The document discusses building a growth model to understand and drive business growth. It defines growth as typically growing the active customer/user base or what drives business value. A growth model identifies key metrics like number of sales or subscribers, adds additional context metrics, and models the drivers and growth loops that impact the key metric. This includes paid, viral, sticky, and content-based growth engines. The document provides examples and emphasizes reviewing the model weekly to prioritize growth efforts.
Prezentare Brandfluence 2023 - Social Media Trends
Building Growth Model Drive Business
1. Andy Young // @andyy // andyyoung.co
Building a
Growth Model
to drive your business
Andy Young
@andyy
2. Andy Young // @andyy // andyyoung.co
Hi, I’m Andy!
@andyy
#fb
PhotobyDanTaylor-dan@heisenbergmedia.com
3. Andy Young // @andyy // andyyoung.co
So what is this about
“Growth” anyways?
4. Andy Young // @andyy // andyyoung.co
What do we mean by Growth?
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. Andy Young // @andyy // andyyoung.co
● Typically growing our active customer/user base
● Growing whatever drives value in our business
● Not necessarily growing revenue $$$
What do we mean by Growth?
7. Andy Young // @andyy // andyyoung.co
● Typically growing our active customer/user base
● Growing whatever drives value in our business
● Not necessarily growing revenue $$$
● Growing whatever’s most strategically important to
us right now
What do we mean by Growth?
8. Andy Young // @andyy // andyyoung.co
Why do we
Growth Model?
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. 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. Andy Young // @andyy // andyyoung.co
How can we grow?
12. Andy Young // @andyy // andyyoung.co
ACQUIRING new customers
vs.
RETAINING existing customers
Ways to grow..
13. Andy Young // @andyy // andyyoung.co
Retention is a SILENT KILLER!
Brian Balfour, Reforge.com
14. Andy Young // @andyy // andyyoung.co
Most important: Retention Flattens
Brian Balfour, Reforge.com
15. Andy Young // @andyy // andyyoung.co
When your retention curve flattens..
Brian Balfour, Reforge.com
16. Andy Young // @andyy // andyyoung.co
Ways to grow
Sustainably:
Growth
Loops & Engines
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. 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. Andy Young // @andyy // andyyoung.co
Sticky Engine of Growth
Acquire new users
(any channel)
Users stick
around
Acquisition >> churn
so we grow
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. 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. 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. 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. 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. Andy Young // @andyy // andyyoung.co
The myth of the
Hockey Stick
AKA what growth actually looks like..
28. Andy Young // @andyy // andyyoung.co
What people think
hockey-stick growth
looks like..
29. Andy Young // @andyy // andyyoung.co
What people think
hockey-stick growth
looks like..
..what it actually looks like
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. Andy Young // @andyy // andyyoung.co
Selective Tweets
1.3 million users
3 years
36. Andy Young // @andyy // andyyoung.co
http://www.david.blog/blog/the-importance-of-launching-early-and-staying-alive
37. Andy Young // @andyy // andyyoung.co
http://www.david.blog/blog/the-importance-of-launching-early-and-staying-alive
38. Andy Young // @andyy // andyyoung.co
Which
startup
is this?
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. Andy Young // @andyy // andyyoung.co
http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/
41. Andy Young // @andyy // andyyoung.co
Engineering-driven Growth
AirBnB built on top of Craigslist
42. Andy Young // @andyy // andyyoung.co
http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/
43. Andy Young // @andyy // andyyoung.co
http://leananalyticsbook.com/analytics-lessons-learned-free-e-book-with-13-case-studies/
44. Andy Young // @andyy // andyyoung.co
How can we grow?
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 $$$ - convert higher % and simply make more money!
Working across the whole FUNNEL
46. Andy Young // @andyy // andyyoung.co
Our most precious commodity is
TIME
57. Andy Young // @andyy // andyyoung.co
Building a Growth Model
1. Identify your traction KPI
58. Andy Young // @andyy // andyyoung.co
Building a Growth Model
1. Identify your traction KPI
Spoiler alert..
Ultimately it’s $$$
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. 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. 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. Andy Young // @andyy // andyyoung.co
Building a Growth Model
1. Identify your traction KPI
Commerce: # sales
Subscription / SaaS: # subscribers
Marketplace: # transactions
63. Andy Young // @andyy // andyyoung.co
Building a Growth Model
1. Identify your traction KPI
64. Andy Young // @andyy // andyyoung.co
Building a Growth Model
1. Identify your traction KPI
2. Next, add NUANCE
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. Andy Young // @andyy // andyyoung.co
Building a Growth Model
1. Identify your traction KPI
2. Next, add NUANCE
3. Add DRIVERS & LOOPS
67. Andy Young // @andyy // andyyoung.co
Building a Growth Model
DRIVERS: the things we
actually work on to grow
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. 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. 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. 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. 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. 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. Andy Young // @andyy // andyyoung.co
Growth Model Spreadsheet
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. Andy Young // @andyy // andyyoung.co
Let’s see some
examples..
80. Andy Young // @andyy // andyyoung.co
Identify your
One Metric That Matters (OMTM)
to get everyone pushing
in the same direction
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. Andy Young // @andyy // andyyoung.co
Thanks, & good luck!
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..