A Growth Framework for PMs
“The only essential thing is growth.” — Paul Graham
‘Growth’ is the elixir of life in startup land. It fuels the virtuous cycle of user acquisition, revenue growth, funding, talent acquisition (and repeat). So the “Growth PM” role is becoming more and more common on startup teams.
Maybe you’re a PM thinking about getting into growth, or maybe you’ve just been tapped by your boss to spin up a growth squad. Where to begin?
Am I a growth hacker or a growth PM?
First let’s address our identity crisis.
Somewhere in the two-thousand-tens, “growth hacker” became the vogue way to identify if you were a marketer trying to get into startups. Over time, the term started to get associated with spam mail and dark patterns, so many “growth hackers” re-branded as “growth marketers” or even “growth product managers.”
How you choose to identify is really up to you, but I’ll delineate between growth hacker and growth PM here, to the extent that they represent distinct functions appropriate for different company stages.
“Growth hackers” tend to be scrappy marketing generalists who can run lightweight experiments across a few different top-of-funnel channels (e.g. paid, SEO, email marketing, maybe referrals). They typically work solo and move fast — sticking to lanes outside the product where they can run low-code experiments. This can be a good fit during a startup’s early stage when you’re just trying to drive incremental traffic to your product to gain a little traction and find your early adopters. These days, there are tons of easy-to-adopt tools available to track and experiment on top-of-funnel growth, so early-stage founders are often well-equipped to play the role of growth hacker themselves.
But once a startup has gained some initial traction and identified a promising channel or two, a dedicated “growth PM” can really be an asset. Unlike a growth hacker, a growth PM tends to be less focused on driving short-term bumps in traffic or acquisition, and more focused on systematically building out and optimizing compounding growth loops, often leveraging the organic rhythms of the product. For example, increasing organic virality from product invites or shares, leveraging user-generated content to maximize SEO, etc. Growth PMs typically pair with engineering and design to run experiments across the user journey (not just limited to the marketing site or email channels).
Know what stage you’re in, and what growth toolkit that stage demands.
Titles are somewhat arbitrary, and since growth as a discipline is still nascent, we’re likely to see new specializations emerge over time. The big takeaway here is that different skillsets are appropriate at different stages in a company’s growth trajectory. Regardless of what you choose to call yourself, know what stage you’re in, and what growth toolkit that stage demands.
How should I approach growth product?
Now for the good stuff. Growth PMs and growth product teams (less so growth hackers) can follow this framework to get up and running:
- Know your customer
- Assess your channels
- Identify the ‘North Star Metric’ du jour
- Identify inputs & build your growth model
- Ideate, model & prioritize growth initiatives
- Run experiments and iterate
As Lauren Bass says, “Frameworks are great, but they aren’t life.” So take this as a rough guide, and know that life happens and you may need to adjust to your approach.
Step 1: Know your customer
I’m always surprised how many growth leaders don’t really talk to their customers. Growth is not one-size fits all — it has to be shaped around the fundamentals of your product and your market. So as a new growth PM (or growth marketer, or growth engineer, or certainly growth designer), your first task is to spend some quality time with customers.
To build out a sustainable growth strategy, you need to have a deep understanding of your customer and their relationship with your product.
Who are they? How did they first hear about your product? What convinced them to sign up or subscribe? What other solutions were they using or considering first? What other products do they use alongside yours? What are they confused about? Which parts of their experience have been frustrating? What kept them coming back (#magicmoment)? Why did they unsubscribe? To build out a sustainable growth strategy, you need to have a deep understanding of your customer and their relationship with your product.
Step 2: Assess your channels
Hopefully as you talked to customers, you found that there’s a large, ideally growing, group of them who love your product and are practically pulling it into the market. (If you’re not quite feeling it yet, you’re probably still shy of product-market fit and it’s too early to be investing in growth. Focus instead on nailing down who your customers are, who you want them to become, and how you can help them get there.)
Now it’s time to assess the channels these customers are coming from. Where are most of your signups coming from today? What channel converts the best? What channels are looking a little weak but have great potential? How much do your channels cost? Is customer LTV sufficient to achieve channel profitability? Identify 1–3 promising channels and keep them in mind for step 4.
Step 3: Choose your “North Star Metric”
A North Star Metric is a high-level business metric that can guide product strategy and get everyone rowing in the same direction. Ideally your North Star Metric relates to revenue, but revenue metrics themselves can be misguiding. (e.g. If your goal is to maximize revenue, you could do that by making it difficult for customers to cancel. But that would also erode customer trust and hurt your growth long-term.)
So you want to look for a retention metric that’s a leading indicator of revenue, and an accurate measure of user value. For example, Airbnb uses monthly booked guests and monthly booked hosts. Figma might use monthly active editors. Pinterest might use monthly active pinners.
Don’t stress too much about getting this metric right on the first try. You can always reassess and redefine it later on. And the North Star Metric might inherently evolve over time as your business expands into new products or markets. The important thing is to have a simple user-value-centric north star to start rowing towards.
Step 4: Identify Inputs & Build Your Growth Model
Now that you have your North Star metric, write it at the top of a whiteboard. Start jotting down all the inputs, or levers, that influence that north star metric on sticky notes. (Hint: Those promising acquisition channels you identified in step 2 are a good place to start!) For example, if you are Quora and your north star metric is # of questions answered, you might write down # of users coming to site from SEO, conversion rate from site visit to answering a question, conversion rate from question asker to question answerer, average # of social shares per question, etc.
Now arrange your input sticky notes in terms of how they ladder up to one another, and ultimately to your North Star metric. You will probably end up iterating a lot in this stage, rearranging and adding to your sticky notes, drawing connecting lines and experimenting with different ways to simplify the model. It’s probably going to look crazy and that’s all good. Just keep finessing it until you feel like you have a relatively simple but accurate representation of the inputs that drive your north star metric.
Then it’s time to…. put it in a spreadsheet! So fun, right? (I actually think it’s so fun 🤓) Chris More, Head of Growth at Firefox developed a great growth model spreadsheet template you can use to get started. Again, you want to keep your model relatively simple, but use as much real data as you can. It’ll help you stay realistic and more confidently prioritize your growth initiatives in step 5.
Step 5: Ideate, Model & Prioritize Growth Initiatives
By playing around with the numbers in your growth model, you can predict how changing various inputs will move the needle on your North Star metric. Pay attention to which inputs are the most sensitive — they represent areas of your model where your assumptions are important, and where there could be some powerful opportunities to optimize your growth engine.
Work with your team (I like to involve engineering, design, marketing and data here) to ideate creative ways to turn the dial on your growth model inputs. Estimate what impact you think each idea could have on a specific input, plug it into your model and see how that drives your north start metric.
For example, let’s say you’re considering two potential growth projects. The first is a promotional marketing campaign that you estimate could increase weekly signups by 15% for 4weeks. The second is a user on-boarding redesign that could improve 1-month retention by 10% for all future acquisitions. Plug both scenarios into your model and watch how they impact the North Star metric over time. In general, short-term acquisition campaigns tend to give an early boost but have declining impact over time. Improving retention rate tends to have a compounding impact over time.
But not all projects you’ve ideated cost the same to build, or require the same amount of time to test. Use your model to predict the upside of your ideas, and work with your team to estimate cost and run-time. Now prioritize that list and move on to step 6!
Step 6: Run Experiments and Iterate
Of course, your model is only a simulation and it needs to be tested in the real world. Step 5 should have given you a good hypothesis to test (e.g. Our user on-boarding redesign will increase 1-month user retention by 10%.) Now it’s time to execute an experiment to either validate or disprove your hypothesis.
The only true “failed experiment” is the one you don’t learn from.
Remember: many (if not most) of your experiments will fail. But disproving a hypothesis is still a step forward as long as you learn and iterate. The only true “failed experiment” is the one you don’t learn from.
A Note on Early vs. Mature Companies
In earlier growth-phase startups, it’s particularly important to choose your experiments thoughtfully because you have a smaller user base and limited resources with which to test your funnel. You’re looking for growth projects with a big “lift” that will be easier to validate with a small user base in a short amount of time.
You’re also in a great position because as long as you have product market fit, you have room for explosive growth before you hit your saturation point. A well-managed startup growth curve could look like this:
Bigger companies, by contrast, have a significant user base to test on as well as the bandwidth to run many small experiments. Incremental improvements add up and are valuable because even a small percent change could mean 10’s of thousands of users. Besides, more mature products don’t have as much room left for explosive growth:
The bottom line?
Despite what some VC’s would have you believe, growth itself is not the end-goal. The end goal is to empower humans to do/achieve/become something they couldn’t before. Remember that sustainable growth is built on a foundation of user trust and value delivery. Anything that compromises that foundation is a short-term win at best.
In summary…
- Growth hackers/growth marketers and growth PMs have slightly different skill sets. Be clear on the business’s growth needs, and intentional about what skills and strategies you deploy against those needs.
- Use all the data you have at your disposal to understand the full customer journey. After all, growth is built on user trust and value-delivery.
- Before you pour resources into growth, make sure you have product-market fit and a promising acquisition channel or two.
- Build a growth model that accurately but concisely maps the various inputs / levers that influence your North Star metric.
- Hypothesize which inputs are most powerful and prioritize opportunities to optimize them.
- Design, execute and evaluate experiments to test your growth hypotheses.
Questions? Comments? Critiques? Leave a comment below! I’m all ears.
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