How to build a sustainable growth strategy — Yaroslav Stepanenko
“Close your eyes. Think of growth, picture growth in front of you with your eyes being closed. Now open your eyes… And please be honest with me and raise your hand who thought of anything like that: dollars, KPIs, positive metrics going up… You’re wrong. Unfortunately, you are wrong because growth is not about dollars.”
Yaroslav Stepanenko, Product Marketing Manager at MacPaw Inc., shows us how important is the process when we are talking about business growth, and most importantly, its implementation in our team. During his Talk at the Productized Conference, he explains to us how to build a sustainable growth strategy going through a playbook and giving Setapp as an example. We will try to summarize the three key ideas that you have to keep in mind:
- Find and Measure Product <> Market Fit
- Build and Scale Functional Growth Teams
- Scale via Testing and Experiments
“So as you can see, it’s about product-market fit. It’s about teams that execute on your product and work with your product. And it’s about how those teams should operate.”
How to measure product<>market fit?
There are seven questions that you should ask your users, based on Sean Ellis’s survey:
- How would you feel if you could no longer use “this product”?
- What would you likely use as an alternative if “this product” was no longer available?
- What is the primary benefit that you have received from “this product”?
- Have you recommended “this product” to anyone?
- What type of person do you think would benefit most from “this product”?
- How can we improve “this product” to better meet your needs?
- Would it be okay if we followed up by email to request a clarification to one or more of your responses?
And then, Yaroslav’s rules so that survey results:
- You should not send the survey to the whole user base. Instead, it should be sent to people “who experienced the core product offering”.
- No incentives > “You cannot offer incentives to your users because at best, you will be hearing the complimentary language about you, about your company, about your product… in exchange on $100, Amazon coupon or wherever you are offering.”
- How many people do you need to get the conclusive results? “The more you have, the more accurate the results will be. But ~50 responses can be enough.”
- “You have to talk to your users.”
“How would you feel if you could no longer use Setapp?”
This is the most important question in your survey, that defines your product: “very disappointed”, “somewhat disappointed”, “not disappointed” and “N/A (no longer use Setapp)”.
“If 40% say that they would feel very disappointed that your product could not exist anymore, it would mean you have a product-market set. So, 40% would be very disappointed… you are in a good market with a product that could satisfy this market, according to the definition we’ve seen before.”
However, you have to go into another kind of research that involves analyzing all the qualitative and quantitative data and this is where the open question for the user to answer appears, where he explains why and you know in more detail how you can improve. “The important thing is that you are giving your users the voice and then can explain who the competition is. (…) [because] they can tell you who their competitors are. So in our case, we found out that a lot of users would not use any alternatives. And that’s not surprising, because we are building a new niche”
And then come the following questions, that puts the user in first place on the podium. With one simple word, you can completely change the answer that you want to receive. It is very important to consider the tone of your question, which may lead to a positive or negative answer, where your active users appear. Active users don’t regret saying bad things (which is good because they will say to you what is the primary benefit that they are receiving from your product with no tests needed).
Another important thing to consider is not talking about hypothesis but about action, such as “Have you recommended Setapp to anyone?” instead of “Would you recommend?” — we are, once again, focusing on the user, asking them to explain what kind of words they are using to recommend us with an open answer. With this, you will see that your entire team will benefit — the power of positive impact.
And so we get more active and committed users with our product.
And these are the kind of users you should want…
“When you ask them how you can improve the product, they will tell you. And they will tell you all the truth about your product. So in our case, they’re mostly requesting applications and they let us know which apps they need, and why. And with data… With this data, we go to developers and invite them to Setapp.”
So, do it yourself:
Product-Market Fit is not permanent and there are two easy ways to regularly check your product market:
- Set up an email sequence and send it every X months to your new customers — this will allow that you understand how people feel, what are they telling about your product, analyze data and make conclusions
- Use retention dashboards with segmentation applied — this will allow that you understand which channels work or not and better contribute to your product markets
Build and Scale Functional Growth Teams
What is the growth team?
It is not a classic marketing team, but a “Self-contained team that owns and drives a business metric through rigorous testing practices” composed of marketing, engineering, data and product expertise.
In small letters, we can conclude that:
- Product Manager is not the same as Product Owner. PM should be the leader who sets the culture and the direction for the team within the team (and preferably fast).
- Marketing People should have great expertise in certain domains and test things fast.
- A no perfectionist designer it’s ideal to run three sprints in a row giving preference to one who loves doing cool sexy stuff.
- Engineers and Data Analytics should build fast and gives the results fast.
- In other words, you want people who are willing to do things fast and it’s all about speed for the growth team.
“If there is a two-week sprint, a lot of experiments should be happening within those two weeks, not a month, not a quarter — that’s not about growth, right.”
And now we ask the question, so who should we choose for our team or who to hire to the growth team? Based on T-Shaped marketing, you should hire a person that can do different things such as email marketing, research or even be able to analyze data. That’s what makes the difference between growth marketing and classic marketing.
“You need to have people who think of the whole funnel from the top down to the bottom. Think of the conversion on each of the stages (…) And then think about how to build a referral program, for example, being able to analyze the data.”
Scale via Testing and Experiments
For this concept, it is necessary to keep in mind experimentation. As Yaroslav ends “it’s really easy to say, but it’s super tough to implement” but it’s all about following the five next steps and have a North Star Metric defined together with your team, stakeholders and product managers.
- Design and Execution
- Learning & Insights
“Now close your eyes again, please. One last thing, think of growth.
And if you picture something not related to $1 sign, or metric going up a positive KPI I think I achieved something for today. You can open your eyes right now.”
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About Yaroslav Stepanenko
Yaroslav is a PhD., marketing and customer acquisition professional with 10+ years experience in developing and executing marketing programs for businesses in various industries and verticals. Yaroslav is an author of a series of workshops and industry studies that are adopted globally. Now he is employed by MacPaw, one of the most successful Mac software developers, on a product called Setapp. Setapp.com is a fast-growing SaaS business that was launched by MacPaw in 2017 and achieved $1M ARR in just 6 months.
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By Teresa Segismundo on December 11th, 2019
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