How to Build a Growth Team in 2019
Launching a growth team is complicated. You have to discover the large-scale problems, like how it aligns with the marketing and product development departments as well as less visible problems i.e how to measure the progress of the department. According to Google Trends, growth is a topic that an increasing number of teams around the world are thinking about right now.
I’ll cover a couple of general topics on Growth. I’ll begin with the definition, and why do you need a growth team in first place, will compare an in-house growth team versus hiring a freelance individual, and cover the difference between functions of various departments.
The data and ideas are taken from interviews of growth team geniuses from Dropbox, Hubspot, and Uber.
Let’s start with Uber first. Its growth team was initiated by Ed Baker back in 2013 when Uber experimented with its department structures and focused on both the drivers and the riders side of the platform.
It started out really small — just a couple of designers, few developers, several product managers, and business analysts. In just a few years the growth organization grew up to a ~300 member team, which is huge, but still isn’t as large as China’s team, peaking at 500+ growth team members. (take a look at a chart below it displays how China’s massive team outperformed the rest of the globe)
Uber changed a lot throughout the following years. It definitely changed a lot of logos and survived several drastic UI redesigns.
If you take a look a the compilation of the leading B2B and B2C companies of the world, most of them had heavily invested and build the growth teams. The rest is simply leveraging the existing project managers and marketers to build growth by joining together into informal GT’s and asking the CEO to invest more into growth teams. So why do you need one?
Unfortunately, this is the way the products are often launched and delivered. There’s a visionary guy, who joins together with the followers to a build some basic features and then shoots a product out to the public to see the reaction. Sometimes this attempt initiates a spark of traction which almost instantly dies away and it very unclear which direction to move on. Then they start talking to their early adopters, create lists of features they request, pick out the most common and re-launch again. The cycle is repeated over and over again up until the moment the team falls apart because of disbelief.
Many of the factors that drive user retention and engagement aren’t always present in the toolbox of the product leaders. They include a list of very important techniques that are rarely considered a core necessity for the initial launch. This includes advertising technology, onboarding, and signup optimization, pricepoint A/B/C testing etc. I’d like to emphasize the adjective “rarely” since there are individuals that seem to know it all but they are singular personalities. Additionally, they cannot pull everything by themselves, and growth is needed to be a part of a root organization of a company.
These development methodologies are organizational systems by themselves and represent the way the organizations are structured and the workflow they follow. Those methodologies are the map of how do we currently work within our companies. Similarly, we can build growth methodologies as well since it’s a scientific method that is applied to business KPI’s.
Just as you might expect the steps are similar to any scientific method.
For example, if the number of your active users is low, you can study your data to see that you have a problem at the very top of your customer acquisition funnel, then make a hypothesis that a combination of a referral model and advertisements might help and start the execution.
This is a better way than simply building in more features that your existing customers ask and hoping to instantly get growth (Build those features in if you think it’s necessary, but don’t do it for the sake of growth)
Back in the early days, there were no teams. You could meet lone individuals who could mix some ideas according to certain workflows and tactics in one product. Those individuals sometimes would call themselves growth hackers. As they became more and profound at this, it became clear that working on more complex products, required them to organize a group of people to create something impressive.
It’s a team sport in other words, and to apply science to your KPIs you need team members with different specialties (Marketing, Data, Operations), but with a great vision and feel for growth.
You may be wondering what are is the prefix “growth” mean for different roles.
Here are some of the Growth roles:
Depending on a task you’re trying to solve, teams may include different members. Let’s take new user acquisition and SEO. For the first one, you might want to focus on increasing your signup conversions which require more of an engineering approach to create forms to capture users attention, a designer to create eye-catching elements and a data analysts to keep a look on metrics. If you focus on SEO, a designer should be replaced by the Growth Marketer.
The ultimate goal is to determine what exactly you are dealing with and then construct your team according to the needs, but not interfere with the mission of other teams in your company.
A traditional way of structuring growth teams is to matrix the growth team member to its functional vertical. For example, a Growth engineer reports to a head of Growth engineering which reports to a VP of engineering. The same goes for all other company functions.
When I say cross-functional teams, I don’t mean teams that have a weekly Friday stand-up meeting. They should work together, share the same goal and replicate the same process over and over again.
This type of structure was popular a few years back. It means that your Growth Team is set up as a separate business in line with, Marketing, Operations, and Design. The obvious advantage is an amount of freedom inside the team, but having conflicts with other teams if a serious drawback.
Sometimes cross-functional and independent team structure can be mixed to create hybrid models to fit better within a general company structure.
It seems that most of up and coming brands are obsessed with having a growth team. They don’t care about the configuration or the necessity of it. However, the first thing they must focus on is figuring out the issues they are trying to solve that will have the biggest impact on Growth. The next step is analyzing your KPI’s and building an execution plan. After the problematic area is highlighted then you begin staffing it in.
At what point marketing ends and growth begins
There is a lot going on when it comes to marketing and growth.
The main focus of a Product team is enhancing core value by perfecting a product market fit. Growth teams concentrate on getting as many people to experience the companies essential values as possible.
The next thing you might be wondering is who owns growth. As usual, there are two extreme models — GAAS and Full Ownership. But those two can be mixed and matched in any sequence.
In the Growth-as-a-service model, the team doesn’t own any of the features or any code in fact. You hire them to work on the most valuable part of the product. They analyze and make certain corrections, ship out regular improvements and move to the next part. The problem here is for the guest team to stay nimble and not own every part of the product because of the risk of getting stuck maintaining rather than growing.
Full ownership is the second extreme. It means the growth team owns every possible area where amount matters. It can be new user acquisition, advertisements, onboarding flow or any other critical area.
It’s completely up to you which model to pick. For example, Uber started with GAAS and then gradually started owning more and more.
So you staffed up your growth team. What should it focus on? Since growth marketing team should focus on different areas than a regular marketing team, they should use different tools and methods. There are 3 values you should try to map. How much effort does it take to achieve results? Success likelihood and how much will a victory in one area bump up the whole growth? Since growth is basically an experiment it should always start with defining a correct priority keeping these three values in mind. Over time your team will become more and more efficient with this.
A simple example is to admire a project where there is a +50% increase in a single feature valuable for 0.05% of the overall user base, but don’t pay attention to a 5% increase that is valuable to 50% user base, which is of course much more important.
Another example is to prefer focus on projects that require large amounts of effort over the low effort projects since there is a risk that you will overvalue your chances of success
Reach is often underestimated. Most product teams concentrate on getting their main product experience perfect to satisfy their core users since they are the most important from a financial standpoint. However, the problem is that they are only a small slice of your overall active user base. Of course, it depends on what do you mean by core users and how you define them, but generally, they make up something between 5 and 20% of all active users. If we talk about platforms that require users to generate content to sustain the ecosystem then this number will only reach 3–4%. So if you focus more on active users, rather than on hardcore ones you might end up with 20 times more audience reach.
There is another category — registered users. Statistics show that only 15–45% of your registered users are active, with the higher number being inherent to unicorns as Uber or FB. A realistic number is 20% because there are still lots of users who run the product once and forget about it.
This happens because companies don’t understand what is it exactly that makes a user active. If you know what it takes then it’s a good practice to highlight this during onboarding.
Reach is a much wider topic than it appears at first. You have to keep in mind that there are people who interact with your product daily but never register. A good example of this is Google Drive or Dropbox with its shared links. They get most of their traffic from it — a perfect place to start optimizing.
Airbnb’s growth team recently shared this document that displays how they practice growth. They highlighted every touchpoint with non-registered users. Out of those 6, the referral strategy works best, with Airbnb claiming to make 6 digit figures on it alone. This strategy has benefits not only because of new user traffic, but it brings social proof alongside and improves the quality of traffic.
If you think about launching a growth team at your organization should start with the evaluation. There is no single right way to do this but there are three common elements of consideration:
Does your leadership team understand “growth”? Or maybe your head of the company forces it without VP’s agreement?
What are the core elements of your company? (engineering, design, product development, operations etc.) Whatever your core element is always promote extreme experiments on SMALL user groups.
Which ownership model works best for your organization? In my opinion, having a dedicated team at your location that works on growing outside your active user base is great.
It often happens that you may stumble upon disagreements while initiating a growth team. There may be various reasons such as old ideologies that reward huge codenamed projects more than numerous little changes that evolve the business.
Remember growth teams require support from the root of the company and it starts with the basic understanding that product growth has drastically changed in the last decade and that the concept of “Build it and they’ll come” doesn’t work anymore.
Originally published at cudato.com on November 21, 2018.
How to Build a Growth Team in 2019
Research & References of How to Build a Growth Team in 2019|A&C Accounting And Tax Services