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Building a Growth Model to Drive Your Startup

Building a Growth Model to drive your startup - Growth Marketing Conference London

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Building a Growth Model to Drive Your Startup

  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 What do we mean by Growth?
  5. 5. Andy Young // @andyy // andyyoung.co ● Typically growing our active customer/user base ● Growing whatever drives value in our business What do we mean by Growth?
  6. 6. Andy Young // @andyy // andyyoung.co ● Typically growing our active customer/user base ● Growing whatever drives value in our business ● Not necessarily growing revenue $$$ What do we mean by Growth?
  7. 7. Andy Young // @andyy // andyyoung.co ● Typically growing our active customer/user base ● Growing whatever drives value in our business ● Not necessarily growing revenue $$$ ● Growing whatever’s most strategically important to us right now What do we mean by Growth?
  8. 8. Andy Young // @andyy // andyyoung.co Why do we Growth Model?
  9. 9. Andy Young // @andyy // andyyoung.co Understand how we grow so we can grow more! Ensure our growth is sustainable Why do we Growth Model?
  10. 10. 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
  11. 11. Andy Young // @andyy // andyyoung.co How can we grow?
  12. 12. Andy Young // @andyy // andyyoung.co ACQUIRING new customers vs. RETAINING existing customers Ways to grow..
  13. 13. Andy Young // @andyy // andyyoung.co Retention is a SILENT KILLER! Brian Balfour, Reforge.com
  14. 14. Andy Young // @andyy // andyyoung.co Most important: Retention Flattens Brian Balfour, Reforge.com
  15. 15. Andy Young // @andyy // andyyoung.co When your retention curve flattens.. Brian Balfour, Reforge.com
  16. 16. Andy Young // @andyy // andyyoung.co Ways to grow Sustainably: Growth Loops & Engines
  17. 17. 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
  18. 18. 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
  19. 19. Andy Young // @andyy // andyyoung.co Sticky Engine of Growth Acquire new users (any channel) Users stick around Acquisition >> churn so we grow
  20. 20. 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
  21. 21. Andy Young // @andyy // andyyoung.co User-Generated Content Growth Loop New people discover content via Google Users sign up and create new content Content is indexed by Google
  22. 22. Andy Young // @andyy // andyyoung.co B2B Content Growth Loop New people 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
  23. 23. 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?
  24. 24. Andy Young // @andyy // andyyoung.co ● Is your engine of growth coherent? ● Beware attempts to force a user to take unnatural behaviours Watch out for FAILURE!
  25. 25. Andy Young // @andyy // andyyoung.co The myth of the Hockey Stick AKA what growth actually looks like..
  26. 26. Andy Young // @andyy // andyyoung.co
  27. 27. Andy Young // @andyy // andyyoung.co
  28. 28. Andy Young // @andyy // andyyoung.co What people think hockey-stick growth looks like..
  29. 29. Andy Young // @andyy // andyyoung.co What people think hockey-stick growth looks like.. ..what it actually looks like
  30. 30. 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
  31. 31. Andy Young // @andyy // andyyoung.co Selective Tweets 1.3 million users 3 years
  32. 32. Andy Young // @andyy // andyyoung.co
  33. 33. Andy Young // @andyy // andyyoung.co
  34. 34. Andy Young // @andyy // andyyoung.co
  35. 35. Andy Young // @andyy // andyyoung.co
  36. 36. Andy Young // @andyy // andyyoung.co http://www.david.blog/blog/the-importance-of-launching-early-and-staying-alive
  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 Which startup is this?
  39. 39. Andy Young // @andyy // andyyoung.co https://blog.rjmetrics.com/2012/04/27/airbnb-data-analysis-6-million-users-by-year-end-only-20-active/
  40. 40. Andy Young // @andyy // andyyoung.co http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/
  41. 41. Andy Young // @andyy // andyyoung.co Engineering-driven Growth AirBnB built on top of Craigslist
  42. 42. Andy Young // @andyy // andyyoung.co http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/
  43. 43. Andy Young // @andyy // andyyoung.co http://leananalyticsbook.com/analytics-lessons-learned-free-e-book-with-13-case-studies/
  44. 44. Andy Young // @andyy // andyyoung.co How can we grow?
  45. 45. 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 $$$ - convert higher % and simply make more money! Working across the whole FUNNEL
  46. 46. Andy Young // @andyy // andyyoung.co Our most precious commodity is TIME
  47. 47. Andy Young // @andyy // andyyoung.co
  48. 48. Andy Young // @andyy // andyyoung.co Intentionality If we can’t explain why we’re doing something then We have no idea WTF we’re doing
  49. 49. Andy Young // @andyy // andyyoung.co Make predictions in advance!
  50. 50. Andy Young // @andyy // andyyoung.co Identify Levers and prioritise our ideas
  51. 51. Andy Young // @andyy // andyyoung.co Levers: things we can push to get growth
  52. 52. Andy Young // @andyy // andyyoung.co Prioritise using ICE framework Impact Chance of Success Effort (time/resources)
  53. 53. Andy Young // @andyy // andyyoung.co Building a Model to understand your growth
  54. 54. Andy Young // @andyy // andyyoung.co Growth Model Spreadsheet
  55. 55. Andy Young // @andyy // andyyoung.co Growth Model Spreadsheet • Not an OPERATIONAL dashboard: metrics related to GROWTH http://bit.ly/kpi-sheet
  56. 56. Andy Young // @andyy // andyyoung.co How?
  57. 57. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI
  58. 58. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI Spoiler alert.. Ultimately it’s $$$
  59. 59. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI NOT revenue (that’s an output) Traction KPI leads directly to revenue
  60. 60. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI The one metric that - if it’s not growing - there’s only so long we can go kidding ourselves we’re making any progress
  61. 61. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI Keep it simple! There’s probably a pre-determined answer for how to measure your growth
  62. 62. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI Commerce: # sales Subscription / SaaS: # subscribers Marketplace: # transactions
  63. 63. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI
  64. 64. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI 2. Next, add NUANCE
  65. 65. Andy Young // @andyy // andyyoung.co Building a Growth Model Nuance metrics: help understand the full picture behind your Traction KPI E.g. for commerce: Traction KPI: # sales Nuance: average sale $; # customers
  66. 66. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI 2. Next, add NUANCE 3. Add DRIVERS & LOOPS
  67. 67. Andy Young // @andyy // andyyoung.co Building a Growth Model DRIVERS: the things we actually work on to grow
  68. 68. Andy Young // @andyy // andyyoung.co Building a Growth Model DRIVERS: the things we actually work on to grow E.g. for marketplaces: Traction KPI: # transactions Drivers: # suppliers, # customers
  69. 69. Andy Young // @andyy // andyyoung.co Building a Growth Model DRIVERS: the things we actually work on to grow E.g. for commerce: Traction KPI: # sales Drivers: # new customers, # repeat
  70. 70. Andy Young // @andyy // andyyoung.co Building a Growth Model DRIVERS: the things we actually work on to grow E.g. for SaaS: Traction KPI: # subscribers Drivers: # new customers, # retained
  71. 71. Andy Young // @andyy // andyyoung.co Building a Growth Model LOOPS: model out our engine(s) of growth Paid, viral, sticky, referral, B2B/B2C content..
  72. 72. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI 2. Next, add NUANCE 3. Add DRIVERS & LOOPS 4. Add FUNNEL for each driver & loop
  73. 73. Andy Young // @andyy // andyyoung.co Building a Growth Model 1. Identify your traction KPI 2. Next, add NUANCE 3. Add DRIVERS & LOOPS 4. Add FUNNEL for each driver & loop end up with AARRR..
  74. 74. Andy Young // @andyy // andyyoung.co Growth Model Spreadsheet
  75. 75. 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
  76. 76. Andy Young // @andyy // andyyoung.co Let’s see some examples..
  77. 77. Andy Young // @andyy // andyyoung.co
  78. 78. Andy Young // @andyy // andyyoung.co
  79. 79. Andy Young // @andyy // andyyoung.co
  80. 80. Andy Young // @andyy // andyyoung.co Identify your One Metric That Matters (OMTM) to get everyone pushing in the same direction
  81. 81. 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
  82. 82. Andy Young // @andyy // andyyoung.co Thanks, & good luck!
  83. 83. 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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