Growth Teams Part 2
A series (at least 2 parts, maybe more) exploring the rise of Growth Teams at SaaS companies with Jas Garcha
Though this post won’t travel too far back in time, I think it’s relevant to the intersection of technology and history (the overarching theme of this blog) because it examines ongoing shifts that are taking place within technology companies that have led to the rise of growth teams.
The main difference between this series and the more typical explorations on this blog is that this series shares lessons we’re learning in real-time that operators may find more directly applicable.
In the last post, Jas & I covered the following:
The origins of growth teams
How typical growth teams are structured
The first set of actions a new growth team should take, especially if the charter is ambiguous
You can read the first post here.
In Part 2, we’ll talk about how we’ve approached understanding a Series C business and establishing conviction around where a nascent growth team has the highest leverage.
Creating a mental model in a new context
Understanding a new business requires a lot of listening and data mining.
Immediately, we began interviewing and building relationships with many people across the company, focusing in a few key areas:
Executive leadership to identify consistency of vision and strategy, and perception of constraints
Sales leaders to understand the value proposition that resonated with the market and the reality of what friction existed on the ground
Engineering and product leaders to get a sense of how R&D aligned with S&M, the core technology bets that might realize the mid-term opportunity, and to gather empathy for the customer problem
Operations stakeholders, including in sales and marketing ops to understand whether the systems and processes supported the execution bets the company was making
Regardless of how folks perceived the business’ growth, we also needed to internalize how the company had been growing, how it wanted to grow in the future, and the constraints that had the highest potential risk.
Doing this required a combination of the following:
Gathering data and context from sales, marketing, and finance to understand how the business is currently segmented and current assumptions about growth
Visualizing acquisition, retention, and segmentation to observe current business trends and processes
Lining up observed growth with assumptions baked into operating model
Interviewing internal stakeholders
To ensure we were gathering well-rounded opinions we focused on several, consistent questions:
What is the company trying to prove within the next 12 months?
What are the most important opportunities you think we’re not exploiting fast enough?
What are the most important risks that you think we’re not mitigating fast enough?
Why do you think the company wants to build a growth function?
If a growth team is wildly successful, what do you think it will have accomplished in the next 12 months?
We took detailed notes in every conversation, and then simply entered summarized answers in a spreadsheet.
Understanding business mechanics
We chose to separate our mental model of the business into macro and micro factors. With this framework, we could quickly articulate the business’ context in logical categories, and ask the right questions of others to fill in gaps that we couldn’t answer.
We focused on macro factors that helped us answer questions related to the size of the opportunity and whether the product, strategy & vision, and team were positioned well to realize it. Those factors included:
Vision & Funding - What did stakeholders in the business want to reach for, and were they trending towards capitalization to get there?
Strategy - What was the primary strategy articulated to achieve the stated vision?
TAM - What was the accepted size of the market? Did it support the continued growth of the business?
Team - Was the team experienced? Had they done this type of thing before? What were the superpowers of the team?
Product - Where was the product currently? Who had it resonated with?
We focused on micro factors that dove deeper into how customers reacted to the business evidenced by how they bought and their longevity with the product, and how our tactics supported them in the future.
Acquisition - How did customers traditionally buy from the business? In what configuration (ASP, packages)?
Retention - How long did customers stick around? Did that result in net contraction or expansion over time?
Segmentation - How did the business think about selling to the customer base?
Execution Bets - How did the business think about the GTM investments that were necessary to support business growth?
Technology Bets - How did the business think about the R&D investments that were necessary to support business growth?
You can find a template of this framework here.
Building Conviction & Communicating with the Executive Team
Once we could articulate the current context well through qualitative and quantitative inputs, we synthesized all of that information into a format that was easy to understand and collaborate on with others – that’s where Minto came in.
The artifact looked like this:
Situation - the unambiguous facts of the business, driven by a summary of the macro and micro factors of the business.
Complication - obvious friction or dissonance that is making it harder, or will make it harder, for the company to achieve its growth goals.
Question - how can we remove the constraints?
Answer - suggested methods to remove those constraints, supported by logical arguments and backed by evidence.
The above work effectively established two outputs:
A solid understanding of the macro and micro business mechanics, and a clear mental model for addressing the primary constraints on growth rate
Conviction about where the growth team’s resources could best be focused
This second piece allowed us to evaluate common definitions of Growth and select the definition that was most applicable to the company’s unique strategic needs.
The company needed to grow revenue materially in the succeeding 18 months, and we believed that a consistent data layer to visualize product usage data and GTM data was the critical foundation to do so. That layer would empower our team and the rest of the organization to measure the business more consistently and much faster.
We were able to ship that first deliverable within a month, which ended up being highly utilized across teams. That has led to our ability to baseline components of the business and begin addressing other opportunities with a higher degree of confidence in their costs & potential impact on growth rate.
In possible future posts, we may explore:
Balancing mission-oriented and persistent ownership while tackling growth constraints
Building a roadmap for product-led growth
Building a growth process & discipline around it
Productizing the growth function