Startup stages of growth

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Created after attend Growth Hacker Conference in San Francisco in 2013, this presentation is a summary of several major take aways from speakers at the event, including Sean Ellis.

Published in: Business, Economy & Finance

Startup stages of growth

  1. 1. Startup Stages of Growth By Will Fraser, Chief Squatch Referral SaaSquatch The Customer Referral Program for Web Apps
  2. 2. ReferralSaaSquatch.com @getSaaSquatch TL; DR Growth Transition to Growth Product/Market Fit There are three stages of growth every high growth startup will go through:
  3. 3. ReferralSaaSquatch.com @getSaaSquatch Where it came from Sean Ellis, the First Marketer at , talks about the Startup Stages of Growth. He combined his real-world experience and collaborated with other growth experts to come up with the concept.
  4. 4. ReferralSaaSquatch.com @getSaaSquatch What Really Matters; When The first year of a company’s life greatly influences its chances of success because of issues like: pre-mature scaling, not enough customer engagement, and poor pricing models. The trick is to figure out not only how to address these problems, but when to.
  5. 5. ReferralSaaSquatch.com @getSaaSquatch Some Data to Back it Up “74% of high growth internet startups fail due to premature scaling.” – Startup Genome Project, Study on pre-mature scaling
  6. 6. ReferralSaaSquatch.com @getSaaSquatch How The Pyramid was Built Sean discovered the importance of this concept by taking many short-term roles with different startups. During this time he got to work at some great companies ( ) and ultimately built the Stages of Growth model to help future entrepreneurs.
  7. 7. ReferralSaaSquatch.com @getSaaSquatch The Growth Stage Pyramid The objective of this model is to help you understand, not just the stages of growth, but how they are built on top of each other like the layers of a pyramid.
  8. 8. ReferralSaaSquatch.com @getSaaSquatch The Foundation When you can build a strong foundation of Product/Market Fit you have a great chance of growing your startup. This is why you need to focus obsessively on finding Product/Market Fit with no concern for scaling. When you don’t have Product/Market Fit, you aren’t providing any real, sustainable value to your customers.
  9. 9. ReferralSaaSquatch.com @getSaaSquatch All Businesses are Pre-Product Market Fit or Post-Product Market Fit How do you determine if your company is Pre-Product/Market Fit or Post-Product Market Fit? Sean proposes a single question to quantify if you have product market fit. He suggests you ask your customers: How would you feel if you could no longer use this product?
  10. 10. ReferralSaaSquatch.com @getSaaSquatch Market Fit These are the people that are really getting value from your product, and are the people that are going to help you grow it. If you have at least 40% of respondents confirm they would miss your product you have achieved the first stage and can start to move forward.
  11. 11. ReferralSaaSquatch.com @getSaaSquatch Market Fit If you ask this question, and don’t hit the 40% mark, don’t panic! You simply need to be responsive, iterate and measure again. Talk to those customers that did say they would miss your product, and understand exactly why. Focus on what you learn from these real conversations and continue to move forward.
  12. 12. ReferralSaaSquatch.com @getSaaSquatch Transition to Growth is just execution It’s important to note that it’s a Transition and the Stages of Growth model doesn’t go right from Product/Market Fit to Growth. This middle step is required because in the Product/Market Fit stage you spend so little time on growth that you really aren’t ready for it.
  13. 13. ReferralSaaSquatch.com @getSaaSquatch Key Growth Transition Activities Implement user analytics Identify “must have benefits” Map benefit to context Improve your business model Optimize conversions Hire a growth team
  14. 14. ReferralSaaSquatch.com @getSaaSquatch Transition to Growth Most optimization tasks do not become a priority until after the Product/Market Fit stage is complete. I point this out because as an entrepreneur it can become addicting to polish your product until it’s perfect. However, this typically leads to a lot of lost time and effort if you don’t already have Product/Market Fit.
  15. 15. ReferralSaaSquatch.com @getSaaSquatch Tips for Transition to Growth Conversion rate = desire – friction This simple equation explains the entire complex world of increasing conversion rates. If you can increase a users’ desire or reduce the friction required to convert, you will increase your conversion rate.
  16. 16. ReferralSaaSquatch.com @getSaaSquatch Tips for Transition to Growth Optimize funnel on delivering must have benefit. Ask your users “What is the primary benefit that you have received from our product?” Arrange the common answers into a multiple-choice questionnaire and present them to your remaining customers. This will help to drill down to the core of what people find valuable about your product so you can optimize your conversion funnel on.
  17. 17. ReferralSaaSquatch.com @getSaaSquatch Introduce the Growth Hackers At this stage the exciting growth hacks we all like to read about can actually work. The size of your growth team isn’t overly important, they often range from 3 – 50 people. You must create a culture of growth and then put the right skills on the growth team.
  18. 18. ReferralSaaSquatch.com @getSaaSquatch Conclusion Growth Transition to Growth Product/Market Fit

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