SEEK AUTHENTIC GROWTH

All growth is not equal.  

Before I dive into the specifics of how to build a growth machine, I want to get super clear on the type of growth we’re pursuing. 

Authentic Growth 

Authentic growth is three things:

Lets walk through each of these individually...

Make Your Growth Meaningful

The kind of growth we seek is meaningful for both the company producing it and the user. This means it must produce real value for both parties (the company and the customer).  For a company, that typically means revenue, but growth can also produce other indirect value like defensibility in network effects.  For the user, the product must solve a problem or provide a perceived benefit to be meaningful.  Let's take a look at a couple examples:

When growth is valuable to the company but not to the user it is often referred to as a "Dark Pattern" - tricking users into taking an action that helps the company’s growth numbers.  You or a friend has probably fallen victim to this at some point, signing up for an application only for the company to email or message all of your friends without you realizing it.  BranchOut and Brewster are examples from the past 5 years.  Both companies went through fast up front growth but ultimately flamed out.

When growth is valuable to a user or customer but not the company, it inevitably leads to the company not being sustainable.  Many companies will face pricing optimization at some point.  Almost any product could grow more just by lowering price.  Paying less is definitely valuable to the user, but if the price is so low the company can’t cover costs, then the company can’t stay in business and deliver any value to the user.  

You should ask yourself two things with every growth improvement:

1. Is this providing value to the company?  

2. Is this providing value to the user/customer?

Your growth has to be meaningful to both users and companies otherwise it isn’t sustainable, which brings us to the second part of authentic growth.

Pursue Authentic Growth Video

(Watch the video associated with this post by hitting play below.  Or you can just keep reading below the video.)

Make Your Growth Sustainable

Sustainability mostly comes down to retention.  If you grow users, usage, or revenue but it doesn’t sustain over time, then it will become incredibly difficult to continue growing.  Your cohorts of acquired users/customers will need to grow at an increasingly faster pace to overcome losses mounting from previous cohorts. 

It is important to build retention into key metrics.  Tracking downloads, registrations, or installs doesn’t tell you if users retain.  In contrast, tracking a metric like Weekly Active Users forces you to track churn alongside acquisition. Though it can be manipulated in the short term, it will eventually fall if users aren’t retaining.  

Let’s take a look at a hypothetical example.  All three of these graphs were generated using the same set of registration and retention data.  

Here is a graph of a company tracking their total registered users over time.

Looks great, right? Well it doesn't tell us how many people we are acquiring every month so lets look at that…

Huh... well looks like the number of new registered users we are acquiring has flattened off.  But we have still 7X’d going from 100 new users per month to 700 new users per month.  Still good, right? Well… we should see how many monthly active users we have…

Uh oh.  Looks like our growth has completely flattened.  Why?  Because despite total registered users and new registered users going up, our growth is not sustainable.  Users aren’t staying active.

As you grow you should be asking yourself:  Is this sustainable?  Are we retaining users/customers?  Retention is the ultimate measure whether you are delivering value to your user/customer over time.  

Make Your Growth Repeatable

This growth system’s goal is to help find and produce growth initiatives that are repeatable, not one off bumps like PR hits, app store features, Product Hunt launch etc. The bumps are like cocaine. You just have to keep doing more and more to sustain your high until your supply runs out or you head to rehab. (weird analogy I know)

I'm not saying you shouldn't pursue PR, App Store features, or Product Hunt but I find a lot of teams spending an unbelievable amount of energy on these initiatives.  Those initiatives are not for your growth team.  90%+ of your time should be dedicated to channels and growth mechanisms that drive the engine of your growth machine.  These are things that are repeatable.  

Why Would I Pursue Anything Else?

You are probably asking, why would I pursue anything else?  I’ll warn you, the force of the dark side of growth is strong.  

First, it is much easier to grow inauthentically.  Producing and improving authentic growth is typically much more difficult.  Great teams will take the impactful, hard problems head on.  Mediocre teams will shy away and try to find something easier to work on. 

Second, inauthentic growth numbers always sound more impressive.  This typically produces what I call the Wheel of Meaningless Growth.

The pursuit of inauthentic growth eventually leads to the classic startup story of companies such as Viddy, Branch Out, and Homejoy. All three companies raised tens of millions of dollars and got massive amounts of press based on inauthentic growth. They all also went down in flames within a few short years and employees are the ones who lose in the end.  

So I’ll say it one more time, pursue authentic growth. 

Throughout Building A Growth Machine, I’ll point out the traps of inauthentic growth and help you learn to build authentic growth for your company.