👇Thread. Published a new essay: The red flags and magic nu…

This was a deck that I created on my (longish) interview process with @a16z. It was a long path, starting with meeting folks at the firm 10 years ago. But the purpose of the deck was to explain how I would use my superpower in an investing context

Here's what I explain in the deck. As investors (whether angel or VC) we're often confronted with an up-and-to-the-right graph. Is it going to go up? Or down?

One solution to forecast these growth curves is the Growth Accounting Framework, where you add up New+Reactivated and subtract churned users. In each time period that gives you the difference in monthly actives.

The problem with this is that it's a lagging metric, not a leading one. We need to go one level deeper and look at the underlying loops that drive these numbers, to understand the quality.

For acquisition loops, I go through a number of different models. SEO+UGC, Viral, and Paid marketing.

In the deck, I break down how to get more granular on each step, and case studies for how to optimize the loop.d

From a metrics standpoint, it's important to analyze the acquisition mix, the quality of the signups, and the platform dependencies. In the deck, I talk through a bunch of the red flags I'm looking for.

I go through the same discussion for the Engagement Loop too. Examples, Upside, Metrics, and Forecasting.

Two kinds of engagement loops- Social Feedback and Content Personalization. There's obviously many others, but these are two that are particularly useful to think about.

I use examples from Pinterest, Twitter, and Uber. Both increasing the activation of users to get them pinning more, how to build a network, and unblocking users who've lost their password.

From a metrics perspective on engagement loops, I'll look at cohort retention curves, frequency analyses, and analyzing notifications too. I don't mention it, but the Power User Curve is important too: https://t.co/kdgO8PIspq

Once you have the Acquisition and Engagement Loops mapped out, and the potential upside, then you can build a forecast for MAUs. This lets you answer the questions you want to answer - where will this curve go?

Hope you enjoy the deck! Again, here's the link:
https://t.co/Kp7YSHTTs6