How to Design Your Startup for Exponential Growth
If you know our team at all, you know we love a good communications plan. We embrace Twitter chats and cherish our media lists. But we’re the first to admit — marketing and PR are only a piece of the puzzle.
In order to ensure the audience you invest so much time attracting and engaging become loyal customers in the long-term, strategy and resources designated for sustainable growth should go hand in hand with efforts to earn press coverage or “go viral.”
As a startup founder, growth is likely something you think about often. You want to grow your social media following, your customer base, your team, your revenue and ultimately your dream. But you know long-term growth won’t be fast or easy.
And yet growth hacking has become a popular buzzword. Despite the fact that word “hack” implies quick fixes and time-saving discoveries, the in’s and out’s of growth hacking are far from brief.
Consider this your Cole’s notes, “standing-in-line-at-Starbucks” explanation of growth hacking.
To download our entire guide, How To Design Your Startup For Exponential Growth, click here.
The term “growth hacking,” coined by growth and marketing expert Sean Ellis, is one every startup founder should understand, yet there are plenty of myths surrounding it. Here are some of the top myths — and more importantly the truths — you should know about it.
1. Exponential growth is all about the users
Perhaps one of the biggest mistakes founders can make when measuring growth is focusing too much on new and first-time users, and not enough on the percentage that keep coming back for more. Out of the five “startup metrics for pirates” (AARRR...) by 500 Startups founder David McClure, growth is most often associated with the As — acquisition and activation.
But the reality is, it’s much more cost effective to retain a customer than to attract a new one. In other words, equal, if not more resources should be invested in the R’s — Retention, Referral and Revenue.
2. Growth hacking is a shortcut
The second myth is that growth hacking is about finding quick solutions. But the name is deceiving. Rather, the “hack” in growth hacking refers to the way growth strategists identify opportunities to improve the product, reach new audiences, develop partnerships, or otherwise contribute to overall business growth.
In other words, growth hacking is more about innovation and ideation than shortcuts and quick fixes, and successful growth strategies can often be long term strategies.
3. Build it and, with the right marketing, they will come
This myth is really two myths in one. Assuming, as a startup founder, you know there needs to be a market for the product you’re building, we’ll skip to the second, more believable myth: that marketing alone will lead to customers.
The truth, of course, is that marketing and development teams should not work in silos, but rather be in constant communication and aiming to understand the role each other plays in the growth of the product.
As it turns out, myth #3 is a great segue into our final thoughts on effective and sustainable growth hacking: that product is king (and market matters.)
At its very core, the basics of designing your startup for exponential growth look like this:
1. Find product-market fit
2. Optimize the user acquisition funnel
3. Scale up growth
Entrepreneur and investor Marc Andreessen describes product-market fit as: “being in a good market with a product that can satisfy that market.” The goal, of course, of product-market fit is to have the product and its customers perfectly aligned with each other.
Once this has been achieved, you can start working towards maximizing your ROI when it comes to acquisition.
Finally, focus on large-scale growth tactics. While press coverage in your favourite tech publication might feel good in the moment, the kind of growth it usually results in (new, one-time users) isn’t sustainable.
Instead look for opportunities to build growth hacking into your product, creating customers who complete the growth cycle for you by continuing to use your product, referring it to others, and generating revenue for your business.
For more growth hacking myths and lessons, and to learn how other successful startups have built growth tactics into their products, check out How To Design Your Startup For Exponential Growth. This complete guide answers questions like:
- Is there such thing as bad growth?
- Are marketing and growth hacking one-and-the-same?
- Is growth hacking only important at the startup stage?
- How do I design for growth?
- How do I know when I’ve achieve product-market fit?
Download How To Design Your Startup For Exponential Growth here.