By Nikolas Vogt
Ex-Growth Marketing Lead, Google | Founder, Growth Academy | Guest speaker, Santa Clara University
We decided to take a different angle than usual for discussing growth strategy insights in this article. With a selection of growth hacking related graphs and visuals we want to highlight different thought leaders’ growth insights. Explore our top picks of the month:
Applying growth strategy implies holistic and growth-oriented user experiences. In order to deliver such experiences companies have to move away from classical silo org structures and have to make sure that customer facing functions (e.g. marketing, sales, and support) and product functions (e.g. product management, engineering, and analytics) work closer together.
This cross-functional collaboration can be compared to a reversed prism: previously siloed teams bundle their efforts to deliver experiences that delight and grow the user base. Since most of these experiences involve product changes people also refer to it as product-led growth (see article by Product-led Collective). Digital professionals with less exposure to growth strategy often believe that cross-functional efforts are too slow, expensive, and ineffective. But if applied to the right problem they usually pay off later through lowered acquisition cost and increased customer lifetime value. For example, cross-functional projects aiming at the alignment of marketing messaging and in-product onboarding can substantially lower acquisition cost and increase retention.
Successful growth organizations, like Spotify or Skyscanner, usually have a different understanding of leadership and alignment than more traditional corporates. Spotify looks at leadership of agile growth teams in four different ways:
The quadrant in the lower left, low autonomy and low alignment, is basically a micro-management culture. Low autonomy and high alignment is characterized by leaders who tell folks what to solve, and how to solve it (for example simply instructing their team that they should “build a bridge to cross the river”). Moving to the lower right, high autonomy and low alignment means that basically everyone does what they want and leaders are helpless. The goal is to be the upper right, high autonomy paired with high alignment, where leaders focus on identifying problems that have to be solved, but let the teams do the solving part, as well as come up with solutions. Similarly to coaches telling their team “why they have to cross the river, but not that they have to build a bridge”. With that guidance motivated growth teams collaborate and find solutions.
The only potential downside here is that there isn’t much room for standardization so you need processes that enable the sharing of knowledge and best practices. This basically creates an informal-but-natural convergence of processes and tools used. The ideal result is enough flexibility to get things done, without teams reinventing the wheel.
Spotify’s growth team definitely pays attention when it comes to developing a growth culture and structuring their growth teams. Do you want to learn more on growth topics like this? Join Growth Academy to learn more about growth strategies to acquire and retain customers from leaders at Google, Amazon, TikTok, Spotify, Skyscanner, and more.
A recent article by Microsoft’s Head of Consulting talks about that in the future “the most important skill is the ability to connect the dots”. He stresses the combinatorial nature of creativity and defines it as “the ability to tap into our ‘inner’ pool of resources – knowledge, insight, information, and inspiration that we’ve accumulated over the years.”
This insight is very important when it comes to growth strategy. Based on previous discussions above, the mere existence of knowledge and experience in silos or individuals does not suffice to solve today’s growth challenges effectively. Growth companies have to provide the right organizational ingredients that allow for new combinations of knowledge and experiences.
This means establishing an agile growth culture with cross-functional collaboration and leadership as coaches become necessary hygiene factor for creative problem solving. Since there are no copy-paste-blueprints or silver bullets when it comes to growth strategies, teams have to work closely together across functions to come up with creative solutions. To enable the creativity required to solve growth problems at scale modern tech companies usually create agile team structures and institutional mechanisms for knowledge exchange (e.g. cross-functional meetings and targets, or design thinking methods) but also foster informal growth communities and culture.
Similar to our previous article about growth lessons learned in Silicon Valley, the former Chief Product Officer of Netflix points out the following: “If you have 70% of the data, it’s time to make a decision.” Such a ‘speed over perfection’ mantra seems counterintuitive at first since traditional companies, especially the ones from Europe, often aim for perfection before anything gets launched.
It makes more sense once you have learned about the dominant characteristics of most digital products. One big advantage of internet and technology products is that you can easily collect real customer data, which allows you to rapidly optimize the product experience and even product-market-fit right after launch.
Additionally, compared to traditional products, technology products usually have inherent network effects, i.e. the individual value of a product increases the more customers are using it. Once these network effects kick in, they exponentially attract customers and therefore often create winner-takes-all situations, which also means high barriers to entry once a player reaches a greater size. This does not mean you cannot enter this market anymore, but you should focus on a slightly different segment than the dominant player. Looking at the graph above you can see how WhatsApp generated tremendous growth without being necessarily the best product in the market. The one thing they did well was solving a key problem (free texts!) before others and on a global scale. Also TikTok was able to penetrate a social market that most people thought was already taken. But they were able to find their 'social entertainment' niche first and rigorously applied growth strategies to expand internationally.
The goal of this article is to show you the importance of systematic growth approaches for your business. These curated graphs and articles are just the tip of the iceberg when it comes to growth strategy. Join Growth Academy to learn strategies to acquire and retain customers from growth leaders at Google, Amazon, TikTok, Spotify, Skyscanner, and more.