8-Step Product Growth Framework
Growth Starts with a deep understanding of product value and is about moving new users to the AHA! moment as quickly as possible. - Chamath Palihapitiya
If you're a startup founder or marketer, you've likely heard of Demand Curve.
They're growth experts who wrote the guide on how to nail a Product Hunt launch. You need to understand how this works because you only have one shot. No redos.
What is growth Product Management?
Growth Product Management refers to increasing an existing product’s value and user base. Unlike core product management, which focuses on managing all activities required to bring a profitable product to market, Growth Product Management aims to help an existing product become more successful.
When and why growth PMs are needed?
In general, the need for growth PMs depends on the product and business goals that they should achieve. Here's what growth product managers can do for your business.
To define a company's growth direction
To do so, they should analyze user behavior, A/B test results, etc. In case a company doesn't have its own analytics infrastructure, growth PM undertakes integration of available SaaS analytics tools (like Google Analytics, Optimizely, or Oracle Maximizer for A/B testing) into the company's analytics framework to build dashboards that show potential growth drivers or vulnerable metrics that require improvements.
To increase the customer base and/or expand into new markets
If a high-quality product hits the market but hasn’t been optimized for growth, companies start looking for growth PM. The tasks may be different. As an example, the growth PM should increase customer LTV or enlarge the customer base by a certain percentage. For SaaS businesses with a subscription model, the common goal is to motivate freemium users to upgrade to premium.
To track and improve metrics
As a rule, when a business intends to build a growth team to eliminate inefficiencies in a funnel and improve customer experience, the growth product manager is needed to monitor related metrics and enhance them, in close collaboration with their team.
But, you may wonder why core product managers cannot do that? Perhaps, broadening the area of their responsibilities may be enough? Well, there's a fine line between traditional and growth PMs. Read on to figure it out.
Growth and Core PMs collaboration
The relations between growth and core PMs may sometimes be complicated. Oftentimes, growth PM can interfere in core PM's product development with a short optimization project. It's followed by creating a business case, which the core PM should approve, so they both can schedule the work.
A short-term focus of a growth PM usually frustrates the core PM's plans. Yet, effective communication and trust-based relations can lead to great outcomes.
Even though these two types of product managers are playing different roles on the same stage, they still have worthy things to teach each other.
What Core PMs can teach Growth PMs
The qualitative approach works too. Data and metrics that growth PM is deeply focused on won't always show the customers' needs. There are qualitative aspects that core PM understands intuitively when building a good product.
Data communication methods. The core PMs indeed are interested in metrics to understand if they managed to convey core value to the user. But the vast amount of data a growth PM usually delivers to them is overwhelming. To make further decisions, core PMs need to know what essential data they should focus on and how to analyze it.
What Growth PMs can teach Core PMs
Experiments are for learning. Traditional PMs use to see tryouts solely as a risk. But it's a great way to obtain helpful insights and verify hypotheses.
Failure is okay. It's widely thought that failure is not an option for traditional PMs. A lot of possibilities can open if they could treat failure as a reasonable cost of steps taken forward.
So, now as you know the fundamental difference between traditional and growth product managers, let's see what growth PM is accountable for.
Growth product manager tools
Unlike the role itself, the growth PM’s tech stack is fairly well-defined. Growth PM’s generally preferred a combination of specialized, best-of-breed solutions. Here’s a look at their growth tech stack:
Analytics and data visualization: Growth PMs want deep, flexible, and comprehensive analytics covering the entire funnel from marketing acquisition to product usage.
Examples: Mixpanel, Amplitude, Heap, Looker, Tableau, PowerBI
Engagement and optimization: While growth PMs and engineers often work directly in the code to improve marketing and product experiences, they rely on technology to quickly spin up new experiments, test hypotheses, and (surprise!) move faster.
Examples: Google Optimize, Optimizely, Appcues, Drift
Project management: With so many initiatives running in tandem and multiple teams involved in each one, project management becomes even more critical for growth PMs than it is for traditional PMs. Good project management software is a must in any growth stack.
Examples: Excel, Airtable, Zenhub, Asana
Internal communication: Growth PMs need to be excellent communicators, and the right tools can enable that.
Examples: Confluence, Slack, Google Docs
An 8-Step Framework for Product Growth
Shopify uses multiple frameworks and different structures across many of its teams. The most interesting is the product growth framework. Its goal is to grow the adoption of a product, not just build it. Shopify’s GM, Sylvia Ng, developed this framework.
The product growth framework has eight steps:
Stage your company – First, you need to understand the stage of your company and your product. Are you trying to find a product/market fit? Are you trying to launch an MVP? Whatever it is, define it. A lot of companies dive into product growth without identifying their stage.
Know your strategic goal – This is another one you have to define ahead of time. What’s your goal for your product? Are you going after profitability, new users, or something else? Articulating this ahead of time will help you identify what your product needs to do to drive growth.
Model the funnel – What’s the process that users will take to start using your product? Are they going to be existing or new users? These are questions that a model will help you answer. Modeling your funnel will also help you understand what areas you need to improve on to really grow your product.
Define your north star metric – You need a metric to help you understand whether you’re headed in the right direction. Your north start measures progress immediately, or at least incrementally, and may differ slightly from your overall strategic goal.
Create a prioritization grid – Get input from everyone working on this project about what features they think will create the most significant impact for your users. Everyone on your team is going to have different ideas about prioritization, which is why it’s essential to hear from multiple people.
Set targets – Targets aren’t goals or deadlines as they’re simply milestones to complete in the near term. They help keep your team on track and working toward your north star metric and your strategic goal.
Work on execution – Efficient execution enables every step of product growth. You need to work with your team to create an efficient process for all phases of product development—from prioritization to delivery.
Develop a multidisciplinary team – Your team needs skills in product, engineering, design, data, and marketing. That doesn’t mean you need one person dedicated to each task, but your whole team should cover these fundamental skills.
Following this framework will give you a repeatable way to grow your product. Sylvia used this framework at several companies, which means it’s easy to adapt, and you can use it at your company.