The document discusses best practices for scaling companies once they achieve product-market fit. It analyzes pairs of companies that achieved product-market fit around the same time but one scaled while the other stalled. Key factors for scaling included ensuring an excellent first interaction to positively influence customer perception; leveraging viral growth by building referral of additional customers into the product workflow; capitalizing on catalyzing events after initial launch like conferences; having a complementary team with diverse skills; forming strategic partnerships and thinking about the product ecosystem; employing appropriate financing strategies as the company grows; and being data informed but not driven to avoid micro-optimizations. There is no single recipe for success but combining these techniques increases the chances of scaling.
1. The Science of
Growth
Why some
companies
scale
while others
stall
in the same
market?
Sean Ammirati @SeanAmmirati
Partner, Birchmere Ventures
Adjunct Faculty, Carnegie Mellon University SeanAmmirati.com
11. Partnered with my graduate students
from Carnegie Mellon to look at …
12. Pairs of
Companies
Achieved product-market fit at
roughly the same time
Yet one scaled while the other
didn’t
Primarily (but intentionally not
exclusively) internet companies
13. Reinforced with five exemplar
examples
Only used to reinforce best
practices identified in the pairs
of companies analyzed
… Plus
14. There is a scientific
method to growth
Conclusion:
15. Combination of
Techniques
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch
Complementary Team Skills
Partnerships & Platform Thinking
Financing Strategies
Being Data Informed (but not Driven)
No Single
Recipe for
Success
but ...
16. How customers perceive
the product the first time
they touch it has a huge
impact on it’s ultimate
scale.
Create Constraints to Ensure
a Great First Experience
Focus on Implications from
Product ArchitectureChoices
An Excellent
First Interaction
Viral Growth
Catalyzing Events After
Initial Launch
Complementary Team Skills
Partnerships & Platform
Thinking
Financing Strategies
Being Data Informed
17. Amplify growth by
leveraging customers to
recruit additional
customers.
Build recruiting additional
customers into product workflow
Look for existing social
connections to refer additional
customers
An Excellent First
Interaction
Viral Growth
Catalyzing Events After
Initial Launch
Complementary Team Skills
Partnerships & Platform
Thinking
Financing Strategies
Being Data Informed
18. An Excellent First
Interaction
Viral Growth
Catalyzing Events
After Initial
Launch
Complementary Team Skills
Partnerships & Platform
Thinking
Financing Strategies
Being Data Informed
“we didn't actually launch Twitter at
SXSW -- SXSW just chose to blow
it up. We launched it nine months
before -- to a whimper.”
Evan Williams, Founder
19. An Excellent First
Interaction
Viral Growth
Catalyzing Events After
Initial Launch
Complementary
Team Skills
Partnerships & Platform
Thinking
Financing Strategies
Being Data Informed
“No matter how brilliant your mind
or strategy, if you’re playing a solo
game, you’ll always lose out to a
team.”
Reid Hoffman,
Co-Founder & Chairman
20. An Excellent First
Interaction
Viral Growth
Catalyzing Events After
Initial Launch
Complementary Team Skills
Partnership &
Platform Thinking
Financing Strategies
Being Data Informed
Where are there engaged
groups of customers
looking for a solution to
the problem your product
solves?
21. An Excellent First
Interaction
Viral Growth
Catalyzing Events After
Initial Launch
Complementary Team Skills
Partnership & Platform
Thinking
Financing
Strategies
Being Data Informed
While it has gotten
cheaper to test and build
a first version, it still takes
capital to scale.
$100 M
$200 M
$300 M
$400 M
Seed
'04
Series A
'05
Series B
'06
Series C
'07
$375.0
$27.5$12.7$0.5
22. An Excellent First
Interaction
Viral Growth
Catalyzing Events After
Initial Launch
Complementary Team Skills
Partnership & Platform
Thinking
Financing Strategies
Being Data
Informed
Vision
Driven
Data
Driven
DATA
INFORMED
Adam Mosseri, Product
“ We use data to inform certain
decisions … [but] overreacting to
data can lead to micro optimizations.”
“Data is the voice of your customer”
Riley Newman, Head Data Science