How To Build A Growth Model (Part 1)

In Andy Johns’ interview, he shared a basic growth equation which he learned from his his former boss, Chamath Palihapitiya, who then ran growth at Facebook.

Growth = A (top of funnel) * B (magic moment) * C (core product value)

Leave the numbers and equations aside and start with a high level conceptual model that captures the core levers of growth. This alone will provide a valuable framework to help you make good decisions. 

Bottom line is this model should explain how your business will grow, in a way that is different from that of other companies.

The answer is no. Why? Simple: your time is limited, it probably makes more sense for you to spend time on improving your product and growing your initial user base, rather than on building a growth model.

Still, there are unique benefits of going over the exercise of creating a growth model and making it part of your day-to-day decision making.

• The process of uncovering all variables and then synthesizing them into one single equation will deepen your understanding of the business
• Growth model also helps you assemble individual metrics into a big picture, and force you to think about their relationships and the relative importance
• When entire team look at a single equation with a couple key variables, it helps prioritize and focus
• Once you have growth model version 1.0, you will naturally begin to find questions to ask. As you ask more questions, you change how you do business, or adjust your model, or do both, and so on and so forth