Developing your startup’s growth strategy is difficult.
It can be mentally and physically exhausting.
If only you had someone to show you the ropes.
To point you in the right direction when it comes to developing your startup’s growth strategy.
In this article, I am going to give you exactly that —
All the things you need to do to ensure that you are on the right path.
Let’s dive right in.
Chapter 1: Product-Market Fit Analysis
A startup growth strategy starts when a business finds a product-market fit (PMF).
This is an essential stage in every startup’s lifecycle.
Early-stage startups need to discover if they’ve found a product-market fit before they get into developing a growth strategy.
As I’ve mentioned before, a business that hasn’t found product-market yet is validating its business idea.
Growth hacking is the stage that comes after PMF.
In an interview he gave to Stanford Business School, Steve Huffman, Co-Founder and CEO at Reddit said that:
“At Reddit, we were growing; despite not knowing anything about our business, knowing a little about our users, not really knowing how to run a business, not having a ton of product sense, being down a lot, we were growing.”
When the demand for your products and services is excessively high, when your user base is growing, when you have people who engage with your products, then you’ve probably found product-market fit.
“Asking if you’ve found product-market fit, is like asking: how do you know when you are in love — trust me, you know.”
Another point of view regarding product-market fit is that:
“Product-market fit is when people sell for you.”
This quote coming from Josh Porter indicates the level of engagement and loyalty people have with your products and services.
Chapter 2: Define your Value Proposition
Many marketers will tell you that you have to define your value proposition on day one.
This is correct — in fact, you have to define your value proposition early on.
However, when you want to develop your business growth strategy, you’d want to take a closer look to your value proposition.
You’d be surprised by the number of early-stage startups (that have found a product-market fit) and many established companies that don’t pay attention to this part.
A marketing strategy or growth strategy from any successful startup should include a clear and rock-solid value proposition.
An example of a great positioning statement is this of Fintech unicorn startup Revolut:
Another excellent value proposition example comes from social media management tool Buffer:
And, another one that comes from freelance website Upwork:
And, one last one that comes from Unbounce:
As I hope it is evident by now, a right growth strategy includes a clearly defined value proposition statement.
Now, you may be wondering:
“I did this when I started my business using the proposition canvas, why should I do it again?”
Let me break up the train of thought here.
From the moment you started your business until you find a product-market fit and have to develop your startup’s growth strategy, you may have made:
- A pivot in your overall strategy and business model
- A shift in what your target audience is
- A significant change in your features
This is why you have to define your value proposition again.
Chapter 3: Design your Customer Avatar (Again)
When running a startup business, you have to know your target audience like the back of your hand.
Every successful startup knows that to take a business to the next level, you have to be very specific as to how the ideal customer for your business is.
Early stage startups make a vital mistake when it comes to defining their target market or their target audience —
They believe that everyone can be their customer.
The following LinkedIn post proves the point I am trying to make:
You have to be very specific as to whom you are trying to reach — as to whom you’d like to communicate your message to.
For example, take a look at this excellent Facebook Ad from shaving and grooming startup Harry’s.
Apparently, Harry’s knows what their target audience is — thus, it is using a plain language that their potential customers will understand and a healthy sense of humour that will resonate with them.
To design your customer avatars, you have to have access to these groups of data:
- Demographic data
- Transactional data
- Behavioural data
- Psychographic data
To get access to this kind of information, you have to start interviewing your current customers.
The more — and the more accurate the data –, the better and the more precise your customer avatars will be.
During the identification process you can use:
- Social media to find common patterns across your audience
- Your current customer base as an audience for your interviews
- Competitor analysis as a tool to retrieve data from your competitors’ audience
- Paid advertising as a way to define your audience characteristics
Chapter 4: Map out your Funnel
If you are a startup founder or marketer, then you’ve probably heard of the word: funnel.
A conversion funnel consists of all the necessary steps that someone has to take from being a visitor, someone who hears about you for the very first time, to a paying customer and promoter of your products and services.
There is no limit as to what funnel you can use for your startup business.
Remember: the funnel that you are going to build has to be aligned with your North Star Metric choice.
There are many types of funnels out there — One of the most popular ones is the PIRATE Funnel.
You can learn more about the PIRATE Funnel here.
No matter the type of funnel, you have to keep in mind that you have to apply the growth process to the whole funnel and not just certain parts of it.
Chapter 5: Choose your North Star Metric
The truth is that your early adopters will let you know what actions are essential to them.
Moreover, these early adopters will inform you about the actions that, if taken, lead to more critical actions.
“We found out that the magic number is three — if they signed up for three different things that we offer, they are way more likely to come to the Content Marketing World.”
Thus, the North Star Metric for this particular occasion could be the number of people who take three different actions on the website.
As you can imagine, defining that key metric can help you form your growth strategy and attain rapid growth based on things that matter.
The reason why most startups fail is that they focus on vanity metrics like:
- Annual Revenue
- Conversion Rate
- Profit Margin
- Number of Leads
Don’t get me wrong — these metrics are important but not as critical as your North Star metric is.
Your startup growth strategy should be based on your North Star Metric and sub-metrics.
According to CB Insights, one of the twenty reasons why startups fail is that they lose focus.
Your North Star Metric could work as a compass that always points you in the right direction.
So, the lesson I’d like to instil here is: choosing your NSM should be an integral part of your growth plan.
To track the KPIs that you’ve come up with based on your North Star Metric, you have to set up a tracking system.
Here are some tools you can use to do that:
- Google Analytics
- Google Tag Manager
Find the ones that fit your needs and set up your tracking system, or have someone else set it up for you.
Let’s move on to the next one.
Chapter 6: Create a Growth Marketing Roadmap
This is one of the most important ones.
According to Growth Marketing Conference, a growth marketing roadmap is:
“A document that helps you communicate your growth strategy over time.”
The growth hacking roadmap is going to help you keep everything in order.
It also helps you get an idea of where you need to focus and how to allocate your time.
Roughly speaking, there are three time horizons you can include in your roadmap:
- What’s Now?
- What’s Next?
- What’s in the Future?
You can tailor this by turning the action items into action groups and allocate them accordingly in the time horizons we mentioned earlier.
Here is a quick example to illustrate how to do that:
There are many tools you can use to create your growth marketing roadmap.
However, especially if you are on a tight budget, I suggest that you use Google Sheets — I am sure it will do the job.
Let’s move on the last chapter.
Chapter 7: Get Prepared for Running Experiments
Designing, running and analysing experiments is an integral part of every growth hacking strategy.
Simply put, you can’t have growth if you don’t test — if you don’t experiment.
The four main elements when it comes to an experiment:
Now, based on your growth plan and your growth roadmap, you have to be prepared for running experiments.
Of course, by collecting data from various touchpoints, you will come up with more experiment ideas —
And, based on your prioritisation structure, you will decide which ones to run and which ones to kill.
Chapter 8: Last Thoughts
Creating a growth plan is the first step towards success for every new startup.
Most startups fail because they don’t take their business growth seriously.
Many successful entrepreneurs were very specific with their startup’s growth strategy.
Of course, creating the strategy and executing it is a different thing.
This will help you grow your business and reach out to investors who will be willing to hear your message.
Above all remember: planning is essential, execution is vital.