Frameworks and Models for Startup Marketing — Part 2/3

La Danse by Henri Matisse, 1910.

The second part of the 3-part series is here! Check out the first part here.

In this post we will dive deeper into growth. I cover three frameworks that I use often to understand growth better.

Try the Bullseye Framework exercise

“[You] probably won’t have a bunch of equally good distribution strategies. Engineers frequently fall victim to this because they do not understand distribution. Since they don’t know what works, and haven’t thought about it, they try some sales, BD, advertising, and viral marketing — everything but the kitchen sink.

That is a really bad idea. It is very likely that one channel is optimal. Most businesses actually get zero distribution channels to work. Poor distribution — not product — is the number one cause of failure. If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished. So it’s worth thinking really hard about finding the single best distribution channel.”

In their book Traction — A startup Guide to getting customers — G. Weinberg and J. Mares talk about 19 different customer acquisition channels in startups.

Here’s the list for you here so that you have a basic idea of what they’re about:

1. Viral Marketing
2. Search Engine Marketing
3. Search Engine Optimisation
4. Content Marketing
5. Community Building
6. Targeting Blogs
7. Engineering as Marketing
8. Email Marketing
9. Existing Platforms
10. Social and Display Ads
11. Public Relations
12. Unconventional PR
13. Sales
14. Business Development
15. Speaking Engagements
16. Offline Advertising
17. Offline Events
18. Affiliate Programs
19. Trade Shows

You have the 19 channels now, what do you do now? Use the Bullseye framework to brainstorm, rank, prioritise, test and choose 1–2 main channels to double down.

The Bullseye Framework

Here’s how you can start using the Bullseye framework now!

• Brainstorm. Come up with ways you might use each channel for your startup. Do not dismiss any channel in this step. Think of at least one idea for every channel.
• Rank. This step helps you organise your brainstorming efforts. Place each of the channels into one of three columns (Highest Potential, Possibilities, Long-shots), with each column representing a concentric circle in the Bullseye.
• Prioritise. Identify your highest potential inner circle the two channels that seem most promising.
• Test. The goal of this step is to find out which of the channels in your inner circle is worth focusing on. Make that decision based on results from a series of relatively cheap tests. These tests should be designed to answer basic questions such as — how much does acquiring one customer take? How many customers are available through this channel? etc.
• Focus. Wring every bit of traction out of the traction channel. Continually experiment to find out exactly how to optimise growth in your chosen channel. As you dive deeper into it, you may uncover effective tactics and do everything you can to scale them until they are no longer effective due to saturation or rising costs.

Know the Andy John’s Growth Equation

Andy Johns’ growth equation

Andy Johns, VP of Growth at Wealthfront who previously worked on growing products in at Facebook, Twitter and Quora suggests that the growth head must figure out the startup’s growth equation and the core levers that result in a sustainable growth. In addition to talking about what a growth leader should do, he also talks about how various levers like Top of the funnel, Magic Moment and Core Product Value play their roles in ensuring sustainable growth.

I’m going to give you a quick introduction to these core levers:

Top of the funnel — In looking for a robust top of the funnel, you need to figure out the following: can the product capture traffic and convert it at an increasingly higher rate into some meaningful type of usage? This is a more tactical variable and the least important parameter in the equation.

Magic Moment — This is the user’s emotional response when interacting with the product. It is also called the AHA moment — the moment when your product value proposition become clear to your user. Ideally, it strikes early and often in the product experience.

Core Product Value — This lever involves your market-size, the legitimacy of the problem you solve and how right you were with your product/market fit hypothesis. For products that get the “magic moment” and “core product value” right, the top of the funnel naturally and rapidly fills and you just need to remove friction where it exists.

Learn about Viral loops

The Viral Loop

Viral loops are loops through which your users and customers bring you new users and customers, without you having to advertise or market to those new users. The loop is a combination of the speed and effectiveness of your users going through a three-step process:

1. The user finds or starts using your product
2. The user tells their friends about it, or invites them to use it
3. New users begin using your product, and the process repeats

The “Viral co-efficient” decides your effectiveness in making this loop happen.

This coefficient measures how many other users you can expect one new user to bring. For example, a viral coefficient of 1 means that each new user will bring on 1 additional user, and that additional user will bring another user...

To calculate the viral co-efficient, take your startup mechanism and assess how well it converts for your average user. For example, say you give users an invitation link to the product that they can send to their friends. You can measure the viral coefficient for your invitation links by tracking the number of sent invitation links, and dividing that by the number of people who join from these invitation links

For example, let’s say last week 100 users sent out 500 invitations, and that 163 new users join from invitations. Your signup conversion ratio is 163/500 or .326, and your rate of referral is 500/100, so 5. Multiply the two together (5 x .326) and you get 1.63, your viral coefficient.

How do you boost this?

You can focus either on the conversion percentage (how many sign up from invitations), or on the rate of referral (how many invitations a given user sends out).

Here’s a quick introduction to make you understand better. Inspiration from Andrew Chen.

Don’t forget to take a look at the 5 best articles to understand more about Viral growth.

So there you go.

Quick recap: this post gives you an introduction (just an intro!) to three basic frameworks that you can use to grow your startup. I suggest you try the Bullseye Framework with your team, try building growth models for a fictitious startup using Andy’s Johns’ growth model and play around with viral loops using Excel.

Let me know what you think about the post in the comments below. Also, if you’d like me to cover some other growth subjects, let me know!

Coming up sooner than you think! — Frameworks and Models for Startup Marketing — Part 3/3. The final one!