This post is the sixth in a series of ten posts about the 10 key reasons your consumer startup will succeed.
I speak with hundreds of aspiring consumer entrepreneurs and review thousands of executive summaries and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. In this series of 10 blog posts, I will list the top 10 reasons consumer startups succeed. Note that all seem necessary, but none on their own are sufficient.
Growth is the lifeblood of the business for early-stage consumer startups. Viral marketing, or unlocking the potential of your product to sell itself and acquire new customers for little or no cost, is critical to the success of hyper-growth consumer companies. Yet it’s very hard to do in a sustainable way. That’s why at Maven we spend so much time focused on growth and why we have recruited a Growth Hacker Hall of Fame to join us as mentors.
You can find plenty of information available on the basics of growth metrics and definitions. In general, the five key elements of the growth funnel are acquisition, activation, retention, referral, and revenue. At the earliest stages, we focus our companies on two main priorities: acquisition (top line growth) and retention (engagement). If you can acquire massive numbers of new customers, and they stick around and engage with your product, you will have the chance to optimize your activation flow and referral methods to add fuel to the fire. Make no mistake– we care deeply about building companies with a sustainable revenue model, we just don’t focus on that in the early stages. There’s a right time to “turn on” the revenue for the type of consumer startups we help to build, and we’ll discuss that in a later post.
These three steps are the foundation to finding successful, sustainable growth strategies for your business:
Track everything: true successful growth marketers are very data-driven. Growth hacking is not a trick. If you “trick” someone to use your product, it’s likely they won’t stick around. Setup the proper analytics, identify your key metrics, and be diligent in reviewing the data.
Study what’s proven, but still be creative: there is no silver bullet. There is no “one growth tip that works for every business.” Thankfully, though, there is now a lot of content– from online blog posts to workshops and conferences– sharing what has been successful at other startups. Start with those proven strategies! Adapt them to your business and test the results. But, you will have to innovate to remain successful. Think creatively about new growth vehicles and channels which are special to your specific business.
Focus on what’s working: once you’ve established a solid base of core active users, study them. Reach out and talk to them. You may see new customers sign up and quickly leave, and the tendency can be to try and recruit them back, working to fix their issues. This can be a big waste of time. Rather, focus on what’s working. Find out what your core base loves, and make the product even better for them. They will use it more, and are more likely to tell their friends, helping to unlock new viral growth channels.
Your goal in following these steps is organic, viral growth. However, sometimes you might need to kick start viral growth with some paid marketing. Be careful with this; one of the dangers of paid marketing is getting hooked. Spending money to acquire customers can be addicting, and like any addiction, it can be deadly to the health of your business.