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:
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.
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?
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:
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);
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.
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:
- 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? 🤓
If you like, don’t forget to 👏👏👏👏👏👏👏👏👏👏👏👏👏👏
You can check all references linked in the article or below:
- On Growing: 7 lessons from the Story of WeChat by Y Combinator
- Siqi Chen, former VP of Growth at Postmates, on scaling a growth team by Intercom
- Retenção e Engajamento — Quando tudo começa pela emoção by @arthurklose
- Retention is king by Andrew Chen
- Don’t Let Your North Star Metric Deceive You by Brian Balfour
- Does a North Star Metric Oversimplify Growth? by Sean Ellis
- Medium’s metric that matters: Total Time Reading by Pete Davies
- What is North Star Metric? by Sean Ellis
- The Only Metric That Matter by Josh Elman
- Building A Growth Machine by Brian Balfour
- Principle, Process, Team and Tactics by Brian Balfour
Read writing about Growth in Hacker Noon. how hackers start their afternoons.hackernoon.com