I didn't originally set out to be a "growth" person. When I accepted my first full-time role as a data scientist, I was offered the choice of 4 different teams that were hiring at the time: Marketing, growth, product, and customer operations. I thought about this decision for a few days and eventually, landed on growth.
In hindsight, a lot of my decision had to do with external factors. I didn't have a great understanding of growth — what it meant and what work was involved with it. Fast forward to today and I think I have a better idea of what's going on.
Startup = Growth
When you think of a startup, you probably imagine a smaller team with some venture funding. In the past they might have worked out of a loft in San Francisco. Paul Graham has a slightly different definition:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.
In simple terms, the only thing that matters when you're a startup is growth. And if growth is the most important thing, shouldn't you have a group of people responsible for working on it? This was the thinking behind what's largely viewed as the original growth team at Facebook:
Facebook’s growth had slowed. “Growth had plateaued around 90 million people,” Zuckerberg recalls. “I remember people saying it’s not clear if it was ever going to get past a 100 million at that time. We basically hit a wall and we needed to focus on that.” Palihapitiya came offering a solution: a high-energy team with a long leash whose focus would be accumulating and keeping users. He felt he had identified the North Star of Facebook, and that was the concept of the Monthly Active User.
As legend goes, just like that growth teams were born. Once Facebook proved out the model's success, other ambitious companies like Uber and Airbnb followed suit. Fast forward to today and growth teams are a common fixture both for B2C and B2B products.
What Growth Does
When it comes to explaining what growth teams do, I'm a big fan of Andy John's definition from his talk, Indispensable Growth Frameworks:
Finance owns the flow of cash in and out of a company. Growth owns the flow of customers in and out of a product.
This comparison to finance resonates with most people, but the next question that comes up is the real one we want to answer: What is involved in owning the flow of customers? What does growth actually do?
Well, it depends what the product does and how it grows in the first place. At a high-level, growth at most companies can be boiled down to the following formula:
Acquisition x Activation x Retention x Churn x Resurrection x Monetization = 🌱
Within this equation, you could go deeper into each of these variables. Take acquisition for example, where a product might rely on paid ads, search, referrals, viral loops, and more. Similarly, retention might be impacted by things like user onboarding, product education, notifications, customer success, etc.
This is all to say that what growth does depends on your growth equation. One week growth might run an experiment on user acquisition, another they might be focused on monetization. Growth moves throughout the funnel as needed.
One commonality across growth tasks is an experiment-driven approach. The best teams quickly and effectively prioritize the work that will move their north star most. They develop hypotheses, test them, and evaluate results. This is why Steven Dupree described growth as the scientific method applied to KPIs, which I like a lot.
Since concrete is better, let's close this post out with examples of experiments that a growth team at an early-stage startup might run:
- Format blog post entries to rank for featured snippets on Google Search
- Optimize user onboarding to encourage high value actions in the product
- Create and enable a setting to enable desktop notifications
- Send a weekly email summarizing engagement with the product
- Reach out to influencers who use the product to partner for exposure
- Offer promotions to high-value customers on the free pricing tier
- Redesign the landing page on mobile to drive user's to your app
As you can see, the experiments cover multiple parts of the funnel, and tap into a wide variety of skillsets. When I think about growth from this perspective, it's no wonder the field is so interesting to me, an analytically-minded generalist.
Lots of other great resources have informed by views on growth as a whole over the last few years. Here are some of the talks and articles I reviewed while writing this piece. Hopefully you enjoy them as much as I did:
- How are Growth Teams Different from Marketing and Product?
- What is Facebook's Growth Team Responsible for?
- Indispensable Growth Frameworks
- How to Build a Growth Team
- Startup = Growth
- Growth for Startups
- Growth by Alex Schultz
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