No, Growth Isn't a Strategy
But there are plenty of good ways to grow
““Growth” isn’t a single, one-off event– just “getting people in the door.”
It’s an ongoing relationship-building process that involves changing client behavior in ways that mean success for them, as well as for our business, as our relationship with our clients progresses through each stage..”
Hi & welcome back to the latest edition of the Upstream Full-Stack Journal
Summer 2023 is in the record books! Back to work, folks…
In this edition:
Why “Growth” is never a Strategy
Leah Tharin’s Product Growth Guide v3
A definitive guide to Product-Led Growth
Growth Loops are the New Funnels
Growth is Never a Strategy. It’s The Result Of Designing the Right Strategy
Sustainable, profitable growth comes from making the right set of strategic choices for your customers and your organization
“Growth should not be a strategy. Growth should be an outcome.”
– Howard Schultz, Starbucks CEO, Interview with CNN Money 2018
A breakthrough strategy?
I’ve been in countless boardrooms where, when asked what their strategy is, executive leaders have enthusiastically shared some variation of:
“Our strategy is growth.”
As my job in those meetings was to get enough context to go out and discover and deliver the solutions to power that growth, I never questioned it.
Over time, I had this growing sense that “growth as a strategy” seemed off, but I couldn’t quite figure out how to express it.
Why Growth isn’t a Strategy
And then recently, it hit me — regardless how often it’s repeated and accepted at face value, not only can’t your strategy be “growth,” an unchecked focus on the wrong kind of growth can easily cause the opposite to happen.
Here are three reasons why growth can’t be your strategy:
It’s an Outcome, not a Goal
You’ll be tempted to hack growth for growth’s sake
You’re ignoring the real engines of growth
#1 — It’s an Outcome, Not a Goal
“Happiness is like a butterfly, the more you chase it, the more it will elude, but if you turn your attention to other things, it will come and sit softly on your shoulder.”
– Henry David Thoreau
As with happiness, it’s been said the more you try to force growth, the less likely you’ll be to attain it.
Why? Because growth is the result of consistently matching your company’s individual capabilities to solving client wants, needs, and desires in distinctive ways.
A different growth model
Riffing off Jeff Gothelf and Jeff Patton’s excellent Metrics Mountain mental model, we can visualize the Pirate metrics that align to growth laid out as a series of “basecamps” on a mountain-climbing expedition.
We ask progressively more from our clients at each step in the journey as we seek to build trust and lasting relationships with them.
I’ve crossed-referenced Jeff & Jeff’s model with Rajesh Nerlikar and Ben Foster’s Customer Journey model from their Prodify.group practice, and book “Build What Matters” to come up with following 7 basecamps:
Acquisition
Trial
Activation
Usage
Retention
Revenue
Referral
Two callouts:
Laid out like this, it’s hard to view “growth” as a single, one-off event– just “getting people in the door.”
It’s an ongoing relationship-building process that involves changing client behavior in ways that mean success for them, as well as for our business, as our relationship with our clients progresses through each stage.
In other words, growth starts when we’ve made an effective set of strategic choices that encourages clients to sign up for a free trial (Acquisition).
If their experience using our product continues to meet and exceed their expectations (“Trial”), lasting growth can unfold because we’ll increase the likelihood of turning them into a paying customer (“Activation”), through regular “Usage,” and onward, up the mountain.
The other callout is that fewer and fewer people will make it through each stage of the journey, and that’s OK.
You don’t want everybody as your customer— you just want the right customers for your product (see #3 below).
There is no “secret” to growth
“The purpose of business is to create and keep a customer”
– Peter Drucker
While we can’t control client behavior, by designing the right set of strategic choices, we can compel them to voluntarily choose to move up to the next basecamp.
Read the full story on Medium here.
Leah's Product-led Growth Guide 3.0
Leah Tharin has an excellent Substack that I frequently recommend.
This is her condensed learnings of years of Product-led Growth insights.
Her guide has sections on
Why it is so relevant today
What it takes you to get started with it in a team or organization
How the approach differs in B2B from B2C
Combining Product-led Growth with Sales-led Growth to optimize your pipeline
Definitely worth subscribing and taking a closer look.
Read the full piece on Leah’s Substack here.
Product-Led Growth (PLG): A Definition, Examples, and Why it's Taking Off
At ProductLed.com, Wes Bush shares another in-depth guide to Product-Led Growth.
Product-led growth is a business strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers. If you’ve used Slack or Dropbox, you’ve witnessed this first-hand. You didn't request a demo to have a sales person show you how cloud-based file sharing or instant messaging could revolutionize your work. You just tried the product out yourself for free..
Wes does a great job here going deep on the essentials and nuance of PLG, including options to watch videos or read the material.
Read the full ProductLed.com Growth Guide here.
Growth Loops are the New Funnels
While the marketing “funnel” concept is a popular model for customer acquisition, the Reforge team takes a different look at PLG through the lens of self-reinforcing “loops.”
The AARRR funnel framework has been the dominant guiding framework to metrics, goal setting, and strategic growth conversations. Funnels were a good starting point but do not accurately represent how the fastest growing products grow. It is time to move past the funnel framework and focus on growth loops.
There’s much I like here, including the importance of not having siloed teams working on separate strategies, but a single strategy to unite the Product and “Go-to-Market” strategies.
Read the full Reforge Growth Loops article here.
That’s it for the final newsletter of the summer.
Join me next time as we continue to go upstream and use strategy, goal-setting, and product management to make you more effective.
Please reply with any questions or comments, and how we can continue to improving this original and curated content for you.
Cheers,
Mike