Josh (00:00):
Welcome to Friday Forum, June 16th, 2023. Quick reminder on what forum’s all about. So this is our weekly sync time. We celebrate recent achievements across the various functions. As a remote async team, it’s pretty easy for things to get out of sight, out of mind, and it’s a good opportunity for us to come together to celebrate what’s been happening over the past week and hear from our members and partners directly, share on culture, generally align. An update on this slide, you’ll see the Monday Metrics meeting. So this is going to be kind of a counterweight to the energy of the Friday Forum, which is that we in the Monday Metrics meeting, really focus on the core metrics that drive our business. This is sort of a steering meeting. It includes metrics driven validation reviews for the specific projects that are launched and closed, meaning we have not only driven them to delivery, but we’ve then measured the effect on the underlying objective for that function and confirmed positive or negative effect.
(00:50):
And so that’s what we are going to be going live with here in the next week as a means of sort of balancing the overall perspective. And then of course we have the async updates and social connection elsewhere. Recent achievements, so I just want to highlight the ongoing intense collaboration between product and member experience. This feedback loop is getting better and better all the time and it’s just evident all the way across all the surfaces. And so I just want to highlight that. It’s really awesome to see. An anecdote, our new members are logging above average. So this is something interesting and exciting. It also is a bit counterintuitive, because the initial effect was that when we rolled out our two-step logging process, existing members tended to drop their level of logging as additional friction was added to the process, but new members who had never seen the prior logging experience increased the amount of logging.
(01:43):
So this is kind of just an anecdote I want to call out because it gives some evidence to the fact that driving measurement and metrics in these projects is super important and it can lead to really intuitive and counterintuitive learnings. The member experience team has also been dealing with a huge volume of contact over the last week, week plus because we had multiple data outages across multiple CGM platforms this week. So just constant struggle, want to just lift them up and appreciate all the work that goes into staying on top of this, especially when we get something like 1,000 new outreach messages when the main CGM platform goes down. All right, with our continued focus on growth getting to 10% month-over-month growth, we have a new H2 or second half of 2023 strategy for performance marketing. As part of that, we’ve brought on Nik Sharma and Sharma Brands company, which is expert in the space of performance marketing. So we’ll be doing a lot of sharpening on that campaign soon.
(02:39):
We’re also launching a win back email, so we’re trying to learn about what it takes to take people who showed a high intent to purchase Levels, but were, for example, given a smoke test where they weren’t able to actually convert into a purchasing member. What does it take to win them back? Essentially reach out again, give them another opportunity, maybe even an exclusive offer and what is that conversion like? And the early signs are that this is actually quite difficult, so you got to strike when the iron is hot. That’s what we are going to be focusing on over the next few months is making sure that our funnels are really refined and that we make it easy and intuitive to get Levels when the interest is highest. We also have a static creative Meta campaign.
(03:20):
So on Meta we’re testing, previously we had just been doing video, we’re now doing some static images and testing retargeting as well as sort of new outreach. With this campaign, we’re going to be learning a lot over the next few months. We have a new growth strategy doc out, so this is really exciting. I highly recommend everyone take a look. So this is going to be driving the main company initiative over the next year, but certainly over the next three to six months as we go from product led growth to growth led growth. We also have gone live with Casey’s new podcast tour, so she recorded with the Primal Kitchen podcast this week and we’ve got a number of others teed up. We’ve also onboarded a number of new partners and affiliates. You’ll even see some familiar faces in there. And we have a new Levels ad read approach that we’re taking for the whole new level.
(04:09):
So our first whole new level episode with a little ad read interjected, which basically describes the fact that Levels is not just a content and education platform, but we also actually do make a product. And so this is, for many people who listen to the podcast, maybe the first time that they realize that Levels is a company that builds things because we have traditionally kept those so separated. So we’re going to be learning a lot from that ad read effort. We also have a new multimedia content strategy, which is going to talk primarily about top level growth. It’s going to do things like reformat our TikTok strategy, focus on various channels, and we’re also working on the content side on new homepage copy, which will be coming soon. The measurement effort, so as part of this next phase of Levels, the measurement effort is a core focus and that is now fully live, so there’s just been a ton of activity on this.
(04:56):
Yeah, we’ll talk more about it in this meeting, but that is now fully underway. And our Monday Metrics meeting, as I mentioned at the beginning is live starting next week. We did a drive run this past week, which was pretty insightful, and we’ve converged on the core metrics for the functions that we’ll be measuring on an ongoing basis. Then we have new memos on our equity compensation philosophy and transparency. Sam will touch on the latter, but the equity compensation memo as well, highly recommend reading and reaching out and clarifying if there are any questions, but very excited about both of these. On the signup side, so our conversion rate is recovering. So we had a number of smoke tests that went live towards the tail end of our beta experiences last month, and that deliberately split our traffic and actually removed the opportunity for many people to convert into Levels members.
(05:41):
And so that had a meaningful impact on our conversion rate, totally expected, and we’re now recovering after those and so that’s obviously a good sign. We’ve shipped our new A/B signup flow for Levels Classic. So this is part of our new growth engineering team coming together. This is the first experiment that we’ve shipped and we’ll be looking to, you can see the flow right here, but there’s a lot of new information and new structure there. So we’ll be comparing that against our prior signup flow and we’ll be learning a lot. This will go live to members once we’ve confirmed that it has the correct effect. And then we have a top level, top of funnel traffic decline. So overall traffic to our website has been declining. There’s a number of reasons for this, but we’re definitely going to be focusing on increasing that as a major point of focus over the next few weeks.
(06:25):
We’ll also be focusing on a new homepage that really drives up product education around Levels Classic. Focusing on cart abandon, so reconnecting with people who have gotten all the way to the end stage. And then abandoned cart. We have a new IRB opt-out path with a different CGM strategy than previous. So we’re working on incorporating that into the new signup flow and all the logistics behind it. Our partner landing pages are quite outdated. They not, certainly not the main point of, it’s not the main mechanism for partner conversions, but it certainly is an important thing to keep up to speed with the most recent version of the product. And then of course, we’ll be continuously updating our app store assets. So a lot of work behind the scenes. Again this week the main thing that we shipped is the new A/B signup flow.
(07:08):
And then in big news the new product strategy memo is out. So Cosima has been crushing it and pulling in a ton of data across the Levels team, member surveys, and just historic documentation pulled together a new strategy memo. We held an AMA, so if you haven’t caught that, I highly recommend doing so. And the main focus right now is nailing the basics. We’re focusing on agency, performance, and accountability. Those are the major themes that we’re really building on right now. So this is the measurement project, which is making sure that our product is instrumented so that we can actually measure and understand impact of decisions that we make. Fixing Jank, the bring your own device slash Amazon effort, which we’ll be experimenting with more and more over the coming weeks. And then you’ll notice a lot of work on app service area reduction. So this is not shipped to our members, we’re targeting by the end of this month. So a lot of work going on there and that’s already evident in the internal platform or internal version of the app that we have.
(08:05):
Then we’re looking ahead to the accountability project, which we’ll talk about later, this meeting, trends and insights, that sort of thing. All this comes together in the new product database. So if you go in Notion the product database here, everything is consolidated there. It’s a really nice, clean view. You can filter by validation stage or shipment stage, a lot of great stuff. So highly recommend using that consistently, staying up to speed on it.
(08:26):
Okay, that’s it for this week. With that, I want to welcome Dr. Andrea Beaver. So Andrea has been a member/ investor of Levels since 2021, I believe when she participated in the crowdfunding round, which was one of the most exciting days in Levels history, I would say. She’s a doctor in chiropractic medicine, Cincinnati Health Institute. Also, is an avid outdoor person, hiking, hunting, gardening, eating local fresh food, wildlife conservationist, maintains a farm stand, and is naturally growing, harvesting, and selling all natural fruits and vegetables and really just deeply connected to the local food ecosystem. And Andrea, really appreciate you coming and joining us. First of all, thanks for being a supporter of Levels, member of Levels. I’d love to hear from your perspective what you’re excited about in the world of health and metabolic health specifically.
Andrea (09:21):
Yeah, thanks for having me on, Josh. So I have been with Levels, like you said, since 2021. Really when I first started, I wanted to dig into myself, figure out what’s going on with my metabolic health, how do foods impact me? And I found myself trying to figure out what’s in different recipes and what’s in different sources of foods. So at first, when I started taking on the challenge, I challenged myself eating out and at home.
(09:54):
So during 2021, a lot of to-go food, and I really started to realize that you can have the same meal eating it out and it really can affect your body differently than making it at home. And it just goes down to the ingredients used. What are they putting in to your food at a restaurant? So that kind of really formed myself to eat at home and as local as much as possible really with hiking and hunting and foraging and gardening, just kind of ties that all together. Just yesterday, eating fresh strawberries out of the garden. I know what’s good for my health, I try to eat in season and really just create the metabolic health that I strive to have.
Josh (10:43):
I love it. It’s something I personally strive or aspire to, I should say. At some point I would love to be eating fresh strawberries right out the garden in the midst of the season. Andrea, I’d love to hear a little bit more, specifically you’ve been with Levels for now through many eras or phases of the company. We’ve sort of grown quickly. We’ve tried a variety of different approaches to bringing these concepts to our members, and I’d love to just hear the main thing that you think we should focus on, improve, fix, or start building now. What do you feel that a company like Levels could do that we are not yet doing and could do better?
Andrea (11:21):
One thing that I’ve noticed that has changed over time is definitely the platform itself, a little bit easier to work with and being able to chart and note what you had. Take the pictures, upload the pictures. Before, when I first started, I could put that I had chicken and broccoli, but I didn’t necessarily put that I cooked that at home or if I was getting that out to eat. So adding that picture in, I can take a picture of the packaging or know exactly where it’s from or make that note. So that helps on my user end. As far as Levels as a platform and a company, I have really loved the new blogs and stuff like that that you can read on your own time. You have a great newsletter that comes out that shares all that within the email and it really makes that connection to your food and your health.
Josh (12:14):
Well, I love the two concepts there. Logging is key and the education and sort of connecting the dots for people. And it is actually genuinely very insightful to be able to filter down to those core themes because they are things that we internally care a lot about, but have not necessarily done the most that we can, particularly with logging for example. And we’re thinking a lot in this, as I touched on earlier in the meeting, thinking a lot about how to create accountability for people. And these are two of the major ways that we believe we can do that as this tool is first of all, it’s providing awareness for people, but it can also for many of us, be a lever for continuing to be accountable to ourselves, not just understanding that, but then actually implementing it continuously.
(12:57):
So thank you for the reminder there. We have a very full meeting and I would love to have you stick around if you’re able to. I understand you’re probably very busy and won’t be able to, so if you’d like, please do. And on behalf of the whole team, thanks for being a supporter, thanks for being an investor in Levels and looking forward to continuing to connect with you and hear more about your feedback as we move forward in the next few years.
Andrea (13:20):
Thank you. Had a great time. Thanks for letting me join you today.
Josh (13:24):
Thank you, Andrea. All right, culture and kudos. So first off, we have a new product ideas channel. So in this next era, we are building a product that we love. We’re returning to that sort of as a foundational element of what we need to ensure we’re doing. And so as a function of that, we have this comms channel for new product ideas. The goal here is if you have an idea, rather than suppressing that or sharing it through as a bug or an improvement recommendation in the app, go right into that channel and we can create some collaboration about that. The product team can triage it in real time. So please use this channel. I’d love to see a ton of activity in here on an ongoing basis because we ultimately, if we don’t love it, other people won’t love it and vice versa. All right, we’re going to shift over to transparency updates. Sam, take it away.
Sam (14:11):
Yeah, for sure. So we’ve been giving a lot of thought. I’m sure a lot of you have been involved in these conversations. We’re going to be pushing a little bit harder on some of these transparency goals that we have on how to build a high trust team and how to, given the new smaller group that we have, starting from a foundation of trust. There’s a memo on this which I shared earlier this morning and just pasted in chat. There are two major changes here. One of them applies to everyone. One of them is opt-in. So the one that applies to everyone going forward is historically we’ve had compensation and individual performance as the two carve outs to what we share by default with the rest of the team.
(15:01):
Going forward, only compensation is going to be confidential by default, which means things like performance reviews, any conversations related to individual performance, all of those sorts of things are now default share. Now, default share does not mean that you are required to share this information. If you want to opt out of a particular conversation or something that you wrote, you can always exclude that from sharing. It’s totally okay. This is not a suicide pact that we need to share everything no matter what. This is just really intended to change the default orientation. So next slide, Josh.
(15:50):
The second change, and this is something we’re going to be doing as an experiment. So this is an opt-in experiment that we’ll probably do for maybe three months for anyone who wants to participate in this. We’re going to change our default sharing settings for all meetings, including one-on-ones. Meaning, going forward, some number of people who opt into this are going to be sharing all of our meetings to the entire team with the exclusion of anything related to compensation. So this is definitely will be an interesting shift. There’s a lot of stuff in one-on-ones or in other formats that we have not historically been comfortable sharing, but I’d like for us to push more towards a culture where we’re okay sharing this stuff.
(16:35):
There are companies that do this. Bridgewater being one of them, may or may not be something that works for us. But I would like us, as some of you have seen, I’m now sharing all of my one-on-ones. If there’s something said in a particular meeting, you can always choose not to include it. In the memo, I include some information about the process that Athena will kick off in order to make it easy to share or not share certain meetings to clip things from it. But this is an experiment that we’ll be running for the next few months. So if you would like to volunteer yourself for this experiment, just send me a message in comms and we’ll set you up with that and we’ll see how it goes.
Josh (17:24):
Thanks, Sam. Yeah, I think another thing that I want to just add onto this is, as part of the transparency goal, in order to really understand how these sorts of changes impact us as a team, we all need to kind of reciprocate that transparency and share how this impacts you. How are you changing or not changing your day-to-day as a function of these updates. So please do share with Sam, with myself, Miz, about these sorts of things and how you’re navigating introducing them into your workflow. I mean, the objective here, again, as a remote async team, we need to maximize the amount of trust and transparency and sharing that happens so that we can all be on the same page and be as effective as possible. And so if there are areas where this can be improved, please do surface them. All right, big culture and kudos slide number three.
(18:13):
So as part of the updated transparency, a third element of that is that our default sharing for the Friday Forum is going to be shared by default. So if you want something redacted from the forum, please do let me know. Let Lynette know. Just share in the Friday Forum weekly thread on comms and we’ll make sure we get that removed before distribution. But again, the defaults are going to be shifted to sharing. That does not mean that we share everything. You can always remove something if you’d like. We have a new memo on ownership and equity strategy, which Ryley published, which is a must read. Please do check that out and really absorb it and ask questions. This is a really important transition in the recognition of what we’re trying to build and aligning incentives across the entire team towards that goal. Okay, and then have a bucket of shout outs that I want to make.
(19:06):
The whole engineering team, this software development culture shift that was released in May has led to a huge number of efforts, like actual tactical efforts to instrument everything that we do and enable engineers to take lead on measuring and validating the effect of each project that we build and ship. This is not an easy task and the way the whole team has just jumped in and taken this over has been amazing. There’s just a ton of knowledge that is being used to add forced multiplication, so to speak to the idea here, the philosophy here and actually implement it. So big shout to the whole team specifically, I think Galit, Murillo, and Juan have been doing a ton of great work on getting this implemented on the backend and just driving towards a more data-driven culture. In a different culture in a different company, this would be met with a lot of friction and a lot of resistance and I for one am just really impressed with how quickly the whole team has absorbed this and taken it on.
(20:03):
And then finally, Cosima’s in a well-deserved out of office right now in Europe somewhere, but the whole team has been shouting out and I just want to boost again here on this forum how effective Cosima’s has been over the last few weeks. Just adapting and pulling in so many different threads, simplifying and executing, and this is the thing that we need in this phase. So a lot of empathy, a lot of grace, a lot of understanding as a lot of people have input and feedback and she’s doing all this with no ego and just generally with super great intent. So really appreciate that. Okay, over to Tom.
Tom (20:44):
All right, hey team, this is going to be a growth strategy update for the second half of the year and definitely going to be a 30,000 foot view. So there will be a growth memo going out later this afternoon with many more details. So recommend digging in there. Next slide. Okay, so we’re going to be reciting this prayer a lot, but I think as everyone knows at this point, hopefully our goal is to get to 10% month-over-month growth, but wanted to spend just a couple of minutes defining what exactly we mean by month-over-month growth. And specifically we’re focused on growing revenue through new members. That is the priority over the next six to 12 months in order to put us in the strongest position possible to raise a Series B. So I know at times there’s been a little bit of confusion because there are a lot of different revenue metrics that we track, but particularly we need to prove out to investors that we can actually scale customer acquisition and that there is a market for this product that we’re building.
(21:47):
Next slide. So digging in just a little bit deeper here, again, just reiterating, new member revenue is the metric that we are optimizing for and orienting around currently over the next few months. And that is the metric that’s been relatively flat over the last 12 months. So there are a number of other metrics here that are still relevant and will be relevant to investors when we raise a Series B, but the most important one that we’re looking at right now is new member revenue. So you’ll see on the top right of this slide, this is looking at new members each month and I’ll dive in a little bit deeper in the next slide. But then on the bottom right you’ll see there is this chart, and this is over all time over the last few years. That is up into the right and that is our total revenue.
(22:31):
So that’s looking at all revenue from any CGM shipment on any subscription or labs, et cetera. And as most people know, we don’t make margin on most of those CGM sales. So on a monthly basis the majority of those bars on the bottom right are from CGM shipments and subscription revenue that we’re not making margin on. So again, we’re going to be paying attention to all of these metrics, but the one we’re specifically trying to move the needle on right now is new member acquisition. And I think Sam wants to jump in and just say a word here on this slide as well.
Sam (23:03):
Yeah, this is something I think is really important is that especially as we move towards a more data-driven culture, and part of being as transparent as we are, many companies would show only this bottom chart because it is up and to the right and this is ultimately a vanity metric and we should be focused on things like new member acquisition. And so I just want to point out that part of this shift in culture and making sure that we’re open and honest with our data is that this is part of it. That there are charts that are going up into the right and there are other things that are flat and we’re going to be open and honest about those things and really paying attention to what we should be optimizing for. So just wanted to reiterate that, that there are numbers that are going really well. Membership or revenue, top line revenue every month has been going up, but that’s not the thing that we need to be focused on right now as Tom mentioned.
Tom (24:06):
Cool. Next slide. All right, so this is just mostly context. I know everyone’s joined at different times, so gotten feedback that sometimes providing these brief histories can be useful. So this is just my personal look at the last 12 months, and again this is this important chart that Sam was just mentioning where we’ve been relatively flat. But taking a look at the last 12 months as a reminder, this initial increase here in this bar chart is from when we initially launched. We came out of beta, there was no longer a wait list and we basically hammered our email list telling everyone that they could finally buy and we saw a corresponding increase in that quarter. In Q4 we basically saw a continuation of a steady decline. There’s a little caveat here of that big bar that you’ll see in the middle of November, which as we start to orient more around revenue, this would be more clear, but a lot of those sales came from effectively a 50% off promo that we wanted to test for Black Friday, which was a great learning.
(25:06):
But in general, Q4 was a continuation of steady decline and it was really establishing the reality for us that we were not at product market fit. This also coincided with when Sam released the company strategy doc in December that set forth the path of focusing on a new product offering of CGM optional. In Q1, and really in Q2, we shifted growth goal to number one priority to prepare for the new product and then also invest in infrastructure. So we don’t talk about this a lot, but we actually saw some meaningful improvement in Q1 as a result of investing in growth infrastructure, making updates to the signup flow, doing a bit of performance marketing and just getting better at some of our levers, we stopped the bleeding but ultimately stayed pretty flat throughout the months of Q1 and Q2. And so as we all know now we’re moving into Q3, 2023 and really for the first time ever, we are going to go really hard on growth and marketing.
(26:07):
Next slide. Okay, so just a brief pause here just to acknowledge that there are two ways that our business can make revenue high level. So that’s acquisition and retention and maybe in asterisks there around retention in terms of it also including just almost what I’d refer to as marketplace transactions. So if people want to continue to buy CGMs or labs, currently we’re selling those at cost, so we’re not making margin on them, but again, they do contribute to top line revenue and again, growth is prioritizing acquisition as our north star metric right now. And product of course owns retention currently. Next slide.
(26:48):
Okay, so we’re evolving our approach somewhat philosophically here from sort of soft selling to hard selling. So I don’t know if DiCaprio here is really the best representation of soft selling, but I think I put something into gif.com like playing hard to get or cool guy or something like that. And this is what I got and really what our pillars for marketing and growth have been is this more soft sell approach, just specifically being the leader in trusted metabolic health science content, establishing the most credible partners and advisors in the space, investing in community, investing a lot in company content around culture and attracting talent. And this provided a fantastic foundation, but clearly it is not going to get us to where we need to go next. Next slide. So where we are heading, Mike D., don’t get too fired up by this right here, but where we’re heading is really a more effortful approach across the board to driving revenue.
(27:53):
A lot of these are sort of the traditional e-commerce focus areas for marketing and growth, but we’ve invested relatively low effort over the last couple of years for understandable reasons, but nevertheless, we need to make a concerted effort towards shifting that approach. So this will start with optimizing our website and signup flow for conversion and revenue and then frankly just doing a lot more marketing and advertising. So more on the specific levers, but that’s kind of the high level here. Next slide. And again, just a quick note that we didn’t do this by accident and this wasn’t in error in our approach overall. And in fact many have praised us that this was overall a smart approach that most companies don’t really have the ability to do. So we started by establishing this large foundation via this soft sell approach, which currently remains our foundation.
(28:55):
It’s why we get 250,000 blog visitors. It’s why we get 70,000 homepage visitors and it’s largely why we’ve been able to do what we’ve done to date, but we now need to stack on top of that the hard sell approach in order to get to the top of this mountain, if you will. And many consumer companies, if not most direct to consumer companies these days sort of start the other way around and they get into a lot of trouble, because they’re pouring all their money into unscalable, say Facebook ads from the get go. And then inevitably if that starts to run out or get more expensive or they’re in a tough position with cash, they can’t then quickly move to this soft sell foundation and build it on top of the more vulnerable hard sell approach. Next slide. So bear with me here for this metaphor that no doubt I won’t really have enough time to fully explain, but it is in the growth strategy doc, but this is a look at the competitive landscape and the metaphor here is really imagining Levels as a storefront on a street.
(29:57):
So if you look down on the bottom right, you actually can barely see, which is by design the little Levels logo there on the storefront. So if you imagine you’re driving in a car and you’re on a highway and there are these signs that tell you that these stores exist, you’ll notice Levels is not on the highway signs or maybe we are, but we’re not super visible. And then once you get to the street again, we’re not the most clear and attractive and appealing storefront and most people might not even know that we’re there because we’re being quite subtle about it. And then once you actually get into the store, arguably if you were to go into one of those other stores, there’s going to be a lot of staff members there educating you on the value of the product, why you need it, and frankly pushing you towards making a purchase perhaps even with a limited time discount.
(30:47):
And if you go into the Levels store, there might not be any staff. And that might be philosophical in nature to start, because we don’t want to be too pushy. And then there’s also not a ton of product education and clear pricing. So where we need to go, next slide, to not go too deep on extending this metaphor, but we need to increase visibility, so think highway. We need to overall be a more attractive choice, think storefront and then actually in the store, think our signup flow, we need to sell and to close people far better than we currently are. So next slide. All right, so these are our key focus areas. None of these will be terribly surprising here. We’ve got website and signup, performance marketing, user referrals, partnerships, podcast tour, and content. And again, I’m going to quickly go through some of these, but there’s going to be way more on what these mean, the tactics, the rationale, the metrics in the growth strategy doc.
(31:48):
Next slide. All right, so high level on our website. We need to improve and clarify pricing as well as product marketing. So on the pricing front, clear and attractive pricing for customers and then also maximize revenue per website visitor, which is a new metric that we’re really orienting around so that we can make as much money as possible while delivering value to our customers. And then on the product marketing side, quite simply we just need to speak more directly to customer needs and better differentiate ourselves. So this little case study that’s admittedly hard to absorb on the right side of the slide here is us verse Athletic Greens. And without going too deep, if you just pay attention to some of the language, this is really focused on the two top modules on both website. For Levels we’re saying things unlock your metabolic health, personalized insights, optimize your nutrition gain insight, real time feedback.
(32:50):
Those are decent enough words but they’re clearly not as direct as something like Athletic Greens when you look at it, which is they’re very simply, they are the foundation for daily health. The description of the product above the fold is nutrition and gut health support in one simple scoop and then immediately it launches into really tangible benefits of daily use and what exactly you should expect and do get when you buy Athletic Greens. So this is the direction that we need to move into. Next slide, we’re collecting tons of feedback, shout out to Karen for implementing this, on the signup flow and we’re getting this feedback every single day and it is very much the lifeblood for informing our strategy on the website and the signup flow. I pulled out quotes here specifically related to pricing and so you can just take a second to read some of it.
(33:45):
There are a number of themes that emerge. The biggest ones are around pricing and then just sort of lack of product education. I think a lot of us kind of know that our pricing and our model is not super clear, but also there are fascinating insights. People will come to Levels because it’s recommended, but they end up going to a competitor website to actually learn more about what the hell a CGM is and exactly why they should buy. So again, we’re looking at this daily and weekly next slide. All right, moving on to performance marketing. So simply put, performance marketing is probably going to be the fastest and immediate growth lever that we can get up and running and scale. And we’ve been doing a little bit of performance over the last few months, but really where we need to invest is improving our creative and our full funnels from actual ad creative into landing pages.
(34:41):
And Ben is taking lead on this and we’re bringing on, as mentioned in the first slide, a performance marketing agency that works with Eight Sleep and a million other brands that has a ton of knowledge on how to do this well. Next slide. User referrals. Pretty self-explanatory, but we need to better take advantage of the inherent virality of the product and user referrals at one point in time were driving pretty significant revenue for us, notably when there was a wait list, so there was not another way to get the product, but we need to better accelerate the natural word of mouth that’s happening. And even just making user referrals more visible with better design in the app without changing anything else about the funnels or incentives over the last few weeks has actually led to a notable increase in both click-through rate in the app and then actual conversions. So there’s a lot more that we need to do here over the next couple of months. Next slide.
(35:42):
Partnerships. So partnerships has been a core growth lever in terms of attributable conversions, it’s generating about 25% of monthly sales, but for some of our other post-purchase attribution surveys, it arguably is responsible for up to 50% of our sales. So partnerships has been a core growth lever, but now with both just returning our attention to being in growth mode as well as Mike D. focusing on partnerships and then Casey being back, we’re going to double down here with the focus on just generally scaling the process for sourcing and then also focusing on YouTube, which has been our top performing channel of late. Next slide. All right. In terms of getting back to some of our roots with Casey’s return, we are leaning into what we believe to be one of our biggest competitive advantages.
(36:36):
No other team has… I don’t think it’s an understatement to say or an overstatement to say that Casey is a metabolic health and just general health and science rockstar at this point. And the fact that she can tap her network, honestly her friends at this point and start to generate hundreds of thousands of views and impressions about our company and about this space is incredible. And we’ve known in the past that podcast stories have driven a ton of revenue. But a really interesting data point is even in the last six months when we haven’t been doing podcast interviews and we’re not seeing attributable conversions with podcast interview partner codes, our recent post-purchase survey data, which we implemented a few months ago and are finally analyzing, is telling us that even today, 15% of our conversions every month people are saying that they heard about us on a podcast interview with one of our founders. So this is pretty amazing and we’re going to kind of get back now that Casey’s back, get back to our roots here with a big podcast tour push. Next slide.
(37:40):
All right, on the content side, our number one priority is to build more of a bridge between our content surfaces and our actual funnels. So getting people from our blog, from our YouTube channel, from our podcast into our funnel. This is pretty common. This is what’s known as content marketing ultimately, but to date, as mentioned, we’ve really been focused mostly on pure health and science education for health and science education’s sake and not for sales. So it will continue to be our standard top of funnel approach for driving website visitors and educating the world. But notably, we’re really going to focus on building this bridge and there’s an example here on the right side of doing more kind of product and content marketing. Next slide. I think that’s it. Okay, so more details in the growth memo going out later today and then we’ll be doing an AMA soon as well. That’s it.
Josh (38:36):
Fired up. Yeah, that was awesome. I think I really particularly like the basis of starting from a soft sell foundation. I haven’t thought of it in that way and I think that’s such an elegant way to describe how we’ve built a skillset that many others have not and we shouldn’t take that lightly, but we got to get the storefront going. Thank you, Tom. Thanks growth team. Looking forward to this. All right, Ryley.
Ryley (39:01):
All right, finance update. So next slide Josh. I took three takeaways from things that I learned at Skip through my growth story that I thought are universally applicable. So maybe not removing the things that are applicable to online ordering and food delivery and applying those to metabolic health. So first one, growth is deliberate. So focusing on deliberate growth and understanding that our growth are the result of the actions we take every day leads to bias to action and daily delivery against our objectives. This is one really important lesson. Next slide. The second is prioritize relentlessly. So just simplifying and making decisions that enable those daily actions and the daily push towards growth. Need to approach optimization cautiously and understand a difference between optimization and growth because sometimes there’s trade-offs there and sometimes optimizing too early can come at the expense of growth. Next slide. The last one is that incremental gains really matter and the little things really matter in a push for growth.
(40:22):
So having positive things like positive customer interactions, shipping quicker, build momentum along our path that we can use. And these things are very, seems like a lot of growth bravado, but these things are real and they really play out over time. So how does this actually tie into finance? Next slide. I do have a graph with numbers and lines that I can tie this into and just talk about how these things play out. So this is a graph starting at about a $400,000 monthly revenue base, which is about where our monthly membership is right now and how different lines evolve over a 24 month period. So this isn’t a very long timeframe in context, this is two years. And so we’re comparing the green line, which is 10% month-over-month growth, that’s what we’re shooting for, to a few different lines.
(41:23):
So I’ll talk about the red line first in the context of some of the key lessons. So redline is 20% annual growth. A lot of large public companies would be really thrilled with this level of growth. This line does not represent success for Levels. So companies like that have a large revenue basis. They can afford to take on projects that have a 30% return and generate millions of dollars of upside from those projects. That differs from the type of decision making and actions we need to take to get to 10% growth because we need to be a little bit more bold than that. If we’re taking actions that optimize revenue only, we could end up stuck on the 20% month-over-month path. So just an illustration how big the gap can be between those two lines. Another one I wanted to just dig into is the orange line, dash line, which is 10% month-over-month growth, but starting six months later.
(42:31):
So the premise here is timing matters. So by delaying decisions or delaying actions, you actually create a big gap between what your potential is. A very large opportunity cost between those two lines that plays out over years and it’s just very difficult to get caught up if you get behind. The other two lines, the dotted yellow line and the dashed blue line are just slightly different growth rates. Dash yellow is 8% month-over-month growth, which at face value isn’t that different than 10%, but over time there’s a huge difference between those two lines. So this is kind of the difference that we can create by focusing on those aggregated wins. So small wins over time compound and really add up these lines on a chart, show the trajectory and run rate. But let’s look at the next slide, which contrasts the year two revenue.
(43:41):
So this is months 13 through 24 in each of these scenarios. So if we’re growing at 20% annual growth versus 10% month-over-month growth, the difference next year is $20 million. That is a massive, massive difference. Likewise, the difference between starting growth late or growing slightly slower could be as much as $10 million. On the flip side of that, there’s opportunity to do even better. Like growing at 12% versus 10% is an extra 10 million revenue. So there is just huge, huge differences between these numbers and it should be, it just illustrates the opportunity to take action, deliver on the little things and keep iterating and learning. So next slide. I wanted to take a step back too and just stole this chart off the web, but I thought it’s a good illustration of where we’re at now. So we are in pushing ball uphill mode. We are not at the tipping point yet and we can’t yet watch the ball roll downhill and optimize.
(44:58):
So we’re in very much an action oriented phase of growth. If we stop and look too much and pause, the ball’s going to start rolling back hill towards us. So last slide. This is my LFG slide for Mike. The takeaway is taking action, diving into our strategy, just having that bias to action to create wins and not everything is going to win. And so when we don’t win learning from those mistakes and moving forward, that’s the most important thing right now. One thing we would just want to be cautious of is avoid optimizing wins that we have not yet realized, because that’s going to cause the ball to roll back downhill towards us. All right, that’s it everyone. Thank you.
Josh (45:52):
That was great. Thank you, Ryley. I think that was the most exciting finance update in startup history. Let’s go. So quick hiring update. Currently, no roles posted, but if you or someone you know is a good fit for the culture that we’re building here and want to stay in the loop, check Levels out, link slash careers and yeah, let’s jump into individual contributions. So I’m going to stop the share here and we’ll use the hand raising, which Ben has beaten me to the punch on. Ben, take it away.
Ben (46:23):
You’re supposed to go first, Josh, but I’ll take it. I’m going to dovetail Ryley. So before I get into the professional or the story, super stoked professionally on all the work Cosima’s is doing, all the growth strategy stuff Tom is doing, and then Ryley’s update. That gets me super fired up, so big hat tip two, the three of them and everybody that’s putting in lots of work to move things forward. But dovetailing what Ryley said, so this is around prioritization, intent, and not chasing what you think you’re supposed to do. So for the first few years, the blocks that Ryley showed with Skip, a lot of people questioned why we didn’t have any social media presence and we had such a strong principle, we were so positioned about it that we didn’t do any posting on Facebook, on Instagram, on any platform.
(47:19):
And people were going like, “Are you crazy? Are you not seeing what Eats is doing? Or you’re not watching Dash?” And we didn’t run performance marketing ads and we said, “Nope, we’re going to focus on not minimizing our take rate.” Which other competitors were lowering their opportunities to earn revenue, to try to capture demand. And we just hammered through inside sales and we had our growth principles. And it took until post acquisition to say, “Okay, now let’s shift our focus.” This idea of the soft selling to hard selling. “Let’s shift our focus and priorities to do all these things that people question whether or not we are making the right choices.” And I think it’s easy for us to fall into these traps of feeling like we should chase Nutrisystem or feeling like we should do what other companies are doing and we’ve got our principles that we choose to do for the right reasons at the right time.
(48:09):
And so dovetailing what Ryley was saying, we’re still in early innings, we’ve got a lot of growth to undertake, but everybody is thinking very critically about the choices that we’re making and just knowing that by doing the right things at the right time and having good reasons to do it, that we will get to a path that we want to get to. So appreciate Ryley’s insight there. That was a nice trip down memory lane. So anyways, professionally stoked on that. And then personally, reading a book called The Daily Dad, which is kind of misleading, its Ryan Holiday’s new book, but it should be called The Daily Parent. And just really interesting principles for whether or not you have kids, worth reading and highly recommended. It’s a very good reflection on just life and thinking about being present with the things that are going on. So recommend it to current parents, new parents, aunts, uncles, anyone on the call.
Josh (49:08):
Nice. Well said, Ben. All right, we have no additional volunteers, so I’m going to jump in. Yeah, I think professionally what I’ve most appreciated about the last few weeks is the focus when there could be frenzy. I think what we are not seeing is the counterfactual for how this team has responded to a big change in both our focus and our team and on and on and on. But instead I’ve just appreciated that everyone has pulled together and minimized noise and chaos and sort of pulled the right threads out of the philosophies and put them into practice and there’s a lot more that we still have to do, but I just don’t know, I would just not expect that as a given for sure.
(49:59):
And I’m very motivated by, we did the dry run on the Monday Metrics meeting and just the number, the density of insights was so high in what was essentially just a simulated meeting about how our core metrics are moving that I think we will all benefit tremendously from this next phase where measurement is the link in the chain that closes the loop. So thank you everyone for the work on making that happen. I’m just really feeling good about this single-minded focus on nailing the basics, building something we love, growth mode. Personally, I am going camping tomorrow in the Delaware River Gap, so I’m going to be off the grid watching bald eagles hunting fish, or at least that’s what happened last time we did this trip. So I’m very excited for that even though there’s this crazy storm that just came out of nowhere and probably going to lose power momentarily. Haney.
Mike (50:55):
Yeah, professionally, I just want to give a shout out to Tom as much as it pains me to do, I have to take a break from my normal razzing him to say that memo that he just very really went through is incredibly detailed and incredibly well thought out. Watching it come together and watching him sort of take in the feedback of a now pretty big and diverse growth team and pull it all together into a narrative and a plan. I feel good about our chances to execute on this and the direction we’re going and I think everybody should as well have confidence that this is a very well thought out effort. On the personal front, this is just a shameless request for Mike to give me an LFG, but I’m doing my first Ultra tomorrow, it’s just a little baby 50K, so not much, but we’ll see if I can drag my old bones around a 31 mile course. That’s it.
Josh (51:48):
Hell yeah, Haney, that’s awesome. Keep us posted and see some data. Good luck. Mike D?
Mike D. (51:55):
Yeah, I just had to do my Andrew Huberman double inhale, exhale to try and calm down, so bear with me for a second. Yeah, just honestly the entire team, definitely Cosima and the eng team, just been crazy to see everyone rally here and I don’t think in my four years here I’ve ever been more confident and excited to go to battle with the team. It’s just been really cool to come back and I just came back from being out of office and another plug for our culture, just being able to watch things and read all these documents, getting back up to speed is pretty awesome. And definitely the shout out, TG growth strategy. And also we had a chat and also Jackie, I want to thank her as well. She had a chat with me to get me up to speed and has been bringing me into emails and I’m just really excited to be back in 10% month-over-month growth. Haney, let’s fucking go. That’s it.
Josh (53:10):
There we go. There we have it. Casey.
Casey (53:13):
Oh my gosh, amazing, Haney. That’s incredible and I can’t wait to hear about it. Yeah, I would just say it just feels wild to see how profoundly everyone is just crushing it and stepping up in this new era. It’s been a tough couple of weeks. We had that huge transition, but it just feels like everyone’s on fire and the motivation is so high, the energy’s high. I was journaling last night just about some of the calls from the week and I just was like, every single call I’ve had with the growth team and with other people, I left feeling so inspired. So it’s just a great feeling. I want to specifically shout out Tom who has been leading this push with the growth memo and leading calls with the growth team and has just been just an amazing leader and is just, I love the way he’s thinking about it and the way he listens and synthesizes and it’s just really wonderful.
(54:06):
Also, things that feel, I just want to shout out this week, I just want to shout out the support team. I feel like that entire team is full of leaders and are so open to speaking up about how to optimize processes, how to do right by the members, and also how to support product in really innovative ways. Just like Lynette Taylor, Sonny, every comment you guys make in different meetings, I’m just like, “Yes, thank you. That’s amazing.” And of course Chris, the fearless leader, so just really inspired by that whole team. Also, just want to shout out Sam and the transparency work that’s happening right now. I don’t think we can underestimate how big a deal it is to be at a company that’s so committed to a non-toxic culture and an open culture. And so the conversations with Huay and Miz, and Sam around pushing that forward are just, it’s really, I mean, it’s pretty special and just that continual improvement and pushing towards a culture that is as functional as possible is amazing.
(55:06):
Okay, last thing, sorry. Personal share, I started F45 when I moved to LA and I’ve been doing it almost every single day and I’m obsessed with it and I’m just like, it is always so fun to find new workout things and one of my favorite parts about being on this team is how everyone is always trying new, different, cool health things and hearing about is really fun. I was chatting in the Donut chat with Galit and Taylor this week about new things that everyone’s doing in the health space, but for me is F45, so I hope I stick with it.
Josh (55:35):
Amazing. Yeah, I remember some early days in Philly doing F45 with the very first Levels covers and Mike and I trying to make sure as many people saw the arm as possible. Sam.
Sam (55:46):
Yeah, I’ll close it out. I think professionally what I had prepared was I’ve just been really inspired with the software development culture shift on how much ownership all of our engineers are taking. It’s been really cool to see that. I had a feeling it was going to go well and it’s good to see that everyone’s fully bought in and making it happen. I will add to that, that new highlight of the week was Ryley’s presentation. That was a really good one, and just having that perspective is always helpful.
(56:19):
Oftentimes zooming out when things can feel like it’s a struggle, you realize that every company goes through these sorts of struggles. Seeing when we’ve gone through this round of layoffs, all of the other founders. And I just got an email from a multi-time CEO, who’s started and built many centi-million dollar companies, almost every one of them went through layoffs at some point, often multiple rounds of layoffs. And so just having that perspective, and I think Chris has done a great job of giving his perspective, having been through these many times and just seeing that and recognizing that this is a marathon, not a sprint.
Josh (57:03):
Amen. Yeah, the context there in the first five years is super helpful and it’s amazing to see compared directly. All right, team, thank you for an awesome meeting. I’m feeling motivated. Have a great weekend and let’s do this thing. Haney, good luck. We’re rooting for you.