5. Scaling Funnels with Retention Flywheels
- Abhishek Patil Co-Founder, GrowthX
Nothing called ‘hacking’ will give you sustainable growth over a longer period of time.
You can speak to anyone who has been through the zero to one to hundred journey, hacky stuff only gives you spikes. It never gives you sustainable growth over a long period of time with quality users. The only way to get there is to figure out flywheels in your product.
A good flywheel usually looks like this — you spend money on marketing, you get users who are actually using your product, hitting an aha moment, you get some revenue from these users, and then you reinvest that revenue to spend again on marketing.
The first aspect of building a flywheel is ensuring that if you have users coming in they hit an aha moment and brag about the product. Without this, you are pre product market fit. Don’t even think about growing your product until you have figured this out.
If you are not able to achieve the aha or the retained user revenue, then you’re essentially just buying time or you have to raise capital, either of the two. If you don’t have revenue from the retained user, then you will have problems on spending money and acquiring more users.
What are the super important points in that flywheel?
First is the product market fit. You need to know where you have a product market fit and why you don’t. You need to understand the difference. To do this you should be very close to the user and the only thing you should be doing in this phase is calling users.
This is easier for B2B folks because they can directly talk to the user. It’s harder for B2C. But do it anyway.
Create a small Discord, a small WhatsApp group of very early users you can soundboard with. Do this first, before even thinking about growth.
You have to look at a lot user research in the early days of figuring out your flywheel. Take feedback when you’re building the product itself. Don't build something and then take feedback.
In the initial user research stage your acquisition you should be faster, cheaper, and feedback driven. Have a one to one channel with your users so you can talk to them.
Like, Kabir from Dunzo was essentially on everyone’s WhatsApp, every customer’s WhatsApp. That gave him an insane advantage over any other founders building Dunzo at that time. Because he was actually talking to 8,000 WhatsApp users directly.
That’s the kind of thing I’m talking about.
With the user research, pay attention to like a high value action to figure out retention and flywheel. Consider what are the actions that users most likely to retain are taking. That’s the type of information you need at the early stages.
Figure out the retention metric, then figure out what actions your new users and existing users are doing, and from thereon just focus on the users who are doing the certain set of actions or combination of actions that lead to retention.
You cannot grow with means like referrals until you have this figured out. You can only run an incentivized referral when you have a lot of users, who have the willingness to pay and you sure shot know what is the most important product action. Because only then can you optimize the journey for those referrals.