A growth practitioner is someone that practices the strategy of making small experimental improvements every day.
How are you defining growth?
In 1955, the average life expectancy of a Fortune 500 firm was 75 years. It now stands at 15 years.
How did Amazon become Amazon? How did Apple become Apple?
How did IBM and Unilever avoid extinction?
As difficult as it is to answer these questions, you might start by stating each company has an amazing product. You might point out the qualities of the founder, or the fact the company focused on a single product in a niche market. You might say they truly found product-market fit or the fact they have an unbeatable experience.
Honestly, it seems like we all have the textbook answer, but how come so few pull it off?
To help us understand this new environment, let’s turn back the time.
So like typical people, they decide to turn their space into a living area. In October 2007, their first guests pay $80 each to stay on air mattresses. At that point, they feel they have something and start developing an idea with the help of their old roommate, Nathan Blecharczyk.
Still strapped for cash in August 2008, the friends come up with an idea to raise money by selling Barack Obama and John McCain cereal boxes in the runup to the elections. They sell $30,000 worth of boxes.
Customer: “I want to go to London but there’s no conference.”
Brian, Joe, and Nathan (to themselves): “Why does this have to be for conferences?”
NOTE: At the time, Airbnb required you to use an air mattress.
Customer: “Why am I putting air beds on my mattress, it’s so uncomfortable!”
After realizing how uncomfortable it is to have an air bed on top of a mattress…
Brian, Joe, and Nathan: “Okay fine, you may have a real bed.”
This was after Mr. Graham asked, “People are actually doing this?”
While others believe they have the magic answer, you might be able to systematically find it.
Unlike the situation above, where folks are relying on traditional leverage, you can optimize your probability of success and increase the skills of your team in a measurable way that creates value and is undeniable to your customer.
How can you do this? As the 76ers and Nick Saban have pointed out, “Trust the process.”
Now more than ever, a more holistic approach to growth is required by companies.
Experimentation and creativity are at the heart of the new growth formula.
4 key trends to this new growth environment include:
Apart from increased venture capital investment (which goes to a fairly concentrated area still), a key driver of this new environment is the cross-pollination of data and technology.
An important question is, why now?
In order to better understand this shift in thinking, it’s worthwhile to mention how companies previous to this were growing. One could argue growth hacking existed early as the 60s when companies like Walmart and McDonalds were rapidly growing. This is likely true — I’d bet there were some smart individuals who were able to look at business growth holistically and used small, clever ways to engineer growth. However, there’s one significant point in our history when something important changed — in the 1990s, the internet appeared.
However, thanks to the likes of Google, Facebook, Amazon and those mentioned above — that’s all changed now.
We now live in an economy where growth no longer comes after a product is made, rather growth is co-created with the product itself. Digital disruption is creating significant opportunities. Customer choice is influencing how we involve technology. Every industry is being reimagined.
Social, economic, and technology factors are changing the way people behave. The focus has shifted from large sales team and siloed departments to the customer experience and software.
— Steven Dupree, Former SoFi/LogMeIn
From a high level the growth process includes the following steps:
Skilled growth leaders like Brian Balfour, Sean Ellis, and Andrew Chen look at the entire customer journey from end to end while keeping a focus on long-term growth. It seems pretty simple but can be quite tricky if the past culture has its way. Even more, you can have short-term growth at the expense of long-term churn. The best growth teams look for sustainable methods to test and iterate with. It’s a continuous process where data and creativity play roles as key catalyst.
The customer journey includes:
A possible scenario in the past (and likely present): Marketing team works on awareness and acquisition. Product team works on activation and retention. Sales handles revenue and referral. Different functions work on different parts of the funnel. This behavior leads to certain parts of the organization to be deprioritized.
— Andrew Chen, General Partner @Andreessen Horowitz, previously @Uber
As you’re probably thinking, you can’t do any of this without a great product. Absolutely true. But is your first product going to be the solution customers come to love? Probably not — it’s a process.
What can do right now? Focus on what’s in front of you, the now. The best way to lean into this is by building a sustainable process. A machine, that step-by-step, moves you forward (even if in reality some steps might be backward). Through this process, you can systematically remove unknowns.
You start with what you have and you let your customers decide. Then using the above framework and philosophies, you try to create a radically authentic and meaningful product your customers care to use and want to share with others.
At the end of the day, this new growth formula is more of a shift in mindset than anything. The changes required are a function of the new environment we live in.
Growth takes time but with the right approach, you can mitigate the necessary risks to cultivate an environment ripe for growth.
Apologies for any mistakes or typos. I welcome any feedback or questions. If you enjoyed this article or thought it was helpful, I’d appreciate if you could give it a few claps and shared it with other community members.