Growth is key, yet growing a startup is really hard.
Many founders struggle to figure it out. What makes it even harder is the overwhelming amount of tactics and the “one size fits all” hacks that dictate how we should be running our own growth & marketing efforts.
While these pieces of advice are supposed to be an inspiration, a lot of founders take them as a prescription and apply them them regardless of the context of their product or customers.
I think this happens because many founders love “short-cuts” and fantasize about hockey-stick curves. Stories we heard about Dropbox, Airbnb or other unicorns led us to think that growth is about chasing this one silver bullet that will change the course of our history.
What these startups did instead was ask a single question: “What marketing channel(s) will help us find our dream customers?”. This led them to establish a growth process that involved lots of experimentation, measurement and learning to get their growth machine up and running.
It might seem easy and appealing to talk about building a growth machine, but how can anyone start this process from scratch?
1) Don’t take hacks out of their context.
It’s simple, there is no silver bullet. No unicorn you’ve ever heard of made it overnight.
Dropbox was doing Google AdWords before introducing the “Refer a friend for more space.”
Hotmail was considering billboards and doing Radio ads (yes, believe me!) before introducing their wildly glorified viral loop “P.S. I love you, get your free email at Hotmail”.
They didn’t sit around and start thinking what’s the single hack that will save us. What worked for others won’t work for you simply because your audience, your model, your customer decision process are different. Your business is different, plain and simple.
To make the most of what you read, always try to understand the context of the hack that’s being discussed: What was the audience? What was the business model? What’s the customer decision process?
By answering these questions, you start making assumptions of why this might work for you as well. Comparing your business to the context of the hack is important in prioritizing what you work on.
For the hacks to work, your competition might be a good starting point to identify the patterns of success.
2) Don’t experiment with many acquisition channels at once.
Focus wins.
Almost all successful startups or companies get the majority of their scale from a single channel.
However, with so many channels to consider, most founders are tempted to try a bit of everything instead of a lot of one thing.
Yet, doing so is equivalent to shooting yourself in the head, because it will require more time to learn from your experiments, therefore taking longer to decide whether to kill a channel or double down on it. As a result, you end up with no focus.
3) If you can’t measure it, you can’t manage it.
Don’t hesitate to stop and get directions.
No startup can find a sustainable business model without occasionally pausing to get directions, and these directions are derived from examining the right metrics.
As Head of Growth at a Creative startup, a big part of my job is to regularly check upon my metrics. In fact, we have a big screen in the center of our office hall that shows our growth metrics and their progress on a daily basis.
This sounds a bit stressful, doesn’t it? It turns out to be utterly helpful. Measuring my performance makes me accountable. I’m forced to confront inconvenient truths and always look for ways to improve the results.
Growth metrics.
It’s very critical to define your growth metrics and measure them constantly. Customer acquisition without a clear set of objectives is just a random activity.
Key performance indicators (KPI’s).
You’ll always track and review multiple numbers, but pick a minimal set of key performance indicators (KPIs), which you’ll track and report everyday. Capture everything, but focus on what’s important.
In their book Lean Analytics, the authors introduce the concept of OMTM — the One Metric that Matters. The OMTM is the one number you’re completely focused on above everything else for your current stage. It could be N° of customers per week, Churn, N° of new active users, N° of paid subscribers, Cost of acquisition…anything that has a direct impact on your company performance.
4) Do things that don’t scale
In your early stage, by all means, get those friends and family members to use the product. Email your local community groups, get those blog mentions and engage with potential users over Twitter, Reddit, Creative News or other niche forums.
Most founders are aware of these methods, but the reason they resist doing unscalable activities is that the numbers seem so small at first (is it really worth it?). This can’t be how the big, famous startups got started, they think. The mistake they make is dismissing the power of compound growth.
When you have a small user base, little things can drive a high percent growth. As Paul Graham, Y Combinator founder explains: “If you have 100 users and keep growing at 10 percent a week you’ll be surprised how big the numbers get. After a year you’ll have 14,000 users, and after two years you’ll have two million.”
The other benefit behind using methods that don’t scale is the ability to get in close contact with your users. And both of us know how crucial it is to engage with potential customers directly, especially if you are still working on product/market fit, this can be an important way to learn if you have the right product.
5) Focus on a small niche
Who do you actually want to work with?
Most of us start with a product idea, never thinking about who we want as ideal customers.
We started our company Cread Hub Resources with the idea of helping non-creative founders build their startup projects and get them to market. We had so much value we wanted to provide people — connecting them with our team of designers and developers to help them build, teaching them how to test their product on the market. But 80% of our time was spent on customers who are still trying to figure out what to build.
Who’s the who?
It took months before I sat back and actually thought about the WHO. I realized our offering can’t serve all non-creative founders and, in order to grow faster, we had to focus on those who were ready to build their product.
Many investors give startup entrepreneurs this terrible piece of advice: “Your ideas are too small. You need to think bigger & go after a larger market. “ When you’ve found the unusual idea to base your startup on, don’t go too broad too quickly.
This may sound counter-intuitive because most founders fear that if they start small, they will lose potential customers on the way. Startups are more likely to accelerate growth by narrowing their target demographic, better understanding customer needs, building more focused products, and tailoring their marketing message to their specific audience.
Later on, After getting initial traction with a small audience, startups can grow their market and expand product offerings to go after bigger market segments.
It took months before I sat back and actually thought about the WHO. I realized our offering can’t serve all non-creative founders and, in order to grow faster, we had to focus on those who were ready to build their product.
Many investors give startup entrepreneurs this terrible piece of advice: “Your ideas are too small. You need to think bigger & go after a larger market. “ When you’ve found the unusual idea to base your startup on, don’t go too broad too quickly.
This may sound counter-intuitive because most founders fear that if they start small, they will lose potential customers on the way. Startups are more likely to accelerate growth by narrowing their target demographic, better understanding customer needs, building more focused products, and tailoring their marketing message to their specific audience.
Later on, After getting initial traction with a small audience, startups can grow their market and expand product offerings to go after bigger market segments.
If you enjoyed this post, please consider leaving a comment and subscribe to my platforms or via email to ensure you can enjoy the latest post(s)
No comments:
Post a Comment