Foundations And Frameworks For Driving Sustainable Growth
Greylock Investor Mike Duboe, Reforge CEO Brian Balfour, and Mulesoft SVP of Product Shaun Clowes discuss developing a healthy and successful growth strategy.
Growth is fundamental to a company’s survival. To compete in today’s crowded business environment, it is vital for founders to implement powerful strategies that drive healthy and sustainable growth. Successful growth strategies start with a methodical framework tailored to your product and target audience that will increase your user base and activation rate.
This episode of Greymatter is the first in a mini-series of growth discussions featuring Greylock investor Mike Duboe. In this discussion Reforge Founder and CEO Brian Balfour, and Mulesoft SVP of Product Shaun Clowes chat with Mike about frameworks and foundational concepts needed to develop a successful growth strategy. The three growth/product leaders discuss the skills and traits to look for in a startup’s first growth hire, why growth should be a cross-functional discipline vs a set of channels or tactics, how to assess healthy vs unhealthy growth, conceptualizing loops vs funnels, and the applicability of B2C growth concepts in B2B organizations.
Prior to joining Greylock, Mike Duboe created, scaled, and led cross-functional growth organizations from Series A through IPO across a span of businesses including consumer marketplaces, retail/online commerce platforms, and social payments networks. His most recent stint before Greylock was leading the Stitch Fix growth team through IPO, and he has advised a number of high-growth startups and VC portfolio companies on growth.
Brian Balfour is Founder and CEO of Reforge. Reforge offers selective growth-focused programs for experienced professionals in marketing, product, data, and engineering. Before Reforge, Balfour was VP Growth at HubSpot. Prior, he was an EIR at Trinity Ventures and founder of Boundless Learning, acquired by Valore, and Viximo, acquired by Tapjoy. Balfour advises companies including Blue Bottle Coffee, Gametime, Lumoid, GrabCAD, and Help Scout on their company growth and customer acquisition.
Shaun Clowes is a long time technologist, executive, advisor, and investor. Prior to Mulesoft, Clowes was the Chief Product Officer at Metromile. Previously, Clowes was the Head of Growth at Atlassian building the industry’s first B2B Growth team. He advises companies on product management growth and created the Reforge Retention and Engagement Program, a comprehensive program covering every aspect of retention including activation, engagement, resurrection, and churn.
Below are key quotes from the discussion.
Skills And Traits Of Your First Growth Hire
“A first growth hire needs to be a very intellectually curious type of product person who can scout across all of the different surface areas of the product experience including the go-to market, the acquisition funnel, the activation funnel, and the product experiences themselves, to see where users are going missing. The hire must be able to see where the value is not being successfully captured by users.
Your first growth hire is also very data oriented and have a tendency to not be willing to stay inside a box because successful growth hires don’t look at one specific thing, instead they look at owning the overall experience. They have a tendency to be change agents in terms of if, if they can see that the problem is somewhere that isn’t directly inside their scope, then they will be out there inside the company pounding the pavement, and beating the drum in order to change that.“ — Shaun Clowes
“If the starting point of the conversation is about a person and not a team, it’s a set up for failure. One person just can’t do that much. Ultimately at the end of the day you need this hybrid of skillsets to truly move the needle, and so that’s probably one of the top three most common things that we see people set up for failure.
The second thing is that growth is either set up under purely as the marketing function rather than the product function, and the growth hires get siloed away from tech, and product, and design resources. The third mistake we see is that there’s no CEO buy-in around ‘this is the time that we need to go do this’ or ‘we need to establish this’. The conversation has to be around a team, and not a person, otherwise it’s most likely gonna tank.“ — Brian Balfour
Growth Teams Within Organizations
“I view growth as a cross-functional discipline, not as a function in the organization itself. All successful growth teams tend to be a mixture of product engineering, design, and marketing skillsets blended into one. Growth teams are more likely to fail when they are established as their own dedicated function vs a cross-functional team.
Growth to me is a combination of both looking at growth from different strategic lenses, such as growth loops mixed with a different set of processes or problem-solving tools. One of the main tools is around experimentation and the scientific method that combine to form the growth discipline.
If you are taking a bet as a product, or marketing, or any professional, it is to your advantage to understand the different types of problems that you might encounter in building and growing a software product, and the sets of tools that fit with that problem. You will be a much more versatile and valuable professional and leader, if you do understand sort of that range of the tool belt.“ — Brian Balfour
Healthy Versus Unhealthy Growth
“You cannot grow a product that is not a perfect fit for some identifiable group of people. You can’t have one without the other. But similarly, product fit doesn’t just cause growth by itself. You need to build in loops that enable it to successfully grow.” — Shaun Clowes
“I think an interesting exercise for any leader is to gather four or five people in a room, give them all a blank piece of paper, and ask them the question, “How does our product grow?” Have them privately draw or map out how they think the product grows and then have everybody put it on the whiteboard and see what it looks like. 9 times out of 10 you end up with very different pictures. What that means is that everybody is working from different mental models of how they think about how the business grows. The problem is that if this is the starting point, then any of the conversations that happen thereafter are going to be people talking a foreign language to each other, and they don’t even realize it. Discussions around things like prioritization, and what’s going to influence growth the most, and all of these types of things are just incredibly difficult to have, unless everybody’s working from the same starting point about how does your product grows.
The interesting thing is that in product, we tend to have tools or mechanisms that define our target audience, what problem we are solving, and what is our value prop in solution. When it comes to the topic of growth and how does our product grow, typically the answer is ‘we’re just going to try a bunch of tactics and whatever works we’ll keep doing that.’ This is not a model for how products or companies sustain growth. A model is really just about answering that question, ‘how does your product grow.’“ — Brian Balfour
Applying B2C Growth Tactics In B2B
“It is more often right to utilize B2C growth tactics than it is wrong. People just don’t naturally lean into this practice, and it’s because there are extra dynamics in the B2B space that make it seem less likely to be successful. The first is sample size. You tend to have much lower volume, so it can be difficult to know how to use these techniques in much lower volume funnels.
The second is, do you often have humans in the loop? Some companies have humans whose job it is to effectively paper over the ugly parts of your product experience. This leads to paying less attention to the smaller parts of the product experience that are friction full, because the system is set up to make it very hard for you to even see that they exist.
When you step back and think about it in a different way, once you take away all of those support networks, and the safety net that comes from the B2B context, absolutely the B2C growth techniques work. At the end of the day, the person on the other end of your software is a human. Any assumption you have that that person is going to be more tolerant of painful experiences is by definition flawed. The consumerization of IT is 100% coming in full force to the enterprise. People assume that just because I’m at work I have a higher tolerance for torture.“ — Shaun Clowes
Paid Marketing
“Often, paid marketing is used as a need to find quick wins at the start. For many businesses that are well resourced with VC funding, it’s easy to just go turn on an acquisition channel, like Facebook, which is fairly automated these days and start driving volume from there. I think too often companies go too far down this path, and it can actually mask underlying health of growth.
It is rare that a company sustains differentiation based on paid marketing in the long run. In general, healthy businesses will use paid marketing as an accelerant vs a crutch“ — Mike Duboe
“At Reforge, we believe viewing things from a product centered viewpoint is the best starting point for anybody. That being said, we do view anything around paid acquisition or paid marketing as being an amplifier. So paid marketing would be a loop within your model, versus it being the core of the model. We’ve seen this time and time again, when paid marketing is the core of the model, it just ends up saturating and hitting the ceiling very quickly. Also, it’s vital to consider and anticipating where this ceiling is at through a number of techniques such as burst testing for example.“ — Brian Balfour
“You have to be really careful, channel saturation is a thing. Every given channel that you’re in, which isn’t yours, is only ever going to go in one direction, and that gets more expensive and usually exponentially so. You need to spend years, time, and thought to build sustainable growth. It’s worth it, but it does not happen instantaneously and if you delay starting a sustainable strategy, you won’t get the fruits of that labor. , of that, it’s a bit like, you know, you gotta plant the seed, and let it grow in order to successfully get there, and when, and when instead you’re at end of quarter using paid channels or, or finding new pay channels, or whatever, then the organization doesn’t get the time and space to focus on truly doing that.“ — Shaun Clowes
Loops VS Funnels
“The concept of growth loops has been popularized in part by Reforge and has helped various companies change from a linear to exponential trajectory. However, the concept of funnels are deeply embedded in how companies think, operate, and organize. For example, mature companies might have the acquisition team under marketing and retention under core product — which can lead to suboptimal or narrow solutions to broader problems. I think the concept of loops is very powerful and has forced teams to rethink [the funnel construct] to be a much more integrated approach to growth.“ — Mike Duboe
“I think in most organizations that are structured around funnels, if they take a small team and try to look at things through this lens, what they’ll first find is that there are loops that exist within the product where the final step or one step might not be fully connected, or that there’s a piece that isn’t fully optimized. That is the result of having the teams siloed and structured in this funnel format in that there isn’t anyone thinking about the connection of what is coming out the other end of this product or how is it being reinvested to generate more users.
That tends to be the starting point in an opportunity to find low-hanging fruit. So if you do take the small team that is more of a mixture of product technology in a marketing focus and start to look at it through this lens, you tend to find these spots where it’s like, ‘Oh we have this, but we just haven’t connected this piece, but if we just insert that one piece, all of a sudden we have the start of a loop.’
The second thing that can naturally be found is looking at product and first observing the natural behaviors of what your users are already doing, and then productizing it in a loop format. This not only delivers value to the user, amplifies what they are already doing, and makes the product more frictionless, but it also delivers value to our business as well.” — Brian Balfour
The Importance Of Early Stage Analytics
“Defining and creating new loops rests upon the ability to lean both qualitatively and quantitatively about what is happening in a product right now. One of the biggest mistakes or missteps I see in early stage companies is around analytics. There is a well understood concept of tech debt — yet analytics debt is equally a common problem. Many teams assume that simply going and buying Amplitude or Mixpanel solves their problems in analytics. Data visualization is the tip of the iceberg to a broader problem of logging & instrumentation.
I was fortunate to spend some time with Facebook’s Alex Schultz earlier in my career in growth; he said there was an arc of how teams treated data, with four stages. First was not having any data at all, just flying blind. Two was starting to have data but not trusting it. Three was having data, trusting it, but not using it properly and completely. For is everything working harmoniously. It’s rare for companies to make it to stage four.“ — Mike Duboe
“You literally cannot build a growth organization without really clear and really good data and instrumentation because everything you build on top of that is uncertain. If you don’t have very good instrumentation, one thing you can begin with is qualitative data, while you are busy doing quantitative.“ — Shaun Clowes
When talking about loops, there’s this wheel of death loop going on, where if you’re not investing enough in the data infrastructure, then people either lose confidence in the data, or there’s too much friction to get to the data. As a result they don’t use the data, which leads to lower investment in the data, and then it just spins to a point where you’ve got this thing sitting around that’s absolutely useless.
A lot of times, people view growth as projects. ‘We’re just going to do this project, it’s going to be three months long, and it’s done.’ This mindset is incorrect, growth has to be a core part of your product process, and you have to put the right incentive mechanisms in place, to make sure to reinforce it, and support it over time.“ — Brian Balfour
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