Reverse Engineering Growth

As I alluded to in a previous post, the buck stops with growth. Each startup lives and dies by it.

That's why I've been so obsessed with growth roles. Impact potential is enormous. But growth is tricky. It's fickle. For the past 10 years, I've been concerned primarily with creating growth from either stagnation or newness. Throughout that work, I've stumbled on a repeatable process that, in a way, allows you to reverse engineer the growth you'd like to achieve. Or, at the very least, provides a roadmap on how to tackle growth.

If you want to skip the writing and hop to a video, I spoke on this topic at The Small Business Web last year, and it does a decent job of walking thru my step by step approach. You can view that here.

If you're more of the reading type and don't want to listen to my voice for 45 minutes (I don't blame you), let's dig in.


Step 1: Visualize The Funnel

Every business has a funnel. Buzzword aside, a funnel is essentially the path from the point of entrance of a lead or prospect thru to becoming a customer and beyond. Some funnels are cleaner than others, but they always exist, in one form or another. Step 1 is to plot out and visualize that funnel.

As a practical example, the Bitly funnel went from Free User -> Lead -> SAL (Sales Activated Lead) -> SQO (Sales Qualified Lead) -> Customer -> Advocate, which you can see below.

We later expanded this funnel to include website visitors and free users. The funnel at Moz had different labels, but the same fundamental path. Here's a look at that funnel from my time there in 2014. Pretty meaty to consume, but you get the idea.

Step 2: Analyze The Funnel

The point of visualizing the funnel is to understand where your growth engine is falling over. Failing to think of a great analogy, but here's my best shot. A car has a series of parts that activate when you hit the ignition (no, not that ignition). Those parts work in concert to start the engine, transfer energy to the wheels and eventually move the car forward. Each step of a funnel is like the chain of events when you turn the key in your car. If one part fails, the entire thing fails to move.

As you analyze the funnel, your goal is to determine the conversion points that are failing. From each step to the other, there's a conversion rate. Depending on your industry, those conversion rates may be documented with benchmarks. If not, use the sniff test. If it seems like an unusually large number of folks are falling out at one point of the funnel, note that. It'll be important in step 3.

Step 3: Forecast and Focus In

Next step is to forecast based on that funnel. Every company sets target revenue or growth numbers each year. Now that you have your funnel visualized, you can project where you'll be at the end of the year, assuming conversion rates within your funnel remain the same. You may determine, for example, that you're fine with your conversion rates throughout the funnel, and solely increasing the number of leads (or traffic) will get you to your goal. Or, you may determine that your conversion from a meeting to a sales opportunity is the biggest area of improvement. In the Bitly funnel above, you'll notice that this was the failing point. The goal is to figure out the part of your funnel where you have the highest level confidence in improving, getting you to your goal as a company.

Whatever you decide, the key is to pick one part of the funnel and focus in on it -- at least in a startup where resources are constrained. I'm a big believer in narrow focus on improving a single metric.

Step 4: Pull Some Levers

Now comes the fun part. Depending on the section of the funnel you decide to focus on, it's time to start pulling the levers that you believe will affect that metric.

Again, as a crude example, let's say that I believe that simply increasing the number of leads is what we need to be successful. Assuming that, we would shift resources to the activities that help move that metric - things like paid acquisition, webinars, content marketing, etc. Each of these activities is your a lever in your business.

Step 5: Analyze and Iterate

Finally, you need to continually analyze the funnel. As you begin to pull your levers, you'll see the numbers move (ideally up) in that section of your funnel. As the number moves, the conversion rates in the rest of your funnel may move as well. If they do, forecast and understand the impact of that. Think back to the car analogy, every piece of the funnel works in concert. If one part begins to fail, the entire growth engine fails. I generally like to keep a daily, weekly and monthly cadence on tracking my funnel.

As you measure and understand the results of your work, iterate. You may need to shift your efforts as you receive data back. Growth is a fluid thing that needs to be consistently fine-tuned and improved-upon.


This is a simplified look, but should get your mindset to where it needs to be.

If you're struggling with this process or the tactical activities on moving your metric, feel free to drop me a line. Growth is key to every business.

Hi there, I'm Andrew. Welcome to my blog. I'm an entrepreneur that loves the process of building and scaling startup companies.

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