GROWTalks. Grow and be merryby Brandon Chatreau (@kipsmithers)
What does it take to grow a business? Well that depends on what your definition of growth is and what aspects of your business you want to grow. There are many different ways to "grow" your business, whether it's through acquisition of new users, increasing revenues, cutting costs, product improvements, or better user experience. The truth is there isn't one specific answer. I learned this lesson at GROWTalks Montreal.
For those of you that haven't heard of GROWTalks, it is a one-day conference that focuses on how to create simple, actionable metrics, and use them to make better product and marketing decisions. Experts from all over the world come together to share actionable advice on how to improve design, product and customer development, acquisition, retention, and more.
As someone that works at a fairly early stage company, I thought this would be a great learning experience and that the speakers would provide some great advice that I could take back to the team at MBS.
I'm going to give a brief overview of my favorite topics from GROWTalks and share some of my key lessons learned.
First, lets take a look at the list of speakers and their keynote topic:
- Brant Cooper, Author of the Lean Entrepreneur: Customer Development on the Innovation Spectrum
- Greg Isenberg, CoFounder & CEO of fiveby.tv: Million Dollar Product Mistake
- Kate Rutter, CoFounder of LUXr: UX + Lean = Awesome
- Laura Fitton, Inbound Marketing Evangelist @ Hubspot, Customer Acquisition
- Scott Kveton, CEO/Founder of Urban Airship, Scalable and Repeatable Business Models
- Dan Martell, CEO/Founder of Clarity, Art and Science of Growth Hacking
- Alistair Croll, Founder of Solve for Interesting, What Metrics You Need to be Tracking
- David Nault, Entrepreneur in Residence, Quebec Investment Director @ iNovia Capital, What It Really Takes to Close Your Next Round
How could I not be excited with this roster?
So what did I learn? Lets look at my key take-aways based on my favorite speakers:
Million Dollar Product Mistake
I really enjoyed Greg's talk. He used his past experiences to provide us with 8 of the biggest product mistakes he made up to this point in his career. These were his lessons learned from his career of building product-based businesses.
- Good Copywriting is underrated: Compelling copy is key to conversions and also making your brand human, friendly, and fuzzy. Great copy is a huge differentiator that connects your audience to your brand. It has a direct impact on retention and engagement
- Influencers are a big deal: To scale users quickly, onboard relevant communities by targeting influencers who are key players in these communities. The best way to onboard influencers is by building real relationships..through picking up a phone, sending an email, or taking them out for a drink
- How to Sell to Influencers: Getting influencers onboard is a difficult task. It is important to make a compelling offer to influencers. Be sure to make influencers feel special. It is the best way to get them involved.
- Ride Those Waves: New technology opens up opportunities for disruptions. Always questions how outside innovations provide opportunities for you to grow your business.
- Distribution. Distribution, Distribution: Strategic alliances with partners helps create value-add for their user base and helps get traffic and SEO juice. Find your most compelling feature that can be embedded and easily accessible
- Create exclusivity, urgency, and scarcity: Invite-only increases hype and word of mouth. People like to be a part of an exclusive club. Emulate a land grab by providing users the ability to claim land on a first come first serve basis.
- Be Prepared at Conferences: Launching at conferences although good for morale, PR, and setting a date to launch is not always good for the company.
- Become a viral baker: Just as design and development have a process, so should growth hacking. The most beautiful products don't win, it's the one's that are marketing machines from the core.
To be honest Greg could have give a presentation for every one of these lessons learned. Each of them left me wanting more and drove me to do my research afterwards.
Customer Acquisition and Inbound Marketing
For any early stage company, this topic is crucial, especially if the success of your product is end user driven.
Laura's presentation started with this great quote:
"Inbound marketing is a fundamental shift in how we relate to potential customers"
This got my mind spinning because it made so much sense. Marketing is treated as a chore, a lot of it isn't about the quality of the message, but how many people we can mass email with stuff the probably don't need or pay any attention to.
All marketing should be something your target audience (end users) wants to read. It should give them something to dream about, something that makes them think, wow, "they're giving me this information for free? I would totally pay for this!". Anything you send as a communication to your community should be of the utmost relevance. Context is king, and if the information is well timed and easy to find, then your users will actually use and appreciate it.
In addition, it is extremely important to build marketing spaces that allow people to find you, whether it is being active in online communities and forums that are specific to your targeted end user, or being physically present at events your end users frequent; it is crucial to know your audience. This allows you to properly educate and inform them of the benefits of your product or service. Educating and informing your current and potential end users demonstrates that you have a solid understanding of their problems and it builds a relationship that increases the users engagement.
On top of this relationship building and communication, it its important to have a compelling offer and a conversion plan. The offer could be something as simple as giving the user additional invites so that they can get their friends using the product. This adds an element of exclusivity and rewards the end user.
At the end of the day good inbound marketing should be given away for free, but the users should get so much value out of it that they would ultimately be willing to pay for it.
Scalable and Repeatable Business Models
Scott was an amazing speaker and really touched on some great lessons for young companies when it comes to designing a business model for a young company. He literally built a business that sells bacon online. I like to think of it as Bacon-as-a-Service.
Scott's experience provided him with several valuable lessons and built the foundation for his approach to scalable and repeatable business models.
The first lesson was ship fast and see if the market is there. We've all heard of an MVP, but Scott really stressed the importance of getting that first iteration out the door as soon as possible to test your target market. This helps you to validate your idea/product/target market.
Next Scott discussed the importance of setting guidelines before even writing the first line of code for a product. For Urban Airship, Scott and his team laid out the following guidelines:
- Have a business model from day 1
- Launch our MVP in 30 days or less
- Company name must have "Airship" in it
The first two are the most important to me because with the development of a business model you identify your target market, the basic feature set of your MVP, and how you plan on making money. With a launch window of 30 days, the team has something to work towards and has to be held accountable if you miss the deadline, ultimately you get one shot at a first launch... so you better make it count... Execution is key!
When it comes to your business model, Scott stressed the importance of pricing and packaging. New companies should think long and hard about their pricing strategy and how they plan on packaging it up to deliver to their target users. In Scott's case they started with a tiered basic pricing strategy and provided users with a number to call to inquire about premium packages. This allowed Urban Airship to test various premium-pricing strategies with potential clients in real time. Eventually they were able to establish a market standard for the pricing of their enterprise service.
Finally, and the lesson I took as the most important from Scott's talk, was that your customers will tell you what you're supposed to sell them, not the press. At the end of the day it is those who have the problem that will provide you with the most insight in to the solution. Don't listen to the press!
The Art & Science of Growth Hacking/What Metrics You Should be Tracking
Dan & Alistair's talks kind of fit well with one another. At the end of the day it all depends on value-add metrics, metrics that provide critical insights into the progress of product, its growth, and its users. No one gives a shit about how many Twitter followers you have, the number of Facebook friends, page hits, page view... these are all "vanity metrics".
Early stage companies need to identify growth areas through segmenting their user base into cohorts, and from there they can run experiments to learn, measure, test, and try using various tools. These experiments will help define your growth strategies and measure their outcome effectively. After listening to Alistair, I immediately pre-ordered "Lean Analytics". This isn't a plug for the book, proper analysis of key metrics is crucial to the success of any company, early stage or well established. So do yourself a favor and pick up a copy!
What It Takes to Close Your Next Round
This was a great presentation given by one of Montreal's well-known entrepreneurs in residence. David Nault provided valuable advice on how to secure funding and some great insights into the mind of a VC.
There are a few crucial elements that VCs consider when evaluating a company as a potential investment. First things first…VCs need the businesses that can be huge. To give you an idea of what I mean when I say huge lets look at an example. A $100M venture capital fund has a life of 10 years and promises a 20% return to their LPs. Based on these numbers, the return needed is $300M, with an average owner ship of investment companies of 15% and an aggregated exit of $2B! So... I say again: VCs are looking for business that can be HUGE!.
So what do VCs look at when evaluating your company as a potential investment?
It is crucial that early stage companies show that operationally you are a metrics driven organization. You need to know your metrics by heart and be able to demonstrate their value upon request..and you will be requested to talk about them! You also need to be able to demonstrate the growth of these key metrics. How fast is your user base growing? What is your conversion rate? Revenue? Cost per acquisition? Referral rate?, pick you poison, but no matter what, demonstrate growth! VCs love a company that is huge in magnitude... 1000s of enterprise clients, $5 million in revenue, 10 million users... the bigger the better!
The 3 T's – Team, Traction, Technology
Team: Demonstrate your team's knowledge in your industry. If you're making a mobile app, show the VCs that you guys live and breath the mobile industry, you know market statistics, and you have key mobile influencers in your Rolodex. Make sure your team has a story that demonstrates a great track record and you can address the skills your team lacks (if any). Basically let them know that you guys are rock stars that can execute at break neck speeds.
Traction: Demonstrate that your company has traction through sales, end users, and partnerships. Traction shows VCs that there is a market for your company and that the team can execute
Technology: You should demonstrate how your technology gives your company a competitive advantage. What makes you better than the other guys? What do you have that they don't? Is there a barrier to entry with your technology? VCs love proprietary technology, something that you have that no one else has. Pending or approved patents are a great way to entice VCs.
A Sustainable Business Model
This is pretty self-explanatory. If a VC thinks that your business model isn't sustainable... then the idea of a big business goes out the window. Ensure your metrics back up your business model! Growth, Growth, Growth!
Do your homework
Make sure you research your potential VCs extensively. Due diligence goes both ways. You want to make sure that if you are getting involved with a VC firm that they are familiar with your market and provide you with value added individuals to grow your business. Research each of the partner's backgrounds and know all of the funds previous investments. This will help you evaluate whether or not this particular VC fund is a good fit for your company!
Growth happens in a variety of ways and can span across each role in your business. Product Mangers, Marketers/Growth Hackers, UX/UI Designers, Sales & Business Development, and Operations people can all play a part in growing a company..the trick is leveraging everything all of your resources to identify the area in which the most growth exists and designing a strategy to attack that high potential growth area.
I am still trying to process everything I learned at GROWTalks…and in the process I've been testing some of the key take aways at Magnetic Bear Studios... I'll be sure to keep everyone updated on what worked/failed & what I liked/disliked. Thanks for reading!