Startups Should Not Have Growth Teams

Alex Schultz, VP of Growth at Facebook, just gave the best talk I heard on startup growth at Stanford’s How to Start a Startup, a course organised and orchestrated by YC Sam Altman.

In his own words:

…if you’re a startup, you shouldn’t have a growth team. Startups should not have growth teams. The whole company should be the growth team. The CEO should be the head of growth.

Check out his entire talk here:

Some other highlights from his talk, as found here:

On Retention:

Retention is the single most important thing for growth.

But the one thing that’s true, over and over again is, if you look at this curve, ‘percent monthly active’ versus ‘number of days from acquisition’, if you end up with a retention curve that is asymptotic to a line parallel to the X-axis, you have a viable business and you have product market fit for some subset of market.

If you’re on ecommerce and you’re retaining on a monthly active basis, like 20 to 30% of your users, you’re going to do very well. If you’re on social media, and the first batch of people signing up to your product are not like, 80% retained, you’re not going to have a massive social media site. So it really depends on the vertical you’re in, what the retention rates are.

Retention is the single most important thing for growth and retention comes from having a great idea and a great product to back up that idea, and great product market fit.

On Growth Teams in startups:

[…] is if you’re a startup, you shouldn’t have a growth team. Startups should not have growth teams. The whole company should be the growth team. The CEO should be the head of growth.

On following the right metric:

Think about what the magic moment is for your product, and get people connected to it as fast as possible […]

The second thing […] everyone in the Valley gets wrong is, we optimize when we think about growth for ourselves. […] What you need to focus on is the marginal user. The one person who doesn’t get a notification in a given day, month, or year. Building an awesome product is all about think about the power user, right?

So for operating for growth, what you really need to think about, is what is the North star of your company: What is that one metric, where if everyone in your company is thinking about it and driving their product towards that metric and their actions towards moving that metric up, you know in the long-run your company will be successful.

The number one most important thing in a social media site is connecting to your friends, because without that, you have a completely empty newsfeed, and clearly you’re not going to come back…

On Growth tactics:

‘Build it and they will come.’ That is something that is very much the mantra in the Valley, and I don’t believe it’s true; I believe you actually have to work.

[…] think about virality about a product, in terms of three things. First, is payload – so how many people can you hit with any given viral blast. Second, is conversion rate, and third is frequency. This gives you a fundamental idea of how viral a product is.

This is a really good way to look at virality if you want to say, ‘Is this product viral?’ Facebook was not viral via email sharing or anything like that. Facebook was purely viral via word of mouth.

In SEO, there are three things you need to think about. First one is keyword research.[…] Once you’ve done that, the next most important thing is links. […] But the single most important thing is to get valuable links from high authority websites for you to rank in Google.[…] The last thing is that there’s a whole bunch of table stakes stuff for XML sitemaps, and making sure you have the right headers.

Email is dead for people under 25 in my opinion. Young people don’t use email. They use WhatsApp, SMS, SnapChat, Facebook; they don’t use email. If you’re targeting an older audience, email is still pretty successful. Email still works for distribution, but realistically, email is not great for teenagers – even people at universities. You know how much you use instant messaging apps, and how little you use emails.

Everyone focuses towards doing marketing emails that are just spam in my opinion. Newsletters are stupid. Don’t do newsletters because you’ll send the same newsletter to everyone on your site. Someone who signed up to your site yesterday versus someone who’s been using your product for three years – do they need the same message? No.

I’d say make sure you have deliverability. Focus on notifications and triggered based emails, SMS, and Push Notifications.

There’s one thing I wanted to finish with, which is my favorite quote by General Patton. It’s so cliche; it’s crazy, but it’s awesome. “A good plan, violently executed today, is better than a perfect plan tomorrow.”

And one other thing that Chamath instills in us and Mark still instills across the whole of Facebook is move fast and don’t be afraid to break stuff.