Starting a Growth Team from Scratch
Most high-growth companies now have Growth Teams (e.g. Facebook, Uber). These teams have enormous potential…
Creating a Growth Team isn’t as easy as it sounds. You’ll find many roadblocks coming your way and going lean (generating results with small money) is the first step to actually building a standalone team.
This article will walk you through the different steps involved in creating a Growth Team, from getting the management on board to getting a few big wins.
While there are no best practices publicly available to the construction of Growth Teams, I’ve found that the next few steps are the most common paths.
Since the process can be long, I’ve designed a checklist that you can print to help you to follow every step. Click here to download it.
Disclaimer: Growth is a new sport. These views are my owns. If you disagree with something, I’d love to hear from you. Leave a comment or contact me directly.
When you’re a startup, everyone bashes you with Product / Market Fit. Here it comes again.
You can’t drive sustainable growth without a clear Product / Market Fit.
Why would you want to optimize something that isn’t really working? Product / Market Fit always comes first.
You won’t be able to satisfy the needs of users coming your way. Even if you get them on your product, they won’t stay, and you’ll waste your time.
If you want to launch experiments on the inner parts of your funnel, you’ll need a constant flow of new users (at least several hundreds per week), which generally happens after PMF.
Being in business is all about focusing on the right thing at the right moment. Before Growth, you should be focusing on understanding the needs of your customers.
If you don’t know (yet) if you reached Product / Market Fit, chances are that you need to work a little more on your product before experimenting on Growth.
John Doherty wrote a great piece which outlines a few questions that you need to ask yourself. Some of them are:
- Are we prepared to invest budget into not only this person’s, but also into what they need to grow the company?
- Is our technology in such a place that it can handle a large influx in traffic?
- Is our engineering organization set up to execute on growth initiatives while also building out the product and new features that are also key to growth?
- Do you understand where your specific company’s growth could come from, or what might be involved in marketing/growing your specific product?
It’s necessary that you meet the requirements. Don’t start too early because your time could be better spent somewhere else and you’ll struggle with the rest of the process.
Some people think that Growth is all about scrappy techniques. That’s not what we’re after here. We’re after true sustainable Growth.
You shouldn’t be looking at growing your number of users without driving Engagement & Adoption. Otherwise, you’re just wasting your time (you’re looking for $$$, not Users alone).
Please note: it’s okay for Pre-PMF Startups to use scrappy techniques to get their early adopters and generate early-growth, but when you want to build a long-lasting business, you just can’t rely on these principles.
Here is how Growth as a practice could be defined:
Constant testing & experimentation of hypothesis that are deeply linked to the growth of your company.
Growth isn’t about some sort of hacks that will boost your Growth Rate by 200%. It’s about a sum of many parts that will all impact your end result.
The whole idea is that the process should enable you to grow at a higher pace and to learn about what works.
It’s all about uncovering insights about your product and users, leading to some tactics creating Growth.
Quick note here: Don’t put tactics first because that’s the wrong way to think about Growth. Put your product and consumers at the center. Understand them as much as you can. Tactics will come in later.
What’s a Growth Team?
Why a Growth Team? Tech companies don’t grow the same way traditional companies do. The Skills required are much different and the Growth is plainly, different.
Let’s compare the Growth + Forecast of Walmart and Amazon:
In 2030, Amazon will outgrow Walmart. It took Amazon 30 years to reach $100B in Revenue while it took Walmart 80 years.
We all know I can’t predict the future (even more knowing the simplicity of this model) but this is just an example of how digital companies can grow.
Just to take another example…
It took decades for the telephone to reach 50% of households, beginning before 1900. It took five years or less for cellphones to accomplish the same penetration in 1990. – The Pace of Technology Adoption is Speeding Up, Rita McGrath
Technology enabled us to create product that can have mass adoption in a very short timespan. Companies don’t Grow the same way they used to. For such companies, Growth Teams may be needed…
Growth Teams can be defined as follow
Growth Teams aim at launching experiments deeply linked to the Growth of your company. They aim at discovering Growth Drivers and optimizing users’ flow within products.
Some companies might not need one…
Andrew Chen wrote a great article about what Growth Teams do on a day-to-day basis, he summarizes it as:
- Having a solid product that users are happy with
- Coming up with a model of how your company grows
- Executing ideas (testing hypothesis and deploying A/B tests)
- If it works, execute more (increase velocity) or revisit your model
The Creator Mindset
Before you create an actual Growth team (w/ Roles & Structures, something that stands on his own), what you want to do is to have a few big-wins.
That’s the whole idea of this article: How you can get a few wins in order to get everyone on board (shareholders included), and create a team.
Once you’ve proven your impact on the bottom line, getting resources and everyone on board will be a snap.
You’re now fully prepared for the real stuff. If you don’t feel like reading today, I suggest you to grab the workbook! Click here to download it.
1. Get the Management On Board
Even if you’re not building an entire team (yet), you’re going to take away resources from Product development to some shady initiatives that you’re launching. Unless you get someone on board, you won’t be able to move forward.
You need to find at least one executive to support you. This person should be able to help you to bypass a few things.
You should aim at getting on board your CEO and most of your VPs (Product, Marketing, Sales…). They’ll most likely agree but share important concerns that you’ll need to address while experimenting.
To sell the project, you can use some of these arguments:
- Growth Teams are now common in most high-growth companies: Facebook, Uber, Pinterest…
- We loose X% of our Users after they sign up, and no one is doing anything about it.
- Y% increase in Conversion Rate could generate $Z in MRR.
- Bringing plenty of users is one way to grow. Optimizing their flow is another.
- The more we optimize our funnel and product, the more effective our Marketing, the more profitable we’ll be.
Agility is key here. If you need weeks before you can get something off the ground, you won’t be able to move fast enough.
Your Management Champion should help you move quickly.
Getting the Management on board is therefore fundamental to your success. You won’t be able to take away resources without their say-so.
2. Find your Early Adopters
Now that you have the management on board, you need to gather a few more people to get started.
Remember: You’re not trying to get a full team, but you need to find a few people that are willing to work on this project with you.
The people that you choose should be complimentary to you. You most likely need 3 people on board: Product, UX and a developer.
You need to be able to experiment quickly, so having a few people with you should enable you to do so.
Present them with project and tell them you’re only going to take a few hours of their work. Share your excitement. You’re doing something exciting, they should be on board.
Pay attention to who you’re getting on board. Someone could easily tank your initiatives at this point.
If you can’t find anyone, try to ask your Management Champion about it.
Worse case scenario: Bring some outsiders (freelance & consultants) and start experimenting with them.
3. Define your Area of Focus
Don’t start to experiment without defining a clear Area of Focus.
What you want is to find the Highest Impact Area. In other words: Where can you have the most impact within your funnel and product?
Have a look at your data (Qualitative, Quantitative & Intuition) and try to see where most people drop off.
If you need more information about this, read about The Growth Strategy.
To explain my point here, I wanted to take the example of a company I work with. They do a great job at getting people to their product. But they struggle to convert them.
I looked into their analytics and here is what I saw:
After just a few days, very few people are coming back to their app. 3 days in and less than 3% of the cohort will come back.
People didn’t hang around for the full trial. They couldn’t experience Core Product Value, which led them to leave the app (and not convert).
Focusing on Week 1 Retention and especially the first experience was therefore where we could have the most impact.
If we could just get a 10-20% uplift on this part of the funnel, we could have tremendous impact on the bottom line.
Area of Focus = Highest Impact Area = Where can you have the most impact? Start there!
4. Start Experimenting
You should now have: a small number of people to support you (operationally and managerially) and an area of focus.
Everything is now in place for you to start experimenting. Define hypothesis on why people are dropping off during your area of focus and brainstorm ideas.
Gather all of your ideas into Canvas, TargetProcess or a simple spreadsheet.
You can then use the ICE score to prioritize them:
- Impact on a given metric
- Confidence of the experiment
- Ease of launching the experiment
Once you have all the three scores, average them and you’ll have the actual score of the idea. The highest, the better.
You can also start adding the Reach (RICE score) to this equation in order to make sure your idea will reach a substantial amount of people and avoid local optimization.
Remember: you’re trying to show results (to prove that a Growth team is worth to the management) so challenge the status quo, be creative and brainstorm ideas with high impact.
When launching tests, don’t try to get to perfection. Just launch stuff, if they stick, you’ll improve them later on.
You should have started to experiment by now. Remember, your goal is to get a few big wins in order to prove your results to the management.
If you didn’t get any significant results:
- Think about your low-hanging fruits: Every company has some, push where it matters.
- Launch big and bold tests: Don’t change a word of copy and expect a 200% improvement. Focus on big bold changes that can really make a difference.
Quick example: If you have trouble Activating users, just changing the title of a page isn’t going to have a huge impact. Test the part where most users struggle.
After a few weeks, you should start to see some improvements on the bottom line…
6. Creating a Case Study
You created a small team and you want it to grow into something slightly more official in order to keep experimenting.
The best way to get the support from the management and shareholders is to prove your value to the organization.
To do so, you need to create a Case Study explaining your results and the impact on the bottom line.
To help you write your case study, I’ve included some directions in the workbook. Click here to download it.
Here is a plan that you could follow:
- Strategy including Focus Area, Goals & Roadmap
- Experiments that you ran, with the associated results
- ROI Report explaining the cost of operations and the MRR / Money earned
Now that you have your case study, pass it along to the management. If you have a nice ROI, you should have no issue pushing this forward.
If you don’t get support from the management, try to understand what’s going on and how you can improve your results.
Okay. You have a Case Study. Your C-level executives are all on board, they even mentioned the creation of a Growth Team in the latest board meeting.
Things are getting serious! What’s next is now up to you. Essentially you need to:
- Figure out your Growth Levers / Model
- Set Goals
- Define your Structure, Roles, Tools & Processes
- Hire the right people
- Invest in A/B Testing & Analytics
- Keep experimenting
- Increase Velocity
Creating a Growth Team is a difficult subject: You won’t be able to find any one-size fits all procedure.
There is no specific order to all these actions. You could start by defining your structure, hire people and invest into Analytics. This is really up to you.
Just make sure that all the steps that you undertake make sense and think about what you’ll need in terms of resources.
The following part is about giving you some information about all of these steps.
Define your Growth Model
This step of the process was already well described by Andy Johns (Wealthfront) on Building a Growth Model for Your Company. So I’m just going to add a few things.
I like to take this step even further and put a mathematical formula behind a company’s growth. The presentation below explains how to do that:
Looking at things this way will enable you to understand your growth better and brainstorm ideas where it matters.
Defining Roles & Structure
Now that you want to move forward and create a fully-featured team, it’s necessary that you hire the right people and define your structure.
There is no right or wrong answer here. You should create the team that suits you, your company and product.
The article “How Do You Choose the Best Growth Team Model?” goes into much depth of the kind of structure that you can choose.
You’ll most likely start with one team (Focus Area), and then grow to multiple teams as you start moving forward.
In terms of the people that you need to hire, start with your bottlenecks. During the launch of your experiments, you probably experienced some slowdowns. Start there.
The structure of the team isn’t a big deal. It will evolve over time. Start with the main people so that you can experiment. The team will grow as you move forward.
Define your Process + Tools
Process is one of the most important parts of Growth. You’re not looking for some sort of hacks: You wanna go after true authentic growth.
This “authentic growth” doesn’t happen over night. You’ll need to experiment for a while before you can start seeing results.
To make sure that you keep experimenting, you need the right process in order to support your team.
The article The Growth Process goes into much more depth about this subject.
Although this process is very simple to implement, it might not be the best suited for your team. What’s important here is this:
- Your process can be easily explained to the whole team
- You document everything (making sure your learnings don’t go to waste)
Don’t necessarily follow this process step by step. Start experimenting quickly and you’ll improve your process as you move forward.
Invest in Analytics & A/B Testing
You most likely ran into some bottlenecks in your first weeks of experimenting. Often times Analytics & A/B Testing are part of it.
Since you’re going to be experimenting for a while, it’s necessary that you spend some time thinking about what you need and how to implement it.
Gather your team and see how you can improve your systems. Although this can seem like huge investments, they can have tremendous impact on the long run.
Remember something: Watch out for technical debt; They’ll slow you down and bias your conclusions.
Here are some things to get you started:
- Implementing a Data Warehouse + Visualization tool
- Implementing an A/B Testing Framework: Sixpack, PlanOut
Unless you’re very big, I’d advise you to use systems that are already open-source. The last thing you want is to start developing and maintaining an entire system from scratch.
Scaling Team & Velocity
Now that your team is fully functional, more (of the right) experiments = more growth. How can you scale this team?
You’ll probably need to shift your roles & structures as you move forward but it’s primary that you pay close attention to your velocity.
How many ideas are you launching per week? Can you launch more? Where are your bottlenecks?
These are all questions that you’ll need to answer if you want to grow further beyond this initial “Growth Use Case”.
Master Your Growth
Building a Growth Team can be complicated. However, it can be very rewarding if you get the right kind of results.
I’m thankful you made it this far. I’ve distilled every piece of information in a comprehensive workbook. Click here to download it.
Growth Teams are clearly spreading out across tech startups and if you’re beyond Product Market Fit, you should definitely consider having one.
I hope that this article helped you to see more clearly how you could build a team. I strongly encourage you to ask any questions you may have in the comments below.
How did you do it? Anything stood out to you? Share your results with the community.
Need help building your Growth Team? I’d love to help! Contact me and we’ll get the ball rolling.
I really like your advice on creating a case study. While it may seem like a very academic endeavor, it can be enormously useful to validate what your team is doing, especially when that team is focused on the growth of the business. In my world, having a case study showing that there really is an ROI for our growth efforts is the only way to get executive leadership to pay attention to what you’re doing.
This was a very insightful post with great data to back it. Thanks for sharing.
The startup world is becoming more and more academic. We’re systemizing most things (e.g. Validating an idea with Customer Development). Getting results first is therefore an amazing way to prove that what you’re doing is worth something and avoid bottlenecks (Show results first. Invest afterwards).
Thanks for reading Spencer 🙂
Great article. Thank Pierre !
Thanks for reading Alexandr!
A well crafted article. Thank you Pierre.
Thanks for the kind words Kevin!
Thanks for reading Michael 🙂
Great post Pierre!
Thanks for reading Yoav!
Very insightful article about building Growth teams Pierre! It’s great that you have also shared many other very interesting links btw. Thanks!
Glad it helps Andreu 🙂
Great insights, Pierre!
Thanks Alexander 🙂
Good stuff, thanks for posting… 😉