Growth Marketing Conference London 2017 - Andy Young - Building a Growth Model

Andy Young // @andyy // andyyoung.co
Building a
Growth Model
to drive your business
Andy Young
@andyy

Hi, I’m Andy!
@andyy
#fb
PhotobyDanTaylor-dan@heisenbergmedia.com

So what is this about
“Growth” anyways?

● 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?

Growth Marketing is finding growth that is:
● Measurable
● Predictable
● Repeatable & Scalable
Growth is a mindset, and a process.
Growth Truths

How can we grow?

ACQUIRING new customers
vs.
RETAINING existing customers
Ways to grow..

Retention is a silent killer!

Most important: Retention flattens

When your retention curve flattens..

Retention in a
transactional business?

How can we grow..?
Ways to grow
Sustainably

Paid Engine of Growth
Pay to acquire
new users Monetise those
users
Reinvest profit into acquiring
the next set of users

Viral Engine of Growth
Acquire new users
(initially via
seeding)
Each new user
invites N friends
% of invites convert
to new users

Sticky Engine of Growth
Acquire new users
(any channel)
Users stick
around
Acquisition >> churn
so we grow

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

User-Generated Content Growth Loop
New users
discover content
via Google
Users sign up
and create new
content
Content is indexed by Google

B2B Content Growth Loop
New users 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

● 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?

● Is your engine of growth coherent?
● Beware attempts to force a user to take
unnatural behaviours
Watch out for
structural FAILURE!

The myth of the
Hockey Stick
What growth actually looks like..

What people think
hockey-stick growth
looks like..

What people think
hockey-stick growth
looks like..
..what it actually looks like

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

Which
startup
is this?

https://blog.rjmetrics.com/2012/04/27/airbnb-data-analysis-6-million-users-by-year-end-only-20-active/

http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa/

Engineering-driven Growth
AirBnB built on top of Craigslist

http://leananalyticsbook.com/analytics-lessons-learned-free-e-book-with-13-case-studies/

http://www.david.blog/blog/the-importance-of-launching-early-and-staying-alive

● 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

Our most precious commodity is
TIME

Identify Levers
and prioritise your backlog

Levers:
things you can push
to get growth

Prioritise using ICE
framework:
-Impact
-Chance of Success
-Effort (time/resources)

Make predictions in advance!

Build a Model
to understand your business

What makes a
good dashboard?

Growth model spreadsheet

Not an operational dashboard:
metrics related to growth
1. Identify top-level KPI
2. Add nuance
3. Add drivers
4. Add funnel for these drivers
Template Google Sheet: bit.ly/kpi-sheet

How?

Building a Growth Model
1. Identify traction KPI

1. Identify traction KPI
It’s hard.

Identify your Traction KPI
Keep it simple!
The good news: there’s probably a
pre-determined answer
for
what drives your business

There’s probably a pre-determined
answer for what drives your business
Spoiler: ultimately it’s $$$

There’s probably a pre-determined
answer for what drives your business
Commerce: # sales
Subscription / SaaS: # subscribers
Marketplace: # transactions

2. Next, add nuance

How’re we doing?
Nuance behind your top level KPI
E.g. for commerce: # sales
Nuance: average sale $; # customers

How’re we doing?
2. Add nuance
3. Add drivers

How’re we doing?
Drivers behind your top level KPI
E.g. for marketplaces: # transactions
Drivers: # suppliers, # customers

How’re we doing?
2. Add nuance
3. Add drivers

How’re we doing?
2. Add nuance
3. Add drivers
End up with AARRR

How’re we doing?
2. Add nuance
3. Add drivers
Model this out - put in a spreadsheet
(Template Google Sheet: http://bit.ly/kpi-sheet)

How’re we doing?
Put in a spreadsheet
- key KPI at the top, nuance and drivers below, finally the
detailed funnel below for reference
- columns for weekly numbers, w/w growth

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

Let’s see some
examples..

http://bit.ly/kpi-sheet

How’re we doing?
Put in a spreadsheet
- review weekly
- share with whole team
- set targets
- use as a model to predict and prioritize

Identify your
One Metric That Matters (OMTM)
to get everyone pushing
in the same direction

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

Thanks, & good luck!

● 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..

Growth Marketing Conference London 2017 - Andy Young - Building a Growth Model

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