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build software that does marketing for you

💨 tl;dr

Revolut's explosive growth to 10M users was driven by targeting low-competition markets, excelling in one key feature, and leveraging referrals. They positioned their product for everyday use, used free services for acquisition, and offered premium products to drive demand. Smart hiring, rapid feedback, and a data-driven culture were crucial. Founders using their product and constant system upgrades were key to managing rapid scaling.

💡 Key Ideas

• Target markets with minimal competition for rapid growth (e.g., Ireland, Romania, Poland)
• Focus on excelling in one key aspect rather than spreading thin
• Referrals are crucial; optimize product for quick, easy sign-ups and fast inviting
• Position product for everyday use, not just niche cases like travel
• Use free services for user acquisition, then cross-sell additional services
• Premium products and appealing design (e.g., metal cards) drive demand
• Software-driven marketing and innovative acquisition methods outpace traditional marketing
• Sustainable growth requires mastering early channels before diversifying
• Hire ambitious, smart individuals with the right attitude; skills can be taught
• Prefer rapid feedback cycles and weekly performance reviews for fast development
• Create a culture where truth and data-driven decisions matter
• Rapid scaling leads to operational challenges; constant rebuilding is needed
• Centralized data warehouse improves segmentation and analysis
• Revolut’s growth heavily relied on a successful referral campaign offering free cards
• Founders must use their product regularly to avoid failure
• Fintech companies thrive by disrupting high-fee legacy banks, particularly in unique regulatory environments (e.g., Nubank in Brazil)

🎓 Lessons Learnt

• Target low-competition markets: Enter markets with little competition to grow faster, secure more funding, and hire better talent.
• Excel at one thing: Focus on doing one task exceptionally well instead of spreading efforts thin.
• Optimize referral processes: Ensure referrals are quick and easy to maximize word-of-mouth growth.
• Adapt product positioning: Reposition the product if users don't find immediate use, like evolving from a travel card to everyday banking.
• Address technical issues quickly: Fix problems like verification failures promptly to improve user experience.
• Be resourceful with limited funds: Use creative methods to add value and meet targets without significant spending.
• Use strong value propositions: A compelling product value proposition can drive organic customer acquisition.
• Leverage product aesthetics: Visually appealing products can enhance customer pride and drive word-of-mouth.
• Experiment and double down: Test different growth tactics and invest heavily in successful ones.
• Centralize data for better insights: Combine data sources into a centralized system for actionable insights.
• Hire post-product market fit: Bring in a Head of Growth after achieving product-market fit to scale effectively.
• Hire for attitude and mindset: Skills can be taught, but the right attitude and mindset are crucial for long-term success.
• Act quickly on hiring decisions: If a new hire isn't working out within a few weeks, it's better to move on.
• Rapid scaling demands simultaneous system upgrades: Upgrade all company systems together to handle increased loads during rapid growth.
• Founders should use their product daily: Regular engagement with the product helps identify areas for improvement.
• Be prepared for system overloads: Expect and manage spikes in user activity during promotions or market launches.
• Innovate with customer incentives: Create products with clear benefits, like discounts for paying off installments, to attract users.
• Compete against outdated incumbents: Legacy institutions with poor service and high fees present opportunities for disruption.

🌚 Conclusion

Revolut's success came from strategic market entry, a strong focus on referrals, and positioning their product for daily use. They thrived by disrupting high-fee banks, leveraging innovative marketing, and maintaining a data-driven, fast-paced culture. Key lessons include focusing on one thing, optimizing referrals, and hiring for attitude. Founders must engage with their product to ensure its success.

In-Depth

All Key Ideas

Key Insights for Market Strategy and Growth

• You want to go in a market where you don't have competition
• Revolut grew fastest in markets with less competition like Ireland, Romania, and Poland
• The best founders find markets with unique insights and minimal competition
• Growth is better achieved by excelling in one thing rather than multiple tasks
• 90% of Revolut's B2C customers were acquired through referrals
• Effective referrals require optimizing the product for quick and easy sign-ups
• Referral success depends on the speed of inviting new people
• Revolut engineered referrals to minimize the time from onboarding to inviting friends

Revolut User Insights

• Early activation rates for Revolut users making payments were around 30-35%, which later increased to around 90%
• Many users initially saw Revolut as a travel card and didn't have an everyday use case for it
• Revolut adjusted its marketing and product positioning to be seen as an everyday banking option
• Technical issues like identity verification problems and limitations in Italy's banking system affected user onboarding
• Offering higher monetary rewards increased the attractiveness of referral programs
• Revolut was cash-strapped and had to creatively balance aggressive acquisition targets with limited funds
• Revolut's origin was based on providing low-cost currency exchange, inspired by the founder's experience with high exchange fees at traditional banks

Key Insights from Revolut's Growth Strategy

• Founders often over-optimize their product, which can be counterintuitive.
• Revolut used free services as an acquisition driver, relying on strong value propositions.
• Revolut's strategy involved cross-selling additional services to existing users.
• Competitors struggled to understand how Revolut could offer free services and still be profitable.
• Revolut released a premium product 1.5 years after launch, which was immediately successful.
• The design and appeal of Revolut's bank cards contributed to their success.
• Revolut's metal cards had significant demand, exceeding manufacturing capacity.
• Growth experiments at Revolut varied, with some being hard to measure.
• Successful strategies were scaled aggressively until saturation.

Key Concepts in Growth Marketing

• Calculating CPA (Cost Per Acquisition) involves estimating click-through rates and conversion rates from website visits to actual users
• Determining LTV (Lifetime Value) is challenging initially due to lack of long-term data
• Analyzing monthly cohorts helps understand user retention and product optimization effects
• Early Revolut saw 20% retention after a few months, which improved with product enhancements
• Traditional marketing methods are outdated due to scalability issues and inefficiency
• Growth through software-driven marketing is more scalable and efficient than traditional methods
• Innovative acquisition methods include paid marketing loops and content acquisition strategies

Growth Strategies

• Sustainable growth is crucial; without sustained investment, growth vanishes.
• Building something hard to disrupt is advantageous, like Cona and its dominance in marketing tools.
• Revolut's growth benefits from social pressure and convenience in group settings.
• Content marketing can work through user-generated content or internally generated content clusters.
• Internal content teams can create topic clusters to drive traffic and revenue.
• Controlling both supply and demand in a marketplace is a modern strategy for easier growth.
• Early channels should be mastered before diversifying to avoid data noise and inefficiency.

Key Insights on Hiring for Growth

• The timing of hiring a head of growth should be post-product-market fit because their role is to scale the product.
• Even without product-market fit, businesses can still grow by generating more traffic, but this may result in losing customers quickly.
• Founders with unique market insights are crucial for achieving early product-market fit.
• Hiring someone who grows with the company is often better than hiring an experienced head of growth due to their ambition and willingness to prove themselves.
• Growth roles are highly stressful because they require consistently hitting weekly metrics.
• Many companies fail at hiring because they don't test candidates deeply enough or understand the context of their past achievements.

Key Points on Hiring Strategy

• The importance of hiring people with the right attitude, mindset, and hunger, as skills can be taught
• Revolut's hiring strategy focused on young, driven, and smart individuals
• The hiring mistakes included assuming too much and not directly assessing candidates' willingness to work hard, including weekends and evenings
• The hiring process involved targeting candidates from companies known for excellent operations and using LinkedIn for sourcing
• The significance of clear metrics in CVs to demonstrate the impact of candidates' work
• The use of top universities as benchmarks for identifying fast learners and ambitious candidates

Hiring Practices at Revolut

• Using proxies to determine fit for senior roles, such as rapid promotion to product director
• Preference for candidates with a background in computer science over marketing for growth roles
• Interview process involving solving complex, real-world problems to assess structured problem-solving abilities
• Early identification of unsuitable hires within a few days to a week
• Making a final decision on new hires within 3-4 weeks based on their ability to understand feedback and show progress
• Revolut's cutthroat, high-performance culture likened to top-tier sports clubs and leading tech companies

Key Points on Employee Development and Performance

• The importance of fitting into a company's environment for success
• Effective training involves spending more time with employees
• Frequent feedback cycles accelerate learning and development
• Weekly performance reviews can be optimal for fast-paced environments
• Nick's involvement in frequent team syncs contributed to the development of talented individuals at Revolut
• Learning from high-caliber leaders, like Nick, can significantly enhance an individual's growth

Key Insights from Revolut's Growth Journey

• Nick created an environment where truth matters, enabling open discussions and changes based on data
• Scaling rapidly at Revolut caused everything to break, requiring constant rebuilding
• Revolut's rapid growth necessitated scaling up every system within the company
• Launching referrals in one market (Romania) led to explosive growth, overwhelming the system
• The challenge of maintaining operational efficiency during rapid growth, exemplified by increased KYC times and customer support wait times
• Revolut's expansion strategy involved adapting to different markets and utilizing TV advertising to attract diverse demographics
• There was skepticism about Revolut becoming a primary bank account, but it eventually achieved this status for many users

Revolut's Strategies

• Revolut's early strategy was to distance itself from traditional banks, emphasizing better, faster, and more innovative services.
• Conventional data strategy typically relies on event-driven data infrastructure, which can lead to issues due to limited insights and data access.
• Revolut opted for a centralized data warehouse, integrating various data sources through user IDs for better segmentation and analysis.
• The most effective growth strategy for Revolut was a referral campaign offering free cards, resulting in 180,000 signups in a week.
• A failed growth strategy was the attempt to acquire customers through P2P payments, as it did not yield significant results.

Key Insights and Observations

• Founders often fail by not using their product regularly
• Starting with paid marketing makes it hard to build a product-led business
• AI will initially increase spam and automate partnership management
• Revolut is seen as a financial ecosystem, unlike Monzo, which is viewed as a modern bank
• Working at Revolut required perfect execution and a Special Forces mentality
• Questioning the future necessity of the internet as we know it, considering advancements in robots and AI
• Large companies are more susceptible to disruption due to their inability to target smaller markets
• Smaller companies can disrupt larger markets gradually by starting with niche markets

Growth Strategies of Fintech Companies

• Revolut targeted markets with little to no competition (e.g., Ireland, Romania, Poland) to raise more money, build better products, and hire more people.
• Successful founders find unique market segments with minimal competition and build products that are significantly better than the status quo.
• Nubank's growth strategy is impressive, featuring a 90% retention rate over 24 months, leveraging unique market conditions in Brazil.
• Nubank capitalized on Brazilian regulations that mandate installment payments without interest, offering a credit card that provides a 5% discount for upfront payments.
• Nubank's strategy included competing against legacy Brazilian banks with high fees, contributing to their rapid growth and profitability.

All Lessons Learnt

Growth Strategies

• Go into markets with little to no competition - Targeting markets where your product faces less competition allows you to grow faster, secure more funding, build better products, and hire more talent.
• Focus on doing one thing really well - It's more effective to excel at one thing rather than spreading efforts thin across multiple tasks.
• Optimize the referral process for speed and convenience - Ensure new users can complete the referral process quickly, ideally in under five minutes, to maximize word-of-mouth growth.
• Engineer referral timeframes for rapid growth - The faster new users can invite others, the quicker the company grows. Reducing the time it takes for users to refer friends can exponentially increase growth rates.

Strategies to Improve User Retention and Product Positioning

• Understand why users are dropping off: Send surveys to users who stop using the product to identify their reasons and address them.
• Reposition the product as needed: Shift the product's market positioning if users don't find an immediate use case, like evolving Revolut from a travel card to an everyday banking tool.
• Address technical issues promptly: Fix problems that hinder user experience, such as identity verification failures due to camera flash.
• Adapt to local market conditions: Customize solutions for specific markets, like handling Italy's outdated banking system and lack of MasterCard/VISA.
• Incentivize but manage costs: While higher referral rewards attract more users, keep customer acquisition costs (CPA) reasonable.
• Be resourceful with limited funds: Find creative ways to add value and achieve targets without significant spending, like giving away free Revolut codes instead of cash incentives.

Growth Strategies for Founders

• Don't over-optimize your product: Founders often make the mistake of over-optimizing their product, which can limit growth. Instead, focus on creating multiple products to diversify revenue streams.
• Use strong value propositions for customer acquisition: A strong product value proposition can drive customer acquisition without heavy spending on marketing. Ensure your product offers significant value to attract users organically.
• Cross-sell to existing customers: Once you've acquired customers, cross-sell additional products or services to increase revenue per user. This strategy helps maximize the value of each customer.
• Release additional products sooner: Founders should not wait too long to launch new products. Early releases can capitalize on existing customer interest and drive significant growth.
• Leverage product aesthetics for customer appeal: Creating products that are visually appealing, like Revolut’s premium bank cards, can enhance customer pride and drive word-of-mouth marketing.
• Capitalize on unique product features: Innovative features, such as Revolut’s metal cards, can generate high demand and create a buzz, leading to rapid customer acquisition.
• Experiment and double down on successful strategies: Continuously test different growth tactics and double down on those that work well. For instance, if YouTube influencers drive significant traffic, invest more heavily in that channel until it's saturated.
• Utilize basic math for growth strategies: Growth strategies, like using influencers, can be simplified by using basic math to estimate potential reach and impact. This helps in making data-driven decisions.

Marketing Strategies for Scaling Up

• Test different niches to find what works
• Focus on gathering initial data
• Use cohorts to analyze user retention
• Optimize product features for everyday use
• Traditional marketing methods are not scalable
• Build software that automates marketing
• Implement a paid marketing loop

Growth Strategies

• Invest in sustainable growth strategies: Don't rely on paid marketing alone; aim for tactics like SEO that continue to bring value long-term even without ongoing investment.
• Leverage group dynamics for user acquisition: Create a product that becomes a social norm, making it 'uncool' not to use, which encourages peer pressure for adoption.
• Utilize user-generated content or large in-house content teams: For effective content marketing, either build a community that creates content or invest in a dedicated team to produce high-quality content that drives traffic.
• Build topic clusters for SEO: Create a hierarchy of dynamic landing pages that match popular search keywords to boost organic traffic.
• Control both supply and demand in marketplaces: Managing both sides internally can simplify growth and engagement, making it easier to scale.
• Double down on successful acquisition channels: Focus on and optimize the channel that works well before diversifying, as spreading too thin can dilute efforts and make measurement difficult.

Key Insights on Growth and Hiring

• Hire a Head of Growth post-product market fit: Once you demonstrate product market fit, hire a Head of Growth to focus on scaling the company.
• Early product market fit is crucial: Companies that achieve early product market fit tend to have unique insights about the market that others haven't seen.
• Selling early can be profitable: Even without product market fit, a company can be sold for a significant amount if it can consistently generate traffic and revenue.
• Choose a growth person who can grow with the company: Opt for someone ambitious and hardworking, even if they haven't been a Head of Growth before, as they can scale with the company.
• Growth roles are stressful: Being in a growth role is demanding because it requires consistently hitting weekly metrics.
• Effective hiring requires deep testing: Founders should thoroughly test candidates by asking follow-up questions and understanding the context of their past experiences to ensure they genuinely contributed and led projects.

Hiring Best Practices

• Hire people with the right attitude and mindset: Skills can be taught, but behaviors, attitudes, and mindset are intrinsic and crucial for long-term success.
• Be direct about job expectations: Clearly communicate the work culture, including expectations for working weekends and evenings, to ensure candidates are genuinely willing and fit the company's demands.
• Source from benchmark companies: Target potential hires from companies known for excellence in relevant areas (e.g., Uber for operations) to ensure a high standard of talent.
• Use metrics to gauge impact on CVs: Look for candidates who use specific, quantifiable metrics to demonstrate their achievements rather than vague or vanity metrics.
• Look for signs of fast learners: Prefer candidates from top universities or with a track record of rapid career progression to ensure they can quickly adapt and excel.

Hiring Best Practices

• Use proxies to identify potential senior hires: Evaluating candidates who have been promoted quickly can indicate their potential for higher roles.
• Hard, real-world problem-solving in interviews: Use challenging, past problems with modified data to assess candidates' structured problem-solving approaches.
• Look for structured approaches in problem-solving: Candidates should demonstrate a methodical approach to identifying and solving problems, which can be replicated across different issues.
• Trust your gut on hires quickly: You can usually tell within the first few days whether a new hire will work out, often fully realizing it within a week.
• Act fast if a hire isn’t working: Give a new hire about 3-4 weeks to show improvement. If not, it’s better to move on.
• High expectations in top-tier environments: Similar to elite sports teams, top companies expect high performance and quick adaptability. Perform or move out.

Employee Training and Feedback Strategies

• Spend more time with employees to train them effectively
• Provide frequent feedback for faster learning
• Daily catch-ups can improve productivity
• Weekly reviews are optimal for balancing speed and thoroughness
• Learning from high-level leaders accelerates growth

Key Strategies for Rapid Scaling

• Create an environment where truth matters - Encourages a culture of honesty and data-driven decision-making, allowing for constructive feedback and improvement.
• Be prepared for rapid scaling challenges - Rapid growth can break existing systems, requiring constant rebuilding and adaptation of internal processes.
• Adapt communication methods as the company grows - What works for a small team won't work for a large one; communication strategies need to evolve with the company's size.
• Expect and manage system overloads during rapid user acquisition - Launching in new markets or running promotions can lead to unexpected spikes in user activity, affecting customer support and verification times.
• Scale up every system simultaneously - Rapid scaling demands that all systems within a company, from databases to customer support, need to be upgraded together to handle increased loads.

Key Strategies and Insights

• Distancing from Traditional Banking is Effective: Revolut's strategy of positioning itself as better than traditional banks helped them build a unique identity and attract users.
• Centralize Data for Better Insights: Combining various data sources into a centralized data warehouse allows for more comprehensive and actionable insights.
• Referral Campaigns Can Drive Rapid Growth: Simple referral campaigns, like offering free cards, can significantly boost sign-ups quickly.
• P2P Payments Might Not Attract New Users: Attempting to acquire customers through peer-to-peer payments may not be effective, as it can be perceived as suspicious or fraudulent.
• Use Your Database as the Source of Truth: Rely on your database for accurate and valuable information, as it is the most reliable source of truth for your application.

Key Insights for Founders

• Founders need to use their own product daily: By engaging with their product regularly, founders can better understand user experience and identify areas for improvement.
• Starting with paid marketing can be challenging for building a product-focused business: Relying heavily on paid marketing early on can detract from developing a product that genuinely meets user needs.
• Effective growth in an AI-driven world requires value-driven, old-school methods: Despite the rise of AI and automated partnerships, foundational principles of offering real value and cutting through noise remain crucial.
• Build better products to ensure value: It's essential to develop products that truly add value to users, making them easier to sell and sustain.
• Being creative, analytical, and logical simultaneously is beneficial: Combining creativity with strong analytical and logical thinking enhances problem-solving and innovation.
• Strive for perfection and speed in execution: Adopting a 'Special Forces' mentality where every detail, design, and campaign is executed flawlessly and swiftly can drive success.
• Small markets can be entry points for disruption: Targeting smaller, overlooked markets can be a strategy to build a foothold and gradually move into larger markets, especially when competing against big companies.

Strategies for Market Success

• Target markets with low competition: Focus on markets where your product can be significantly better than the status quo and where there's little to no competition. This can help you raise more money, build better products, and hire more people.
• Leverage unique market conditions: Identify unique market insights that allow you to grow. For example, Nubank capitalized on Brazil's installment payment laws to offer a compelling credit card product that attracted millions of users.
• Innovate with customer incentives: Create products that offer clear benefits to customers. Nubank's strategy of offering a 5% discount for paying off installments in one go made their product very attractive.
• Exploit high retention rates: Aim for high customer retention by addressing specific market needs effectively. Nubank's 90% retention rate over 24 months is a testament to their product’s stickiness and effectiveness.
• Compete against outdated incumbents: Competing against legacy institutions with poor customer service and high fees can be advantageous. Nubank’s success partly came from competing with inefficient Brazilian banks.
• Combine innovation with market gaps: Use product innovation to fill gaps left by incumbents. Nubank’s innovative credit card solution filled a major gap in the Brazilian financial market.