93% of startups prioritise wrong

Hi there 👋,

Welcome to Growth Waves 🌊.

Almost every startup I work with struggles with the same challenge.

It is the root cause of much of their other fun challenges (because let's be honest, growing a startup is full of challenges).

Yet, it isn't a new one: lack of focus.

But I do have a new unusual suspect to blame 🕵️‍♀️.

Your prioritisation framework - Most startups are prioritising in the wrong way

When ICE Scoring is Not Enough

A key part of the growth process is your prioritisation framework: how do you score and compare different growth experiments. But they have a fatal flaw...

Let's take ICE as our example prioritisation framework:

Sean Ellis’ ICE scoring methodology is a great tool for prioritising ideas, but I see teams fail when they use this method too broadly and without a solid anchor point.

If you ICE score every idea in your backlog, you will likely have many ideas with precisely the same score. However, this doesn’t help solve your prioritisation problem.

If you get past that issue (of similar scores) by creating a more complex scoring system, you’ll still find you are comparing growth experiments across multiple growth levers:

So if an acquisition idea gets a 7.7 ICE score and a retention idea receives a 7.3, can you effectively decide which one to focus on first?

Enter Growth Levers

I believe the set of KPIs missing is a layer between our North Star Metric, quarterly focus points and backlog. We need to first determine what our key growth levers are and from there develop individual backlogs and focus points around each one.

Growth levers are simply put specific focus areas that could help lead to faster growth, e.g. improving paid ads conversion rate, reducing churn within the first 7 days.

We work out our growth levers by going through the following steps:

1. Define / update your growth model. What are the funnels and/or loops that lead to growth, aka how do you grow?

2. Identify opportunities within that growth model. How is each of those loops / parts of the funnel performing, which part is holding your growth back?

3. Work out the quantitative impact of improving those opportunities, aka growth levers. Calculate how much it will help you in reaching your North Star Metric. This is often at best an estimation, but starts interesting discussions and allows you to compare various areas.

4. Pick the key growth lever(s) and source experiment ideas. Narrow down the different potential opportunities to ideally just 1-3, work out the quantitative metric. Start doing further research to source ideas.

5. Prioritise ideas and execute. Now your chosen prioritisation framework can come into play to organise your smaller more focused backlogs.

To learn how to do this in more detail, check out Ethan Garr and mine full article on how to identify and use growth levers

What makes a strong growth lever (newsletter exclusive content)

On Tuesday a client asked me a tricky question:

What makes a good growth lever? Can you give me a concrete framework?

I wish like hypotheses there was a concrete framework I could give, almost like an experiment hypothesis framework, but I don't have one because:

• It depends on your business size / stage how narrow or wide a growth lever is. A young startup may focus on retention as a growth lever, but for a larger organisation that is too broad and reduce churn before day 7 may be a better lever.

• Growth levers aren't just conversion rates or parts of your funnels / loops. They can also be other areas that help you drive growth, e.g. pricing, exploring a new market.

But I can make it more concrete, good growth levers:

1. Relate to and impact your North Star Metric

2. Give focus rather than span too broad across different groups

3. Is within your control (to a certain extent)

4. Doesn’t contradict with other focus points

5. Are not vanity metrics

Got any further questions about growth levers or want to share your experience?

Join the conversation on Linkedin or attend our free Linkedin audio event "How to identify your growth levers as a startup" hosted by Ethan Garr and I on Friday 16th December, 2:30pm - 3:00pm (GMT):

Recommendation

In every newsletter, I will also share a related book, individual or newsletter to check out related to the topic of the week.

The content of this newsletter and the related article were created together with Ethan Garr. I met Ethan through Linkedin during lockdown and since then we've had calls every two months, or let me say... growth rants. Sharing everything we were struggling with and working on, helping each other along.

So when we both realised we'd seen the same issue: a missing layer in companies prioritisation framework, it only made sense to write an article on it together.

Definitely check him out and his podcast, Breakout Growth, which he co-hosts with Sean Ellis.

Bonus recommendations: With ADHD focus is even harder for me on a personal level too. Two things have helped hugely:

1. Joining regular focus sessions online with Flown to get deep work done

2. Trying to reduce my digital dependencies to focus on one thing at a time (I kickstarted this with going on an Unplugged weekend and reading the books Digital Minimalism and Do Nothing)

That is it for this week! Always feel free to drop me a quick email to let me know what you think of Growth Waves and any feedback you have,

Daphne