6 Truths and 4 Signals of Growth | Part 1
Interpreted from growth journeys of software companies like Notion, Figma, Basecamp and Arc
Every growth journey is unique. By reflecting on those stories, we can create a map. The problem with a map is not simply that it is an abstraction; we need abstraction. Maps also need interpretation.
But interpretation creates another map. Using someone else’s map for your journey may not work. Only when interpretation takes the form of signals that can guide us on a similar journey does it works like a compass.
I could derive 6 truths and 4 signals from studying the growth journey maps of Figma, Notion, Basecamp, and Arc. The source of the maps are based on real episodes discussed by the leaders of these products on various channels and blogs that are publicly available. I hope they guide you on your journey of growth. May the force be always with founders!
TLDR: Truths
One of the key moments that contributed to Figma's rapid growth within an organization was the launch of the design system feature. Figma used a data layer that started by answering simple questions rather than fancy dashboards.
Notion templates and workspaces allowed users to showcase something about themselves. A product that creates something people want to share, as it reflects something about themselves, serves as a breeding ground for growth.
Great communities are built piggybacking on a great product experience that resonates with users, not on on transactional referral or advocacy programs, where there is a direct exchange of "if you do this, you get this" schemes.
SaaS products that optimize for bottom-up growth offer value throughout the journey of a product, like a page-turning novel.
Pricing is not only a way to capture the value on the table, but it is also a way to keep your teams focused on what drives value for users and what should be optimized at an organizational level.
Last but probably the most bitter of them all, the DNA required to make real product-led growth happen cannot coexist with an enterprise motion. It is crucial to choose one, as they cannot coexist simultaneously.
Truths
Truths are like first principles derived from the real-episodes from the growth journeys of these products.
1. A unique growth lever is identified by deeply understanding users within their problem environment
For Figma, their deep understanding of their users led to creating features that enabled sharing the product experience with others in an organization.
One of the pivotal moments attributed to Figma's superspreader growth within an organization was the launch of the design system feature.
The design system feature brought designers from across the organization together to address a persistent pain point - producing inconsistent designs.
This feature signaled an intent to solve the problem, which brought the designers together and unified their efforts. Claire Butler mentions that Figma had a strong data layer that informed them about the behaviors of product champions they should deep dive into.
The data layer does not start with fancy dashboards. At the beginning, there are a lot of spreadsheets, says Jesus Requena, VP of Growth Marketing at Figma.
Data layer starts by answering simple questions first,
- Who are the users ?
- What kind of things are they doing with product ?
The fine print answer to these two questions is enough to help you understand ideal user profiles and whether they are experiencing key value moments (behaviors) in their product experience.
At early stages, in the absence of data, frameworks like JTBD force us to think from the context of users. And when applied well, they can help identify growth levers. If you are looking to deep dive into this rabbit hole, Lenny's recent conversation with its co-creator is the right hole. (I will add the link at the end).
2. Does your product create something that people want to share because it exhibits something about themselves
For Notion, apart from the frictionless sign-up journey and ease of sharing a Notion page with anyone, there was another core thing that played a pivotal role.
Notion templates and workspaces allowed users to showcase something about themselves.
The notion of people creating their own templates and workspaces that demonstrated their clarity of thought or how organized they were allowed people to express themselves. The team at Notion recognized this early on and made efforts to encourage this behavior.
Mobilizing a product hook with community initiatives that are purposeful for users' lives helps scale behavioral change at large. At Notion's templates, new users could get started with templates built by power users. This brings us to the next truth about community building.
3. Great communities are built piggybacking on a great product experience, not on tiered referral programs
Building communities was a common feature across all four products. Figma has created a strong design community on Twitter. Notion has built a community of champions who create templates. Basecamp recently launched their community. Arc by Browser company has taken a "build in public" approach through their YouTube channel.
While all four products had very different approaches to building communities, one thing that was common among them was that they were not built on transactional referral or advocacy programs, where there is a direct exchange of "if you do this, you get this" schemes. Instead, all of the initiatives were purpose-driven.
They first connect at a purpose level, and then maybe have a layer of rewards that acts as fuel.
All the products were embedded with small delightful product hooks that made users love the product experience.
Notion - The motivation to create templates paired with a clean interface to write.
Figma - Core users spread 8 hours a day with the product, they either love it or hate it.
Arc - Same, core users spent long hours with the product, hate it or love it.
Basecamp - Once you in it, you enjoy meeting-less work environment.
It would not have been possible without innate motivation to be a part of the purpose than just be users who don’t care. The growth team simply channeled that desire through an effective program.
4. Does your product have too many variables that need to be set up before experiencing its value?
Imagine teaching the game of chess to a kid. Nearly everyone of us will start by explaining the rules regarding pawns, kings, queens, and other pieces, trying to get the foundational theory out of the way. What if there is a way to teach what a pawn can do and make them play with only pawns? Tell them how a king can move and play with two kings on the board. It will help deliver those "Aha" moments and keep the kid engaged.
In software, the first "Aha" moment creates an appetite to continue and reach the next "Aha" moment. If you can make them take a step, show the micro value, and then do it again and again, you are carving a path to your complete value through these episodes of micro value.
Great SaaS products offer value throughout the journey of a product, like a page-turning novel.
Research shows that of all forms of human motivation, the most effective one is progress. Maybe that's why a progress bar was, or is, an effective way to make users complete a long form.
Onboarding experience of products like Basecamp has simplified the way to get started by making users perform a few steps first. While there is scope to simplify it further, it does not become a blocker to experiencing product value. So, does your product help users experience value like a page-turning novel?
5. After doing everything right, does your transactional mindset make you come in the way of your product ?
Basecamp decided from the first day to charge flat rates rather than charging by seat. As Jason Fried said, this allowed them to focus on delivering the best possible product to all of their customers, instead of focusing on chasing large contracts.
The easy-to-use product and simple pricing made Basecamp spread like wildfire. In just six weeks after release, they hit their 1-year goal of $5k MRR.
If you choose per seat pricing, you are allowing the enterprise motion agents to take over. The contract value gives them the right to dominate the product roadmap rather than the product value that the team set out to build.
Basecamp did go with variable pricing, but it was not a function of the number of seats. Instead, it was based on the number of projects, which is connected to the value that their users derive from it. It is about managing projects.
Your pricing is not only a way to capture the value on the table, but it is also a way to keep your teams focused on what drives value for users and what should be optimized at an organizational level.
A similar approach can also be observed in Figma's growth journey. Unlike most design tools that charge per user seat, Figma recognized the unnecessary friction this creates. With their per-seat pricing model, approvals are required to add someone, but Figma ensures that non-editing users do not incur any charges. As a result, even though a majority of the company utilizes Figma, the company only pays for a small percentage of those individuals. This approach has greatly contributed to their growth.
6. DNA required to make real product-led growth happen cannot co-exist with an enterprise motion
There is not even a single success story that has adopted both strategies at the same time. Yes, it has followed one after the other. Mostly, the growth DNA to create bottoms-up motion is followed by enterprise sales motion.
There is a reason why Basecamp has chosen not to have the enterprise DNA and stick to its game of building products that users like to use, not enterprises. Figma did a fabulous job of bottoms-up growth motion, but borrowed the enterprise toolkit from Adobe. Slack did the same with Salesforce. Even for Dropbox, who championed user growth via growth, there are signs that they are failing to make the transition to enterprise, as per this recent HBR article.
If you have a product that is positioned for the enterprise right from the start, a growth motion that is user-led is practically impossible to have. That is because
the DNA required to make the growth of users via the product's bottom-up motion is completely opposite to the DNA required to scale in enterprise. Choose one; you cannot have both at a given point in time.
Bottom's up user growth warrants building a product in a way that users love using it. A lot of the time, it is drastically different from the way things are. It questions the fundamental assumptions of today. On the other hand, enterprises, by nature, do not like disruptions to the way things work today. Real user led growth levers seems to be a rare find in products positioned for enterprise.
Signals
While truths hold true, they may not necessarily help you move forward on the journey of growth. On the other hand, signals are principles that can help you navigate on your journey.
In part two of this series, we will look at how to go about the following signals:
What type of projects growth team should take up ?
Is there a useful way to classify growth projects ?
What are must-have’s before setting up a dedicated growth team ?
If you only had two questions ask to get started on growth problems, what would they be ?
Disclaimer - I am grateful to all the content out there that has been created that helped me in the process. Lenny’s podcast, Reforge course blogs and experts who have written about growth journey about these products were the core sources that helped me create this piece. In the process of interpreting these maps, I do not have any intention of dismissing anyone’s work.
References directly mentioned:
- Japna Sethi talks about time to value framework here
- An inside look at Figma’s unique GTM motion | Claire Butler (first GTM hire) - https://www.lennyspodcast.com/an-inside-look-at-figmas-unique-gtm-motion-claire-butler-first-gtm-hire/
- Jesus Requena (Figma): Building a PLG Data & Product Analytics Stack at Unity - https://openviewpartners.com/blog/building-a-plg-data-product-analytics-stack-at-unity/
How Notion leveraged community to build a $10B business | Camille Ricketts (Notion, First Round Capital) - link here
How an Anti-Growth Mentality Helped Basecamp Grow to Over 2 Million Customers - https://nira.com/basecamp-history/
Competing with giants: An inside look at how The Browser Company builds product | Josh Miller (CEO) - https://www.lennyspodcast.com/competing-with-giants-an-inside-look-at-how-the-browser-company-builds-product-josh-miller-ceo/#transcript
References that helped me build my understanding
How we implemented data and analytics for product-led growth https://mixpanel.com/blog/data-analytics-product-led-growth/
Five steps to starting your product-led growth motion, part 2 - Link here
How to hire your first growth team - link here
Hiring your first Growth employee—Part 1: Picking the right time, growth archetypes and constructing an interview process. Link here