|If you want to grow your product’s user base… similar mechanics are at play—durable, scalable growth is driven by “loops”. And each loop is deeply embedded in the “DNA” of your company.|
So today I want to show you 3 things:That your “growth DNA” is the systems that you buildHow these systems create growth loopsA shortlist of exactly which systems you need—because there are 6 of them
But let’s start with an example growth loop.
I’ll deliberately take something boringly simple, but you’ll understand the idea quickly that way:
EXAMPLE: The USG-SEO growth loop
“USG” stands for “user generated content”, and SEO of course stands for organic search traffic. This is a growth loop that’s used by companies like LinkedIn, Reddit, Pinterest, and StackOverflow… and many others.
StackOverflow is a Q&A website for developers. If you do anything with development, it’ll be your bible and holy Source-o-Truth. On StackOverflow people post questions (related to development), and other developers answer them. Simple enough.
Here’s the simple mechanic of how StackOverflow drives growth… Create question — users post (very specific, dev-related) questionsRanking — StackOverflow makes sure that those question pages are perfectly SEO-optimized. Google loves that, and quickly starts ranking the page for it’s specific keywordSEO traffic — other people with the same question find the page in Google, and click on itFunnel — people love how the site answers their question, so they sign up as a userActivation — finally, that new user decides to post another question…
And that completes a cycle.
Visually, it would look something like this:
You wouldn’t really call this “viral growth” because the user doesn’t have to share anything. He’s not recommending the product to his friends. In fact, he can be an anonymous user and doesn’t even know the people that will find his question page in the future.
There’s certainly that viral dynamic here.
And that’s the cool part.
Because even though there is no “viral sharing”, the growth curve of StackOverflow is viral nonetheless. But it’s not “traditional” virality (think: Facebook or Dropbox), but rather it’s some sort of engineered virality.
Now, surely there are more aspects to the success of StackOverflow (spoiler: they have multiple growth loops, that feedback into each other)… but let’s focus on their “growth DNA” for just this part.
What makes this loop work?The right architecture: this is not a hack. There’s a strategy here—a deep connection between the product and the distribution process. All the pieces fit together. Content-heavy sites and Google… are meant to be together <3 Growth engine: low-level implementation matters, too. They bundled proven SEO tactics too, so all pages rank easily, automatically. Their tactical implementation supports the strategy, exactly as it should be.Sales funnel: in a USG-SEO loop, the content is the sales funnel. Once people interact with the site, there’s a frictionless and efficient process to get people signed up as users. Activation: StackOverflow helps you get comfortable posting questions and answers quickly. to perpetuate their loop!: StackOverflow knows that just user count is not enough. They need you to be active: you need to be posting new content…
Now that you’ve seen this, I’m sure you can figure out the growth loop that this Academy drives on:Buy paid ads (growth engine)People join email courseProvide great value, to build trust (sales funnel)Some buy our premium offers:The better we help them, the more they’ll spend with us (= retention system)Part of the revenue goes back into the growth engine… (closes the loop)
Even simpler, but still the same idea.Remember: There’s always a loop.
In the next emails I’ll show you (many) more examples, for more complex growth loops. I’ll also help you pick the growth loop that’s best for your business.
For now, I just want to take this basic knowledge: you need to understand (roughly) what systems are needed to create those loops. Unlocking functional loops is the last step towards product/market-fit, and enabling sustainable growth for your business.
Anyway. Six systems. I call them…
The six pillars of growth
Here they are (not in any particular order):Strategy
Before anything else, you need to have the clarity of general. You need to be the architect of the plan, that can take a “big picture” view, and sketch out a growth marketing plan.Growth Engine
You need a system to drive traffic. That’s inevitable. Different channels have different needs, but there are systematic ways to drive gobs of traffic (e.g. see the SEO example above)Sales funnel
Once you have traffic, you need a dependable process to convert it. You need to build trust and slowly nurture people to the point where they’ll say: “I’d love to work with you some more…”Retention system
New customers need to become activated. StackOverflow needs questions to be posted. Twitter needs tweets. Mailchimp needs emails. The only users that count, are the active ones. Conversion drivers
This is the “oil” that greases everything. Copywriting is the big one, but also product design, branding, and —to some extent— content marketing. You want high conversions, every step of the way.Growth process
That’s the only one we haven’t really spoken about, but we’ll get to that… tomorrow 😉
Suffice to say for now: you need a process to quickly ensemble all the other systems above. We’ll talk about “high-tempo testing” tomorrow. That’s how it’s done…
And did I show you this diagram already?
I did… didn’t I? All of them are there.
And they’re the only ones you’ll ever need.
This is the entire “Universe of Growth”, captured in one simple diagram.
It’s simple… (but not always easy).
A quick recap:
- Stable, durable growth happens through loops
this is THE ONLY WAY to drive sustainable growth
- There are many (25+) sorts of growth loops
for different sorts of businesses. I gave USG-SEO (for StackOverflow) as an example
- Loops can easily be fully automated
You do that by using systems to drive them. This makes it scalable & predictable
- There are only 6 systems
no matter what loop you’re building
Here’s reframe on a reframe (meta!) to round it up:
Finding a growth loop that works profitably equals achieving product/market-fit in the “lean startup” sense of the word.
Once you unlock a profitable growth loop, you unlock the growth phase of your business.
That’s why building these loops into the fabric of your business is… kind of a big deal!