#132 - Dan Hockenmaier and Gustaf Alströmer

**Craig Cannon** (0:00)
Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Dan Hockenmaier and Gustaf Alströmer. Dan is the founder of the growth strategy firm Basis One. Prior to Basis One, he was the Director of Growth Marketing at Thumbtack. You can learn more about Dan at basisone.com.
Gustaf is a partner at YC. Prior to YC, he was the Product Lead for Growth at Airbnb. You can find Dan on Twitter at Dan Hockenmaier, and Gustaf is at Gustaf.
All right, here we go. Today we have Dan Hockenmaier and Gustaf Alströmer. So Dan is the Founder, Investor and Advisor at Basis One, which is Growth Strategy Consulting. And previous to that, you were Director of Growth Marketing at Thumbtack, and Gustaf's a partner at YC, and also was a Product Lead for Growth at Airbnb. So Gustaf, why don't you start it off?

**Gustaf Alströmer** (0:50)
Sure. So I was thinking about getting a right into it. So Dan, you advise a lot of startup on growth, and you kind of get into their teams and work directly with them on growth.
What is the most unpopular advice that you give the founders of the companies that you work with?

**Dan Hockenmaier** (1:07)
So I say nine times out of 10, we are talking them out of doing things that they want to do.
I think, as you know, there's this huge power law to growth. I think most of the gains come from one channel, a handful of tactics, and most early teams are really good at coming up with good ideas that they want to try, and often that has diminishing returns. So we're often talking them out of things. I think the second class of things would be actually that the company may not be ready for a traditional growth effort. And so I think it's really important to think about where they are in terms of product market fit and when the right types of tactics should be used.

**Craig Cannon** (1:41)
Yeah, in terms of being specific around that, what are the most common things that people are trying to jump on too soon?

**Dan Hockenmaier** (1:47)
So I think really heavyweight acquisition, particularly if it's unsustainable, prior to having the right kind of retention. And so you don't have to have best in class retention numbers, but you need to be seeing some cohorts of people for which retention truly levels out and they use the product very long term. But if you don't see that, you're not ready.
And particularly if you're doing things like paid marketing or others, which can have big burn implications, you can get to that too fast. That can be really problematic.

**Gustaf Alströmer** (2:13)
So let's say I run a series B company. It's a consumer company and I just hired you to help me figure things out.
What are the questions you're gonna ask me and what are the data you want from me?

**Dan Hockenmaier** (2:24)
So I think it's a really healthy exercise to actually start with a pretty traditional spreadsheet model, you know? Like what are the kind of channels of acquisition? How does traffic convert, activate, retain? What are your different cohorts of retention look like? And how does all this link up now? How do like your existing users then start referring other users? How does monetization fuel your paid growth strategy? And when you build something like this, you can like play around and say, what happens if our activation rate goes up by 5%? Usually that's really powerful, much more powerful than a 20% increase in acquisition.
And so I think about like the kind of full stack of things and how it all links together. And it's a really good starting point for where there's leverage.

**Gustaf Alströmer** (3:04)
So if I am that founder and I couldn't hire you, I couldn't afford you, like who is the person in my team that should kind of make that spreadsheet? Like where do I start if I don't hire you?

**Dan Hockenmaier** (3:14)
So I'm a big fan of smart, analytical generalists actually. And it depends a little bit on whether you need more of a marketing business type person or more of a technical person. But somebody who, one, has kind of low pride of ownership and just wants to move fast and test things and figure out what works and is deeply analytical can often get a lot of that work done. I mean, I think we can talk about the composition of a large scale growth team, but that's a luxury that many don't have. And so finding somebody who can do lots of those things before you know what's really gonna work is really valuable.