Let’s discuss a new way to grow. The Growth Flywheel coupled with data-driven growth goal objective will empower you to prepare you for the next phase of growth with your company.
This will likely be a ‘living’ document where you’ll make adjustments as you go. We suggest you complete steps 1-3 and then update the document each week where you see fit.
To get an understanding of what you’ll be working towards, take a look at the example below. At the top is the overarching growth goal. Underneath are the inputs that will support the realization of this goal, and each input has specific strategies and tactics.
The first step is to create a model for your company’s growth, which includes a clear goal and supporting inputs. Brian recommends not to use your gut and run a proper analysis using existing data from your performance thus far and the industry.
You can create a growth goal spreadsheet by making copy of the template.
There are two main approaches: top down and bottom up. It’s recommended to complete both and ideally by different people so that they don’t influence each other’s results.
To run a top down analysis, start by defining your growth goal. This should incorporate your primary metric such as WAUs (weekly active users), MRR (monthly recurring revenue), total sales, employee retention, etc. The next step is to look at what inputs would drive this goal such as new leads, increased conversion rates, increased retention, etc.
For example, if you want to get from $10,000 to $50,000 MRR by the end of 2018, you’ll need to consider the key inputs that will have to change to drive this growth. We suggest looking at where you’re currently at with these inputs and consider what it would take to get them to the level required to hit your goal.
You can create as many inputs as you think is necessary, but we recommend starting with three to four.
To run a bottom up analysis, start by looking at your key inputs and how they might change through increased effort this year. As you modify the output of your inputs, estimate how they would influence the primary metric of your business.
For example, if you increase your monthly leads by 50%, increase conversions by 20% and decrease your customer acquisition cost by 10%, how would that affect your MRR? Are these changes realistic for this year? What would it really take? What if you focused on one of these metrics and kept the others relatively flat?
You’ll want to test different outcomes for inputs to see how it affects your primary metric, and then settle on what you think is the best case scenario.
Bring top and bottom together
Whether you complete one or both of the analyses, take a look at the result(s) and reflect on what you think is the ideal outcome. We suggest using the SMART method (specific, measurable, action-oriented, realistic and time bound) to ensure what you’re envisioning is tangible and achievable. Common pitfalls are setting goals too small or high, or too ambiguous. We recommend sharing your goals with other participants in Grow Camp and get feedback where you think it’s useful.
We don’t recommend splitting your energy equally between inputs, but rather consider the approach of sequencing. This means decided on which input(s) to focus on first and then the others that will follow. For example, you may want to consider what inputs might create an amplifying effect on others.
When entering your inputs in your spreadsheet, you can prioritize them by putting them in the order of which you’d like to focus on them.
Step 3: Create strategies that will drive your inputs
The next step is to create strategies that will drive the change you want to see in your inputs. Brian cautions against getting too caught up in the weeds with tactics as this will likely change throughout the year. We added a section in your the template where you can add tactics if you feel compelled to capture them during Grow Camp. However, we recommend creating your key strategies before jumping into designing tactics.
This is the last step to complete before you’re ready to use your growth goal spreadsheet in Grow Camp.
Make sure to research a variety of strategies and tactics that could influence your inputs. We recommend you capture one or two that are particularly compelling and consider how you might incorporate it into your growth goal spreadsheet. Our weekly challenge to you is to apply the strategy or tactic by running a small test in your startup before the next work week and share your findings with your team.