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What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters

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I receive a lot of questions about growth teams. Naturally, there is a lot of confusion. Is this marketing being re-branded? Who does this team report to? What is the goal of it? What do they actually work on? When do I start a growth team for my business?

The purpose of growth is to scale the usage of a product that has product-market fit. You do this by building a playbook on how to scale the usage of a product. A playbook can also be called a growth model or a loop.

The first question you should ask before asking about growth is if you have product-market fit?

Published in: Technology
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What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters

  1. 1. What are Growth Teams For and What Do They Do? Casey Winters Growth Advisor in Residence @Greylock Former Growth Lead @Pinterest Former First Marketer @Grubhub Former Marketer @Apartments.com @Homefinder Casey Winters | @onecaseman | caseyaccidental.com
  2. 2. Scale usage of a product which has product market fit. You do this by building a playbook on how to scale the usage of this product. The purpose of “growth”
  3. 3. How you might know? You have customers that are actively using your product and would be pissed if it went away. You know your customers, you know your market, and your primary challenge is how do I get more of these customers? Product Market Fit Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  4. 4. Key Action: what indicated the user received value Designated Frequency: how often we expect the user to receive value Measuring Retention What do you need to know? Casey Winters | @onecaseman | caseyaccidental.com
  5. 5. Key Action: identify best unit of value Designated Frequency: Frequency of offline analog Measuring Retention What do you need to know? Casey Winters | @onecaseman | caseyaccidental.com
  6. 6. Key Action: Saving Offline Analog: Magazines Designated Frequency: Monthly (at first) Measuring Retention Pinterest Example Casey Winters | @onecaseman | caseyaccidental.com
  7. 7. Key Action: Ordering Food Online Offline Analog: Ordering Food by Phone Designated Frequency: Monthly Measuring Retention Grubhub Example Casey Winters | @onecaseman | caseyaccidental.com
  8. 8. Product Market Fit How you might know? Your retention curve (of usage, not revenue) flattens somewhere. This means that for some customers, you have product market fit. You just want to grow the volume of those customers now. Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  9. 9. Product Market Fit Can you grow a business with that retention? The ability to acquire users at less than the amount of money you make from that curve represents true product-market fit. If you’re not making any money, that means you need to be able to grow the size of the cohort without spending any money. Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  10. 10. Product Market Fit Can you grow a business with that retention? If you are making money, it’s growing the cohort size with a cost per acquisition less than the revenue per user of those users over a time frame you can predict well Three months for early stage Six months for mid stage One year for late stage Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  11. 11. Product Market Fit Can you grow a business with that retention? If you can’t grow cohort size with where your cohort flattens, you are not at product- market fit and need to improve where the cohort flattens Do you have it? Casey Winters | @onecaseman | caseyaccidental.com
  12. 12. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  13. 13. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  14. 14. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  15. 15. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. Casey Winters | @onecaseman | caseyaccidental.com
  16. 16. Product Market Fit What happens when you think you have Product Market Fit … but you don’t. “A cleaning company charges north of $85 for a 2.5-hour house cleaning, but to rope in as many new customers as possible, it offers the service for a promotional price of $19. Guess what happens when the introductory deal is used up?” What Really Killed Homejoy? It Couldn't Hold On To Its Customers (Forbes) Casey Winters | @onecaseman | caseyaccidental.com
  17. 17. Why Growth? Why not just marketing or product? Casey Winters | @onecaseman | caseyaccidental.com
  18. 18. Why Growth? Three ways to grow your product. Phase I: “Free”, Measurable, Scalable (Growth Product) Phase II: Paid, Measurable, Scalable (Performance Marketing) Phase III: Paid, Non-Measurable, Non-Scalable (Brand Marketing) Casey Winters | @onecaseman | caseyaccidental.com
  19. 19. Why Growth? Startup growth is different from marketing. The first stage requires working with the product. Marketing teams (usually) don’t have access or expertise to that part of your organization. Casey Winters | @onecaseman | caseyaccidental.com
  20. 20. Why Growth? Startup growth is different from traditional marketing. Awareness Interest Evaluation Commitment Use Casey Winters | @onecaseman | caseyaccidental.com
  21. 21. Why Growth? Startup growth is different from traditional marketing. Loving Product Trying Product Tried Product Need Product Fit Core Audience General Awareness Casey Winters | @onecaseman | caseyaccidental.com
  22. 22. Startup growth is different from traditional marketing. Why Growth? Loving Product Trying Product Tried Product Need Product Fit Core Audience General Awareness Product, Referrals Product, Conversion, NUX Notifications, Retargeting Paid and Organic Search Targeted Advertising e.g. Facebook Brand Marketing Casey Winters | @onecaseman | caseyaccidental.com
  23. 23. Why Growth? Most product teams are built to create value or improve value provided to customers. Growth is connecting more people to the existing value of a product. Startup growth is different from traditional product. Casey Winters | @onecaseman | caseyaccidental.com
  24. 24. How do I start a Growth team? Where do the people come from? What do they do? Casey Winters | @onecaseman | caseyaccidental.com
  25. 25. How do I start a Growth team? Where do the people come from? What do they do? So how do growth teams start? Typically, they find one problem that could help drive growth that has been neglected at the company, so it’s easy to own. Prioritize problems based on high impact, low effort, high chance of success, and ideally short iteration cycles. Analyze the data to figure out where the problems are. Run experiments. Some examples: Logged out experience, Emails/Notifications, Referrals, SEO, Onboarding flow Casey Winters | @onecaseman | caseyaccidental.com
  26. 26. How do I start a Growth team? Where do the people come from? What do they do? What does team structure look like? Required: Dedicated engineer and designer Nice to have: PM and analyst/data scientist The team has to sit together, not with other people of the same function Casey Winters | @onecaseman | caseyaccidental.com
  27. 27. How do I start working on growth? What’s our first problem to solve? After that, you have to analyze the data... Pinterest example: ● Millions of visits a month from Google to board pages ● A conversion rate of less than 1% ● All previous conversion work had been focused on the homepage, which was receiving a lot less traffic than these board pages ● So let’s set a goal of increasing that rate by 15% Casey Winters | @onecaseman | caseyaccidental.com
  28. 28. Conversion Optimization Project Gift Wrap • Recently ran an experiment making a new page available to search engines, which decreased signups • As we analyzed the experiment, we saw the reason was because when people clicked on these links from other pages, they were blocked and asked to sign up, and they did. Casey Winters | @onecaseman | caseyaccidental.com
  29. 29. Conversion Optimization Project Gift Wrap • We let users scroll infinitely on these board pages, but only showed 25 Pins to search engines • For simplicity, we decided to make the same rule for users as search engines Casey Winters | @onecaseman | caseyaccidental.com
  30. 30. The results? • 50% improvement in conversion rate • No decrease in search engine traffic • No decrease in activation rate (at least at first) Conversion Optimization Project Gift Wrap Casey Winters | @onecaseman | caseyaccidental.com
  31. 31. What else do growth teams work on? Examples from all parts of the funnel. Casey Winters | @onecaseman | caseyaccidental.com
  32. 32. Product Retention Reducing Friction > Adding Features Casey Winters | @onecaseman | caseyaccidental.com Retention comes from a maniacal focus on improving the core product.
  33. 33. So how do you improve the core product? People + metrics. Data (what people do) Qualitative research (why they do it) Casey Winters | @onecaseman | caseyaccidental.com
  34. 34. Remove barriers to higher retention Grubhub example ● Low restaurant variety ● High minimums and fees Casey Winters | @onecaseman | caseyaccidental.com
  35. 35. Get to product value as fast as possible. But not faster. Casey Winters | @onecaseman | caseyaccidental.com +
  36. 36. Reduce friction that distracts from product value. Get rid of non-critical elements for new users. Casey Winters | @onecaseman | caseyaccidental.com
  37. 37. Don’t be afraid to educate contextually. A design with education is better than a design that doesn’t educate. Casey Winters | @onecaseman | caseyaccidental.com
  38. 38. Referrals and Virality Have engaged users drive new users or growth inside organizations ● This requires people to share and to want to share ● Need a strong value proposition for sharing. ○ Uber: money ○ Dropbox: better product experience (solo) ○ Snapchat: better product experience (friends) ○ Medium: vanity or emotion ○ GoFundMe: cause Casey Winters | @onecaseman | caseyaccidental.com
  39. 39. Search Engine Optimization Authority and Relevance Authority - Market Launches example Relevance - Landing pages Casey Winters | @onecaseman | caseyaccidental.com
  40. 40. Search Engine Optimization SEO friendly landing pages Casey Winters | @onecaseman | caseyaccidental.com
  41. 41. Paid Acquisition Google, Facebook, and more. Oh my! ● By far the fastest way to get people to try your product ● It’s a drug that’s easy to get addicted to, and scaling via paid is not a very defensible strategy unless you get to best in the world at it ● Very expensive at scale, so need to understand arbitrage ● CPA < LTV (set lifetimes conservatively and measure them by cohort and channel) ● Everything (and I mean everything) is trackable ● Efficient frontier is real ● Adwords (if there is existing demand) and Facebook Lookalikes are best way to get started ● Retargeting is effective, but hard to measure correctly Casey Winters | @onecaseman | caseyaccidental.com
  42. 42. • Right content i.e. it reinforces value of product • Right time • Right amount Emails and Notifications Start messaging like a personal assistant Casey Winters | @onecaseman | caseyaccidental.com
  43. 43. • Test manually, then automate and personalize • Subject lines and calls to action matter; design doesn't as much • Run emails/notifications as AB experiments to see lift in usage + lift in unsubscribes/app deletions • Measure impact of unsubscribe/deletions on usage Focus on testing and personalization. Start messaging like a personal assistant Casey Winters | @onecaseman | caseyaccidental.com
  44. 44. Loyalty and Engagement Programs Engagement tactics • These need to be profit drivers, not cost centers. • The exception: Unless they build a moat (which is more rare than most operators would like to believe). Casey Winters | @onecaseman | caseyaccidental.com
  45. 45. Loyalty and Engagement Programs Examples ● Apartments.com was definitely infrequent, non-loyal. ● For Grubhub, we had to figure out biggest opportunity ● Yummy Rummy Casey Winters | @onecaseman | caseyaccidental.com

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