When Your Product Hits the Growth Wall

Picture this: your company is killing it when it comes to the revenue metrics, your product’s growth rate skyrocketing faster than Elon Musk’s latest rocket launch. But then, out of nowhere, just when everything seemed dandy, the engine starts sputtering. Growth slows. Panic sets in. And just for the fun of it, you’re in the outback with your last water bottle (Clearly Lost had a big influence on me). Welcome to the dreaded growth wall.

It’s a scenario that’s all too familiar in the world of startups. I have worked at high growth companies and low growth, and what was once a thrilling ascent becomes a nerve-wracking plateau. Late-night strategy sessions, frantic dashboard refreshing, hiring consultants to come and help out, “help understand the issue” – the whole nine yards.

So, what’s a team to do when faced with this existential crisis? Well, one thing is for sure that you can forget about a silver bullet feature or dumping loads of cash into marketing.

It don’t work. Haven’t we all learned that by now?!

So now that we have gone through the easy answers (and often misguided). Instead, it’s time to roll up your sleeves and dive deep into the data.

I will use the example of an onion here, as my friend Rui happens to be an onion and very raw. Umm when he reads this, he will get the inside joke.

Peeling Back the Layers: Understanding Retention

First things first, let’s peel back the layers of this growth wall onion. Behind the scenes, a growth stall typically boils down to one thing: churn catching up with customer acquisition. Every founder’s worst nightmare.

Think of it like this: your product is losing users at a rate that’s canceling out the new ones you’re bringing in. It’s a classic case of pouring water into a leaky bucket. And trust me, it’s not a pretty sight.

This is the churn. It’s like having holes in your lemonade cups – no matter how much lemonade you pour, you’re losing a significant portion of it before it even reaches your customers.

Meanwhile, your efforts to attract new customers – maybe by putting up flashy signs or handing out free samples – are only bringing in a steady stream of people. This is the new customer acquisition, and it’s happening at a fairly consistent rate.

However, the problem arises when the rate of people leaving (churn) surpasses the rate of new customers coming in. Even if you keep pouring lemonade into cups, you’re losing more than you’re gaining, and eventually, you’ll run out.

So, where do you start assessing the situation? Well, retention is your North Star. How many users are sticking around? How engaged are they? These are the questions that need answers.

If I can have anyone of you take only one point away from all this, then it’s to please make sure that you focus on retention. Do not let it slip because your TOFU (Top of the funnel) growth looks great. It will catch up to you.

Sure, there are benchmarks out there, but let’s keep it simple: if your Week 1, Week 4, and Week 8 retention rates aren’t hitting respectable numbers for your industry, you’ve got a problem. And it’s one you can’t ignore.

Because no matter how hard you try and ignore it, it will ruin your numbers MoM. You keep adding the customers at the top of the funnel, but they don’t stick around long for you to make a bigger dent in the revenue.

Facing the Ugly Truth: Admitting When Your Product Just Isn’t Cutting It

Now, here’s the hard truth: sometimes, your product just isn’t cutting it. It’s the bitter pill no one wants to swallow, but ignoring it won’t make it go away.

Maybe your product is too niche, too clunky, or simply doesn’t solve a pressing need for your customers. Classic vitamin vs painkiller phenomenon, anyone? It happens. When faced with a growth wall, the knee-jerk reaction is often to seek out quick-fix solutions. But before you go chasing after the next shiny feature or diving headfirst into another marketing blitz, take a step back.

Ask yourself: does my product have clear competitors? Can people even describe what my product does without a PhD in jargon? And perhaps most importantly, do people actually want my product, or are they just being polite?

Sometimes, the best move is to reposition your product within an existing category. Sure, it might not be as sexy as blazing your own trail, but it beats languishing in obscurity.

By honestly assessing your product’s strengths and weaknesses, you can identify opportunities to pivot, reposition, and ultimately reignite growth. But what this requires a healthy dose of being honest and truthful about the predicament you’re in and how to get out of it.

So coming back to our lemonade example, as you are gathering this data, you realize there might be a harsh truth waiting for you. Maybe your lemonade simply isn’t as appealing as you thought. Perhaps it’s too sour, too expensive, or not conveniently located. Whatever the reason, facing this reality is the first step toward finding a solution and getting your lemonade stand back on track.

Navigating the Treacherous Waters of Retention Woes

Now, let’s talk about retention. If your retention rates are in the dumps, don’t fall into the trap of thinking one magic feature will save the day. It won’t.

Instead, focus on the fundamentals: user activation and network effects. Get more users onboarded and engaged from day one. And if your product thrives on network effects, focus on building density – one network at a time.

And for the love of all that’s holy, resist the urge to pile on features in a desperate bid to retain users. It’s the classic “next feature fallacy” – and it’s a trap.

In the quest for growth, it’s all too easy to fall into the trap of conventional thinking – to assume that success can be achieved through a formulaic approach of feature enhancements and marketing blitzes. But the reality is far more nuanced, requiring a willingness to explore alternative paths to recovery.

It’s like trying to make a sandwich with just bread and mayo—sure, it’s nice, but it’s missing the meat of the matter. You gotta focus on what’ll make new customers fall in love with your app faster than a rom-com montage.

The TLDR is that when you add features that engage hardcore users, that’s going to be such a small % when in reality you need to stem the bleed in W1/W4/…W8. That is, in the activation step of the product. If you get 10% of your hardcore users to engage more deeply, the reality is that it won’t move the needle enough mathematically to lift your entire retention curve. This means that you need to listen to the “silent majority” of users who churn, rather than the core users who stay and are highly vocal.

So the smart option here is making sure you are focusing on your existing customer base. By focusing on user activation and adoption, you can unlock new avenues for growth that extend far beyond the traditional playbook.

From onboarding new users more effectively to fostering a sense of community and engagement, there are countless ways to leverage your existing user base to drive sustained growth.

Polishing the Rough Edges: The Unsexy Art of UX Optimization

Last but not least, let’s talk UX. No, it’s not the sexiest part of product development, but it’s absolutely critical for growth.

This is where things get really wild—we’re diving headfirst into the world of UX flows. Forget the flashy features; we’re talking about the unsexy stuff—the signup forms, the invitation mechanics, the payment process.

Sweat the small stuff: your signup flow, your referral process, your payment experience. These are the unsung heroes of growth, quietly working their magic behind the scenes.

So, polish those rough edges. Streamline your signup process, optimize your referral flows, and make paying a breeze. It might not win you any awards, but it’ll sure as heck move the needle towards getting retention getting in control. I cannot stress how much customers dislike these things not working well or not well thought out.

So, how does one master the art of growth-centric UX? It’s a meticulous dance of clarity, simplicity, and strategic nudges:

  • Craft compelling value propositions that spark urgency and intrigue.
  • Ensure critical elements are readily accessible, above the fold.
  • Streamline the journey, removing distractions and extraneous links.
  • Embrace multimedia to captivate and engage across platforms.
  • Optimize for mobile, where the magic often happens on the move.
  • Simplify the signup process, prioritizing the magic moment.
  • Integrate essential asks seamlessly into the user journey.
  • And above all, test, iterate, and refine relentlessly.

In the end, navigating a growth stall is no picnic. But with patience, perseverance, and a healthy dose of data-driven decision-making, you can steer your product back on course. So, buckle up – it’s gonna be a bumpy ride. But hey, what’s a little turbulence when you aiming to IPO and make a bucket load of cash so you can jump in naked like Scrooge Mcduck.

Closing Thoughts

World of tech in tumultuous, even the greatest of products can hit a roadblock. Take Facebook, for example. It started off as the cool kid on the block, reigning supreme in college campuses everywhere. But then, like a party balloon losing its air, growth hit a snag. Why? Because, saturation effects kicked in. Suddenly, Facebook needed to break free from the college bubble and spread its wings to conquer new territories. And oh boy, did it ever.

But wait, there’s more! Dropbox, the darling of the cloud storage world, had its own rollercoaster ride. It had a wild growth after a surge on Digg and Hacker News. But then, just as it was catching its breath, it hit a wall. What did it need to push through? A referral system, some shared folders, and voila! Off it went to conquer new peaks.

And let’s not forget TikTok, the app that’s taken the world by storm with its dance videos and viral sensations. But even TikTok had its moment in the gutter. Yup, you heard it right. It hit a snag before its acquisition, stuck in a rut of dance videos and desperate for a lifeline. But a hefty dose of paid marketing came to the rescue, propelling TikTok to the stratosphere with its vast library of content.

Now, here’s the thing: when you hit the growth wall, it’s tempting to throw money at the problem or pile on the features like a kid in a candy store. But hold your horses, because there’s a better way.

Instead of resorting to knee-jerk reactions, take a step back and assess the situation that you are in. Every stalled growth curve has its own quirks and idiosyncrasies. Maybe activation rates are in the dumps, or perhaps the shine has worn off the apple. Heck, it could even be something as simple as the wrong season or a saturated marketing channel.

But again, fear not for the solution lies in the power of patience, analysis, and—dare I say it—deep customer empathy. It really is a wild journey, but finding those levers to kickstart growth again? Now that’s a tale worth telling and what sets you apart from other companies. So strap in, because on the other end is one hell of a success story waiting to be told.

And like they say, if it was easy, everyone would do it.


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