Growth Is Not Gross
|Feb 2, 2016|
People talk a lot using popular buzzwords like ‘lean startup’, ‘do things that don’t scale’, ‘growth hacking’ etc.… But they tend to lose sight of the fact that at some point, execution must fuel growth in order to avoid a fatal destiny. GROWTH…
…IS AN ABSOLUTE FOCUS
You must continuously grow your business at all times, this is not a topic for discussion. If you don’t grow, it’s either because you are failing (at finding product-market fit, at executing your sales strategy…) or because something is holding you back. In the latter case, solve that problem/bottleneck and keep growing.
…STARTS WITH TRACKING ONE SINGLE METRIC
To grow, you must focus on only one metric, the one most downstream from your activity and make sure it’s growing week after week; month after month. Airbnb is focusing on bookings, Facebook on daily active users, a SaaS company on monthly recurring revenue. You too should find the downstream metric that is most relevant to your activity.
At the very beginning, we like to observe 10 to 20% weekly compound growth, down to 5–10% as the business takes off and above 15% monthly in SaaS businesses doing $100k MRR for instance.
…IS MEASURED, ACCURATELY
Growth must be measured in a compound way, either weekly or monthly. It has nothing to do with tweaking charts or using cumulative data (this is strictly forbidden and don’t ask why, this is a stupid question). Realize that a 5% compound weekly growth rate means that the ending value after 52 weeks is 12x bigger than the beginning value on day 1. 10% = 129x ! Exponential growth is not an illusion.
Play around with your numbers and see how growth affects your business: http://growth.tlb.org/
…YOU RUN EITHER AFTER OR BEHIND
Growth is something you don’t find and master, it’s something you run either after or behind. And while you‘re doing so, you must be careful not to accumulate financial, technical or operational debt along the way and start scaling as well as organizing.