How to start a Growth team at an early stage startup
You’ve been through business modelling process, prototype development, probably fund-raising from angel investors, etc and now you are ready to launch your product in your target market. Everyone in the startup industry talks about the success stories managed by Growth Hackers at the time of writing. If you are a founder or in the leadership team, you may seriously consider hiring one or starting a growth team for your company.
Looking back the past few decades
Let me take a little step back. The product life cycle is shortening due to the changing pace of technology adoption speed in the world. If you look at the US technology consumption trend, Telephone took more than 100 years to penetrate 90% of the US households whereas it only took appx. 15 years for Cellphone to reach the same.
Realizing the fast-changing consumer behavior is the very first step in strategizing your product launch plan, including the hiring process. Your product positioning and the first user group’s feedback can help define the timing of hiring your growth team.
Analysing your product/service’s user behavior
Whether your business is ready to hire a growth team or not can be decided based on the comprehensive analysis of your user behavior. Yes, comprehensive analysis. How can we make this happen during the busy working hours at a startup though?
Fortunately, we have some easy-to-implement methods shared by experienced growth hackers.
Ask one single question.
You have your first group of users. Depending on your business model, it can be 100 (for the very niche targeting) or 10,000 (for the consumer-driven business). Then you can start measuring the Net Promoter Score (NPS) of your product in your target market by asking this single question to your existing users.
How likely is it that you would recommend our company/product/service to a friend or colleague?
Here is the key. Depending on the NPS, you can estimate the right timing for hiring a growth team.
- If it’s in between 9–10 (promoters), your product could be in demand and you may want to start looking for the potential growth team candidates — they could help accelerate the quality user acquisition.
- If it’s in between 7–8 (detractors or promoters), you may want to review the focus metric’s performance (i.e. retention rate) before looking for the potential growth team candidates.
- If it’s below 6 (detractors), you may want to identify the roadblocks and find ways to improve your product/service first in order to increase your NPS.
Product + Market fit
NPS can be used to measure the willingness to refer your products or services, which is helpful in estimating the right timing for hiring your growth team. However, it may not provide you an enough data to support you and your leadership team’s key decision.
In Marc Andreessen’s article “The Only Thing That Matters”, he introduced Rachleff’s Corollary of Startup Success:The only thing that matters is getting to product/market fit-Rachleff’s Corollary of Startup Success Click To Tweet
This was referred by Sean Ellis, who suggested measuring the Product/Market fit for your product/service by asking this question:
How would you feel if you could no longer use the product?
Startups with 40% of the users saying they would be ‘very disappointed’ without their product/service could be the ones with good traction. If you achieve this number, you may be ready to start your growth team.
Ask yourself first.
Let me remind you one thing. Before you consider hiring a growth hacker, you should understand that there is no simple magic in growing your business. If you haven’t proven the market demand, your business will not take off no matter how experienced growth hacker you hire.
The Growth Team Model
Whether you hire one growth hacker or a growth team, it’s good to understand the growth team model from various successful startups.
Andrew McInnes analyzed the two different types of growth team model by interviewing 20 growth leaders in 2015. There is no significant correlation in between the growth team model and company’s outcome, therefore, keep in mind that the cultural + organizational + strategic fit should be prioritized on top of these models.
In this model, the Growth lead reports directly to CEO, managing the team of product managers, engineers, designers and data scientists.
One of the notable startups applied this model is Uber and Facebook. Uber successfully implemented this model by building a strong team DNA focusing on the speed and iteration in order to establish strong feedback loops into their product.
The independent growth team structure could raise concerns by other teams; Andrew mentioned that there could be a rising tension in between user experience and growth metrics in this model. Successful implementation of the growth hacking process could result in influencing other team’s key performance metrics.
Each functional head reporting to CEO collaborates on the growth initiatives together. In this model, the product team lead owns the growth performance.
Companies applied the functional growth team model are Pinterest, Twitter, LinkedIn and Dropbox, to name a few.
The functional lead is responsible for both Growth and Non-growth initiatives, therefore the product lead in charge of growth should maintain the good balance in setting up their team member’s objectives.
It’s unavoidable to face the tension between the team even in this model, yet it can be resolved by applying the iterative approaches for the growth initiatives and non-iterative approaches towards your product roadmap concurrently.
I’d recommend reading the full article by Andrew McInnes here.
The team matters to your success. Hack your team management by applying the right hiring process. Before thinking about hiring a growth team, you can run a simple iteration process by applying a few tips mentioned above. When you are ready to form a growth team, project your future team structure in advance and implement the growth team model well-fitting to your existing team and your business.
If you are an experienced growth hacker, please share your tips in the comment below.
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