The Secrets to Building a High Growth Company (Interview)
Morgan Brown is the co-author of Growth Engines and Hacking Growth (a new book coming Spring 2017). While he’s now serving as COO at Inman, he’s spent the last few years consulting with businesses to build growth teams, refine their “must-have” products, and create growth engines that repeatedly drive sales. You can find him sharing his 15 years’ worth of startup experience on Twitter and Snapchat (@morganb180).
Morgan understands the nitty-gritty details of why some businesses succeed and others ultimately fail. We decided to sit down with him and see if we could learn a few of his secrets.
He didn’t disappoint.
Q&A with Morgan Brown, co-author of Growth Engines and Hacking Growth
1. In some of your writing, you mention how successful businesses are rejecting the “traditional marketing playbook.” What is that?
The traditional marketing playbook has a long cycle time. Take Procter and Gamble, the company that makes your toothpaste and your toilet paper, or any company with a physical good. They do lots of market research, specify a product, get the product manufactured, and send it to retail distributors.
The product team is really focused on getting the product and building it to meet the needs detailed in marketing’s research, and then marketing basically has to take whatever product they decided to build and promote it. The sales data comes back and then they go through this whole new product iteration cycle to introduce Colgate Plus Cavity Control or whatever.
It’s very silo’d, with a very long lag time. You can only optimize once a quarter or once a year.
This paradigm has also carried over to other forms of marketing, even those without physical constraints. So companies write big digital marketing strategies and update them once every six months.
2. In other words, the traditional marketing playbook is slow. How are the world’s fastest growing companies like Uber, Evernote, and Snapchat approaching marketing differently?
Today, what you’re seeing with startups is instant data. In real-time we can see what users are doing with apps, what they’re doing on the web, what’s working, and what’s not working. It creates outsized advantages for companies that can move so much faster.
If you’re running one or two A/B tests a month compared to a company running 100 per week, it’s exponentially slower learning. Even companies with physical products are starting to figure this out. Tesla doesn’t wait to ship new features to cars with a new model year (heck, the cars don’t have model years), they just push a software update.
3. So basically, traditional marketing is out and growth hacking is in. What do companies have to do to adopt this new approach of building “growth engines” that repeatedly drive sales?
The building blocks for growth are: one, a must-have product; two, distribution and acquisition strategies for that product and finally, a rapid experimentation process to improve performance based on learning.
4. Got it. Can you tell us more about building a must-have product?
A great product is the foundation of growth. Hands down. Without one, any marketing effort or any growth effort is unsustainable. Getting the product right is all about customer development, and measuring the stuff that really matters.
5. How should companies measure what really matters?
In the very early stages I think you can use qualitative feedback. Sean Ellis has this idea of a must-have product score, which is essentially your response to a survey question of how disappointed would you be if this product didn’t exist anymore. If 40% of the people you survey say that they’d be extremely disappointed if this product disappeared, you have some user passion. That’s an early signal that you’re headed in the right direction.
A high net promoter score can also suggest a must-have product. Sam Altman from Y Combinator wrote a blog post a few weeks ago called Before Growth. He said, before you start scaling growth, you basically want to know whether people love your product enough to tell someone else about it. If they do, then you have something there. If they don’t, you don’t really have that must-have product. That’s a binary way to figure it out.
Ultimately as you get bigger, the quantitative way to know whether you have a must-have product is retention. If you have nice, high, stable retention rates of your audience over time, then you have a product that people can’t live without. Stable retention is the foundation that the rest of growth builds off.
6. Okay, awesome. What about the distribution and acquisition strategies for the must-have product? How can companies unlock that growth?
There’s a whole bunch of different strategies and channels. Different products have different strengths or different channels make sense for them. As you go through the distribution discovery process, it’s about:
- Finding levers in your product that drive growth and natural loops of product use that can bring in new users
- Finding distribution channels that work and optimizing those.
- Finding what channels don’t work and eliminating those.
- Repeating that process over and over again to build up a nice acquisition funnel that drives high-value users into your product.
There are a few things that you can always do that make sense:
- Search engine optimization. If there is known demand for a problem, being good at search is usually a good idea.
- Email marketing is really core to retention.
- Distribution across existing platforms. You have these mega platforms online with hundreds of millions of people on them. Leverage these existing large audiences.
- Paid acquisition is a key component if you have a product that is revenue-generating.
- Get the users that love you to invite more people. Even if it’s not “viral growth,” every referred user basically lowers the overall cost of acquiring users.
7. Last question, what are the key elements to building a whole organization focused on growth?
First, have someone in a leadership position really own it and champion it. I think growth starts from the top down. It has to be an organizational priority from the C level. The CEO, cofounders, whomever, have to make growth an organizational priority. I think you see more and more companies both big and small appoint someone as the chief growth officer.
Second, you want to have a growth team structure. Whether it sits in the product organization, its own group, or an ad hoc team that comes together from different departments, you want some structure that breaks down the silos. You’re leveraging your entire company’s capabilities to drive this.
Then, you need a process. Make sure that you’re constantly working on the core metrics that drive growth for you.
Finally, understand what the core metrics are that drive growth for your company. Having those “north star” metrics nailed down and having the company understand what those are and who owns them and why they’re important and how you move them, all of that’s really critical to building a growth culture.
Now it’s your turn. What have been the key steps to growth in your business? Do you have any follow up questions for Morgan? Let us know in the comments.
About the Author: Jessie Gould is a content strategist who helps small businesses attract customers through note-worthy copy. You can find her blogging about small business success at Connection-Theory.com.