the science of growth
Post on 02-Dec-2014
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The Science of Growth
Why some companies
scale
while others
stall in the same
market?Sean Ammirati @SeanAmmirati Partner, Birchmere Ventures Adjunct Faculty, Carnegie Mellon University SeanAmmirati.com
Most startup advice today
Makes sense as you can’t scale until
product market fit
http://blog.startupcompass.co/pages/startup-genome-report-extra-on-premature-scal
Prematurely Scaling
= Failure
However, once you have product market fit
not as simple as: “hire a growth hacker”
not a new reality ...
Everything is either
Growing
Dying
or
The Best Technology Rarely Wins
!
#VCcliche !
#clicheForAReason
What are the best practices for
growth?
Partnered with my graduate students from Carnegie Mellon to look at …
Pairs of Companies
!Achieved product-market fit at roughly the same time !!Yet one scaled while the other didn’t !!Primarily (but intentionally not exclusively) internet companies !
!!!Reinforced with five exemplar examples !!Only used to reinforce best practices identified in the pairs of companies analyzed
… Plus
There is a scientific method to growth
Conclusion:
Combination of Techniques
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch
Complimentary Team Skills
Partnerships & Platform Thinking
Financing Strategies
Being Data Informed (but not Driven)
No Single Recipe for Success
!
but ...
How customers perceive the product the first time they touch it has a huge impact on it’s ultimate scale.
Create Constraints to Ensure a Great First Experience
Focus on Implications from Product ArchitectureChoices
An Excellent First Interaction Viral Growth
Catalyzing Events After Initial Launch
Complimentary Team Skills
Partnerships & Platform Thinking
Financing Strategies
Being Data Informed
Amplify growth by leveraging customers to recruit additional customers.
Build recruiting additional customers into product workflow
Look for existing social connections to refer additional customers
An Excellent First Interaction
Viral Growth Catalyzing Events After Initial Launch
Complimentary Team Skills
Partnerships & Platform Thinking
Financing Strategies
Being Data Informed
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch Complimentary Team Skills
Partnerships & Platform Thinking
Financing Strategies
Being Data Informed
“we didn't actually launch Twitter at SXSW -- SXSW just chose to blow it up. We launched it nine months before -- to a whimper.” ! Evan Williams, Founder
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch
Complimentary Team Skills Partnerships & Platform Thinking
Financing Strategies
Being Data Informed
“No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a
team.” !
Reid Hoffman, Co-Founder & Chairman
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch
Complimentary Team Skills
Partnership & Platform Thinking Financing Strategies
Being Data Informed
Where are there engaged groups of customers looking for a solution to the problem your product solves?
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch
Complimentary Team Skills
Partnership & Platform Thinking
Financing Strategies Being Data Informed
While it has gotten cheaper to test and build a first version, it still takes capital to scale.
$100 M
$200 M
$300 M
$400 M
Seed '04
Series A '05
Series B '06
Series C '07
$375.0
$27.5$12.7$0.5
An Excellent First Interaction
Viral Growth
Catalyzing Events After Initial Launch
Complimentary Team Skills
Partnership & Platform Thinking
Financing Strategies
Being Data Informed
Vision!Driven
Data !Driven
DATA INFORMED
Adam Mosseri, Product!
“ We use data to inform certain decisions … [but] overreacting to
data can lead to micro optimizations.”
“Data is the voice of your customer”Riley Newman, Head Data Science
!!Slide 10: https://www.flickr.com/photos/vkpatel/5685826217/ !!
Slide 22: https://www.flickr.com/photos/zoramite/3993280685/
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