We also mention a couple of resources you might want to check out:
* “Traction,” a book by DuckDuckGo Founder, Gabriel Weinberg offers a framework for identifying and testing potential channels.
* The First1000, (https://thefirst1000.substack.com/) offers inspiration on how to get early customers.
* “Do Things That Don’t Scale” (http://paulgraham.com/ds.html) Paul Graham’s famous article emphasizing the importance of validating Product/Market Fit before looking for a scalable growth channel.
So jump in, and in less than 10 minutes you will have food for thought as you work to achieve breakout growth success in your business.
We discussed:
* Even the best leaders will try to do too much all at once (00:45) * The order of operations matters; slow down and focus (01:15) * Don’t let the pressure to hit numbers force poor execution (02:00) * Growth isn’t just about channels, focus on core customer challenges (03:13) * Get the right customers to the right experiences (03:45 Transcript: Sean Ellis 00:00:00 All right. If you were leading growth, building a startup or looking toladder up your skills, then you are probably really busy. So every other week, tune into growth snack, the breakout growth podcast, short where Ethan Gar and I share one key growth learning to help you on your journey to breakout growth, success. It’s food for thought for anyone hungry for growth. Ethan Garr 00:00:19 All right, Sean. So next week we have an awesome episode teed up for our audience. We are gonna be speaking with Charlie Cole. He is the turnaround CEO who led FTD flowers, um, since 2019, since 2020, um, following their bankruptcy, it’s gonna be an awesome episode for our listeners, but one thing stood out for both of us. So why don’t you tell us, tell our listeners what you and I have been so excited to tell them about why it’s so important. Sean Ellis 00:00:43 Yeah, absolutely mouthful there. So yeah, , we are, uh, one of the things that really stood out to us is, is something we see in startups all the time. And so for a turnaround situation, it was interesting to see it as well. Yeah. And it’s that even the best leaders will try to do too much at once. So it’s, it’s important to remember that growth does not depend on getting absolutely everything. Right. It depends on getting the right things. Right. And that requires just ruthless prioritization of where you focus your energy and your time. Ethan Garr 00:01:16 Yeah. I mean, as spoiler alert, you are probably gonna mess up a lot of things in growth. I mean, it’s just part, part of the game. So what it comes down to is really kind of getting your order of operations, right? And Charlie really talks about this a lot, but you know, it starts with, you know, step by step. You have to understand your customer journey. You have to ensure that everything is instrumented properly. Find the highest leverage opportunities, focus and so on and so forth. And if you don’t do those things in the proper order, and if you don’t slow down and really focus on what matters, you’re probably gonna run into all sorts of trouble and it’s gonna be almost impossible to grow. So why do you think it is that? I mean, we’ve seen it so much. Why do you think it is that so many companies try to do too much all at once and fail? Sean Ellis 00:01:57 You know, I, I think it starts with just, just pressure to hit numbers. Mm-hmm and, uh, and that comes from the very top. So even beyond the CEO, a lot of times it may be, it may be that when the CEO was, uh, raising that first round of capital or the most recent round of capital that they over promised, and now, now they have to hit those numbers that they promised, or it might have been that investors said we’ll invest, but you need to commit to hitting X. And as soon as you have these big aggressive numbers, then those numbers start to guide all of the executions. So you start trying to do everything possible to hit those numbers. And the first thing we think about is, oh, it’s, it’s, it’s gonna be based on the channels that, that are gonna work for us. Sean Ellis 00:02:43 So we need to do a little of this and a little of that. And, and, and you start thinking about all the different ways you can acquire those customers. But the, the truth is that you really only need one channel that can scale to, to be successful. So it’s not necessarily about trying every possible channel, but it’s that search for at least one channel that’s gonna scale. And then sometimes channels are not even where the problem is. Mm-hmm, maybe you’re having a hard time finding that channel, that scales for some other reason, maybe your conversion is bad or your retention or your unable to monetize. Ethan Garr 00:03:19 Yeah. I mean, if you’re trying to dive bomb into all of these things all the time, it’s really impossible to put enough focus into any of them to kind of know what’s gonna, what really is the problem what’s going to work. You really have to take your time and figure those things out. So how do you, you know, how do you figure out what matters? Like what’s in your experience? Where do you think like that starts? Sean Ellis 00:03:40 Yeah, I think in a, in a startup in particular, you know, first, first area you wanna look at is retention. And, and we, we talk about this a lot. We’ve, we’ve had a lot of growth snacks where we talk about product market fit and it’s, it’s because it’s a super important concept. And so retention is often an indicator of product market fit. So essentially meaning that someone tries your product, they like it enough that they keep using it over time. And, and if they do that, then, then everything in the business tends to work well. But if you have bad retention, there could be a number of factors that, that lead to that bad retention. It might be, it might be that, that the product is actually really bad. It might be that the, the product’s good, but you’re onboarding into the product is bad. Getting people to use the product the right way is, is where the challenge is. Um, so there’s a, a, a ton of different things that may be causing that retention issue. But the, the biggest thing you wanna figure out is how do I get the right people to experience, to experience my product in the right way. Ethan Garr 00:04:49 Yeah. And I think figuring out that, that, that journey from right people to right experience is often comp complicated by the fact that people don’t look at it both quantitatively and qualitatively. I mean, especially in a startup where we’re focused on data and instrumentation, it can be really easy, especially, you know, I see it with apps a lot where you have, you know, a funnel, you look at the funnel and there’s some drop off. And like, for example, you’re asking for, uh, permission, like contact, access, address, book, access, people get there, and you see that there’s this big fall off there. So you say, oh, we’ll just move that. We’ll put it after the pay wall or something, and that’ll solve our problem, but you’re just really kicking the problem down the, down the road. Um, you haven’t really thought about what is happening in the customer’s mind to make them feel that way. So if you’re not looking, you know, talking to your customers and analyzing it qualitatively as well, probably gonna miss important things like that. So I think there really is this balance between figuring out the right experience and, you know, both quantitatively and qualitatively. Sean Ellis 00:05:46 Yep. And, and getting that right, figuring out these things, uh, is something that, that probably starts with leadership. So it starts with, with that CEO of being able to being able to shine the spotlight on what matters in the business. But I think it goes even beyond that, to where if you can get everyone across the team on the same page about what matters, and these are the things that we’re gonna need to figure out in order for this business to be successful. And this is the order in which we need to figure these things out. You’re gonna be much more likely to be able to, to, to solve the really hard, hard problems in the business to, to be able to unlock growth. And so, um, it’s yeah, the, the last thing you wanna do when you’ve got a million things on your plate is to take a step back and, and look at the big picture of the business, but that’s generally what you need to do. And you need to have that shared context that shared understanding and then, and then concentrate team resources around those couple of things. Those, those, that one, two, maybe three things that, that really matter in order to put the business on a track to where it can ultimately be successful. Ethan Garr 00:06:58 Yeah. I think when in doubt do less to do more, I think that’s a, a really good just way to approach this. So this is great stuff, but, uh, we’re running outta time. So I think, uh, we should, uh, call it, call it there. Thanks everyone for tuning into this week’s growth snack. Like we said, next week, we’ll have a full episode with Charlie Cole, the FTD, uh, turnaround CEO. It’s gonna be great. I think everyone’s gonna really enjoy it. So if you’re hungry for growth, keep tuning in. We discussed:* First growth channel mistakes Sean and Ethan see companies make (00:18)
* Why for some businesses certain channels need to be thought about early (02:24)
* Frameworks and resources for finding your first growth channel (05:01)
* You will need to experiment! (06:17)
Transcript…
Ethan Garr 00:00:00 All right. If you are leading growth, building a startup or looking to ladder up your skills, then you are probably really busy. So every other week tune into Growth Snack, The Breakout Growth Podcast Short, where Sean Ellis and I share one key growth learning to help you on your journey to breakout growth, success. It’s food for thought for anyone hungry for growth.
Sean Ellis 00:00:18 All right, Ethan, possibly one of the hardest things to do is to find your first growth channel. So what do you think is the biggest mistake companies make in that process then I’ll share mine.
Ethan Garr 00:00:31 Hmm. That’s a good question. I think probably mistake number one is that companies try to find all of the growth channels all at once, and it’s really a time when they should be focusing on finding one scalable channel to, to start.
Sean Ellis 00:00:44 Yeah, absolutely. So we’ll dive into, to kind of the details behind that in a second. Um, but I wanted to, uh, focus on the mistake that I see, um, often as well, which is, um, I, I think that they’re really trying to find that, that scalable channel too early and yeah, I, it is true that you, you can’t really iterate on, on getting to product market fit and, and optimizing flows, if you don’t at least have some user flow coming into the site, but it doesn’t require you to identify that, that highly scalable first channel. Um, instead I, I recommend that you, you do something that, uh, Paul Graham wrote an, an essay on will, will link to it in the show notes, but it’s an essay called do things that don’t scale. Yeah. And what he’s really emphasizing is, you know, in, in the beginning that kind of manual recruiting of lots of people to try your product is, um, is a good opportunity to actually engage with them directly. And so sometimes that’s where, where you can even, uh, you can even do something that, you know, that, that, that Reddit one off thing, or that product hunt, one off thing, that’s gonna send a good flow of users to you. And only after you dial in product market fit, should you really be trying to think about how, how do I develop that first channel?
Ethan Garr 00:02:10 Yeah. In those first,
Sean Ellis 00:02:11 Sorry, even, even, uh, sorry. I just like fill in the gaps on one more thing. I think once you have that product market fit, then it’s about connecting the dots between people who actually have that need and you must have solution.
Ethan Garr 00:02:24 Yeah. And I think the that’s a really good point and what I think that article really highlights too, is when you do that, a lot of times you get really close to your audience and you get these deep conversations where you get those learnings that are gonna help you figure out what the right channels are and how to scale. But, you know, some potential drivers like SEO or viral virality, they may require some upfront thinking before you’ve even validated product market fit. Right?
Sean Ellis 00:02:48 Yeah, absolutely. In fact, uh, I’m not by the time this comes out, we probably will not have published the interview yet, but we had a, a great conversation with Kevin Indig who runs, uh, SEO at Shopify in, within the last week we had this conversation. And that was one of the things that he really highlighted is that for certain businesses where SEO is, is likely to be a really important driver, they need to think about, uh, SEO kind of from day one in the business. And, and again, as you said, virality is another one that as you’re building certain collaborate collaboration tools, for example, there may be such, uh, an important viral loop there that over time you’re gonna wanna optimize, but you wanna set it up right from the beginning. So, um, yeah, ahead,
Ethan Garr 00:03:37 We cut you off <laugh> no, I, I think, I think it’s a really good point, right? Like that, um, you know, there are certain businesses where that first growth channel may be really intertwined almost with your value hypothesis, but not all businesses like that for probably for the most part. I think it goes back to what you’re saying. Like, don’t start worrying about scale first, get the product, get the experience, get the aha moments and the, and the magic going first. Right?
Sean Ellis 00:04:02 Yeah. In fact, maybe we even take a little bit of a step back and say like, why is sort of scalable, repeatable important in the later stages of the business? And that’s where I would say, you know, if you, if you’re just living off these one offs, like, like the, the product hunt launch and the Reddit and, and, you know, certain things that, um, maybe get you a big flow of traffic or, or even, you know, that, that, that press announcement about a launch, um, you’re, you’re gonna get that really spiky growth. And so the reason we wanna find that one scalable channel is that it actually starts to bring predictability to the business. You start to be able to, to have an organic growth curve over time, but you also start to have something that you, you can actually feed and, and execute on. So with that in mind, assuming that we’ve gotten to that point where we at least now have product market fit, how would you go about, uh, trying to find that first, uh, uh, scalable growth channel?
Ethan Garr 00:05:01 Yeah, I mean, there’s a book that I really like called traction by Gabriel Weinberg. Uh he’s he founded duck dot go, and we actually had a, a conversation with a duck dot go executive a while back. That was also really great, but I think that book, um, provides really a good framework for anyone trying to sort out sort of the chaos of channel discovery. And it’s the, really, the key is there’s to hone in on a few core opportunities and then systematically test them as opposed to just try to go scattershot and try to do, you know, let me try PR, let me try, uh, paid marketing. Let me try all of these at once. So I think that’s a really, like, it’s a good way to get yourself in the frame of like, how do I do this systematically?
Sean Ellis 00:05:35 Yeah. So I wanna take it back though, to, to that mistake that you said, uh, is, is that they’re, they’re trying to develop too many channels at the same time. Yeah. And now you’re saying a few channels, do you, how is it, is it right to kind of focus on a few channels or do you, do you sequence that and focus on just one channel at a time
Ethan Garr 00:05:54 It’s sequence it’s yeah. It’s, it’s traction is all about getting to the, figuring out the one channel to start with. And then, but, um, it sort of has this like target approach where you start with like, figuring out, like, which channels are probably gonna give you the most predictable outcomes focusing on those. And then, uh, from there use, you know, independently testing one at a time to get you from, from point a to point B.
Sean Ellis 00:06:17 Cool. And I, and I agree by the way that, that I, I love the book traction. I, uh, that, that is one that I, I read years ago and it, and it definitely resonated with me. I think the one thing that’s maybe missing from that book, it’s been a while since I read it. So maybe, maybe the highlight this, but, um, you know, I, I, when you’re, if you’re moving, as you said, sequencing one channel to the next channel, I think it’s important to, to take a step back before you move on to that next channel and recognize that, uh, you know, to make that channel work, you’re gonna need to be able to convert, monetize and retain those customers and the monetization piece in particular, if you’re, if you’re SEO driven for your growth or your, your viral driven for your growth, monetization’s maybe not gonna be quite as important in making that channel work.
Sean Ellis 00:07:04 But if you’re, if you have a sales led model or you have, uh, a model that’s gonna require, you know, some, some human touch along the way, or your arbitration growth and, and spending money on paid search, for example, or even just, uh, paid demand gen ads, you’re gonna need a business model that has, that has a, that leads to a high enough lifetime value where you can support those customer acquisition costs. So you just need to be ready to experiment. I think with both the, the monetization and the onboarding as you move from one channel to the next and, and think about that more holistically,
Ethan Garr 00:07:37 That makes sense. And it’s probably, you know, a good idea as you think about this, to try not to reinvent the wheel, you know, look for inspiration from other businesses that have done similar things or had similar, you know, sort of starting points and try to learn from them. There’s a, there’s this, um, great website it’s called, uh, first 1000 it’s by a guy named Ali ALA. Um, I saw it on mm-hmm <affirmative> Lenny’s newsletter. It’s one of my favorite resources for inspiration, cuz it’s the, it it’s like this just broad list of how hundreds. I, I think hundreds of companies found their first thousand users got to their, you know, that those first thousand customers now that might not be the scalable channel, but I think like it’s a great place to look for inspiration. Like how did this guys,
Sean Ellis 00:08:17 We should, yeah, we should add a link to that in our, uh, show notes as well. Oh yeah. We’re, we’re actually coming up on, on time here. So all right. <laugh> maybe if there’s like one big takeaway from, from that, that you can highlight and then we should wrap things up.
Ethan Garr 00:08:28 Yeah. It’s just not all early tactics are scalable, but they can get you into conversations with your targets to help you find those effective channels and, you know, figure out the vocabulary you’re gonna need to adopt to be successful.
Sean Ellis 00:08:40 Absolutely. Well that’s good stuff. Uh, so thanks everyone for tuning in to this week’s growth stack. It’s one growth insight to help you power your team’s breakout growth success. Next week, we’ll be back with a full breakout growth, uh, podcast episode, and an interview with a growth leader from another of the world’s fastest growing companies. If you are hungry for growth, keep tuning in.
Ethan Garr 00:09:02 Thanks everyone.