The Art of Measuring, Scaling, and Building for Growth

Kazuki

Hatched by Kazuki

Sep 17, 2023

4 min read

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The Art of Measuring, Scaling, and Building for Growth

Introduction:

In today's competitive business landscape, measuring the right metrics, scaling effectively, and building for growth are essential for long-term success. This article combines insights from "Five Lessons from Scaling Pinterest" and "Issued and Outstanding Shares Versus Fully Diluted Shares" to provide actionable advice on these topics. By understanding the importance of strategic measurement, organizational structure, user feedback, and ownership calculation, businesses can navigate growth challenges and achieve sustainable success.

  • 1. Strategic Measurement: Measure the Right Thing

When it comes to measuring success, it's crucial to focus on the right metrics. In the case of Pinterest, the team shifted their focus from Monthly Active Users (MAUs) to increasing the number of new weekly active pinners. By aligning their measurement with Pinterest's core action, they were able to drive meaningful growth. This highlights the importance of measuring what truly matters for your business. While measuring any metric may lead to improvement, measuring the wrong one can result in wasted effort and resources.

  • 2. Organizational Structure: Adaptation for Scale

As companies scale, it becomes crucial to evaluate and adjust the organizational structure. Most execution problems can be traced back to either a wrong organizational structure or having the wrong person in a critical role. While organizational changes can be challenging and disruptive, they are necessary for effective scaling. An organization that doesn't reflect the company's strategy or is overly matrixed can hinder execution capabilities. Therefore, adapting the organizational structure is essential to enable growth and maximize operational efficiency.

  • 3. User Feedback: The Blessing and Curse of Vocal Users

User feedback is invaluable for product development, but businesses must strike a balance between catering to their loudest users and pursuing broader growth. While vocal users are crucial for a company's initial success, reaching the next 100 million users requires the ability to ignore their demands when necessary. This doesn't mean disregarding all feedback, but rather using data-driven insights to make informed decisions. Facebook's experience with the controversial newsfeed feature exemplifies the importance of listening to data and being prepared to go against vocal minority opinions to achieve broader success.

  • 4. Building for Scalability: The Right Questions and Features

Building features based solely on user requests can lead to a highly engaged but limited user base. To achieve scalability, businesses must focus on asking the right questions and identifying solutions that cater to the majority of users. Not every requested feature will have a significant impact on the majority of users. Therefore, it's essential to prioritize game-changing features that will resonate with a broader audience. Additionally, it's easier to add features than to remove them, so careful consideration is necessary to prevent feature bloat.

  • 5. Building for the Future: Balancing Existing Users and New Growth

As a product becomes sticky and gains a loyal user base, it's essential to shift focus towards the next hundred million users. This requires a willingness to take risks and potentially disappoint existing users in pursuit of broader growth. While negative experiences can have a substantial impact, it takes five positive experiences to make up for a single negative one. Therefore, leadership must prioritize long-term goals and stick to first principles during moments of self-doubt. By doubling down on the value proposition, persevering through challenges, and adopting new distribution strategies, companies can position themselves for future success.

Conclusion:

Measuring the right metrics, adapting organizational structure, leveraging user feedback, building scalable solutions, and balancing existing users with new growth are crucial elements for sustained growth. To put these insights into action, here are three actionable advice for businesses:

  • 1. Regularly evaluate your metrics and ensure they align with your core actions and goals. Don't waste time on the wrong initiatives.
  • 2. Continuously assess your organizational structure to ensure it supports your strategy and facilitates efficient execution.
  • 3. Prioritize data-driven decision-making while considering user feedback. Focus on solutions that cater to the majority of users and have a significant impact on scalability.

By implementing these practices, businesses can navigate growth challenges, drive sustainable growth, and position themselves for long-term success.

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