Growth: What Does This Role Actually Mean?
Over the past few years, the term “Growth” has been one of the most frequently used buzzwords in the SaaS world, especially at product led growth businesses. Recently I surveyed over 350 SaaS companies and found that 43% of B2B software companies already have a dedicated growth team and 27% are looking to fill a growth role. Job functions such as growth marketing, growth hacking, and growth engineering all came onto the scene and it feels like every tech startup developed some type of growth team including Facebook, Uber and SurveyMonkey. There are over 256,000 candidates on LinkedIn across industries with current job titles such as Director of Growth, Growth Manager or Growth Hacker.
Despite the rise of this buzzword, there is not much clarity regarding what Growth actually means and what this team should be responsible for.
What does Growth actually mean?
Back in 2014, Brian Balfour described Growth as the “blending of marketing, product and engineering into one tight knit team.” He explained that growth teams “focus on the funnel in a holistic way […] because their mission is about the growth rate of a metric that tells a more complete picture of the business.”
Similarly, Sean Ellis, who coined the term “Growth Hacker” in 2010, suggests that “Growth is not just a concern of sales and marketing, but of product, engineering and support too. It is this organization-wide commitment to growth that ultimately sets companies apart.”
Marketing teams typically focus on the top of the funnel metrics. They are incentivized to improve KPIs that align with awareness and acquisition such as number of visitors, leads, MQLs, etc. Product teams often concentrate on usage metrics that align with retention and expansion.
The genesis of growth teams at a startup is often to fill the gaps between these departments. Typically, growth teams are established to focus on a key metric in the lead or customer funnel that may lack one central owner. The team is created because there are known inefficiencies in the funnel; their job is created to enhance metrics related to customer acquisition or expansion while improving the customer experience.
What they should be responsible for
It’s obvious that the number one goal of every startup is to achieve quick and sustainable growth. Shouldn’t all team members of a startup be striving for the company’s growth?
On the surface, this goal seems pretty easily achievable, but in reality, it’s not. A huge benefit of a growth team is that it can overcome the barrier of siloed departments. Growth teams can quickly fill gaps and build bridges between the departments as the team often consists of cross-functional team members (think product, marketing, design, engineering and/or business intelligence).
Elena Verna, SVP of Product & Growth at Malwarebytes, suggests that “Growth teams are built to fundamentally challenge existing concepts and existing beliefs.” In order to be able to challenge existing beliefs and concepts, the growth team typically “runs rapid experiments across different departments within the organization in order to spot new growth and innovation opportunities.” This is mainly achieved by developing hypotheses which are then A/B tested in experiments.
Hiring for Growth
After understanding the importance of a growth team, it is critical to develop hiring criteria for this relatively new field.
A candidate in this role must be able to truly understand the customer’s needs and have empathy with their pain points. They must also be process and data-driven in order to test their hypotheses in a scalable and methodological way. Suitable employees usually have an insatiable drive to improve current processes and take the company/product to the next stage, while not being afraid of failure.
Darius Contractor, former Growth Engineering Lead at Dropbox, recently shared his recipe for success in the setup of growth teams on OpenView’s BUILD podcast. He combines alignment on key metrics with low-stakes testing. “When I’m working with a company that’s starting growth teams, I tell them the best thing to do is find a metric everyone cares about,” Darius says. “That’s usually either user growth or revenue growth.” After that, Darius recommends identifying a surface area where you can make a lot of changes without disrupting other teams or needing to jump through too many hoops. For example, the payment page or the onboarding flow – places where you have the freedom to try out a lot of different things quickly in order to figure out how to create success.
Keep in mind, your Growth team will evolve as your company evolves. At an early stage startup, Growth may just be one engineer and data-driven resource. As it scales, you will find Growth is truly a team sport and is simply about how to best ensure all teams are working together and staying focused on KPIs that matter. Growth can be the pinch hitter in your organization that can step in and fill the gaps.
At the end of the day it doesn’t matter if you have someone in your organization with “Growth” in their title, what matters is that someone owns every critical KPI that will drive growth for your business. If you’re a leader at a SaaS company, I challenge you to think about the key metrics that don’t have clear owners at your company and find a way to dedicate your own pinch hitter(s) to improve these metrics.
Mike Walsh, CMO at Reflektive, has gone through multiple pricing processes and has developed his own framework for assessing the situation and then developing pricing that is appropriate and effective. Learn more about his 4-step framework here.