Lesson: Consumer Growth with Jim Scheinman

Step #1 Fit First: Getting started with growth hacking

So the key pieces of growth, when we're looking at early stage companies we'd start looking at the top line funnels. What does that mean? So you need to get your first customer. So that's where you'd start. You start with how do I acquire customers and it may be that you need to pay to acquire your first customers. Ideally, you found some techniques where you don't need to pay. What I mean by that is, maybe you pay services like Facebook to advertise on their platform to drive traffic to your app in the App Store and if you do that for a little bit, maybe you have some features built in the product that encourage other people to invite their friends and family to the service and then organically reaches the top 25 position in the App Store. Now because you're there, you can stop buying the ads and you have the organic growth from the position in the App Store.

Generally speaking unfortunately for most companies they spend money, they get to the top 25 and they just drop straight back. So the top line funnel is really the first thing to figure out is how do you acquire your first set of customers and there are some great techniques that have been written about classic email campaigns. Go to where your customers are. Maybe there is mommy bloggers who have a lot of your customers and work with them to get the word out. You kind of have to be really creative and scrappy. If you're fortunate to have a friend who has a very large website or app who promotes you because it makes sense for them, maybe you can get some free advertising. You need to kick start this to make sure that when the customers come to your product, you have product market fit, it’s a really important concept. If you are not solving a problem or you haven't really identified the right market to go after and they're not sticking to your product then you don't have product market fit. If you don't have product market fit it’s not a good idea to the growth hacking.

So initial traction, product market fit and then when you see that you have people who like your product, you're getting positive reviews and more importantly, they're showing engagement which they're taking action to show you they like your product. They're coming back every day, maybe a couple times a day ideally. If not, at least once a week, once a month. If you have 30% engagement metric, you found product market fit. That's really a rough number. It could be lower for certain products and it needs to be higher for other products, but you'll have a sense. There are some metrics out. But 30%, you have product market fit; now you can focus on the other piece of growth hacking on the engagement side. So there is the user acquisition or customer acquisition side and then there is the engagement piece. So now that you've acquired a customer, how do you get them and keep them engaged in your product.

Then the third piece of that is now that you've acquire the customer and you have them engaged your product, how do you encourage them or how do you create a process so that they can bring other people into your product? Within each of those buckets there are probably three or four different techniques that you can focus on. But you really need to be careful about where you're looking at. If you don't have product market fit and you're looking at engagement driving more people to your site, it's a broken system just to have customers coming in and going out, coming in and going out. That’s not sustainable