What we cover on Episode 31
Reforge is the premier platform to learn all things growth. It was founded by Brian Balfour who has founded a number of companies, along with working for high growth SaaS companies like HubSpot.
In this episode, we talk to Brian about the 3 critical steps to adopting growth within a company, the importance of growth models, and how to find your product-channel fit.
1. There are three critical steps to growth
At a high-level growth provides companies with the frameworks, models, and processes to grow their business. You can boil this down to a few simple steps.
a. Building a qualitative and quantitative model for understanding how your product grows.
b. Use that model to identify your largest constraints and your most significant points of leverage.
c. Decide on the best way to either remove that constraint or go after your points of leverage, e.g. do you invest in a new feature to accelerate acquisition, or experiments around onboarding, or a new upgrade point.
One of the most common challenges companies have in adopting this approach is the teams involved are often speaking a different language to each other.
“The more I’ve done Reforge and seen inside a bunch of different organizations, the more I’ve realized that problems and friction emerge because people are speaking a different language to each other and they don’t even know it.”
Once you start to build out the above models, it will shine a light on the differences between teams.
“When you sit down to draw this stuff out on paper, you realize teams are working from opposite points, they’re talking apples and oranges, but they have no idea they’re doing it. It’s a core issue in most organizations.”
Once teams have a shared vision for how the product will grow it helps teams to think beyond what they control and ask will the thing I’m working on have more leverage than all the other things the company can invest in.
“We tend to think about the things in our specific area, the ones we can control. We need to think more about the macro picture and how does that thing fit into that macro picture because although it might be important, it isn’t the highest leverage thing the company can work on now.”
2. Growth models give you a detailed map of how your product is growing
The first step in creating a growth culture within your company is building a model of how your product will grow.
The model is part qualitative and part quantitative, and it provides an aha moment for companies who haven’t gone through the exercise before. It gives them a different perspective on how their business will grow.
“Growth models help you answer the question of how does the product grow in a more detailed and consistent way. The first thing we do is sit down and map it all out with boxes and arrows.”
With a growth model, you’re able to see how new users are acquired, how those new users can generate different types of outputs, and how you can use those outputs to create more new users or more returning users. It provides you with a detailed blueprint of what exactly makes up growth for your product.
At Reforge Brian teaches his students how to look at this growth model through loops, not funnels. He has written an entire blog post on how to do this.
The qualitative part of the model will help your teams to get on the same page with your product’s growth plan. For example, it will help you to answer questions like:
- What direct acquisition channels map to your product - SEO or PR or Paid
- What acquisition loops can you build within your product - Virality or Referrals
- How does the product help onboard users to its core value
- How does the product encourage users to return to the app
- How does the product help to upgrade users to paid plans
The quantitative part lets you go a step further where you can map out all of the different inputs and outputs to the product's growth, and see how they interact with each other. It will give you historical performance on those inputs and outputs, and you can start to understand better where you most significant points of leverage and constraint are.
“You can start to identify opportunities - if I increase this thing by 10% what happens to my output over six months versus if I increase this other thing by 10%. You can get a lot more detailed on your investments and stack rank them accordingly.”
A growth model is a foundational piece of work every company needs to invest in as part of building out a growth plan for their product.
“It’s the foundation and starting point to anything sort of growth related. It helps you to lay out a hypothesis and understand how your product growths to identify the biggest areas to improve and work on.”
3. Why Product-Channel Fit is so important
Reforge used to run a blog called the “Reforge Brief”, the concept behind it was strong:
“The concept behind Reforge brief was there’s a ton of content out there, it’s hard to filter through to the most credible, newest most interesting stuff. We started with the concept of being that filter and extracting the best insights for people.”
Before launching the blog Brian and his team did a ton of customer validation around that problem, and they had gotten a ton of great feedback, including some great engagement from experiments they had run.
Once they officially launched the blog and exposed it to a broader audience, they started to study retention curves.
“Once live we started to look at retention curves because I believe you need solid retention curves or it just becomes a game of churn and burn. We thought of the blog as a product itself, and our goal was to build an active email subscriber base to be valuable for us.”
They were happy with what they saw for retention curves, with them flattening out to about 35% to 45%. The next question they needed to answer was how the product would grow? And that means identifying your products channel fit.
“There’s this concept that I always talk about which is product channel fit, which is you need to mold the product to channels, as you can’t mold channels to products, because you don’t control the channels.”
The Reforge briefs product channel fit was search and social.
The Reforge brief wasn’t a great fit for search because it was packaging up the best insights from other people's content into short form content and Google tends to reward long-form content.
Social also wasn’t a great fit as it tends to work best when you’ve explicitly written content with shareable/clickbaity titles, and that didn’t fit with the Reforge brand.
Reforge did see potential in referrals as people we’re sharing the content with their networks. They saw an opportunity to further invest in this channel. Before they could make that investment they wanted to answer two key questions:
a. Is it contributing to our key business metrics, applications to our programs that lead to revenue?
b. Does it align with our brand and is a good reflection of our values.
When they dug into both of these things, they saw there was nothing measurable that suggested the Reforge brief contributed to revenue.
And, it also didn't align with their brand, which was covering topics more deeply than any other faculty. It was the complete opposite of their brand.
Given those factors and the lack of product-channel fit, Reforge decided to shut the blog down.
The podcast provides a more in-depth look at these topics, so if you enjoyed reading the above, please do give it a listen.
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