Niccolo Maisto & Michele Attisani, Founders FACEIT (Masterclass Edition)

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Niccolo Maisto and Michele Attisani founded FACEIT in 2011, together with their third co-founder, Alessandro Avallone and the company grew to become the world's largest eSports platform in the world. It hosts competitive gamings for egames, like Counterstrike and Dota 2. In 2021, FACEIT was acquired by Savvy Games in a deal, valued at $500 million, and then merged with ESL gaming in a deal that was itself valued at $1.5 billion.

One of the pillars of FACEIT's success as been the incredibly strong community that the company built amongst gamers especially, but also game developers and content creators. To quote Alexis Ohanian, the co-founder of Reddit on this topic, who said, "Community is everything, it's what helps companies thrive and survive and it, and it's what's keep and what keeps people engaged and coming back". Today, there are more than 30 million users playing over 30 million game sessions each month on FACEIT. So we think we have the right experts to cover the topic.

EPISOD TRANSCRIPTION

Camilla Scassellati (00:00:04) - The series continues, so welcome back everyone. I already see people commenting on the chat, so, hi. And we cannot wait to kickstart yet another session that I think is going to be extremely informative, especially because we're covering one of the foundational pillars of building a startup, which is how to start and grow a successful community. And I wanted to quote Alex Hanian, the co-founder of Reddit on this topic, who said, community is everything. It's what helps companies thrive and survive. And it, and it's what's keep and what keeps people engaged and coming back and to cover this all important topic, we have Niccolò Maisto and Michele Attisani, the co-founders of FACEIT. So welcome both to the masterclass.

Niccolo Maisto (00:01:05) - Thank you. Thanks.

Camilla Scassellati (00:01:06) - Good to be here. And yeah, and I'm sure our listeners will know the story of FACEIT and Your Successful Journey. And if they don't, I'm going to do some self promo because we've interviewed Niccolò Maisto twice on my podcast. He told he was the very first guest of our podcast and we're forever grateful to him for that. He told the story of how, they founded FACEIT, and grew it, and then came back to talk about their very successful exit, which I'm going to recap in a moment, but just for everyone's sake, Michele and Niccolo founded Faceit in 2011, together with their third co-founder, Alessandra Valona. And the company grew to become the world's largest eSports platform in the world. It hosts competitive gamings for games, very popular games like Counterstrike and Dota two, which I'm sure the gamers amongst us will know. And in 2021, FACEIT was acquired by Savvy Games in a deal, valued at $500 million, and then merged with ESL gaming in a deal that was itself valued at $1.5 billion.

Camilla Scassellati (00:02:14) - and one of the pillars of FACEITs success has been the incredibly strong community that, the company built amongst gamers especially, but also game developers and content creators. And today, there are more than 30 million users playing over 30 million game sessions each month on their platforms. So we think we have some experts among us to cover the topic. And before we start, last thing I'm going to say is don't forget to use the chat function on your right and see people typing in already , but use it also to drop in some questions from Michele and Niccolò at the end when, we've gone through sort of the prepared questions that we have to make sure we cover the topic of the, the masterclass. We'll read out, we'll select a few questions and we'll read them out to Michele and Niccolò. So it's really your chance to ask them direct questions if you have anything that you're struggling with in building your company. So don't be shy, but let's dig in Niccolò Michele. And before we start, to dive deeper on how FACEIT itself built this strong community that we've talked about, I wanted to ask you if you could help us level set and explain what we talk about when we talk about community building in the startup world, and how important you think it is.

Michele Attisani (00:03:46) - I was saying when it comes to, communities, I think, especially in gaming, it's very much intrinsic in the product nowadays. So especially in award where gaming becomes so multiplayer, when you start having social interactions, it, becomes a real part of the actual product you're building, which was our case. I think at the same time, if you, take that experience, at the beginning of a journey that becomes even more important and across multiple different products, and I think the real reason is you actually have opportunities. You're building a product to connect with someone that needs your product, that actually might be your target customer, and, that loves what you're doing or loves the idea of what you're selling him or her, and, actually engage that person with your product. And I think that's ultimately what, makes building communities so important. You're building a community of early adopters that makes, feedback loops, way, way shorter and faster, and gives you access to more and more information as quickly as you can when you need the most. Mick

Niccolo Maisto (00:05:06) - Yeah, I mean, I agree. You covered it,well, and I think, what, what that unlocks is, a product loop that allows you to, iterate really fast and, if you have like the, the right type of, say data driven process and KPIs in place, you can really, see greater results on, all the key metrics, when it comes to like engagement and retention, and ultimately conversion rates and monetization, which is, the end game, let's say.

Camilla Scassellati (00:05:42) - And this is a great answer because it really co you smarized very briefly all of the different parts of building a community that we really wanna dig in. And in order to dig in, as I said at the start, we'd love to hear more about how Faceit itself started its community in Gru's community, because I think like many, the best way to learn is through someone else's practical experience,so to break down the process, as we said, we need to start, I guess from what it means. The first thing a founder needs to do is identifying its target audience. So even before you build a community, you need to understand who you're building a community for and what their needs and interests are. How did you initially identify the need from a plat for a platform, like FACEIT, and how did you in identify the potential universe of users that might be ab that might be interested in using it?

Michele Attisani (00:06:40) - Yeah, I think, initially we started by coming up with a relatively stupid idea, that, we thought might work, and started testing it around with, a nber of users, mostly a mix of, friends and, what we identified as potential hardcore use hardcore users,it was mostly private interactions, so without, actually going, public in any way or posting or similar things. And, that was the very first interactions, that actually allowed us to understand that what we were doing was stupid, and, actually gave us, the ability to pivot and do it rather quickly and get to a product that, was actually solving a need. So what we actually did was we didn't change our target audience, we changed the product we were building,and it actually happened a couple of times, and I think that's because we did have a sort of unfair advantage when it came to accessing influencers within the gaming world. We were super early as we didn't have access to users. Basically, we did have access to super users when it came to feedback, and that's what allowed us to get to something that, eventually actually ended up solving, a problem,I think if I have to think about the very first product, it didn't sort of match, probably it was creating more issues than anything else. .

Niccolo Maisto (00:08:15) - Yeah, I think, the other important thing is, to, to start from, from a niche of, users that have a very, specific need,that's what we, we did at the beginning. We started from, an niche that was actually very small, definitely not big enough to, to scale a business, but they had a very clear need and, they were a very underserved community. So we managed to, step by step over time, start fulfilling that need, as Niccolò said, not at the beginning , but, that really created the, very loyal community that, cared about the company, cared about the the product, and, was the perfect, set of early adopters to help us iterate on the product. And then ultimately, when we felt like the product was, in a better place to, to, to provide actual value, we started looking at, other communities and bigger communities and expanding beyond that. And I think that was quite critical.

Camilla Scassellati (00:09:27) - So Micheleand Niccolò, you were saying clearly that early adopters are such a core part of building product, and they're then the foundational base of your community,and your unfair advantage Niccolò, I guess was because one of your co-founders is a professional gamer, that is quite recognized in the space. And so he was able to access all of these early adopters that helped you iterate on the product.

Michele Attisani (00:09:58) - Indeed, indeed. That was one of the core things. I think it was bad. It was a reputation within the industry and the network within the industry. I think putting all those things together made, give us opportunity to actually iterate quickly and iterate in the right direction,that was the, the core thing that, that happened. I think if I have to translate this into advice, it's, really building a founding team that, is complimentary, and, can actually, open doors, in different ways. Right. And I think you mentioned Ali Ali's been fantastic at, at building the network for the company when it comes to an initial footing the door with, gaming influencers, even game publishers and game developers.

Camilla Scassellati (00:10:46) - And Michael, you, you talked about this first sort of set of users that you acquired some more of the er acquisition front, but then you already started talking about how you started to build a community amongst those users. If, if you can break it down for us, is there anything practical that you did? Any sort of things that worked, whether it's community events or social media channel in the very early days that you, that you remember and can talk about?

Niccolo Maisto (00:11:18) - Yeah, I think, communication with the, with the users was, was quite critical,we had, very early on, even like in the, in the first stages of the product, we already had, chat functionalities and, we were often like, you know, spending, days and nights talking with the, with users on the platform,and, ultimately that was the, the first, say form of, creating a two-way communication with the, with that community. And, for a lot of those, those people that really felt like, they belonged to, to this community, to the point where, you know, some of them actually became, early employees, of, of faceit and, most of them are still with the company today, and, they're actually managers in the company. So, I think it was, one of, one of the first things re , being able to promote, I think we, from the very beginning, we, we built a product with the idea of like, having communication tools, having a social graph and, create, the right, set of the tools to promote, communication and, the, the sense of, of community.

Michele Attisani (00:12:40) - Yeah, maybe I think on, on this topic, we have a product with has, intrinsically and, almost by nature is a community, right? So all things like, social interactions, interactions, friendships, chats, things like, being completely open and, being able to see profiles of any players and what we did. Like, these are all things that obviously incentivize interaction and the more interaction we have, we have the more community we build. But I think one thing that was key early on, as, as Mike said, roughly is communication, and most importantly the tone. But we were communicating with our users. We have, we had used to have a few core values as Faceit, and we now have a few of them that reported inside Es, esl, FACEIT group. And, one was the very first one, community first. And for us, community first meant we were part of a community.

Michele Attisani (00:13:41) - We were not the ones dictating the community or building the community or owning the community. We were part of a community. We were not defining the community, but we were living it. And we were able to interpret what was happening and what the community wanted and therefore build it. That, that was a little bit, the, the tone when it came to communicating, make said two-way communication. That was absolutely key. And the way that we really presented it was, especially at the beginning with early adopters, Hey, this is an opportunity to build something fantastic with us that is going to make your life easier. And we're all doing it because we're passionate about it. And then the second step as we started growing was really like, look, we might be a bigger company, but we're still part of a community. We respect the community, we talk like the community. And, I think it's something that, especially in, when hiring is not as easy to transmit, as, as we initially thought .

Camilla Scassellati (00:14:38) - So just to smarize it and break it down, and you are talking about really making the community feel like they're part of the company and the product, and that they are in some way sort of helping you decide the direction that the product takes. So by making them part of it, they feel involved and then they become ambassadors, and then they feel like this is a product that's really built around them and not something you're trying to sell, sort of top down more of a bottom up approach. Yeah. ,

Michele Attisani (00:15:08) - And they have, I actually have a couple of examples. Okay. One is, the very first, interactions on Reddit, it was us asking the community what we wanted. Like literally, and even later on, as we were already with a few million users, we had, moments during which we had the community decide our pro product pipeline cause the mix of a marketing stand. And, a we, we already knew more or less what would've come out, but basically posting things like, Hey, what do you want us to develop next? And they would've answered, we would've known more or less what would've come out of the rankings would've done what we said. So it's really like making them feel part of it.

Camilla Scassellati (00:15:52) - And you talked about the first product not solving issues and being complicated, but beyond that, once you started building the right product and building this community around it, do you remember any sort of specific challenges that you faced and any sort of lessons you learned from that, that you think might be relevant for this group of people? In terms of lessons that you drew from it?

Michele Attisani (00:16:17) - I think you faced a lot of challenges. You wanna start

Niccolo Maisto (00:16:20) - ,

Michele Attisani (00:16:21) - Apart from working with me

Niccolo Maisto (00:16:23) - Exactly,I mean, a pretty obvious one. Maybe this was more of a challenge for you, but, we, we didn't have any technical co-founders, so, definitely like, you know, building the, the right tech team and having the, the right tech, this is a pretty complicated product,so that was, definitely, a huge pain point for us,I would say more so for, for Niccolò and for me, because he, he ended up, learning how to, to program, at least a little bit, taking on the, the Ct o role at interim as well,but, yeah, certainly, it took us some time to, to get there and, obviously like when you're trying to, to build trust with the, with the community, and, let's say the, the technology is not on, on your side, it's difficult.

Niccolo Maisto (00:17:26) - At the same time, it's also like a, if you have a strong relationship with the community and they're real early adopters, they will, they'll be more forgiving. They will understand that this is a work in progress that, issues might happen. And certainly like, you know, they would appreciate more, having fast iterations, where even if, that means like sometimes things are breaking rather than, let's say, a more corporate approach where, things are not getting out, early enough. But I'd say that we, we fully embrace, move fast and break things, philosophy, maybe, maybe even a little too much at the beginning. I dunno if Niccolò, if you feel the same way,

Michele Attisani (00:18:13) - , it's never too much. It was fun, but, no, I totally agree. I think, very few things. I mean, you, you mentioned the team and, the tech and so on, I think that's important,but, and that's general across companies. I think on the other side, if you're trying to build a product that depends on building communities, I think the biggest challenge is getting to a network effect,basically you might have a tech, you might have a product, but, if you don't have users using it at the beginning, it's really hard to create value if the value you're delivering depends on the users. And I think what helped us, quite a lot of what we struggled with the first year and a half, two years, what helped us afterwards was quickly understanding or eventually understanding how to create, enough, traffic at specific times of a day to make sure that whoever would come on the product at that point in time would actually get value out of it. And, that's, I think whenever you're building basically a network or whenever you have network effects, that's probably the hardest piece, especially if you don't have multiple sides of a network. If you have multiple sides of a network, say a B2B side and a B2C side, think of a marketplace, you can subsidize one of them. In our case, it was user to user, so it was very hard to subsidize. The only way we had was to promote, basically, and that, that's probably one of the biggest struggles we had at the beginning.

Camilla Scassellati (00:19:48) - And in terms of when you say to promote, what promotion channels did you use to build the community, and how important were, were they, how did you also, how did you identify the right channel channel? That's something else we wanted to ask you, because of course, nowadays there are lots of channels to interact with your potential users or, you know, customers. Social media's the most obvious one, but not Instagram or TikTok are not the right places for everyone. How did you identify yours? And I know it was a coup it was 10 years ago now, so things have changed a little bit. Yeah,

Michele Attisani (00:20:23) - I, I think it's ultimately it's understanding where was, target customers spend time. In our case, we started small with fors, fors that are probably now less than 0.1% of the size of our user base. So super tiny niche fors, that, basically we knew, had super hardcore gamers. We moved on to Reddit, eventually, and we started basically leveraging all these different channels we tested. Like ultimately it was trial and error,we tested Facebook, realized it wasn't for us, and, and wasn't for our community,we, then tested Reddit worked amazingly well, but not hyper scalable,and I think eventually we found one of, two or three core channels we still have today, which was, content. So in our case, it was, creating, streaming content out of the tournaments that were happening on the platform and create that pro layer and, and, and stream it and distribute it on TWI, YouTube and so on.

Michele Attisani (00:21:34) - , and that's how we actually ended up building almost, a business inside the business, but was only doing that. We tested it, we saw the results, we actually cited seeing, depending on different days, how the results were moving in terms not of how many people were watching the content, but rather how many people were playing thanks to watching the content,so really looking at that not as a business, not as producing content for the sake of distributing it, but as a customer acquisition strategy. And, and ultimately as soon as we saw it worked, we like, I think we did what, make a hundred x in a year in terms of investments into the channel.

Niccolo Maisto (00:22:17) - Yeah,

Camilla Scassellati (00:22:21) - Great. So to break it down again, trial and trial and error in understanding what channel works for you. But then the other big lessons that I'm taking out of this is measuring your actual success in the channels that you're using in terms of how many users do they bring and how much community do they create,rather than say, I have to have a TikTok channel and I'm going to put content every week on a TikTok channel, but not actually looking at whether that TikTok channel is bringing users to your platform or your, or bringing customers. And so, can we talk a little bit more about measuring success? And, and Michael, you also mentioned in the beginning like really having a data driven approach and looking at metrics. What kind of metrics did you look at? How did you measure success in your user acquisition and community building, which I know is harder to measure community building. So I don't know if you found a way to really look at that.

Niccolo Maisto (00:23:22) - Yeah, I think what, what Niccolò was talking about is really the top end of the funnel,so user acquisition, but ultimately like user acquisition per se, is just one of the, the components that you need to look at in the funnel. I think another big factor for, for FACEIT for the growth of face, it was the, also the virality that was built in the product, playing competitive is, I say it's, it's a pretty pretty social activity. So people, if they like the experience, they like to, like the community, they tend to to bring, a lot of their friends as well. So a lot of the growth we had was, was actually word of mouth and viral. So finding the right mechanics also to incentivize that and promote that, reward that, was, was important.

Niccolo Maisto (00:24:14) - And then, you know, even if, if you, we move down the funnel even more, acquiring a lot of users is pretty useless if, if you don't find a way to engage them and, and retain them, right? So making sure that we are always, measuring how much time, they, they spend, interacting with the product, what they, what they spend time interacting with, what sort of experiences, what sort of content. And, I really fine tune the experience to, to improve those metrics. And, and, and retention, obviously, like looking at, you know, how, how many times they, they, they come back every day, every week, every month and month over month. Make sure that, ultimately we find, ways to, to keep them within the, the community and the that ecosystem,otherwise the, all the value that you're creating in terms of user acquisition can very easily be wiped out,if you don't, find ways to, to retain those users. So, dunno, Nick, if you wanna add anything,

Michele Attisani (00:25:26) - I totally agree. I think all the things you said are a little bit the, before find the core, or the north star that we look at. So, and I think that's, an important thing. We decided we needed a single North star and, making sure that everybody had a very clear understanding of what was the one nber that everybody was looking at when waking up. And then you have, different nbers and different metrics that lead to that. I think all the ones you mentioned make from retention, acquisition and so on, are basically that. And that's what we look at deeply on a daily basis. But at the same time, what we, the one nber we, we always, looked at was D a U. So how many daily active users we have, as simple as that. So I, I think you need to be able to dig very deep to understand why you have that amount of daily active users, but at the same time, you always need to remember all of this we're doing for one reason and invests to have more daily active users.

Camilla Scassellati (00:26:33) - I was just going to ask you, what if there was one metric that sort of drove all of your work around? And so daily active viewers, there's I guess a specific of course to a gaming platform,it could be specific to a marketplace, but I guess depending on the startup and company you're working on, selecting that metric that will tell you if your product is having traction and then bringing everyone, like trying to grow that nber and testing different ways to do so, by building a community that can engage,and, we talked a lot about communication and I just wanted to spend another couple of minutes talking about that,especially at the beginning you talked about user feedback, and if we can dig deeper a little bit on this, I think that's another very valuable lesson and important thing that all startup founders need to think about is how to integrate user feedback in the product they're building,and whether you listen to all feedback or some feedback, you talked about the fact that you almost verbatim took what user said and create to create a product at the beginning. I'm sure that changes as the product gets built, but can we talk a little bit more about user feedback, how important it was for Faceit, and how you, how important you think it is generally in developing a community?

Michele Attisani (00:27:53) - I think it's the one key, probably like, if, if there is one piece of advice I'd like to give to myself next time is listen to users more. And, you are actually not as right as many times as you think your users sometimes are, right? Or if you think they're wrong, there's, there is something wrong anyway if someone is complaining, right? So when it comes to think to user feedback, it's been the one thing that, helped us grow, find us pro , pro find the product market fit, find even, product channel fit, and the distribution channel. We mentioned content,and, and it's really the key. And, initially we did it, in, a very simple way, which was, spending time on our customer support system, spending time. I, I literally spent nights answering customer support live chats, and I still like to do it every now and then.

Michele Attisani (00:28:50) - , when I, I I like it because I think it keeps you in touch with your customers and, and with our consers and their problems, playing. So using our products, it sounds, a bit crazy, but, I think, it was very important for me to play on our platform. I think it allowed us to actually understand what was the experience and what was working, what was not,and, and basically all the way to customer surveys and so on. I think today it's obviously way more structured, so way more customer surveys. We do have multiple groups that we tag and, we can decide which groups to give access to which features in, a very structured way. Each team has a, a feedback group that they can access. So today it's extremely structured compared to what it, it was back in the days, back in the days, it was seriously myself and, a few of us, make, going around, on the platform and writing to users and asking them questions as simple as, well, when we put a few of them into a Skype p at the time, you didn't have Slack.

Michele Attisani (00:30:01) - , and, this dates us a little bit, but basically put them into a, a Skype P and, we would, share, ps and, different mocks, and mockups, before actually developing them,but

Niccolo Maisto (00:30:20) - Right now we still do it, especially if there's, very famous Brazilian football players

Camilla Scassellati (00:30:27) - Playing the game. ,

Niccolo Maisto (00:30:30) - Sorry, playing

Camilla Scassellati (00:30:31) - The game.

Niccolo Maisto (00:30:32) - Like, yeah, we have like some, pretty high profile football players, that are customer on our platform,

Camilla Scassellati (00:30:39) - , so they get special channel to give you, to tell you what they want,

Niccolo Maisto (00:30:43) - Sometimes

Camilla Scassellati (00:30:44) - ,I think that's, but I, yeah, I think that's a very important lesson on user feedback. And I was trying to think in my mind as you were talking, does this only apply to a tech platform? Like FACEIT and a user generat sort of a very user fueled platform like yours, or does it apply to all kinds of business? And I, I actually think it does apply to almost any startup, especially because you're, you're trying to solve a problem and you're trying to come in to give something that customers need or don't know they need, but you want to tell them that they need, and in order to do that, their feedback is, is intrinsic to, to your success. Do, would you agree with that or do you think there's some businesses that are better suited to having this type of approach?

Michele Attisani (00:31:31) - Yeah, I think every business benefits from it at the same time, in I think B2C businesses, especially if they have some sort of network effect, for them it's must. So if you're a B2C business, and you have a network, you need to think about the community and you need to do it early on. I think at, at the same time, it applies for everyone. If you apply it to a B2B business, building a community around your product means, you actually have a few more shots at building something that is useful. So it's, it's obviously a different balance, right? But, ultimately it comes for all.

Camilla Scassellati (00:32:12) - And, Michel, you talked about this, and this is what we're driving towards, of course, which was, okay, it's great to acquire users, it's great to build a community, but ultimately the end of the final, what you need to get to is find a way to monetize this community,sometimes for some businesses, and this is just a parenthesis, I guess, a community, something that they have on the side of their product that they, that they have on the side. For some it's central and the communities using their products and buying it time and time and time again. But to talk about monetization and, and, and that in particular, are there any sort of, what are the strategies that founders can use to monetize their community? And how do you need, how do you balance the need to generate revenue with the need to having like an authentic user experience and not looking at you trying to sell something to someone at all, at all moments, and still have that community feel? Any tips or lessons or,

Niccolo Maisto (00:33:15) - Yeah, for us, as Nick said, like, network effects were, were critical. So, we never wanted to create a paywall for our users. We always wanted to keep the experience, freely available and, allow us to, to really scale,cuz by, you know, having more users, we could just provide a better experience to, all the participants,so that was always been, that's always been a, a key factor At the same time as we evolve with our product and, we managed to offer more and more value, to the users, we managed to identify, certain components that we could start offering as a value, add services for, for subscription fee, and, in a way that wasn't dis disruptive of, keep growing the, the overall community and and ecosystem on our platform.

Niccolo Maisto (00:34:19) - , we, I think we're we're lucky enough that, we managed to attract, a particularly, let's say, our audience. So, there were, they're, they are spending a lot of time using, using our products. So in certain cases, even, marginal additional value can be a lot of value, in their eyes. So they're ready to, you know, to pay to access it,at the same time, I'd say for us, even today, there's still a lot of, room for, for improvement when it comes to monetization. Niccolò can talk about this, way better than I can, but certainly, like, we never, we never, let's say, wanted to, to squeeze every, single dollar we, we could have from, from our users and try to, keep a balance in having a user experience that was actually positive and, and allowed us to, to really grow and and scale. That's always been the nber one priority. While the monetization, of course sounds, it's something that we needed, especially in the early stages of the company, we had to, bootstrap it for, for quite some time. So, it was, it was definitely important as well,but, it was never the, the first priority I'd say.

Michele Attisani (00:35:49) - And I think, as you said, I think it was important for us to understand which things we needed in order to, amplify the network effect. So all, everything that, would create access, for example. So using the product is something that would never be behind the payroll for us, because the network effect was so too important. We prefer to have someone for free, the team pay us when not to have someone. Then we had some features that had a cost and, might have a network effect, a positive network effect. If they were free at that point, we might have put them inside the, the medi pack. And then the most expensive pack became everything that was single user has no impact on the wider user base sort of feature. And, I think that was, we, we really looked at it as not how do we maximize revenues, but how do we build a same business while at the same time making sure we maximize user growth, especially early on.

Michele Attisani (00:36:53) - That was a bit, the thing, and we tried different ones. We ended up with freemi because it's the one that balanced it the best,advertising is one that, we tested. We knew it worked. We knew more or less economics we could do, we haven't, scaled until roughly a year and a half ago,so we always knew that a user for us was Warf X knowing that half of it X was something we would've monetized in the future and not today. And, the other one was micro transactions, but, we ended up, dropping for now and I might start looking into it again in a year or two.

Camilla Scassellati (00:37:34) - And how, how difficult was that decision? , I think it's a very important equation, like understanding how, how much a, an extra user is worth to your, to your sort of network effect growth, rather than an extra free user, rather than an extra paying user,how difficult was that discussion? Were you always, mi was saying, we knew that we didn't want to put a paywall up. Was there ever a moment where you almost doubted yourself and thought about putting a paywall in order to monetize? And I'm just thinking about an early stage mm-hmm,founder, who that's sort of maybe acquiring a lot of users but doesn't, is not making money out of it. How do you make that decision? Yeah,

Michele Attisani (00:38:20) - So I I, I think for us at the beginning, it was a very back of envelope, calculation sort of. So it was a mix of intuition,if you have a network effect and you need more users, and in our case we need to match users, for example, to play together, and we need to be online, at the same time, it's obvious that if we say you need to pay in order to come here, we're going to have less users and therefore wait, times are going to increase, and the value we create is smaller. So the fact that it would've happened was very clear. And I think at the beginning, if you depend on a network effect, it's very likely you're not providing value at all. So it's very likely that you actually only have to think about user growth. You can't even think about monetization.

Michele Attisani (00:39:04) - I think at a certain point, we started trying to actually calculate how much a user was worth was,I think today it really depends on the state of the platform because the marginal value that the user brings to a network, keeps decreasing, right? The first user or the second user using the telephone brings the most value of all in certain sense,in the preferr ones likely less, the fourth ones likely less. And at certain points we margin of values zero to zero. So I think it depends from the state of a, a specific region, a specific game, a specific queue where basically we have that localized network effect. And, in some cases we should live everything for free. In some cases we can monetize more. We started doing it. So the way we do it today is we analyze literally how many seconds someone waits in a queue.

Michele Attisani (00:40:00) - , are they going to wait for two minutes, five minutes, 10 minutes? What's the drop of rate? What's the probability of users in certain regions games or with, certain criteria to actually, only wait a minute versus waiting five minutes. At Vet Point, we know how much we can push the boundary, how much we can, actually make someone wait. And at Vet Point, we also know what we can do in terms of product and eventually also in terms of, monetization. One thing that worked really well for us in terms of, freemi was that given it wasn't mandatory to pay, so you didn't need to pay in order to pay, it wasn't a complete power to entry, but those that were paying were basically committing themselves. And what we noticed was if we managed to convert a user into a premi user, it would've increased retention dramatically and would've increased the amount of time spent playing dramatically. Because it's almost like, okay, I'm going to buy the subscription this month. This is an investment I'm going to make, and I want to actually make sure I use it. And, it, it wasn't, as, it's not something we expected, but it actually ended up working really well, which is why we ended up, really scaling on framing early on.

Camilla Scassellati (00:41:21) - And, I, I know I wanna leave time for my favorite part, which is the rapid fire questions, and I'm seeing a lot of questions from the audience, but the last thing I I wanted to sort of underscore that you said was virality, and that's an very important word and something that a lot of people are chasing. How do I make sure my product is viral, which essentially means that I'm not investing that much to acquiring users because there's this crazy word of mouth that brings people to me. How important is that word? Is it over chased by people? Is it possible to achieve virality something that you plan for at the beginning, or is it just something that happens?

Michele Attisani (00:42:07) - I think there are some products. Go ahead. Mic. Oh, go. You go, you go. ,I think there are some products that are, prone to be viral. If you have social interactions or you need a friend to join, it's very easy. Invite your friend and you're going to get more value,and that's very much the case,for us, it's the case for many of the social networks in the end,if you think of a discord, early on, it was all about virality simply because the product was voiceover ip. And it's, you know, if you don't have anyone to talk with, voiceover IP is quite useless. So it's, the whole strategy was heym, this is the Discord link. Super easy to install, come in, and it happens. So I think some products are more viral by default,I think then you have a ton of tactics.

Michele Attisani (00:42:56) - So in the case of Discord is it's making it easy. It's not asking you for your email address early on. Nowadays we do, but back in the days, you didn't need to create an account or put an email address,it was super easy to actually get into it. It was the, the whole funnel was optimized as much as they could in order to mass as many users as possible using that virality In our case,and a good example was we prompted the user every time they won,we would've prompted the user to share basically the result they had and, invite their friends and potentially get, benefits out of it. That's a good example of a tactic that increases virality. And again, some products, it's going to do 10 x on some products, it's going to do way less, but ultimately every product can can benefit of it. I think Refer Friend is a good example, right? If you can get, every 10 people to, get a new customer, then at least you have a 1.1 factor and, you, you grow more for free, almost.

Camilla Scassellati (00:44:05) - And okay, so I think we're ready for rapid fire. One thing I wanted to say at the end is I don't think we can sort of discount the important, importance of community think, FACEIT as a perfect example, how important, it was for you. But generally, if we think about building a product in this day and age in 2023, it's almost more what the product repre represents than what the product actually gives you. No, everyone wants to have aspirational brands. Every brand has now understood that they need to stand and mean something in order for customers to really want that thing. But also, as you said, many times, be loyal to the brand and co keep coming back because it's not enough to have a customer once you wanna have them many times. And the best way to do that is to create that meaning and aspiration. And so I think this is a very important topic and everyone listening, thinking about a product, whether it's I, I think it, it's not only for B2C businesses, even B2B businesses. What are you offering? What does your brand mean? And how are you creating this sense of loyalty amongst your user base or customers is a core, core question. And I know there are more questions coming, but before we do, as I promise rapid fire, I'm going to pick, I think Kelley, we're going to start with you because Ola was the last one who answered,

Niccolo Maisto (00:45:26) - Okay,

Camilla Scassellati (00:45:27) - We're going to try to move quickly. How did, how, sorry. Do you read negative user reviews or did you at the beginning, and how did they make you feel?

Niccolo Maisto (00:45:39) - Maybe not so much anymore,but definitely yes, we, I used to read, write it, pretty obsessively and, actually used to get, pretty depressed as well,most of the time I would say, Aw,

Michele Attisani (00:45:55) - Come on.

Niccolo Maisto (00:45:55) - It was, yeah, come on. It was definitely more, more depressing than joyful, but also useful and, and always, you know, try to take it in a constructive way and, and learn from it and say,

Michele Attisani (00:46:07) - Every negative review is an opportunity.

Niccolo Maisto (00:46:10) - Exactly.

Camilla Scassellati (00:46:11) - And flip side, Niccolò, how much do you, how much weight do you put on positive feedback from users and positive reviews?

Michele Attisani (00:46:20) - I think positive feedback is, what gives you the energy to go back and write it and  read the negative reviews.

Camilla Scassellati (00:46:30) - Well said,Michelethe most helpful piece of feedback, whether it's from users or anyone that you ever received,

Niccolo Maisto (00:46:40) - I would say, I can't really pinpoint one specific, feedback,but bit to, to Nicole's point, it was like, meeting random people. Maybe I was wearing a FACEIT hat or some something with a brand and, meeting random people in the elevator or on the beach telling me like, I love FACEIT, I play on FACEIT every day. This product really changed my life. And, you know, when you have a digital product, you, you don't realize that, that the level of impact that can have on people's lives. So, that was super motivating for sure.

Camilla Scassellati (00:47:16) - Niko, what's the milestone you achieved that made you specifically personally feel most successful?

Michele Attisani (00:47:25) - Probably, I'd say post merger. At the beginning of this year, we, flew all of our employees to Cancun for a week, to basically, go over the plants for the next two years. And we did a five days long conference,and I think the amount of energy you had were a thousand plus people in a room, all coming together under a new brand, ESL Faceit group, and post-merger. And, I think at a certain point, one of the nights we entered into one of the local bars and without 300 of them singing E F G E F G, ESL Face Group is basically short, or EFG is short of ESL Face Group. I think that was probably at least of the latest ones, one of the best ones.

Camilla Scassellati (00:48:17) - Amazing. And Mial a similar question. Best Day and faced it

Niccolo Maisto (00:48:21) - For, I think when we, when we reached, 1 million registered users, we were all, in the office.

Michele Attisani (00:48:30) - It was my birthday,

Niccolo Maisto (00:48:31) - It was Nick's birthday, and, yeah, we had, the big celebration and the, the energy and it was just incredible. We were, everyone was so happy and we were still like a small group, very scrappy, you know, just got a new London office is, yeah, pretty special.

Camilla Scassellati (00:48:48) - What a special coincidence to, on the birthday and Nico to bring us down worst day at FACEIT,

Michele Attisani (00:48:56) - , every hour day, no, I'm joking.  . I'd say probably the day we launch or every box to launch, we had, whether it was a new product or, or, or anything new, and every time it happened. So every time we didn't make a good launch, and obviously the first day was the very worst,it was the feeding off, okay, are we actually ever going to recover from this? , I think I remember first day, we had, hundreds of users and at the time we looked like a lot trying to log in and, nobody able to log in or do anything. Obviously nothing was working,and , we, we changed CT o in the meantime, but, yeah, that, that was a bad day. .

Camilla Scassellati (00:49:48) - , Michel, how do you define success given all that you've gone through?

Niccolo Maisto (00:49:54) - I guess this is pretty personal, but, for me it's like when I can see that, the company is, progressing and improving, even if I'm not there,so the idea of like, being able to just, retire and see the company, let's say keep progressing, and taking life on, on of his own, that, that for me would be real success.

Camilla Scassellati (00:50:25) - And to, to close off a very sort of practical question that we like to ask to give, to leave something,Niccolò, what's your favorite book on business or entrepreneurship or a book that you think everyone should read if they're starting a company,

Michele Attisani (00:50:40) - I usually ask, Mick to read them and then smarize them to me,but lady, I discovered Blinkist,but just aside, I think a few, it depends a little bit from where you are, and with which stage one that I really liked lately and that I wish I had found earlier on, simply because I think we outsized it a little bit, was, us So the entrepreneurial, operating system, it's something that I actually enjoyed. I think, going into things like what matters in OKRs is another good one. Like a, anything that, and maybe it's a little bit later stage when starting a company, but anything that is really how you do, you make sure as soon as it's more than four or five of, of, of you, and, you need to organize yourself. What's the management system, not just the KPIs and metrics that you look at, but actually how do you manage the company and how do you manage people?

Camilla Scassellati (00:51:40) - Great. Okay. Time for listeners questions. I think we're going to be selecting some and they're going to come up. Let me just read them out loud,so Bianca Rossini is asking you, when is the right moment to address monetization and how did you approach it? So we talked a little bit about it, but when is the right moment? Maybe something we can double click on

Niccolo Maisto (00:52:08) - When you're about to run out of cash. No, that's true,

Michele Attisani (00:52:15) - Fair enough. Eh, I think it's, I think it depends a lot from the product, and where you are as a company,where are some products that are not harmed? And I think I made an example of, the premi in our case, we ended up addressing monetization, but , we did so in a way the teen harm products, the contrary, it was actually increasing retention rates,and it's something that in insight I do again, and, that worked relatively early on. Where are some products that you can only monetize when at scale? , and I think nowadays it's going to be really, really hard to, to raise for similar products, and, and get there,where are some products that you can monetize from day one? So it, it really depends from the product you're building. I think as long as, you, don't depend on a certain scale and the product doesn't create too much of a barrier when it comes to user growth, I think it's fine to look into monetization early on,I think one thing maybe to keep in mind with monetization is it can make it harder to change. So if you're far from a product market fit and you think you might have to change your product quite a bit over time, avoid going into monetization because that the moment someone pays changing something becomes way harder.

Camilla Scassellati (00:53:41) - Great. Next question. So Marco Gata is asking, what was your first MVP and how did you understand that it had, that it had product market fit or didn't have product market fit? Yeah,

Michele Attisani (00:53:58) - So, I'd say the very first one did not have product market fit. We understood it because nobody was playing  . Well, I think, the, the first one that actually worked, we understood it because the day after I woke up and I looked at, the nbers and someone was playing, and I was really surprised,but we, when I think we understood, that, was actually working and ultimately the one metric that told us, product market fit or that was screaming product market fit, was, retention. So medi term retention and seeing that retention rate after initial drop off, basically stabilizing, that's the one thing that defines product market fit.

Camilla Scassellati (00:54:50) - Perfect. Next question from Carolina Decast. How early would you recommend building a community should a product already be quite well shaped to provide enough value to the members? I think this is really a core question. Like do you start with a community? Did you build a community after? At what, at what point are you ready for a community?

Niccolo Maisto (00:55:14) - I, I think it depends, but, generally speaking, what you see nowadays is, for conser products, a lot of people start building communities even before they have a product,I don't, I don't think there's, too early,really as long as, it's probably, you know, not, not going to be able to, to scale, dramatically,that's not even necessarily the case, right? Sometimes you see, say communities on discord for products that are not even being launched yet, that are already in the, in the thousands of, of participants. So, yeah, I would say as early as you want.

Michele Attisani (00:55:57) - And look, community ultimately means you have something in common and that's usually a passion for the product you're building. So the sooner you actually start building that community, the better it is for you. Cause you actually have access to that community when it comes to shaping the product. I think the one thing that is important for on the other side is to remember why you want a community and, make you mentioned, many building communities without being a product. I think I've seen a lot of first time entrepreneurs doing the mistake of, looking at, their Facebook community page more often than, than their product. And thinking that the amount of likes they had on a post was, a good metric of our success when we still hadn't had no products, we're even spending money on, acquiring, followers on an account when we still had no product. So I, I think there is a balance, as long you can start our build, building a community as early as you want, and most probably earlier you do, the better it is, as long as you're actually doing it for building product. And, you don't become obsessed about it without looking at your product.

Camilla Scassellati (00:57:15) - Yeah, I'm thinking if you're thinking about a conser business, Steven, I don't know if you're launching, I don't know, makeup is actually a great example. Like Glossier, the, the US makeup brand, they started with, you start with a blog, you start having people who follow you and love you, and then you're like, oh, I'm ready to launch. Oh, I see that people actually love mascara's a certain way. Let me ask my community what they want. And then you build a product around them, you're for sure going to sell it to a core group of people, right? So yeah.

Michele Attisani (00:57:45) - So is an made product coming.

Niccolo Maisto (00:57:48) - , we need to sell. If you have a huge community, if you have a huge community, but you don't have a product, you're an influencer, there's a name for it,

Camilla Scassellati (00:57:56) - I guess. Yeah, you're right. Exactly. And how do you use that influencer to, to actually monetize, which is kind of what we were talking about,next question. I think we have a couple more. So Ado, Gentile Ask is asking us, should also more B2B companies think of community early on? I know we've been talking about B2C a lot, but how does this all affect B2B companies in your view?

Michele Attisani (00:58:26) - I think a million percent. I mean, in fact, I am personally in B2B communities of new products that we use as a company, and I think it's a very different type of community building. Like if you can hook a c level of a startup, scale up or a company into your community, I mean, no better feedback or, hook into a corporate when doing something similar, right? So in, I think in our case, I love a couple of, B2B products. One is around data and, make your, I'd say in that community as well,and we, we love that product, we spend time on it, and the founder is smart enough, I think, to be able to start building that community, inciting even before launching the product and building that product, listening to the feedback that, myself make, and another hundred members of that, that community started giving him, it's a very different community because we're not talking about, a million consers.

Michele Attisani (00:59:29) - , we're talking about, a few hundred, business users that, you interact with differently. And I think that's when it comes to product management, the big difference between B2B and b2c. B2C tends to be way more data driven or better. Without data analytics. You can't go anywhere in b2c. Having just a chat with a single conser is, absolutely not, enough, while when it comes to b2b, smaller communities, and which gives you an ability actually, especially early on to create, a deeper, relationship with a bigger part of your potential customers.

Niccolo Maisto (01:00:08) - Yeah. So just to, to add on that, I think on the B2B side, obviously you have much fewer relationships, but, the sales cycle is very long and expensive and, average contract value is really high. LTV is very high. So, ultimately having a community, it's something that allows you to improve on, on both metrics. Where you can, let's say decrease your, your customer acquisition cost, you can increase, average contract value and, and, improve retention of , your customers.

Camilla Scassellati (01:00:43) - Great. And I know we have a couple more questions that we weren't able to get to,it, we have been talking for an hour. I'm conscious of time. I know people have to drop off because they made an hour of time for this, so I don't want to keep you too long,thank you so much, especially to Niko and Michelefor having shared all of your knowledge on this very important topic with us and to everyone who's tuned in. I hope this was helpful to you. Thanks for asking questions. If you have more questions, you can reach us. We'll find a way to get Michele and Niccolò and they can hopefully answer a few more offline as well.