Build a Growth Machine Like Andy Johns

Facebook → Twitter → Quora → Wealthfront

Andy Johns has had the good sense to hop on, not one, but FOUR rocket ships. He’s been a key member of the early growth teams at Facebook, Twitter, and Quora and is now the Director of Growth and Revenue at Wealthfront. He may know a thing or two about hypergrowth.

That’s why I’ve devoured everything I could find about his approach to growing startups. Here, I’ve done my best to distill his perspectives on growth into eight actionable takeaways for the aspiring growth marketer.

1. Measure Growth Like You Measure Cash Flow

The growth team manages the flow of users just as the finance team manages the flow of money. — Andy Johns ←Tweet This

User growth accounting can be measured with a simple formula:

User growth (over any given period) = New user signups + Reactivations of current users - Deactivations of current users - Churn

The goal of a good Head of Growth is to effectively manage this formula, just as a Head of Finance must manage its accounting counterpart, tracking dollars rather than users. If you’ve got a product in which new user acquisition + reactivations is significantly more than deactivation + churn, then you’re winning.

What to do:

• Measure and track each metric in the equation for your product and calculate your user growth.
• Choose the period of time you want to measure these metrics over - a day, a week a month.
• Religiously measure and LEARN from these user acquisition metrics.
• Watch how the metrics trend over time.
• Use the trends to inform your decision making on growth and product strategy.

2. Make it Exponential

In finance we aim to invest in assets that’ll produce compound interest. Likewise, in growth marketing, we should dedicate our resources to initiatives that’ll produce compound growth.

Take your product (the original principal value) and optimize it to produce compound interest. — Andy Johns ←Tweet This

At the heart of compound interest or growth, is the idea that incremental upticks now lead to huge growth over time. This means that the optimization that leads to a 2% increase in conversion today, can potentially produce millions of additional users down the road.

Compound Interest > Simple Interest

Simple interest produces linear growth

Compound interest produces exponential growth

(Images from Andy’s answer to the question What is Facebook’s User Growth team responsible for and what have they launched? on Quora.)

What to do:

• Get into the optimization mindset.
• Survey the tactics to grow your product.
• Choose one or two to experiment with immediately.
• Keep the others in a back log for future experiments.
• Run cycles of iterative experiments to drive incremental growth.

3. Both Science and Religion Matter

A successful startup is usually inspired by a hunch. A founder identifies a problem, often stemming from her own experience, and has a vision for how to solve it. This vision is where “religion” plays its part. She builds something and people start using it. And hopefully they keep using it and tell their friends. This is the start every entrepreneur hopes for.

This same product, born originally from the founder’s instinct, must be nurtured, sustained and scaled not through creative genius alone, but through partnership with disciplined data-informed decision making. Running product experiments, and then quantifying the changes in user behavior allows teams to test their hunches, marrying the creative with the data.

Take the story of Airbnb. Co-founders, Brian Chesky and Joe Gebbia had a problem — they were roomates and couldn’t make rent. So they set up a website and started renting out a few airbeds on the floor of their apartment to travelers. This was the inspiration for what became Airbnb.

They grew slowly at first but quickly transitioned to an experimental and data-driven approach to growth. They hypothesized that professional photos of the spaces for rent on Airbnb would increase bookings.

To test this hypothesis, they flew to NYC, shot professional photos of select apartments and found that those apartments received 2–3 times the bookings of the other spaces. After getting their initial proof they doubled down on this tactic for growth, offering professional photo shoots to many of their hosts. This is just one example of the kind of testing and data-driven decision making that drives growth for Airbnb.

What to do:

• Build a new product based on your instincts.
• Use your instincts as inspiration for your hypotheses.
• Test your hypotheses.
• Measure and learn from the results.
• Iterate.

4. “Growth Hacking” Isn’t the Goal

You can’t “growth hack” a crappy product. If no one group of people finds your product compelling and worth using and buying, then regardless of the marketing or growth muscle you put behind it, it won’t grow.

Growth is about doing business fundamentals well, not finding one sneaky lever for exponential growth. — Andy Johns ←Tweet This

Founders often look for the silver bullet that will grow their product. This is why people experienced in growth wince at the term “growth hacker.” Real and sustainable growth does not come from a single hack or a lone wolf hacker.

It’s driven by a team of dedicated, process-oriented, creative people in product, design, data and growth engineering, and data analysis. They experiment — brainstorming, planning, executing, learning, and optimizing, over and over. Moving repeatedly through this cycle very quickly, brings the incremental lifts that drive compound growth over time.

What to do:

• Get to product-market fit first (tips for this in the next section).
• Check out this great post by Brian Balfour on how to recognize product-market fit when you have it, then look for indicators of product-market fit in your product.
• Once you start to see traction with your product, invest in growth.

5. Get to Product-Market Fit

If you’re having trouble getting to product-market fit, Andy discusses a useful framework to help your discovery and development process.

a. Have a clearly defined user

Make sure that you are building a product for a specific group of people with specific needs. This way you can knock it out of the park for those users. They become your early adopters and evangelists. Many founders are terrified to ignore any potential users. These founders usually create a product by consensus, mildly pleasing a bunch of different types of people but wowing no one. These products generally fade into mediocrity.

b. Clearly describe the product to that user

The heart of this point lies in language and messaging. You have to get this right. Make sure people know what your product is, what it does and how it will help them. The goal is to peak their interest to learn more.

c. Find and remove the friction that prevents engagement

Once your target user understands your product and is curious to learn more, your job is to identify any points of friction, and remove them.

Real growth is about finding and removing friction. — Andy Johns ←Tweet This

For example, someone may be interested in trying your product, but if the sign up flow is long or confusing they may just abandon and never come back. That’s someone you could have converted into a loyal user if they had just gotten to try the product.

What to do:

• Create personas for your target users to help you clearly define the user. Check out part 1 and part 2 of this guide to creating personas.
• Use Brandon Redlinger’s post on Marketing Messaging for Startups for inspiration and a useful framework. Ensure you are using language to cultivate the intended understanding and feelings in your user.
• Study your abandonment metrics. Determine what prevents users from activating or staying engaged over time.
• Test product changes that reduce friction and increase activation and retention.

6. It’s All About the Aha! Moment

The Aha! moment is important. It’s that critical point in time when your user “gets” your product, when he experiences and truly comprehends its value. And once he “gets” it, you’re in good shape because before that point, he didn’t really have a reason to stick around.

With some smart data analysis, Facebook’s growth team discovered its Aha! moment, realizing that if a new user got to 10 friends within 7 days of signing up, they became hooked. And so they focused on getting each new user to have at least 10 friends within their first week of using Facebook as quickly as possible.

What to Do:

• Look at two subsets of your users a) The users that are highly engaged and b) The users who tried your product and never made it into that core user group.
• List all the actions a new user takes after they first sign up for the product.
• Look for a causal relationship between the specific actions of your core users and their stickiness, versus the actions of users who never truly engaged.
• If you find that relationship, it’s your north star.
• Use it to optimize your new user flow and get new users to the Aha! moment ASAP.

7. Build Growth into the DNA of Your Company

To make sure that growth is sustainable, and your best people stay engaged, long-term growth must be a core value. You want all executives, managers and employees to deeply understand what drives growth for your company, not just the growth team. Cultivate a growth mindset in all team members.

Get some quick and easy wins under your belt to demonstrate the value of the growth team’s efforts. At Twitter, Andy and his team orchestrated a two week sprint in which they optimized the new user signup flow, increasing sign ups by 30%. That kind of early success invariably catapulted them onto the executive team’s radar.

Build your initial growth team by hiring from within. Ideally, you will build a team of product managers, supported by growth engineers, designers who code, data engineers to build the data infrastructure and statisticians or data analysts to pull insights from the data. To successfully attract these people with these talents, demonstrate the insane impact a great growth team will have on the company’s trajectory.

What to Do:

Ask yourself the following questions and then take action based on the answers:

• What can we do right now to demonstrate the value of our growth efforts?
• What optimizations can we make immediately that will move the needle?
• How can we communicate our wins to the rest of the team? The goal is to make the best talent realize they will make the biggest impact by joining the growth team.

8. You MUST Know Where Your Growth Comes From Today

Know the numbers that define your business. Without this information it’s impossible to prioritize effectively.

If you have channels that are already working, double down on those channels. Invest there to optimize and drive compound growth from what’s already working. Pick the low hanging fruit first to seed that exponential growth and maximize your yield. The more you do this, the faster you will grow and the more this growth will increase your ability to attract the resources and talent necessary to explore new growth opportunities.

What to Do:

Answer the following questions about your business:

• Where has your growth come from thus far?
• Which channels perform well?
• What percentage of your traffic comes from each channel?
• What is the conversion rate on the traffic from each source?
• What is the retention rate on the conversions from each source?

If you know the answers to these questions, you will know where to invest.

Finally, Learn from the Trailblazers in Growth

Andy Johns is a force in the world of growth for startups. His experience at some of the fastest scaling consumer internet startups in history has given him an inside view that almost no one else has. Learn from him!

There are a number of other trailblazers, like Andy, out there. A few of my favorites are — Brian Balfour, Aaron Ginn, and Avinash Kaushik, among others. Read what they’ve written, watch any videos you can get your hands on — they will teach you what it takes to turn your startup and your team into a self-sustaining machine for growth.

If you enjoyed this a recommend would be much appreciated!

Check out my blog to read my latest insights on growth marketing, startups, mindfulness and the business of life. There you can subscribe to my list to get notified when I publish a new article.

Lauren Bass — I’m an entrepreneur, growth marketer, and daily meditator. I write about launching and growing startups and how practicing mindfulness makes us better at both.

A big thank you to Brandon Redlinger and Misha Chellam for their valuable feedback.