Without growth your startup will die. At startups, growth means increasing revenue or customers. Once your product is working for customers, and not before, you should be aiming for 10% weekly growth. Here’s how to hit that goal:
Definition: Real growth is based on positive recommendations from engaged customers — the people who love your product. These customers use your product everyday and generate organic, sustainable growth.
Execution: Once you’ve identified your engaged customers, talk to them — all the time. Ask them: “What do you like about the app?”, “What do you dislike?”, “What problems do you face in your daily work?”. Identify patterns across these customer surveys and use the data to create a roadmap for your future experiments (see ‘Run Experiments’ below).
Avoid: Ignore top-line vanity metrics like signups or downloads. These can be easily swayed by PR or similar short term spikes, which are not real growth. In addition, don’t go crazy with metrics, you probably don’t need more than 3 core metrics for the business.
Definition: Experiments should be directed by customer feedback from a) happy customers, b) churning customers, c) disengaged customers and d) potential customers who chose a competitor. Experiments can be run on every aspect of the business from user experience to sales and marketing to customer support, essentially any customer touch point.
Execution: Test only 1–2 things concurrently and decide what success looks like in advance for each test. When budgeting resources, allocate 75% to existing operations and 25% to new experiments. This split allows you to get the benefit of known operations working well, while giving yourself a good chance to find something better. Optimizely and LaunchDarkly are popular tools for live experiments on production systems.
Avoid: Steer clear of big projects. You can work on larger projects after hitting your growth milestones for your current product. Don’t optimize for 100% reliability in an experiment, if it works you can always rebuild it. Right now you need to ship early and often.
Hire at Choke Points
Definition: Your business will come under steadily more pressure as your customer base grows. You’ll need to hire people in the areas under the most strain, the ‘choke-points’, as these issues tend to recur in growth situations.
Execution: Once a choke-point is identified, search for great people who can solve that specific problem. For example, if your website is running slow, you should hire a platform engineer, not a mobile app developer; if new customers aren’t engaging, hire in customer success, not sales.
Avoid: Don’t hire for roles you don’t currently need, even if the person is truly great. It takes months to find the right person, you can’t afford to invest that time in someone who will not drive near term growth. Explain the situation honestly and hire them later.
Building a product people use is a good start but it’s only one ingredient of a successful startup. Achieving 10% weekly growth begins with listening to customers and acting on their feedback.
This article is part of a series on Startup Growth.
How to Understand your Customers Before Launch
Your First Product Should Be Terrible
A Simple Framework for Goal Setting
Bad Ways to Set Startup Goals
Hit Goals or Your Startup Will Die
How to Get 10% Weekly Growth
Finding the Right Price for Early Customers
Which Pricing Model is Best for Your Startup?
When Should Startups Pursue Partners?
Early Traits of a $100M Company
Sterling Road invests in pre-seed B2B startups based in North America. Full process here: sterlingroad.com/process.
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Thanks to Kaego Rust for reading drafts of this.