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Ecommerce Growth & User Acquisition


I’m Wilson Hung, Growth @ Kettle & Fire, previously Growth @ SumoMe, Process Engineer @ ExxonMobil.

I quit my job as a chemical engineer to apply a data-driven, and scientific approach to acquiring customers.

I write detailed essays on growth that have been featured in Forbes, ConversionXL, SumoMe, and shared by Andrew Chen, Guy Kawasaki, and 500Startups.


If you’d like growth advice, I help Ecomm companies on a selective basis. I can provide the most value if you’ve reached product market fit, and have a functional supply chain.

Get in touch             

Main Takeaways From Principles By Ray Dalio

“Think about how you can make all of your decisions well, in a systematic, repeatable way, and then being able to describe the process so clearly and precisely that anyone else can make the same quality decisions under the same circumstances.”

I’ve been trying to read a lot more this year, and a couple months ago, our CEO recommended Principles By Ray Dalio.

So I picked it up… and wow. Just amazing.

There are so many great learnings in this book that I just had to read it twice, and put together this blog post to organize my main takeaways from this book. This is one of those rare books I know I’ll be returning to throughout my life.

I found many of these takeaways to be obvious and logical… because they are. It’s hard to describe, but the way the book provides context, reaffirmation, and communicates the concepts was extremely valuable to me.

Below are my main takeaways from Principles by Ray Dalio:

Improving The Way I Engage In Thoughtful Disagreement

Lesson: Follow up with questions and not assertions.

“Closed-minded people say things like ‘I could be wrong… but here’s my opinion.’ This is a classic cue that is often a perfunctory gesture that allows people to hold their own opinion while convincing themselves that they are being open-minded.”

You should follow it up with a question and not an assertion. Open-minded people know when to make statements and when to ask questions.”

“You should be what I call open-minded and assertive at the same time—you should hold and explore conflicting possibilities in your mind while moving fluidly toward whatever is likely to be true based on what you learn.”

My thoughts: I use the phrase, “I could be wrong… but [XYZ]” quite often. Usually when I’m trying to play ‘devil’s advocate’ to provide a different viewpoint. However, I’ve noticed that this phrase may stall discussions, possibly because by making a statement, it doesn’t directly ask for a reply. 

Example: If someone brings up an idea but I think it has limited impact opportunity. Instead of making a statement, “I could be wrong, but I don’t think this will move the needle because XYZ”.

I could reply with a question along the lines of: “That’s interesting. If this first iteration was a success, what would be the next steps?” Or, “What would this look like at scale?”

And based on the reply, I could eventually ask questions like: “If our targets are [XYZ], would this be a big driver towards it? Why/How?”

By following up with questions, it’d force me to be radically open-minded to allow others to point out what I might be missing. The benefit of this style of disagreement doubles as a training exercise for the other participants because it’ll get them in the habit of expecting the type of “probing” or “stress-test” questions in their business cases.

Actions:

  1. Keep in mind to not use the phrase, “I could be wrong, but XYZ.”
  2. When playing devil’s advocate, do it by asking questions rather than with statements to encourage a socratic discussion process.
  3. When being asked for advice by others, refrain from making statements and start by gaining context by asking questions first.

Improving The Way I Manage & Think About Risks

Lesson: Create a R&D budget to explore risky growth opportunities, and fund it from core profit sources that are easy to forecast.

“Making a handful of good uncorrelated bets that are balanced and leveraged well is the surest way of having a lot of upside without being exposed to unacceptable downside.”

“The most important components to separate were the profits coming from the core business and those that were speculative profits and losses…”

My thoughts: In 2017, our marketing strategy at Kettle & Fire has been relatively safe. However, to reach our very ambitious 2018 targets, we’re going to have to be very aggressive.

So the question is, how can we balance the need to expand aggressively without getting overexposed to financial risk?

My main takeaway from Principles is to think about our budgeting framework in two components:

  1. Profits coming from the core business
  2. Profits/losses from speculative bets

So what does this actually look like?

Actions:

  1. Look into our safest and easiest profit generating marketing channels. Things like revenue from organic traffic which is very steady and easy to forecast.
  2. Take a certain percentage of the profits from these “core business channels” to fund our R&D budget. This R&D budget would essentially have zero expectation for ROI.
  3. Use this R&D budget to explore future growth opportunities (e.g. paid acquisition) to establish and learn baseline metrics across various paid channels. After we have the baselines of say 5-10 channels, we can prioritize + pick which ones to focus on in-house

But the main idea is that we’ll only be taking an acceptable % of profits from very easy to forecast channels which makes it much easier to control our risk/downsides. If we wanted to be more aggressive, we just increase the % of profits we take from our SEO traffic.

If we get into the scenario where we’ve exhausted all the profits from organic traffic, it’s repeating the same process but with another channel that’s easy to forecast (e.g. paid search).

Improving The Way I Run Meetings

Lesson: Have a methodical approach to run meetings to navigate across multiple levels and discussion points.

“1. Remember that multiple levels exist for all subjects. 2. Be aware on what level you’re examining a given subject. 3. Consciously navigate levels rather than see subjects as undifferentiated piles of facts that can be browsed randomly. 4. Diagram the flow of your thought processes using the outline template shown on the previous page.”

Figure #1 – A remake of an example from Principles between a “good” and “bad” meeting.

My thoughts: Running effective meetings is something I’m trying to improve on. 

Too many meetings get derailed on tangents which results in unclear conclusions and wasted time. Either because I fail to moderate properly, or because I’m contributing to the root cause.

The solution is to have a structured agenda. Super obvious, I know. But I think the missing piece was communicating the agenda so everyone is on the same page.

So for example, let’s say we’re having a 2018 planning meeting. Before it starts, I’d show everyone the agenda with a visual aid along the lines of:

Figure #2 – Example of the diagram flow outline to be used to structure meetings

Once everyone is aware of the of the meeting structure, only then will the meeting commence. If the discussion does go on a tangent, I can simply jump-in to refer to the agenda to get the meeting back on track.

In the above example, let’s assume while in “Part C” of the meeting to brainstorm new initiatives, the meeting gets derailed on resource allocation (e.g. “We don’t have enough resources for this idea!”)

Instead of continuing on the discussion of resource allocation, I can jump in and say something along the lines of: “You’re right, but for now let’s just brainstorm ideas and we’ll figure out the resources component in Part D of the meeting”.

Improving The Way I Approach Personal Growth

Lesson: Focus on improving your strengths, while compensating on the weaknesses (instead of focusing on improving weaknesses).

“What happens after we crash is most important. Successful people change in ways that allow them to continue to take advantage of their strengths while compensating for their weaknesses and unsuccessful people don’t.”

“But some things you will never be good at and it takes a lot of time and effort to change. The best single clue as to whether you should go down this path is whether the thing you are trying to do is consistent with your nature (i.e., your natural abilities).”

My thoughts: A frequent piece of advice I hear is to focus and improve on one’s weaknesses. However, there’s something to be said about understanding one’s strengths and to develop those skills, instead of focusing on one’s weaknesses.

So my strengths are:

  • Setting goals (higher level thinking like visualization & prioritization)
  • Identifying opportunities (breaking down the goals into the individual comonents to find low hanging fruit)
  • Designing plans/solutions (systems level thinking to identify the milestones for each plan).

However, my weaknesses are:

  • Attention to detail (quality assurance/control, minimizing mistakes & edge cases)
  • Execution/pushing through to results (self-discipline, good work habits, results oriented)

Example: 

If we’re scaling Youtube Sponsorships, I’d minimize the amount of time I spend on doing the detail oriented work (prospecting, outreach, scheduling promotions). I can then compensate on my weakness by partnering with a colleague who has strengths in those areas.

Whereas my focus and strengths would be:

  • Figuring out a systematic way to prospect Youtube influencers which would then be assigned to our virtual assistant
  • Figuring out a way to systematically qualify the prospects by automatically scraping key data points
  • Figuring out an automated way to determine how much to pay for each Youtube influencer by analyzing historical data

From there, I’d pass over a qualified list of influencers & how much we should pay to a colleague of mine who is very detail oriented & fantastic at sales/outreach (i.e. my weakness).

Figure #3 – A screenshot of a systemized process for identifying/prospecting → qualifying → negotiating sponsorship agreements with Youtube influencers which can then be implemented by other team members.

Actions:

  1. Communicating my understanding of my strengths/weaknesses to my team members
  2. Surround myself with people who can compliment me (e.g. pairing myself up with an ad-buyer for each paid acquisition channel).
  3. Focusing on my strengths, such as creating the processes (e.g. creation of tools/decision frameworks that others can leverage).

Improving My Business Analytics/Dashboard

Lesson: Don’t create an “ultimate” dashboard off the bat. Start super simple with the most important questions that need to be answered with metrics.

“In constructing your metrics, imagine the most important questions you need answered in order to know how things are going and imagine what numbers will give you the answers to them.

“Don’t look at the numbers that you have and try to adapt them to your purposes, because you won’t get what you need. Instead start with the most important questions and imagine the metrics that will answer them.”

My thoughts: I’ve built so many “dashboards” and “analytical models” but only use a few on a regular basis. The mistake here is I try to build the “ultimate dashboard” right away, which takes up a lot of time not just to create, but to also maintain. And after all that time spent, it doesn’t end up being useful.

My takeaway from Principles is to start super simple and add to it as needed. So instead of having a fully developed growth model right away, it’d be starting with the most important questions we have at the stage of our business.

So for a brand new company, the most important questions could be:

  • “how many visitors are we getting?”
  • “how many of them are buying?”
  • “how much revenue are the buyers generating?”.

As the company grows, so does the need to answer other types of questions such as:

  • “how much did it cost us to acquire these customers?”
  • “how many of these customers are buying again?”

And as the company continues to grow:

  • have those same questions by segmented by different marketing channels
  • retention cohorts (overall & segmented)
  • LTV (overall & segmented)
  • CAC (overall & segmented)
  • etc…

So instead of having a fully fledged dashboard with all the key metrics segmented by channels, it’s best to start SUPER simple and slowly adding to it over a longer period of time.

Improving The Way I Make Decisions

Lesson: Always think of multiple options of completing an objective.

“Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored.”

My thoughts: Seems super obvious but it’s something I don’t see too many people practice. I also tend to have “shiny object syndrome” which sometimes impedes my productivity because I’ll stop what I’m doing to work on a new idea. It’s basically an extension of the common advice to “sleep on it” before making an important decision or while in an emotional state of mind.

Actions:

  1. Start developing mentally a “check” so whenever I change my daily/weekly to-do list because of a new idea, I must wait a day or so (unless it’s super high priority) to let the thought settle in.
  2. Whenever I build a business case or ask for a business case, always put in multiple options to force myself to think through other approaches + choose a final recommendation

Improving My Productivity

Lesson: Invest in taking the time to plan out your days and weeks.

“Good work habits are vastly underrated. People who push through successfully have to-do lists that are reasonably prioritized, and they make certain each item is ticked off in order.”

“Recognize that it doesn’t take a lot of time to design a good plan. A plan can be sketched out and refined in just hours or spread out over days or weeks. But the process is essential because it determines what you will have to do to be effective.Too many people make the mistake of spending virtually no time on designing because they are preoccupied with execution. Remember: Designing precedes doing!”

My thoughts: I’ve only recently started spending time on Mondays to plan out my “to-dos” for the week. I’ve found practice extremely helpful so each day of the week, before I even arrive at the office, I know exactly what I need to accomplish.

Figure #4 – An example from our company’s ‘daily-standup’ Slack channel

Actions:

  1. Continue to do this on a regular basis at work
  2. But also this is applicable to my personal life (e.g. hobbies, books to read, errands, side projects, people to keep in touch with, etc).
  3. Could also expand the timescale so it’s not by week, but even month/quarterly/annually.

Improving The Way I Communicate

Lesson: Add longer pauses before talking so I can talk slower and more concisely.

“Watch out for assertive ‘fast talkers.’ Fast talkers are people who articulately and assertively say things faster than they can be assessed… Don’t be one of those people. Recognize that it’s your responsibility to make sense of things an and don’t move on until you do.”

My thoughts: I have a tendency to talk fast when I’m trying to make a point, over the years I’ve been called out on it a few times, mainly by my dad & a previous mentor @ Exxon. Recently I’ve noticed many high achievers, especially those in senior management positions, they tend to talk slowly, but concisely.

Actions:

  1. Put more thought into what I’m going to say so I can speak slower & more concisely
  2. Communicate to others at work that this is an area I’m trying to improve on and to let me know when they notice I’m talking too fast.

Other Interesting Quotes

“It was awful-tasting medicine, but I guess the patient needed it.”

What I Like About It: Great quote to use when something doesn’t go according to plan.

“With time and experience, I came to see each encounter as “another one of those” that I could approach more calmly and analytically.”

What I Like About It: The value of experience and getting older, especially when seeking advisors/mentors.

“By recognizing the higher-level consequences nature optimizes for, I’ve come to see that people who overweigh the first-order consequences of their decisions and ignore the effects of second- and subsequent-order consequences rarely reach their goals.”

What I Like About It: I like this quote, especially with the lens of political or controversial topics. Great way to “test” new people I meet to see how curious or open minded they are.

“Having a process that ensures problems are brought to the surface, and their root causes diagnosed, assures that continual improvements occur.”

What I Like About It: Everyone always talks about personal growth and learning from mistakes, but rarely do they spend the time to create a systematic framework to actually collect → review → action the learnings. Something to think about more.

“The most believable opinions are those people who…have demonstrated that they can logically explain the cause-effect relationships behind their conclusions.”

What I Like About It: I like this quote because it’s a great standard to hold everyone to. Have everyone in the company make their opinions and ideas structured so the “cause-effect relationships” are communicated clearly.

“Build great metrics. Metrics show how the machine is working by providing numbers and setting off alert lights in a dashboard. Metrics are an objective means of assessment and they tend to have a favorable impact on productivity. If your metrics are good enough, you can gain such a complete and accurate view of what your people are doing and how well they are doing it that you can almost manage via the metrics alone”

What I Like About It: Great quote that summarizes the importance of being data-driven, and the end result of a well established analytics framework. The last sentence essentially ties in to how all initiatives and goals should be based on a certain metric to improve.

“Beware of paying too much attention to what is coming at you and not enough attention to your machine. If you keep your focus on each individual task, you will inevitably get bogged down. If instead you pay attention to building and managing your machines, you will be rewarded many times over.”

What I Like About It: Fantastic reminder, especially because it’s so easy to get bogged down by the day-to-day tasks and forget about the bigger picture.

“Don’t get distracted by shiny objects. No matter how complete any project or plan, there will always be things that come out of nowhere and look like the most important or urgent or attractive thing to focus on. These shiny objects may be traps that will distract you from thinking in a machinelike way, so be on your guard for them and don’t let yourself be seduced.”

What I Like About It: I’ve been told by many people I have shiny object syndrome, so this is a great quote to reinforce and remind myself on the importance of staying disciplined.

“Every problem you find is an opportunity to improve your machine. Identifying and not tolerating problems is one of the most important and disliked things people can do.”

What I Like About It: Great quote to use when the same mistake or problem happens. Also a great point whenever someone says they “don’t have time” because all the time is spent on firefighting problems.

“The best students in school tend to be the worst at learning from their mistakes, because they have been conditioned to associate mistakes with failure instead of opportunity.”

What I Like About It: I get into many discussions on why MBAs aren’t worth the opportunity cost. This quote touches on one of the main reasons why having a MBA is typically a neutral or even negative factor when hiring for an early-stage employee.

“Making suggestions and questioning are not the same as criticizing, so don’t treat them as if they are.”

What I Like About It: Another great quote to keep in mind when going through the “thoughtful disagreement” exercise.