How to Set Up, Hire, and Scale a Growth Strategy and Team: Sequencing Business Models

How to Set Up, Hire, and Scale a Growth Strategy and Team: Sequencing Business Models

Introduction:
In today's competitive business landscape, having a growth team in place can significantly accelerate a company's overall growth trajectory. Companies like Facebook have seen immense success by implementing a growth team early on in their journey. However, before hiring a full-fledged growth team, it is crucial to ensure that the company doesn't have a "leaky bucket" problem and that long-term retention is stable. In this article, we will explore the process of setting up, hiring, and scaling a growth strategy and team, while also discussing the potential of transitioning from a SAAS business to a marketplace.

Building Your Growth Team:
To build an effective growth team, it is important to focus on sustainable retention. Benchmarking your retention against companies in your specific vertical can help determine the success of your product and value proposition. Additionally, it is advisable to hire a team lead with prior growth experience, preferably someone who has been a founder themselves. This expertise can greatly contribute to the success of the growth team and its initiatives.

Setting Growth Goals:
Setting realistic and motivating growth goals is crucial for the success of a growth team. It is recommended to set a goal that is midway between being too easy and too difficult to achieve. This creates a stretch for the team while maintaining a realistic target. The end goal should be an absolute number that the entire team collectively works towards. By adopting this approach, growth becomes ingrained in the company's DNA, driving success and expansion.

Identifying Channels for Growth:
Identifying the right channels for growth is essential for any company. Most products find one or two relevant channels early on that work exceptionally well for them. Referrals have been cited as the top channel within the first year by around 70% of growth experts. By leveraging existing user behavior, companies can identify the channels that align with their target audience and maximize growth potential.

Scaling the Growth Strategy:
Scaling a growth strategy requires constant experimentation and optimization. Companies at scale typically run one experiment per growth engineer per week. It is crucial to start early with a solid growth experiment dashboard to effectively measure and evaluate the success of various initiatives. Additionally, it is important to avoid testing things that wouldn't be shipped to everyone, ensuring that experiments align with the company's overall vision and values.

Sequencing Business Models: SAAS to Marketplace Transition:
Many SAAS businesses are exploring the potential of becoming marketplaces. By aggregating buyers on their platforms and aiding in the discovery of businesses, these companies aim to attract more buyers and drive growth. However, transitioning to a marketplace requires careful consideration and planning.

Changing the Incentive Structure:
Founders need to change the incentive structure for a significant percentage of the company to prioritize the marketplace initiative. By aligning the entire company's growth around this new initiative, companies can drive long-term success. Alternatively, creating a new team with separate goals and reporting lines can also be an effective strategy, especially for larger companies looking to expand into new product lines.

Shepherding Resources and Changing Company Culture:
Transitioning to a marketplace requires a shift in company culture and the recruitment of new resources. Founders must shepherd the right people who are passionate about the opportunity and have a background in consumer product development. Hiring leaders with consumer backgrounds can help bridge the gap and ensure a smooth transition.

Confirming Market Demand and Alignment:
One of the critical factors for a successful marketplace transition is confirming the existence of a demand side to the market. Additionally, the opportunity must align with the characteristics of successful marketplaces. It is essential to analyze whether the SAAS customers make revenue by selling something people want to buy or if the marketplace opportunity is limited to finding vendors once on the demand side.

Conclusion:
Setting up, hiring, and scaling a growth strategy and team requires careful planning and execution. By prioritizing sustainable retention, setting realistic growth goals, identifying the right channels, and constantly experimenting and optimizing, companies can drive significant growth. Additionally, for SAAS businesses considering a marketplace transition, carefully evaluating market demand and aligning the company's culture and resources are crucial steps. By following these actionable strategies, companies can achieve long-term growth and success.