Systematic Approach for User Acquisition and Growth Marketing

You’ll learn everything about user acquisition & growth marketing, focused on early-stage startups. A bit of background. Seth Godin wrote the other day…

Marketing used to be advertising
Now, marketing is everything you do.

And he’s right—marketing now touches on almost every aspect of the business. What used to be an industry of ad agencies and PR campaigns… now has completely new rules. In that shifting landscape, “growth marketing” was born. An effort to integrate Marketing with Data and Product. But at the core is the acknowledgment that marketing needs to become integrated with all other parts of the business… to see the best growth results.

In this article we’ll try to break down marketing, and build it up “from first principles”, to give you a strong foundation of how to reason about marketing.

Content Summary

The universe is not on your side.
Inside this growth marketing machine
Would YOU buy it?
You’ve gotta get the sauce right.
The Elon Musk approach – not suitable for Twitter
How to think about marketing (Part 1/3)
How to think about marketing (Part 2/3)
How to think about marketing (Part 3/3)
EXAMPLE: The USG-SEO growth loop
The Six Pillars of Growth
A day in the life
Lock the door!
How to sketch out your very own growth loop.
The mother of all checklists

Growth marketing has also changed a lot… It’s no longer about hacks as much as a much bigger umbrella of professionalized frameworks. What we have now is a set of mature frameworks to structure growth.

Growth marketing is much simpler than you think. The frameworks and mental models are there, to approach this problem with confidence and clarity. Some systems drive startup growth.

The 2 first principles to “how to get users” for any startup business…

1. Your growth strategy—how well you can acquire users at scale—is the biggest predictor of startup success/failure. Startups need a scalable, durable path to acquire customers. You make that happen through a series of systems… which I’ll show you tomorrow
2. Growth won’t happen automatically. You have to make that happen, and it’s harder than it looks. Those systems don’t build themselves. Early-stage startups should probably split resources 50/50 between product development and “getting users” and finding early growth.

In other words:

• Pay attention to distribution (because it’s the biggest predictor of success/failure)…
• …and allocate resources accordingly

In general, this article will show you a full understanding of how growth marketing works, to the point where you’re confident (and able) to execute a growth marketing strategy for your own business.

The universe is not on your side.

You can’t expect users to randomly land on your door. If you want to get users, you have to go get them yourself

And then shortly followed by: “… and getting those users is much harder than it seems!”

But the question every entrepreneur struggles with is…

“How do I get people to use our product?”

• What can we do to hit those growth targets we’ve set for ourselves?
• How can I get a steady stream of people signing up?
• How can we get more revenue, so we can hire a better team?
• How can we 5X the revenue this year… so we can finally pay all the bills?

And we tell ourselves…

“Ah, that’ll be fine. We’ll figure it out!”…

And most startups manage to get the first 10 customers. And most of them can find 25 if they #hashtagHustle a little bit. But that’s where the trouble starts. If you need 3 new customers every month, you can hustle to get them…

• But what if you need 30 new customers per month? —That’s one new customer, every day
• What if you need 300 per month?
• What if, God forbid, you need thousands?

At that point, just being a “hustler” won’t cut it anymore, you really shouldn’t hinge your entire business on something unreliable as willpower and “hustling hard”.

What you need (to build a stable, scalable business) is a steady cadence of traffic and a smooth flow of new customers. In short: You need a much more systematic approach. Something that generates traffic and qualified leads every month… virtually on autopilot. And to get there, you’ll have to build some systems into your business:

• You’ll need a system that ensures you can generate more traffic, at relatively predictable rates (= “growth engine”)
• You’ll want to capture that traffic and reliably convert leads into a flow of signups (= “sales funnel”)
• … and with a steady flow of signups, you’ll want to build systems to ensure people get activated (= “retention system”)

If you want to get customers, we need to create those growth systems into your business
CAREFUL: one thing to keep in mind here…
A business is a complex system with many moving parts, just like —for instance— a car. You can’t build the car and at the last moment say “oh shit, we forgot the engine”… and then bolt the engine on top. Similarly, you can’t just bolt those growth systems on. It’s deeply embedded in the “DNA” of your company. The sooner you integrate them into the fabric of your product and your marketing, the better…

So that’s where growth marketing comes in…
Growth marketing is simply a matter of building and tuning such systems. What used to be about “hacks”, is now turning into a set of professionalized frameworks that works as well for venture-backed SaaS companies as it does for a single-founder lifestyle business.

It’s all the same idea. It’s the same set of systems.

The next chapter will explore the 3 most important systems which form the foundation of your growth strategy.

Inside this growth marketing machine

Here’s a snippet of an ad that we run quite often. Maybe you even recognize it…

[…] Growing a startup is not about sketchy marketing tactics and loopholes to “game the system”.
It’s not about loopholes or tricks. It’s about systems.
Hacks don’t drive growth. Systems do.

There’s a better, more systematic way to grow your business. A way that doesn’t involve soul-crushing sales calls and endless “hustle”. That’s the core of growth marketing.

Below are the exact three systems that ANY BUSINESS needs, to turn into an automated selling machine…

1. A way to attract gobs of traffic
2. A way to convert those leads into customers
3. A way to make & keep customers happy

Make a promise => build trust => deliver
There’s more to it, of course. But let’s unpack each system a little bit further.

1. GROWTH ENGINE: make a promise
You need a way to get exposure…. a way to reach people, and drive traffic. A growth engine is an automated system that plugs into an acquisition channel and generates traffic out of it.

That system can rely on paid ads, or SEO, or referrals, or any other kind of mechanic. Growth engines typically consist of a cluster of growth tactics, bundled together. They play nicely together, to drive traffic.

Such an engine can be built on any distribution channel… whether that’s Amazon Alexa, messenger platforms or magazine ads. How this works, deserves its email. But in either case, you need a system that brings you in front of your audience, and that brings people into your funnel…

2. SALES FUNNEL: build trust
In the world of today, you don’t have to do high-pressure selling anymore. Once you have someone’s email address, you can take it easy. You give value first. Whether it’s an app, online training or legal advice…. you show that you can help FIRST.

Once you do that, something magical happens: people will love to do business with you. Because they like you and trust you. In most cases, you can set this up to run “on autopilot”. Instead of dealing with cold traffic, you only deal with pre-qualified, warm leads.

Some simple funnel examples:

• Freemium apps (e.g. Evernote, Slack, etc.)
• Free trial
• Webinars
• Blogging & free content
• Etc.

In your business… How can you provide value —first—, instead of pushing for a deal?

3. RETENTION SYSTEM: deliver the promise
Okay, so you got them signed up—great! Now… How do you make those people successful? How do you deliver value to the customer? How do you make them stick around? Better yet, how do you turn them into “power users” of your app?

This is an incredibly underrated part of marketing. Retention and onboarding have a profound impact on your business. Here’s why in 4 parts…

• Retention -> Higher revenue per user. Users that stick around longer, will generally pay you more over time.
• Retention -> Higher virality. The more often people use your product, the more opportunities they’ll have to talk about it to friends.
• Retention -> Faster earn-back cycle. If you can quickly move customers to purchases and follow-up purchases, it takes a shorter time to earn back the acquisition costs you paid to acquire them
• Retention -> Increased acquisition costs allowance. If each user is worth more, you can also spend more to acquire them. High retention opens up new acquisition channels and allows you to out-bid competitors (e.g. on paid ads)

And of course, you’ll just get happier users. Besides the fact that happy people rave about your product… it’s also probably the reason you started your business in the first place!
Growth happens through systems
Create those basic systems (don’t sweat it)… then optimize relentlessly
Growth will start accelerating NOT because of one individual system, but because those different systems start to create feedback effects into each other. (the exact ways how these systems are meant to interact, are not as obvious as it might appear)

For now, simply start thinking of your business as a series of interconnected systems.
Systems drive growth. User growth happens systematically (at the strategic level, not the tactical) 

Would YOU buy it?

Could a lack of empathy be the reason… that you’re secretly destroying your sales funnel conversions?

Empathy is simply the act of “putting yourself in their shoes”, as the phrasing goes. To feel the pain—and perspective—of the other person. Sounds simple enough, but here’s the thing…
The role of empathy in online conversions came like a total surprise to me.
And if you run any form of digital marketing, small missteps can completely obliterate your sales.

1. The mind-state
Empathy applies within your acquisition efforts, too. One thing in particular: you want to be extremely mindful of the “mind-state” (for lack of a better word) of the people you talk to. For instance:

• Facebook: Someone scrolling his Facebook feed is probably… bored. They either want some light entertainment (cat videos) or check-up with their friends. Keep that in mind when you write your Facebook ads!
• Google: Someone on Google is ‘looking for an answer’. They have a problem, and they hope Google can give suggestions on how to solve that. So if you want your blog posts to rank well in SEO…. better give those readers the damn best answer possible!
• These emails: What are you doing, right now, as you read this email? It’s not an urgent email. Nobody dies if you don’t check this email, right now. So my guess: you’re probably having a moment of “downtime” from more important matters. You need a break —and a double espresso, please!

And so on… Different formats for different situations. Considering the mind-state helps you tailor the experience to something that fits their life, right at that moment.

2. Start with the problem
As entrepreneurs, we care about our product. That’s what we have spent so much time on, and what we care so deeply about. But customers don’t care about that.

From the customer’s perspective, the story starts with a problem. The problem could be something like “I’m hungry” or “we need to make more sales”. That’s what they care about… so the easiest way to start your communication is to articulate exactly what problem you are solving.

It creates context. It puts you and the customer on the same page. They know you understand them… and that you care about them. So they’ll be eager to listen to the solution you’re suggesting.

EXAMPLE:
Instead of saying: “We sell the best pizzas…”

Start by saying: “If you’re hungry and you’d like to get something to eat…” […then we happen to have great pizzas for you!]

That’s a (really simple) problem statement. It reframes the context. It flips it around to their perspective.

That’s what empathy is about.

The next chapter will show you the backbone skill that any successful growth marketer possesses.

You’ve gotta get the sauce right.

First, you need to think in terms of systems. But that’s not a skill. There’s only 7 of them, and once you know them, you’re good. But the systems alone are not enough. On top of the systems, you need the ‘magic sauce’.

There’s one skill that I continuously keep investing in because whenever I do that I see my growth rates bump up.
It’s the only skill that I know that could add an extra zero to your bank account. So what’s that skill? What’s the magic sauce of growth…?

Copywriting

Copywriting is the backbone skill of every growth marketer, and — by far and away — the most profitable skill you could ever hope to acquire. Copywriting is writing with the purpose to sell. Simple as that. (simple, but not easy) It’s the equivalent of great salesmanship but put online. It’s automated sales.

It’s just incredible what happens:

• Your ads convert better (thus clicks become cheaper)
• Your email open rates go up
• Your website starts to convert better… way better, actually
• You craft better offers, that people love
• All your advertising costs drop, while conversions rise
• Channels that previously were too expensive, now become profitable
• People ‘get it’ when you talk about your product
• Finally, you get that viral loop to work… referrals start working
• Etc.

I can’t say enough good things about copywriting. If there’s only one skill you’re gonna master, then copywriting is the most profitable one. Imagine what would happen if every conversion rate across your funnel would go 20-30% up. It is compounds. It adds up quickly!
Copywriting is a skill that hardly changes over time. Stuff that was relevant in the ‘30s still works today. It’s all human psychology.
Some of the best resources on copywriting, are quite old… but anything from dated. That’s why I always make the same recommendation to everyone that wants to learn to copywriting:

Study the masters.

More specifically:

• Get a copy of ‘Ogilvy on Advertising’: a book by David Ogilvy, the godfather of advertising.
• Read the ‘Gary Halbert Letters’: written by -surprise, surprise- Gary Halbert, who is without a doubt the most famous direct-response copywriter.

In the next chapter, we’ll give you one such example of radical simplification.

The Elon Musk approach – not suitable for Twitter

Let’s start today with a depressing fact…
Most startups fail.
Startups are RISKY.

This chapter is all about risk management, and “brought to you” by Elon Musk, so to speak. No matter what you think of him, I think we’ll all agree that Musk started extremely difficult and ballsy enterprises…. and yet somehow pulled off surprising successes…. against pretty bad odds!

Was he lucky? Yes, certainly.

Was it only luck? No, not.

The reason for that is that entrepreneurs like Musk see the world a little different than “normal” people do. He wears different “glasses”, so to speak. In particular, he has a completely different take on risk management. That sounds incredibly boring… but I believe that’s the single biggest reason for his success—much more significant than his working hours or intelligence.
The most experienced entrepreneurs use an invisible framework to make “impossible” ideas succeed against all odds
Here’s a little example…

This was the situation when Musk started Tesla:

• A huge, established, competitive market for petrol cars
• People were skeptic that electric cars would ever happen
• Moreover, electric cars were very expensive to produce
• “Refueling” them took ages, and…
• The driving range was incredibly limited

Yet Elon was confident he’d be producing 500,000 cars by the year 2020… which would require an entire operation of production-grade car manufacturing to compete with behemoths that have been around for a century or more…

How do you go about that? Where do you start to solve such a clusterfuck problem?

Well, I believe that Musk’s to-do-list was actually incredibly simple and looked somewhat like this:

That’s all.

Musk went “all in” on the battery. Why obsess about the battery? Because out of all the work, the battery technology was the single RISKIEST part of his model…

• For electric cars to work, they need to be able to drive a significant distance—Musk aimed for 250 miles (~400 km)—and recharge in ~20 min.
• Other things part of running a car manufacturing business had been done before, but nobody had figured out the battery just yet.
• If the battery wouldn’t improve, all else would fail. Electric cars ultimately didn’t work… simply because the battery system didn’t work well enough.

So instead of spreading himself thin, Musk was incredibly focused. He put all the resources to make the battery work. That means he put the riskiest thing first.

Once he ‘validated’ that this crucial part would work… everything was ‘easy’.

It might still be 10 years of work…

But that’s just execution. That’s not as risky—just tons of hard work.

At that point, the path was open to raise a crap-ton of money, and build the rest of his business… while knowing that the riskiest parts were already taken care of.

Even though you might not recognize it, this is an extreme version of the “lean startup” philosophy…
The “Minimum Viable Product” for an electric car is not a golf cart or an electric skateboard…
It’s a battery in a laboratory that provides enough capacity to power a car for 400km and recharge in under 20 minutes.

Because that’s the risky part. That’s the stuff you have to ‘validate’. You don’t have to validate that you can design a car to look better than a golf cart. People at Mercedes, Porsche and Ferarri already know how to do that. The biggest risk was in the damn batteries.

So, back to our framework…

Engineer at heart, Musk was very systematic about cutting his risks. The framework to execute an extreme version of a “lean startup” like Musk, is called a ‘risk roadmap’. I won’t go into there, but the most significant part is the mindset change…

Focus relentlessly on riskiest-things-first, rather than most-work-first. Call it a reframe. A different set of ‘glasses’, to look at the world. Same idea, different phrasing.

On a different note… these reframe are incredibly powerful. They allow you to see the world differently, and create new opportunities for yourself. Today’s reframe is about risk-optimization. In general, you want to be on the lookout for such reframes. It’s much more powerful than looking for “growth hacks” and silver bullets like other people do. Reframes help you think better. They make you a better entrepreneur.

How to think about marketing (Part 1/3)

Math teaches you how to think.
Math doesn’t give you the low-level “how-to” guidance in life, but it strengthens your overall mental toolbox. It gives you the mental tools to make better decisions. It turns you into a strong, all-round generalist. It’s a similar idea. Mental models are frameworks to help you think through complex problems. For instance:

• The “80/20 rule” (Pareto’s Law) gives you an easy way to think about distribution in economics, but applies in all kinds of situations…
• “Survival of the fittest” captures the essence of evolutionary biology… but also helps you think about problems in economics, business and many other aspects of life

Once you know the mental models, you don’t need to remember the ‘facts’ anymore. In marketing, once you know the models, you can forget about all the hundreds of little ‘hacks’. Of course, the skills still matter.

• You still need to learn how to track conversions
• You still need to improve your copywriting game
• You still need to learn about persuasion & mental triggers
• You still need to build the funnels

But that’s not what’s missing for most people. Most people struggle, because…

They have no higher-level models when it comes to marketing & growth

Their mind just goes blank. That’s essentially what’s happening.

These are the mental models for marketing and growth. Here are a handful of mental models that drive much of the “growth marketing mindset”:

• Risk front-loading: the stuff we talked about yesterday: the extreme version of “lean startup”, that allows you to move to P/M-fit faster and more aggressively
• Agile/iterative: creating a small baseline, and then iteratively expanding it. (to increase velocity, and produce more user value, faster)
• A/B testing: the “bread ‘n butter” of optimization and incrementally adding conversion lifts, so every percentage increase can compound on the rest
• Radical customer empathy: constantly thinking through the perspective of the customers, and anticipating their needs. Then pacing and leading them, for high persuasion.
• Power laws: As opposed to bell curves, to unlock massive traffic opportunities by focusing on a single distribution channel, through “finding the bullseye”
• Conversational sequencing: a mental model on how to restructure the way you write copy and content in your sales funnels
• ​From funnels to loops: the “master model” of growth, if you will. Durable, scalable growth is driven by different forms of loops. (we’ll start covering this in tomorrow’s email!
• High tempo testing: a process-driven growth framework that most mature growth teams employ to accelerate towards their next stage of growth (coming up soon, too)

The better your mental tools, the faster you can find what you’re looking for…. whether that’s product/market-fit, higher conversions or a cheaper distribution channel

Each of those models gives you a “reframe”, or a different lens through which you can look at a problem. That’s incredibly empowering. But the list above is certainly not extensive. As a matter of fact… the biggest, most significant growth marketing ‘model’ isn’t there yet.
It shows you how durable, scalable growth… is driven by loops.

How to think about marketing (Part 2/3)

Growth loops are at the core of how all stable, durable growth works. Let’s explore this top-level growth framework.

In a marketing context, we think of viral growth in the sense of “users inviting new users”, often driven by some form of social sharing and recommendations. That’s a good start, but as you’ll see… it’s only scratching the surface! There are many more growth loops, than just viral loops:

• USG-SEO loops
• Paid ads loops
• Content/SEO loops
• Aggregator loops
• Marketplace loops
• Engagement loops
• Enterprise sales loops
• Branding-ID loops
• Media/PR loops
• Review-search loops
• …

… and then all the variations on each.

The next chapter will give you more details, and provide clear handles to pick the right growth loop for your business. For now, remember this:

• All scalable, durable growth happens through “growth loops”
• Strong growth loops become what’s essentially your “growth DNA” —and make fast growth almost inevitable

..and it’s exactly when you start to think about growth loops, that you’ll realize how powerful “systems” are, and how weak “hacks” are if you want to drive stable, scalable growth…
Companies that succeed, are the ones that can enhance their ‘growth DNA’ to become the rabbits of their industries… while other companies have a DNA that puts them on the path of the Dodo. Don’t be the dodo.

How to think about marketing (Part 3/3)

If you want to grow your product’s user base… similar mechanics are at play—durable, scalable growth is driven by “loops”. And each loop is deeply embedded in the “DNA” of your company.

This chapter will show you 3 things:

• That your “growth DNA” is the systems that you build
• How these systems create growth loops
• A shortlist of exactly which systems you need—because there are 6 of them

But let’s start with an example growth loop.

EXAMPLE: The USG-SEO growth loop

“USG” stands for “user-generated content”, and SEO, of course, stands for organic search traffic. This is a growth loop that’s used by companies like LinkedIn, Reddit, Pinterest, and StackOverflow… and many others.

StackOverflow is a Q&A website for developers. If you do anything with development, it’ll be your bible and holy Source-o-Truth. On StackOverflow, people post questions (related to development), and other developers answer them. Simple enough.

Here’s the simple mechanic of how StackOverflow drives growth…

1. Create question: users post (very specific, dev-related) questions
2. Ranking: StackOverflow makes sure that those question pages are perfectly SEO-optimized. Google loves that and quickly starts ranking the page for its a specific keyword
3. SEO traffic: other people with the same question find the page in Google, and click on it
4. Funnel: people love how the site answers their question, so they sign up as a user
5. Activation: finally, that new user decides to post another question…

And that completes a cycle.

Visually, it would look something like this:

You wouldn’t call this “viral growth” because the user doesn’t have to share anything. He’s not recommending the product to his friends. He can be an anonymous user and doesn’t even know the people that will find his question page in the future.

And yet…
There’s certainly that viral dynamic here.
And that’s the cool part.

Because even though there is no “viral sharing”, the growth curve of StackOverflow is viral nonetheless. But it’s not “traditional” virality (think: Facebook or Dropbox), but rather it’s some sort of engineered virality.

Now, surely there are more aspects to the success of StackOverflow (spoiler: they have multiple growth loops, that feedback into each other)… but let’s focus on their “growth DNA” for just this part.

What makes this loop work?

• The right architecture: this is not a hack. There’s a strategy here—a deep connection between the product and the distribution process. All the pieces fit together. Content-heavy sites and Google… are meant to be together <3
• Growth engine: low-level implementation matters, too. They bundled proven SEO tactics too, so all pages rank easily, automatically. Their tactical implementation supports the strategy, exactly as it should be.
• Sales funnel: in a USG-SEO loop, the content is the sales funnel. Once people interact with the site, there’s a frictionless and efficient process to get people signed up as users.
• Activation: StackOverflow helps you get comfortable posting questions and answers quickly. to perpetuate their loop!: StackOverflow knows that just user count is not enough. They need you to be active: you need to be posting new content…

Now that you’ve seen this, I’m sure you can figure out the growth loop that this Academy drives on:

• Buy paid ads (growth engine)
• People join the email course
• Provide great value, to build trust (sales funnel)
  • ​Some buy premium offers:
• The better we help them, the more they’ll spend with us (= retention system)
• Part of the revenue goes back into the growth engine… (closes the loop)

Even simpler, but still the same idea. Remember: There’s always a loop.

The basic knowledge is you need to understand (roughly) what systems are needed to create those loops. Unlocking functional loops is the last step towards product/market fit, and enabling sustainable growth for your business.

The Six Pillars of Growth

• Strategy: Before anything else, you need to have the clarity of general. You need to be the architect of the plan, that can take a “big picture” view, and sketch out a growth marketing plan.
• Growth Engine: You need a system to drive traffic. That’s inevitable. Different channels have different needs, but there are systematic ways to drive gobs of traffic.
• Sales funnel: Once you have traffic, you need a dependable process to convert it. You need to build trust and slowly nurture people to the point where they’ll say: “I’d love to work with you some more…”
• Retention system: New customers need to become activated. StackOverflow needs questions to be posted. Twitter needs tweets. Mailchimp needs emails. The only users that count, are the active ones.
• Conversion drivers: This is the “oil” that greases everything. Copywriting is the big one, but also product design, branding, and —to some extent— content marketing. You want high conversions, every step of the way.
• Growth process: Refer to the next chapter…

Suffice to say for now: you need a process to quickly ensemble all the other systems above.

In the next chapter, I’ll show you (many) more examples, for more complex growth loops. I’ll also help you pick the growth loop that’s best for your business.

A day in the life

What do a “growth hackers” do, all day?
(And also: “What skills do you need, to become a confident growth marketer?”)
Here are a couple of things you’ll do regularly, and become good at:

• Quickly sketch out a clear growth strategy: Like an architect/strategist, you’ll lay out the ‘master plan’ for getting users and driving growth.
• Design/structure growth systems: Once you have the strategy, start designing each module or system (growth engine, sales funnel, etc.) —this is the ‘planning phase’.
• Create funnels & growth systems: With the plan drafted, you’ll start building small systems, and tweaking them towards performance…
• Testing (Create tests): With the basic systems set up, we start running high-tempo tests… to test which tactics are working and which are not.
• Testing (Copywriting): Hard to skip this. Whether it’s ads, web pages, emails or onboarding flows… The copy is at the heart of what drives conversions…. and these conversions are what drives growth. So copywriting is half of the game (!!)
• Testing (Analyze data): Here we channel our inner nerd, and analyze the data to see what’s working and analyze customer’s behavior. Data > conclusions > new ideas > new tests (> new data, etc.)
• Testing (Create new tests): Yeah, those new tests need to be executed, too. There’s this endless cycle of running more and more tests, at an ever-increasing velocity. It’s in this process where most growth happens!

Do you notice the significance of testing, in that little list? Because once the strategy is laid out, it’s this routine of testing that’s at the core of what you’ll do as a growth marketer, day-to-day. Rather than grand visions, it’s rapid experimentation that’s at the core of a strong growth process.

“[…] we set the goal of launching at least three new experiments per week. We use the term experiment broadly to include new initiatives, product feature releases, and yes, A/B tests.”

“High tempo testing isn’t easy, but it is extremely effective. It requires both a rigorous process and a system to manage that process.

Much like lean manufacturing, it focuses on throughput and small batch sizes.

If your team is truly committed to driving growth, High Tempo Testing is the most predictable way we’ve found to hit aggressive targets.”

The takeaway is simple: The magic is in the growth process — not in any particular tactic!!

Mental model: Aim for faster iterations and quicker deploys (= high-tempo)

Focus on small experiments, but release them at a high velocity. The more you try, the more you’ll win.

A few pointers:

• Pick one metric to optimize for—you can change it later, but pick one for now.
• Make sure everyone’s clear on what metric you’re trying to optimize.
• Know how much improvement you need in a metric (5% improvement, or 500% improvement?)
• Involve everyone in generating ideas and concepts for tests and experiments
• Pick one area to optimize at a time. It helps you stay focused.
• Look for tests that can bring meaningful change —if you need a 200% improvement, an idea that brings a 5% lift is a failure. You need bigger, bolder ideas.
• Focus your testing on areas that will validate your business model, and have the biggest impact on the effectiveness of your growth loops. Go for the “big wins” first!
• Constantly work on your process to allow for faster testing cycles (= embrace the chaos )

The next chapter will show you how to pull everything together into a sort of “growth marketing master-plan”.

Lock the door!

As a founder/CEO, focus only on what’s needed to bring home the bacon. Everything else is irrelevant
What does that mean for us? Focus on what matters.

Generally, there are only 1 or 2 things that move the needle. All these other “urgent problems” are just distractions—they’re busywork.

For most early-stage startups, the single most important problem is…
Finding a stable, scalable pathway to getting more users
If you’re not obsessing about that problem, you’re probably doing it wrong. A lack of traction—real customer growth—is the reason why most startups go out of business. If you don’t have traction, nothing else really matters. So keep your eyes on the ball.

Did you know that the same concept also applies on a lower, tactical level…?

Very often, there are only 1 or 2 things that will significantly contribute to your marketing success. Marketing effectiveness is distributed as a power law. What most marketers (mistakenly) do… is pursue a “little bit of everything” strategy: they maintain their social media, they write a blog, they experiment with paid ads, and they’re working on 5 other things, too. The alternative approach—and I’ve found this to work much better—is to focus relentlessly on 1 funnel, and 1 channel… at the exclusion of everything else! If you get one funnel to work, and if you get ONE growth loop unlocked… all your problems are solved. Pick one strategy, and execute with focus. It works.

This idea applies to many areas outside of entrepreneurship, too. In poker, for instance, this strategy is called “tight & aggressive”: folding most hands, and playing aggressively on a few. It’s a strategy for life.

How to sketch out your very own growth loop.

It’s time to implement what you’ve learned! So let’s start by sketching out a growth loop that makes sense for your business

Take a piece of paper, and let’s draw out real quick the basic dynamics of your growth loop. That sets the basics for your ‘Growth DNA’. You should be able to answer a couple of different questions:

• What’s your primary channel?
• How do you convert people on that channel?
• How to “close the loop”?

Those 3 questions map exactly your future growth engine, sales funnel and retention strategy, respectively. Let me give you two new examples:

EXAMPLE #1: Hipster restaurant

1. Some people find your restaurant because they walk by…
2. The food & service is good, and they like it
3. They leave rave reviews on TripAdvisor
4. You start to rank high on TripAdvisor
5. Many people check TripAdvisor for restaurant recommendations, and find you….
6. They go check you out, too. (And the cycle repeats at step #2)

Could something like that work?

• What could you do at each step to make the ‘conversion’ to the next step higher?
• How could this loop be optimized & improved?

EXAMPLE #2: Selling iPhone cases online

1. People search “coolest iPhone cases” and similar keywords on Google
2. You run Google ads to those keywords. People visit your store
3. In the store, you convert them with good copy, great photography, etc.
4. You use some of the revenue to buy more Google Ads (starts step #2, and the cycle repeats)

But 2 important things:

Thing 1:
Notice that there are always variations…

… That 2nd example could also have an organic search / SEO growth loop…
… Or you could sell through Amazon FBA instead…
… Or maybe you sell such remarkable iPhone cases, that you can unlock word-of-mouth growth…

A growth marketer’s job is to find the best one.

Thing 2:
Even simple examples like that show you exactly what to focus on…

• One channel: You pick one distribution channel and build a loop on top of that channel. You don’t need multiple loops. You just need one that works.
• Many different loops: there are many marketing channels, and thus many different loops. One isn’t better than the other—it all depends on the kind of business you’re in.
• Copywriting: In the 2nd example your copywriting skills matter. Better copy > better conversions > more profits > can spend more on advertising > kills your competitors
• Funnels are the core: you can’t drive traffic without a strong funnel, because you’ll waste it. First build strong funnels (a nice TripAdvisor page, etc.)… and then drive traffic.
• Mindstate: at each step of the way, know what your customers want. Know what they’re thinking. Know how to give that to them, with the least amount of friction.
• Happy customers: if you’re thinking in loops, customer success matters. Happy customers are the fuel that propels your business forward. If retention sucks, the loop dies down.
• Testing: knowing your loops gives you focus: you’ll see exactly what areas of your business to test & optimize for… to make that damn loop cycle faster and faster

There are in total over 25+ growth loops and many variations. Here are some more examples, to get the juices flowing:

• CandyCrush “open graph” loop
• LinkedIn “import address book” loop (scammy!)
• Pinterest USG-SEO loop
• Dropbox referral loop
• Airbnb “Craigslist hack” loop
• Airbnb referral loop
• Mailchimp “sent by Mailchimp” loop
• HelloFresh street sales loop
• Elon Musk innovation-hype loop
• WordPress “powered by” loop
• Indeed aggregator-SEO loop
• Slack freemium-enterprise loop
• Youtube embedded player loop
• Wix “sneaky SEO” loop
• Crypto “get rich quick” loop
• Crypto “invested ambassadors” loop
• Livestrong “yellow bracelet” loop
• Paris Hilton “sex tape” loop (famous ➾ PR event ➾ famous)
• Apple “unmistakable earbuds” loop

These loops are everywhere!
Every high-growth business relies on some sort of loop like that. Traditional businesses that rely heavily on brand-building and capital expenditures… they can’t keep up with the level of growth that such businesses offer.

It’s time you draw out the growth loop for your business. Of course, there might be different variations. Different options. You can draw more than one, of course (for instance: UBER has at least 4 growth loops, that all cycle in parallel). But please get some PRACTICE. Draw something. Maybe once you have the basics down, you can even jot down some tentative numbers with them, too. Here’s an example:

The next chapter will give you a full checklist to quickly turn your new insights into a “growth marketing plan”.

The mother of all checklists

• Problem Statement: The foundation. The only reason a business exists is to create value for someone. What problem do you solve? What change do you bring about? And…. for who?
• Current Scope: What’s the aim of your marketing, right now? Do you need 100,000 new users, or will 100 do, for now? When do you need them? Your scope determines what strategies are fitting.
• Power Law of Channels: Statistically, over 80% of your customers will come from only 1 marketing channel. Which one would that be, for you? Pick one primary acquisition channel… and then ignore the rest!
• Sketch the Growth Loop: Can you sketch out a growth loop that fits with your product, your channel, and your revenue strategy? On the back of a napkin, you should be able to draw the main growth dynamic.
• Sales funnel architecture: How do you convert people from your chosen acquisition channel into users/leads, and then paying customers? Outline your basic sales funnel structure.
• Onboarding/activation strategy: Just signup is not enough. How do you make sure people active, and unlock the full potential of your product? How do you make sure they stay around?
• Slippery-slide selling: Okay, you’ve got your funnels (#5 and #6 above)… but does it all make sense from a user’s perspective? Remember the ‘radical empathy’ reframe? Remove any points of friction, and resolve any potential bottlenecks.
• Riskiest Assumption: What assumptions do you make that could kill your business model? How can you front-load those risks, and cut them out early? (remember the story about Elon Musk and the Tesla ‘battery risks’?)
• Forget about your vision: Go from “solve world hunger”, to “make a sandwich for Bob”. Start somewhere. Start smaller. Start simpler. Start cheaper. What can you do right now to solve someone’s real problem (see #1 above), and pay you (that’s #8)?
• Cut all the features: Almost all products are over-featured and under-designed. Cut 80% of the features, until only the essence remains. How can you get Bob his sandwich right now?
• Dumb it down: Cut out all the “10 dollars” words, and explain everything in 8th grader language. Assume people are busy, confused and unfocused (because they are!). Talk about the customer, and his problems. Then explain in plain terms how you can offer a solution.
• Pricing: With your offer down, it’s time to slap a price on it. Pricing is a complex topic of its own, but you want to optimize pricing to feed that growth loop. For now, just pick any pricing, and adjust later. It’s easier than you think.
• Growth modeling: You’ve sketched a growth loop, but now add the numbers to it. Those numbers are guesstimates (hypotheses) right now, that you can validate (Lean! See #8 above!). If you want, you can turn this into a full-fledged financial model.
• Increase cycle time: Now that you have the growth model drafted up, think through how you can increase the cycle velocity. The faster it cycles, the more explosive your growth!
• Cadence & velocity: Talking of cycles… there’s also a process cycle in your business. High-tempo testing. Concept > test > data > conclusions > concepts > etc… Figure out how you can increase your cadence & velocity in rolling out experiments.

Needless to say, there’s more to consider once you get started:

• Positioning
• Scaling
• Uniqueness
• Sales funnel structure
• Branding & tone-of-voice

But with what you’ve got right now, you can completely rethink your outdated, 10-page “marketing plan”, and work with a lean and simple growth plan like this, instead. With all these reframes and new tools in your toolbox, I hope you’re starting to see a different way to look at your marketing.