320. Growth Model 🎢
Free template for tracking your revenue growth and understanding your levers
Hi there 👋
I’m working on an upcoming article about the value of the “pre-launch,” announcing a product release before it’s available to the general public. If anyone has any real-life examples or first-hand experience, I’d love to hear from you!
As it happens, whenever I pick a topic to write about, I start to see that topic out in the wild. I saw a “pre-launch” the other day for an electric car! (I almost went for it, but it’s quite a bit different to join a free beta list for a Saas product versus put $25,000 down on a pre-order. Maybe next time.)
Wishing you a great week ahead,
Say hi anytime at firstname.lastname@example.org. I’d love to hear from you.
Free growth model template: How to track your revenue growth and find new levers
Someone recently told me, “SaaS is just math.”
What a relief! I know math. And one of the things I know about math is that it follows very clear rules. If SaaS is just math, then that means we can plug our desired growth into a spreadsheet and see exactly the path to get there.
Of course, it’s not that easy.
Even once you know the path to get there, you still have to create those outcomes through a combination of brand marketing, product marketing, and growth marketing, while navigating the constant twists and turns of startup life and digital trends.
But at least you have a roadmap to guide you.
I went through this exercise while at Buffer. We charted our growth model across the pirate metrics funnel — Acquisition, Activation, Revenue, Retention, Referral (AARRR, like a pirate’s favorite sound) — and were able to clearly see which levers would make the biggest difference on our business. In our case, a reduction in churn would have had a huge, outsized impact on all the other variables. Therefore churn (retention) became our focus.
So I thought I’d share a template of the growth model I’ve used at past jobs, in case it’s helpful to you and your team as you’re charting your course for the second half of 2022.
Here are few short instructions on how the model works:
The first sheet is called `Model - Baseline.` Here is where you build a plan with your baseline growth rates, conversion rates, etc. plus how you realistically think these may move over the ensuing twelve months. (If your team works in weeks or quarters instead, there’s a toggle in the sheet to switch to that.)
Note: Some of your rates may improve over the next 12 months. Some may worsen. It’s important to be realistic about what might happen, based on historical evidence or other trends like the Law of Diminishing Clickthrus.
The third sheet, called `Model - Max,` is where you can dream big. Again, you’ll start with your baselines from today, but then you can enter in your best-case scenario for how all these baselines could maximize.
The middle sheet is where you enter your actual numbers as the months go by.
The spreadsheet is built so that you can see quickly how much a different lever can make a difference in your business. For instance, if I were to input Oyster’s numbers into the sheet and tweak our expansion rate from 10% to 25%, it could mean up to $15 million ARR difference over the course of the year versus a similar percent change to New Business revenue that would bring a smaller boost (fake numbers, but hopefully you get the point).
Have fun playing around with the model, and I hope it reveals some helpful insights for you!
About this newsletter …
Hi, I’m Kevan, a marketing exec based in Boise, Idaho, who specializes in startup marketing and brand-building. I currently lead the marketing team at Oyster (we’re hiring!). I previously built brands at Buffer, Vox, and Polly. Each week, I share playbooks, case studies, stories, and links from inside the startup marketing world. Not yet subscribed? No worries. You can check out the archive, or sign up below:
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