Antoine Le Nel, CGO @Revolut: How Revolut Launch and Grow Products & Why CAC is a BS Metric | E1216

Intro (0s)

• A good product manager should be able to know what the right product is without needing an AB test (1s).
• The less belief one has in a product, the better it is, and there should be no preconceived notions about its success (7s).
• At Revolut, the focus is on Return on Investment (ROI) rather than Customer Acquisition Cost (CAC), as discussing CAC can lead to acquiring the worst cohorts (12s).
• The idea of localization is considered overrated, and growth is viewed as a bidding war where the goal is to outbid others (18s).
• Antoine Le Nel is the guest, and he is excited to be on the show (41s).

The Success Formula of Candy Crush at King (44s)

• King's success with Candy Crush can be attributed to extensive testing and a volume game approach, where they tried many things until something worked, with a fast pace of launching games every quarter, even if not all were successful (1m17s).
• However, it's crucial to know when to cut losses and kill projects that aren't working, as waiting too long can hinder an organization's agility (1m47s).
• King was a highly data-driven organization, but this sometimes led to an overemphasis on data over the product itself, resulting in meetings focused solely on numbers rather than the game's quality and user experience (2m45s).
• In contrast, Revolut is more product-driven, spending more time looking at the product than just the data, with data serving as an input rather than the sole decision-maker (3m0s).
• The ideal balance between art and science in growth is not a fixed ratio, but product development should lean more towards art, while growth should focus on science and performance metrics (3m46s).

Lessons Learned About Performance Marketing & Its Limitations at King (3m52s)

• Mastering Performance Marketing gives a huge competitive advantage to a company due to its complexity, and doing it well makes a significant difference in company growth (4m4s).
• Performance Marketing is a deep field, and not many people have comprehensive knowledge of it (4m20s).
• Over time, the fundamentals of Performance Marketing have not changed much, and it remains a bidding war (4m38s).
• Although the field has become more complex due to issues like attribution loss, the core game remains the same (4m42s).
• To succeed in Performance Marketing, it is necessary to reinvent the measurement framework every few years to stay ahead (4m52s).
• The ultimate goal of Performance Marketing is still to win the bidding war by securing the highest impressions (5m3s).

The Difference Between King & Revolut (5m5s)

• King is described as an extremely iterative and data-driven company, with a strong focus on optimization through methods like A/B testing, having run thousands of tests in parallel at some point (5m31s).
• In contrast, Revolut had limited A/B testing when Antoine Le Nel arrived, which was initially surprising, but he realized that there are good reasons for this approach (5m39s).
• One reason is that good product managers should be able to know what the right product is without needing A/B testing, and the second reason is that Revolut aims to achieve 10x results, making A/B testing unnecessary to measure success (6m5s).
• A third reason is that A/B testing can increase time-to-market, as it requires running tests before launching a product, whereas Revolut's approach is to launch quickly and see what works (6m16s).
• King's approach to A/B testing was more suitable for a later stage in the company's life cycle, where optimization was key, whereas Revolut is still in a phase of rapid growth and creation (6m47s).
• Revolut's approach is likened to "founder mode on steroids," with a team of heavily involved founders driving the company's tempo and momentum with the same approach and mindset as when the company was first launched (7m3s).
• This consistency in approach and mindset is remarkable, even 10 years after the company's launch, and is a key factor in Revolut's success (7m27s).

How Is Growth Getting Faster at Revolut (7m37s)

• Revolut is building a growth engine with incredible numbers that seem to be getting faster and better, despite expectations that growth should slow down (7m59s).
• The growth engine is a combination of many things, with no single factor contributing to the growth, making it difficult to pinpoint one thing that really worked (8m44s).
• The growth is steady and accelerating week after week, with the engine getting more optimized as the company progresses (8m55s).
• Even in mature markets, Revolut does not see a limit to growth, which is unusual (9m7s).
• The company's high product velocity is due to its flat organization structure, where every team is self-sufficient and has autonomy to build what they need to (9m16s).
• Revolut runs quarterly cycles and has a high pace, with minimal interdependencies between different teams, allowing them to work independently (9m42s).
• The company strikes a balance between coordination and focus, giving teams autonomy to move quickly in their areas (10m11s).
• When something is not working, Revolut cuts it quickly, rather than giving it more time, and learns from the experience (10m24s).
• An example of this is a marketing campaign that was cut off after two weeks when it was clear it was not working, rather than waiting for it to finish (10m49s).
• Revolut's approach is to move on quickly from failed experiments and focus on what is working (11m17s).

What Is a Growth Engine & How Does It Drive Revolut’s Success? (11m19s)

• A growth engine is a combination of multiple components that work together to drive growth, including the upper funnel, mid funnel, and lower funnel, which must be managed to work in perfect synchronization (11m29s).
• The growth engine is like a fishing net that grabs all conversions, with the upper and mid funnels feeding it, and finding the right balance between these elements is key to optimizing overall growth (11m58s).
• The right balance depends on the maturity of the market, with more mature markets allowing for more upper funnel activities and less mature markets requiring a focus on conversion (12m31s).
• The hardest thing about constructing a growth engine is creating a measurement framework, as it's essential to measure more than competitors to gain a competitive advantage (12m53s).
• A good measurement framework allows for attribution of activities to outcomes, such as attributing TV advertising to downloads, and enables companies to scale their efforts effectively (13m28s).
• Companies that can measure and scale their efforts on platforms like iOS can gain an advantage over those that struggle with measurement and attribution (13m55s).
• Building a growth engine should start at the very beginning, as it's not just about paid marketing, but also includes virality and variety, which are essential components of growth (14m17s).
• Virality should be baked into the product from the start, and growth teams should work closely with product teams to build the virality engine (14m47s).
• The product team should build the variety engine, and growth teams should work together with product teams to drive growth (14m59s).
• Growth operates by building something with parameters and then letting the growth team play with it, as they have a better analytical framework to measure ROI and efficiency, while the product team has a better product vision and UX aspect in building it (15m5s).
• The most common way growth engines break down is when people start bringing their own beliefs and convictions, rather than being open to trying different approaches (15m33s).
• Having no strong beliefs in specific marketing strategies, such as brand or influencers, can be beneficial as it allows for a more open-minded approach to finding what works (15m58s).
• Experienced operators bring a playbook of what works, but it's essential to be willing to change and adapt it to new situations, as seen in the example of Antoine bringing his playbook from King to Revolut and significantly changing it (16m42s).
• The upper funnel, specifically brand marketing, was not initially a focus at Revolut, but it is now being tested and has shown to be effective, although attribution can be challenging (17m20s).
• To measure the effectiveness of marketing strategies, multiple ways of looking at attribution are used, such as tracking the impact of advertising on jet bridges and vending machines in airports, which allows for a more direct link between marketing efforts and results (17m51s).
• Managing attribution is crucial, and having a good system in place can help determine what marketing strategies are working and provide a high ROI (18m46s).
• Many things do not work when launching and growing products, but knowing what does work is crucial for success (18m54s).

What’s Been the Biggest Flop? (18m56s)

• The biggest flop has been the influence campaigns that did not work at all, specifically the ones with celebrities who are not good with social media (18m56s).
• These campaigns were attempted in the early days of the company, with the intention of doing something cool (19m6s).
• The outcome of these campaigns was unsuccessful, resulting in a learning experience for the company (19m28s).

What Antoine Changed from King’s Playbook to Revolut’s? (19m30s)

• Changes made from the King Playbook to Revolut's include investing more in brand campaigns and identifying the ability of brand marketing to improve conversion metrics, which has worked well and led to more investment in this area (19m38s).
• The upper funnel is where brand marketing can improve conversion metrics, the mid funnel is where attribution can be run and a strong Halo effect is present due to high reach, and the lower funnel is where Performance Marketing, Affiliates, and referral programs drive revenue with full attribution (20m0s).
• Mid funnel activities help with brand awareness, conversion, and revenue, taking a full-funnel approach that combines branding impact with revenue generation, unlike the Formula One approach which focuses solely on branding (20m55s).
• Growth teams consist of specialists in each segment, with experts in upper, mid, and lower funnel activities, rather than generalists who are skilled at all three (21m35s).
• When starting a new market, the entire funnel starts again, and the growth plan involves rebuilding from scratch, with the ease of acquiring customers depending on the market's connection to previous ones and the brand's international presence (22m18s).
• The brand's international presence and proximity to existing markets can affect the ease of acquiring customers, with some markets being more challenging than others due to factors like brand recognition and market type (22m47s).

Does CAC Drop with Brand Growth or Rise with Market Saturation? (22m57s)

• The relationship between Customer Acquisition Cost (CAC) and brand growth is complex, with two opposing factors at play: the brand's increasing size leading to more organic growth and word of mouth, and market saturation making it more expensive to acquire new customers as the target market is exhausted (22m57s).
• The impact of brand growth on CAC depends on the market's competitiveness, with some markets experiencing a decrease in CAC due to increased organic growth, while others see an increase in CAC due to diminishing returns (23m31s).
• Focusing solely on CAC can lead to acquiring the worst cohorts, as it prioritizes cheap users over high-quality ones; instead, the focus should be on Return on Investment (ROI) to ensure the acquisition of the best users (24m25s).
• Increasing Customer Acquisition (C) while improving ROI is a more effective strategy, as it acknowledges that sometimes paying more for high-quality users is necessary (24m45s).
• Granular analysis of channels is crucial, as some channels may produce better cohorts than others, making CAC targets irrelevant (25m0s).
• Adjusting to a focus on ROI rather than CAC can be challenging for teams, but it's essential to stomach higher costs temporarily to achieve long-term growth (25m30s).
• Building good analytical models is key to determining the quality of acquired cohorts and making informed decisions about how much to pay for them (25m57s).
• These models can be transferable across countries, but may need to be adapted depending on the product being sold and local market conditions (26m17s).

How Revolut Chooses New Markets (27m3s)

• The objective is to be in every single market, with no preference for one market over another, and the goal is to be everywhere (27m7s).
• The approach is to take a list of markets and prioritize those that are easier and quicker to enter, but ultimately, the aim is to be present in all markets (27m20s).
• China is considered a very different and difficult market, but excluding China, the most challenging market was not specified, and instead, the focus shifted to the idea of localization (27m32s).
• The idea of localization is considered overrated, and it is believed that the same creative approach can work globally, with the exception of Japan, which is considered a different market (27m57s).
• The consumer interest and what people click on is largely the same globally, and the extra performance gained from extensive localization is not worth the effort (28m23s).
• This approach has been successful, as evidenced by Revolut becoming number one in Romania and Norway with the same strategy, despite these countries having different cultures (28m44s).
• The experience at King, a previous company, also showed that the same creative approach could work globally, with the exception of Japan (27m55s).

Balancing Primary Account Focus vs. Broad Reach (29m5s)

• Revolut's primary focus is to prove its ability to be the primary account for its users, with the percentage of primary accounts still being relatively low (29m7s).
• The strategy at Revolut is to encourage users to try their services without necessarily requiring everyone to make it their primary bank immediately (29m18s).
• Revolut views itself as a "snack" that users can try and use at their own pace, allowing them to gradually move more of their financial activities to the platform (29m45s).
• The adoption of Revolut's services is a journey, and users may start by using it for a specific purpose, such as traveling or trading, before eventually moving more of their financial activities to the platform (29m50s).
• Revolut's approach is to encourage "promiscuity" and allow users to try their services without committing to making it their primary bank (30m46s).
• The goal is not to require everyone to become a primary user by a certain date, but rather to allow users to adopt Revolut's services at their own pace (31m7s).
• Revolut views crypto as a core component of the financial world and aims to be a one-stop shop for any type of financial product, including crypto (31m41s).
• The company does not see a spike in user growth due to crypto as a negative thing, but rather as a positive indicator of user interest (31m29s).

What’s the North Star Metric for Measuring Success? (31m54s)

• The key metrics for measuring success include the volume of users, the return on investment (ROI) at which they are acquired, and the payback period in months, as well as how users progress towards becoming primary users over time (32m6s).
• The payback period can vary by market, but it has remained relatively stable for Revolut due to standardization (32m38s).
• The hardest part of maintaining a strong ROI is continuously evolving and iterating the growth engine to stay ahead of the competition (32m50s).
• It's essential to stay on top of the growth engine, even when it's working well, to avoid complacency and maintain success (33m37s).
• Founders should set ambitious yet realistic targets, aiming to achieve around 70-80% of their goals to maintain morale and motivation (34m12s).
• Setting targets that are too low or unachievable can lead to bad morale, while reaching 80% of a target is considered a good achievement (34m22s).

How Does Ideation Work in Growth Team Meetings? (34m27s)

• Meetings with the growth team are standardized and processed, with weekly cycles and a focus on problem-solving sessions, where teams review numbers and bring problems to solve together, with the goal of iterating and reiterating quickly to avoid wasting time (34m44s).
• The growth team consists of 20-25 different teams, working as a matrix with channel and local teams, and each team meets weekly for a Business Review, which is more of a problem-solving session than a presentation (35m0s).
• The power of short cycles is that there's no time wasted in presenting, and teams don't spend time preparing for meetings, instead, they just bring the dashboard and try to solve the problem with no specific preparation (35m35s).
• The meetings are half an hour each, and there are 20-25 meetings per week, but the agenda remains the same, with a focus on repeating and iterating on problem-solving discussions (36m36s).
• The meetings are not ad-hoc, and there's already a meeting for every topic, so if someone wants to discuss something, there's already a meeting for it, and the agenda looks the same every week (36m50s).
• The favorite part of the agenda is the problem-solving meetings, which involve open discussions with everyone, and the team size on the other end can vary between 10 and 40 people (37m18s).
• Idea synthesis and discussion are managed effectively, even with a large number of people on a call, as these meetings are important for the growth team (37m38s).
• Remote work is facilitated by having a clear understanding of company culture, expectations, and goals, which can be achieved by being transparent and open in meetings, allowing everyone to understand how things work, even if they're not actively participating (37m42s).
• Transparency is key to the company's power, and decisions are made in a straightforward manner, with no surprises, and if a decision is made, it's either a clear yes or no, with no need for additional meetings to negotiate (38m26s).
• This approach may lead to some false positives, but it allows the company to move faster, and while it's not perfect, it's more powerful than getting bogged down in discussions and meetings (39m3s).
• The importance of debate and discussion in teams is acknowledged, but it's also important to avoid adding unnecessary time to the decision-making process, as this can stifle creativity and limit the number of projects that can be completed (39m21s).
• By iterating quickly and making decisions in a timely manner, it's possible to create more and achieve more, as seen in the example of running multiple ads in a year, rather than spending months discussing a single ad (39m56s).
• While the inception time for projects may be shorter, the company is able to get more done at the end of the day, and this approach still allows for creativity to thrive (40m13s).

Cracking the US Market (40m18s)

• The US market is considered the "big Golden Nut" that everyone tries to crack, but it is a different market compared to Europe, being more credit-focused, whereas Europe is mostly debit-focused (40m19s).
• Despite its size, the US has relatively small fintech companies, with Chime being one of the biggest, but still only a quarter of Revolut's enterprise value (40m46s).
• There is a negative correlation between the maturity of an economy and the penetration of fintech, with more mature economies like Germany having extremely low fintech penetration (41m2s).
• In contrast, countries like India, Pakistan, and some places in Africa and Indonesia have more mature fintech penetration (41m24s).
• This phenomenon is similar to the telecom industry, where countries that skipped building traditional infrastructure, such as ADSL cables, and jumped straight to mobile technology, achieved higher mobile penetration rates (41m39s).
• This "leapfrogging" effect can be seen in the fintech industry, where countries with less developed traditional banking systems are more likely to adopt fintech solutions (41m53s).

The Power of Remote Teams (41m58s)

• The importance of human contact is acknowledged, and it's noted that being alone at home may not work for everyone, especially those early in their careers, and that's something to be respected (42m19s).
• Despite the potential downsides, remote teams can be beneficial, with the company having once-a-year meetups to combat loneliness (42m35s).
• Remote meetings can be more efficient, with the ability to have shorter meetings of 15 or 30 minutes, which may not be feasible in person (43m5s).
• Remote meetings can also be a great equalizer, as dominant personalities can be "flattened out" by the video conference system, allowing introverted individuals to have a stronger impact (43m33s).
• This can be particularly beneficial for introverted people, who may struggle to contribute in in-person meetings where they can be cut off or interrupted by others (44m25s).
• The video conference system allows for a more polite and structured way of contributing, with features like raising a virtual hand to speak (44m40s).
• While some may argue that relying on remote meetings can hinder the development of social skills, it's suggested that these skills can still be learned and developed through practice and experience (45m6s).
• It's also noted that learning from experiences, including failures and setbacks, is an essential part of growth and development, and that these lessons can often be found in the "cracks" of everyday life (45m19s).
• In a remote work setup, feedback loops are maintained through a combination of business reviews and one-on-one meetings, allowing for regular touchpoints with team leads and their team members every other day, whether through meetings or one-on-ones (46m11s).
• The objective is to create a continuous feedback loop, where team leads receive feedback from their team members and provide feedback to their own leads, ensuring that everyone is aligned and working towards the same goals (46m30s).
• Problem-solving interviews are conducted as case studies, where candidates are presented with a problem and asked to decompose and simplify it, rather than relying on past experiences or trying to find a complex solution (46m51s).
• The goal of these interviews is to assess the candidate's ability to break down complex problems into smaller, manageable parts, and solve them one by one, rather than seeking a miracle solution (47m21s).
• The approach emphasizes simplicity and avoiding overcomplication, recognizing that most problems can be solved by slicing them at the right level of granularity and tackling them one step at a time (47m18s).

Biggest Mistakes in Hiring for Growth Roles (47m35s)

• The biggest mistake in hiring for growth roles is hiring people who try to run many things in an average way, rather than focusing on doing a few things deeply and exceptionally well (47m36s).
• Hiring "growth managers" can be a mistake, as the term is often unclear and can encompass a wide range of responsibilities, including variety, performance marketing, brand marketing, pricing, and more (48m0s).
• Growth is often misunderstood as trying to achieve a single, massive success, but it's actually about making many small optimizations that add up to a significant impact (48m23s).
• A more effective approach to growth is to focus on iterating and improving many small things, rather than trying to achieve a single, moonshot success (48m31s).
• This approach is similar to how athletes like Usain Bolt achieve success, not by being 10x better than everyone else, but by optimizing every aspect of their performance to gain a small edge (48m43s).
• Growth is a competitive process, where the goal is to beat others by optimizing every step of the process, and making many small improvements that add up to a significant advantage (49m11s).
• The key to success in growth is to focus on execution and excellence at every level, rather than trying to achieve a single, massive success (50m3s).
• The success of companies like Revolut can be attributed to many small things, rather than a single factor or achievement (50m14s).

What Does Revolut Still Need to Optimize? (50m16s)

• Revolut still needs to optimize its brand marketing, as it is a very young brand and building brand awareness is a significant task ahead, particularly in finding the right way to position and inspire people (50m21s).
• The concept of brand is often misunderstood, with some people thinking it is solely a marketing thing, but it can also be a product thing, as seen in examples such as King and Revolut, where the brand was established before any marketing was done (51m2s).
• The iPod is another example of a brand that was successful due to a combination of its product design and marketing, including the packaging, scroll wheel, and advertising campaigns (51m21s).
• In the early days of a company, brand is more of a product thing, but as the company matures, it becomes more of a marketing thing, although it is essential to note that brand is not just a marketing problem (51m40s).
• The user experience is a crucial aspect of brand, as it is about how the product makes the user feel, and marketing serves as an amplifier or catalyst to enhance this experience (51m56s).
• Ultimately, the product is the starting point of the brand journey, and marketing's role is to amplify the feelings and experiences that the product creates (52m16s).

Which Brand Antoine Respects Most Today & Why? (52m18s)

• The brand that is respected the most today is Apple, as it has successfully developed a luxury positioning for mass market products, similar to luxury brands like Louis Vuitton, Chanel, and Hermes, which have managed to transcend age and geography (52m19s).
• Apple's products are considered super premium and luxury items, with high prices, such as £3,000 for laptops, but the return on investment (ROI) for these products has increased significantly as they have become essential devices for daily life (53m1s).
• The willingness to pay a high price for Apple products, such as £600 for a phone, is justified by the fact that it is a crucial device that serves multiple purposes, including as a viewing device, TV, and bank (53m34s).
• A common mistake made by startups is investing too much in brand awareness in the early days, instead of focusing on developing a great product that will drive conversion and growth (54m35s).
• Investing in brand awareness too early can be a mistake, as it is often the product penetration that drives brand awareness, rather than the other way around, and startups should prioritize product development over brand marketing in the early stages (54m52s).
• Only at a later stage, when a startup has highly penetrated one segment, can it start using brand marketing to open up new segments and continue growth (55m22s).

Which Product Had High Expectations but Low Impact? (55m45s)

• A product that had high expectations but low impact was the crypto exchange, which is doing well but did not pick up as expected. (55m52s)
• The airport lounge feature, part of the Ultra subscription, has been successful, especially in the UK and France. (56m6s)
• The Ultra subscription, which costs around 600 pounds a year, offers various benefits, including better interest rates on savings accounts, a free subscription to the Financial Times, and other services like Chess.com Platinum. (56m14s)
• The interest premiums from the savings accounts need to be substantial to justify the cost of the Ultra subscription. (56m52s)
• Revolut has also launched a loyalty program called Ref Points, which gives users miles and drives loyalty depending on the plan they are on. (56m59s)

Working with Nikolai (57m11s)

• Nikolai's key strengths include his resilience, ability to focus, and mastery of the "helicopter view," which allows him to identify problems, dive deep to solve them, and then move on to the next issue (57m12s).
• Nikolai's approach to problem-solving involves identifying problems, going deep to fix them, and then moving on to the next challenge, a process that is repeated continuously (57m31s).
• Working with Nikolai has influenced Antoine Le Nel's approach to managing teams, adopting a problem-solving mindset and focusing on identifying and solving problems rather than just discussing successes (57m52s).
• Antoine Le Nel has changed his approach to meetings, shifting from discussing successes to identifying and solving problems collectively, which he believes is a more powerful and effective way to operate (58m11s).
• Antoine Le Nel emphasizes the importance of recognizing what is working well, but prioritizes identifying and solving problems, which he believes is a key aspect of Nikolai's approach (58m37s).
• Nikolai's approach to problem-solving is centered around collective problem-solving, where teams work together to identify and solve problems, rather than just presenting successes (58m41s).

Quick-Fire Round (58m51s)

• Performance Marketing remains a key tactic for growth that has not changed over the last 5 years (59m3s).
• Virality has become more difficult due to changes in user behavior and iOS updates, making it harder for people to share content (59m7s).
• TikTok has made virality easier, but it's still challenging to achieve through word of mouth and other means (59m23s).
• The biggest mistake founders make when hiring growth teams is hiring generalists who try to do everything instead of focusing on specific areas (59m36s).
• When starting a new role as head of growth, it's essential to build an analytical framework before spending any money (59m49s).
• The growth world would be improved if platforms prioritized user privacy and didn't use it as a pretext to reposition themselves as brand platforms (1h0m3s).
• Revolut is working on introducing mortgage products, which would be a game-changer and a huge perception shift (1h0m27s).
• Student loans are another product that Revolut is considering, which would be a significant addition to their offerings (1h0m32s).
• Having a banking license does not inhibit speed, as Revolut is working with different licenses across the world (1h0m52s).
• Nubank's growth strategy has been impressive, as they've managed to go deep in a huge market, particularly in Brazil (1h1m10s).