What I know about Growth for sure

Apparently I have been too consumed at work doing what I love the most — musing. Just replace Meg Ryan in “you’ve got mail”, and you might get me — all musing and writing :P

Reflecting on some of these musings as a Growth person at a hyper-growth startup, I could think of 12 things I know for sure about Growth. Dishing these out for you.

1/ First rule of growth club… you TALK about the core loop

Sorry Brad Pitt.

What is the core loop, you ask?

Every product’s growth journey traverses through the following stages — acquisition (or adoption) → retention → monetisation, and parallelly churn and resurrection.

It’s far from circular, think of it as a loop within the loops. The only thing that matters is who you acquire, do they retain, and how longevitously do you monetise them.

Sure you may not be working on everything all at once. But here’s why it matters for you to revisit the core loop every now and then:

Not all acquisition is good -

• A. Fear leaky buckets — You acquired 100 users, 30 retained, 70 churned. Would you still push peddle on acquisition? Hell, no. At a 30% retention, you have a product with a leaky bucket. You can keep adding users on the top but if your retention doesn’t hold, they are all eventually going to go. If you have incurred media or performance expenses, you have in the least wasted 70% impressions and at this rate — you can’t afford a high spend, low conversion, your CAC is already out of the window. (Note 30% here is just an example, your retention thresholds will always depend on the product and industry)
• B. User quality matters — Acquiring a user who has no PMF with your core product (or is non-monetisable) is a liability than an asset. The reason why companies are particular about who they extend invites to (in case of whitelisting products), or who they gate-in (in case of exclusive community products) is because not every user is the same. A high quality user bolsters the GM/user (gross margin), whereas a poor quality user will sit as a carrying cost on your P&L (in case you use some form of incentives for growth).

Not all retention is monetisable — Even 100% retention is good for naught if your users doesn’t have an eventual path to monetisation. This is same as not all engagement is the same. A user may be 100% retained on your 1, zero inflow offering which may give you regular engagement, but if there’s no way for that user to go beyond retention to exploration, that frequency is of less use to you. Think of retention as visiting a bakery and buying bread (a 0 to low margin product) and exploration as buying desserts every now and then (eventual monetisation at a steady BAU retention).

Not all churn means a dead end — Churn sounds bad, but churn may matter more at a large scale than at an early stage. At a product building stage, users will show an exploratory behaviour, those who find a PMF with you would stick, and others might churn. Those who churned because of negative user experience or 0 PMF are hard to bring back, but those who churned because they were looking for something you didn’t offer at that time can be brought back at a later stage (of course, only if you’ve launched what they want or even better). Strategise your GTMs with a special focus on reaching out to these users and letting them know how you’ve changed since the last time they were on your product.

2/ Building influence and how

Think of this as the tech version of Carnegie’s “How to Win Friends and Influence People”.

Every marketeer, growth or product person, essentially wants to influence what their user does. The key to influencing however is trust.

As a growth person, a lot of your growth strategies should:

A. Depends on the growth stage you are at — Influence itself is multi-layered. It’s not a 1-way street (at least beyond a point). Consider this matrix for example -

• At an early stage, aim only for the power users. Let organic adoption happen and see what’s working for the early adopter cohort. Scale the learnings and ride on to the WOM. This stage is mostly Brand to User communication.
• At growth stage, push peddle on inorganic growth. Consider BTL (push notifications, email and newsletters) and even content and influencer to drive growth in adjacent markets. These are users closer to your power users, or demonstrating behaviour close to that of your target user base.
• At mature stage, now is the time to double down on the market share. Consider ATL, media and performance spends to be a suitable option. You can afford it at this stage because users know about you and you’re amplifying the brand and product positioning to capture more of the existing market.

B. Marry your brand and product promise — Trust is when your on-product experience matches the marketing promise you amplified using ATL. Work closely with your product team to curate an end-to-end onboarding to completion experience, which reinstates the product promise so marketed. User story from watching the ad on OTT to opening the app should stay intact.

3/ Productising motivation

Good products thrive on intrinsic motivation of the user. Great products take that initial spark of intrinsic motivation and couple it with extrinsic motivation, to almost make it feel innate to the user. Think — Duolingo.

Macro motivation always exists, i.e. fundamental truths about human behaviour will always hold. Product & Behaviour Design matters a lot while filling in these gaps and engineering motivation.

BJ Fogg explains in his Behaviour Grid that to induce a certain behaviour, how “trigger”, “motivation” and “ability” are key to getting a behaviour started. Eg. Inform the user what needs to be done by sending a trigger (think a push notification), on the landing screen, create enough motivation for the user to take the action (product value proposition) and create ability to take that action then and there (supplement the user with a CTA) to get the job done seamlessly.

Other examples of cracking user motivation are:

1. Endowment effect — Users value what they have earned after taking an action versus what is merely given or distributed to them.
2. Sunk cost fallacy— Users are more likely to finish what they have already invested in (time, effort or money in). Think buying relatively expensive product from an e-commerce platform only because you have some loyalty points there.
3. IKEA effect — Users place greater value to something they made themselves versus what is already on the catalogue. Online food ordering (options to customize, and then check out) versus simply ordering.
4. Illusion of choice — Google Pay lets you choose your reward after every transaction. You may be choosing from a superset you didn’t choose, but you felt you chose it.
5. Pleasure of gains — You saved “? X” on this order.
6. Loss Aversion — You could have saved “? X” on this order by doing Y.
7. Progress bars — LinkedIn profile feature, which is always on auto-start (1st two or three steps are always checked) makes you want to complete the other steps too. You move from “apprehension of starting” to “motivation of completing”.
8. Luck & Skill — Joy and serendipity of getting a big reward (luck) or the kick of winning it using skill (gaming). Leaderboards are an example of skill based motivation, caveat is that they don’t work for those who are not winning.
9. Reward & Gratification — Clearly called out rewards. Instant gratification to solve cold-start problems, conversion linked gratification to solve acquisition problems, and spaced out gratification (1 out of 5 actions unlocked a reward) to solve engagement problems.
10. Social proofing — Sharing winner details, and building word of mouth.

4/ Cracking virality

Anyone who says they know how to go viral is making you a fool (or are one themselves). No marketing, growth or product condiments can ensure virality 100%.

It’s always a hit and miss, with stakes being too high in case it’s a miss (mostly true with ATL campaigns with marketing dollars behind them).

While this is more of Brand to User virality, what helps crack User to User virality? U2U virality is important because -

• It creates conversation, drives WOM (for a lot more cheaper)
• It reinforces trust (as B2U is often looked at as an ad)

Your power users are your loyalists, they advocate about you and refer you all the time, expanding your growth flywheels. Key questions to ask yourself while engineering this behaviour across all cohorts are:

• Does your user have the ability to share your message with their network? This could be message, content, product SKU, in-app construct. Ensure that they have enough nudges and clear CTAs to share this with their network.
• Why should your user share this ahead?
• a. Incentive — User gains by sharing (think referral programs)
• b. Signalling — Users signal their status (think clubhouse invite)
• c. Altruism — Users share out of benevolence (think “donate now” messages)

Crack the sender’s motivation to spread word, and half your job is done.

5/ Be on top. Always.

Let this be your favourite position(ing).

TOMA may be the most overused word by marketeers, but for all the right reasons. Top Of Mind Awareness can be cracked in two ways:

• Influencing whether you come first to your users’ mind when they need you?
• Influencing what your users think when they think about you?

Former is the conventional definition — if you think burger, think McD. This is essentially capturing a niche market and positioning yourself as almost synonymous to the product category itself. Latter focuses on how should the user think about you when they think of you. What should their top of mind be when they think Apple (Premium, Quality), Zepto (10 minutes delivery).

While former takes years to be built, latter is what to you can choose to influence right from the start. Your GTMs focus on what you want to stand for, what your brand persona is, what is on-brand for you and what brand vocabulary should your users talk in. Remember: What you say, your users take away. Hence, spending time on getting the latter right is super important. Spend time with your brand & product team -

• Doing competitor research — Why do they position themselves the way they do, what can be a differentiating factor for you, what is your right to win?
• User research and surveys — Understand how users perceive and refer to a particular service or offering (you may be surprised to know the gap between product jargon vs user consumable lingo).
• Brand-Product-Market Fit — At this stage, the intersection between your brand persona (which is based on your target audience, how aspirational or relatable do you want to be), and user’s existing product understanding will be the sweet spot for finding your positioning. Depending on the above variables, you may choose to take a mass versus niche approach towards positioning.

6/ Flywheeling your way to growth

With scale comes the responsibility of assessing the quality of scale.

What you want is not only for the user to come back every day/week/month (depending on the frequency of the business you do) but to come back and do more than what they do, every time. Yes, that’d be utopian.

A session should not be an end state. An e-commerce company is happy if you come and transact once in every 3 months, but is that enough? They’d want you discover more, indulge more, every time you come. A transaction end state is not success by itself, often times it is a dead-end disguised as success. Dead end if the user sticks to what they do and never explore you beyond what you want them to.

• Not just assess the # sessions or active session days, but also dive deeper into session time, session type (engagement session or transactional session). Key is to find the depth of engagement and not just the width.
• Study patterns of highly engaged users. What do they do differently than other users? While you may spend time on finding out why something doesn’t work, also spend time on understanding what stood out for those who loved the product. Doubling down on that aha experience is equally important.
• Engineer sweet spots. If 5 sessions on your website equals an inbound lead, make your users session 5 times. Find inflection points which are actionable to engineer.
• Ensure every session type has a further flywheel. An engagement session should help in product education, exploration whereas a transactional session can be used for cross-selling or upselling other products. (“Related products”, “Frequently bought together” are some examples).

Remember, retention by itself is not monetisable. Retention coupled with engagement matters.

7/ Fuck around. Find out

Your user is your date. And the date has to be perfect. You have to get everything right from — why, who, when, where, what.

The science of experiments can be condensed in these 5 Ws.

• Why — Why is the insight or the ingoing hypothesis you begin with.
• Who — Who is the user you are targeting for that particular experiment. Find the cohort which can validate or nullify the “why” of your experiment.
• When — Timing is key. Find the time when your user is most likely to respond to your triggers, when will that trigger be actionable is the objective.
• Where — Channel selection is crucial. If you’re doing ATL — you can barely fuck around and find out (OTT & TV has limited targeting choices), but if you’re doing performance ads (Google, Meta) you can slice and dice your cohorts as per your channels. Channels also depend on the objective of the campaign. Channel efficacy is important but not p0 in brand campaigns (you are creating awareness), however this becomes extremely crucial in product campaigns (where idea is to drive a certain action).
• What — The content, narrative, creatives everything matters. This is the deciding factor as this is what the user consumes. A/B your pitches, scale what’s working for you and manage the spends accordingly. You may want 4–5 pitches when doing BTL or performance ads. Same flexibility is not possible in ATL.

The art of getting better at experiments is only by practicing the golden rule of Fuck Around Find Out. The more the experiments, the richer the learnings. Two rules:

• Always set up experiments with proper test & control cohorts, to measure incrementality in exposed cohort over non-exposed cohort.
• Scale experiments with significant incrementality only. Every marginal gain may not be worth the effort or productisation.

8/ KYF — Know Your Funnel

While designing experiments or big bang campaigns, one size fits all doesn’t work. Sharing a few insights here:

• Shorter the funnel the better. Friction is the death of virality and conversion. Can you automate steps after first attempt (think — address auto-fill), or can you reduce redundant steps? Think frictionless.
• Is it true always? No. Story telling is underrated and it sells. While BAU flows should be lean, introducing another step in the funnel may increase conversion than curtail it. Think creating a landing page for explaining campaign construct and then redirecting to checkout screen, versus direct redirection.
• Lean vs broad funnels. A lean funnel represents low virality, strong conversion whereas a broad funnel implies high TOFU, but not a proportionate conversion. Idea is not to tradeoff growth for virality or vice versa, but strike a balance between the two. The funnel that gets you highest conversion for lowest CAC is the one to settle for. (Will happen when the campaign is viral enough for the CAC to be low, yet growth to be high).
• Is your funnel the only funnel? Often overlooked, and the answer is no. Your brand partners, content partners are a source for increasing your TOFU too.

Curate a frictionless, contextual funnel for your users. And don’t shy from being where your users are, even if it’s not your product.

9/ Unblock. Unlock.

Monetisation can not be a hard-sell. You only get so many chances to get a user, and when you get them, you want to get them right.

Think of unblocking your monetisable user base to unlock their monetisation potential when the time is right. The results here will not be here and now but more long-term.

Example — There are only 4 types of users — Casual, Core, Power, Churned. Power users may already be forming significant percentage of your monetised user base. Unblock the other users to get their maximum potential — engage the casual users, cross-pollinate the core users and resurrect the churned users. The better you unblock these segments, higher your GM/user potential would look.

10/ BAU vs Baseline Shifts

It’s easy to get caught in the everyday routine of driving optimisations. But zoom out to pause and take bigger bets. A baseline shift can help you front-load months of growth and change the gamut of problem statements you are dealing with entirely.

Baseline shift can be through PLG (product led growth) or Campaigns (product or brand led or both). In case of former, it may be a new product launch or feature launch, or in some cases, a complete overhaul. In case of latter, events and campaigns are one-off bets you take. Remember: while designing a campaign, not every problem is your problem. Pick one problem statement to solve, set your p0 and solve it fully. Let everything else be a check metric and a guardrail — this will help you map the playing field. Ensure, that every campaign is helping you break pattern, there’s a lot that freshness alone can drive for you, than you give credit for.

11/ Back out but don’t CAC out

There are 2 ways to look at CAC,

• BAU growth — A product that you have launched should operate at a certain CAC, same holds true for channels (digital, ATL, referral, etc). Whatever the channel may be, your blended CAC should justify your CLTV (not in the short term or early stages when you are scaling) but more so at a mature stage when you can’t afford to spend more than what you’ll make from the user in the long term. Be bold to kill the channels where CAC is not justified nor sustainable. AirBnB killed digital ads in 2021, and they reported $1.9 Billion in profits two years hence.
• Non-BAU or campaign led growth — Big bang campaigns may not be net positive in the short run, but there is no reason why their CAC should be bloated. If you’re controlling your campaign CAC — you are looking at a blended CAC of your fixed and variable components. Fixed cost would be everything incurred on ATL, ads, influencer whereas variable cost would be the budget per activation (think cost per newly onboarded user). While chalking out best and worst cases of the campaign — if you have bottleneck on the variable component, try changing the fixed cost if possible. If the fixed cost is hard to change (think you’re doing TV ads and not digital), change the variable mix so that blended comes out to be sustainable even in the worst case scenario.

12/ Just get the fuck out

• Yes, the advice is as simple as that. Just get the out of your own bay at times and jam with as many cross-teams as you can. Speak with Product to figure what’s new on their roadmap, suggest ideas and changes where you need help, communicate blockers. Jam with Design & Brand teams every time you are curating a campaign, get their inputs, learnings and build an overarching user narrative. You may not like drowning in data, but make time to work on those tableau and SQL 101 skills with your analytics POCs. Speak to tech to understand how can they unblock you operationally. The more you stick to “out of the box” growth (i.e. doing growth with what you already have), the more BAU it will become. Sure, it may lead to optimisations — but not necessarily baseline shift.

Last but not the least,

• Try connecting the dots and advocate for the user. Advocate for what’s best for the user, and do it with the relevant folks in the room.
• Zoom out from time-to-time (after every project or so), to study the core loop and assess the product funnel end-to-end. Try finding what might be limiting downstream conversion. Are there product limitations which is restricting the global maxima? (think — only X% users have filled KYC details, hence downstream conversion is low) Are there TOFU constraints because of which your experiment is not reaching out to a significant base (think — poor delivery and open rates, which may require change of channel or message). Work on solving not just conversion but funnel health as well.
• Go lateral when trying to get the pulse of the problem. Figure what you are going to solve for, and then double down.

The Bonus Section: What should pique your curiosity?

1. Understand user motivation. Consult BJ Fogg’s resources to begin with.
2. Understanding gamification. Octalysis Framework by gamification expert Yu-Kai Chou is a good starting point.
3. Understanding cognitive biases.