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Growth Marketing Conference London 2017 - Andy Young - Building a Growth Model

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Andy Young is a Entrepreneur in Residence at 500 Startups, as well as a Growth Consultant and mentor at accelerators like Seedcamp, TechStars, EF, Ignite100 and Oxygen. He's also given talks and has led workshops at events such as WebSummit, South Summit, Leanconf & ProductTank.

Andy helps fun teams with big ambitions, from core strategy to getting his hands dirty with growth, product, analytics and code.

During London's Growth Marketing Conference 2017, Andy gave a talk on 'Building A Growth Model For Your Business', in which he walked us through the most important steps in creating a growth model for you.

Email or tweet Andy if you'd like to chat - andy@apexa.co.uk / @andyy
LinkedIn: https://www.linkedin.com/in/andrewyoung/

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Growth Marketing Conference London 2017 - Andy Young - Building a Growth Model

  1. 1. Andy Young // @andyy // andyyoung.co Building a Growth Model to drive your business Andy Young @andyy
  2. 2. Andy Young // @andyy // andyyoung.co Hi, I’m Andy! @andyy #fb PhotobyDanTaylor-dan@heisenbergmedia.com
  3. 3. Andy Young // @andyy // andyyoung.co So what is this about “Growth” anyways?
  4. 4. Andy Young // @andyy // andyyoung.co ● Typically growing our active customer/user base ● Growing whatever drives value in our business ● Not necessarily growing revenue $$$ ● Growing whatever’s most strategically important to us right now What do we mean by Growth?
  5. 5. Andy Young // @andyy // andyyoung.co Growth Marketing is finding growth that is: ● Measurable ● Predictable ● Repeatable & Scalable Growth is a mindset, and a process. Growth Truths
  6. 6. Andy Young // @andyy // andyyoung.co How can we grow?
  7. 7. Andy Young // @andyy // andyyoung.co ACQUIRING new customers vs. RETAINING existing customers Ways to grow..
  8. 8. Andy Young // @andyy // andyyoung.co Retention is a silent killer!
  9. 9. Andy Young // @andyy // andyyoung.co Most important: Retention flattens
  10. 10. Andy Young // @andyy // andyyoung.co When your retention curve flattens..
  11. 11. Andy Young // @andyy // andyyoung.co Retention in a transactional business?
  12. 12. Andy Young // @andyy // andyyoung.co How can we grow..? Ways to grow Sustainably
  13. 13. Andy Young // @andyy // andyyoung.co Paid Engine of Growth Pay to acquire new users Monetise those users Reinvest profit into acquiring the next set of users
  14. 14. Andy Young // @andyy // andyyoung.co Viral Engine of Growth Acquire new users (initially via seeding) Each new user invites N friends % of invites convert to new users
  15. 15. Andy Young // @andyy // andyyoung.co Sticky Engine of Growth Acquire new users (any channel) Users stick around Acquisition >> churn so we grow
  16. 16. Andy Young // @andyy // andyyoung.co http://www.startuplessonslearned.com/2008/09/three-drivers-of-growth-for-your.html https://www.slideshare.net/Leananalytics/lean-analytics-for-intrapreneurs-lean-startup-conference-dec-2013-public-share
  17. 17. Andy Young // @andyy // andyyoung.co User-Generated Content Growth Loop New users discover content via Google Users sign up and create new content Content is indexed by Google
  18. 18. Andy Young // @andyy // andyyoung.co B2B Content Growth Loop New users discover content via search & social Users sign up and/or follow Profit is invested in new content creation Distributed to existing followers, who amplify to new users Brian Balfour, Reforge.com
  19. 19. Andy Young // @andyy // andyyoung.co ● Over time, you’ll typically make use of multiple growth loops - powered by different engines ● But you’ll typically always have one loop that dominates your growth Which engine(s) work for you?
  20. 20. Andy Young // @andyy // andyyoung.co ● Is your engine of growth coherent? ● Beware attempts to force a user to take unnatural behaviours Watch out for structural FAILURE!
  21. 21. Andy Young // @andyy // andyyoung.co The myth of the Hockey Stick What growth actually looks like..
  22. 22. Andy Young // @andyy // andyyoung.co
  23. 23. Andy Young // @andyy // andyyoung.co
  24. 24. Andy Young // @andyy // andyyoung.co What people think hockey-stick growth looks like..
  25. 25. Andy Young // @andyy // andyyoung.co What people think hockey-stick growth looks like.. ..what it actually looks like
  26. 26. Andy Young // @andyy // andyyoung.co https://insomanic.me.uk/selective-tweets-3-years-zero-marketing-and-nearly-1m-users-later-now-open-source-851a011f6d5c Selective Tweets - 1.3 million users 3 years
  27. 27. Andy Young // @andyy // andyyoung.co
  28. 28. Andy Young // @andyy // andyyoung.co
  29. 29. Andy Young // @andyy // andyyoung.co
  30. 30. Andy Young // @andyy // andyyoung.co
  31. 31. Andy Young // @andyy // andyyoung.co Which startup is this?
  32. 32. Andy Young // @andyy // andyyoung.co https://blog.rjmetrics.com/2012/04/27/airbnb-data-analysis-6-million-users-by-year-end-only-20-active/
  33. 33. Andy Young // @andyy // andyyoung.co http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/
  34. 34. Andy Young // @andyy // andyyoung.co Engineering-driven Growth AirBnB built on top of Craigslist
  35. 35. Andy Young // @andyy // andyyoung.co http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/
  36. 36. Andy Young // @andyy // andyyoung.co http://leananalyticsbook.com/analytics-lessons-learned-free-e-book-with-13-case-studies/
  37. 37. Andy Young // @andyy // andyyoung.co http://www.david.blog/blog/the-importance-of-launching-early-and-staying-alive
  38. 38. Andy Young // @andyy // andyyoung.co http://www.david.blog/blog/the-importance-of-launching-early-and-staying-alive
  39. 39. Andy Young // @andyy // andyyoung.co How can we grow?
  40. 40. Andy Young // @andyy // andyyoung.co ● ACQUISITION at top of funnel ○ How to reach HUGE new audiences in a cost-effective way ● CONVERSION at middle of funnel ○ Attracting and drawing people deeper into engaging with you ● REVENUE at bottom of funnel ○ Close to the $$$ - convert higher % and simply make more money! Working across the whole FUNNEL
  41. 41. Andy Young // @andyy // andyyoung.co Our most precious commodity is TIME
  42. 42. Andy Young // @andyy // andyyoung.co Identify Levers and prioritise your backlog
  43. 43. Andy Young // @andyy // andyyoung.co Levers: things you can push to get growth
  44. 44. Andy Young // @andyy // andyyoung.co Prioritise using ICE framework: -Impact -Chance of Success -Effort (time/resources)
  45. 45. Andy Young // @andyy // andyyoung.co Make predictions in advance!
  46. 46. Andy Young // @andyy // andyyoung.co Build a Model to understand your business
  47. 47. Andy Young // @andyy // andyyoung.co
  48. 48. Andy Young // @andyy // andyyoung.co What makes a good dashboard?
  49. 49. Andy Young // @andyy // andyyoung.co Growth model spreadsheet
  50. 50. Andy Young // @andyy // andyyoung.co Not an operational dashboard: metrics related to growth 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers Template Google Sheet: bit.ly/kpi-sheet
  51. 51. Andy Young // @andyy // andyyoung.co How?
  52. 52. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify traction KPI
  53. 53. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify traction KPI It’s hard.
  54. 54. Andy Young // @andyy // andyyoung.co Identify your Traction KPI Keep it simple! The good news: there’s probably a pre-determined answer for what drives your business
  55. 55. Andy Young // @andyy // andyyoung.co Identify your Traction KPI There’s probably a pre-determined answer for what drives your business Spoiler: ultimately it’s $$$
  56. 56. Andy Young // @andyy // andyyoung.co Identify your Traction KPI There’s probably a pre-determined answer for what drives your business Commerce: # sales Subscription / SaaS: # subscribers Marketplace: # transactions
  57. 57. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify traction KPI
  58. 58. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify top-level KPI 2. Next, add nuance
  59. 59. Andy Young // @andyy // andyyoung.co How’re we doing? Nuance behind your top level KPI E.g. for commerce: # sales Nuance: average sale $; # customers
  60. 60. Andy Young // @andyy // andyyoung.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers
  61. 61. Andy Young // @andyy // andyyoung.co How’re we doing? Drivers behind your top level KPI E.g. for marketplaces: # transactions Drivers: # suppliers, # customers
  62. 62. Andy Young // @andyy // andyyoung.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers
  63. 63. Andy Young // @andyy // andyyoung.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers End up with AARRR
  64. 64. Andy Young // @andyy // andyyoung.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers Model this out - put in a spreadsheet (Template Google Sheet: http://bit.ly/kpi-sheet)
  65. 65. Andy Young // @andyy // andyyoung.co How’re we doing? Put in a spreadsheet - key KPI at the top, nuance and drivers below, finally the detailed funnel below for reference - columns for weekly numbers, w/w growth
  66. 66. Andy Young // @andyy // andyyoung.co Growth Model Spreadsheet • Review weekly - zoom out vs. zoom in • Share with whole team • Use to predict and prioritise • What to look at daily vs. weekly vs. monthly http://bit.ly/kpi-sheet
  67. 67. Andy Young // @andyy // andyyoung.co Let’s see some examples..
  68. 68. Andy Young // @andyy // andyyoung.co http://bit.ly/kpi-sheet
  69. 69. Andy Young // @andyy // andyyoung.co How’re we doing? Put in a spreadsheet - review weekly - share with whole team - set targets - use as a model to predict and prioritize
  70. 70. Andy Young // @andyy // andyyoung.co Identify your One Metric That Matters (OMTM) to get everyone pushing in the same direction
  71. 71. Andy Young // @andyy // andyyoung.co Weekly/Monthly reporting % week-on-week or month-on-month growth in your One Metric That Matters Focus. Set a target. How to choose? Read this Lean Analytics post
  72. 72. Andy Young // @andyy // andyyoung.co Thanks, & good luck!
  73. 73. Andy Young // @andyy // andyyoung.co ● Bryan Balfour: The Scientific Method: How to Design & Track Viral Growth Experiments ● Dave McClure's Startup Metrics for Pirates ● Eric Ries’s Three Engines of Growth ● My deck on Analytics for Startups Further references..

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