Explosive Growth: A Few Things I Learned While Growing To 100 Million Users - And Losing $78 Million

Explosive Growth: A Few Things I Learned While Growing To 100 Million Users - And Losing $78 Million

by Cliff Lerner

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Product Details

ISBN-13: 9781619617698
Publisher: Clifford Ventures Corporation
Publication date: 11/07/2017
Pages: 314
Sales rank: 901,434
Product dimensions: 5.50(w) x 8.50(h) x 0.66(d)

About the Author

Cliff gave up a lucrative Wall Street career to launch an online dating start-up called SNAP Interactive. With little funding, Snap established itself as one of the leaders and pioneers in the online dating industry, becoming the first social media company to become publicly traded in 2006.

SNAP's dating apps have attracted over 100 million users and pioneered numerous online dating innovations including being the first dating site to integrate Facebook's social features into the online dating experience. SNAP's revenue grew 4,412 percent from 2007 to 2011, making it the 9th fastest growing internet company in the US.

Cliff served as Snap's CEO for 11 years until 2016 when it was acquired. Since, Cliff has focused on publishing his first book called, "Explosive Growth: A Few Things I Learned While Growing To 100 Million Users - And Losing $78 Million." Explosive Growth has been described as a business book like no other, giving real-time insights into the lessons learned of growing Snap's apps to 100 million users, all told through hilarious stories and case-studies.

Cliff is a leading social media and online dating visionary and spokesperson. He has appeared on CNBC, Bloomberg, Fortune TV, and many other top tier media outlets, while his products have been featured in the Wall Street Journal and The New York Times.

He grew up in long island, lives in Manhattan, and enjoys a good steak, karaoke, traveling, and playing basketball where you can usually find him working on his 3-point shot. Cliff can be contacted at: www.explosive-growth.com

Read an Excerpt

Introduction

“Make your life a story worth telling.” —Adam Braun, Founder of Pencils of Promise

It was December 22, 2010, and most corporate office environments were likely recovering from some sort of massive holiday party blowout—the kind where a few too many drinks were consumed, a few too many inappropriate things were said, and way too many regrets were felt. That wasn’t the case at the corporate office for my company, SNAP Interactive, creators of the online dating app, AreYouInterested? (AYI). We had other things on our minds.

I forget exactly what time of the day it was when I got the call from Bloomberg News, but I do have a fairly vivid recollection of how it all went down.

As soon as I picked up the phone, the reporter abruptly asked me, “I have one quick question for you guys. This might sound strange, but do you guys work out of someone’s garage?”

I was caught a little off guard by the bizarre nature of such a question from out of nowhere. “Of course not,” I explained. “You were in our office a couple months ago on 30th Street and 7th Avenue in New York City.” I elaborated for him, “You asked for open access to our employees and to check out our data sources, because you wanted to verify information for a potential story. While you were here, you also said we might be the best undiscovered public company out there.”

The reporter acknowledged my explanation, and verified the facts with me one more time. “Okay, I just wanted to make sure that you didn’t move operations to a garage somewhere for some reason.”

“No, we definitely didn’t do that. Why do you ask?”

“Never mind,” he assured me. “Just be sure to check out the news tomorrow.”

After hearing the click and dial tone, an unsettling mixture of emotions followed—curiosity, anticipation, and more than a little nervous tension.

December 23

When I woke up the next morning and checked out the news online, I noticed a very detailed and in-depth news story titled, “Facebook Friends in Search of Romance Drive App Growth” on Bloomberg News.

It was a nice enough piece; the content was very flattering to our company, describing the uniqueness of our product and the advanced metrics we applied to optimally serve our users. However, the most significant aspect of the article was in the following quote from the CEO of IAC (the parent company of Match.com), Gregory R. Blatt:

“AreYouInterested? is a flirty, fun little app. They have a few people working in a garage. We've got hundreds of engineers maximizing our business. You need huge degrees of sophistication, huge amounts of data behind it, and a huge community.”

Whether it was a snarky comment to describe our corporate office as a garage, or if he actually thought we operated out of a garage, is still a mystery to me. I suspect he was so out of touch that he actually thought we ran our business from someone’s garage. Nonetheless, a big question arose in my mind.

How should I react to an industry leader taking cheap shots at my start-up? I pondered the possibilities:

  • Should I be flattered? After all, Apple got started from the garage of Steve Jobs’s parents.
  • Should I fire back with my own snarky remark about how Match.com is too big to have the necessary pulse of its own user base?
  • Should I devise some sort of Animal House-style prank for Blatt at their corporate office? (However, I didn’t see a John Belushi-type in our office who would be capable or even remotely interested in executing such a pointless task.)
  • Or, should I offer my undying gratitude?

Gratitude might seem like an unusual reaction, but it was ultimately what I chose, and it proved appropriate given the next sequence of events. Whatever the reason for Blatt’s comment, the important thing was that AYI had obviously arrived. A surefire sign that the industry leader is concerned with your presence is when they dismiss you with a not-so-subtle dig like the one in this article.

Before the article came out, our stock was a very illiquid penny stock, which traded zero shares the previous day. That’s right—zero—as in, no trading at all. By the time the closing bell rang on December 23, the stock had shot up from $0.20 to $0.50 per share. That’s a nice little bump—especially when it was likely fueled by one article containing one innocuous comment—certainly worthy of notice, but the best was yet to come.

December 24 (Christmas Eve)

The following day was Christmas Eve, so the markets were closed and there wasn’t a lot of news breaking. With little else to report on, our story simmered in the news pot for a while longer. It was published in some other big-time media outlets, like the L.A. Times. It’s tough to imagine so little going on in the city of L.A. that an article about a small tech company thousands of miles away would be considered worthy of publication, but that’s exactly what happened. The snowball effect had officially begun.

December 26

Christmas was on a Saturday that year, so December 26 fell on a Sunday. That timing meant the stock market had been closed for three days since the article featuring AYI had come out. This was the business version of the perfect storm: a seriously buzzworthy news article sticking around and creating a rising hot stock, and nowhere for either one to go because of the holiday break.

December 27

I showed up for work on Monday, December 27 just like any other day, except that day there was a note on my desk that Maria Bartiromo, the lead financial news anchor at CNBC had called (also known as the “Money Honey”) and she wanted a callback ASAP.

At first, I wasn’t sure if the message was real or some sort of unfunny practical joke, because financial news didn’t get any bigger than Maria Bartiromo. Sure enough, it was the real deal. After turning on the television and reading some online articles from around the country, I discovered that AYI was a lead story on the news that day. Before the closing bell, our stock had soared to unimaginable heights of around $1.50 per share. We went from zero shares traded two days previously and ten days out of the previous thirteen, to trading 2,495,000 shares in one day! What could be next?

December 28

The snowball effect was gaining momentum. We were getting television coverage from sources all over the country. Henry Blodget, a prominent former Wall Street analyst and founder of Business Insider, came out with a story about us on December 28. He said that he hadn’t had the chance to do his homework on us yet, but the numbers looked very promising. AYI had become so hot that even though he knew nothing about us, he still had to mention us or risk appearing out of touch. That led to even more television coverage from Bloomberg and CNBC.

December 29

On December 29—not even one week from the day we got a mysterious phone call asking if we worked out of someone’s garage—our stock traded 3.6 million shares and was up over 1,500 percent! Time to take a victory lap, right? Not the way I looked at it, which is why another big question arose in my mind.

What should I do as the cofounder of a start-up whose stock price had gone up exponentially high overnight? Once again, I pondered the possibilities:

  • Should I pop a $500 bottle of champagne and call Justin Bieber to get on a celebrity cruise right away?
  • Should I visit my most disliked teacher from high school and rub a wad of hundred-dollar bills in his face?
  • Maybe I should stop by an ex-girlfriend’s house in a blazing red Ferrari with a girl who looked like Sofia Vergara’s younger, hotter sister.
  • Or, should I just say, “Huh, how ‘bout that?” and experience an overwhelming sense of concern about what this means for the more long-lasting success of my organization?

Counter-intuitive as this may seem, my reaction was not one of unfettered joy or glorious celebration. For me, it was natural to be concerned about the company and the people who helped me build it. I was worried about our ability to remain focused.

In other words, no call to The Biebs was ever made. There also wasn’t any rubbing of money in an overworked, over-matched high school teacher’s face. And most regrettably, no younger, hotter version of Sofia Vergara was ever paraded Fast and Furious-style in a luxury Italian sports car through the streets of my hometown.

I was legitimately concerned that these ten to twelve extremely talented and hard-working people—so valuable to our success, who shared my unbridled enthusiasm for building a great product from the ground up—would get distracted. I was worried that our drive to innovate would diminish, that we would stop out-working other companies, and ultimately that we would lose our way as an organization. For a short while, it was utter madness in the garage at 30th and 7th.

People had one eye on their work and another on the stock ticker. Who could blame them? Because most of them were paid largely from stock, several of them were officially paper millionaires—scratch that—paper multi-millionaires. We had become the number one story on Wall Street. It got so crazy that I had to totally ban watching CNBC and all financial websites at work.

It turns out that getting to this point was the easy part. What followed was an emotional and professional roller coaster ride, enough to test the mental fortitude of the Dalai Lama during a three-week-long meditation bender and mindfulness blowout.   Opportunities were seized, regrets were had, and success was ultimately achieved. But most significantly, some infinitely invaluable lessons were learned all along the way that will serve me well going forward, and I’d like to share them with you.

 

Table of Contents

Chapter 1: My Epiphany At Lehman Brothers
Chapter 2: The Early Lessons Learned From Iamfreetonight.com
Chapter 3: Does Our Product Suck?
Chapter 4: Bet The Company
Chapter 5: The Growth Rocket (100,000 New Users In One Day!)
Chapter 6: From Revenues Of $3 Million To $19 Million In Two Years!
Chapter 7: My $78 Million Week
Chapter 8: Successful On The Outside, Scrambling On The Inside
Chapter 9: Solving Problems And Sustaining Growth Through Vision, Values, And Data
Chapter 10: Tinder Cracks The Code
Chapter 11: My Innovator’S Dilemma
Chapter 12: Making “The Grade”
Chapter 13: My Reboot
Appendix
About The Author

 

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