1/ As a startup, it's essential that you, and your team, have a clear understanding of how your business is likely to grow. We call this building a Growth Model. With this, you'll know which growth investments to make right away, which to avoid, and which to double-down on.
2/ Our advice is to think about your business like a high-performance race car. The same four components that help a car drive faster also help your business grow:
1. ⚙️ The (Growth) Engine: Self-sustaining growth loops that drive most of your growth (e.g. virality, perf marketing, content, sales)
2. 💥 Turbo boosts: One-off events that accelerate growth temporarily but don’t last (e.g. PR, events, Super Bowl ads)
3. 💧 Lubricants: Optimizations that make the growth engine run more efficiently (e.g. improved conversion, a stronger brand, higher customer retention).
4. ⛽ Fuel: The input that your engine requires to run (e.g. capital, content, users).
3/ All four of these components help your business grow, but understanding your Growth Engine is the most important part because it’s the only component with the potential to be self-sustaining. e.g. engines naturally create an output that can then be re-invested in more growth.
4/ ⚙️ GROWTH ENGINE(S)
Companies grow primarily through four possible Growth Engines:
• Performance marketing: FB, AdWords, TV, etc.
• Virality: Word-of-mouth, referrals, inviting friends, etc.
• Content: SEO, shareable videos, or newsletters, etc.
• Sales: Salespeople
5/ Using just these four engines, we can explain the growth of every breakout success. Here are a few examples:
6/ Check out our previous @firstround review piece where we outline a 3 step process to determine which engine is likely going to drive your business's growth and how to operationalize it. firstround.com/review/drive-g…
7/ 💥 TURBO BOOSTS
Next, we have Turbo Boosts. Similar to a turbocharger in a car, these are tactics that can accelerate growth for a period of time but don’t deliver ongoing acceleration. They include things like:
• PR
• Events
• Brand marketing campaigns
8/ These tactics aren’t "engines," because in most cases they aren’t sustainable and repeatable at scale. For example, any startup that has received the “TechCrunch bump” knows that it can give you a nice boost in traffic, but it’s often not clear what to do next.
9/ However, Turbo Boosts can still be very valuable tools for kickstarting and accelerating your growth rate, particularly at important inflection points for your company, like lighting the initial spark, or launching a new product or market.
10/ 💧 LUBRICANTS
Third, we have lubricants. Lubricants don’t drive growth directly, but instead optimize the efficiency of your engine. Also, without enough lubrication, your engine will stop. There are 3 broad categories of lubricants:
• Conversion
• Activation
• Retention
11/ Of these three categories, retention is the most important, as Brian lays out in this post. reforge.com/blog/growth-me…
12/ ⛽ FUEL
Finally, we have Fuel. Without it, even the most optimized engine won’t run. The type of fuel required is specific to the type of growth engine you’re running:
• Paid marketing and sales engines primarily need capital, which can be invested in ads or salespeople
13/
• Content engines unsurprisingly need more content, which can be used to attract users.
• Viral engines require only more users, who in turn refer additional users.
14/ For more, including the six most common growth pitfalls, and how to put this into practice, check out the full post.
1. Narrow your focus 2. Protect everyone's deep work time 3. Sync regularly to align on priorities and unblock blockers
4. Fire underperformers 5. Encourage more communication between team members 6. Facilitate more async communication 7. Nurture psychological safety 8. Empower your cross-functional teams 9. Align on what success for the team means
10. Set a predictable shipping cadence 11. Anticipate risks and edge-cases 12. Switch your product development process 13. Optimize your code review process 14. Invest in unit testing 15. Re-inspire the team on the mission of the company
A year in review: The Airbnb alumni angel investing syndicate @WeAreAirAngels
We launched the syndicate as an experiment in early 2020, betting that the Airbnb alumni could build a strong angel investor community. We were right.
*Read on*
1/ Led by @djdan85, @bmartlives, @rehanazhar, @MiSunKw, and myself, we've already done 14 deals, investing over $1.7m in 10 deals now worth $2.5m (~100% IRR)
We've also co-invested $1m in 4 deals with our friends the Lyft Angels, Pinterest Angels, @unpopularvc, and @mccabe
2/ Two companies have already raised follow-on capital since our initial investments, and 2 more are in the process of raising their next rounds
Earlier today, I gave a talk at the @SubstackInc's writer conference about building a writing habit. Below are the ten concrete strategies I shared that have helped me publish a post every week for 1.5 years 👇
0/ First of all, just sharing advice about this topic gives me serious impostor syndrome because writing is still pretty new to me, and I have much to learn. But these are things that have helped me, and I hope they'll help you.
1/ Strategy 1: Commit publicly
This was maybe 50% of my initial motivation. Having told people I was going to write weekly made me feel bad when even thinking about skipping a week. It gave me just enough nudge to keep going.
This week, I reflect on the wild year this newsletter has had, and share a bit about what's coming next. See thread for summary.
I've also taken the opportunity to collect the top posts and tweets from the year, plus my favorite mother-in-law takeaways 🥰 lennyrachitsky.com/p/2020-year-in…