April 25, 2016
What makes companies grow to change the world while others seem to fizzle out? That’s exactly what Sean Ammirati’s new book The Science of Growth looks to uncover. Ammirati follows the stories of 20 different companies, in pairs; he closely tracks and compares companies with the same product-market fit (and the same general target market) and looks into why one went on to achieve real scale, while the other languished. For example, Ammirati examined LinkedIn vs. Spoke, Facebook vs. Friendster, and McDonald’s vs. White Castle, thus revealing the secret of “the science of growth” and how to cultivate it in any organization.
We asked Ammirati, a venture capitalist with Birchmere Ventures and adjunct professor at Carnegie Mellon University, to share his top tips for getting your startup company on the right track for growth. The following is what he shared, in his own words:
Make sure you’re ready to scale.
“There are four prerequisites for your company before you scale, they are as follows: the founders core vision must be one that they are passionate to address, it must be a scalable idea, it must solve a real problem, and it must have an excellent first interaction.”
Look for double trigger events to leverage.
“In the evolution of many of our chosen startups, there were events not governed by the company, which accelerated company growth by increasing awareness of its product. People often think of these events later as the company’s ‘launch’ event, even though the company usually released the product publicly months before. For example we often think Twitter launched at South by Southwest in 2007 but that’s not the case, they leveraged the event to gain awareness.”
Draft off of platforms and use them as a catalyst to your growth.
“In other cases the catalyst is not an event in time, but is instead a large, existing platform of engaged individuals who are looking proactively for your solution to augment their experience on a current platform. For example, YouTube leveraged MySpace to grow it’s audience while Paypal enabled payments on the eBay platform thus helping its growth.”
Look for software based solutions that are driving discovery and try to optimize your product to leverage them and be discovered.
“Over the last decade, as software (search engines, app stores, and mobile recommendation apps) became a more significant way to discover products and services, an effective way to increase awareness was ‘gaming,’ or optimizing the rules those systems use to recommend solutions so your startup is at the top of the list. For example, search engine optimization and eventually the app store is how Mint was found.”
Look for opportunities for viral growth by leveraging your customers connections and network.
“The last way to dramatically increase the number of potential customers who are aware of your product or service is to get your existing customers to tell their colleagues and friends. While using existing customers as a referral service predates the Internet, current tools and technologies make this channel much easier to optimize. For example, Hotmail grew quickly by adding a link to everyone’s email so you could also get an account – it was simple but effective.”
Of course, there’s a lot more to be learned on how to implement these tips to successfully grow your company. With ten solid case studies, The Science of Growth by Sean Ammirati, will help guide you through it.
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