Optimizing growth is a success formula for startups

Startups dont need growth hackers - at first. They need products that are really working in the market. This means users love it, that theres lots of retention and engagement, even at small numbers.

The reason for this is that ultimately working on scalable growth is an optimization problem. And its a combined product management and technical function, to boost an already positive growth curve into something even bigger. The analysis needed to drive user growth require a baseline of usage, whether they are A/B tests, cohort analyses, or lifetime value calculations, and the changes that make those numbers go up are product changes. The more data you have, the faster you can iterate and generate more growth.

In fact, its the lucky startups in Silicon Valley that end up spending a significant amount of their time on growth. Most of the startups I run into in Silicon Valley are failing because their products arent working yet for their customers- the reflects itself in low growth, but also low engagement numbers too. You wont fix that just by getting more people to sign up, though its critical to iterate on your product with feedback and data from real users, of course.

Pre-product/market fit
When you are pre-product/market fit, and you only have dozens of friends and family using the site, you dont have enough usage to create a baseline. What you need here is a lot of lead bullets, not one silver bullet. This is where PR, community management, partnerships, and other forms of hard-to-scale growth techniques are great. This is where you need to iterate on the product based on your own expert intuition of what it needs to be. And once you have enough usage and your product is working, then you can use some of the more quantitatively driven growth techniques.

Similarly if your product isnt retaining users, it wont help much to pour water into a leaky bucket. Growth without retention may increase your vanity metrics like total signups, growing your active userbase to substantial levels requires you to get beyond just signing up more users. Once you hit some saturation, things will fall apart as your user curve jumps the shark.

So again, I repeat- startups need product/market fit, not growth. Growth comes as a result of having achieved fit, and a growth team is built to optimize the curve. The real question is, how do you get to product/market fit, given that most startups fail to get there?

Early product work is incremental and intuitive
If youre a startup with minimal users and weak usage, keep iterating on product and doing the hard work of building an initial community. If you think adding some Twitter sharing will help your value prop, then implement it- you dont need to tune or optimize the functionality until you have some scale. If you think that your landing page doesnt communicate the value prop very clearly, then just change it. You can get more scientific about it later.

At some point youll have enough usage to think about optimizing easy things, like signup or sharing flows. The goal is to move fast and ship a lot of product iterations to get to that usage level. But until then, its a waste of time to build a huge analytics system for A/B testing when you dont have to.

Its working? Great, now build your growth team
Eventually, if you beat the Trough of Sorrow, youll start to find evidence that your product is working. Qualitatively, youll see the same users over and over, and theyll tell you how much they love your product. Your own personal opinion of the product will change you may not be 100% satisfied with what youve built (we never are) but youll find some utility for it in your life. Quantitatively, youll have to look at other products in your space to compare, to see if youre really there. For a social consumer product, you might look at metrics like DAU/MAU (is it 10 or 20% or higher?) or next day retention (20% or 30% or higher?) or youll start to see some slow natural growth that you can ramp up.

The first steps of working on growth are often super easy figure out the critical flows in your site, like signing up and sharing, and what factors turn users into successful and active ones. Now start optimizing for that, starting with a few people working on a small number of A/B tests at a time. Based on how that goes, you can ramp it up over time.

If you can be one of the few startups that gets to product/market fit, and you need help with growth, then build up that team as needed. Thats what Twitter, Facebook, LinkedIn, and many others did- they added the growth team after signing up millions of users, and it didnt hurt them in the long run. Try to start optimizing growth too early, and you may not have the product in place to become a long-term success.

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