Startups = growth. Growth = friction, removed.

Growth comes from the market, not you. Your job as a founder is to let growth happen and get out of the way.

As a startup, the kind of growth you want is unbridled.

Unbridled growth only happens when your product delivers breakthrough value that motivates users to invite their friends, who in turn invite their friends, and so on. In other words, you want growth capped only by access to capital, whether from revenue or VC. Think: Uber or Facebook.

Most products never achieve truly unbridled growth. There’s a finite amount of attention in the day, so only so many products can “break out”.

But even products that have unbridled potential have an unnecessary number of blockers in the way of growth. Here’s the 3-pronged growth & product development process I use:

  1. Growth is friction, removed
  2. Growth is a process, not an endstate
  3. Growth is retention

Growth is friction, removed

If there’s nothing else I could instill in a startup, it’s this:

Startups = growth. And growth = friction, removed.

The cardinal sin of startups is forgetting that market matters most. Make something users want. As Sam Altman, President of Y Combinator, puts it:

Your goal as a startup is to make something users love. If you do that, then you have to figure out how to get a lot more users. But this first part is critical — think about the really successful companies of today. They all started with a product that their early users loved so much they told other people about it. If you fail to do this, you will fail. If you deceive yourself and think your users love your product when they don’t, you will still fail.

The startup graveyard is littered with people who thought they could skip this step.

If your goal is to make something users want, then your job is to find something people want and then give it to them as often as they will have it.

Because of this, growth is therefore a friction-removing process, not an friction-adding process. This does not mean you shouldn’t add features & functionalities; it means only add a feature when that feature allows more people to do more of a thing they’re already trying to do.

People already want to do something (whether they realize it or not) and you are simply tapping into that desire. You are not creating a new desire. Your job is to identify the desire, then make it as easy/fast/fun as possible for people to do that.

In a Wired interview, Ev Williams, founder of Blogger, Twitter, and Medium, shared his strategy for building a billion-dollar business:

Take a human desire, preferably one that has been around for a really long time… identify that desire and use modern technology to take out steps.

Growth is like water. It takes on whatever form it is allowed to take given the constraints around it. What constraints you leave in the way is up to you.

Be formless. Shapeless. Like water.
Put water into a cup. It becomes the cup.
Put water into a bottle. It becomes the bottle.
Put water into a teapot. It becomes the teapot.
Water can flow. Or it can crash.
— Bruce Lee

Identify where growth comes from in your product. Then remove everything that gets in the way of users getting to that.

Growth is a process, not an endstate

More than likely the friction of your early product is limiting growth. Most products don’t start with unbridled growth—achieving unbridled growth is extremely hard to do.

Even Facebook’s growth plateaud at around 100M users and they had to be very conscious about breaking through the barrier. At the time, there was no concept of a “Growth team” in Silicon Valley. How Facebook solved this wasn’t easy, but in hindsight it was straightforward, which makes the journey they took and the goal they arrived at (right now 1.5B monthly users!) all the more insightful. Chamath Palihapitiya talks about how they institutionalized growth as a team, thus creating the concept of the modern Growth team:

“Most people think of growth as trying to create these extra-normal behaviors in people. But that’s not what it’s about. It’s about is a very simple elegant understand of product value and consumer behavior.” — Chamath Palihapitiya

In a nutshell, how Facebook got to 1 billion users (and got over the infamous 100 million user hump) didn’t involve any secrets or crazy tactics. It was actually just going back to the basics and iterating ruthlessly.

Chamath created an environment at Facebook where people could quickly test & measure the 3 most important problems to consumer products:

  1. How do you get consumers in the front door?
  2. How do you get consumers to the “A-ha moment” as quickly as possible?
  3. How do you deliver core product value as often as possible?

Using this framework guided them to all the insights they needed to adjust product accordingly, including the things we all talk about in the Valley now like the “magic number”.

Growth is a process, not an endstate. Try, test, measure—repeat.

Growth is retention

The Virtuous Cycle of User Growth

Most startups I see think of growth as purely a customer acquisition process. This reduces growth to just the top of the funnel, when really growth is just as (if not more) heavily reliant on the bottom of the funnel, i.e., retained users.

The biggest customer acquisition firehose in the world won’t save you if you have a leaky bucket.

The most valuable users are those who consistently use your product. In the tech industry this is called retention and it is the most valuable metric you can mention.

Why is it so valuable? Because these are the people who love your product and evangelize it to others, a.k.a. the virtuous cycle of user growth.

Alex Schultz, Facebook’s VP of Growth, asks “Where does your retention asymptote?” As in: after several weeks what % of your users still use the app regularly? This is known as terminal retention in the tech industry.

“If you end up with a retention curve that asymptotes to a parallel line with the x-axis, you have a viable business and you have product-market fit for some set of market.” — Alex Schultz

Simply put:

  • If your terminal retention asymptotes at 0%, all the growth in the world won’t mean anything because they’ll all churn out.
  • If your terminal retention asymptotes >0% (even 1%!), find more users like those users who are between the x-axis and the retention asymptote and get them to use your product.

There is a saying in farming: “Cattle always graze where the grass is greener.” Don’t literally call your users cattle 😉 But do ask yourself: who is using our product (eating our grass) the most? And where are they doing it? That will point you both to product-market fit and to identifying your most valuable users.

Great startups are built by founders who build products that they want themselves, but they’re still just one user in an ocean of users with different lives and tastes and experiences. Growth comes from the market, not you.

As a founder, your job is to hire and scale the reduction of friction. Bring on people who will do two things: reduce friction of the core product value to users, and generate awareness. Those are your goals. That’s it.

Institutionalize your growth process and do it all day, every day.

Be like water.

Header image credit: sorarium via / CC BY-ND