This is the Baremetrics Growth Manifesto — the same one that sits in our internal wiki — that we use to guide everything we do that’s related to growth.
Why make this public?
Well, as you’ll read below, transparency is one of our core values.
We believe that sharing how we do things — our wins, struggles, strategies, etc. — is a rare and beneficial endeavor.
Ultimately, we believe that helping you grow helps us grow.
Before we start talking about growth in all its detail and intricacies, it’s important to establish what exactly we mean when we’re talking about growth.
I asked Twitter how they described their role in growth, and one stood out:
Growth is a discipline developed in the startup world that takes a very focused, systematic, and data-driven approach to activities that directly impact the growth of revenue.
Now, what impacts the growth of revenue for a business is going to vary on a case-by-case basis. We’re not going to pretend like we’ve come to the final and ultimate definition of what growth is.
It depends, just like many other crucial business functions.
How we think about growth at Baremetrics is as a blend of sales, marketing, and customer success.
Growth has the unique opportunity to think of the customer journey holistically, which blurs the lines of what used to traditionally only be sales’ job, only be marketing’s job, or only be customer success’s job.
The easiest way to illustrate this is with the AARRR framework, aka Dave McClure’s Pirate Metrics.
Traditionally marketing would handle “top of funnel” activities in the Acquisition stage to generate leads, sales or even customer success would handle the “bottom of funnel” activities in the Activation stage to convert leads, and customer success would handle activities in the Retention, Referral, and Revenue stage to keep customers. Growth engages all five stages and even works to create “loops” between once disparate stages.
Growth loops are more easily illustrated (and excessively referenced) in consumer products like Dropbox and Pinterest, for example, but are just as relevant to B2B SaaS, memberships, and subscription products.
A growth loop is a system for using the acquisition of one customer to acquire another customer. A growth loop can also be a system for using the retention of one customer to retain another customer.
Despite all this talk about acquiring customers, growth loops, etc., we propose that acquiring new customers actually shouldn’t be your first focus.
Focusing on acquisition before activation, retention, referral, and revenue results in your classic “Leaky Bucket” problem, where newly acquired leads and customers “leak out” of holes in the system because they aren’t properly engaged, activated, or retained.
A starting MRR of $100,000, with $10,000 MRR growth, but with 12% revenue churn actually results in a contraction in MRR. Acquisition without retention results in failed growth.
Focusing on retention… a modest growth rate of $5,000 MRR with only 3% revenue churn results in a positive gain in MRR.
Now, what if we optimized acquisition after retention?
Pairing $10,000 MRR growth with 3% revenue churn results in massive gains.
This is why we advocate for a bottom-up approach to growth.
Start with the Revenue stage, then move to Referral, then Retention, then Activation, and once all of those are optimized, THEN focus on Acquisition. Here are some examples:
Working on Revenue — turning free users into paying users, up-selling and cross-selling, expansion to higher tier plans — can create negative churn, which means that you’re not losing any revenue at all to churn, in fact, you’re gaining revenue.
Working on Referral — creating referral programs, affiliate programs, encouraging collaboration, making a product that customers are proud of — reduces customer acquisition costs (CAC) and creates a passive stream of new customers.
Working on Retention — encouraging adoption, onboarding correctly, educating customers on how to get the most value, fixing bugs, shipping new features — reduces churn and increases their lifetime value.
Working on Activation — leading customers to the “aha” moment, converting trial users, converting deals, showing why your product is the best solution for their problem — increases conversion rate and properly communicates the value of your product.
Working on Acquisition — bringing awareness of your solution to the market, generating demand for your product, creating new trial users, creating new deals — increases the number of qualified customers you can introduce to your product.
Working “bottom-up” makes for a firm growth foundation and helps to retain the optimal amount of revenue growth possible.
This is a list of principles that guide the way we plan and execute growth at Baremetrics.
Drift also has a fantastic marketing manifesto to draw inspiration from for your own business.
I’ve come to adopt a process outlined by the folks at GrowthTribe called G.R.O.W.S.
1 . Gather (G of G.R.O.W.S)
2 . Rank (R of G.R.O.W.S)
3. Outline (O of G.R.O.W.S)
4 . Work (W of G.R.O.W.S)
5. Study (S of G.R.O.W.S)
Our mission is to equip businesses with the tools they need to grow.
By providing tools, insights and education with minimal effort on the business’s part, the barrier to making actionable business decisions is lowered dramatically.
Everything we do is driven by this mission. Everything we do — products and features created, content produced, ads run, resources made — needs to positively answer the question, “Does this help businesses grow?”