When to focus on growth?

So, at the Lean Startup Unconference in San Francisco, David Binetti was holding a session on How to know when to step on the gas and focus on growth.

He repositionned the question, using the growth curve and the 3 horizons model and asking: how can you measure if you have product-market fit or how do you know you can move a product from H3 to H2.

All users or customers of your product come either from PROM: promotion activities or WOM: Word of mouth. PROM activities gives you linear growth but WOM activities gives you exponential growth. Which makes sense when you think about it for a second. Vitality is exponential.

Looking at the growth curve, PROM only brings the curve forward in time but does not impact its shape.

In the real world, your growth curve is messy and looks like this.

If split your source of new customer into PROM and WOM you have a different read the signal.

And when the number of users that comes from WOM is superior to the number of users that comes from PROM, that’s when to step on the gas.

So on the early stage of this growth curve, work on WOM.

Customers are your best source of customers. -David Binetti

How WOM happens? On the iPod, the white earphone told everyone looking this was someone using an a iPod. You joined Facebook because friends asked you to. People started buying flatscreen TV because they could see flat screen TV boxes thrown in the garbage, and neighbours and friends getting flat screen TV.

This is what got the “early majority” to buy the product. This is how you know you are ready to step on the gas, when WOM > PROM.

Thank you for this David.