In Episode 1 of our new series, Insights in Action, we sit down with Ray Ko, currently a Partner at Social Capital and former Director of Growth and Analytics at Facebook.
We talk through one of Ray's core principles around growth; it starts with playing great defense.
You’ve heard the adage that defense wins championships. Though there are more bedroom posters of Jordan dunking than Rodman’s superhuman rebounds, this wisdom holds true.
In this conversation with Ray Ko we get into one of his key philosophies, that protecting your advantages is just as important as finding new growth channels. All great teams, from the locker rooms to boardrooms, rise and fall by the quality of their defense.
Do You Know Ko?
Ray Ko may be the most important person in Silicon Valley that you’ve never heard of. He keeps a low profile but his track record speaks for itself. He started at Yahoo!, where he built one of Silicon Valley’s first Business Operations teams. He then went on to build Facebook’s Growth and Analytics team. Today, he’s a partner at Social Capital, where he’s helped countless startups build and scale growth and analytics. In this conversation we had the chance to learn one of the key ideas that has guided his career: great companies play great defense.
Lessons from Facebook
Ray started our chat with a simple story. During his time at Facebook, he and his team woke to find that account creations had plummeted. After diving into the data they found the cause: email confirmations. Users signed up, but their confirmation email never arrived so their account was never fully created. It turned out that a few major email providers started throttling Facebook, causing a significant number of emails to never arrive.
They fixed that specific issue and sign-ups returned to normal, but this helped Ray and team understand something they’d never considered - the importance of email delivery to Facebook’s growth. They also then took the additional step, which many fail to do, to ask how email deliverability could in fact drive growth. They focused on continuing to increase the rate at which emails confirmations were delivered through various experiments. For example, they were able to drive up the rate at which they captured real emails.
Defense wins championships
This story is a perfect example of Ray’s broader points.
First, many startups make the mistake of trying to outgrow their problems. When something breaks, they try to patch over the problem with a new idea. That’s a recipe for disaster, and only leaves you further from understanding how to drive growth in your business. Playing defense means obsessing over every little bump in the road, driving to understand what caused it, and fixing it.
“If you try to just build to avoid the shit you caused, you end up building shit on top of shit sometimes.”
Secondly, great defense leads to offense. Prior to the deliverability issue, a growth product manager at Facebook would likely have never walked into a meeting and said “ok, the key to unlocking growth is (drumroll)… email confirmations!”
“That’s the thing, [defense] isn’t sexy! You’re not going to find a growth PM saying, ‘f*** features, maintain the stuff we already launched.”
And in that way, Ray offers one of the wisest pieces of advice for all growing startups. “You’re going to hit slow downs, and it’s a good thing.” Treat those as opportunities to fundamentally understand your business. Do the hard work to fix them. And don’t forget to ask how every slowdown can become an opportunity for growth.
A practical starting point
Ray recommends having an individual or entire team dedicated to defense. A “Minister of Defense,” as he quipped in the conversation, should constantly learn and reengineer systems to better scale and avoid unnecessary roadblocks.
Ray described his Facebook’s 24-hour defense team as always on-call to tackle system issues before they started affecting KPI’s. Dedicated engineers and troubleshooters may not be considered “growth-hackers”, but they deserve just as much if not more credit for Facebook’s position today. Ray mentioned that, once a strong team was in place, problems that could have taken months to solve were unraveled in minutes, or avoided altogether.
To the same point, there should be a daily, companywide practice of addressing and foreseeing system hiccups. All team members, and especially executives, should be briefed daily on system abnormalities, working together to explain and solve them.
Listen to Ray (and Rodman): Play Defense, Win Games
Ray’s deep experience and talent have led him to a key conclusion: you can’t grow sustainably without great defense.
“Teams that play great defense build better, more durable products.”
When KPI’s disappoint, resist that first instinct to try to outgrow them. Rather than looking for a new well to draw from, fix your issues, and look for the opportunity from what you’ve learned.