Contrary to sensationalized articles about ‘the growth hack’ that'll get you 1 million+ users, to think about growth as a self-contained activity or even series of activities, is incorrect. Rather, it's the lifeblood of your startup. (Paul Graham writes that "understanding growth is what a startup consists of."). All of the nuts and bolts that you acquire along the way - more teammates, more money, more customers - should come together in a way that enables your company to keep growing.
It's best thought of as an ongoing process that begins with a lot of ‘hustle’, and doing things that don’t scale (if anywhere, this is where ‘hacks’ could prove useful), and eventually morphs into a well-oiled machine. One that is supported by robust experimentation, a good analytics stack, a solid understanding of your customers, and a sprinkling of creativity.
Whether intentional or not, people often use the word 'growth' when really they mean 'acquisition'. And, sustainable startup growth goes so much further than acquisition. It’s also about onboarding, engagement, retention, and upselling. It's about the unit economics (how much it costs for you to acquire a customer) and the scalability of your marketing channels (whether you'll be able to use that channel - facebook, google, word-of-mouth or otherwise - to acquire 1,000's or even 10,000's of customers in the future). It's also inextricably linked to your product - is your product delivering enough value to encourage users to stay or repurchase? As Nic writes, good growth is growth that can fund itself, or will be able to do so at some point in the future.
We’ve got 21 guides on The Path Forward designed to push your thinking about startup growth forward. Particularly, they'll help you understand:
- growth from first principles
- tried-and-tested experimentation processes for driving growth, and
- the tools, and analytics platforms you'll need to measure growth effectively.
1. Growth Fundamentals
Understanding growth from first principles: from growth loops to unit economics.
An example of an acquisition loop, via Andrew Chen
A snippet from ‘characteristics of good and bad growth':
Momentum and growth are everything for startups. A few years of rapid growth is the only way to get to scale in any reasonable timeframe and nothing gets investors calling like a fast growth story. But not all growth is created equal. Good growth is growth that can fund itself, or will be able to do so at some point in the future. Companies with good growth will have some or all of these characteristics: positive unit economics (i.e. revenues per user > cost of acquisition + cost of delivery), a good understanding of the benefits provided to customers, high referral rates, high net promoter score and loyal customers (low churn).
Guides on growth fundamentals
- Characteristics of good and bad growth
- Growth marketing fundamentals: growth engines and loops
- How to use product loops to supercharge your startup
- Achieving incremental growth
- Unit economics by Sam Altman
- There's a K in KPI
- Customer lifetime value, how to model it, how to measure it
- How to evaluate your startup idea
2. The right processes for startup growth
Tried and tested methods for running growth experiments.
Growth process via Reforge program.
A snippet from ‘how to plan your own growth spurt’
It is my firm belief that the best businesses are built around exceptionally strong processes. Having a clearly defined process for growth can help your startup deliver impressive performance, punching like a heavyweight when in fact they are only a lightweight.
Guides on growth processes
- How to plan your own growth spurt
- How to conduct a growth experiment
- Rapid Fire Testing
- Understanding data discrepancies across different analytics tools
- Practical guide to measuring A/B tests
- How to start running small AB tests on your website
3. Measuring growth: tools, tactics and metrics
The tools, and frameworks you can use to understand what’s driving growth and therefore where to double down, and where to scale back.
Snippet from the startup marketer’s guide
Data is an important component of Lean Startup thinking. It not only powers the measure section of the build-measure-learn cycle, but also the insights section of the hypotheses-experiments-tests-insights cycle known as the Lean Minimum Viable Product cycle. It is impossible to complete these cycles without mastering the following three data stages: data capture, data validation and data interpretation.
Guides on measuring growth
- Know it, count it, beat it: Managing growth by metrics
- Data Discipline
- Analytics & Data - The Startup Marketer's Guide
- Channel testing, initial CPCs & judging scalability
- How one small improvement can deliver 10% to conversion
- Use data to drive key decisions
- Email deliverability made simple