Growth Report - #1
Today's topics include:
Forget About Traffic and Start Using Content to Drive Leads and Sales
Churn is the silent killer
Why Facts don't change our minds
On Overnight Successes
Spotify - The Ambient Media Company
⛑️Learnings from the trenches
In this section, I share some lessons learned from the trenches of building our marketing agency GrowthBay.
📈 Growth Marketing
1. Product-led Growth
If you look at some of the fastest-growing software companies today, you need to wonder: What are they doing differently than all the other ones that seem to have a hard time getting off the ground?
One consistent pattern that I am seeing mentioned more and more often, is the product-led approach of growing a company.
This has one major underlying reason:
"Consumers now have access to an ever-growing list of products that can deliver on their expectations. The result is an erosion of any remaining user patience for clunky legacy software—people are more willing than ever to ditch products that aren’t meeting their expectations."
We see that ourselves every day. The high product quality this new breed of companies are putting out, coupled with the plethora of choice out there, creates an overall impatience and disdain for poor product experiences. So before we commit to a product today we want to try it out, we want to make sure it keeps the promises it makes. So what does that mean for your company?
As the guide linked above puts it bluntly:
"People don’t want to interact with salespeople or marketing campaigns anymore—not at the expense of actually getting to experience the product they’re buying. To keep up with the market and get ahead of the curve, businesses must reshape their marketing, sales, and service strategies and fundamentally rethink the roles of their customer-facing teams."
So what is product-led growth?
As opposed to sales-driven or marketing-driven approaches that are mostly in use today, product-led growth is a business methodology aiming to "create company-wide alignment around the product as the largest source of sustainable, scalable business growth".
Some examples of product-led companies with a high growth trajectory:
B2B: Airtable, Slack, Figma, Zapier
B2C: Pinterest, Typeform, Warby Parker
Okay, so that means Product Managers are the new sheriffs in town?
Product-led growth does not equal Product Manager-led growth!
All this shift is aiming to achieve is a common alignment and focus on the product we are delivering to the customer and how that product can be designed in a way to be the main source of the company's growth.
"Think of it as the democratization of product: Like any effective democracy, product-led growth requires traditional decision-makers to open up the decision-making process to a larger, more diverse group of stakeholders. Does this create more difficult, complex discussions? Yes. Do difficult, complex discussions lead to better, more innovative business decisions? Absolutely."
One company that has successfully transitioned from a pure sales- and marketing-led organization to a hybrid product-led organization is HubSpot. Listen to Intercom's interview with Kieran Flanagan for the background story.
Hold your horses. When does it make sense to focus on product-led growth?
Product-led growth is not the new holy grail that will solve all your growth problems.
There are two major factors that need to be in place, in order for product-led growth to truly make sense:
Low product complexity: Is freemium or a free trial the way new customers or users want to experience my product? Or do you have a very complex product that needs to be explained through a salesperson or a sales interaction like a demo. In the latter case that’s a better fit for a sales go-to-market. In a product go-to-market, you are allowing the product to do a lot of that job for you.
QuickTime-to-Value: Can the customer easily understand the core value my product delivers? (→ time to value metric). Because you want to get the user to experience that value quickly and then spread it within their networks. You also need to be able to onboard that person to the core value proposition of this product quickly and without a lot of explanation.
And even if your product fulfills the above criteria, few companies will only rely on one growth methodology, but instead, focus on a hybrid model.
For example HubSpot:
"We have a hybrid growth model: we have a freemium go-to-market, but a lot of our revenue comes through leads that sales interact with and talk to. They’re created by inbound demand. There are many, many companies that have hybrid models."
The next step I would argue, is to educate yourself further about this topic and then start to think deeply about the complexity and time-to-value aspects of your own product(s) and how those are currently reflected in your growth strategy.
A few resources to get you going:
HubSpot's VP of Marketing, Kieran Flanagan on how they did it (Intercom's Podcast)
2. Forget About Traffic and Start Using Content to Drive Leads and Sales
So much of the content that I see out there is written with the sole intent of getting more people to your website. It's SEO optimized and brings in a ton of traffic. But is that traffic part of your target group? How much of this additional traffic is actually resulting in more of the right customers?
Jimmy Dali from Animalz has a theory:
"There is a disconnect between content and sales teams—one that creates an invisible barrier between writers and readers. When content is ideated, written, edited, and published in a vacuum, it can support traffic, but it will almost definitely not support sales."
This is why we want people to start thinking about Bottom-of-the-Funnel Thought Leadership content. Content that addresses pressing challenges that your company can actually solve and content that tells people how to think, not what to do.
How you can start:
Make your content team sit together with your salespeople and make an inventory of the topics and challenges that come up most often.
Send your content people to listen in on sales calls. If a topic comes up more than three times in a sales call, it deserves a blog post.
Make sure your sales team is aware of the new content AND uses your bottom-of-funnel thought leadership content to close deals.
I have seen this issue coming up over and over in previous jobs. Your traffic increases, your SQLs do not. This is one of the main reasons. Your Sales and your content team need to talk!
3. Churn is the silent killer
Retention is an often overlooked part of a solid growth strategy. All the product-led growth strategies and bottom of funnel content gets expensive very quickly if we can't retain our customers. What are you doing to make sure your customers are happy and come back the next day, week, month or year?
A couple of weeks back, I started listening to Churn.fm, a podcast discussing how the world's fastest-growing companies are tackling churn and retention issues. Featuring marketing heavyweights such as Brian Balfour from Reforge, Chris Savage from Wistia and Corey Haines of Baremetrics.
A really good starter episode that will get you thinking about retention is this one:
🧠 Personal Growth
Today we got two ideas from James Clear, the author of Atomic Habits. Which is on my top five most transformational books list.
1. Why Facts don't change our minds
Powerful article on how (not) to convince someone they are wrong.
Some of my favorite quotes:
"Convincing someone to change their mind is really the process of convincing them to change their tribe. If they abandon their beliefs, they run the risk of losing social ties. You can’t expect someone to change their mind if you take away their community too. You have to give them somewhere to go. Nobody wants their worldview torn apart if loneliness is the outcome."
"Your time is better spent championing good ideas than tearing down bad ones. Don't waste time explaining why bad ideas are bad. You are simply fanning the flame of ignorance and stupidity."
“Always remember that to argue, and win, is to break down the reality of the person you are arguing against. It is painful to lose your reality, so be kind, even if you are right.”
2. On Overnight Successes
"Whenever you see an overnight success, your eyes deceive you. What you are witnessing is the hour of opportunity unleashing the potential energy of previous choices. It was not one decision, but the accumulated power of all that came before.
The fuse was lit on a loaded cannon."
🔮 One Technology Trend
Spotify - The Ambient Media Company
If you are interested in audio as an upcoming medium or content format, this is a must-read.
My favorite quotes:
"From devices like Airpods, to music streaming, to new audio-first content categories like podcasts — companies see a massive opportunity to close the monetization gap and capture a larger share of our daily "passive" attention."
"And while we may still be in the early days of audio's growth trajectory, the scale of the opportunity at hand — the possibility of addressing a market size of "all daily passive time" — means that it is no longer enough for companies to think in terms of increasing their share of the consumer's audio day.
The real winner in audio over the next 10 years will also need to own an outsize share of something much larger — the consumer's ambient hours."
"As audio-based platforms take off, network effects would kick in, strengthening the incentives to leave earbuds in for longer and longer. It wouldn’t seem rude to wear them in conversation; it would be as acceptable as glancing at one’s phone or even sending a quick text message seems today. Just as people began to set their phones on the dinner table and direct a small percentage of visual attention toward them, so we might learn to split off a small, continuous share of auditory attention for the headphones we leave in — a rebalancing of sensory inputs to expand our sonic world beyond the merely local."
The Fact that Apple views its Airpods as Augmented Reality devices, blows my mind 🤯
⛑️ One Lesson from the trenches
In this section, I share lessons learned this week from building our company GrowthBay.
Three important aspects when looking for a co-founder
Kevin and I have been working together for a little less than a year now. We started tinkering with the idea of leaving our jobs and venturing out on our own since April of 2019. We decided that we wanted to work on a couple of pilot projects before we go all in and found a company together. So naturally, and similar to dating, I started paying attention to the question of what's actually important to me when building a company with someone else.
I settled on three major factors thus far.
1. Complementary skillsets
"One builds, one sells.", says Naval Ravikant. I don't know if I would make such a black and white distinction, but certainly you gotta have complementary strengths. If you have two people with the same skillset you end up with disagreements every step of the way. Even though Kevin and I are both marketers, he comes from a more data analytics and product centric side, while I have my strengths in the areas of lead generation, content creation, and qualitative research.
2. Alignment on the motives for building the company
What's the underlying motive for building the company? Is it money, fame or simply building a useful product? Most of the time its a mix, but nevertheless regularly aligning on why you are embarking on this adventure together is crucial. Else, you'll find that instead of pulling together on the same side of the rope, you're engaged in a tug of war for internal resources, which is definitely not the point.
3. Alignment on personal core values
Warren Buffet said it right. "Find someone with high intelligence, energy and integrity". However, all of those terms are subjective in my opinion and need to fit with your personal idea of what manifested high intelligence, energy and integrity looks like. Also from Warren: "Make sure they believe in the mantra that nice people finish first". I could not agree more. Yes you might be able to have success working together with bullies and narcissists. But do you really want to? I think in the long-term it will backfire and lead to serious problems both mentally, and emotionally for everyone involved.
Well, this episode of the newsletter became a lot longer than I anticipated. 😬
Thanks for sticking with me and I really hope you enjoyed the very first edition of the GrowthBay Weekly.
I chose this format deliberately over social media because I'd love this to be a conversation. So if you have your opinion or any feedback to share, please send me an email.
Looking forward to hearing from you.
See you next week,