Building a Growth Machine: Brian Balfour's Process for Authentic Growth

BUILDING A GROWTH MACHINE
BY: BRIAN BALFOUR
Brian Balfour :: @bbalfour :: http://www.coelevate.com

ONE MISSION, ONE GOAL

AUTHENTIC GROWTH

GROWING IN A WORLD OF SOFTWARE
HAS CHANGED…
The Lines Between Marketing and Product Are Blurring
Where does marketing end and product begin in software? 1

HAS CHANGED…
Marketing Has Become More Technical & Quantitative
“Mad Men” skills aren’t as important. 2

HAS CHANGED…
Data Is Becoming More Accessible
Gathering quantitative and qualitative data is becoming easier 3

HAS CHANGED…
Data Is Becoming More Accessible
Gathering quantitative and qualitative data is becoming easier 3
Scale and Speed Of Growth Is Accelerating
Time to 1M Users/ARR has accelerated. 4

Revenue
Referral
Activation
Retention
Acquisition
GROWTH ≠ ACQUISITION

GROWTH EFFORTS REQUIRE…
Product
Engineering
GROWTH
Marketing
Data

GROWTH AND PRODUCT IS DIFFERENT
BUILDING
CORE VALUE
GETTING THE LARGEST
% OF OUR AUDIENCE
TO EXPERIENCE CORE
VALUE AS QUICKLY AS
POSSIBLE
GETTING USERS TO
EXPERIENCE THAT
CORE VALUE AS OFTEN
AS POSSIBLE

GROWTH EFFORTS
CREDIT: ANDY JOHNS
0
10000
20000
30000
40000
NATURAL ADOPTION
TRUE GROWTH POTENTIAL
PURPOSE
OF GROWTH
EFFORTS

GROWTH IS MORE ABOUT A CHANGE TO
TEAM STRUCTURE, PEOPLE, METHODOLGY,
PROCESS NOT TACTICS/HACKS

LEARNING HOW TO GROW AUTHENTICALLY
DOESN’T START WITH TACTICS

PROCESS

PROCESS?!?!?!
WHAT CAN BE SO SPECIAL ABOUT PROCESS?

4 REASONS TO FOCUS ON
PROCESS FIRST, TACTICS SECOND

14
1. WHAT WORKS FOR OTHERS, WON’T
WORK FOR YOU

YOUR AUDIENCE IS DIFFERENT

YOUR PRODUCT IS DIFFERENT

YOUR BUSINESS MODEL IS DIFFERENT

YOUR CUSTOMER JOURNEY IS DIFFERENT

YOUR BUSINESS IS DIFFERENT
PLAIN AND SIMPLE

20
2. GROWTH = SUM(1, 2, 3, 4….X)

MOST PEOPLE FOCUS ON
WHAT HAPPENED HERE

BUT WE SHOULD ASK
ABOUT ALL THE THINGS
HERE AND….
HERE

23
SILVER BULLETS DON’T EXIST

24
3. RATE OF CHANGE IS ACCELERATING

SEO No Keyword Data, Author Rank, Content
Freshness, Social Shares, Search Result Format
DISPLAY RTB, No Cookies, Mobile
EMAIL Tabbed Inboxes, Inbox Actions, Unsubscribe,
Mobile
FACEBOOK
Newsfeed Ads (4 formats), Video Ads,
Optimized CPM, CTA Format, Custom Audiences,
etc, etc

Effectiveness
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
WOM
Novelty
Email
MySpace
Craigslist
Twitter
Mobile
iOS
Android
Facebook
Ooga Labs
EVOLUTION OF CHANNELS
CREDIT: JAMES CURRIER

27
4. YOU NEED A MACHINE

A GROWTH MACHINE IS…
1
2 PREDICTABLE
SCALABLE
3 REPEATABLE

THE MACHINE PRODUCES THE TACTICS
THE PROCESS MAKES THE MACHINE

BUILDING A GROWTH MACHINE
THE PROCESS

THE GOALS OF OUR PROCESS
1
2
LEARNING
Constant learning of our customer, product, channels
and feeding that learning into the process to improve.
3 AUTONOMY Individuals decide what they work on to achieve the
OKR’s.
4 ACCOUNTABILITY
With autonomy, comes accountability. You
don’t have to be right all the time, but there
is an expectation to improve.
RYTHYM
Momentum is powerful. Establish a cadence to ﬁght
through failures, get to successes, and ﬁnd
momentum

1. Brainstorm
(Backlog)
2. Prioritize
(Experiment Doc + Backlog)
4. Implement
5. Analyze
(Experiment Doc)
3. Test
(Experiment Doc)
6. Systemize
(Playbooks)
Set Goals
OKR’s
Explore Data
Qualitative and Quantitative
Find Levers
Growth Model
DAILY/WEEKLY

FINDING LEVERS
BUILDING A GROWTH MODEL
GOAL IS TO FIND THE HIGHEST IMPACT AREA THAT WE
CAN FOCUS ON RIGHT NOW GIVEN LIMITED
RESOURCES.

FINDING LEVERS
YOUR TOOL IS YOUR GROWTH MODEL

FINDING LEVERS

FINDING LEVERS
GOAL IS WAU’s, BUT WHAT EFFECTS WAU’s?

FINDING LEVERS
WAU’s = New Activated + Retained

FINDING LEVERS
New Activated = (RegisteredFB ADS * ARFB ADS) + (RegisteredViral * ARViral)+…

FINDING LEVERS
RegisteredViral = Imp * Conversion Rate * Invites/User * Email CTR * Landing Page CR

FINDING LEVERS
RegisteredViral = Imp * Conversion Rate * Invites/User * Email CTR * Landing Page CR
Retained = (New ActW-1 * RetentionW-1) + (New ActW-2 * RetentionW-2)…

FINDING LEVERS
THREE THINGS TO UNDERSTAND ABOUT THE INPUTS
1
2 CEILING
BASELINE
3 SENSITIVITY OVER TIME

HOW WE SET GOALS (OKRs)
OBJECTIVE: Qualitative statement
TIMEFRAME: 30 - 90 Days
KR1: Measurable Goal 1 (Hit 90% Of Time)

AN EXAMPLE…
OBJECTIVE: MAKE VIRALITY A MEANINGFUL
CHANNEL
TIMEFRAME: 90 Days
KR1: 1.5% Viral/WAU
KR2: 2% Viral/WAU
KR3: 3% Viral/WAU

1
2 IN OUR FACE
INPUTS NOT OUTPUTS
3 CONCRETE
OKR’s will never be set on on the
output (WAU) the will always be
set on the inputs.
OKR’s will be somewhere that we can’t forget
them. Review daily and weekly.
Goals will change mid-OKR VERY rarely.
OKR PRINCIPLES

HOW WE GET GROWTH INSIGHTS
INSIGHT
Quantitative Qualitative
Intuition

1
2 QUANTITATIVE
QUALITATIVE User Surveys, 1 on 1 Conversations, Full Story
Videos, Customer Support Tickets
GA, Mixpanel, Datastore. Goal is to answer
questions we don’t know about our user, product,
or channel. Break it into pieces.
EXPLORE DATA
UNDERSTAND THE INPUTS OF THE INPUTS

BUILD A MINI MODEL
1
2 CEILING
BASELINE
3 SENSITIVITY

UNDERSTAND THE WHY
Why do users who get to invite page not covert?
<— Super targeted to the variable we are trying to improve
<— Open ended question to allow for all types of answers
<— Email looks like a personal email to create a sense of
importance

UNDERSTAND THE WHY
Bug
7%
Other
8%
Would Prefer To Just Share On FB
10%
Don't Want You To Spam Friends
11%
Reward Not High Enough
29%
Didn't Know Who To Invite
35%

1. Brainstorm
(Backlog)
2. Prioritize
4. Implement
5. Analyze
(Experiment Doc)
3. Test
(Experiment Doc)
6. Systemize
(Playbooks)

STEP ONE: BRAINSTORM
BRAINSTORM ON THE INPUTS
NOT THE OUTPUTS…

STEP ONE: BRAINSTORM
ACTIVATION RATE = STEP 1 CONV * STEP 2 CONV * STEP 3 CONV
IF WE WANT TO
IMPROVE THIS
WE BRAINSTORM ON THESE

4 WAYS TO COME UP
WITH GROWTH IDEAS
1 OBSERVE How are others doing it? Look outside of your
immediate product space. Walk through together.
2 QUESTION Question brainstorming. Why? What is… What if…
What about… How do we do more of…
3 ASSOCIATE Connect the dots between unrelated things. i.e What
if our activation process was like closing a deal?
4 NETWORK Growth mastermind groups. Build your network of
growth people. I’m on the phone every day for ideas

STEP TWO: PRIORITIZE
1
2 IMPACT
PROBABILITY
3 RESOURCES
LOW - 20%, MEDIUM - 50%, HIGH - 80%
Comes from your prediction. Take into account
long lasting eﬀects vs one hit wonders.
Marketing, Design, Engineering

CREATING A HYPOTHESIS
IF SUCCESSFUL, [VARIABLE] WILL
INCREASE BY [IMPACT], BECAUSE
[ASSUMPTIONS].

JUSTIFYING YOUR ASSUMPTIONS
1
2 QUALITATIVE
QUANTITATIVE
3 SECONDARY
Previous Experiments, Surrounding Data,
Funnel Data
Surveys, Support Emails, User Testing
Recordings
Networking, Blogs, Competitor Observation,
Case Studies

CREATE EXPERIMENT DOC

STEP THREE: TEST
WHAT IS THE MVT
(MINIMUM VIABLE TEST)
TO UNDERSTAND OUR HYPOTHESIS?

1 EFFICIENCY What is the least resource intensive way to gather
data about the hypothesis.
2 VALIDITY
The experiment must take into account how to get
a valid result by designing a control and required
amount of data.
STEP THREE: TEST

STEP THREE: TEST
WRITE THE EXPERIMENT DESIGN IN EXPERIMENT DOC

STEP FOUR: IMPLEMENT
GET SHIT DONE

STEP FIVE: ANALYZE
1
2 IMPACT
SUCCESS/FAIL
3 WHY?
How close to your prediction?
The most important question you can ask. Why did
you see the result that you did?
Be prepared for a lot of failures.

STEP FIVE: ANALYZE
LEARNINGS + ACTION ITEMS IN EXPERIMENT DOC

STEP SIX: SYSTEMIZE
1 PRODUCTIZE Productize as much as you can with technology
and engineering.
2 PLAYBOOKS For the things you can’t productize, build into step
by step playbooks to make them repeatable.

6. Systemize
(Playbooks)
1. Brainstorm
(Backlog)
2. Prioritize
3. Test
(Experiment Doc)
4. Implement
5. Analyze
(Experiment Doc)
REPEAT

WHAT A TYPICAL WEEK LOOKS LIKE
Monday Tuesday Wednesday Thursday Friday
Growth Meeting
- Learnings
- Goal Review
- Blocking Items/
Strategies
Predicting, Prioritizing, Implementing,
Analyzing, Systemizing

WEEKLY GROWTH MEETING
DON’T GET ATTACHED TO IDEAS
1
2 GOALS
LEARNINGS
3 BLOCKING
Learnings, not updates. You can monitor
experiment updates in the pipeline.
Progress against goals
What blocked you from doing something this
week?

WEEKLY GROWTH MEETING
TEMPLATE

MACRO OPTIMIZATION
(REVIEW QUARTERLY)
1
2 ACCURACY
BATTING AVG
3 THROUGHPUT
How many successes to failures? Our we
improving over time?
Are our predictions getting more accurate?
How many experiments are we running in a given
time period? How do we do more?

MACRO OPTIMIZATION
HOW WE IMPROVE
1
2 INFRASTRUCTURE
TEAM
3 PROCESS
Improve current teams skills. Add to the team.
Experiment, analytics, and qualitative
feedback infrastructure
Reﬁning the process for more eﬃciency or
quality of ideas, implementation, and analysis.

A FINAL WORD PART ONE
ITERATION DOES NOT EQUAL
INCREMENTAL

A FINAL WORD PART TWO
IT IS NEVER TOO EARLY
TO START THIS PROCESS

A FINAL FINAL WORD
THERE IS NOTHING SPECIAL ABOUT THIS
PROCESS. SUCCESS COMES DOWN TO
GRIT, FOCUS, AND PERSISTENCE.

THANKS!

Building a Growth Machine: Brian Balfour's Process for Authentic Growth

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