Chris Wake. And then some.

Growth is never a passive endeavor

Yesterday I received an email from a friend, the cofounder of a well-funded, well-publicized and generally highly touted consumer startup, that left me a bit baffled. Essentially, the email said:

In the new year we’re focusing on organic growth and overall experience, less so on data-driven marketing, because nothing really worked well for us.

After my jaw hit the floor, I prematurely assumed that they were throwing up their hands, maybe buying into that old adage of “if you build it, they will come.” It was obvious from this and prior conversations we’d had that they hit a few snags in their attempt to test and measure user acquisition. This latest stance seemed a bit haphazard, however.

Of course after the initial shock, I reread the message and realized that my friend had also called out the overall experience as needing some work. Assuming, therefore, that they are not taking a Field of Dreams approach to business-building, there may be more here that I can help voice around early growth in a consumer business, and how strategy can develop over time… so:

Social activity as core to the product is your greatest mechanism for distribution.

• It’s true, you can sometimes manufacture social activity for quick wins (e.g. Socialcam)—and you can always buy traffic—though more often, sustained growth, or that which nets active over registered users, comes from identifying, and then getting users to your app’s must have experience (MHx) as quickly and effortlessly as possible. The MHx is that primary, though sometimes amorphous reason that users come back to your app. If, as my friend said, nothing really worked for them, it’s worth validating whether they’ve found that MHx, and if so, whether there are roadblocks (intentional or otherwise) that they can remove from their users’ path.

There is no strict beginning or end to Customer Development, it’s a framework.

• News flash, customer development does not stop once you’ve launched a product, or even sold a few—it is a framework for validating or invalidating assumptions with direct customer input, and that applies as much on day 1 as it does on day 1,498. The difference is that at an early stage you have the benefit of knowing every customer that uses your product, so you can tie virtually any data you have to a name, a person, and their own words on why they did or did not do ‘X.’ You need to seek out this feedback, because for better or worse, great experiences and poor experiences are two extremes that get talked about, whereas anything in between never will.

Measuring or exploring user acquisition channels, these are two very different things.

• To measure means applying known tactics to your particular vertical within known acquisition channels; e.g. running targeted Adwords campaigns, buying a promoted tweet or two, etc. etc. Essentially, the basics for anyone versed in acquiring users online. Though he may disagree, I’d contend that my friend has been treading well-worn ground, measuring known acquisition channels. On the other hand, exploring means breaking from convention, it is growth hacking at its best, if you want a buzzword. Start here by identifying your ideal customer, and now get creative thinking of ways to reach and help them in the scope of their existing life—for instance, think about what magazines they read, what their average weekend looks like, what kind of friends they have or seek out, and of course, what they do or think just before they come to your app. Just know that there is no silver bullet. You need to test and iterate quickly, exploring numerous channels until you hit on one to be exploited. 

What would your business look like if a 100% referral rate were your standard of success.

• You should know what your referral number is (i.e. the percentage of users that have referred you to others). If you do not, find out! Consider, if a 100% referral rate were your goal: would you think differently about over-delivering each and every time; would it change your perception of who an ideal user is; would it change how you approach marketing and social media; and finally, would it change the way you communicate with users on an ongoing basis? I know too many startups that believe referral bonuses and social sharing tools are easily bolted on to existing products, but if you stop to consider what it is you are asking of your users when they give a referral, it’s a much more involved process. Not necessarily more difficult, but involved. Don’t short your own effort here.

Data can say almost anything, whereas your metrics have to tell a clear story. 

• The metrics that you track should be actionable (i.e. they must show clear cause and effect; otherwise, they are vanity metrics); they must be accessible (i.e. easily understood by everyone that needs to pull, use or react to them); and finally, you must be able to track them back to a credible source. For what it’s worth, I know some of the marketing channels my friend has used, and I know that there is real difficulty in auditing some metrics because cause and effect are unclear—this may require some creativity, especially where it relates to mobile (… still the wild west when it comes to metrics), and it may even require more in the way of testing (in terms of both time and money) than one would normally put into any single channel.

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Comments, questions or feedback? I’d love to hear them.