Building A Growth Engine

May 2020

In startups, few metrics matter more than growth rate.

For attracting investors. For keeping morale high. For delighting customers.

Because it’s reflective of having built something people really want and of having gotten great at building a growth engine around it.

To achieve an amazing growth rate, though, you must build an engine.

And building a successful growth engine requires profoundly understanding customers. The way they communicate, the way they think, and the life they’ve had.

Because it requires making your benefits clear, addressing the concerns that matter most to customers, and earning trust with the people in your market.

So, strategizing on the components of that growth engine is critically important.

And direct response marketing is 3 things. Traffic, conversion, and economics.

The traffic part is easiest. Being able to repeatedly buy attention to get people into your funnel. This comes down to figuring out where groups of your customers hang out and getting them intrigued so that they want to learn more.

The conversion part is hard. In marketing – it requires being clear about your benefits, building trust, and addressing objections with as few words as possible. In one-to-one sales, it requires listening intently and tailoring the way you talk about the solution to what will help them achieve a better future. One with less pain and more pleasure.

Whereas the economics part is moderately difficult and the most important part of all. It requires making sure that the money you earn from the customer is less than the amount that it costs to acquire them and give them your product. You cannot assume that it will be made up in volume. That is often a deadly assumption.

Instead, you must strike the balance of having unit economics that are profitable while still being able to scale them as fast as possible. The best B2B growth engines (like ClickFunnels) find a way to make their growth profitable immediately. Perhaps not in the very beginning but definitely as they validate PMF and get into hyper growth mode.

They don’t take months to cycle cash. They instead make sure that from the very first transaction that their acquisition cost AND their setup costs are paid back so that it’s pure profit from there. That way, the growth engine has nearly infinite capacity and doesn’t require buying expensive and risky gasoline (raising money) to make it function.

Lastly, it’s important to note that the best growth engines are focused on one channel at a time. Not two. Not three. Not five. One.

One source of traffic. One conversion method. One product with one set of economics.

That way, it can be optimized to maximum profitability.

If you try to do two or more traffic sources, conversion methods, or products at once – though – you sign up for suboptimal results and really end up hurting growth rate.

So don’t do that. Even if the other objects look shiny and good to add. They’re not.

Not until that first growth engine is as optimized as can be and has a full time conductor making sure that it stays efficient.

Then you can layer other growth engines on top. And build a machine of growth that can accelerate from multiple finely tuned engines simultaneously.

That’s the best position to be in. Scalable, repeatable, profitable growth from multiple channels. Because it allows the business to grow rapidly until it bumps in to local maximums like market size.

And that becomes a good problem to have. At that point, the problem becomes finding new markets to drive into and building growth engines to power that expansion.