The Success Flywheel – Part 2 (Superhuman, Perplexity)

Following up with a Part 2 of my last year’s post on ‘The Success Flywheel’ – how the journey of the Founder of Superhuman, as well as Perplexity’s cap table, shows that winners keep winning.

While attending the recent Camp Hustle’24 (which btw, was an awesome LP-GP event; my notes from the event here), I got the opportunity to witness a candid fireside chat with Rahul Vohra, Founder of Superhuman.

I have followed Rahul’s journey for a while now. My last startup Workomo was tackling a similar problem statement to Rahul’s previous startup Rapportive. Also, his article ‘How Superhuman Built an Engine to Find Product Market Fit‘ from First Round Review really helped me as a 0-to-1 founder. In fact, I wrote a post on it myself in 2019 deconstructing Superhuman’s PMF playbook.

Listening to Rahul talk through his life journey in detail during Camp Hustle reminded me of one of my core mental models – the ‘Success Flywheel‘. I first wrote about it in a May’23 post. It essentially means that our world is wired in a way that winners keep winning.

Unpacking this a bit more, I have seen that in every case, the “winner” had a clear first event of success that then kickstarted the Success Flywheel in their lives.

Let’s look at Rahul Vohra’s life journey as an example (from what he shared during Camp Hustle):

  • Started coding at the age of 8.
  • Completed undergrad in Computer Science from the University of Cambridge. Went on to enroll in the PhD program but dropped out.
  • Reid Hoffman (Founder of LinkedIn) was speaking at an event in Cambridge. Rahul met him and asked for one piece of advice, to which Reid responded – “move to the Bay Area”.
  • Rahul followed this advice, moved to SF, started Rapportive, and as luck would have it, got acquired by LinkedIn!
  • As Rahul was thinking through his next startup idea after spending a couple of years at LinkedIn, he got this golden advice from a mentor:

If you are a first-time founder, start by going after a niche market with little competition, even if it’s small in the beginning, so you can differentiate more easily.

If you are a second-time founder, go after a very large and crowded market from the very beginning, because you are likely to out-execute and out-raise competition in the space.

  • Rahul followed this advice and started building Superhuman to go after the behemoth Gmail (which…is free!). On the back of his previous success with Rapportive, Superhuman was able to get backed by top-tier VCs like a16z, First Round, and IVP, in addition to celebrity angels like Ashton Kutcher, Will Smith, and the Chainsmokers.
  • Through Rapportive and now Superhuman, Rahul obviously became deeply entrenched in the Valley venture ecosystem, building relationships with some of the best founders, angels, and VCs out there. Given this access, he started angel investing on the side and soon started running into Todd Goldberg (Founded Eventjoy; Acquired by Ticketmaster) on several deals.
  • They both connected, decided to join hands, and started Todd and Rahul’s Angel Fund. If the founding and operating success weren’t enough, check out some of the portfolio companies of this Fund – Mercury, Circle, Descript, Clearbit, and AngelList.

Rahul’s journey is another great example of the Success Flywheel in action – how he was able to keep parlaying his initial success into more success, and it continues.

Even before his move to Silicon Valley and starting up, the initial success event that seems to have catalyzed the Flywheel in Rahul’s journey was his getting into the ultra-competitive CS undergrad course at a top-tier uni like Cambridge. Few get the opportunity to meet OGs like Reid Hoffman in person, let alone get his advice. Being part of a highly selective cohort of young students positioned him to get this sort of early exposure.

As I was ruminating on these learnings from Camp Hustle, I saw this LinkedIn post from Aravind Srinivas, Co-founder and CEO of Perplexity:

Based on current vibes, Perplexity seems to have the best odds among the new generation of AI-native companies to be the “Google-killer”. If this is true, then check out who has access to the next (potential) Google – Jeff Bezos, the entire YC gang, Naval Ravikant, Elad Gil, Balaji Srinivasan, Tobi of Shopify, and other successful repeat founders, operators & prominent investors. It’s the same set of folks who succeeded first in Web 1.0 and Web 2.0, many of whom then also benefited in Web 3.0/ Crypto.

These individuals are already at the top of the pyramid, operate at the tip of the spear of capitalism, and keep parlaying their success from one economic cycle to the next, one asset class to the next, and one technology to the next. Each of their Success Flywheels keeps ripping and getting exponentially stronger with each rep.

Of course, it’s important to acknowledge the hustle, passion, and hard work that continues to grease these Flywheels. But the Flywheel nature ensures that the ROI on each ounce of input keeps compounding at an exponential pace. Then it’s a personal choice whether one eases the input-effort but still gets growing outcomes, or like Bezos and Musk, keeps growing the input-effort and given improving ROI, translates to even better outcomes with each parlay.

PS: for thoughts on how to get the Success Flywheel going in your own life, check out my May’23 post ‘The Success Flywheel‘.

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

Tips & Insights For Emerging VC Managers – Notes From Camp Hustle’24

My notes from attending Camp Hustle, a unique LP-GP gathering. Includes actionable tips for those raising Funds 1 and 2.

It was a great experience to attend Camp Hustle last week. I have been following the work of Elizabeth Yin (co-founder of Hustle Fund, a pre-seed fund that organized this event) on X for some time now. All this while, I kept seeing posts from the last 2 editions of the event.

This time, I was in town, in a relationship-building zone, and looking to add new and interesting LP-GP folks to my community. So, I landed up at the event (who would say no to spending 2.5 days in the idyllic surroundings of Los Gatos and Saratoga anyway!).

Honestly, I didn’t arrive with a specific agenda or expectations from the event. I just went in with an open mind and knowing the vibe of the Hustle Fund team, I instinctively knew this would likely be the best frame of mind for this gathering.

The event turned out to be a pleasant surprise. Now I know why the name has the word “Camp” in it – the entire event had an informal, outdoorsy, campy, yet energetic and authentic vibe to it. Everyone agreed to an informal social contract – no explicit pitching, no so-called networking and no shallow talk. Everyone bought into the idea of just getting to know a bunch of folks and really bringing their whole, authentic selves to the event.

While the free-flowing, candid conversations amidst nature were the highlight of the event, I did end up with some really actionable insights shared by the Hustle Fund team, other emerging managers as well as a few LPs. Sharing my notes below:

1/ Fundraising for emerging fund managers – via Charles Hudson (Precursor Ventures) and Virginie Raphael (Full Circle)

  • While interacting with potential LPs, focus on making them a “fan” of the fund first. That is the first step towards eventually converting to an LP.
  • One common mistake during fundraising as a first-time manager is chasing people too aggressively. The key is to put out your story and let people come to you.
  • A great way to engage potential LPs is to send out a monthly/ quarterly newsletter. Also, Virginie mentioned doing informal LP meets in the Spring and Fall, so folks stay connected with the fund.
  • The majority of potential LPs you meet today might eventually invest in Funds 2 and 3. So, it’s important to start building relationships from now.
  • I asked Charles a question on ways to increase conversion on warm intros that a GP gets via existing LPs. While intuitively one might expect a healthy conversion on this type of lead, Charles confirmed that in his fundraising experience, the conversion on these referrals was indeed lower than expected.

2/ Venture investing learnings from the Hustle Fund team

During an informal AMA, Hustle Fund co-founders Elizabeth, Eric, and Shiyan shared the following top venture investing learnings from their anti-portfolio:

  • Always bet on your friends.
  • Don’t penny-pinch on valuation (they passed on an initial round of one of the largest consumer Internet outcomes because of valuation).
  • “Good deals have legs” – when you like a founder, push as hard as possible to get into the deal. Don’t be afraid of being perceived as a pain, if it can help you get into the deal.
  • Don’t over-index on what a market or company looks like right now. Learn to imagine what the market or a company can become “over a period of time”.

3/ Tips from an institutional LP

Courtney McCrea (Co-founder of Recast Capital) is one of the most experienced institutional LPs out there. In a candid Bonfire Session, she shared some insightful tips for emerging managers:

  • During an LP pitch, don’t be afraid to talk about how great you are. In fact, spend the first 3 minutes in a pitch just talking about your unique superpowers.
  • If you are having trouble creating a unique narrative for why your fund is different, ask your portfolio founders why they picked you and how they would pitch you to their friends.
  • LPs look at who you co-invest with and who does follow-ons in your companies, as signals for the quality of your deal flow.
  • There are so many LPs out there who aren’t pitched very often. Try and focus on them to improve your odds. Don’t underestimate the amount of capital that is out there looking to be deployed.

4/ Other helpful convos

  • Matthew Stotts of Cerulean Ventures shared that outlining the 10-year vision and story of what the fund is looking to do, goes a long way in generating excitement as most LPs are looking not just for financial returns but also for impact in whatever their personal mission is.
  • To re-engage with potential LPs in your funnel, try going back to them when you have an interesting development or story to share from the portfolio (eg. “we invested in Company X at the pre-seed stage and now, 12 months later, they just cracked a $XMn ACV deal”). This could also be done with a new differentiated investment or interesting deal flow.
  • [Via Rahul Vohra, Founder and CEO of Superhuman] One of the best pieces of advice Rahul got while building Rapportive was to pick a strategy to go from Point A to Point B, never change your mind about it, and continue relentlessly executing it. The goal could be say reaching 1Mn users, $100k MRR, or any other metric. The key is to stick with it.

Hope these notes help emerging managers out there. Once again, thanks so much Team Hustle Fund for creating this unique event format. Am excited for the next one!

PS: For those in SE Asia, the next Camp Hustle is in Bali in September🏖️

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

What can you learn from Superhuman’s product-market fit playbook?

[Update on Feb 26, 2020] Rahul Vohra has recently published a super cool interactive tool so people can use Superhuman’s PMF framework for themselves. Check it out here.

As I am building-out my startup Workomo (helping knowledge professionals supercharge their professional relationships), have already used so many ideas from this method. My detailed take in this article below.

One of the best articles I have read in recent times is How Superhuman Built an Engine to Find Product/Market Fit by Founder-CEO Rahul Vohra. As I have been building Workomo over last few months, the overarching goal for me as a founder continues to be — how to achieve PMF while minimizing time spent & capital utilized? Having read Marc Andreessen’s legendary essay on defining PMF (“Product/market fit means being in a good market with a product that can satisfy that market”), as well as all YC stuff on the topic, I had developed a playbook for it in my head:

  1. Make something people want
  2. Be lean (product development approach + capital)
  3. Launch simple & quick
  4. Organic demand generation (networks + communities + word-of-mouth)
  5. Identify early adopter persona
  6. Iterate based on their feedback
  7. Eventually “delight” & consequently, “retain” early adopters
  8. Test how much will they pay
  9. Get to 10, then 100, then 1000 “retained & paying” users
  10. Scale-up from there

As a founder dealing with so many unknowns, one is always looking for actionable insights, more than theoretical advice. Reading about the Superhuman experience just gave me so much execution color on this PMF playbook. I think every founder (and even venture investor!) should absorb these valuable insights so sharing my notes & key takeaways from this article.

Summary of Superhuman’s deconstructed product-market fit playbook:

#1 PMF takes time

#2 Quantify PMF via a single, North Star metric

#3 Structure & execute the user survey process well

#4 Create a highly detailed user persona of the High-Expectation Customer

#5 Focus on delighting a small number of users first

#6 To convert users that are “one-the-fence”, focus on what your fanatic users love the most about your product

#7 Two-pronged product planning approach to move towards PMF — focus on core strengths + address core concerns

#8 For feature prioritization, stack-rank to get to “lowest cost, highest impact” features

#9 Rinse, and repeat…

Let’s dive into these elements in detail.

  1. PMF takes time

Superhuman team first started coding in 2015 and it’s only in last few months that they have attained a critical mass of vocal adopters, who are in-turn, making the product viral. A reality check for all of us in terms of how much time it truly takes to make something people want, and therefore, the value of patience in founding teams (& investors).

2. Quantify PMF via a single, North Star metric

A big challenge in working towards PMF is that it appears “fluffy”, especially when as a founder, you are trying to align your engineering & product teams around it and even more so, when you are trying to set an actionable & trackable process roadmap for it.

The best way recommended is to quantify PMF in terms of a North Star “leading” metric.

The Superhuman team used the following leading metric to quantify PMF (originally articulated by Sean Ellis in this article) — just ask users “how would you feel if you could no longer use the product?” and measure the percent who answer “very disappointed”. The threshold for having achieved PMF is 40%.

3. Structure & execute the user survey process well

Perhaps the most refreshing info in this article are the details Rahul shares about the user survey process they ran, to gather data on the PMF North Star metric:

a) Identify users who used the product at least twice in the last two weeks

b) Exact survey that was sent out given below (just the minimum number of critical questions were included, amazingly succinct yet effective!)

PS: I loved the 2nd question, where existing users are prompted in a way, to describe their own persona. Makes it so much easier to clearly identify who your real early adopters are. More on this later.

c) Classified the responses into 3 buckets — 1) Very Disappointed, 2) Somewhat Disappointed, and 3) Not Disappointed.

d) Assigned a persona to each bucket, to identify the “Very Disappointed” user persona (the actual early adopter)

To me, this entire user survey process is the core of the PMF playbook, and something I found exceptionally insightful.

As has been my learning doing Workomo’s customer development process, at this really early stage of the company, the number of respondents matter much less than you think. Some data is better than no data, especially coming from actual, retained users. Superhuman mentions anything more than 40 responses as an adequate sample size (at the time, their universal sample set was only ~100–200 users that could be polled!!)

4. Create a highly detailed user persona of the High-Expectation Customer

I think the most clever trick in the above user survey structure is Q #2 — “what type of people do you think would benefit most from Superhuman?” ‘Cos, people tend to describe their own personas as a response. Analyze responses to this question only for the “Very Disappointed” bucket, and you end up with detailed personas that users themselves have pretty much self-created for you!

Going from this 1st level user persona…

1st Level User Persona

…to the 2nd level user persona.

2nd Level User Persona

PS: have been searching for what an optimally-sized user persona should be like for a really early stage startup. This is a great example — ~200 words, 2 paras; captures both professional & personal behavior, motivations, quantified behavioral characteristics, relevant life goals and desired outcomes/ end-state.

5. Focus on delighting a small number of users first

Paul Graham always says it; Superhuman case study just confirms it — define a narrow market, delight, dominate & then grow out from there.

Reproducing this quote by PG, just to drive home this point:

“When a startup launches, there have to be at least some users who really need what they’re making — not just people who could see themselves using it one day, but who want it urgently. Usually this initial group of users is small, for the simple reason that if there were something that large numbers of people urgently needed and that could be built with the amount of effort a startup usually puts into a version one, it would probably already exist. Which means you have to compromise on one dimension: you can either build something a large number of people want a small amount, or something a small number of people want a large amount. Choose the latter. Not all ideas of that type are good startup ideas, but nearly all good startup ideas are of that type.”

6. To convert users that are “one-the-fence”, focus on what your fanatic users love the most about your product

Key to converting more on-the-fence users into fanatic users is first identifying the core 1–2 strengths of your product. The reason being, non-fanatic users that fundamentally care about these strengths, are the ones most likely to convert into fanatics. However, this requires addressing their top 1–2 product concerns.

In Superhuman’s case:

Core strengths (as told by fanatic users)— speed, focus, keyboard shortcuts

% of “Somewhat Disappointed” bucket users, who care about “Speed” as the main benefit — 30%

For these 30% of “Somewhat Disappointed” users, what are their primary concerns (as told by them in the survey)— lack of mobile app (MAIN) + integrations, calendaring, better search etc.

7. Two-pronged product planning approach to move towards PMF — focus on core strengths + address core concerns

Boom! Post the above 6 steps, now you have a clear roadmap of features needed to convert on-the-fence users to fanatic users, and inch closer towards that elusive 40% PMF benchmark.

Your PMF product plan needs just the following 2 strategies — 1) doubling-down on core strengths that are loved by fanatic users+ 2) working to allay concerns & feature requests from on-the-fence users.

8. For feature prioritization, stack-rank to get to “lowest cost, highest impact” features

Use a combination of survey data and your qualitative product instinct to arrive at the low-hanging features (low cost + high impact) that can start delivering immediate value to users.

9. Rinse, and repeat…

…until you get to PMF!

Hope you find this deconstruction useful for your own journey towards PMF. Would love to hear any specific strategies that have worked for you.

Side Note: am currently building Workomo, a smart & simple professional relationships management hub for the new-age knowledge professional. If you would like to transform yourself from just a “networker”, to a deep “relationship builder”, do sign-up to receive private beta access. Also, check out this post on Workomo’s long-term Mission & product thesis.