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After analyzing dozens of companies writing the Growth Studies on this site, I've found that the ones we've looked at have growth engines that boil down into a few key types. I'm wondering if this observation holds, or if you all have a different perspective on it. Are there certain types of repeatable engines, or a set that each startup 'picks' from as its go-to-market?
  • Viral—Instrumented and organic viral growth
  • Freemium—Free product with limited features unlocked w/paid plans.
  • Paid—Paid acquisition
  • Network Effects—social platforms
  • Inbound—SEO, content
  • Enterprise Sales—sales & marketing excellence for SaaS, enterprise sales, etc.
  • Marketplace—etsy, ebay etc., value exchange creates critical mass opportunity.
  • Product Integrations—building integrations with existing ecosystems to tap growth.
  • Piggybacking—arbitraging value out of existing ecosystems, like Zynga and Facebook, etc.
  • MB

    Morgan Brown

    almost 6 years ago #

    Here's what I've come up with so far. Would love your thoughts. Note: I'm not talking about revenue models, but rather growth engines, defined loosely as the method of acquiring customers and growing the business.

    Viral—Instrumented and organic viral growth
    Freemium—Product creates more value over time
    Paid—Paid acquisition
    Network Effects—social platforms
    Inbound—SEO, content
    Enterprise Sales—sales & marketing excellence for SaaS, enterprise sales, etc.
    Marketplace—etsy, ebay etc., value exchange creates critical mass opportunity.

    What am I missing? What would you cut? Are there others that can't be boxed up like this?

    • DL

      Dylan La Com

      almost 6 years ago #

      Solid list. How about partnerships or affiliate programs?

      • MB

        Morgan Brown

        almost 6 years ago #

        I like that one—good thought. I might put affiliates under paid, but the business development is one I think should definitely be on there.

    • AA

      Anuj Adhiya

      almost 6 years ago #

      Awesome list.

      Does piggy backing (a la Instagram on Facebook/Twitter) come under network effects?

      Also, do products that are designed to naturally grow with usage, ie the more someone uses the product, the more exposure it gets to new potential users and so on (eg a survey tool like Wufoo)- where does that fit in - is that also network effects?

      • MB

        Morgan Brown

        almost 6 years ago #

        Hey Anuj,

        Great recommendation on the ecosystem plugin/piggybacking. I think that's definitely a strategy. It might be network effects, but seems to be its own breed.

        I think products like Wufoo have instrumented virality in them, but rather than referrals they're driven by the 'powered by' mechanic, much like Qualaroo.

    • SE

      Sean Ellis

      almost 6 years ago #

      They all make sense to me. One that I'm struggling a bit with is "marketplace." There are definitely growth challenges to a marketplace, but I'd love a bit more explanation how you view it as a growth engine. What is the actual process by which companies like Etsy and Ebay grow? I think the growth engine might turn out to be one of the other engines that you've already listed, but I'm not positive.

      • BP

        Brandon Pindulic

        almost 6 years ago #

        I see marketplace the same way as I see social, except instead of fear of missing out on what your friends are doing, the value is (usually) in the form of the exchange of money or some other thing of value.

        But, before it reaches critical mass or at least where there's value being created for a certain group of people, I'm not sure where I'd categorize it.

      • AA

        Anuj Adhiya

        almost 6 years ago #

        @Sean
        I wonder if this post addresses the question of how marketplaces grow: http://platformed.info/online-marketplace-metrics/
        If not, I'd be very interested in what part of the question still remains unanswered in your mind?

        From reading this, it seems there's certainly a potential overlap with other growth engines but that is just part of what contributes to overall growth.

      • MB

        Morgan Brown

        almost 6 years ago #

        Hey Sean,

        It's a good question, and I'm not sure I have the answer, certainly viral, paid, inbound, etc. could all be drivers of marketplace growth, and network effects too. For some reason they just felt like a different beast to me than other types of businesses and their engine was different. Maybe it is because of the two-sided nature of them; but perhaps it's just executing on these engines on both sides of the market.

    • FB

      François B

      over 5 years ago #

      @morgan - Great list, I am wondering if you have a good example of a company using sales as a growth engine in an original way?

  • SC

    Shana Carp

    almost 6 years ago #

    Freemium—Product creates more value over time - sounds off. It would be great limited features, but can't unlock what you absolutely need.

    • MB

      Morgan Brown

      almost 6 years ago #

      Good point Shana. I was thinking of Freemium from the perspective of a product like Evernote, but there are certainly freemium companies which constrain features that then get unlocked at premium levels.

  • BA

    Benjamin Adamson

    over 5 years ago #

    Hey Morgan, what's confusing about this list is that there's plenty of overlap between the growth engines you've listed. "Viral" can bring users in but Freemium will not bring users to the app, however it will increase conversions because of a lower barrier to entry.

    What is Enterprise Sales defined as in this list?

    Market place, and network effects are fairly similar, eg if you have a strong network of sellers and buyers on a marketplace isn't an alive marketplace a result of network effects rather than the marketplace alone? Having a marketplace does not create growth, it's the other strategies that you use to build that platform that create an incentive to join the market place.

  • GS

    Gary Sieling

    almost 6 years ago #

    I've found product integrations to be helpful as well.

    • MB

      Morgan Brown

      almost 6 years ago #

      Gary, I agree—similar to piggybacking, product integrations are a great way to tap into existing ecosystems. Thanks for adding that.

  • CW

    Conrad Wadowski

    almost 6 years ago #

    Hey Morgan, just noticed this post and think it’s a great, and maybe the most important question when talking about early-stage growth.

    I’d take a different angle in answering it – it really depends on the type of growth you're optimizing towards. A user growth engine might be very different than your revenue engine. In this case, I think you’ve put together a list of what are a lot of channel types – inbound, paid, integrations, WOM etc. but you've mixed these with ways to optimize revenue like freemium and sales.

    If it’s user growth, the "engine" or repeatable place you bring in new users is really dependent on the channel, and how that fits with your product. The place one of these channels get interesting is when it’s (1) large or growing quickly (2) people coming in from that channel are valuable to you and (3) don't cost much. It also helps if you're able to somehow control the channel, or it has a quick cycle time.

    If it's a revenue growth, you have a lot of other engines like enterprise sales, subscription, advertising, peer-to-peer, transaction that you’d potentially layer on top of user growth. Your strategies here will also be very different. For example, if you had a SaaS product, creating a new premium tier might end up increasing your revenue growth, much more than any decision you make on a channel.

    • MB

      Morgan Brown

      almost 6 years ago #

      Thanks Conrad, good thoughts. I agree, I think freemium is more of a business/revenue model than an acquisition channel. Freemium probably uses the viral channel as its driver, for example.

      I think sales can actually be a growth and revenue channel; but that seems to be a pretty peculiar case.

      Thanks for sharing.
      Morgan

  • SM

    Saurabh Mehta

    almost 6 years ago #

    Great post. Do you think dropbox style user acquisition strategy where it incentives users to bring in more user and both get additional storage falls under instrumented viral bucket.

  • DM

    Drew Moffitt

    almost 4 years ago #

    Great case study on growth hacking a startups lead generation engine.

    http://www.needgrowth.com/lead-generation-strategy/

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