Growth Loops are the New Funnels

Growth Loops are the New Funnels

The AARRR funnel framework has been the dominating guiding framework to metrics, goal setting, and strategic growth conversations. Funnels were a good starting point but do not accurately represent how the fastest growing products grow. It is time to move past the funnel framework and focus on Growth Loops.

The biggest thing we've learned is that the funnel framework is too micro of a view. It helps explain a specific step within a Growth Loop, but misses the larger picture of the loop itself. When the funnel is applied at the company level and used to explain how a product grows, it leads to a few common issues…

Building Growth: Product, Process, and Team

Building Growth: Product, Process, and Team

The term “Growth” has been slapped onto everything. Growth marketing, growth hacking, growth engineering, growth product, blah blah blah. It has created a ton of confusion and negative biases. Every week we get questions like, “What is the difference between product and growth team? Growth marketing vs. marketing? Isn't growth just a bunch of local optimization? WTF is growth?”

The term has taken on so many different meanings that it ultimately creates more friction and obscures what we should really be focusing on.

Whatever your opinion is towards the term, throw it away for a second. The term does not matter. The important thing is to realize that all those high-growth companies embraced what we talked about in the first post in this series - Growth wins. The game has changed.

Growth Wins

Growth Wins

Growth wins.

Not growth at all costs, bad unit economics, dark patterns, spam your users, shark fin growth. But authentic growth built on a solid foundation of retention and engagement.

This advice isn't new:

“Poor distribution - not product - is the number one cause of failure.” - Peter Theil

“The best product doesn't always win. The one everyone uses wins” - Andrew Bosworth

“Most value creation takes place not at the startup phase, when new companies are formed but at the “scale-up” phase, when a select number of these companies grow at dizzying pace.” - Reid Hoffman

We've gone through three phases as a tech ecosystem. The early phase in the 90's was all about “Can it be built?” The main risk was technology risk. Mid 2000's we transitioned to the second phase, where the main question was “Can you build a great product?” Then the tools and technology got better and cheaper. Tech and product risk decreased, and distribution risk increased.

GDPR: What Growth People Need To Know

GDPR: What Growth People Need To Know

With the General Data Protection Regulation (GDPR) coming into effect in just 6 weeks, are the days of growth at any cost coming to an end?

The law is designed to safeguard data privacy for EU citizens, and applies to any business with EU users or customers, regardless of whether the business is based in the European Union or not. The penalty for non-compliance is “up to €20 million, or 4% of the worldwide annual revenue of the prior financial year, whichever is higher.” 

After doing a lot of research and interviewing leaders managing GDPR compliance at top companies we’ve come to this conclusion:

If you’re in growth, and not preparing for GDPR, you should be.

Currently, many growth teams are violating the General Data Protection Regulation in multiple ways. And though it was approved by the European Parliament in April, 2016, they’re unprepared to comply when it comes into effect on May 25, 2018.

Does this apply to your team?

It does if you’re:

  • Tracking user behavior on your website or in your app for marketing and personalization
  • Collecting email addresses and other personally identifiable information (PII) for email marketing
  • Testing strategies to resurrect churned users

If you’re doing any of these things without explicit consent (defined below) from users, then it’s time to make some changes to your growth practices. 

In this post, we’ll talk about what you need to know to comply with GDPR across the 3 common growth activities mentioned above. 

What Growth People at Top Companies (actually) Read

What Growth People at Top Companies (actually) Read

While content is getting better, its reach is decreasing, CAC is increasing (faster than CAC for paid marketing), and competition is skyrocketing. ProfitWell recently published a study revealing some grim statistics that illustrate these points - compared to 5 years ago, 300% more content is being published per month, posts are almost 100% longer in word count, and shares per post have dropped 90%(!) in the last 2 years.

The textbook symptoms of channel saturation have set in. Here at Reforge, we realized if we didn’t adapt, we’d risk of getting left behind.

But how do you adapt when channel saturation takes over?

Product is the Future of Growth - Here's Why

Product is the Future of Growth - Here's Why

The future of growth belongs to product driven companies. At HubSpot, we realized this a few years ago, which is why we disrupted our own business model before anyone else could. 

At the time, HubSpot was still growing 30%-40% per year on the shoulders of our original marketing and sales driven inbound marketing model. Despite the success, we consciously chose to upend what had been working by launching our first freemium products in 2014.

Market dynamics and consumer behavior have been changing - increasingly consumers expect to use software and extract value from it before buying. To stay relevant over the long term we needed to adapt, or risk “getting our lunch eaten.”

We entered the world of freemium in 2014 with Sidekick, a sales automation product, and HubSpot CRM. In 2016, we rebranded Sidekick as HubSpot sales and deepened our commitment to becoming a product-first company, launching Customer Hub, a freemium product for customer success, in 2017. 

3 Ways to Fast Track Your Career from Zillow’s VP of Product and Growth

3 Ways to Fast Track Your Career from Zillow’s VP of Product and Growth

Most CEOs reach the chief executive office an average of 24 years after starting their first job. But, there’s one sub-segment of CEOs who get there dramatically faster. They’re called “CEO Sprinters” according to the CEO Genome Project, a 10 year study that looked at over 17K chief executives. 

“We discovered a striking finding: Sprinters don’t accelerate to the top by acquiring the perfect pedigree. They do it by making bold career moves over the course of their career that catapult them to the top.

In the tech world, we read about these “CEO Sprinters” all the time. They choose the right high-growth startup at the right time, land the highest profile projects, get an impressive assortment of quick wins under their belt, and climb the career ladder at lightspeed, leapfrogging their peers along the way. Think Sheryl Sandberg and Marissa Mayer, to name a few.

We hear about what they’ve accomplished (at such a young age no less!) and naturally want to know - what sets them apart? What do they do differently from everyone else? Do they work harder? Smarter? Faster? 

And... what about me? Do I have what it takes? Could I have a shot at the C-Suite?

After reading about, studying, and talking with many of these career phenoms, I’ve found one dominant thread that sets them apart - each and every one operates by their own set of principles and values that guide their decision making. 

In my quest to uncover the unique principles of as many of these trailblazers as possible, I recently spoke with Nate Moch, Zillow’s VP of Product and Growth, and an active member of the Reforge Collective of growth leaders. 

Five Growth Lessons from China’s Big Tech

Five Growth Lessons from China’s Big Tech

By now, you've probably read Mike Moritz' article on the work culture of China's big tech companies, and what that means for Silicon Valley.

Cyriac Roedig (Shopkick's founder) also wrote that Chinese startups just operate on a faster timetable:

"Big startups are built in three to five years versus five to eight in the U.S. Accordingly, entrepreneurs who try to jump on the bandwagon of a successful idea scramble to outcompete each other as fast as they can." link

Chinese tech giants unicorns get there faster, but only partly because of 9-9-6 as Moritz observed. It's also due to a handful of other, maybe more important factors:

  • a dense, interconnected domestic market they're selling to
  • hyper-competition driven by population pressure
  • a culture that lives by the 80-20 rule, preferring to throw features against the wall instead of waiting for months to make them perfect
  • being regulatory bedfellows with the Chinese government

Let's dig into each of these factors one by one.


Why Enterprise Products are Missing the Boat on Growth

Why Enterprise Products are Missing the Boat on Growth

Growth is no longer just for B2C and consumerized B2B companies - if you’re building an enterprise product and you’re not thinking about growth, you should be. 

Most people think “growth” isn’t relevant for enterprise. As a result, companies end up building complex products to satisfy a list of requirements from IT buyers that leave end users frustrated and looking for a “better mousetrap.” As large enterprises transition to SaaS products, this outdated approach leaves the doors for product disruption wide open. 

While product disruption in this space has been slower than in consumer and high volume SMB due to built-in defensive moats around contract structure, technical integrations, and brand, it’s now starting to happen faster. Think Salesforce, Box, and now Slack as it expands upstream towards enterprise. 

To unpack the dynamics behind this shifting enterprise landscape, I’ll walk you through the following in this post:

  • How user experience and growth is changing the enterprise game
  • How to customize the user funnel for enterprise 
  • The 4 pillars of enterprise growth and how to align them with consumer growth strategies

As this wave of change accelerates, some enterprise companies will hunt down the opportunities for growth embedded within the shifting landscape, while others will bury their heads in the sand until it’s too late. Which will you be - the lion or the ostrich?

How to Run Your Growth Team Like a Scientist

How to Run Your Growth Team Like a Scientist

Recently, a colleague was telling me about a “successful” experiment they were excited about. They hypothesized that the best time to encourage users to upgrade from a free trial was while they were using a certain common feature.

To test this they put a big button on that page and saw a measurable lift in conversion compared to users who didn't see the button. Based on this result, they were attempting to drive more free users to that feature.

I asked if they had experimented with putting the same button on other commonly used features, and they hadn’t. They hadn't controlled for the risk that the lift was simply a result of putting a prominent CTA in front of more users.

This was especially concerning given that they were funneling resources into more projects based on the assertion that this one feature is important for activation. It was apparent they just didn't understand how to design proper controls to prove their hypothesis.

I’ve seen examples like this countless times when talking with other growth professionals at companies from seed to IPO. Many experiments they describe are under-optimized or invalid due to flawed design - and they don’t even realize it.

It's great that companies are using the scientific method for growth. What used to be “billboards and a prayer,” has evolved into repeatable and measurable systems for growth.

But, many teams don’t get as much value out of the scientific method as they could. Even worse, they often apply it incorrectly which produces misleading results.

By now, most practitioners responsible for growth know they should be using the scientific method to guide their efforts, but until recently, many hadn’t actively used it since 6th grade science class. (Luckily, there are some useful resources out there for ramping up on building processes for growth.)

But if being effective in your job is dependent on using the scientific method, you need to study how the best teams in the world use it. And the best funded and most experienced teams that use the scientific method aren't in tech, they're in science. Unlike the growth community, which is still in its first decade of existence, the science community has been refining the scientific method for thousands of years.

Don't Let Your North Star Metric Deceive You

Don't Let Your North Star Metric Deceive You

We’ve all heard the rallying cry of the “One Metric That Matters”.

Choose your north star and focus. Grow 7% week over week. If you grow DAUs, the rest will follow.

But blindly buying into the concept of the one metric that matters (OMTM) is a fatal oversimplification.

In a recent essay, Casey Winters, formerly Growth at Pinterest, says:

“The search for one key metric for a complex ecosystem like Pinterest over-simplifies how the ecosystem works and prevents anyone from focusing on understanding the different elements of that ecosystem. You want the opposite to be true. You want everyone focused on understanding how different elements work together in this ecosystem. The one key metric can make you think that is not important.”

In this post, we’ll expand on Casey’s points, walking through why focusing only on your north star metric is a dangerous way to measure the growth of your business, and how teams should think about setting their metrics instead.

Why Do So Many Startups Get Product Marketing Wrong?

Why Do So Many Startups Get Product Marketing Wrong?

Many startup teams fail to bring in product marketers with the right skill sets at the right time, and end up paying for it with failed launches.

Because product marketing is a relatively new role, a majority of technology companies don't know what product marketing is or how it's different from marketing, growth marketing, digital marketing, brand marketing and product management.

For that reason, founders often ask me some combination of the following questions:

  • What do product marketers do?
  • What are they responsible for?
  • How are their goals different than those of marketing, growth and product management?
  • How do we know if and when we need to hire a product marketer?

To unpack the answers to these questions I generally start at the top with the goal:

“A product marketer’s primary goal is to deliver the right product to the target customer at the right time to ensure customer adoption.”

Then, I walk through how I breakdown the role of a product marketer - their key responsibilities, how those responsibilities align to different phases in the product growth cycle, and when is the right time to hire.

In this post, I’ll share the 3-step process I’ve developed for working with teams to help them understand the role of a product marketer and get as much value out of their product marketing efforts as possible. The steps of the process are outlined below:

  1. Clarify the company’s overarching business goals, initiatives, product roadmap, decision making structure, culture, and brand.
  2. Determine the stage of the product’s growth cycle - early, mid, or late stage.
  3. Uncover where you can make the biggest impact within the three typical areas of focus for product marketers (we’ll go through these in detail):
    1. Market validation
    2. Framing the message
    3. Go-to-market strategy (GTM) and delivering the message

Then, I’ll dig into where companies go wrong when it comes to product marketing and how to avoid common pitfalls.

My goal in sharing the process is to help teams and product marketers alike determine if, when, and how they should be working together, and identify the pitfalls that may prevent them from delivering the right product to the target customer at the right time and driving customer adoption.

Let’s walk through the process.

How Showmax Runs a Growth Team Across 70+ Global Markets

How Showmax Runs a Growth Team Across 70+ Global Markets

Showmax is running growth in over 70 regional markets with a centralized team sitting in Amsterdam. We spoke with Barron Ernst, Showmax’s Chief Product Officer, about building an international growth team from scratch, and how the team balances local optimizations with global efforts to drive subscription growth:

1. One specific way a centralized growth team can support dozens of country markets
2. What it means to build “multilateral” growth
3. How growth brings regional teams together
4. The tactics of knowledge-sharing across multiple countries, teams, and goals
5. The secret to adapting experiments and optimizations across 70+ markets
6. How Showmax decides new country markets
7. How brand marketing and growth play together

The Growth Experiment Management System that Tripled Our Testing Velocity

The Growth Experiment Management System that Tripled Our Testing Velocity

All the fastest growing companies move at lightspeed.

Uber, Airbnb, Amazon, and Facebook are some of the fastest growing companies in history, in part because they built high velocity testing into their cultures from day one. Lindsay Pettingill, a data science manager on Airbnb’s growth team, reports that her team has increased their experiment cadence from 100 to 700 experiments per week over the past two years.

Airbnb isn’t the only rocketship that prioritizes speed. For years Facebook’s motto was, “Move fast and break things.”

In 2014, they updated that motto to, “Move fast with stable infrastructure.”

Slightly different, but the message was still the same - speed matters. A lot.

Despite knowing that speed is crucial, most teams move at a snail’s pace. There are two key reasons for this:

  1. They struggle to get organizational buy in for growth initiatives across the team.
  2. They fail to build airtight, repeatable experimentation systems.

Just as Jira has improved efficiency and collaboration for many development teams, a management system built specifically for experimentation can improve speed for a growth team.

Larger companies can devote engineers to building powerful systems in-house, but smaller teams often view these systems as too expensive, too difficult to build, or both.

Google sheets, though clunky and increasingly ill-suited as test pace increases, is the default for most startups. This creates an inherent negative feedback loop within the process that slows cadence.

In this post, I will reveal how I built a lightweight, inexpensive experimentation system for Feastly that:

  • Facilitated collaboration and buy-in across the entire team.
  • Increased idea contribution from the whole company by 2x.
  • 3x'd experimentation speed.

Four New Ad Opportunities to Test Before Your Competition

Four New Ad Opportunities to Test Before Your Competition

Is growth getting harder?

Many existing channels have extended past their golden age and are reaching saturation points in their lifecycles for a variety of reasons.

Additionally, everyone's getting smarter about growth, including consumers. Now, most invite systems no longer have the same novelty value or efficacy today as they did 10 years ago, and consumers’ “banner blindness” extends far beyond actual display advertising to encompass referral systems and virality programs.

Finally, the proliferation of robust off-the-shelf tools like Mixpanel, Optimizely, and many others is closing the gap on being data-driven at companies, and makes all of us (including our peers and competitors) smarter and faster.

But, growth is not finished; it’s just changing. Today, increased competition has led more companies to emphasize paid acquisition as a core driver of growth.

New Opportunities in the Paid Acquisition Age

Back in the spring we saw a burst of ad related launches from “up-and-coming” social products:

  • Quora announced the public launch of its self-serve ad platform.
  • Snap revealed its self-serve tools aimed at democratizing the platform's ad solutions beyond brand advertisers with 6-figure spends.
  • LinkedIn rolled out Matched Audiences to allow advertisers to target people by email address.
  • Pinterest upgraded its Promoted Videos offering to auto-play video ads (rather than click-to-play) for users of its mobile app.

What can new channels, or major improvements to existing channels, add to growth efforts?

Andrew Krebs-Smith, CEO of Social Fulcrum, weighs in.

How HubSpot Hires Growth Marketers

How HubSpot Hires Growth Marketers

When our VP of Growth at HubSpot, Kieran Flanagan, told me to start recruiting a growth marketer for HubSpot’s new customer service product my gut reaction was:

“Sure, no problem.”

Quickly followed up by:

“I have no idea what I’m doing.”

I’d never hired anyone at HubSpot. I knew practically nothing about recruiting.

During my five-month journey of finding someone to join our team, I’ve learned hiring a smart marketer is extremely challenging. While I surely haven’t mastered hiring, I learned a few lessons along the way which I wish I knew when I started.

The #1 lesson I learned during the hiring process is recruiting is shockingly similar to customer acquisition.

My favorite customer acquisition framework is Ramit Sethi’s concept of “Go where the fish are.” You start by identifying what type of fish you want to catch, figure out where those fish are swimming, and then cast your net.

In this post, I’ll walk you through how I altered the “Go where the fish are” customer acquisition concept to apply to our hiring process. Here’s our a 3-step hiring framework that I now use for hiring at HubSpot.

  1. Identify the “fish” you want to catch → identify your ideal candidate.
  2. Go where the fish are → figure out where the most qualified candidates “hang out” online.
  3. Focus on lakes with fish, ignore the rest → Spend all your time recruiting where you get traction with highly-qualified candidates, and ignore recruiting channels that don’t yield the kinds of candidates you’re targeting.

Let’s get started with the first step.

Note: At the end of this article, you’ll find actionable templates we used in the interview process. This includes (1) the exact interview questions we asked, (2) the test assignment we sent candidates, and (3) our “sorry it didn’t work” email template we sent candidates who didn’t get the job.

The Two-Sided Network Effect - How Omni Bootstrapped Marketplace Liquidity

The Two-Sided Network Effect - How Omni Bootstrapped Marketplace Liquidity

Editor's Note: Today we're excited to share an exclusive interview with Ryan Delk, VP of Product and Growth at Omni. Omni is a storage-as-a-service business that recently announced its new marketplace feature, allowing people to make money off of their stuff sitting in storage by renting it.

This is a great piece for anyone looking to understand marketplace growth dynamics better, or for anyone interested in learning what marketplaces can teach other models (Omni started out as a one-sided storage-as-a-service business).


Key Growth Lessons:

1. Building a linear business to seed supply-side marketplace challenges can solve the chicken or the egg problem most marketplaces face.

The fundamental challenge of building a marketplace is solving the chicken or the egg conundrum of which comes first. We all know supply is key, but how do you build it if you don't have demand? Building both at the same time is hard!

Omni took a creative approach to solving this problem by building and monetizing their "storage as a service" business first, hitting critical mass, and then layering on the marketplace, seeded with supply from day one.

2. Layering a marketplace on top of an existing business supercharges linear growth and creates a moat around a commodity business. 

Not only does a linear business seed marketplace growth, but marketplace growth in turn feeds the foundational business. It's a self-reinforcing cycle that once spinning is hard to disrupt.

As Omni generates marketplace demand, they are finding that storage customers store more stuff. This supercharges growth.

Retention is Hard, and Getting Harder - Here’s Why

Retention is Hard, and Getting Harder - Here’s Why

If you've been following along in this blog series on retention, you know that retention can make or break your company.

In the first post, The One Growth Metric that Moves Acquisition, Monetization, and Virality,  we dove into how retention can make your company. Specifically, we walked through the 4 ways in which good retention helps you build a competitive advantage by:

  1. Driving acquisition
  2. Improving monetization
  3. Building acquisition muscle
  4. Accelerating payback period

In the second post, Why Retention is the Silent Killer, we revealed how retention, can break your company because:

  1. It requires a long-term view (often multiple years) to understand its impact.
  2. It’s easy to choose the wrong retention metric, which leads teams to focus on the wrong initiatives.  
  3. It requires not just breadth of customer retention, but also depth of engagement to drive sustainable growth.

When we combine these two factors - the power to compound growth and the power to kill it - the importance of retention becomes obvious.

But that’s not the full story. The last thing you need to understand about retention is that it’s hard to improve, and it is getting even harder.

In his blog post Acquisition is Easy, Retention is Hard, Hiten Shah outlines some excellent points on the challenges of retention for SaaS companies. I’d like to expand on his points and walk through how the same issues apply to every tech product.

In this essay, we will examine how 3 market dynamics have created the perfect storm - making retention much harder than it used to be:

  1. Increased competition
  2. Channel fatigue
  3. The rise of monopolies in tech

Then we’ll dig into each of these factors individually to understand more deeply how they affect retention throughout the three stages of the user lifecycle:

  1. Onboarding
  2. Habit formation
  3. Long term retention and engagement

Taking Over the Full Funnel - an Analysis of Google News

Taking Over the Full Funnel - an Analysis of Google News

Recently, Google News announced a suite of product changes aimed at helping paid subscription-based news sites.

In this post, we’ll be looking at different facets of this announcement and their implications for Google News' growth.

Key growth lessons:

1. If you're an aggregator, start with distribution and then leverage the power it affords to build a platform that can own additional parts of the funnel.

Google "took over the world" by building an incredible distribution engine for publishers and an effective discovery engine for consumers. It's continuing to drive growth by transforming that distribution engine into a platform that will allow it to own acquisition, engagement, conversion and monetization for publishers, in addition to discovery.

2. If you're a content producer reliant on one key distribution channel, design your content specifically to fit the channel (and how it makes money), and look for opportunities to create new content formats as your main distribution channel evolves.

Upstart video content creators producing new genres of content such as Let's Play videos and Product Unboxings, were able to build large audiences on the back of YouTube. As Google News evolves into a platform that controls the full funnel, publishers who design their content for the new world of Google News should do very well.

Why Retention Is The Silent Killer

Why Retention Is The Silent Killer

Retention - not only does it make companies - but it also quietly breaks them. For this reason, poor user retention has become the silent startup killer. In this post, I will walk you through the three key ways that companies go wrong when it comes to retention:

  1. They deprioritize retention altogether

  2. They defining their retention metrics incorrectly

  3. They don’t measure engagement