The 3 Engines Of Growth In Business [Which One Should You Use]

The 3 Engines Of Growth In Business

Different entrepreneurs use?different marketing channels?to grow their businesses.

There is no one-size-fits-all when it comes to growing a business.

Some people find it much easier?to do one thing than another.

For example, in my case,?building an audience around my business?is very difficult - it's one thing I don't like spending my time on because it won'y pay off for me.

However, there are people who don't start businesses unless they have an audience of at least 100 raving fans.

That way, they know that once the business launches, they'll be able to?get sales on day 1.

They know exactly how to build a fanbase around the business, and in most cases, only decide to pursue businesses that are able to have that fanbase effect (more on that later).

Other people take a much more gung-ho approach and spend all their time?getting presales for a business.

They go around?social channels?talking to potential customers about a problem they have and offering to build a solution for $X if they pre-order now.

It's a great way to?validate that a business will inevitably work, however, it's very difficult to collect payments off people you don't know simply by telling them that you've got an idea you want to build.

In this article, however, I wanted to take a birdseye view of the different engines on growth in business.

We're going to be discussing the 3 engines of growth and which one you could potentially use to grow your venture.

Sticky engine of growth

The very first engine of growth is a really effective one.

In his book, 'The Lean Startup,' Eric Ries talks about how businesses should aim to leverage the sticky engine of growth wherever possible.

However, before we take a closer look at this model, we need to understand one thing about these different engines.

Not every business is able to leverage every single engine.

Some business may only be able to use the sticky engine of growth whilst another might only be able to use another one of the three.

This article will give you clarity on which one you should be using in your business.

The sticky engine of growth focuses on?attracting and keeping customers?for the long-run.

Entrepreneurs believe that it's a lot easier and more cost-effective to keep existing customers than going out and looking for new ones.

That way, by reducing your company's churn rate, you'll be able to grow your business faster and more sustainably compared to someone going out and looking for new customers all the time.

My most recent SaaS business,?Hawk Prospecting, is able to leverage this engine of growth.

In fact, a lot of?SaaS companies?are able to leverage this engine because they require customers to pay every single month to have access to a software.

Hawk Prospecting is a key component of many?marketing agency?owner's businesses.

Using Hawk Prospecting, they're able to?find prospect's?information to reach out to.

Therefore, when users start to see the power in?Hawk Prosepcting, they wouldn't stop using it because it's beneficial for their?day-to-day operations.

That's the trick behind the sticky engine of growth - make it addicting or something customers can't live without.

Another great example are games - more specifically Fortnite.

Fortnite is a game that was able to leverage more than one engine of growth in order to grow.

However, the most important engine it leveraged was the sticky engine - people who played the game, Fortnite, were returning every day or every few days.

When you have a business that people return to, you have a?valuable business.

It's difficult for?eCommerce businesses?to leverage the sticky engine of growth, but is it impossible?

One of my favorite eCommerce businesses (from an entrepreneurial stnadpoint) has been able to leverage this engine of growth amazingly.

I've made a?video on my channel where I analyse their Shopify store.

The brand, Blendjet, started by?dropshipping?portable blenders and are now one of the biggest brands out there.

How can a blender be sticky?

Firstly, blenders are a household item that are more commonly used than others.

However, this is not what allowed them to leverage this engine of growth.

The real leverage came when they introduced a subscription package; customers are now able to subscribe and get protein packs called 'Jetpacks.'

Now instead of customers buying 1 or 2 blenders and leaving, they are able to become returning customers by subscribing to the protein packs.

Blendjet, today, is an?8 or 9 figure business.?

Viral engine of growth

The next engine of growth is something some of the world's biggest brands use to grow.

It's amazing because when you're able to use this engine, you're able to?grow exponentially?without paying more for customers.

The viral engine of growth is very simple - when you have a business or a product that has the potential to go viral, you can leverage this engine of growth.

The downside, however, is that you won't know what will go viral or not.

Something you think could go viral might not, however, the business you least expect could pop-off.

A few months ago,?I had an idea?- an idea I knew would go viral, but I didn't act on it because it's not something I wanted to do.

I wanted to build an online chat application that connects you to strangers around the world via face-to-face chat.

Basic, right? Here's the kicker - I wanted to do it using AR technology so that you're essentially talking to people in cartoon form.

A few weeks ago, my girlfriend showed me an application that launched which did exactly that!

It was going?viral on TikTok?because people were recording themselves using the application and posting it.

On the topic of?TikTok, this social platform is a prime example of the viral engine of growth.

In article by CNBC, they said, "TikTok said it had about 55 million global users by January 2018. That number grew to more than 271 million by December 2018 and 507 million by December 2019."

How did they manage to?grow so quickly?

They leveraged the viral engine of growth.

Let's talk about the power of this engine of growth.

Imagine you find a product or service you really like and share it with two friends.

Your friends really like the product so they share it with 2 more friends each.

Their friends love the product and share it with their friends.

Those friends start using it around their group of friends who then also give it a go.

All of a sudden, we have dozens of people using a product or service simply because you told 2 of your friends.

Now imagine this replicated 1000s of times by 1000s of others around the world.

That's the power of the viral engine of growth.

In our last example, we mentioned how Fortnite managed to grow using two engines of growth.

The second engine they used was the viral engine.

Not only was Fortnite addicting and fun to play, it also went viral.

Part of it's success were the dances you could do in the game, these dances were being done by everyone on TikTok, and celebrities were even getting involved.

Although the game might seem less popular than it was before, the game is still growing faster than ever.

To leverage this engine of growth, your business must have a viral aspect to it,?something that makes people share it with others.

When Hotmail first came out, they did something amazingly simple to grow rapidly.

They managed to go from zero to 30 million users in less than 30 months using a very simple viral strategy.

Whenever a Hotmail user sent an email, they had a watermark at the bottom of the email which recipients can click on and sign up for a Hotmail account.

This simple strategy helped them experience massive growth before the 21st century.

Paid engine of growth

If I told you that you could spend $1 to make back $3, would you do it?

How about if I told you that your $5 can make you back $25?

Or what about if your $10 can turn into $100?

Would you make this trade?

That's how the paid engine of growth works.

You're paying a marketing channel, like?Facebook, Google,?YouTube, etc, to put your products or services in front of their audience in the hopes of finding customers.

Although this is by no means cheap or easy to do, it's most likely the simplest of the 3.

All you technically need to do is create adverts and you'll be able to put your products in front of a massive audience.

There are people who like to play things?slow and steady without too much on the line, and there are those who are more direct in their approach.

If I had the chance to choose, I would go with the vrial engine of growth coupled with the sticky engine too - that way, you'll have an?unstoppable business.

However, we're not lucky enough to be able to choose if our businesses go viral or not - we can try, but?there's no guarantee.

That's why a lot of people opt-in for the paid engine of growth.

When your business is unable to leverage the other two channels, you're then able to choose the paid engine of growth.

For a SaaS company, it could make a lot of sense to go for this engine.

Imagine you have a business that sells something which costs $50.

It costs you $10 to acquire that customer with paid advertising.

An?eCommerce store?will simply have made a 5x ROAS, meaning they made back 5x what they paid in marketing dollars.

However, for a SaaS company, you're ROAS might have been much higher.

Let's imagine for a second that, on average, your customers stick around for 6 months before leaving.

That means for 6 months, you'll be getting paid a repeat $50 - 50x6= $300.

Now instead of making you a 5x ROAS, you now made a 30x ROAS.

That's how the paid engine works, coupled with the sticky engine of growth.

If your business has a longer lifetime value, you'll be able to spend more money knowing that the customer might stay for a lot longer than say an eCommerce store.

Brumate - another one of my favorite eCommerce brands, leverage the paid engine of growth to grow rapidly.

Today, Brumate is a?9-figure business?making over $10 million per month (literally my dream)!

They had an amazing product that was new to the market and grew it via the paid engine of growth.

You'd be surprised -?their margins are a lot higher?than most businesses with around a 40% margin.

As you could see, every engine of growth works in it's own way.

Every engine has bred?successful businesses, so which one are you going to use to grow your business?

Did you find this article helpful??

If so, please leave your thoughts in the comments below - let's get some conversations going!

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Till next time,

Mohamad