Growth matrix

Product development workshops are generally all the same. Have you noticed it? You're asked to talk about your product in problem/solution framework, you most likely are filling in the lean canvas or business model canvas template. The product is being evaluated if you are targeting the right customer segment. Let's take a look at the traditional lean canvas.

Lean canvas vs Growth

Lean canvas originated in 2010 and introduced by Ash Maurya. It was this oversimplified version for startups to help them better understand the flow of their product, what are they who are they creating for, and are they going in the right direction. Although it helps to answer the most asked question of the startup industry, "what problem are you solving?", it doesn't help you to outline your growth.

Lean canvas offers only two sections for the product growth: Channels and Key metrics, but let's face it, most likely have the same values for all startups.

  1. Channels - social media, relevant groups, networking events, industry influencers, ambassadors, etc.
  2. Key metrics - weekly active users, number of downloads, average time on the product, etc.

Surely this can be justified by the fact that startups don't have a lot of certainty at the beginning of their journey. However, I feel like that justification is untrue in 2020. By giving the rationale of "it's okay to be messy, we're a startup" we practically are being okay with having no clear plan for growth.

Like Paul Graham once said in an infamous article startup=growth, growth is dividing line between the startup world form the small business world. This strikes the question: what is growth anyway? How can you evaluate growth for startup or indie project or newsletter or any other digital product in the world? Is there a difference between growth strategies of VC backed startups and indie projects of digital nomads and freelance makers?

If you ask me, growth is not a number, well, not only a number. It's a massive list of lessons learned, conversations and experiments. As a maker, you can have both planned and unplanned actions, but you still need to have a framework to measure the outcomes of the activities. Is there a difference in growth strategies? No, the only difference is the budget and the creative flow of growth engineers in the team.

Growth matrix

In this article, I will introduce a growth framework that I'm using to evaluate my projects, grow, and act on the changes.

Let's start from scratch. When I'm creating a new product or even planning the next steps with my newsletter, I use the following model.

It's a straightforward model that helps me to outline the growth strategy for my product. It has two main inputs:

  1. The list of activities for the product (yes list of activities not features, will talk about that in a bit),
  1. The success metric for the activity

This simple model that can be done in a very boring excel file helps me to keep in check with my plans and gradually increase the load on my shoulders in terms of growth. Also it gives me clarity on

  1. Metrics that I'm going to use
  2. Milestones that I wanna hit
  3. Create a roadmap of my growth activities.

Metrics

Each product has it's own list of metrics that are being tracked. For example, SaaS companies often use the number of returning visitors, churn, etc. However, each product should have at least one metric that is their north star, that they are working on to improve. For the same SaaS companies, the most often representation of that metric is the Lifetime Value of a customer. For the newsletter, it is the number of subscribers, aka the size of audience, some people can track the open rate or click rate for their sponsorship opportunities.

In this matrix I'm using a success metric for each activity that I'm planning to do for my product (in this case the newsletter).

Why have success metrics instead of one metric that matters?

My experience as a product manager for a lot of years is that it's not possible to plan for a product growth relying only on 1 metric. Let's say you hit 80% or returning customers. Well that's awesome are will it help you decide what are you going to do next with all that returning people? No.

Here is the example of this Engineering Growth blog so you can see what kind the visualized version of my metrics.

Each next activity can't be done without completing previous step.

List of activities vs List of features

When you're building something new in 90% of the cases (or even more, but not 100% for sure) you already know your list of features, your MVP scope. It's easy to kickstart and plan for the first few spirts as there are a lot of companies that already built something similar. Some business processes are automated by third party tools. This is why list of features is not the thing I'm suggesting to focus on.

So why list of activities? Imagine you have a SaaS company with 0 users on your product, what is the the time and effort you're going to dedicate to your project? What about 100, 200, 10560? Depending on the metrics that is the more important to you your activities and efforts will be different.

Let's see how features and activities look next to each other.

  1. build integration with paypal vs start a podcast
  2. add twitter login vs organize community meetup

Which one is more actionable?

If you have 10 subscribers to your newsletter it's likely that you're writing with enthusiasm and still haven't figured out your niche audience (just like me once). Also you're can still be not that much consistent, as you're just understanding your schedule. Having patreon page for when you have 10 subscribers, is not the best way to start off a fresh newsletter, so maybe the goal can be consistency for the newsletter until you get comfortable with your audience, schedule and niche. Now let's imagine you have 1000 subscribers, that's a lot, and being not consistent can't be the best strategy with this big audience, and it's a building ground for example to launch a course or merch.

For the features on the other hand your customer is pretty much is dictating what you should build next. Building new features is pretty much out of your control, as you are mainly (hopefully) building the features customers are excited about and requested.

In short feature is here to help build your product, while activity is here to outline your growth strategy.

Conclusion

I'm using this matrix to track my newsletter for the past 3 months.

I came up with this solution as it provided me the simplest birds-eye view of my goals and metrics oriented on growth specifically.

What I learned from this model?

  1. What are my priorities in terms of activities,
  2. What is the most important metrics for me,
  3. What is the ultimate goal of the newsletter.

Let me know how this works out for you. Do you use any growth models?