Advanced Growth Strategy

Question 1

What is strategy?

Answer 1

Mission: Mission and values
Strategy: sits in between, Define, Identify, Choose, Communicate, and Observe
Execution: Tactics, Goals, Ideas, Implement and Learn

Strategy is for both managers and non-managers. That is what differentiates a great employee

Question 2

What is a growth strategy?

Answer 2

Need to answer 6 questions
Q1. How does your product grow?
A1. Growth Model; your growth model is a qualitative or quantitative representation of how your product grows.

Q2. What are your points of leverage?
A2. Growth Constraint; Your growth constraints are the places in your growth model that if improved, provide the largest increases in growth

Q3. Where and when does my current growth slow or stop?
A3. Growth Horizon; Your growth horizon is an estimation of where and when your current growth model runs out of fuel.

Q4. How do we improve our constraints or horizon?
A4. Growth Method; A growth method is how you going to address a growth constraint or growth horizon

Q5. How do I align individuals, teams, and the org around the methods?
A5. Growth Principle; A growth principle is a guiding principle that distills and connects your model, constraint and method to your product, experiment or marketing development process.

Q6. What new information do I have that changes our underlying assumptions?
A6. Growth Catalyst; A growth catalyst is new information that causes an evolution of your strategy.

Question 3

What makes a great growth strategy?

Answer 3

1. Compounding with a path to keep it going.
2. Firepower is focused on a small set of high ceiling points of leverage
3. Visibility, known horizon + plan of how to expand.
4. Fluency, how many people are fluent with this strategy, % wide.

Question 4

Five Key Points About Growth Loops

Answer 4

1. The defining feature of a loop is that it is reinforcing. This is what creates a compounding effect over time
2. Loops create different types of value, often more than one. A single loop can fulfil multiple purposes (like acquisition and retention)
3. Every loop step has a What, Who, Why - the Why is the most important.
4. All loops are not created equally. Each loop has a different power as measured by cycle returns, cycle costs and scope
5. Loops are combined over time to drive sustainable growth. To continue to grow you need to combine and sequence loops for new ceilings and efficiencies.

Question 5

Loops Properties

Answer 5

1. What, what action is happening in the step of the loop, there are three primary actions: receiving value, generating value and distributing value.
2. Who, Who is doing the action of the step of the loop. There are four categories users, suppliers, partners and companies.
3. Why, Why is the user doing the what. There are three main whys. To gain personal capital, financial capital or social capital.

Question 6

Loops Properties - What

Answer 6

1. Receiving Value, signing up or returning to the product to receive the core value prop.
2. Generating Value, generating the value that is received by new and existing users
3. Distributing Value, distributing the value that is generated by the value generator.

Question 7

Loops Properties - Who

Answer 7

1. Value Receiver, the person that receives the value, typically a new or returning user.
2. Value Generator, the person that generates the value for the value receiver.
3. Value Distributor, the person that distributes the value that is generated.

Question 8

Loops Properties - Who - Value Receiver

Answer 8

Value receivers can differ based on stage (lead, new, returning) and persona.
Different whos may require different loops.

Question 9

Loops Properties - Who - Value Generator

Answer 9

4 Categories
1. Users, the users of your product
2. Suppliers, others in the ecosystem that are also selling to your end user or customer, are transacting/distributing on your product/platform, and are replaceable
3. Partners, others in the ecosystem that sell to the same end user but have smaller overlap, are transacting/distributing off your product/platform, and are not replaceable
4. Company, you, the company itself.

3 Attributes to evaluate
Cost to you, Scale and Flexible

Low to High
In general, user > supply > partner > company

Question 10

Loops Properties - Why

Answer 10

1. Personal Capital
2. Financial Capital
3. Social Capital

Question 11

Loops Properties - Why - Personal Capital

Answer 11

1. Entertainment, I get more fun and avoid boredom for doing this
2. Communication, I can communicate with others for a selfish reason that I couldn’t before
3. Information, I gain knowledge or valuable information by doing this
4. Flexibility, I gain flexibility of something I value by doing this
5. Time, I save time to get time back by doing this

Question 12

Loops Properties - Why - Financial Capital

Answer 12

1. More Transactions, Make more money by getting additional transactions from existing audiences.
2. Save Money, Save money by lowering costs.
3. New Customers, Make more money by enabling access to a group I didn’t have access to before.
4. Loss Prevention, Prevention from losing the initial capital I already have (insurance)

Question 13

Loops Properties - Why - Social Capital

Answer 13

1. Recognition, Do I gain additional recognition, respect or reputation?
2. Connection, Do I feel more connected or have a greater sense of belonging?
3. Competition, Do I get a feeling of winning or achievement?
4. Confidence, Do I feel more confident from this exchange?

Question 14

Loop’s Quantitative Properties

Answer 14

1. Loop Returns, how much output does the loop produce?
2. Loop Costs, how much does it cost to generate a cycle of the loop?
3. Loop Scope, What are the minimum and maximum thresholds of the loop?

Question 15

Loop’s Quantitative Properties - Loop Returns

Answer 15

1. Cycle return, how much output does one cycle of the loop produce?
   V = State (cycle x) / State (cycle x - 1) /
2. Growth Multiplier, how much total output do all the cycles of the loop produce?
   1 / (1 - V)

Question 16

Loop’s Quantitative Properties - Loop Costs

Answer 16

1. Time
2. Cost
3. People (employees)

Question 17

Loop’s Quantitative Properties - Loop Scope

Answer 17

Min fuel
Max burn
Match -> Bonfire -> Wildfire

Min Scope: The minimum amount of input to get the loop to a point of meaningful returns
Speed: How fast the loop scales in its period of sustainability
Max Scope: The maximum threshold for where the performance of the loop starts to degrade

For example, a S shape graph
The lower flat tail is the Min Scope
The middle verticle part is the Speed
The higher flat part is the Max Scope.

Question 18

Viral Loops

Answer 18

Value is distributed by the user for personal, financial or social capital

1. Personal, AKA organic virality
2. Financial, AKA incentived referrals
3. Social, AKA word of mouth

The value promise to the distributor differentiates viral loops, why do t hey distribute the value.

Question 19

Viral Loops - Personal Viral Loop

Answer 19

1. New User, signs up as the result of the invite because you are on the product
2. User creates value, the user generates value for others by using the product.
3. User invites, Because the experience gets better for them, they invite others
   Value Distributor = User
   Value Promise = Personal Capital

Min Scope: Medium
Speed: High slope, high returns and low people, time cost and very low money cost
Max Scope: High

The primary value promise being distributed is the same.
The thing that shifts is the social capital of the distributor. A close friend of 10 years would like to successfully invite you to this product.

Question 20

Viral Loops - Personal Viral Loop - K-Factor

Answer 20

i * c = k
i: Number of invites sent per new user
c: The percentage of invites that convert to customers
k: Viral coefficient. Every 1 new sign up will produce k new users.

Question 21

Viral Loops - Financial Viral Loop

Answer 21

2. User tries product, the company generates value for user.
   Value Distributor = Company
   Value Promise = Financial Capital
3. User invites, in order to get something financial in nature
   Value Distributor = User
   Value Promise = Financial Capital

Incentive > Friction to experience core value prop

Min Scope: Low
Speed: High slope, medium returns and very low people cost, low time cost and medium money cost
Max Scope: Medium to high

Incentivize habit creation, not first use.
Aligning the currency to the primary value promise can increase perceived value and decrease the actual cost.
Incentive elasticity affects the performance of cycle returns

Question 22

Viral Loops - Social Viral Loop

Answer 22

2. User likes product, the user likes the product more than expected.
3. User tells others, because the user likes the product more than expected they tell others to get social capital
   Value Distributor = User
   Value Promise = Social Capital

The delta between primary value promise expectation and actual experience is what motivates

Min Scope: High
Speed: Low slope, Low returns and very low people cost, high time cost and very low money cost
Max Scope: Very High

Sustaining the delta of experience to expectation over time is difficult due to competition, increasing expectations and other alternatives.

Some products have push dynamics and some have pull dynamics.
Push is like users receiving the good thing about your product passively. while the pull is they actively ask for advice

Question 23

Content Loops

Answer 23

When content is generated from the usage of the product it is then shared in a way that attracts more usage.

Who generates the content?
User Company and Suppliers
Who distributes the content?
User Company and Suppliers

Question 24

Content Loops - CGC

Answer 24

When content is generated by the company from usage of the product it is then shared in a way that attracts more usage.

Company distributed, AKA content marketing

Min Scope: High
Speed: Low slope, Low returns and medium people cost, high time cost and high money cost
Max Scope: Medium

Target high volume/value categories where the cost of creating content can recoup content generation cost

Content presences need a strong PVP that aligns to the product, but goes beyond it

How does the content generation side scale? Voice/Quality constrained by one voice? How to shift to supply or users over time.

Question 25

Content Loops - UGC

Answer 25

When content is generated by the user via usage of the product it is then distributed in a way that attracts more usage.

Mostly company distribute via SEO

Min Scope: Medium < CGCD Loops
Speed: High slope, High returns and very low people cost, low time cost and very low money cost
Max Scope: Very high

Certain UGC content loops will produce more content per user than others

Just because users are generating content, doesn’t mean it is content that will attract users.

Over time need to transition the habit of content discovery from the channel to your product.

Question 26

Content Loops - Supply Generated Content Loop (SGC)

Answer 26

When content is generated by supply that is then distributed in a way that attracts more usage

Min Scope: Medium < CG Loops
Speed: Medium slope, High returns and low people cost, medium time cost and low money cost
Max Scope: Very high

Typically need to bootstrap the loop with CGC and company distributed first to build value promise to generate and distribute

Do users or suppliers have a strong/natural value promise to distribute?

What constraints do distributors have? For example, geography, competition/saturation, etc.

Question 27

Paid Loops - Ad Loops

Answer 27

When capital is generated and reinvested in Ads to distribute primary value promise. AKA Paid Marketing.

Min Scope: Very low to medium depending on platform
Speed: very high slope, medium returns and low people cost, low time cost and high money cost
Max Scope: Low

Ad loop should always be used to accelerate other loops not be the core loop.

When capital is limited, payback period is the constraint. captical is not limited, LTV/CAC.

The platform can vary a lot effecting the performance of every step of the loop.
1. Input costs. How much does it take to get started? Facebook can start with $10. TV typically needs $100K+
2. Targeting. How efficiently can you target your target audience?
3. Format/Steps. What is the format and steps that the users needs to go through to go from ads to new user.
4. Scale. How much of your target audience is within the channel

Question 28

Paid Loops - Ad Loops - Partner and Supply Ad Loops

Answer 28

AKA influencer marketing or affiliates.

Min Scope: Medium depending on platform
Speed: < AD loop, medium slope, low returns and low people cost, medium time cost and medium money cost

How much influence does the supplier/partner have around the PVP with your audience?
1. Audience size
2. Influence
3. PVP fit
Max Scope: Very low < AD loop

Question 29

Paid Loops - Sales Loops

Answer 29

When capital is generated and reinvested in humans to distribute primary value promise.

PVP friction could be medium to very high

Min Scope: Very low
Speed: < Ad loop, medium slope, medium returns and very high people cost, high time cost and high money cost
Max Scope: Medium > Ad loop

When capital is limited, payback period is the constraint. captical is not limited, LTV/CAC.

Every sales loop is combined with a lead loop. This influences the performance/levers of the sales loop

At scale, team optimization such as time to rep productivity, team turnover and other factors become levers.

Question 30

Paid Loops - Integrations Loops

Answer 30

Capital is generated and reinvested in integrations/partnerships that increase the primary value promise for users.

Min Scope: Very high
Speed: Low slope, low returns and high people cost, very high time cost and low money cost
Max Scope: Low

Are integrations at the centre of your core value prop? egment, Zapier, etc?

Do you become the centre of gravity and own the customer? Salesforce, Shopify, Slack, etc? How quickly can you transition to this?

Question 31

Macro Loops

Answer 31

Macro loops connect your micro loops and make them more effective by decreasing cycle costs and/or increasing cycle returns.

Macro loops are how your company gets better with scale
Macro loops are more defensible than micro loops

Macro loops are loops as well. It lives on a spectrum of how strong they are.

Question 32

Five Types of Macro Loops

Answer 32

1. Direct NFX
2. Cross-side NFX
3. Data NFX
4. Economies of Scale
5. Brand

Question 33

Macro Loops Properties

Answer 33

Qualitative Properties
1. Micro Loops, The micro-loops that the macro loop is most commonly paired with
2. Constraints, every type of Macro loop has a common constraint that prevents it from compounding faster
3. Roles, inherit from micro-loops

Quantitative Properties
Min Scope
Max Scope
Key Metric, the best quantitative indicator of the strength of your macro loop

The performance of micro loop variables gets better over time as the macro loop gets past the minimum scope
The performance of micro loop variables stops getting better as the macro loop hits the maximum scope

Question 34

Macro Loops - Direct Network Effects

Answer 34

When value increases as more users use the product

E.g. Github, Slack

Common Places: Networks, Communication and Collaboration
Common Micro Loops: Personal Viral, Financial Viral, Social Viral and UGC
Constraint: User in the network, frequency of core action, what is the core action that creates increased value for both parties?

Min Scope: Low
Max Scope: Low - High, depends on the audience that the direct network exist in
Key Metric: Active users, active core actions

Adding a direct network effect needs to align/extend existing core value prop
Finding the right initial network to deploy in is key to getting direct NFX going
Leverage for retention (activation, engagement, and resurrection)

Question 35

Macro Loops - Cross-Side Network Effects

Answer 35

When value to one type of user increases as more of another type of user joins and vice versa

E.g. Airbnb, Shopify

Common Places: MarketPlaces, Platforms, Ad Networks
Common Micro Loops: Financial Viral, Sales Loop, Ad Loop, Physical Content, SGC
Constraint: One side of network, can flip back and forth over time

Min Scope: High
Max Scope: Very High
Key Metric: Liquidity, active users of constrained side

Supply or demand first? Most of the companies start with supply.
The network effect can be local, global or both.
Frequency Vs Average Selling Price (ASP)

Question 36

Macro Loops - Data Network Effects

Answer 36

When the quality or cost of the product improves as more usage data is collected

E.g. Glassdoor, Pinterest

Common Places: B2B SaaS, Content, Consumer Networks
Common Micro Loops: UGC, Social Viral, Ad Loop and Sales Loop
Constraint: Amount of data globally and for each user

Min Scope: High
Max Scope: Very High
Key Metric: Success rate of the use case increases over time

Data use cases, personalization vs recommendations vs Use case expansion vs Data generated content vs Efficiency/Effectiveness
Min viable data, is there enough data to increase value in a meaningful way? Can you determine something better than your users can?
Scope of data, recency, similarity and category of data.

Question 37

Macro Loops - Economies of Scale

Answer 37

When the value increases as the result of more scale

E.g. Netflix, Oracle

Common Places: Ecommerce, Physical Items
Common Micro Loops: Ad Loop and Sales Loop, Integration Loop, Physical Content Loops
Constraint: Rate of scale, returns on scale

Min Scope: Very High
Max Scope: Very High
Key Metric: Cost per product, Revenue per product

Internal vs External
Internal: You get better by doing more of it
External: You get leverage on others as you get more scale
Diseconomies of scale can eclipse the positive economics of scale

Question 38

Macro Loops - Brand

Answer 38

When social capital of company increases with additional customers. AS social capital increase, it becomes easier to acquire more customers

E.g. Apple, Hubspot

Common Places: Ecommerce, Physical Product, B2B SaaS
Common Micro Loops: Ad Loop and Sales Loop, Social Viral Loop, CGC Loops
Constraint: Awareness and perception

Min Scope: High
Max Scope: High
Key Metric: Aided Awareness, Unaided awareness.

Most fragile loop, it’s easy to destroy with small mistakes or incidents

Brand building is not a macro loop. Does it help as a macro loop?
Difficulty to measure
Narrowing scope. To build density of awareness, a common way to get branding going is to narrow the segment of customers.

Question 39

Growth Model - How does your product grow?

Answer 39

A qualitative or quantitative representation of how your product grows.

Question 40

Different Types of Growth Models

Answer 40

1. Qualitative
   Pros: Great for communication, brainstorming, strategic thinking and planning
   Cons: Lack of accurate quantitative measures so doesn’t help with prioritizing, goal setting, and understanding outcomes.
2. Single loop Quant Model
   Pros: Helps validate and prioritize ideas around a single loop without dealing with the end to end model.
   Cons: Understanding how multiple loops work together and influence each other.
3. End to end Quant Model
   Pros: Good for goal setting, building confidence on strategic investments, and directionally correct predictions
   Cons: Typically complicated to understand fully unless you in it. Terrible for communication.
   previous one informs the next one

Question 41

Building a Qualitative Model

Answer 41

1. Loop Properties, uncover your possible VR, VG, VD and their value promises
2. Identify Loops, identify the loops you can form from your available loop properties
3. Map Micro Loops, map your micro loops into one cohesive picture
4. Map Macro Loops, map your macro loops into one cohesive picture.

Question 42

Building a Qualitative Model - Loop Properties

Answer 42

Start with identifying all value receivers
Different loops can drive different value receivers

Activities to uncover value receivers
1. Value props
2. Friction
3. Data

Then identify VG and VD
Users, Supplier or Company

What are their value promises?
Identifying their motivation + constraint gets to their value promise. identify how strong and their strength, H, M, L.

Question 43

Building a Qualitative Model - Identify Loops

Answer 43

What growth loops currently drive growth for the product?

1. Compare to loops menu
2. Compare different types of value receivers
3. Check user states (new, existing and returning users), sometimes different user states require different loops

Based on the type of the product, we can try to map the macro loops

Question 44

Building a Qualitative Model - Map Micro Loops

Answer 44

Start with what is the simplest form of the entire Company? What is that loop?

Then add additional layers based on the below 4 points
1. Acquisition loops, other acquisition micro-loops that are important to the model
2. Rention loops
3. Value receiver, other types of important value receivers for the model
4. Monetization, parts of the model specific to monetization that are not yet accounted for.

Question 45

Different Qualitative Model Map

Answer 45

Each layer provides an additional level of fidelity and fulfils a different purpose

H: Macro loop qualitative model,
Qualitative map of how all of your macro loops work together to drive growth
M: Micro loop qualitative model, Qualitative map of how all your micro loops work together to drive acquisition, retention and monetization
L: Detailed segment qual model, a zoomed-in version of your micro loop map that provides an extra layer of fidelity and detail.

Question 46

Building a Qualitative Model - Map Macro Loops

Answer 46

How and why do your micro loops improve over time?

1. Start with drawing individual macro loops separately
2. Identify the common parts

Question 47

Building a Qualitative Model - Detailed Qualitative Model

Answer 47

4 ways to zoom in
1. Lifecycle
2. Value receiver
3. Feature
4. Geography

Question 48

Evaluating Qualitative Model

Answer 48

4 Questions
1. Do others understand the model?
2. Do others agree with the model?
3. Is the model self-enforcing?
4. Can you simplify the model?

Question 49

Aligning Your Team Around Your Model

Answer 49

3 quick uses for your qualitative model

1. Alignment, identify how your team is thinking differently about the product grows
2. Roadmap, compare your roadmap to the model to see how it aligns with the steps of your loops
3. Metrics, Do your metrics align with your model? If not, where are the gaps?

Question 50

Growth Model - Identify

Answer 50

What are the points of leverage?
Where and when does current growth slow or stop?

Question 51

Growth Model - Growth Constraint

Answer 51

The places in your growth model that if improved, provide asymmetric results.

Question 52

Growth Model - Growth Horizon

Answer 52

An estimation of where, when and why your current growth model runs out of fuel.

Where: Where does the output of the loop or model start to hit a ceiling?
When: In what time range do we believe that ceiling occurs?
Why: Why do we think it hits that ceiling?

Question 53

Growth Model - Growth Horizon - Why

Answer 53

The most important part

6 types of scope limiters
1. Value receivers
2. Value promise
3. Value distributors
4. Value generators
5. Distribution platform, the platform it is being distributed to has ceiling or other limitations
6. Returns of capital, when the loop goes from high potential -> low potential users.

Question 54

How to Build a Quantitative Loop Model

Answer 54

On the high level, it’s a loop like this
1. New/Refine Hypotheses, we form new hypotheses or refine existing ones about how things work
2. Causal Formulas, we then create formulas that describe the causal relationship and predict what might happen.
3. Compare Actual to Predicted, we then watch actual data to see what happens and use it to identify holes in our hypotheses getting closer to actuals over time

Detailed steps
1. Define Loop Steps + Outputs
Define the granular steps of your loops and their outputs
2. Define Conversion Formulas
Define the conversion formulas between each step of the loop
3. Evaluate Conversion Variables
Evaluate each conversion variable for how it will move over time
4. Build The Model
Build the model using your formulas and variables
5. Extend Cycles + Output Graphs
Extend the model to look at loop cycles and outputs

Question 55

How to Build a Quantitative Loop Model - Define Loop Steps + Outputs

Answer 55

We define these elements because they differ from product to product

1. Steps, the exact steps of the loop for your specific product
2. Conversion Formulas, The conversion formulas from one step to another step of the loop
3. Variable Dynamics, They dynamics of how a variable might change over time or through more cycles of the loop

When defining the steps
1. Steps should describe the core actions happening
2. End where the first one begins
3. Have an output

When defining the outputs
What is the output metric for each step of the loop?
Good output metrics: Total/new something
Bad output metrics: % of something

Question 56

How to Build a Quantitative Loop Model - Define Conversion Formulas

Answer 56

How does the output of one step convert into the output of the next step?

Output (B) = (Output (A), Conversion Rates (CR), External Resources (Captial, Leads etc))

Question 57

How to Build a Quantitative Loop Model - Evaluate Conversion Variables

Answer 57

1. What are all the variables within the conversion formulas?
2. What are their current baselines? When filling out baselines for conversion variables, you need to choose a consistent time period.
3. How might they change over time/cycles/scale?
   3.1 Constant
   3.2 Get worse
   3.3 Get better
   3.4 Bi-Directional, The variable could get better or get worse based on the movement of another variable.

Question 58

How to Build a Quantitative Loop Model - Build The Model

Answer 58

Be careful about the time period we use for each cycle

Question 59

Uses of The Loop Quantitative Model

Answer 59

1. Identify growth constraint
2. Analyze growth constraint
3. Estimate growth horizon

Question 60

Uses of The Loop Quantitative Model - Identify Growth Constraint

Answer 60

1. Insert Hypothetical Max. Insert hypothetical max for each individual variable, keeping scope limiters in mind
2. Compare Time-Based Return. Compare time-based returns for each variable.
3. Evaluate Elasticity. Evaluate the elasticity for the variable to understand the cost and refine your hypothetical max.
   3.1 Cost elasticity curve, how returns scale with increasing costs (time, people, and money) e.g. Ad loop TV needs more money vs Ad loop Reddit Ads has return immediately, but both of them have a ceiling.

Three questions to evaluate the elasticity
1. If we add more of X in a contained scope/time, how strong are returns? The spike test to understand how it might scale in comparison to other loops.
2. Are there inflection points where returns fundamentally change? Elasticity curves are not always continuous and may have different inflection points.
3. How difficult is it to add more of X? Adding some costs will likely be more difficult than others.

Disagreements occur when multiple people have different mental models of what this curve looks like.

Question 61

Uses of The Loop Quantitative Model - Analyze Growth Constraint

Answer 61

1. Break down, break the constraint down into its more granular pieces
2. Segment, segment the constraint to find outliers
   2.1 Segment by Persona
   2.2 Segment by Acquisition Parameters
   2.3 Segment by landing/entry page
   2.4 Segment by device/platform
   2.5 Segment by Geo/Demo
   2.6 Segment by Loop specific
3. Qualitative, run qualitative research on the constraints and segments to understand why. Why does the difference happen?
   3.1 1:1 interviews
   3.2 Triggered surveys
   3.3 Observations
   3.4 Screen recordings

Why the constraint is the constraint? Is it because of the What, or Who or Why?

Two types of bad friction
1. Physical friction, forms, installing something
2. Cognitive friction, figuring out what something is, calculating the price.

When we find outliers, there’s five different types of common findings. First is on persona, so if we find outliers by segmenting and performer, what it probably means is that different users have different needs. Meaning they have different loops that are driving them, or experiences, or friction to drive the right behavior.

The second is on source, so users behave differently depending on where they come from due to different levels of intent. That might indicate a different experience is needed for those different segments. The third is if we find differences in the landing, what we often find is users behave differently based on the context of how they entered, so we want to look at that context and see how that might be influencing the behavior at that step in the loop. The fourth is on geo, so if people in different geographies have different needs, willingness to pay, or they might have a different value promise at that step in the loop. Then finally on platform, people on different platforms behave differently and need different experiences in order to perform at the same level at that step in the loop.

Question 62

Uses of The Loop Quantitative Model - Estimate Growth Horizon

Answer 62

1. Baseline, Assuming no improvement, what is the baseline Growth Horizon?
2. Hypothetical Max, Assuming max improvements, what is the Growth Horizon?
3. Middle Scenario. What is the likely scenario in the middle? Assuming the improvements I’m most confident in, where is the growth horizon?
4. Recalibrate. How have the actuals performed in comparison to my predictions?

Question 63

Growth Method

Answer 63

A way to improve our growth constraints or growth horizon.

3 Key Questions to Choose A Growth Method
1. What stage is the loop in? (Minimum scope, accelerating, Maximum scope)
2. Where is the constraint?
3. Why is it constrained?

Question 64

Growth Method - Minimum Scope Stage

Answer 64

Strategies to get past minimum scope
1. Narrowing scope, artificially constraining elements of the loop to get past minimum scope.
1.1 By persona
1.2 By geography
1.3 By Category
2. Non-scalable spikes, use non-scalable tactics/strategies to artificially increase part of the loop to get past the minimum scope
2.1 Paid Acquisition
2.2 Promotions/Incentives
2.3 Artificial Scarcity
2.4 Press
2.5 Events
2.6 Faking/Manual
They are the means to an end, not an end itself
3. Leveraging loops of others, leveraging others’ loops is also not a long term sustainable strategy

Question 65

Growth Method - Accelerating Stage -

Answer 65

1. Removing bad friction
   1.1 Physica friction
   1.2 Cognitive friction
2. Adding good friction, good friction is friction when removed might increase loop performance in the short term but decrease it over the long term
3. Increasing throughput, how do we get more of the same ingredients? e.g Generators, Distributors, Receivers and Platforms (Adding platforms that users can participate in so that it expands generators, distributors and receivers, e.g. browsers)
4. Aligning value capture and creation
   4.1. Business Model Alignment, aligning your business model which captures value from customers and how you generate value in your loops
   4.2. Compensation Alignment, aligning how you generate value in your loops, and how you compensate others to distribute the value

Question 66

Growth Method - Maximum Scope Stage - Expanding The Loop

Answer 66

To get past these scope limiters is a three-step process

1. Identify the constraint
2. Expansion strategy
   2.1 Expand to a new type of value generator, distributor or receiver
   2.2 Same type but expand to a different value promise
3. Min Scope, what is the minimum scope of that loop expansion? Can your current loop or strategies get past it?

Question 67

Growth Method - Maximum Scope Stage - Adding New Loops

Answer 67

Loop Sequencing

Current -> Defined Total Addressable Market (TAM) -> WorldWide TAM

1. Identify the constraint
2. Sequence, how do you change 2 or more ingredients in order to sequence to a micro or macro loop?
3. Min Scope, what is the minimum scope of that loop expansion? Can your current loop or strategies get past it?

4 common paths to sequencing PVP
1. Tool to Network, Come for the tool, stay for the network. In order to enable various viral loops and direct network effects.
2. Content to Commerce, leveraging content loops into commerce loops
3. Product Expansion, expanding to new adjacent product lines that open up new loops
4. Use Case Expansion, Expanding to new use cases within the same product to open new loops.

Question 68

Communicating Your Growth Strategy

Answer 68

How do I align individuals, teams and the org?

1. Growth Principles, how do you create actionable principles that align the team on your growth model, constraints and methods in an actionable way
2. Evaluating Growth Principles, all growth principles are not created equally. What are the different attributes you should evaluate your growth principle on?
3. Communicating Your Strategy, How do you build a communication arc to align your strategy up, down and across the org and facilitate productive conversations?

Question 69

Communicating Your Growth Strategy - Growth Principles

Answer 69

Guiding principles that connect your model, constraints and methods to your development process.

OKR don’t tend to communicate why the things on your roadmap are the right things to work on within the broader picture of the company.

4 Steps to Create Your Growth Principles
1. Deconstruct Your Method, What are the sequence of things/assumptions we have to prove for our method to be right/wrong?
2. Codify Analysis, What quantitative or qualitative insights should guide our execution? 1&2 are from top down
3. Understand Roadmap Drivers. What are the unconscious thoughts informing our roadmap? This is to extract the bottom up ideas
4. Align With Values and Mission. How do our company values or mission inform our principles?

Question 70

Communicating Your Growth Strategy - Evaluating Growth Principles

Answer 70

All growth principles are not created equally.

1. Differentiation
   1.1 MMRS (Minimum Market Requirements), Minimum Market Requirements are the basic features that every customer expects and demands for the problem your product is addressing
   1.2 Neutralizers, Neutralizers are features and efforts that mitigate competitive threats
   1.3 Differentiators, differentiators are your product’s and company’s competitive advantage.
   We can assign previous principles to each of these 3 categories, if one does not belong to any, we should deeply question the principle. 50% or more should focus on Differentiators. A good principle invests in differentiation and doesn’t over-invest in MMR or neutrolizers
2. Team Fit. The principles are within the scope of the team’s core competencies, they don’t overlap with other teams and are complementary.
3. Focus. The number and scope of the principles aren’t too wide or too narrow.

Question 71

Communicating Your Growth Strategy - Communicating Your Strategy - Good Communication

Answer 71

Great Communication
1. Frequency, repeating it frequently in multiple channels
2. What vs Why, Focus more on the why vs the what
3. Evidence, clear evidence with qualitative and quantitative analysis with plan to de-risk
4. Structure, Ligic chain that naturally builds on itself, leading the person to your conclusion
5. Resource Constraints, Communicate the constraints, what they can do with those constraints and what they can do if alleviated
6. Audience, Anticipates the audience, what they care about, and how the strategy impacts them
7. Narrative, Packaged in a simple, clear, purpose-filled narrative that aligns with the mission

Question 72

Communicating Your Growth Strategy - Communicating Your Strategy - Structured Narrative

Answer 72

1. Mission, Anchor the communication in the mission and values of the company
2. How do we grow? Present that this is the number one question we need to answer
3. Fastest = Loop, Establish that the fastest growing products grow via loops
4. What A Loop Is. Explain the basic concept of a loop, use examples
5. Our Core Loop, Show what the core loop of your product is
6. Others w/ This Loop, Establish that this loop is not unique and that other successful products also have this loop
7. Our Full Model, Show all of the loops your product has in its full model and that this is how we grow
8. Our Constraint, Identify the constraint in the model that is preventing more growth
9. Constraint Evidence, Establish the evidence that you have that it is the biggest constraint vs other areas.
10. Constraint Cause, Explain what you have found that you think is causing the constraint
11. Suggest Method, Suggest the method and direction that you think is the right solution.
12. Possible Impact. Show what will improve, if the suggested solution ends up being correct.
13. Our Current Resources, Explain what current resources (people, money, time, infrastructure you are working with)
14. What we can do, Show the initiatives that you can accomplish with those resources
15. What Is Possible With More, Show an alternative scenario of what additional things you could accomplish with more resources.
16. Appendix, Anticipate possible questions, other alternatives, or beliefs.

After a few rounds, when we have new info, we can change 2-7
2’. Old World, What your hypothesis for your growth model looked like
3’. What We Worked On, the constraint, the method, and the growth principles you worked on and why
4’. Model Learnings, What new information you learned about your growth model
5’. Constraint Learnings, What you learned about the constraint that you worked on
6’. Method Learnings, What you learned about the growth method that you choose.
7’. Our New World. Propose what you think the new world (growth model) looks like as a result of those learnings.

Question 73

Communicating Your Growth Strategy - Communicating Your Strategy - Considering Audience

Answer 73

4 Considerations to Evaluate Your Audience
1. Cadence
2. Channel
3. Incentives
4. Personas, What personas exist? What would person ask?

For Exec Team, quarterly, quarterly planning presentation, yearly goals + board, CEO + VP Sales + VP Marketing
For Entire Org, Quarterly + Monthly + Ad-Hoc, Company Wiki + Email List, Mission + Simplicity, Vocal Influencers
For Team, Quarterly + Weekly, Quarterly Planning Offsite + Weekly Team Sync, Performance Bonuses, Tech Lead + PM + Desinger

For the team level, we can adjust the 14 -16
14’. Growth Principles, Details out the principles and what they mean to inform the execution process.
15’. Roadmap Initiatives, The same initiatives that fit those principles
16’. Initiative Impact, Possible impact those initiatives will have and measures of success.

Question 74

Communicating Your Growth Strategy - Communicating Your Strategy - Navigating Feedback

Answer 74

Disagreements are inevitable, how you navigate them is key.

The real problem is almost never disagreement about the solution, but rather not understanding or disagreeing with something earlier in the assumption chain.

Question 75

Growth Catalyst

Answer 75

New information that changes an underlying assumption of our growth strategy

Question 76

The relationship between the input and output - Internal Information

Answer 76

1. Internal Info
   1.1 Execution Processes, Information from your execution processes.

1.2 Growth Model, the delta in your actual vs predicted quant model.
1.2.1 Concentration, Are there areas of my growth model producing the majority of the growth?
1.2.2 Loop Execution Factors, Each loop has a common set of execution factors. Each of these execution factors informs areas that we would want to monitor for growth catalysts.
1.2.3 Business Model, What are the key execution factors based on our business model or category?

1.2.3.1 Marketplaces, Supply or Demand constrained? Has the constraint flipped? Have we hit liquidity within a category or market?
1.2.3.2 SaaS (Product Led Growth), Are we lead-constrained or sales-constrained? Has that constraint flipped?
1.2.3.3 SaaS (Sales and Marketing Led Growth), Are we lead-constrained or sales-constrained? Has that constraint flipped?
1.2.3.4 Ecommerce, How are brand (macro loop) metrics performing? How is CAC and payback period trending per channel?
1.2.3.5 Platforms, what are the constraints of our developers? Which things should we own vs open?

1.3 Business, Fundamental changes to your business.
1.3.1 What has happened with new initiatives or launches? New initiatives that look positive at local level, but not at the macro level yet.
1.3.2 Has something hit minimum scope? Has an asset hit minimum scope that would enable something new?
1.3.3 Has something hit maximum scope? Has an asset hit maximum scope that would change how the product grows?
1.3.4 Have there been fundamental resource changes? Team, funding, budget allocation, etc.

Leveraging our quant model
Output did not move & Input did not , our model assumptions are incorrect
Output moved & Input did not move, we are missing a variable that is driving the output of the model. Identifying it will be key
Output moved & Input moved, The relationship between the input and output seems to be correct
Output did not move & Input moved, The relationship between the input and output might be wrong, or some other input is cancelling out the effect.

Question 77

The relationship between the input and output - External Information

Answer 77

2. External Info

2.1 Competition, Competitor moves that change your model
2.1.1 Draw their loops, What is their strategy?
2.1.2 Model changes, What changes are they making to their growth model?
2.1.3 Existing and future customer changes, How do those changes impact the views of your existing and future customers?
2.1.4 React, which of these changes materially matter to you?

2.2 Channels, Channel changes that impact your strategy, more specifically the distribution step

2.3 Market, Market changes that impact your strategy, (Regulation, Economy, Market Trends)

Question 78

Spectrum Of Autonomy

Answer 78

0% -> 100%
Mission Values -> Product Vision -> Target Audience -> Growth Model -> Growth Constraints -> Growth Methods -> Growth Principles -> Priorities -> Ideation -> Execution

Identity teams and individuals where they are and how they can get to the next level, always start from right to left.

Question 79

How To Build Product Quant Model

Answer 79

1. Build Base Model
2. Adding retention/engagement details
3. Adding moving variables
4. Adding cohorts
5. Adding macro loops
6. Adding more details

Not every step is required for all companies, depends on the gap

Question 80

How To Build Product Quant Model - Build Base Model

Answer 80

1. Setup
2. Output
3. Acquisition
4. Retention
5. Monetization
6. Costs
7. Connecting

Question 81

How To Build Product Quant Model - Adding Retention/Engagement Details

Answer 81

1. Churn, What is the churn rate of our starting active user base?
2. Engagement Segments, out of retained users, how do they break down into various engagement segments?
3. Activation + Resurrection, How many users activate out of new registrations? How many users do I resurrect?

Question 82

How To Build Product Quant Model - Adding Moving Variables

Answer 82

How might the conversion variables change over time/cycles/scale?

1. Direction, the direction in each conversion variable will move with more time, cycles or scale.
2. How, how will the variable move over time and in relation to what?
3. Insert, Insert changes to the variable and frag across to find the impact.

Question 83

How To Build Product Quant Model - Adding Cohorts

Answer 83

Apply cohorts for those variables that change quickly and a lot.

Question 84

How To Build Product Quant Model - Adding Macro Loops

Answer 84

Identity the variables that our macro loops affects and adjust the changes

Question 85

How To Build Product Quant Model - Adding More Detail

Answer 85

1. Granularity. More granularity on the specific steps and inputs for certain areas of the model
2. Segmentations
3. Geography
4. Seasonality
5. Daily/Weekly Roll Up, Using a more frequent time period for certain pieces of the model and rolling it up into the monthly cadence.

Only add more details from the areas that have a huge impact.