Learn more about startup with this collection
How to analyze churn data and make data-driven decisions
The importance of customer feedback
How to improve customer experience
What is A Growth Model?
At its core, a growth model boils down to a way to conceptualize and summarize your business in a simple equation, which allows you to think about growth in a holistic and structured way.
“A growth model is an equation that tells you what are the different variables in your business and how they work together and translate into growth.”
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Benefits of a Business Growth Model
- 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 imp...
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Start Constructing Your Business Growth Model
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 ...
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What Does A Growth Model Look Like?
When you build a mathematical model, you need the following components:
- Inputs
- Function
- Output
The same applies to a growth model.
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Do You Have To Create A Growth Model?
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 mode...
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A Basic Growth Equation
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)
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Related collections
Other curated ideas on this topic:
The Big 5 model
One personality model survived the 20th century. It's called the Big 5 Personality Traits (5-Factor Model). It was developed in 1961 and since have been developed into its modern form.
The Big 5 model takes a holistic approach by compiling every word that could be considered a personality ...
Subscription Model
If you want a business model with retention baked right in, consider a subscription model for your next product launch. Customers sign up for the subscription and pay monthly for products delivered to their doorstep or inbox. Customers with a regular need for your products will love the convenien...
Consider your growth gap
Executives are seldom set up to deliver performance and growth. Instead, they typically pay more attention to day-to-day performance.
One way to focus on growth is to ask your organisation to articulate how much new growth they expect to ge...
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