Grow

Grow

1. Engine of growth: mechanism that startups use to achieve sustainable growth

   • Sustainable growth--> ONE RULE: "New customers come from the action of past customers.. ways in wich past customers drive sustainable growth
     • Worth of mouth
     • Side effect of product usage
     • Funded advertising (the advertising must be paid for out of revenue,)
     • Repeat purchase or use

2. Engine of growth: designed to give a relativively small set of metrics on wich to focus energies. engines of growth:

   • Sticky Engine of growth: RULE-->"If the rate of new customer acquisition exceeds the churn rate, the priduct will grow
     • Churn of rate: fraction of customers who fail to remain engaged with the company's product
   • The viral Engine of Growth: (consequence of normal product use. Growth happens automatically as a side effect of customers using the product
     • Is powered by a feedback loop that can be quantified, it is called the viral loop and its speed is determined by a mathematical term called the viral coefficient.
       • Viral coefficient: measures how many of each new customers will use the product as a consequence of each new customer who signs up.
   • The Paid Engine of Growth: : 2 ways to increase the rate of growth--> increase the revenue from each customer or drive the cost of aquiring a new customer
     • LTV- Customer lifetime value (the money that pays the customer - variable of costs. CPA- cost per aquisition.. The margin between thr LTV and the CPA determines how fasr the paid engine og growth will turn.

3. Engines of growth determine product/ market fit

   • Market fit: describe the moment when a startup finally finds a widespread set of customers that resonate with its product
   • The metrics for each engine work in tandem with the innovation accounting model.

4. Engines of Growth determine Product/ Market Fit.

   • Prioduct market fit: describes the moment when a startup finally finds a widespread set of customers that resonate with its product.
   • The metrics for each engine of growth work in tandem with the innovation accounting miodel

5. When engines RUN OUT

   • Adaptive Organization
     • The companies need to manage a portfolio of activities, simultaneously tuning their engine of growth and developing new sources of growth for when that engine inevitably runs its course

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