Growth Hacking Startups: How To Avoid Deadly Mistakes
Growth hacking startups. Founders are assumed to know. Truth be told it’s a bit of a “dark art”. Is your company growing, declining, or at a standstill? That’s the question VCs want to know. It’s the question that keeps founders up at night. The question will ultimately decide whether your company succeeds or fails.
How Do YOU Measure Growth?
SaaS companies can track a seemingly endless list of metrics to measure their progress. But at the end of the day, most of it boils down to one word—growth.
However, there’s more than one way to measure growth. While ARR growth is the top-level metric for many SaaS companies, it’s only the tip of the iceberg.
“Think of your startup like a person going to the doctor for a physical exam. There are a lot of markers of a healthy person—blood pressure, weight, cholesterol, etc. Your blood pressure could be great, but if your cholesterol and glucose levels aren’t in healthy ranges, it’s a sign of an issue you need to address.”
Startups function the same way. You may have a fantastic revenue growth rate, but what if your burn rate is too high? What if your customer acquisition costs are unsustainable?
Due to the current economic uncertainty, startups are under more pressure to grow efficiently and build healthy businesses. Those are the businesses that will weather the storm and get VC funding.
To become one of those companies, you need to measure the totality of your startup’s health.
To do a deep dive into all the metrics that Startups at various stages should measure, and how they stack up against industry benchmarks, I highly recommend you read the Metrics Benchmark Report 2022 by Finmark from Bill.
Growth Hacking Startups – The Killer Mistake Most Founders Make
“Scaling growth before having product/market fit is the fastest way to kill your startup.” – Sean Ellis, regarded as the father of “growth hacking” and former head of growth at Dropbox, Eventbrite, & LogMeIn.
Early-stage products are in a vicious catch-22.
Whether you have a new product, growth has stalled, you’re entering a new market, or you bought a startup, sometimes it feels like there are two options:
It’s like you’re stuck between a rock and a hard place, it appears to be a lose-lose situation. Scaling growth before product-market fit is like pouring water into a leaky bucket. If you’re one of the lucky few, the bucket will hold enough water to stop the immediate threat of death. But this is terrible for sustainable growth
About the Author
James Spurway is an Angel Investor, Mentor, Advisor, Speaker, former Commercial Pilot, and Author who specialises in raising debt and equity capital. He strives to model diversity, equity, and inclusion in the founders he agrees to invest and work with. He has paused his angel investing activity to focus on raising his first US$ 50M venture capital fund, which will invest in startups that can accelerate the achievement of net zero emissions. James spent the past 33 years living in Hong Kong, Vietnam, Germany, Switzerland, Monaco, the USA, Thailand, the Philippines, Singapore, and Australia, his country of birth. In that time, he started 10 businesses, exited from seven, shut down two, and kept one. He has invested in a total of 50 startups since 2001 and had six successful exits.