Navigating Growth Teams: A Blueprint

Unveiling Practical Insights for Establishing and Scaling Effective Growth Teams

Growth, as a function, is only a decade old. Many companies are establishing growth teams for the very first time, and there’s still very little practical advice for thinking through the timing and sequence of building your first growth team.

Growth teams don’t build net new products or features. Instead, they work on creating distribution strategies that help acquire, activate, engage, and monetize customers on the existing product value.?

In the dynamic realm of contemporary business, the concept of specialized growth teams is a relatively nascent phenomenon, with its roots barely a decade old. As companies grapple with the idea of forming dedicated growth teams for the first time, there's a palpable void in practical advice on when and how to embark on this pivotal journey.

The Growth Imperative: A Departure from Tradition

Traditionally, product and marketing teams have been the linchpin for companies, designed to create and amplify the core value delivered to customers. However, the advent of growth teams marks a paradigm shift—they're not in the business of crafting new products or features. Instead, their mission is to engineer potent distribution strategies that elevate customer acquisition, activation, engagement, and monetization for existing product portfolios.

In the words of Andrew Chen, a prominent figure in the growth space, "Most product and marketing teams are built to create or expand the core value provided to customers. Growth is connecting more people to the existing value.

Most product and marketing teams are built to create or expand the core value provided to customers. Growth is connecting more people to the existing value.

Decoding Growth Team Objectives: Strategic Framework

These growth teams and their corresponding pods typically organize around four primary objectives: acquisition, activation, monetization, and engagement. However, for a whopping 90% of new growth teams, acquisition emerges as the inaugural goal. Why this emphasis on acquisition, and why is it recommended to be the first frontier?

1. Ample User Volume: The early stages of the customer journey are teeming with user activity, providing a fertile ground for a data-driven approach to optimize distribution effectively.
2. Critical Drop-Off Point: A significant number of businesses witness notable drop-offs during the acquisition phase of the user journey, making it a pivotal area for immediate improvement and faster time-to-value.
3. Holistic Impact: A boost in acquisition invariably translates into improved engagement and monetization, setting off a positive chain reaction across downstream metrics.
4. Building Organizational Trust: Monetization, being a multifaceted challenge, demands a foundation of trust across all organizational stakeholders. Fostering this trust becomes a prerequisite before delving into the intricacies of monetization.

Growth teams and pods are typically formed around (1) acquisition, (2) activation, (3) monetization, and/or (4) engagement goals. And 90% of the time, acquisition is the first goal new growth teams take on. This is my recommended approach as well, because:

1. There is more user volume in the earlier stages of the customer journey for the growth team to take a scientific, data-driven approach to finding the best ways to increase distribution.
2. Most businesses experience the biggest drop-offs around the acquisition parts of the user journey, giving a way to faster time-to-value for the newly formed growth team.
3. Improved acquisition leads to healthier engagement and monetization; thus, by refining these initial stages, businesses can also enhance downstream metrics.
4. Monetization is a complex issue involving all company stakeholders, so the growth team must build organizational trust before addressing this crucial element.

The Growth Trajectory at Different Company Stages

The approach to growth is not one-size-fits-all—it morphs at various stages of a company's evolution. Here's a distilled guide:

Before Product-Market Fit (PMF): Lay the groundwork with a growth model hypothesis. Resist the allure of premature growth talent acquisition. Growth hinges on amplifying the distribution of the core product, and without PMF, there's a dearth of substance to amplify.

Finding PMF: Pioneer growth efforts under founder-led stewardship. In the early signs of traction, the founder takes the reins of growth, emphasizing quick decision-making, alignment with the company's vision, and instilling a growth mindset in the organizational culture.

Scaling PMF: Introduce your inaugural full-time growth roles. As the company transitions from validating PMF to scaling, it's time to contemplate the construction of a dedicated growth team. The opportune moment for hiring your first growth team member is when you're poised to magnify your product's distribution and possess initial validation of your distribution methods.

Growth efforts and team compositions vary depending on the stage of a company’s development. Just like with the first product or marketing hire, it is a difficult decision to determine when growth specialization and hiring are worthwhile.

Many founders get caught up in growth hype and try to hire growth talent as early as possible. Don’t fall victim to this trap—you will only waste precious capital and equity for lackluster results. Growth is about increasing the distribution of the core product. If there is no validation that the product has found PMF, growth has nothing to grow. PMF has to happen first, then growth.

But that’s not to say you shouldn’t think about growth pre-PMF. As you explore potential product-market fit, it is crucial to have hypotheses on how you will distribute your product. For example, if you are planning to be product-led, then the product has to be designed with acquisition, monetization, and retention distribution goals in mind from the very beginning. If you are planning to be marketing/sales-led, then the product experience will look very different from inception, as you will have humans responsible for growth levers and distribution.?

Founders must assess their PMF strategy and develop the best-fitting ways to distribute the product to create predictable, sustainable, and defensible growth. It can be product-led, marketing-led, sales-led, or combinations thereof. But just like you wouldn’t outsource your PMF to a PM, you cannot outsource your initial growth ideas.

Finding PMF: Founder-led growth

During early signs of traction and initial scaling stages, it is important to validate that the growth model hypothesis was correct. Founder-led growth is the best path here, where the founder drives growth efforts across product-led, marketing-led, or sales-led motions.

• Product-led growth: The founder prioritizes not only building core functionality but product experiences to resolve distribution goals, from acquisition to monetization.?
• Marketing-led growth: The founder prototypes third-party channels and content to enable the market with the information to drive acquisition, educate on engagement, and assist monetization.
• Sales-led growth: The founder does sales themself.?

The benefit of founder-led growth at this stage is quick decision-making, tight alignment to vision and customer, and, perhaps most importantly, leading by example to set up the growth mindset within the company culture.

At this stage, we recommend you don’t hire a team for growth, as it’s still too early in the PMF journey to warrant multiple headcounts, but if you still want to hire dedicated growth talent, look for someone with (1) high iteration/learning velocity; (2) a growth mindset; (3) strong execution skills, and a generalist who can execute across different growth problems; and, ideally, (4) someone internal who already has the business context.

Scaling PMF: Hire your first full-time growth roles

As your company efforts transition from a search for and validation of PMF to scaling work, you can begin hiring your growth team. In other words, the right time to think about the first growth hire is when you are ready to blow up the distribution of your current product-market fit and have initial validation of your distribution methods.?

Your first growth hire’s skill set should be anchored to the biggest growth lever that is currently experiencing friction: acquisition, activation, engagement, or monetization. Is your biggest bottleneck to growth today acquiring new users, activating those users, keeping them retained, or generating revenue?

It is important not to hire growth team members just to “accelerate growth,” as it will likely result in a misfire. For example, if product-led growth is your main motion, hiring a marketer to accelerate growth will lead to disappointing results—because most of the growth work will need to be done in the product by the PM and eng teams. Knowing where you are experiencing friction will ensure that you have sufficient data tracking and understanding of your growth model to bring the right talent on board, enabling new hires to have a meaningful impact.?

Understanding why your business is not growing is incredibly difficult. Many founders want to shortcut this by hiring a growth leader to outsource solving this problem to them. Unfortunately,?even the most experienced growth leaders will take at least 6 to 12 months to understand the local problem fully. The business ecosystem is incredibly complex, and learning about products, industries, markets, customers, and internal employee dynamics is not an easy feat.

When growth leaders need immediate results, they are forced to simply copy-paste from their previous experiences, often resulting in initiatives that do not produce desired outcomes.??

A common misstep in this trajectory is the premature hiring of a growth leader. Sustainable growth is an evolutionary journey, not an instantaneous revolution. Instead, focus on recruiting a versatile builder—someone armed with tactical execution skills, capable of tackling a spectrum of growth challenges, and making substantial contributions.

Sustainable growth is about evolution, not revolution. Hiring a “builder” profile (e.g. Acquisition PM, Activation PM, Monetization PM, Acquisition Growth Marketer, Retention Growth Marketer) as your first hire is a better bet. A builder is a growth generalist focused on broad tactical and execution skills within a specific domain. These are the individuals you want on your team when you are standing up growth processes and systems from the ground up.

How to structure the growth team

Since growth is a result that the whole company contributes to, the question is how to structure the growth team to accelerate growth while also ensuring that the responsibility for growth is shared across the entire organization.

Let’s take data analytics teams as an example. Although almost every company has data analysts, other team members also analyze data whenever possible. While the analysts may take ownership of the more complex data projects where they can provide unique insights, the entire company must take responsibility for data analytics if they want to make data-driven decisions.

The same concept applies to growth teams. Growth teams take accountability over growth work where they can uniquely add value, yet the entire company should continue aligning to growth outcomes.

Structuring the Growth Team: Centralized vs. Decentralized

The structure of a growth team can either be centralized or decentralized, contingent on the company's objectives and culture. My personal recommendation would be Centralized teams, optimized for velocity, operate as agile, self-sufficient units. On the flip side, decentralized teams enlist the entire organization in contributing to growth success. Centralized growth teams are optimized for velocity. Growth marketing, product, and analytics report to a Head of Growth. Dedicated engineering and design resources are embedded in the team or may even report directly to the Head of Growth. The reporting structure can be to the CEO.

Key attribute is Velocity. They operate as a lean, mean, execution-hungry machine.?They have aligned priorities,Are self-sufficient,Have customized processes, rituals, and development lifecycles, Can prioritize and re-prioritize on the fly

Drawbacks:

Centralization of responsibility: Dedicated teams often hoard growth responsibility because they can do it faster and better than anyone else. This often results in all growth outcome accountability falling on the dedicated team, alleviating the need for the rest of the company to contribute to growth success. The Product team may become a feature factory, and Marketing begins to fall back on the blind chase after traffic/MQLs. Resource constraints are often felt fairly quickly because the rest of the organization is not aligned to contribute.? Unclear career progression for people on the growth team—not all growth marketers and growth PMs want to be growth leaders.?

Stay tuned for forthcoming Post that delve deeper into the multifaceted landscape of building growth teams. Subscribe to access future content and gain nuanced insights tailored for the evolving business landscap