What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters

What are Growth Teams For

and What Do They Do?

Casey WintersGrowth Advisor in Residence @Greylock

Former Growth Lead @Pinterest

Former First Marketer @Grubhub

Former Marketer @Apartments.com @Homefinder

Casey Winters | @onecaseman | caseyaccidental.com

Scale usage of a product which has product market fit. You do this

by building a playbook on how to scale the usage of this product.

The purpose of “growth”

How you might know?

You have customers that are actively using your product

and would be pissed if it went away.

You know your customers, you know your market, and your

primary challenge is how do I get more of these customers?

Product Market FitDo you have it?


Key Action: what indicated the user received value

Designated Frequency: how often we expect the user

to receive value

Measuring RetentionWhat do you need to know?


Key Action: identify best unit of value

Designated Frequency: Frequency of offline analog

Measuring RetentionWhat do you need to know?


Key Action: Saving

Offline Analog: Magazines

Designated Frequency: Monthly (at first)

Measuring RetentionPinterest Example


Key Action: Ordering Food Online

Offline Analog: Ordering Food by Phone

Designated Frequency: Monthly

Measuring RetentionGrubhub Example


Product Market Fit

How you might know?

Your retention curve (of usage, not

revenue) flattens somewhere. This

means that for some customers, you

have product market fit. You just

want to grow the volume of those

customers now.

Do you have it?


Product Market Fit

Can you grow a business with that retention?

The ability to acquire users at less than the amount of money you make from that curve represents true product-market fit.

If you’re not making any money, that means you need to be able to grow the size of the cohort without spending any money.

Do you have it?


Product Market Fit


If you are making money, it’s growing the cohort size with a cost per acquisition less than the revenue per user of those users over a time frame you can predict well

Three months for early stage

Six months for mid stage

One year for late stage

Do you have it?


Product Market Fit


If you can’t grow cohort size with where your cohort flattens, you are not at product-market fit and need to improve where the cohort flattens

Do you have it?


Product Market FitWhat happens when you think you have Product Market Fit … but you don’t.









“A cleaning company charges north of $85 for a 2.5-hour house cleaning, but to rope in as many new customers as possible, it offers the service for a promotional price of $19. Guess what happens when the introductory deal is used up?”

What Really Killed Homejoy? It Couldn't Hold On To Its Customers (Forbes)


http://www.forbes.com/sites/ellenhuet/2015/07/23/what-really-killed-homejoy-it-couldnt-hold-onto-its-customers/#6d164890114c

Why Growth?Why not just marketing or product?


Why Growth?Three ways to grow your product.

Phase I: “Free”, Measurable, Scalable

(Growth Product)

Phase II: Paid, Measurable, Scalable

(Performance Marketing)

Phase III: Paid, Non-Measurable, Non-Scalable

(Brand Marketing)


Why Growth?Startup growth is different from marketing.

The first stage requires working with the product. Marketing teams (usually) don’t have access or expertise to that part of your organization.


Why Growth?Startup growth is different from traditional marketing.

Awareness

Interest

Evaluation

Commitment

Use


Why Growth?Startup growth is different from traditional marketing.

Loving Product

Trying Product

Tried Product

Need Product

Fit Core Audience

General Awareness


Startup growth is different from traditional marketing.

Why Growth?

Loving Product

Trying Product

Tried Product

Need Product

Fit Core Audience

General Awareness

Product, Referrals

Product, Conversion, NUX

Notifications, Retargeting

Paid and Organic Search

Targeted Advertising e.g. Facebook

Brand Marketing


Why Growth?

Most product teams are built to create value or improve

value provided to customers.

Growth is connecting more people to the existing value

of a product.

Startup growth is different from traditional product.


How do I start a Growth team?Where do the people come from? What do they do?



So how do growth teams start?

Typically, they find one problem that could help drive growth that has been

neglected at the company, so it’s easy to own.

Prioritize problems based on high impact, low effort, high chance of success, and

ideally short iteration cycles. Analyze the data to figure out where the problems are.

Run experiments.

Some examples: Logged out experience, Emails/Notifications, Referrals, SEO, Onboarding flow



What does team structure look like?

Required: Dedicated engineer and designer

Nice to have: PM and analyst/data scientist

The team has to sit together, not with other people of the same function


How do I start working on growth?What’s our first problem to solve?

After that, you have to analyze the data...

Pinterest example:

● Millions of visits a month from Google to board pages

● A conversion rate of less than 1%

● All previous conversion work had been focused on the homepage, which was

receiving a lot less traffic than these board pages

● So let’s set a goal of increasing that rate by 15%


Conversion OptimizationProject Gift Wrap

• Recently ran an experiment making a new

page available to search engines, which

decreased signups

• As we analyzed the experiment, we saw

the reason was because when people

clicked on these links from other pages,

they were blocked and asked to sign up,

and they did.



• We let users scroll infinitely on these

board pages, but only showed 25 Pins

to search engines

• For simplicity, we decided to make the

same rule for users as search engines


The results?

• 50% improvement in conversion rate

• No decrease in search engine traffic

• No decrease in activation rate (at least at first)



What else do growth teams work on?Examples from all parts of the funnel.


Product Retention

Reducing Friction > Adding Features


Retention comes from a maniacal focus on improving the core product.

So how do you improve the core product?People + metrics.

Data (what people do)

Qualitative research (why they do it)


Remove barriers to higher retentionGrubhub example

● Low restaurant variety

● High minimums and fees


Get to product value as fast as possible.But not faster.


+

Reduce friction that distracts from product value.Get rid of non-critical elements for new users.


Don’t be afraid to educate contextually.A design with education is better than a design that doesn’t educate.


Referrals and ViralityHave engaged users drive new users or growth inside organizations

● This requires people to share and to want to share

● Need a strong value proposition for sharing.○ Uber: money○ Dropbox: better product experience (solo)○ Snapchat: better product experience (friends)○ Medium: vanity or emotion○ GoFundMe: cause


Search Engine OptimizationAuthority and Relevance

Authority

- Market Launches example

Relevance

- Landing pages


Search Engine OptimizationSEO friendly landing pages


Paid AcquisitionGoogle, Facebook, and more. Oh my!

● By far the fastest way to get people to try your product

● It’s a drug that’s easy to get addicted to, and scaling via paid is not a very

defensible strategy unless you get to best in the world at it

● Very expensive at scale, so need to understand arbitrage

● CPA < LTV (set lifetimes conservatively and measure them by cohort and

channel)

● Everything (and I mean everything) is trackable

● Efficient frontier is real

● Adwords (if there is existing demand) and Facebook Lookalikes are best

way to get started

● Retargeting is effective, but hard to measure correctly


• Right content i.e. it reinforces value of product

• Right time• Right amount

Emails and NotificationsStart messaging like a personal assistant


• Test manually, then automate and personalize

• Subject lines and calls to action matter; design doesn't as much

• Run emails/notifications as AB experiments to see lift in usage + lift in unsubscribes/app deletions

• Measure impact of unsubscribe/deletions on usage

Focus on testing and personalization. Start messaging like a personal assistant


Loyalty and Engagement ProgramsEngagement tactics

• These need to be profit drivers, not cost centers.

• The exception: Unless they build a moat (which is more rare than most operators would like to believe).


Loyalty and Engagement ProgramsExamples

● Apartments.com was definitely infrequent, non-loyal.

● For Grubhub, we had to figure out biggest opportunity

● Yummy Rummy


Technology

What Are Growth Teams For, and What Do They Work On? By Greylock's Growth Advisor in Residence Casey Winters