearly see how much that stock was worth. When our story broke and we became a very hot story, the stock became what’s called liquid, meaning all of a sudden everyone was trading it.
If you wanted to sell it you could do that very easily whereas before, it literally didn’t trade. I mean when I say it didn’t trade, it didn’t trade in the 10 or 12 days prior to the story breaking. The next day, $2.5 million worth of shares were traded.
On paper, my net worth was about $112 million at its peak. At the time, I was 32.
Now the Facebook movie hadn’t come out yet but I am thinking to myself, “Hey, I have the fastest growing dating site in the world. No one realizes how big this Facebook thing is going to be. Why should I sell out at $100 million because I’m going to be worth a billion.”
Fortunately, I did have a few friends, advisers, and mentors who told me, “Don’t be an idiot. You don’t need to sell it all but take some money off the table. It’s going to be no harm and you’re going to say thank you. At least take a few million dollars off the table.”
So I went to the bank and told them I wanted to sell some shares. They said, “Cliff, we would never get this deal done.” I told them, “No, just a few million dollars”. They say, “Cliff, your stock was worthless last week. Your company, no one has ever heard off. This might disappear tomorrow. We need the strongest message possible and if we go to the investors saying you wanted to sell some shares personally the story will die.”
Well, I listened to them. But our stock continued to trade up for several more months. It turned out it was a complete lie and the bankers were completely self-motivated. They didn’t even try to tell the investors because they knew at the time they could bully me.
I absolutely could have taken money off the table and of course, I continued to hold my shares as the site ultimately stopped growing and declined over the next few years.
By the time I finally woke up, it was pretty much too late and nearly the entire stake was lost.
So my advice for anyone else who may find themselves in a similar situation is that people are very self-motivated. When it comes to bankers and human beings in general, everyone is looking out for their own interests.
“If you take advice from someone, understand their motivations, they are not always going to be aligned with yours, understand that.”
Not taking money off the table is probably my biggest regret in all of this.
When you have the chance, it doesn’t mean you need to sell the farm, but you should definitely take some money off the table.
What’s one thing from Explosive Growth that listeners can implement this week to not only grow their products or services but to get ahead in their careers?
If you read the book, I summarize each key section with an explosive growth tip and I challenge readers to take action in the form of a question which really forces you to be honest.
There are about 70 growth tips in the book and they range from establishing a culture to how to hire and fire to how to determine whether your product is unique enough.
So, to anyone listening now, I urge you to take the explosive growth quiz at Explosive-Growth.com. It will really make it clear to you what’s holding you back from explosive growth.