For early stage companies, Growth makes or breaks the business. With the success of many high growth tech companies, Growth is a function that many companies are looking to establish. Many terms have been used to describe “Growth”: growth hacking, growth marketing, growth product, product-led growth, demand generation, performance marketing.... Growth may mean different things for different companies. I define Growth as using data-driven experimental approaches to acquire, retain, and monetize users.
For early stage companies, the top priority should still be finding Product Market Fit. You should think about how to grow from day one, but establishing a standalone growth function should only come after you’ve found product market fit. Otherwise, you may go down the wrong path, just faster.
The most common team structure for Growth divides responsibilities between Marketing and Product. Marketing team typically focuses on user acquisition, raising awareness, driving traffic to the website or app, and getting people to sign up for the product. Product team typically focuses on user retention and monetization, designing intuitive user onboarding, getting users to use the product frequently and deeply, and encouraging them to upgrade to paid plans.
Recently we’re also seeing Growth emerge as a distinctive team, with ‘Head of Growth’ or ‘Chief Growth Officer’ as leaders, and includes product, marketing, sales, customer experience, design, engineering, and analytics functions.
Let’s explore a few ways to kickstart the Growth function for early stage companies and the pros and cons of each method.
The job of a growth generalist is to explore different potential directions to grow and identify areas to focus on to build up the team and capabilities. This is especially helpful when it’s not obvious what type of growth strategy is best for your business, and you need someone dedicated to figuring that out.
Your first growth generalist will ideally have:
The Growth Generalist is typically supported by a cross-functional ‘Growth Pod’ with a designer, an engineer, and an analyst. Initially each member works on growth part time, and as the needs increase, they become entirely dedicated to the growth work. For example, initially a front end engineer may dedicate 30% of their time on small landing page tests, then as the team proves the impact of landing pages, that engineer becomes a ‘Growth Engineer’ dedicated to large scale landing page tests and other growth experiments.
Folks in the Growth Pod often don’t report to the Growth Generalist. Instead they report to their own functional heads as the company is typically quite flat at this stage.
Key characteristics of this Growth Generalist:
The benefit of hiring a full time Growth Generalist is that someone will live and breathe growth as their primary job, rather than an afterthought. This accelerates the speed of execution, and starts to build institutional knowledge early on.
The downside of this option is that it is quite hard to find someone who has broad knowledge in different disciplines of growth, while good enough in each to make meaningful trade-offs and impact. If you hire the wrong person, you may miss critical time and make certain mistakes that require expensive repairs, especially since resources are limited for an early stage company. So, make sure this hire has a good track record and is passionate about your business, and if you spot a good one, don’t let them get away.
Instead of hiring a Growth Generalist from outside, sometimes companies transition one of the cofounders to focus primarily on Growth. This is a good option when the company is raising the strategic importance of Growth as critical for the future of the company, and a cofounder is needed to mobilize the team and shift the focus of the company. This person may hire a junior Growth Generalist to support this effort.
This cofounder needs to be truly passionate about Growth and is happy and committed to solely focus on it. Among the cofounders, the person most interested in digging into data and experimenting tends to be a better fit. The characteristics and how they work with the rest of the company are similar with the previous model.
The benefit of transitioning a cofounder to dedicate to growth is that they have a deep understanding of the product and the users to craft the growth strategy. They also have the clout to drive change, and know the best people to pull in to make things happen.
The risk of this option is that the cofounder may not have deep experience in growth, and the institutional knowledge may be a double-edged sword that justifies past decisions and weakens the desire to innovate. So, make sure the cofounder has strong expertise and desire to drive growth.
When you don’t have expertise with Growth internally and have a hard time hiring a great growth person full time, finding an external growth advisor may be a quick way to kick things off. The job of a Growth Advisor is to map out the growth strategy and tactics, establish a growth roadmap, while overseeing external resources or building an in-house team to execute.
A good Growth Advisor ideally:
The benefit of getting a senior Growth Advisor or even several growth advisors is that they’ve done it before and can help narrow the many potential directions to one that’s most likely to succeed, saving time and resources and reducing chance of mistakes.
Because a good advisor typically has a good network, they can also help with hiring a full time growth team or finding a reputable external agency to execute.
I argue that for most early stage companies, it’s better to get a senior Growth Advisor than to hire a full time CMO or Chief Growth Officer. Startups often can’t afford an expensive full time executive, and even when they can, it takes time to hire one. A full time CMO or CGO needs time to onboard, and is typically too far removed from execution that they’ll want to first hire people to execute. So you may need to wait for months before seeing tangible impact. A Growth Advisor can craft strategy relatively quickly to start the efforts without the administrative overhead.
However, there are risks in this option too:
A frequent issue with Growth advisors who come from bigger companies is that their recommendations may take more time or resources than your company is ready for.
Another risk is that some advisors may copy and paste the same ‘playbook’ from their previous employer, which may miss unique opportunities for creative solutions. Prior experiences help identify opportunities more likely to work, but they’re circumstantial and should not be taken as hard truths that work at your company too. So it’s important that the Growth Advisor creates a strategy tailored to your company’s unique circumstances.
I believe that the right Growth Advisor needs to not only create high level strategies, but also map out the tactics and roadmaps, and guide the team in execution. It’s easy to say ‘focus on user generated content’, and it’s much harder to create the actual plan to get there. The advisor needs to connect the dots between 30,000-foot view strategy and on-the-ground realities and limitations of the startup, and help the team to implement the strategy.
If you have a hypothesis of the focus area in driving growth, but not entirely sure about it, you may not be ready to hire a full time employee yet. Working with an external agency helps you test the waters before committing. A good agency also brings in vast industry expertise and provides execution resources, so that you can focus on other priorities while the agency takes care of the heavy-lifting. It makes the most sense to use an agency when the area of focus is relatively independent of other functions, for example, SEO, content marketing, paid media, influencer marketing, which can be executed by external resources without too much internal support.
The benefit of hiring an agency is that typically you not only get strategies, but also execution resources to get things done.
The risk of hiring an agency at this stage is that agencies tend to focus on executing an established playbook and tactics, and are unlikely to suggest creative strategies. Agencies often don’t have visibility into internal metrics, hence tend to focus on upper funnel metrics that they have access to such as impressions, clicks and visits, rather than down funnel metrics such as conversions, retention and lifetime value, so there could be a disconnect in return on investment, and they may not always feel accountable to your end goal. Ideally you should have someone internally knowledgeable enough to oversee the quality of execution of the agency and connect the dots.
Establishing a Growth function at an early stage startup is hard. Out of the four models, I typically recommend the first option, hiring a dedicated Growth Generalist, to most companies, because you want to start building the muscle and institutional learning early on. However, finding the right first growth hire is often a matter of luck and timing. When you can’t find the perfect first growth hire in the short term, I recommend a hybrid model, finding a trusted Growth Advisor who manages an external agency to kick things off, while looking for your own growth hire. Having a cofounder or CEO as the point of contact helps too. In this way, you make sure you’re running towards the right direction, and have someone you trust on your side to keep tab on the effectiveness of the agency.
