the science of growth

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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

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What do you do once you have product market fit? There is an entire science to generating growth once they've achieved the first milestone of p/m fit and it's not as simple as "hire a growth hacker."

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Page 1: The Science of Growth

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

Page 2: The Science of Growth

Most startup advice today

Page 3: The Science of Growth

Makes sense as you can’t scale until

product market fit

Page 4: The Science of Growth

http://blog.startupcompass.co/pages/startup-genome-report-extra-on-premature-scal

Prematurely Scaling

= Failure

Page 5: The Science of Growth

However, once you have product market fit

not as simple as: “hire a growth hacker”

Page 6: The Science of Growth

not a new reality ...

Page 7: The Science of Growth

Everything is either

Growing

Dying

or

Page 8: The Science of Growth

The Best Technology Rarely Wins

!

#VCcliche !

#clicheForAReason

Page 9: The Science of Growth

What are the best practices for

growth?

Page 10: The Science of Growth

Partnered with my graduate students from Carnegie Mellon to look at …

Page 11: The Science of Growth

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 !

Page 12: The Science of Growth

!!!Reinforced with five exemplar examples !!Only used to reinforce best practices identified in the pairs of companies analyzed

… Plus

Page 13: The Science of Growth

There is a scientific method to growth

Conclusion:

Page 14: The Science of Growth

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 ...

Page 15: The Science of Growth

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

Page 16: The Science of Growth

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

Page 17: The Science of Growth

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

Page 18: The Science of Growth

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

Page 19: The Science of Growth

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?

Page 20: The Science of Growth

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

Page 21: The Science of Growth

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

Page 22: The Science of Growth

THANK YOU !

@SEANAMMIRATI

SEANAMMIRATI.COM

Page 23: The Science of Growth

!!Slide 10: https://www.flickr.com/photos/vkpatel/5685826217/ !!

Slide 22: https://www.flickr.com/photos/zoramite/3993280685/