Finding Your Business’ Unique Growth Drivers

By Jon Davids, Founder & CEO of Influicity

New businesses tend to spend their early years figuring out product/market fit and then spend even more time fine-tuning every aspect of their offering. One of the things that an entrepreneur waits too long to consider is their business’ unique growth drivers (UGD).

For this column, a UGD is something that the business can do over and over again, that will continue to produce revenue. UGD’s are essential because they allow the company to foster a predictable growth curve. Let’s look at some proven UGD’s and where they make the most sense.

1. Viral Expansion Loop

The strategy adopted most commonly by consumer tech (and more recently by enterprise tech) is the viral expansion loop. This type of growth driver relies on an ever-growing “loop” of users that attract ever more users.

The viral expansion loop works when the benefits of your product increase in sync with the user base grows. With enough value derived, users will naturally work to attract other users.

This was a very obvious UGD with the early social networks (MySpace, Facebook, Twitter, etc.) Some other examples are payment apps where a user must sign on to receive money (i.e. Venmo) and collaboration tools where one employee invites their colleagues (i.e. Slack). Even referral programs could also count as expansion loops.

While the viral expansion loop is tough to trigger, the payoff is massive.

2. Physical Locations

Many retailers — both online and offline — grow as a direct result of adding locations. Once they calibrate the perfect formula of one location, they rinse and repeat.

We all know that adding locations drives revenue for companies like Starbucks, McDonalds, and 7-Eleven. But it also drives revenue for eCom players like Indochino and Warby Parker. In my interview with Drew Green, CEO of Indochino, he explains how physical stores have built Indochino into a $100M+ juggernaut. 

3. Supply/Demand Drivers

In marketplace businesses, the most common obstacle to growth is supply/demand liquidity. That is, increasing both the supply side (the product being sold) and the demand side (customers to buy that product) in unison.

I’m a firm believer that the demand side must always come first. A marketplace with 1,000 items for sale and zero buyers, is worthless. But 1 item for sale and 1,000 buyers is the start of a great marketplace!

Another reason is that the supply side can be hacked in all kinds of ways, much more readily. In the early days of Airbnb, the founders famously siphoned listings from Craigslist to fill the supply side. In the early days of eBay, they used content to attract listings.

If you’re building a two-sided marketplace, the demand-side is your UGD. Figure out how to build it, and then pour on the fuel.

If you sell it, they will come!

4. Direct Sales Force

When you’re selling high dollar items, direct sales reps can be the most efficient method of growth. Once you’ve cultivated the ideal product/sales strategy, adding bodies to the sales force can drive major growth.

But consider splitting the roles into different functions: new business hunters, deal closers, account maintenance, rainmakers, etc. In building several million dollar companies, I have rarely found a sales professional who excels at every part of sales.

Make no mistake - companies with average products (or even below average products) have dominated industries because of their effective sales teams. Product people are fond of saying “if we build it they will come.” That’s non-sense. If you sell it, they will come!

5. Performance Marketing

Many businesses can correlate their sales very closely with their ad budgets. If you’re in a business where every $1 in advertising generates $3 in sales, it’s time to hit the gas.

Of course, this takes many forms from digital and direct response, to search and social, right down to out-of-home and broadcast. Interestingly, TikTok's early ascent was driven largely by performance marketing, not the typical viral expansion loop that most social networks experience.

JM Wrigley once said, when asked why he keeps spending money on advertising even though he already sold more gum than any other company in the world — it’s the same reason the pilot keeps hitting the fuel even while the plane is in the air. So it doesn’t come crashing down.

Jon Davids is an entrepreneur and investor. He hosts the Top of Mind podcast, focused on media and marketing. Follow Jon on Instagram and LinkedIn.