Startup Growth Diagnosis: Part I.

Based on 12 Key Factors & 53 data points

The Round Barn Labs team and I have been fortunate to work with companies backed by a16z, Google Ventures, Kleiner Perkins, First Round Capital and Goldman Sachs.

We are passionate about: growth and marketing. We love evaluating companies, pointing them in the right direction, helping them grow.

Over the course of figuring this stuff out, we came up with 12 growth principles and 53 data points to create a crystal clear growth diagnosis.

This is the first part of a series of articles about Growth Diagnosis.

  1. Some background on how we at Round Barn Labs come up with Growth Diagnosis
  2. The 12 Factors that form the core of the diagnosis. Focus on the first 4 in this Part I.
  3. A sneak peak of the 53 point data points

As a team of growth marketers at Round Barn Labs we are constantly looking to improve.

We often ask ourselves “how can we offer the best possible growth council to our clients?” “How should we evaluate projects and the growth prospects of a startup?” “How can drive the most revenue impact as efficiently as possible?”

Image Source: Growth Mindset

Having worked on growth startups and mature companies alike, we wanted to create a “Super Growth Score” to more accurately assess startups.

Using 12 Factors and 53 data points, we built Growth Diagnosis instead. While we wanted to build a tool / product, we ended up with a process.

Like many in the startup ecosystem, we’re a fan of Mattermark. We love the high scan value of their startup rankings and it was one of the things that inspired us to create a more comprehensive version of the Mattermark Growth Score, for the sake of this discussion we will call it a Super Growth Score (super original I know).

To get to the score we would ask the founder or team lead key questions, and gather data points to determine their growth potential, help them focus on key areas, and offer them a plan to deliver and execute the marketing strategy based on the score.

In our due diligence, we realized that providing a “Super Growth Score” was possible, but not the best idea. It is not only very challenging and time consuming to create and objective benchmark, but it can be misleading given each startup market, product, and case is so unique.

It was tempting from a marketing perspective to announce an automated tool to simplify a complex process, provide a benchmark, and assess a startup’s growth prospects. The reality is it is far too nuanced and far too unique to each startup / company. I have to admit I certainly fell in love with the idea of a “Growth Score on steroids” based on industry best practice and our experience working with over 40 startups companies.

I mean, who doesn’t love a good score? These days we are measuring everything from fantasy football stats,the food we eat, and steps we take. You can imagine what digital marketers like us are looking at on a daily basis: LTV, CAC, CPA, CPC, CTR, CVR, just to name a few. Oh and the scores…

Facebook Ad Relevance Score

Google Quality Score

MOZ Domain Authority Score

Image Source: MOZ

Lead Scoring in SaaS B2B

Image Source: Marketo

The list goes on.

My teammates and colleagues can attest to my pseudo obsession to the idea of providing startups with this “Super Growth Score” that is actionable and based on highly relevant data points. When Social Capital Partners rolled out their Diligence Tool, I thought “damn! The guy that started the first Growth team at Facebook and owns the Warriors beat us to the punch!”

If you check out their tool, you can see that Social Capital Partners focused on LTV and Revenue by Cohort. While it will not tell you the entire picture, it is a critical piece of the startup growth puzzle and a great place to start especially for SaaS or Social business models.

So good news, (or bad, depending on who you are), we are NOT going to roll out a “better Super Duper Growth Score” (despite my best efforts) but rather, use the principles behind our 53+ data points to generate a “Growth Diagnosis.”

So why a diagnosis? And no score?

  1. It’s Not That Simple: The health of a business and its growth prospects are a complex matter, akin to an individual’s health.
  2. Talk to a Pro: Experts are typically needed to assess the situation and prescribe solutions.
  3. It’s Not Comprehensive: Imagine getting one single score that encompassed your entire personal health situation. It just doesn’t tell the whole story.

So…we decided to make it part of our internal process rather than publish a score.

Our growth diagnosis is a more comprehensive and efficient way for us to approach growth effectively evaluate a business.

After a needs assessment, we build and review a scope of work. Upon it’s execution we we kick off the project. The first piece of the project is often the Growth Diagnosis. We guide clients through a 53 point review of their business and growth factors. We use tools similar to Social Capital’s Diligence Tool as part of the 53 points to provide our custom diagnosis.

Cohort analysis based on Social Capital Diligence Tool sample data

In an in-person working session, we can learn much more than an anonymous intake form and go beyond the numbers. The >53 data points form the basis for how we approach growth marketing for a client. Good examples of some of the 53 data points we look at include: visit to purchase conversion rate, sign up / join rate, churn rate, tests running each week, and even something as hard to quantify as team culture.

Instead of data provided in silos, or pulling from Google Analytics (which we find is setup properly 10% of the time), we decided we’d all be better served if a Growth Diagnosis was part as a candid friendly discussion with our client. More doctor patient relationship than transactional.

How will we make this “diagnosis” actionable?

Once we sit down with a client to gather their company’s “state of growth,” we can provide them with a diagnosis. Aside from being completely confidential, it improves the effectiveness and efficiency of deploying specific marketing channels. We run into dozens of different types of of product market fit, founders, LTVs, CACs, marketing budgets, churn rates, we can add context to the data and prescribe some potential solutions and strategies. From the diagnosis we can craft the most effective marketing plan possible to unlock growth.

So how what 12 factors do you use to determine my diagnosis?

We assess the following 12 factors to diagnose growth:

  1. PMF (Product Market Fit)
  2. Growth Model
  3. Founder Factor
  4. ABT: Always Be Testing
  5. Retention / Churn / Growth Multiplier (I know, I know, 3 in one)
  6. Customer Focus: NPS (Net Promoter Score) / Gathering Feedback
  7. Week over week growth
  8. LTV : CAC Ratio
  9. Self awareness / Stage recognition e.g. Traction or Growth
  10. Ability to ship product
  11. Focus
  12. Team Culture

Ok ok some of these are the same “factor” and some can be broken out, but hey, we wanted to get to 12 in time for the 12 days of Christmas!

While these factors do not cover all aspects of growth, nor do they cover all the questions we ask in our client work, it’s forms a foundation and covers the core areas needed to understand at a high level where a company stands from a growth perspective. We cover 4 in this article (more to come).

As you might expect, having a trusted third party work with you to provide a brutally honest assessment of the business, metrics, resources and best path ahead to grow, can be extremely helpful. Even if just to ask the questions and hold up the mirror. While these are getting asked by employees, peers, investors, we see a lot of benefit when a marketing leader or founder can step back and review these 12 factors.

Like investors, we look at things like churn, but we also like to look at things like conversion rate in specific marketing tests to discover opportunity to improve over time.

  • For each of these metrics, we can craft plans and recommendations around increasing each metric. Areas where we can be really effective we will discuss in greater detail but think: marketing channel assessment (where to start and where to prioritize)
  • marketing testing, A/B testing plans
  • Interpretation of data e.g. benchmarks, channel decay, ad / audience fatigue
  • Specific marketing channel deployment, e.g. Paid Social, Content Marketing, Paid Search, Influencers
  • Optimization of each channel

Let’s take a look at 4 of the 12 key pillars to growth we outlined above that form the basis for our Growth Diagnosis

#1 Product Market Fit (PMF)

This ain’t #1 by accident

Coined by Marc Andreessen of a16z and defined as “being in a good market with a product that can satisfy that market,” it is often very challenging for startups to achieve and define.

Brian Balfour lays it out well in his The Never Ending Road to Product Market Fit. The notion here is that your product and your market are evolving, so having an honest assessment of where your product fits into it’s addressable market at any given time given changes to technology, competition and consumer behavior is really important.

One of our Round Barn Labs teammates Lauren Bass wrote an excellent article on the topic featuring Morgan Brown outlining the 5 Phases of Startup Lifecycle. Insights that Morgan and other top growth practitioners have listed on how to measure Product Market Fit:

  • Survey users to understand how they feel about your product (Qualitative not just Quantitative data)
  • Measure Net Promoter Score (NPS) — if it’s a 9 or a 10 you’re in good shape
  • Use Sean Ellis’ test for product-market fit — if 40% or more of your users say they would be very disappointed if your product was taken away that is a good indicator of product-market fit.
  • Measure retention rates and look for a stabilizing retention rate over time. What’s a good retention rate? Depends on model and vertical.
  • PMF is not simple or easy for folks to get to but the above can help.

#2 Growth Model

Massive credit here to Brian Balfour and Andrew Chen. Their Growth Lecture Series in Fall 2015 now relaunched as Reforge provided us with some foundational growth principles that built upon our experience. One of the most critical points was the concept of Growth Model. Here is an example of a business with a SEO / Content Growth Model:

Source: Reforge Growth Lecture Series Fall 2015 Brian Balfour & Andrew Chen

Each business is going to have a very different Growth Model. Startups will behave differently, some paid, some SEO, some viral, etc. Once we can determine your growth model, we can more clearly provide you with a Growth Diagnosis and prescribe options, plans and solutions. If you already know your growth model, we can validate that or align specific strategies, channels and tactics to support it.

#3 Founder Factor

“It starts at the top.”

“Growth is a team sport.”

“Effective growth needs to have executive buy in.”

Are you a first time founder? Or do you have previous experience and knowledge from the failures and wins that come with it?

If a founder / CEO understands or strive to understand the foundational principles of growth that is a great start. Understanding the pitfalls can be the difference between success and failure.

Product Hunt’s recent What Do Investors Look for When Evaluating a Startup is an excellent primer. It serves as a great guide especially in its emphasis on people first, which often starts with the founder.

How do you make decisions about who to invest in?

“That the founder is passionate about what he/she is doing and believes that it is important and can help people and businesses be more effective, productive, and happy.” Michelle Tandler, Associate, Trinity Ventures

Love this Product Hunt article quoting Om Malik, Partner at True Ventures & Founder of Gigaom

Ben Horowitz’s The Hard Thing About Hard Things is required reading for the startup founder and startup growth practitioners.

“Whenever I meet a successful CEO, I ask them how they did it. Mediocre CEOs point to their brilliant strategic moves or their intuitive business sense or a variety of other self-congratulatory explanations. The great CEOs tend to be markedly consistent in their answers. They all say, ‘I didn’t quit’.”

“Startups should not have a growth team” the CEO should be the head of growth” - Alex Schultz VP Growth, Facebook.

Persistence, growth understanding & mindset, and passion that enables the team are key themes.

One area we have seen a lot of success if founders that are able to balance involvement & support with allowing the smart experts they have hired to do what they do best. We have found those that can provide that optimum level of checking in, guidance and support plus autonomy and trust can be extremely powerful.

#4 ABT. Always Be Testing

Are you testing and if so how often?

The value of laying out structured hypotheses, testing, and learning to inform improved tests and performance has been emphasized extensively in the growth community.

Sean Ellis is one of growth’s pioneers and coined the term “Growth Hacker.” Besides defining some great measurements for PMF we discussed earlier, talks about the importance of High Tempo testing. At last years Growth Marketing Conference in San Francisco, he shared the correlation between Twitter’s growth rate and the number of tests they were running.

Understanding whether a company is running tests with structured hypotheses and running them at a cadence that allows for learnings and impact will tell us a lot about their growth prospects.

We have been testing Sean Ellis’ Growth Hackers Projects tool with success, we enjoy the structure, as have our clients.

We are cheating again here adding another sub factor. But it relates to testing so sorry we’re not sorry…

One of the elements we employ, especially when working with earlier stage companies, or startups from seed to series B range is speed. Sean Ellis and other growth marketers like us have learned the value of speed and agility. Not only have we worked with First Round Capital backed start ups but we are fans of their learnings and insights. Speed As a Habit is one of our favorites and see a correlation between Dave Girouard’s “agile (beyond product)” approach and a lot of growth marketing best practice and what is required for a startup to be successful.

The fastest man in the world, Usain Bolt.

“All else being equal, the fastest company in any market will win.” The article coupled with a lot of other data inspired us to adopt a weekly sprint schedule similar to the product world.

On a recent client weekly call with an innovative series A backed IOT startup a trusted parter said one of my favorite quotes of the project:

Speed is of the essence.

So for this part I of our series, that wraps up the factors we will cover today!

Once we have the diagnosis of your company’s growth situation, we can work with you to craft a plan to improve the most critical needs first.

You might ask why does this insight matter if all you’re doing is running marketing acquisition channels?

Sometimes it ensures we know what NOT to do. The Diagnosis process can also allow us to guide a startup on ways we can leverage their strength / better support their weaknesses. The knowledge also makes us better at HOW we manage a top of funnel marketing channel like paid social and WHEN we determine to help with full funnel activity like refocusing efforts on customer feedback or improving onboarding, or boosting low conversion rates.

A startup might approach us to drive traffic and acquire customers. With this detailed diagnosis we can assess whether they might need to focus on operations, or product, before acquisition. If we do determine that acquisition makes sense we can help them ensure acquisition is efficient to keep burn rate as low as possible and ensure learnings are high enough to inform future plans. So that plan and list of key recommendations will often include things like:

  • Marketing Channel Analysis — one of our favorite exercises to rank stack marketing channels based on your needs, business model, and stage so you know where to start and how to prioritize more effectively.
  • Content Marketing Strategy Plans and execution — stay tuned on future posts on this topic
  • Influencer / Affiliate / Blogger Strategy Plans and Execution
  • Paid Search strategy and execution
  • Paid Social strategy and execution
  • Channel Discovery, testing determine CAC (Customer Acquisition Cost)
  • SEO Strategy Plans and execution
  • A/B testing plan and execution to ensure cadence
  • Mobile app downloads / mobile focused growth
  • Design work and support

So there you have it folks, 1–4 of our 12 factors in order to diagnose a startup’s growth. Good news, this is only part I. So more to come, please keep the comments and questions coming.


Tye & the Round Barn Labs crew

The Barnyard: Growth Insights

Growth Marketing musings from Round Barn Labs. A team of Growth Marketing experts. Topics include: Paid Acquisition, Growth, SEO, Customer Acquisition, Digital Marketing, Retention, Mobile, Case Studies


Written by


Growth Expert. Paid Marketing + CRO (Conversion Rate Optimization) @RoundBarnLabs CEO. Former @Amazon @eBay @KPCB startup. @Reforge Growth + Retention + Models.

The Barnyard: Growth Insights

Growth Marketing musings from Round Barn Labs. A team of Growth Marketing experts. Topics include: Paid Acquisition, Growth, SEO, Customer Acquisition, Digital Marketing, Retention, Mobile, Case Studies