What does startup growth mean and how do you achieve it? 8 game-changing tips from Seedstars growth mentors


What does startup growth mean and how do you achieve it? 8 game-changing tips from Seedstars growth mentors

Eugenia Shevchenko

MAY 20, 2021

When lighting a fire in a windy setting, one should always start small, get close to the flames and be attentive. Throwing wood too early or not paying attention to it will only result in going back to square one.

Growth in a startup is similar. In the early days, startups should reserve their capital as they ideate, build the MVP, and go through the customer discovery stages, which is the first step of laying the fire.

Then, it is time for some experimental spending in search of growth channels and solving retention. At this stage, if they spend too much in unproven channels it will just be a waste. The goal here is to find product-market fit, which is well defined by Sean Ellis: “Achieving product-market fit requires at least 40% of users saying they would be “very disappointed” without your product”, which is the second step of getting the flames going.

Once the product-market fit and proper growth channels have been found, entrepreneurs can spend more aggressively on growth. However, experimenting shouldn’t be forgotten. The environment is always changing so being data driven is like throwing more wood on the fire.

It is important to note that growth is a process and not just hacks. We have been teaching this process and how to run each step to our portfolio companies for 7 batches. We asked the mentors in our program to share what growth means for them and what actionable steps they can share for startups to achieve it.

1. Identify your North Star Metric


Anuj Adhiya, VP of Growth at Sophya

Anuj told us about the importance of setting a key goal. For him, growth means that a startup has found a repeatable process for testing and learning about where their biggest opportunities for unlocking greater value are for their customers. It also means they have adopted a company-wide culture of experimentation, where everyone's job is to contribute to growth.

Anuj mentions identifying the startups’ North Star Metric as important. This metric quantifies the value they deliver to customers and it is important that a startup identifies its North Star Metric: this is the number that quantifies the value you deliver to your customers. It’s important because the entire company's job is to grow this value and everything that is done should be guided by this number. He also emphasizes the importance of a great first experience for users:

“Without a great first experience, people will leave and you won't get a second chance. So talk to 10 of your best existing users to understand what value they get from your product and how they discovered it so you can replicate that great experience for everyone else.”

2. Embrace suboptimal results and celebrate the learnings behind it


Satwik Govindarajula, Head of Growth at Seedstars

For Satwik growth is a process of continuous improvement of the organisation as a whole:

“To achieve growth, startups should embrace suboptimal results and celebrate the learnings behind it. Let every single person in the company be responsible for your north-star metric growth. It's not only on the founders anymore.”

3. Measure, learn and iterate


Peace Itimi, Growth Mentor at Seedstars

“Growth touches every part of a startup”, Peace told us. It is never too early to start paying attention to data: what is the most valuable channel of acquisition, where are quality users coming from the most? Answers to these questions will help in acquiring and retaining users, and ultimately increase revenue.

4. Create and maintain an organized experiment pipeline


Pei-Ran Yu, Senior Growth Hacker at Careem

Experimenting is great, but only when there is an organized experiment pipeline built on strong data infrastructure that will allow most experiments to be trackable:

“Growth is achieving maximum impact a product/service can deliver in a sustainable way, powered by experiments based on (sometimes bold) hypothesis & analysis.”

5. Make sure the vision is clear and simple


Abhinav Krishna, Head of Expansion - APAC at Deel

Every entrepreneur knows how valuable a good team and a clear vision are. Yet the foundations are often the hardest to put together as founders get carried away with plans and projections:

“Make sure the vision is simple and clear. Think of something you can easily explain to your mom. As we look into growth and go crazy about numbers, we end up defining the whole world as a market which is risky for growth and confusing for the team.”

Abhinav also mentions having clear Level 1 and Level 2 KPIs, as well as an automated way to track them. L1 KPIs are those directly related to the quantifiables the company is going to make or lose (revenue/active customers/ churn etc.), whereas L2 KPIs affect the pipeline- think of content generated leads or channel partnerships.

Startup growth is a strong team which is as crazy as you about the vision.

6. Hire people willing to experiment


Patricia Hansen, Growth Mentor at Seedstars

Biases can be very dangerous. That especially goes for our personal biases, as we are often unaware of them. Patricia mentioned that the founder’s own biases on how their vision should be achieved often leads to failure and disappointment, because of their inflexibility to adapt. However, with experience comes knowledge too, so founders are trained to recognize what strategies work for their businesses and which don’t:

“They will be more in control of their strategy and guide their team with more prescriptive tactics. Growth, as a framework, will get teams aligned and investors excited. As a to-do I would say: hire people willing to experiment; fire those you won't align to an experimentation and metrics-informed strategy: people don't change overnight.”

7. Find the "wow/aha" loop for your target customers


Srinu Chowhan, Head of Growth

“For me Growth in a startup is all about finding the "wow/aha" loop for your target customers and running rapid experiments to deliver that "wow/aha" experience faster, better throughout the customer journey using product or marketing channels.” says Srinu.

The buyer’s journey is key here, as it would identify the target customers and allow experimenting with the entire conversion funnel. Srinu’s pro tip: start with the biggest dropoff which should positively impact the North Star Metric.

8. Apply a systematic way of using resources for the best possible result.


Jon Attwell, EIR at Seedstars

As several mentors above, Jon is also a fan of applying a systematic way of using resources to achieve the best possible results. His growth frameworks has three key steps:

  1. Identify the parts that make up a business.
  2. Analyse each of those parts from the perspective of a user/client/customer, and eventually;
  3. Prioritise which of those parts to work on that will take the business to the next level.

All of these tips, a framework and an action plan, as well as some practical examples of growth in companies and guidance by a mentor are offered to startups in the Seedstars Growth Program, a virtual three-month post acceleration program focused on growth. If you are an investor and would like to talk to startups, please fill in this form and we will make the introduction happen.

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