Review

This book is far more professional and methodical than its title suggests - don't judge this book by its cover. It perhaps provides the best explanation of the importance of Acquisition, Activation, and Retention that I've come across. It balances engaging anecdotes with practical advice on how to influence your metrics. It's a comprehensive playbook for establishing and operating a growth team. Its emphasis on the importance of rapid experimentation in product development is spot on. This book is surprisingly practical, insightful, and actionable. It's more than enough to get you started.

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Forget the Funnel

I can’t wait to try the approach outlined in this book. Having a customer-led growth framework makes a lot of sense. A company is a value exchange mechanism, it must provide customer value and capture some of it. The authors did a great job of showing how this framework is complementary and intersects nicely with customer research and JTBD theory. The way it promotes a radical focus is helpful, in my experience it’s often a lack of focus that stops product teams making rapid progress.

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Book Review and Summary: Product-Led Growth by Wes Bush

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Obviously Awesome

I’ve seen April speak at a conference and she was truly captivating. April is a great communicator, and is shows in this book.

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Key Takeaways

The 20% that gave me 80% of the value.

• You can unlock rapid growth and get more from your marketing spend if you breakdown the traditional silos of marketing and product and setup teams to focus on acquisition or retention. Dropbox acquired 1/3 customers through offering free storage for referrals.
• A multi-disciplinary with a mandate to find growth potential is powerful. Focus them on continuous testing and tweaking of the product (it’s features, messaging, and its acquisition, retention and activation methods). Give them exec sponsorship and point them at acquisition, activation or retention.
• Test if you have product-market fit before spending big on marketing. To find out ask customers how they would feel if they could no longer use your product… If 40% or more are very disappointed → you might be onto something.
• Tag your product so you can understand what’s happening from the beginning to the end of the funnel. Data tells you what users are doing - not why they are doing it. You’ll need to conduct some user surveys or interviews to work out what’s going on
• The ‘aha moment’ is when users experience the value of a product for the first time.
• Once you’ve identified the conditions that make the AHA moment, turn your attention to getting more customers to experience that moment as fast as possible. Spend about 30% of your time and effort on this.
• Your essential metrics are determined by identifying the actions that correlate most directly to users experiencing the core value of your product
• Create your growth equation - it’s simplicity helps focus. It should include each of the steps users must take to reach the aha moment (and how often they are take them).
• Hone your growth equation and narrow your focus by choosing a single metric of success that all growth activity is geared toward.
• Experiment and test at high tempo. The faster you learn the faster you can grow. Most experiments fail to produce results, so volume is key. Set a weekly heartbeat to encourage experiment velocity, discuss results and what to test next. Think minimum viable test. Scattershot experimentation is a waste of time and effort - instead focus on growth levers. Set a minimum number of tests a week.
• Don’t be afraid to double down - push more and more on successful levers. Push past local maximums by taking moonshots. Expect most of the gains to come from more modest changes.
• The growth hacking cycle: Data analysis → insight gathering → idea generation → experiment prioritisation → running the experiments → review results → decide
• Small changes in language and messaging can have a big impact on acquisition. E.g. ‘Store your photos online’ to ‘share your photos online’. Or ‘Find a date’ to ‘help people find a date’
• Channel Strategy - Research and prioritise your channels. Find one or two that have high potential - optimise them for cost-effectiveness and reach. Consider the needs of your business model and the characteristics of your customers. Fish where they are.
• Rank each channel on cost, targeting, control, input time, output time and scale
• Virality = Payload x Conversion Rate x Frequency
• Create a funnel report - then do qualitative research to understand what’s happening at each stage. “What’s the one thing that nearly stopped you from completing your order?”
• The Compounding Value of Retention: The longer a customer is retained - the more chance to earn revenue from them. Increasing the life time value of a customer enables you to invest more in growth. Enables you to predict revenue better. Enables you to learn more about them, their needs, desires - better personalisation - earn more from them
• Providing a product that addresses the needs of, or delights of a customer is the best way to drive retention. Better retention will drive better results from viral marketing - the longer they stay, the more likely they’ll talk to others about it.
• Success of Trigger = Motivation to take action x Ease of taking the action
• Behaviour = motivation x ability x trigger
• A retention rate that grows over time is a strong signal that the product is successful - Often this is because of stored value - the more you use it, the more the data becomes valuable, the more likely you’ll be able to use it
• The Hook Model: Trigger → Action → Reward → Investment (repeat)
• Ongoing Onboarding: Continuing to educate your customers about the value they can receive from your product. Getting users to a place where they’re getting the most value out of the product is called ramp up.
• Monetisation is about earning more revenue from each customer over time - increasing LTV (lifetime value). Look at revenue by cohort. Find your high profit vs low profit customers. Look at average revenue per users.
• Potential Cohorts
• Group by: age, location, gender, types of item purchased, features used, acquisition source, type of device, type of browser, number of visits, date of first purchase
• Look for patterns in retention rates - correlations will give ideas for experiments.
• Utilise the power of simple recommendations → Jaccard similarity coefficient → The similarity of two items (A and B) is equal to size of the intersection of A and B divided by the union of A and B. The intersection is how many people purchased the products together. The union is how many bought either independently
• Use the 4 question pricing survey to find the optimal price.
• Compare personas: Do they value the same features? have the same willingness to pay? Cost of acquisition? Lifetime Value?
• Charge based on value: find a way to charge customers more if they get more value. Does your value metric align with customer value perception? Scale as the customer uses the product more? Is it easy to understand?

Deep Summary

Longer form notes, typically condensed, reworded and de-duplicated.

Part I The Method

Part II The Playbook