Nilan Peiris: What Growth Hacks Worked and What Did Not, from Wise CPO | E1182

Intro (0s)

• Nilan Peiris defines product marketing as bridging the gap between the perceived value a customer has of a product and the actual value delivered.
• He emphasizes that a product must be significantly better than alternatives to achieve word-of-mouth marketing.
• Peiris believes that a successful product should provide customers with an experience they were previously unaware of.

Entry into Growth and Product (42s)

• Nilan Peiris's background in mathematics at university instilled in him a love for problem-solving and finding unique solutions. This approach influenced his entry into the world of growth and product, where he emphasizes thinking differently and innovating.
• Peiris questions the effectiveness of playbooks in product and growth, arguing that while they can be helpful for market expansion, they often fail to account for cultural, regulatory, and financial nuances across different regions. This makes truly globally scalable products rare.
• He believes playbooks are more applicable to specific channels like content creation, where there are established frameworks for creating effective Twitter content or short-form video hooks. However, the real edge comes from creativity and finding new ways to tell stories or present content, which often leads to bursts of success that others then copy.
• Peiris draws a parallel to Seth Godin's concept of the "Purple Cow," highlighting the power of being different rather than just better. This is particularly relevant in today's content landscape, where standing out is crucial.

Joining Wise (2m57s)

• Nilan Peiris, a seasoned professional with over 20 years of experience in online business, was initially a consultant who helped brick-and-mortar stores establish their online presence. He realized his passion for driving revenue through online platforms and has been focused on this area ever since.
• Peiris's journey led him to work with various companies, ranging from large corporations to early-stage startups. He eventually met the founders of TransferWise (now Wise) through an angel investor who recognized his expertise in marketing and product development.
• Impressed by the product but lacking customers, TransferWise sought Peiris's help. He initially worked part-time, assisting with their first marketing campaigns and product development. After a couple of years, he joined the company full-time and began building their team.

Understanding Wise: Products & Services Overview (4m36s)

• Wise focuses on solving the problems associated with cross-border money transfers, targeting both consumers and small and medium-sized businesses (SMBs).
• The cross-border money movement market is vast, with approximately $1 trillion in consumer flows and $10 trillion in SMB flows.
• Traditional cross-border money transfers are often slow, expensive, difficult to execute, and lack transparency.

How Wise Got the First Customers (5m10s)

• Wise's first customers came from a TechCrunch blog post and interview that went live on the day the company launched. This initial exposure led to a trickle of customers who found Wise through the article.
• The company employed a "hacky" word-of-mouth approach, actively engaging with communities of people who sent money internationally and spreading the word about Wise.
• Wise experimented with various marketing channels, including paid marketing, which has remained a significant source of customer acquisition, accounting for about 30% of their customer base. Word-of-mouth marketing has been even more effective, contributing to about 70% of their customer base. Social media, particularly Facebook and YouTube, has been a key driver of paid marketing success.

Creating Content for End Users (6m53s)

• Creating Useful Content for End Users: Wise's content strategy focuses on creating valuable resources for their target audience, aiming to become the go-to source for information related to international money transfers. This strategy involves creating both "on-topic" and "off-topic" content.
• On-Topic Content: This type of content directly addresses the core needs of Wise's users, such as providing comprehensive guides on sending money to specific countries, explaining exchange rates and fees, and offering tools like BIC and IBAN calculators.
• Off-Topic Adjacent Content: This content expands beyond the core service and targets specific demographics, such as students living in London, creating content relevant to their needs and interests. This approach helps build brand awareness and attract a wider audience.

Extracting Value from Revolut's Product Range (11m26s)

• Revolut's potential for monetization: The speaker questions whether Revolut, with its diverse product range, could potentially extract more value from its customers by monetizing its products more efficiently.
• Wise's business model and the challenge of cross-subsidization: Wise's strategy focuses on driving down costs and adding margins to achieve profitability. The speaker argues that whoever offers the lowest cost, highest quality product will dominate the market. However, this strategy faces challenges from competitors who cross-subsidize their products, particularly in the fintech and neobank space.
• The challenges of cross-subsidizing international money transfers: The speaker highlights two key challenges with cross-subsidizing international money transfers: the high cost of moving money internationally and the potential for customer churn if they expect to receive all their interest back. The speaker uses Wise's example of offering high interest rates on customer deposits to illustrate this point.

Product Quality vs. Distribution Efficiency (17m21s)

• Product quality alone is not enough for growth. Nilan Peiris emphasizes that distribution is a product in itself and requires careful attention. He argues that a product needs to be significantly better than the competition to achieve word-of-mouth marketing and hockey stick growth.
• Customers need to understand the value proposition. Peiris highlights that even when a product offers significant savings, customers may not fully grasp the value unless it is clearly communicated. He uses the example of Wise's hidden fees in exchange rates, which many customers didn't realize they were saving on.
• Product marketing closes the gap between perceived and actual value. Peiris defines product marketing as the process of bridging the gap between the value customers perceive they are getting and the actual value delivered. He emphasizes that by clearly communicating the value proposition, Wise saw a significant increase in customer recommendations and growth.

Recognizing New Product Success Quickly (22m40s)

• Nilan Peiris, CPO of Wise, highlights the rapid success of the Wise account in Brazil, comparing it to a hockey stick growth trajectory.
• This success is attributed to Wise's ability to provide Brazilians with a cost-effective way to move money internationally, particularly while traveling, a service that traditional banks had not offered effectively.
• Wise's partnership with a Brazilian bank, Novo Banco, has further amplified this success, with Novo Banco offering the Wise account to its customers and even co-branding cards with Wise for its most valuable customers. This collaboration continues to evolve and improve the product offering.

When to Kill a Product (23m26s)

• When to Kill a Product: Nilan Peiris, CPO of Wise, discusses the decision-making process for killing a product. He emphasizes that a product should be killed when it doesn't pay for itself, especially when the costs of running it become high. He also highlights the importance of considering the opportunity cost of time invested in a product, as it could be better spent on other initiatives.
• Outcome Scenario Planning: Peiris emphasizes the importance of outcome scenario planning, which involves assessing the potential upside of a product and its impact on the company's overall goals. He suggests that products with limited upside or a smaller market should be cut quicker than those with the potential for significant growth.
• Minimum Hurdle Rate: Wise sets a minimum hurdle rate for all products, meaning they must have the potential to become a "huge" business. This ensures that the company is focusing on initiatives with significant growth potential.
• Public Company Constraints: Peiris acknowledges that being a public company can create challenges in terms of extended paybacks, as investors often prioritize short-term results. However, he emphasizes that Wise has a long-term vision and is willing to make investments that may not yield immediate returns.
• Long-Term Bets: Wise's investment in price reduction is an example of a long-term bet that may not show immediate results but is expected to drive market share and growth over time.
• Autonomous Teams: Wise historically operated with autonomous, independent teams, allowing them to set their own goals and execute their plans. This structure worked well initially but became less effective as the company grew.
• Squads and Tribes: To address the challenges of managing a larger number of teams, Wise transitioned to a structure of squads and tribes. This allows for greater accountability and coordination while still maintaining a bottom-up approach to strategy development.

Effective Marketing for Diverse Product Lines (32m7s)

• Devolving Marketing for Diverse Product Lines: Wise addresses the challenge of marketing diverse product lines by decentralizing marketing efforts. They create dedicated marketing teams within each product line, allowing them to tailor their messaging and strategies to specific audiences. For example, Wise Platform, which provides financial infrastructure to banks, has its own marketing team that runs conferences and targets specific banking segments.
• Balancing Brand Consistency and Product-Specific Marketing: Wise maintains brand consistency across its diverse product lines by having a centralized brand marketing team that sets the overall brand strategy. This team ensures that all marketing efforts align with the core brand values and messaging. However, they also recognize the need for product-specific marketing, allowing individual teams to tailor their messaging to their target audiences.
• Leveraging Consumer Trust for B2B Success: Wise's consumer business plays a crucial role in building trust for its B2B offerings. By establishing a strong consumer brand known for its affordability and ease of use, Wise creates a foundation of trust that extends to its B2B products. Banks and other financial institutions are more likely to adopt Wise's infrastructure if they know that it is trusted by a large consumer base.
• Word-of-Mouth Marketing as a Key Driver: Wise has found that word-of-mouth marketing is a highly effective driver of growth. They have focused on providing a great customer experience, which encourages customers to recommend Wise to their friends and family. This approach has proven to be more effective than traditional marketing tactics, as people are more likely to trust recommendations from their peers.
• Social Pressure and Group Payments: Wise has also learned that social pressure can be a powerful driver of adoption. By focusing on features that facilitate group payments, they have tapped into the desire for social conformity and convenience. This strategy has been successful in driving adoption, as people are more likely to use a product if their friends and family are already using it.

CAC Challenges in a Competitive Fintech Environment (39m18s)

• The challenge of fluctuating LTV in a competitive fintech environment: The speaker highlights the increasing difficulty in predicting customer lifetime value (LTV) in the fintech space due to customer transience. Users often utilize multiple services, making it harder to determine the long-term value of a single platform. This variability in LTV directly impacts the Customer Acquisition Cost (CAC) budget.
• The importance of granular campaign analysis and LTV tracking: Effective marketers understand the need to break down campaigns into smaller, more targeted groups. This allows for a more precise understanding of the cost and LTV associated with each campaign. The speaker emphasizes the importance of tracking the overall "bet" made on acquiring customers and the potential losses incurred, as the success of customer retention is not entirely within the company's control.
• The value of profitability and controlled marketing spend: The speaker shares a personal experience where their company achieved profitability by significantly reducing marketing spend. This decision, while initially challenging, ultimately led to greater control over the business and revealed hidden efficiencies within the marketing team. The speaker emphasizes that this type of efficiency can be achieved repeatedly, but requires a conscious effort to analyze and adjust marketing spend.

Hiring Mistakes & Lessons (43m58s)

• Nilan Peiris, the CPO of Wise, has learned that interviews are not a perfect predictor of job performance. He estimates that he makes hiring mistakes 20-30% of the time, even after 10 years of experience. He believes that the best way to assess a candidate is to have them work on a real project, even if it's just for a day.
• Peiris uses two specific interview questions to assess candidates. The first question asks candidates to describe a time they went "above and beyond" in a project, focusing on their ability to take initiative and solve problems. The second question explores the candidate's reasons for leaving their previous role, aiming to understand their motivations and potential limitations.
• Peiris emphasizes the importance of being open to different approaches and learning from mistakes. He acknowledges that he has been wrong about candidates in the past, and that he has learned to trust the ability of people to learn and develop. He believes that the most important thing is to focus on the outcome, rather than the specific method used to achieve it.

Quick-Fire Round (48m25s)

• Common Founder Mistakes: Nilan Peiris believes the most common mistake founders make is thinking they can achieve growth through marketing alone, without focusing on product-market fit. He emphasizes that spending time on understanding the market and building a great product is crucial, rather than relying on "magic" marketing solutions.
• Dangerous Startup Growth Myths: Peiris identifies the myth of a "magical playbook" for startup growth as particularly dangerous. He argues that focusing on product-market fit and building a strong product is more important than chasing quick fixes or diversifying channels too early.
• AI's Impact on Growth: Peiris sees AI as a powerful tool for accelerating growth, particularly in areas like payments and content creation. He believes AI can automate tasks, improve efficiency, and enhance creativity, but emphasizes the importance of human oversight and creativity in leveraging these tools effectively.