Arthur Castro

@arthurklose

Growth is NOT just growth.

Growth involves much more than just grow retention, conversion or increase any specific action

You can read the Portuguese version here.

I know that you have been listening and seeing Growth like ever before. Strategies that increased the conversion in X%, retention grew Y% and a lot of other numbers that grow based on smart movements.

But at the end of the day, we need to discuss and prepare a lot of stuff before start and analyze behavior, numbers to optimize growth.

When I start talking about it on the first Mobile Growth Workshop in January at Product Arena Rio de Janeiro Edition, the students look me like a stranger. After I gave a lot of examples, exercises, and discussions, they understand the importance of the Foundation of Growth.

One thing that helps to understand it is the growth pyramid that Brian Balfour explained in one of his articles about growth:

Source: Brian Balfour's blog

Starting by Principes and not by tactics make sense once all tactics are different from each product. And for sure that you know your product, your audience, your users, and the customer journey are so different, right?

Rather than ask about:

  • Tactics that help X% active faster the service; or
  • Tactics that grew the retention by Y%,

People should ask: How are created the principles of growth and how that keeps working?

And, the pyramid has other essential points:

  • Process: Help orientate/priority hypothesis and focus, and of course, alignment;
  • Team: Define the process is so important to create your team;
  • Tactics: Are the "Hands on" part. Turbinated and evolved by the Team. Good Process and the right Team are essential to be successful here.
To learn more about the Growth Pyramid, read more here and here.

Ok, and then…?

What is the most critical area that we can focus our effort with minimal resources?

The one billion dollars question that helps define a lot of things. For example:

Will we invest effort in Activation of users or the Acquisition of new users?

For sure that both make sense. But, if you don't have enough resources what the priority is? Make sense acquire new users if they not back?

That's why Retention is king! (and I recommend you to read this article about retention by Andrew Chen and this one about my keynote on ProductCamp)

Virality Vs. Retention. Source: Andrew Chen's Blog
PS: did you know that can be 25x cheaper retain a user than acquire a new one? Source: Harvard Business Review

About it, two more topics need attention: North Star Metric and The Only Metric That Matter.

  • North Star Metric is the best metric to measure the value that your product delivery to users, and
  • The Only Metric that Matter is the only number that needs attention at the moment (and maybe in the future, you need other OMTM)

Basically, OMTM is the number that will help your startup next fund rising, and NSM will help orientate your startup in the long term.

Examples of North Star Metric:

  • Facebook: Daily Active Users (more users access, more info/status users look and of course, more segmentation they have to Ads)
  • Airbnb: Nights Booked (value to the hosts and guests)

Examples of Only Metric That Matter:

If you want to learn more about these topics, I encourage you to read it about NSM and this one about OMTM.
As soon users exposed to these value, the conversion grow. Source: Inside Intercom Poadcast

You can have a lot of answers to What is the most critical area that we can focus our effort with minimal resources? Like:

  • Activation (Onboarding);
  • Acquisition (New Users);
  • Retention

Former Postmates VP of Growth, Siqi Chen shared one interesting example about Onboarding at an interview on podcast Inside Intercom. Postmates allows getting anything from anywhere, like a Nintendo Switch from Target. That’s an advantage if you compare competitors like UberEats. (also, in Brazil we have a startup doing the same of Postmates, called Rappi). So, as soon users exposed to these value, the conversion grow.

The next level of growth

Another good example of growth is not just growing specific action is WeChat. The Asian Juggernau, that recently achieves 1 Billion monthly active users, Instead they think just make users send more messages, WeChat trying to grow the number of tasks that can be done through the app in the daily lives of users.

Crazy, no? Source: Y-Combinator

To think in this way, you need your foundation of growth prepared. But, you can step back and understand how and where your customer interacts with your product/service using a simple framework, called User Channel Map. Make a copy to apply to your product and get some insights:

Download User Channel Map Template

User Channel Map — Source: Growth Series by Reforge

To resume:

  • Better questions always bring better answers. Do not forget that Growth is much more than just tactic;
  • Find your NSM as soon as possible to orientate the future of your company;
  • NSM is different from OMTM;
  • Understand what your customer do during the day can bring a lot of insights to take your product to the next level;
  • Define the foundation/principles of Growth help better tests, hypothesis and probably, best results and velocity.

So, are you ready for Growth? 🤓

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