Quick note: We recently announced the next Growth Series, an 8-week program for designed for experienced practitioners in growth (past participants came from Dropbox, Google, LinkedIn, Evernote, Airbnb, Soundcloud, Facebook, and many other companies). It's by application only, and if interested, you can learn more here.
In the early days of building the growth team at HubSpot, we spent a few months optimizing onboarding in our product and produced some meaningful improvements. As the team expanded, I wanted to dedicate a full-time team to onboarding, but I got a few versions of the following questions from other executives:
“Why do you want to put a full-time team on that? I thought you guys were done optimizing onboarding?”
The mentality of “done” is the exact opposite of the mentality of high performance growth teams. Change is constant. Change is difficult. Not adapting to change is fatal.
The point is a critical one for any company and is the foundation for this growth principle. By nature, humans resist change because adapting can be hard and it’s usually a lot of work. We like to think of things as “done” so we can check them off our to-do list, and move on to the next thing.
Any great growth team is ready for and responsive to change, nimble, and always, always adapting. They go beyond adapting, and truly embrace change building their team and process around it. Let's talk about why…
Systematic growth is iterative.
There are four main reasons that this principle is important:
- Product Evolution
- Audience Shift
- Channel Change
- Tactic Fatigue
And constant change is the common thread that ties them all together.
We must be aware of and accept of the constancy of change, integrate it into our culture and empower our teams to always be adapting. If we don’t, our product’s growth will inevitably stall at some point in time. If instead we evolve our growth efforts in sync with the changes happening across product, audience, channels and tactics, we will increase our chances of driving sustainable growth and operate by this principle.
Reason One: Product Is Always Evolving
We should be learning constantly. For product, this means constantly getting better at delivering more of the core value by refining existing features and building new ones based on our learnings. If we don’t, we risk stagnation and being beaten by competitors who are constantly evolving to meet the needs of the market.
As we refine and change our product, the way our users enter, engage, and exit the product will evolve too, which ultimately affects how we approach growth.
Think about how interaction with Facebook’s core value has transformed over the years. In the beginning, users updated their profiles, scrolled through their list of friends, clicked through to profiles and left messages on friends’ walls.
But then, when the company added the newsfeed, user behavior changed in a big way, evolving from comments to the Like Button to current day Reactions. What users shared also changed from text only, to photos, to links, to videos, to live videos today.
All of this points to the fact that with every product change, how we onboard, retain, monetize, and generally mobilize users for growth, may change. So we can never forget to evolve our growth strategies in lock step with our product strategy.
Reason Two: Audience Is Always Shifting
As the market shifts and the product develops and grows, the composition of our audience, who they are, what they want, and what they respond to, shifts. Across the board, our strategy and tactics from acquisition to activation, retention, revenue and referral need to evolve in sync. There are many ways to segment an audience and so there are many ways an audience, and each of its segments, can evolve.
The Innovation Adoption Lifecycle
First, let’s think about it in relation to the Innovation Adoption Lifecycle.
Typically as a company grows, its audience shifts from innovators and early adopters to late majority and laggards, all of which behave very differently and respond to different product experiences and messaging.
Twitter offers a useful example. In the early days, Twitter’s onboarding focused on guiding users to write their first tweet. This was the core action innovators and early adopters responded to.
But as the company grew beyond innovators and early adopters, the onboarding changed to emphasize following and consuming content first. That was an action the early and late majority were more likely to take in the adoption phase.
Niche to Niche
Another way to think about these changes is that audiences expand from niche to niche growing in concentric circles. The growth can be based on different facets of the audience:
Let’s take a look at Facebook’s growth for a moment. It expanded in concentric circles to increasingly large populations based on education.
Harvard → All Ivy → All College → College + High School → College + High School + Recent Grads → Everyone
How Facebook Grew From Harvard to the World
Uber expanded by location, starting in San Francisco and then launching in other U.S. cities like New York, Chicago and DC, and then expanding internationally moving from the U.S. to all other english speaking countries and then to Europe and beyond.
Workday (and lots of other B2B companies) expanded by industry. It started by serving other technology companies first, and then extended its reach from vertical to vertical - moving from technology companies to service-based companies to the financial, healthcare, and education sectors.
These and other niches live in different channels, respond to different messaging, and have different needs. So as our audience expands from niche to niche, we need to adapt our growth strategies and tactics with every shift in focus.
Reason Three: Channels Change Constantly
User acquisition channels are changing constantly, evolving at an accelerating rate on both a macro and a micro level. For this reason, companies that adapt quickly and experiment in the newest channels increase their odds of capturing the biggest growth opportunities
On the macro level more and more channels are emerging, while their lifecycles are simultaneously accelerating. The graph below shows these two dominant trends - you can see that there are a lot more to channels than there were 10 years ago and that they’re rising into and falling out of favor much faster than older channels.
Check out MySpace and Facebook, they both grew at unprecedented rates shooting up very quickly, only to die (in the case of MySpace) or become closed (in the case of Facebook) even more quickly. As channels come and go we need to adapt with them.
Zynga experienced stratospheric growth riding on back of the Facebook platform. But in 2012 Facebook changed the rules of the game and in an instant completely shut off Zynga’s only growth channel overnight. Zynga’s entire business model tanked as a result. This story demonstrates how quickly a channel can change and how vulnerable companies are when they aren’t positioned to see these changes coming down the pipeline, at best, or at least respond instantly when they’re blindsided.
When we zoom in to the micro level we can see that each channel is evolving at an ever increasing rate. What’s even more challenging is that the platforms upon which we grow - Facebook, Google, Gmail and many more - write the rules of the game. Not only do we not even get a say, but many change the rules constantly.
To stay in the game we have to play by the rules of the platform. The only problem is that they don’t actually tell us what the rules are. Google doesn’t tell us exactly how a page ranks and Facebook doesn’t tell us exactly how a CPC is determined. So we run experiments to deconstruct them, and figure out how to adapt and keep growing. This means that once we find a channel that works for us we need to be adapting our approach constantly to keep up with how the rules are changing and the channel is evolving.
Reason Four: Tactic Fatigue
Increasingly, we are bombarded by more information than we can process and our brains have developed ways to filter out what we don’t need to survive. This survival mechanism is important for us to understand because it forces all of our favorite acquisition tactics to move through the Growth Tactic Lifecycle depicted in the chart below.
There are 4 Stages of the lifecycle of any growth tactic:
- Tactic Discovered - Someone discovers a new tactic, facilitated by the evolution of an existing platform or channel or the advent of new platforms and channels. Initially, this new tactic performs well because it captures the user’s attention in a novel way.
- Tactic Optimized - The innovators and early adopters of this tactic experiment like crazy to optimize it to peak effectiveness and maximize its impact on their growth.
- Tactic Adopted by the Masses - Other companies, the early and late majority, see that the tactic is working and they copy it.
- Tactic Goes into Fatigue - By this point, users have been exposed to this tactic over and over across multiple products. The novelty of the tactic has worn off and users start to block it out. The effectiveness of the tactic decreases and it no longer drives the same kind of growth it once did.
For example, how we ask for email addresses has undergone rapid change over the past few years. As users, we’ve experienced this change first hand and as user acquisition professionals we’ve had to learn and adapt quickly to continue driving email capture conversion rates.
As an example of how quickly tactic fatigue can happen, let’s walk through the incarnations of this tactic over the past few years:
- Form within a webpage
- Slide ins
- Lightbox popovers
- Full page takeovers
- SumoMe Welcome Mat
Take this one little thing - how do I collect email addresses on my content - and we can name 5 different iterations of that ecosystem in just a few years.
When I first started capturing email on my own content, I used a lightbox popover, which few people were doing at the time. My conversion rate was initially around 10%. But as more sites implemented lightboxes to collect emails, consumers became desensitized, the tactic went into fatigue, and my conversion rate leveled off at 3-4%. I recently started using exit-intent full page takeovers and my conversion rate has increased to 6%, but I expect that it won’t last long.
Do These 5 Things To Implement This Principle
1. Build A Culture of Constant Experimentation
People often see constant change as a negative thing and resist the inevitable. Instead, we must welcome change by building a culture of constant experimentation. This allows us to incorporate the constant flow of change into our growth processes and survive and thrive in competitive environments.
2. Constantly Validate Old Playbooks, Ditch The Ones That Don’t Work Anymore
Eventually, all playbooks will stop working. This is not the real problem though. The real problem is that over time we become habitualized and attached to these playbooks, and we resist throwing them away. Even when all evidence points to the fact that they are no longer relevant, the thought of ditching our old faithfuls and starting anew is intimidating. Do it anyway.
3. Balance Your Portfolio of Bets
Here I challenge you to think of your set of growth tactics like a financial portfolio to be balanced in terms of risk and reward. When we test new and unproven channels we take higher risk, higher reward bets. When we optimize proven channels we take lower risk, lower reward bets. It’s like a game in which we have a pool of resources and we’re shifting them between different bets, depending on results of various experiments.
Since all channel effectiveness curves flatten eventually (think of my email capture conversion rate leveling off at 3-4%), in a perfect world we aim to hit our stride with a new channel as a proven channel starts to slow down. It may never happen perfectly like this in reality, but we should attempt to layer tactics on top of each other if we want to maintain growth.
4. Accelerate Your Growth Team Investment As You Keep Growing
When your growth team first starts out almost all of its time will be spent experimenting.
Over time you find more and more things that work and the team’s resources will be consumed by running and repeating these successful things.
The danger is that 100% of your time and resources will get consumed by repeating the successful things and you won’t make time for experimentation.
If you follow this trajectory, you will eventually get caught with your proverbial pants down.
At scale, it’s easier than not to let experimenting with new ideas fall by the wayside. Instead, we must set aside time and resources specifically dedicated to this effort. This requires us to continue increasing the total pie of resources we dedicate to our growth teams.
As a rule of thumb, I focus at least 30% of my team’s time on experimenting with new ideas, and 70% of our time repeating and optimizing our old faithfuls.
5. Hire For Grit and Resilience
The thought that growth is never done can be exhausting. This is why I hire for grit and resilience. When an experiment fails multiple times in a row, I want people who get right back up, learn from their misfires, bring new ideas to the table, and attack the problem over and over until they solve it.
When they do succeed, these folks don’t view the job as done, instead they focus on making it even better. And, they have no problem adapting when something they slaved over in the past is no longer working. They’re willing to throw it out and start all over again because they know that’s what it takes to stay on top.
If I Stepped Into Your Company Today As VP Of Growth...
I would establish a baseline to determine where your team and systems fall in relation to the principle - Embrace Constant Change. Walk through the checklist below, assess your team on the principle of Constant Change, and figure out where you’re killing it and where you’re being killed.
- How has the product evolved over time?
- Did we adapt our growth strategies and tactics? If so, how?
- What major product changes are upcoming? How do we plan to adapt our growth strategies?
- Who is our audience?
- How has it evolved over time?
- Did we adapt our growth strategies and tactics? If so, how?
- What are our channels?
- How have they evolved over time?
- Did we adapt our channel strategies? If so, how?
- What are the biggest changes coming down the pipeline that threaten the effectiveness of our channels?
Build A Culture of Constant Experimentation
- Does our team view change as negative?
- Does it resist or welcome it?
Validate Old Playbooks
- What playbooks are we running?
- What has been their trend of effectiveness over time?
- Do we ever throw out playbooks that no longer produce results? Or do we hold on?
Balance a Portfolio Of Bets
- How is experimentation time being apportioned?
- What percent goes to low risk, low reward bets?
- What percent goes to high risk, high reward bets?
Accelerate Growth Team Investment
- What percentage of overall resources and time is spent on experimentation for new ideas?
Hire For Grit and Resilience
- When an experiment fails does our team learn, bring new ideas to the table, and keep trying to solve the problem?
- When an experiment succeeds do we view it as done or focus on making it even better?