If You Want to Build a Huge Company, You Must Understand Growth

January 25, 2018

A new year is here, and with the arrival of this new year, there come new year resolutions. Get more users. Add more features. Hire people. Figure out funding. But most of all don’t die.

I want to strongly suggest another item, which I want you to place at the top of that list—growth. In fact, “strongly suggest” isn’t strong enough language. “Strongly suggest” is too polite. Just like most of you when you are thinking about Growth.

So let’s get down to the brass tacks—many of you fledgling startups don’t really understand growth. I’d guess many of you post Series-A companies have ways to go before you do. You know you have problems—you want more users, more traction, more money. So…more features right! More Facebook Ads! More salespeople! More blog posts—content marketing wins, right?

Stop. This is not true Growth. Let’s take a step back.

The thing is, we Canadians are really good at starting companies. We can build them to 50 or 100 people. But then we sell off. Or we fail. Or we become a lifestyle company. So why can’t we build massive companies?

Because we don’t actually understand Growth. We are at least three years behind the Valley on this, and probably more.

What is Growth?

Let me flip that question first—what isn’t growth? First, growth isn’t what you hear at most meetups, mentor sessions, or while sipping lattes in a café on Spadina.

Here is a list, in no particular order, of what growth isn’t:

Clever tricks.
SEO/SEM.
Email marketing.
Landing Page optimization.
Online advertising (I.E. PPC).
Customer acquisition.
Customer retention.
And so on…

Growth isn’t those things—it’s all of them, at different times.

The reality is that there still is no consensus on what is a growth person is, but there is agreement that it is a necessary role to scale a company. Let’s look at three definitions of what a growth person is:

“A growth hacker is not a replacement for a marketer. A growth hacker is not better than a marketer. A growth hacker is just different than a marketer. To use the most succinct definition from Sean’s post, ‘A growth hacker is a person whose true north is growth.'”

“The purpose of growth is to scale the usage of a product that has product-market fit. You do this by building a playbook on how to scale the usage of a product. A playbook can also be called a growth model or a loop.”

“Growth hacking is a process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business.”

Finally, growth was originally coined by Sean Ellis in 2010 here.

Okay, that’s a lot of information. You probably already think you know all of this. Seems reasonable, and you do it alright, ready? Well, that might be wrong.

Growth Won’t Fix Your Product

Let’s start with the big one—don’t bother with growth if you are starting with a product nobody wants or needs.

But wait, you don’t believe that. Maybe you think your product is amazing and you’ve identified the market. Hold one second. Let’s get into product-market fit. Do you really have it? How do you measure it?

I’m going to be honest for a second–at least half of the startups I meet in the Toronto area have no user instrumentation implemented at all, and the other half have poorly implemented Google Analytics, Mixpanel or something similar.

Let go of your ego, and go get the data. Watch your user behaviour, cohort them, and survey them.

Most importantly, measure the retention curve, because retention begets acquisition. If you have a leaky bucket, stop pouring fuel into it. Fix retention, then amplify acquisition. (Note: of course you should still use acquisition to test retention). For a longer read on this, I really encourage you to go read this great article.

Growth Starts At The Top

We have a bit of a problem here in Toronto: most of the established CEOs grew up pre-growth hacking, and they still heavily lean towards traditional marketing. Unless your users are other tech companies, coverage in Techcrunch doesn’t get you anything other than a chance at some visibility to investors.

What makes this even more of a problem is that these CEOs are revered as mentors in the Toronto community, and the traditional views on marketing get paid forward.

We need the current generation of CEOs in Toronto to dig into growth. Which leads to the big question.

Who Should Growth Report To?

The order of who Growth should report to is as follows: CEO, Head of Product, CMO. The last one is a very risky choice. If your CMO carries personal opinions and follows traditional marketing techniques, this often goes against what your growth person should be doing.

They direct the growth person to “make the buttons green,” “stay on brand,” and “use our standard descriptions”—which significantly limits what growth can and should be doing.

Reporting to the Head of Product will work if you have a really good one, but this is a role that is in scarce supply here in Toronto. The reality is your CEO is Head of Product until at least 50-plus employees, and only after you have achieved and validated Product Market Fit should you go hire a Head of Product.

By having the growth person/team report to the CEO, you empower growth throughout the organization to work with marketing, product management, sales, and customer success.

Here is a reality—growth works in sprints, often weekly or bi-weekly. They move and learn fast. No, they aren’t building polished code or getting every word reviewed by marketing. This is OK. They—and you—need to always be learning. This far and away works the best if they report to the CEO and the CEO participates.

Here is a great article on the Independent Model versus the Functional Organizational Model of Growth. Notice that growth doesn’t report to marketing in either model, but they should be working closely together.

Growth Needs The Tools

This one scares me. I can’t count how many startups I’ve spoken with in Toronto who have no instrumentation implemented at all. At best Google Analytics or Mixpanel, but they aren’t used effectively or at all.

Case in point—awhile back, at TechTO I had a talk with a person who had founded a startup. They had funding and a team and had just presented. I asked them, “How do you track user behavior? Segment? Mixpanel? Even Google Analytics?” They looked at me like I was an alien. They’d never heard of any of these tools and didn’t know tracking user behavior was possible.

If this is you, immediately stop what you are doing, and implement one of these programs. Now. Ideally, route the data to a data warehouse of some type. Route your other data there too—Mandrill, User Data, Mailchimp, CRM, etc.

Guess what? You can now run queries to evaluate the entire customer journey.

You should also be thinking about data and user behavior before you launch your first product. Don’t just run surveys and talk to users—often they’ll lie to you.

So You’re Ready To Appoint Someone To Growth?

Now it’s time to devote energy, resources, and possibly hire someone into growth. But we have a problem. There aren’t many growth people in Toronto. But that’s okay, just like with a Product Manager, you can hire someone who has a certain set of traits and they will fill out into the role. Here are some traits of a growth person:

Competitive personality.
Extremely, obsessively analytical.
Makes decisions with facts, not opinion.
Willing to push the limits.
Technical by nature (doesn’t have to be a coder, but SQL will be a must).
Inspired by data – very analytical.

Don’t Take This To Say Marketing Is Dead

There are a lot of articles out there talking about how Traditional Marketing is dead and data-driven marketing is the future.

Don’t believe it. Marketing is just different, but still very necessary. You need creative people. You need to care about what your brand represents. You need to do PR, webinars, events, and more.

This article has been put together with incredible help from Kamil Rextin, Jessica Jekkel, Paige Gerber, and Malay Upadhyay. We have formed a small private growth meetup group where we share war stories, support each other, and look to make a difference in how growth evolves here.

We are extremely bullish on the future of Canadian tech—we live in the best country in the world, so let’s get growing Canada.

Chris Hamoen is the CEO of Account HQ and the former director of growth for Hubba.