CEO Thoughts on Exponential Growth: An Interview With Tally CEO Jason Brown
The job of a CEO at a fast-growing company is not easy.
Fred Wilson, co-founder of Union Square Ventures, says the role of a CEO is divided into three key areas:
- Create a strategy and vision for the company and communicate it.
- Build a team.
- Make sure the company executes on the plan and has enough cash in the bank.
These are all critical components of any successful organization and, most importantly, these are elements that fuel the foundation of scalable and sustainable growth. Finding the right balance between the time to be spent on each of these areas is a challenge on its own and, from early on, it can make or break the company’s future.
As this study from Bain & Company states:
Just one in nine companies achieve sustained, profitable growth over 10 years. And 85% of executives blame that shortfall on internal factors. This is the growth paradox: Growth creates complexity, and complexity is the silent killer of growth.
These “internal factors” are a reflection of a poorly executed job from the CEO on one or more of the key areas listed above. Internal issues with things like resource allocation, hiring, culture, product development, business plan, and company vision are the common traits of companies struggling to successfully scale and grow.
But even though we know these stats, companies and startups are scaling at a much faster rate than ever before. As a result, it has arguably never been more necessary for any CEO looking to make their business thrive to nail down the factors mentioned above and how they approach growth.
To do this, some of the questions we need to answer are:
- How do successful CEOs think about growth?
- What are the key elements to measure for growth?
- What should you look for in growth candidates?
To answer these questions, I interviewed Jason Brown, Tally’s CEO. The company is currently entering a hyper-growth phase, and he has lived first-hand most of these challenges over the past 4 years building Tally.
As a disclaimer, I’m currently working as a Growth Manager at Tally.
So let’s get right into this…
To understand growth, let’s go back to the basics: The Four Ps of Marketing
I asked Jason about growth and what it means to him, and his answer surprised me:
“To answer this, we first need to understand marketing and the four components that are usually referred to explain it.”
Let’s do a quick refresher on this. In the 1950s, Neil Borden popularized the idea of the marketing mix and the concept of the four Ps.
These four elements were used to structure and shape the marketing plan of most businesses of that time. At a basic level, the main idea behind this was “putting the right product in the right place, at the right price, at the right time.”
In many cases, this idea still holds true. But Jason continues by adding that, nowadays, especially in Silicon Valley, there has been a spin to this concept and that growth is born through this virtuous cycle between product and promotion.
“There’s less of a focus between place and price, but product and promotion are today the two big levers you need to pull from a marketing perspective,” Jason says. “The reason why this new label has been placed on it is because there’s a better understanding of how product drives promotion.”
Let’s give Jason a clap!
For a modern tech company, the better you are at pulling the levers on your product, the more likely you are to get consumers themselves to promote your product. There’s a flywheel effect that’s created out of the interaction between these two levers, and growth is the outcome of this relationship.
Jason adds that growth is basically this interplay between how the product is designed and built, and how it provides real utility for users and the optimization and maximization of the promotion loops that inherently should exist as part of the product.
You cannot grow a product that is not a perfect fit for some identifiable group of people. You can’t have one without the other. But similarly, product fit doesn’t just cause growth by itself. You need to build in loops that enable it to successfully grow— Shaun Clowes
Measuring Growth: Conversion Rates, Retention & Happiness
As we continued the conversation, I was curious to understand how Jason measures growth. As a current member of the Growth Team at Tally, we have internal metrics aligned to the business goals that we use to define the success of different acquisition campaigns, product experiments, customer happiness, etc.
I wanted to dive deeper into how he personally measures the success of the growth trajectory of the company and whether we are heading in the right direction.
“The №1 metric I look is overall conversion rate,” Jason says. “The rate at which someone, who showed interest in your product, goes through it to become a client is a daily sanity check I use to be sure things are working as expected. … But also as important as conversion rate, you need to be measuring your retention rate and the happiness of the users interacting with your product”
Let’s take a moment to analyze this.
Conversion rate is a function of getting more people into your product, making it more appealing, removing friction and creating more trust around the user experience.
Retention and happiness are a function of the utility and value you are creating in your customers’ lives.
Personally, I loved Jason’s answer. There have been a lot of articles on how important it is to improve conversion rate and/or retention to build an efficient and sustainable business. But adding the happiness component as part of the core metrics you measure brings a whole new layer to the table.
As a key metric, happiness adds new angles that are outside of the cost/efficiency analysis we usually do. Happiness forces you to think about the actual value you are creating to the user with your product. It makes you ask yourself what it means a “happy” user and pushes you to think about how to make as many users as possible feel that way.
Jason adds, “A growth marketer is someone who looks at conversion rate every day, cares about retention, but deeply devotes their work to improve happiness.”
Hiring for a Growth Role
In a previous article, “Building a World Class Growth Team,” I wrote in-depth about this topic, but I wanted to understand from the perspective of a CEO of a fast-growing company what they expect about growth candidates and how they can succeed in their role.
Jason describes the core skills set an ideal candidate should bring to the table.
- Deep domain expertise and idiosyncrasy to succeed in one or more acquisition channels
- Passionate about the product and how to use it as a platform to accelerate growth
- Basic communication skills to influence other teams to align growth goals with other teams’ goals.
- Scrappiness and creativity that allows them to find opportunities where others think there are none
A lot has been written about what companies should look for in growth candidates, but the reality is that each company’s product and business goals are different, which makes this process unique.
From Inc.com: “Growth is not a ‘one-size-fits-all’ business strategy because different industries require different approaches to overcome the challenge of reaching more customers while controlling costs.”
The same idea should be applied when thinking to hire for a Growth role. What worked for one company won’t necessarily work for your company. Hiring for this role is a process that requires founders, especially if the startup is in its early stages, to think carefully about what success means for the role and how this role fits with the overarching goals of the company.
Jason gives a great example of this by explaining how, at different stages of the company’s life, he thinks this role and team need to be evolving.
“In the early days, growth marketing is king. Basically, all you want to do is to find product-market fit, understand your product levers and your core users, and how and where to acquire more of those users,” Jason says. “But once you go through that phase, your challenges as a company change, and with that also the roles you are hiring for. For example, your brand voice and how you position your company from a branding perspective take an important priority, and those skills and mindsets are very different from someone with a traditional growth marketing background”
Jason’s final thoughts …
As we were coming to the end of our discussion, we talked more about the future of Tally as the first platform that will enable users to automate their entire financial life, and how Tally Save was an important milestone in the company vision to achieve that.
Jason gave a great talk about this at the Future of Fintech 2019 in New York City.
Without going into too much detail about this, the underlying conclusion was around this idea of the constant push for a company vision and mission that’s born from a growth mindset.
This mindset has created an organizational structure and culture that prioritizes growth as part of Tally’s DNA. This has been an invaluable way to create competitive advantages, rapidly win market share and create a fast, iterative product-development shop.
“I’m very much thinking about what’s next for Tally in the next 2, 5, 10 years,” Jason says. “I’m thinking about all the other financial jobs we can do, how we can acquire those users today and how we can shape our current product experience so we can serve their different needs tomorrow.”
If you want to understand startups, understand growth. Growth drives everything in this world. — Paul Graham
I would love to catch up with you and know about your experience! Feel free to reach out to me at Matias Honorato.
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