How “The Law of Shitty Click-Throughs” translates to “Go Seek Leverage”
My process of how I find new opportunities
The Law of Shitty Click-Through states that “over time, all marketing strategies result in shitty clickthrough rates”. This concept was first coined by Andrew Chen on his blog and later expanded upon in his book fantastic book, The Cold Start Problem.
As more people and company gain success from high-growth marketing channels, those same channels become overused (and abused), becoming less effective. In a world of shitty click-throughs and degrading performance, there’s an increasing need to seek out new opportunities and leverage. This is the difference between stagnation (or even decline) and growth of your business.
Please read Andrew’s article in full, but here are the three main drivers he identifies:
a) Customers responding to novelty
b) First-to-market never lasts
c) More scale means less qualified customers
I consider this post an (self-anointed) extension of Andrew's piece, and it will teach readers how I approach finding something new.
Be a Chameleon
I’m not sure what it says about me or my personality, but I’m pretty good at blending in. I don’t (hopefully) stick out like a sore thumb - unless it’s a fashion event, because I have absolutely no fashion sense! You could say I’m a chameleon in many ways. So when I work with founders and companies who are thinking about finding new growth channels, I always pushing them to live, breathe and think like their audience. Do this by reading, joining communities, watching YouTube videos, or better yet, talking directly to customers.
Here are my favorite ways to find information:
Start with Perplexity.AI (or any consumer-facing LLMs) and ask broad, open-ended questions
Take the keywords provided by the LLMs and search them on Google and Reddit. Information from websites and subreddits are hugely valuable
Explore relevant offline and online communities. Get to know them an get involved
Youtube and podcasts are great lakes of information, you can get so much from a few hours of conversations on a topic
Find your customers and set up time to talk to them (duh!)
I have a framework for categorizing the information I collect. I call these “Growth Hooks”. If you’d like me to create one for your company, reach out to me and I can send that to you. This framework will have its own blog soon.
‘New’ has emphasis!
I don’t hunt IRL, but I do go “hunting” for new experiences. In 5th grade, I remember owning the first MP3 player (I think it was the first in my school, but certainly in my class). While everyone else was walking around with wired headphones plugged into their Sony Walkman, I carried around my 20-song MP3 player. I still remember the feeling of showing everyone my cool new toy.
That’s when I knew. New experiences had an emphasis in peoples’ lives. However, not all new things are created equal.
How do you find what’s new? This is not an exhaustive list but a good start to how I approach this problem:
Which products are experiencing an explosion of growth and attention? Examples: Clubhouse (or more recently, ChatGPT)
What new products are large companies launching? Example: YouTube launching Shorts
How can I ride the coattails of the macro environment? Example: Reddit going public
Explosions of attention
This is a no-brainer because we chase eyeballs, and products in the zeitgeist attract more user attention and interest. During the early days of COVID, it was Clubhouse, and towards late 2022 it was ChatGPT and LLMs.
ClubHouse’s special appeal was its excellent format, allowing people to communicate and be with each other. You could drop in and out of conversations at will - a fresh approach to audio-first communities. If I were growing a product at that time, I’d harness that energy by creating many spaces to build a following and boost engagement. Customers were responding to novelty so why not make the most out of it?
Product launches within big companies
New products launched by large companies offer incredible potential for leverage and growth opportunities. These product launches are often initiatives and innovations that are behind the curve. Take clubhouse as an example, Reddit announced their own version in April 2021 and Twitter Spaces followed shortly after. When these large companies launch and promote their products, we (as marketers) should be learning about that opportunity as much as possible. It is most likely in the company’s strategic decisions to allocate resources and promote their product. I saw this personally on my podcast when YouTube stories launched to compete with TikTok - the growth was far beyond what I had seen before! Give it a try next time! The current “hot thing” is most likely TikTok Shop, but even that opportunity may be fading.
Ride the coattails
What are the external forces pulling the company to improve performance? I often think about this when I think about where to go searching for new opportunities. The latest is Reddit and it will continue to be RDDT for some time after they IPO’d. In the next few weeks and months, they are going to do everything possible to make their business look as attractive as possible. Expect more marketing dollars spent to increase traffic, more benefits shared with partners to boost advertising revenue, and more experiments to improve their monetization and retention programs. Ride the coattails of other companies' hard work!
If you have any questions, please feel free to ask them in the comments and I’ll respond to them! In the meantime, take care and navigate around “The Law of Shitty Click-Throughs”!