Startups need to grow, it is a simple goal. Growth is life for a startup, knowing what to do to grow is not so simple. Knowing your business and building a product or service to achieve Product to Market fit is a difficult but not an impossible task when you get your startup out of the gate. Once you have a product to market fit the team needs to focus on nothing else but to grow the metric that matters. I was watching Lecture 6 of How to Start a Startup by Sam Altman. The talk this thursday was on Growth by Alex Schultz of Facebook. There were a number of articles on the reading lists for the lecture, here they are in an order that I think you should read them:
- Startup = Growth by Paul Graham – this is a must read
- Does Slow Growth Equal Slow Death? by Joel Spolsky – case for why you need growth
- A Recipe for Growth – Adding Layers to the Cake by Jeff Jordan – strategies for how to grow
- The Secret Behind Pinterest’s Growth Was Marketing, Not Engineering by Liz Gannes – case for approaches that are not technical but essential to grow
- Mark Zuckerberg on Facebook’s Early Days by Mike Isaac
- How we put Facebook on the path to 1 billion users – Chamath Palihapitiya; (user-provided transcript) – what should you focus on when focusing on growth
- Chasing Facebook’s Next Billion Users by Douglas MacMillan
- Ready to Grow Breakout Session at f8
Here is the video of the lecture
I cannot emphasize enough how critical this part of building a startup is. Startups don’t have to be experts at building a great product or in “growth hacking”, Startups need to be experts in their customers and their customers problems. Understanding your customer is one of the fundamental ways to build a great product and once that understanding and product are there then running experiments to finding the North Star, leading the customer to the ah-ha moment and making sure they are actually using your service to solve their problem become the 3 major goals of the team. All of this is easier said than done. Having a ruthless priority to build and execute a growth strategy is what got Facebook to where they are today.
Growing at 5% to 7% a week is not a trivial task. If you read Paul Graham’s post you would have seen the following table
The kind of business that you will be building is dramatically different if you start at different growth rates. The difficult question to ask yourself is what kind of a business are you building?
Focusing on hitting a growth rate reduces the otherwise bewilderingly multifarious problem of starting a startup to a single problem. You can use that target growth rate to make all your decisions for you; anything that gets you the growth you need is ipso facto right. Should you spend two days at a conference? Should you hire another programmer? Should you focus more on marketing? Should you spend time courting some big customer? Should you add x feature? Whatever gets you your target growth rate.
Yes I agree that growth is important but I think it depends a great deal on where in the process your company is and what your revenue model is. Unless you have done an investment round and have some money to burn you should always focus on the revenue. I suggest making decisions with the questions “Will that create revenue for me in the near future?”. Ofcourse if your growth is in direct correlation with your revenue then growth can be your main focus.
Growth should be the main focus, growing revenue or any other metric, in the case of Facebook it was very simply getting 10 friends in 14 days after someone joins facebook. The relentless pursuit to get more people connected is what created The Social Network. Many startups don’t focus on this.
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