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The essential elements of creating a high performance growth team, by YCombinator.

  • VM

    Vishal Maini

    over 2 years ago #

    It's worth noting that the panel is largely made up of companies whose products seem strongly communal by nature. Slack, Pinterest, Instagram, YikYak, Facebook, and Twitter are social platforms. AirBnBs are shared with fellow travelers, Ubers with other riders (and on the supply side, driving as a side job or renting out a property seem likely dinnertable conversation topics). Stitch Fix, Fanatics, Square are the three that stand out as having a more 1:1 interaction between the company and the customer, where the nature of the business is a product/service being exchanged directly for $$ and isn't likely to rope other humans into the process.

    Given this, not sure how well this early-growth-team framework generalizes. The article is a "Growth Guide: How to Set Up, Staff and Scale a Growth Program", but seems to be a model built to explain a somewhat homogenous data set, and I want to question how it would fare if applied as a template for early growth teams generally.

    100% agree with the following:
    - "Startups that have seen amazing growth have developed teams and processes that are intentional, exceedingly metrics-driven, and thrive on experimentation."
    - "Scientific approach to growth"
    - The retention checklist, picking core metrics, etc.
    - Experiment dashboard, analytics tools, peer review, user research
    - That all of the advice is well-suited to companies whose growth is (1) primarily driven by the product itself, esp. by referral/virality, and (2) for whom retention is especially important. (1) and (2) are certainly not true of all startups, and maybe not even true of most, though I'd trust YC to have a better statistical view on this than I do.

    Less sure these heuristics are broadly applicable:
    - Growth PM = first growth hire at a company

    Depends on how we're defining "growth", but if we say "the first growth hire is the first person whose primary mandates are acquisition, activation, revenue, retention, referral", then it could make sense for a first growth hire to focus on e.g. paid acquisition if that is the highest-leverage growth driver early on. This was my experience at Upstart (ML-driven lending platform), where my mandate as the first growth hire was to do whatever it took to grow. It turned out that priority #1 was to build out targeted paid acquisition campaigns. If some flavor of performance marketing, or partnerships/sales, or content or in-person events are the strongest growth tactics at the early stages of scale, does it not make sense to build a growth team starting with those early hires, and add eng/PM/design/data science from there? This seems like a case worth mentioning if it's not extremely rare.

    Perhaps this is just a semantic thing, where the panel would respond that the aforementioned first growth hires would would be called something other than Growth (i.e. you might build a 1-2 person Marketing or Sales team to deploy ad spend or build partnerships, and the Growth team would sit separately with Product)? Seems odd, but... maybe. I'm especially curious what YC has to say about this from observed patterns across many different business models and early growth team structures at companies in the 10-50 employee range.

    - "70% of experts mentioned that referrals were the top channel within the first year."

    This stat seems to follow from the homogeneity I mentioned; seems worth calling out that this doesn't mean it's 70% likely that any randomly selected growth-stage startup should focus on referrals in its first year. While any great product will be talked about and benefit from referrals, it's a stretch to say this will be the top channel for most startups, and I worry that the guide recommends a team structure that lends itself to virality-first growth when this isn't a template that applies as widely as the article implies

    - The circle chart Sean called out (where 70% of the growth teams sit in Product)

    I particularly disagree with this snippet:
    "Traditionally, a company’s marketing team has been responsible for driving user acquisition (and the associated budget), so this is sometimes a default department in which to house a growth team. Often this evolves from prior functions that have lived in the marketing department (like performance marketing and user acquisition). In these cases, the Head of Growth would report to the Head of Marketing. The general sentiment about this approach is that the line of reporting is a bit rooted in the past, and most growth experts cited this as the least-favorable option."

    I don't think the line of reporting is necessarily "rooted in the past" such that the orange 70% in the pie chart are the modern, smarter ones and the rest are the dinosaurs. Instead, I suspect that the type of growth those companies experience are more deeply rooted in the product itself, so it's natural for Growth to sit within Product, and this may be true of many modern companies. But it's not a function of modernity, it's a function of the nature of the product itself.

    This is all coming from someone who has built growth frameworks largely from first principles (rather than direct mentorship from someone broadly experienced) with only a few years of personal experience, so I'm spelling this out as a request for someone to please point to any blind spots in my reasoning.

    Anu, @gustaf , @sean: would love to hear your thoughts on this!

  • SE

    Sean Ellis

    over 2 years ago #

    This is a great post.
    I particular like the circle chart about where the growth team sits in the org: http://blog.ycombinator.com/growth-guide2017/#checkretention

    • HP

      Hoang Pham

      over 2 years ago #

      I totally dig this.

      I recently did a poll asking from the Pirate Metrics what you work on the most. You could only choose one.

      Out of almost 200 respondees, 54% picked Acquisition.

      I'm glad there is much more attention towards Retention with this post.

      And also how to build a growth team 🙌

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