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At $1M monthly revenue I didn't know how we'd do $2M.
By $5M it was clear how we could get to $10M.
Here's what I've learned about scaling a startup:
By $5M it was clear how we could get to $10M.
Here's what I've learned about scaling a startup:
1) Scale is proportional to (value x audience size)
If you're not addressing a fundamental need for a large group of people or companies, true scale is unlikely.
Scalable niches: health, wealth, relationships, etc.
If you're not addressing a fundamental need for a large group of people or companies, true scale is unlikely.
Scalable niches: health, wealth, relationships, etc.
2) Scaling requires unprofitable experiments:
The initial challenge is not just to validate that people want what you're selling:
You have to be able to reach them efficiently through marketing.
Early LTVs can be low, which makes this hard.
It helps to have money in the bank.
The initial challenge is not just to validate that people want what you're selling:
You have to be able to reach them efficiently through marketing.
Early LTVs can be low, which makes this hard.
It helps to have money in the bank.
3) There are only a few marketing strategies that scale:
- paid acquisition
- organic
- product-led growth
Most products don't sell themselves.
A single big channel can make your business.
Defend it with additional channels in parallel.
- paid acquisition
- organic
- product-led growth
Most products don't sell themselves.
A single big channel can make your business.
Defend it with additional channels in parallel.
4) Your message may matter more than the product
If you have the right product but wrong message, you won't scale.
Most consumption is based on "satisficing": people aren't looking for the best, they're looking for "good enough".
There are exceptions.
If you have the right product but wrong message, you won't scale.
Most consumption is based on "satisficing": people aren't looking for the best, they're looking for "good enough".
There are exceptions.
5) Differentiation wins
The paradox of disruption is that newcomers mimic the establishment because they want credibility.
The only way to outperform is to do what others don't.
This can branding, messaging, product differentiation, etc.
The paradox of disruption is that newcomers mimic the establishment because they want credibility.
The only way to outperform is to do what others don't.
This can branding, messaging, product differentiation, etc.
6) The internet is larger than you think
Many startups rely on the same 3-5 ad platforms.
There are thousands of ways to buy ads online.
Direct publishers are also eager to sell their own inventory.
Venture out...
Many startups rely on the same 3-5 ad platforms.
There are thousands of ways to buy ads online.
Direct publishers are also eager to sell their own inventory.
Venture out...
7) Scale is about more than marketing and product
Early growth may lean heavily on marketing or product.
Scale comes from compounding gains across all teams.
Examples:
Better data -> better marketing insights
Better product -> higher conversion rates
Better CS -> higher LTVs
Early growth may lean heavily on marketing or product.
Scale comes from compounding gains across all teams.
Examples:
Better data -> better marketing insights
Better product -> higher conversion rates
Better CS -> higher LTVs
8) Fixing mistakes is a powerful strategy
Every team has gaps in competency and areas of expertise.
"Good enough" can hide some glaring defects.
We've seen this in wasted ad spend, faulty tech, broken processes.
Search for flaws, fix them and add to the flywheel.
Every team has gaps in competency and areas of expertise.
"Good enough" can hide some glaring defects.
We've seen this in wasted ad spend, faulty tech, broken processes.
Search for flaws, fix them and add to the flywheel.
9) Treat your marketing engine like a machine
You need certain inputs to produce desired outputs:
People: specialization of critical expertise
Budgets: tradeoffs of scale, margin & quality
Creative: always be testing
Campaigns: systematic optimization
Analysis: deep insight
You need certain inputs to produce desired outputs:
People: specialization of critical expertise
Budgets: tradeoffs of scale, margin & quality
Creative: always be testing
Campaigns: systematic optimization
Analysis: deep insight
10) Defy the law of shitty clickthroughs
You'll have to increase the effectiveness of your marketing funnel faster than scale robs you of it.
Ex: if CPAs at 2x scale are 2x higher, you'll need to >2x your CVR to keep CAC steady.
You'll have to increase the effectiveness of your marketing funnel faster than scale robs you of it.
Ex: if CPAs at 2x scale are 2x higher, you'll need to >2x your CVR to keep CAC steady.
11) At scale, EVERYONE is your competitor
You're competing with ALL advertisers for wallets and attention.
If your funnel can't monetize as well as a dating app or weight loss program, you won't be competitive in the biggest arenas.
You're competing with ALL advertisers for wallets and attention.
If your funnel can't monetize as well as a dating app or weight loss program, you won't be competitive in the biggest arenas.
That's it. Thanks for reading.
If you found this useful, please retweet so others can too.
Follow me @bbourque for more on startups and marketing.
If you found this useful, please retweet so others can too.
Follow me @bbourque for more on startups and marketing.
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