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Focus On Acquiring Customers, Not Just Pleasing Them
Many companies become so obsessed with "customer satisfaction" that they forget to focus on customer acquisition. They worry so much about not upsetting a tiny fraction of customers that they fail to aggressively market and sell to new prospects. This is shortsighted. You can't satisfy customers you don't have. For example:
- Apple isn't afraid to obsolete its own products in order to offer newer, better ones.
- Amazon expanded beyond books into countless other markets despite critics saying they were spreading themselves too thin.
- Starbucks continues opening new locations despite having a shop on every corner in some cities. Don't be so concerned with a few complaints that you miss opportunities to massively grow your customer base.
Section: 1, Chapter: 19
Book: The 10X Rule
Author: Grant Cardone
A Good Plan Violently Executed Now is Better Than a Perfect Plan Tomorrow
"A good plan violently executed now is better than a perfect plan tomorrow."
This quote, cited by Facebook's Alex Schultz, underscores a key growth team principle - moving quickly to ramp up the tempo of experimentation is more important than having a flawless, thoroughly debated plan. Analysis paralysis and over-planning are the enemies of growth. Growth teams must act decisively and with urgency.
Section: 1, Chapter: 1
Book: Hacking Growth
Author: Sean Ellis
Genchi Gembutsu - "Go and See for Yourself"
The Toyota Production System has a key principle called "genchi gembutsu" - "go and see for yourself." It emphasizes the importance of making decisions and taking action based on firsthand experience, not the reports of others. Managers should see operations for themselves to truly grasp problems and opportunities. Entrepreneurs need to get out of the building and directly interact with customers to test their assumptions. When managers go and see for themselves, they often realize their beliefs about their customers are wrong. Speaking directly to customers reveals insights that no amount of surveys and focus groups can.
Section: 2, Chapter: 5
Book: The Lean Startup
Author: Eric Ries
Why Trust Is The Ultimate Competitive Advantage
the digital age, trust has become the most valuable currency in business. With infinite options and information at their fingertips, customers gravitate toward companies they believe in on a personal level. Trust is built through:
- Transparency - Being open and honest about your processes, policies, and performance
- Consistency - Reliably delivering on your brand promises across all touchpoints
- Authenticity - Staying true to your values and principles, even when no one's watching
- Empathy - Demonstrating genuine care and concern for your customers' well-being
Examples of high-trust companies:
- Patagonia - Radically transparent about its environmental impact and supply chain
- Zappos - Empowered employees to "wow" customers, even if it meant taking a short-term loss
Section: 3, Chapter: 10
Book: Company Of One
Author: Paul Jarvis
Hacking a Path to Wow - Tactics to Drive User Activation
Chapter 6 focuses on improving user activation - getting more new signups to reach their aha moment and become active, engaged users. Key activation tactics include:
- Obsessively reducing friction in the signup flow and first user experience. Minimize fields, use social logins, and cut steps ruthlessly.
- Designing a clear "happy path" in your product that guides users to key actions and value. Don't make them think!
- Using triggered messaging and prompts to nudge users to key actions. But avoid nagging and message fatigue.
- Deploying re-engagement tactics for users who visit but don't sign up or who sign up but don't complete key actions. This could include targeted emails, in-app prompts, and more.
Section: 2, Chapter: 6
Book: Hacking Growth
Author: Sean Ellis
Hire Managers Of One
"Managers of one are people who come up with their own goals and execute them. They don't need heavy direction. They don't need daily check-ins. They do what a manager would do - set the tone, assign items, determine what needs to get done, etc. - but they do it by themselves and for themselves."
Section: 1, Chapter: 9
Book: Rework
Author: Jason Fried, David Heinemeier Hansson
Dropbox's Famous Referral Program Almost Didn't Ship
When growth lead Sean Ellis proposed a double-sided referral program to Dropbox - giving existing users 250MB of extra space for referring a friend and giving new signups 250MB too - the founders initially rejected it, fearing it was too generous and would be abused.
However, Ellis persuaded them to run a test to a portion of users. To their surprise, referrals shot up with no signs of abuse - so they quickly rolled it out to all users. Referrals increased 60%, with 2.8M invites sent per month!
Always test ideas before rejecting them. You may be surprised by the results!
Section: 2, Chapter: 5
Book: Hacking Growth
Author: Sean Ellis
Part 1 Summary
Part One of "Blue Ocean Strategy" lays the foundation for understanding and creating uncontested market space, termed "blue oceans," as opposed to the competitive and saturated "red oceans" of existing industries. The authors, W. Chan Kim and Renée Mauborgne, present a compelling argument for shifting focus from competing to creating, emphasizing value innovation as the cornerstone of this approach.
Section: 1, Chapter: 1
Book:
Author:
Surprise - Asking For Less Money Can Increase Revenue
Sometimes offering a discount can actually decrease your revenue, as the Inman real estate news company discovered.
"At Inman, the team tested giving a discount to visitors who were abandoning their purchase in the middle of checking out by offering a limited-time 25 percent off their purchase to complete the checkout process. Not surprisingly, this discount drove a significant lift over offering no discount at all, increasing the rate at which people completed the purchase by 39 percent. But when they ran another test, testing the 25 percent discount against a 10 percent discount, they found that the smaller discount still converted roughly the same amount of additional customers—and by offering a smaller discount they were able to improve the revenue captured from the sign-up process by 18.9 percent."
Always test discounts to see the optimal price for maximizing total revenue.
Section: 2, Chapter: 8
Book: Hacking Growth
Author: Sean Ellis
Beware Of Relying Too Heavily On One Acquisition Channel
Many companies become overly dependent on a single major acquisition channel, which can lead to stagnation when that channel loses effectiveness.
For instance, online publishers like Upworthy and Buzzfeed rely heavily on Facebook's News Feed algorithm to drive traffic to their websites. This dependency becomes problematic whenever Facebook adjusts the algorithm, as even minor changes can significantly reduce the publishers' readership and advertising revenue. Thus, their growth is vulnerable to the volatility of this single acquisition channel.
Section: 2, Chapter: 9
Book: Hacking Growth
Author: Sean Ellis
Leap of Faith Assumptions
Every business plan begins with assumptions. Startups make "leap-of-faith" assumptions - the riskiest elements upon which their success depends. Two most important assumptions are:
- Value hypothesis: The belief that the product delivers value to customers once they start using it
- Growth hypothesis: The belief that customers will love the product enough to fuel exponential growth
An example is Facebook. Their value hypothesis was that connecting online with one's real-world friends has inherent value. Their growth hypothesis was that users would be fanatical enough to rapidly recruit more users.
Section: 2, Chapter: 5
Book: The Lean Startup
Author: Eric Ries
Find the Smallest Way to Solve a Real Problem
When starting out, don't get caught up in building complex infrastructure, hiring staff, getting offices, etc. Instead, identify the core problem you want to solve. What solution could you provide to a single customer right now, with the bare minimum of resources?
For example, designer Paul Jarvis started getting clients by simply emailing his network, offering his skills. Crew started by manually matching clients and freelancers, then automated only after proving out demand. Start tiny, prove your concept, then slowly expand only as needed to better serve customers. Premature scaling is the enemy.
Section: 1, Chapter: 4
Book: Company Of One
Author: Paul Jarvis
Experimentation Velocity Determines the Pace of Growth
Chapter 3 focuses on why the pace of experimentation is crucial to the pace of growth:
- The faster you run experiments, the more you learn about what works and what doesn't. More experiments = more insights.
- Most experiments will fail or show inconclusive results. Growth comes from many small wins compounded over time vs one big win.
- Early on, focus experiments on areas most core to your product vs incremental changes. Experiment boldly to maximize learning.
- Establish a weekly growth meeting rhythm to review results and determine the next most important experiments to run. Keep the growth team accountable.
Section: 1, Chapter: 3
Book: Hacking Growth
Author: Sean Ellis
"The Ultimate Currency In Business Is Not Money. It's Trust."
"More than ever before, trust is the most important currency in business. The ability to build trust, and do it authentically, is the greatest predictor of a brand's success... Without trust, a business fails."
Section: 2, Chapter: 5
Book: Company Of One
Author: Paul Jarvis
Pour Yourself Into Your Product To Make It Uniquely Valuable
To avoid being a commodity that others can easily replicate, inject unique elements of yourself into your product. Infuse it with your values, identity, and personality.
Incorporate your way of thinking and working into how you build, deliver, and support it. By pouring yourself into your product, you make it an extension of you. No competitor can copy that. Your product won't just perform a function - it will represent a distinctive worldview customers can identify with.
Section: 1, Chapter: 6
Book: Rework
Author: Jason Fried, David Heinemeier Hansson
"The Currency Of Real Networking Is Not Greed But Generosity."
"Networking isn't about hunting for new contacts, it's about farming for new relationships. Plant seeds of helpfulness everywhere and you'll be amazed at what opportunities pop up. Few things are more fulfilling than connecting with like-minded people in the spirit of service."
Section: 3, Chapter: 12
Book: Company Of One
Author: Paul Jarvis
The Value Of A Business
"The value of a business today is the sum of all the money it will make in the future. (To properly value a business, you also have to discount those future cash flows to their present worth, since a given amount of money today is worth more than the same amount in the future.)"
Section: 1, Chapter: 5
Book: Zero to One
Author: Peter Thiel
"Profit Is Sanity, Revenue Is Vanity"
"Profit, not revenue, is what matters. Revenue is often thought of as the top line, the "gross sales" a company has made in a year, yet what really matters is how much of that money is left after all the bills are paid—that's profit... Focusing on profit from day one sets you up for long-term stability."
Section: 1, Chapter: 4
Book: Company Of One
Author: Paul Jarvis
Companies of One Question Growth
A company of one is a business that questions the assumption that growth is always good. Instead, it focuses on being better rather than just bigger. Key traits include resilience, autonomy, speed, and simplicity. Companies of one can be solo entrepreneurs, small businesses, or even self-directed teams within larger organizations.
The focus is on making considered decisions about growth based on specific goals and values, not pursuit of growth for its own sake. Prioritizing profits over scalability. Retaining freedom to adapt and change course quickly. Keeping things as simple as possible by avoiding unnecessary complexity. A company of one aims to do great work and serve customers excellently, even if it means staying small.
Section: 1, Chapter: 1
Book: Company Of One
Author: Paul Jarvis
Prostitution Economics 101
Levitt and Dubner lay out a simple economic framework for understanding the business of prostitution:
- Supply and Demand: When demand from male customers outstrips supply of female prostitutes, prices are high. This explains why prostitutes could earn the equivalent of over $76,000/year in early 1900s Chicago.
- Substitute Goods: Competition from other women willing to have unpaid sex acts as a substitute good, eating into prostitutes' earning power. As premarital sex became more common, demand for paid sex fell.
- Pimps as Managers: Pimps provide legitimate business services (protection from police/johns, marketing, price discrimination) in exchange for a 25% cut. Prostitutes working with pimps earn more per trick.
- Price Discrimination: Pimps charge different prices to black vs white customers to maximize revenue. This first-degree price discrimination extracts more total surplus.
Section: 1, Chapter: 1
Book: Super Freakonomics
Author: Steven D. Levitt , Stephen J. Dubner
Casinos Use Data To Optimize Profits And Player Experience
Modern casinos are increasingly using data analytics and machine learning to model player behavior and optimize every aspect of their gaming floors. Pioneered by Gary Loveman, former CEO of Caesars Entertainment, casinos now employ teams of MIT-trained mathematicians and data scientists to determine everything from the optimal slot machine hold percentage to the personalized comps offered to loyal high rollers.
By tracking player activity through loyalty cards, mining behavioral data, and running experiments, mega-resorts can create a perfectly tuned ecosystem that maximizes both player satisfaction and casino winnings.
Section: 1, Chapter: 3
Book: On The Edge
Author: Nate Silver
Embrace Constraints As A Catalyst For Creativity
Having fewer resources drives resourcefulness. When you have unlimited time, money or people, inefficiency and waste emerge. But constraints breed creativity and clarity. With tight limitations you must:
- Solve problems simply, not elaborately
- Focus only on what's essential
- Find unorthodox ways to make do with what you have
Don't lament lacking resources. Treat finite means as a source of innovation. Let your constraints guide you to elegant, creative solutions instead of bloated, complex ones.
Section: 1, Chapter: 5
Book: Rework
Author: Jason Fried, David Heinemeier Hansson
Hallmarks of effective OKRs
- Urgency: When a crisis arose, Intel's leadership responded within weeks to set and communicate a clear, focused objective to the entire company.
- Clarity: From the CEO down, everyone knew exactly what the objective was and how their work connected to it. No ambiguity.
- Alignment: Every team, from engineering to marketing to sales, set their own OKRs in service of Operation Crush. While the key results differed, the overarching objective unified everyone.
- Tracking: Regular check-ins and grading enabled leaders to monitor progress, identify obstacles, and make adjustments as needed.
- Stretching: The 2,000 design win goal was hugely ambitious. But it motivated people to rethink old approaches and deliver amazing results.
Section: 1, Chapter: 3
Book: Measure What Matters
Author: John Doerr
Envy - The Hidden Driver of Business Growth
Much of the obsession with growing businesses as big as possible stems from ego and envy, not smart strategy. We see other large, successful companies and assume growth is the only way to respect and clout. But comparisons are misleading - you don't see behind the scenes, only the shiny exterior.
Instead, use envy as a tool to identify what truly matters to you. If you envy a company's profits or impact, focus on improving those things sustainably, not just getting bigger overall. Don't let ego drive irrational growth. Stay true to your own definition of "enough."
Section: 1, Chapter: 2
Book: Company Of One
Author: Paul Jarvis
The Three Phases Of Customer Retention
There are three key phases of retention that growth teams should focus on:
- Initial retention (first few days/weeks after acquiring a customer)
- Medium-term retention (solidifying the customer relationship and making product usage a habit)
- Long-term retention (continuing to provide value to retain the customer over many months/years)
Different tactics should be used in each phase to optimize retention. In the initial phase, focus on getting the user to the aha moment quickly. In the medium-term, build habits around using the product. For long-term, keep adding features and value to retain the customer.
Section: 2, Chapter: 7
Book: Hacking Growth
Author: Sean Ellis
Done Is Better Than Perfect
One of the biggest traps for companies of one is getting stuck in a cycle of endless preparation and perfectionism. You tinker away in isolation, waiting for your offering to be flawless before releasing it to the world. But the truth is, you learn more from one real customer interaction than countless hours of solitary strategizing.
The antidote is what LinkedIn founder Reid Hoffman calls the "embarrassment test":
"If you're not embarrassed by the first version of your product, you've launched too late... The feedback you get from releasing your 'embarrassing' product is the most valuable feedback you'll get in your life."
You'll never achieve perfection, only progress.
Section: 3, Chapter: 11
Book: Company Of One
Author: Paul Jarvis
Customer Misbehavior Signals Unmet Needs
Many innovative products are shaped by observing how customers creatively use existing products to solve needs in unintended ways. Examples include:
- eBay's "Everything Else" category leading to significant new verticals
- Facebook users finding unexpected uses for the platform and APIs
- Airbnb hosts renting out extra space in creative ways
When customers "misbehave", they often signal a new use case or market opportunity ripe for innovation. Resist the urge to shut this behavior down. Instead, study it carefully and engage those customers to understand what problem they are solving. Then adapt your product and business model to serve the need.
Section: 4, Chapter: 43
Book: Inspired
Author: Marty Cagan
From Idea to Experiment - How to Document Growth Tests
To keep experiments organized and surface key insights, document each test with the following details:
- Name: A concise label to refer to the test
- Description: What change is being made and who will see it (e.g. a 50/50 split test of two landing page headlines for new visitors)
- Hypothesis: The expected result and why (e.g. Changing the headline to emphasize key benefit X will increase signups by 10%)
- Metrics: The key metrics to track (signups, click-through rate, retention rate, etc.). Include a primary metric that determines success.
- Launch details: When it started/ended, sample size, anything that might affect results
- Results: The actual metric changes seen in the test. Note statistical significance.
- Conclusions: Insights gleaned and ideas for follow-up experiments to further optimize
Section: 1, Chapter: 4
Book: Hacking Growth
Author: Sean Ellis
Early Adopters: The Foundation of Learning
Early adopters are a special breed of customer. They accept an 80% solution and are eager to give feedback. Early adopters use their imagination to fill in what a product is missing because they see its potential.
When cultivating early adopters, focus your marketing efforts on places they congregate, use messaging that resonates with their beliefs, and speak to their needs. Don't try to appeal to the broader mainstream yet.
Early adopters are tolerant of a product's flaws and their feedback is invaluable for steering the product roadmap. Find them, cherish them, and shape your product to meet their needs.
Section: 2, Chapter: 6
Book: The Lean Startup
Author: Eric Ries
Analyze Your Value Network
To understand your company's innovation potential, analyze your value network and its key characteristics:
Identify the key players: Who are the suppliers, producers, and customers within your network?
Understand the metrics of value: How is product performance measured and valued within your network?
Analyze the cost structure: What are the costs associated with operating within your network, and how do they impact profitability?
Assess your company's position: Where does your company fit within the value network, and how does this influence your innovation strategy?
Section: 1, Chapter: 2
Book: The Innovator's Dilemma
Author: Clayton M. Christensen
The Four-Step Growth Hacking Cycle
Chapter 4 lays out the four key steps in the growth hacking process:
- Analyze: Review macro metrics, dive deep into user behavior data, and gather insights from customers via surveys/interviews to generate experiment ideas.
- Ideate: Encourage the team to brainstorm bold experiment ideas aimed at improving a North Star metric. Create an idea pipeline and rank using the ICE method.
- Prioritize: Each week, review top experiment ideas and prioritize based on impact, effort and company goals. Assign an owner to each.
- Test: Launch experiments quickly, ensuring each is constructed to give clear, statistically significant results. Track results obsessively.
Section: 1, Chapter: 4
Book: Hacking Growth
Author: Sean Ellis
The AI Canvas For Redesigning Decisions And Systems
The authors present an "AI Canvas" framework for mapping how AI predictions could enable businesses and organizations to redesign their decision-making systems. The key steps:
- Define the core objective or "north star" of your organization
- Identify the key decisions required to achieve that objective, assuming the availability of perfect predictions
- For each decision, specify the prediction required as an input and the judgment required to act on that prediction
- Analyze how the decision-making roles and processes would need to change to incorporate AI predictions
- Redesign the overall system to maximize the value of AI predictions while preserving necessary human judgment
The authors apply the framework to an extended case study of the insurance industry, showing how AI could transform insurers' decision-making from underwriting and claims processing to customer acquisition and retention.
Section: 6, Chapter: 17
Book: Power and Prediction
Author: Ajay Agrawal, Joshua Gans, Avi Goldfarb
Don't Let Your Customer Outgrow You
As your customers grow, some will develop needs and ambitions beyond what your product can fulfill. If you try to satisfy them by tacking more and more onto your product, you can wind up with a complicated, overbuilt mess none of your customers can use.
Don't underestimate the continuing market for "simple." Let advanced customers graduate to more complex products when they must. Stay true to your product vision. Keep your product clean, simple and narrowly focused so new customers can always get started easily.
Section: 1, Chapter: 7
Book: Rework
Author: Jason Fried, David Heinemeier Hansson
Make It Up, Make It Real, Make It Recur
Successful businesses have three key roles covered:
- The Entrepreneur - Has the vision and creates the strategy. They "make it up."
- The Specialist - Executes the strategy and produces the core product/service. They "make it real."
- The Manager - Handles ongoing customer service, admin, finance, HR etc. They "make it recur."
Early on, the founder often covers all three. But to grow, you need to delegate the specialist and manager roles so you can focus on the high-level entrepreneurial work.
Most businesses are missing the manager piece. They deliver a great product but don't have systems for generating leads, onboarding clients, upselling, getting referrals, etc. As a result, growth is limited.
Section: 2, Chapter: 5
Book: The 1-Page Marketing Plan
Author: Allan Dib
Outside Funding Should Be A Last Resort
Seek outside money only if absolutely necessary. Bootstrapping gives you more control. With investors, you have to answer to others who may not share your vision. Pursuit of an "exit" so investors can recoup their stake takes priority over long-term sustainability. And the mentality of spending other people's money breeds bad, unsustainable habits. Unless your endeavor absolutely requires major upfront capital, find a way to self-fund through savings, sales, or trading services. Your freedom is worth more than easy money.
Section: 1, Chapter: 4
Book: Rework
Author: Jason Fried, David Heinemeier Hansson
Hiring For Fit, Not Just Skills
Hiring well is one of the biggest levers you have in building a great team. A few tips:
- Create a hiring rubric, not just a job description - Define not just the skills required but the values and behaviors needed for team and cultural fit. Make them specific enough to evaluate against.
- Ask candidates to complete a practical exercise - See their actual work product vs. just trusting a resume. Give them a sample project and evaluate the results.
- Include multiple perspectives - Have a panel do the interviews, not just the hiring manager. Get diverse input on a candidate's potential fit.
- Check references - Ask references specific questions about the person's past behaviors and performance, not just generic info.
- Do informal interviews - Take the candidate to lunch or on a walk. Give them a chance to let their guard down and show their true personality.
Skills are necessary but not sufficient. Drill down on culture and values as much as technical capabilities.
Section: 1, Chapter: 7
Book: Radical Candor
Author: Kim Malone Scott