Growing a Startup


This handbook explains how to acquire customers for your site or app.

This guide is widely recommended within Silicon Valley because it teaches advanced growth and has zero self-evident fluff. 

If you're skeptical of marketing advice, know that I am too. This handbook is unique in that I have years of diverse data: I've run 1000's of experiments for Microsoft, Imperfect, Perfect Keto, Webflow, Tovala, Clearbit, and others.

The first page of this handbook helps you develop a growth strategy for your company.

On the last page, there's a cheatsheet that summarizes all the key takeaways.

I invest in startups. If you'd like to invest with me, learn about my fund here.

Who should read this

This material applies to companies of every size and vertical. I cover both introductory and advanced B2B and B2C tactics. 

Marketers of every skill level will encounter new material.

If you're brainstorming startup ideas+

It's important to learn growth before choosing which idea to work on.

Before starting, assess whether your idea is suited for profitable and scalable user acquisition—assuming your goal is to grow large.

If you can’t foresee the strategies in this handbook working for your idea, perhaps consider a different one.

If you're a manager+

It's important that managers know how growth works so they can facilitate it.

Don't treat growth like a black box powered by engineering and marketing teams. It's your most important business function, so study the principles.

This handbook will help you prioritize your team's growth projects based on their likelihood of profitability and their ease of implementation.

It will also shed light on a growth marketer's skills so you can hire better.

What is growth marketing?

What’s the difference between growth marketing and brand marketing?

Brand marketing increases the potential energy for revenue. It primes users to convert at a higher rate in the future.

Growth marketing, on the other hand, converts that potential energy into kinetic: it gets purchases.

Specifically, growth marketing is data-driven revenue maximization.

Counter to popular belief, growth is not a series of "hacks." It's a rigorous methodology consisting of experimentation, data collection, iteration, and behavioral psychology—in pursuit of continually increasing revenue.

You'll sometimes hear growth marketing referred to as "growth hacking" or "performance marketing."

Hiring growth marketers+

Most growth marketers are not good. They haven't learned frameworks for making efficient growth decisions. Instead, they haphazardly throw ideas at the wall without process or iteration.

Worse yet, many growth marketers are brand marketers pretending they're experienced with data-driven growth.

So, hire slowly and with a skeptical eye. Focus on three core qualities:

I use a three-step project to assess these qualities. It looks something like this, but it varies significantly per growth role, and this is not one-size-fits-all:

Collectively, these projects help assess the three qualities from above:

1. Are they proactive?

Growth marketers must be proactive and resourceful. They should never stop generating ideas, running experiments, and iterating.

Don't hire a "set-it-and-forget-it" marketer.

2. Do they have a process for generating and prioritizing ideas?

They must have a framework for ideating ideas—not just a depletable basket of ideas.

You're assessing their flexible, cross-disciplinary process more so than their actual output. A great process adaptably generates ideas forever.

Further, because company resources are limited and growth is time-consuming, I look for candidates who understand how to prioritize their ideas efficiently.

Don't hire a "I have ten ideas and that's it" marketer.

3. Do they know what a job well done looks like?

Do they know what mastery looks like for their role?

If they're running ads, for example, can they identify compelling value propositions, write enticing ad copy, and target audiences that fit the product?

This handbook will help you achieve competency in various growth disciplines so that you can partially assess these competencies yourself.

Finding growth marketers

You can hire growth marketers on the Demand Curve job board. You can also poach them via LinkedIn: find those working at companies facing similar growth challenges as you and pay them more.

Who's Julian Shapiro?

I spend thousands of hours deconstructing how things work. I compile my insights into free handbooks (like the one you're reading). Over a million people read them annually. Insights that don't make it into handbooks are shared on Twitter.

I'm also the founder of Demand Curve, a company that trains startups in growth marketing. You can read more about me on my about page.

The growth trajectory

Here's what the growth trajectory looks like for many startups:

  1. Build an amazing product that naturally encourages word-of-mouth. 
  2. Kickstart your user growth with a scalable acquisition channel, such as ads. Even if it's temporarily unprofitable, ignite the fire.
  3. In parallel, spend the majority of your growth resources optimizing your funnel: at every step, A/B Test conversion to maximize per-user revenue.
  4. Once you have a profitable and efficient funnel, scale it. Experiment with every acquisition channel that might work.
  5. Over time, switch your focus to sustainable, cost-efficient acquisition channels—such as product-led growth, organic social, content, and sales. This removes your dependency on ads, which have volatile costs.

The growth funnel

Let's develop an intuition for why the growth trajectory plays out the way it does.

Consider the growth funnel:

Lead Acquisition → Conversion → Engagement → Revenue → Referral

This is the journey a customer takes through their experience interacting with your company: you acquire them as a lead, you convert them into a customer, then you keep them engaged to maximize their lifetime revenue. Finally, you compel them to refer others to generate even more leads.

Let's walk through this.

1. Lead acquisition

An acquisition "channel" is a place you source leads from. For example, ads, content marketing, and sales are all acquisition channels.

Acquisition channels split into two categories:

Of these channels, this handbook focuses on Ads, Content Marketing, and Sales.

You should know that most companies never actually get paid channels to work profitably. Instead, they rely on a mixture of sales, word of mouth, product-led growth, and content marketing.

If they do get paid to work, it's often just kindling to build their initial customer base—it's then unpaid that powers the rocket from there.

Growth employees who focus on this step have job titles including user acquisition, SEO analyst, paid social analyst, copywriter, and growth marketer.

2. Conversion

Once you've attracted visitors with your messaging, some of them "convert" into the next step in your product journey: they become a user or email subscriber. Later, they "convert" once again—this time into a paying customer.

Growth marketers continuously run tests to improve the conversion rate at each step in their growth funnel.

This handbook explores the topic of conversion optimization through Landing Pages and A/B Testing.

Growth employees who focus on this step have job titles including copywriter, UX designer, growth engineer, lifecycle marketer, email marketer, marketing automation, content strategist, and growth marketer.

3. Engagement

In the Engagement stage of the growth funnel, a lead has converted into an active, recurring user.

This happens through empowering them with product education, motivation, and success. Your goal is to get them to try new features, buy more products, and build a recurring habit of relying on the product.

This handbook teaches engagement optimization via User Onboarding.

For some B2B companies, Engagement is the stage where you encourage users to invite their colleagues (which is called product-led growth).

Growth employees who focus on this step have job titles including data scientist, product manager, product marketing manager, growth engineer, lifecycle marketer, marketing automation, and growth marketer.

4. Revenue

Your revenue per customer can be maximized by reducing your costs and increasing conversion, retention, cross-selling, up-selling, and prices.

Unfortunately, revenue maximization is outside the scope of this handbook.

5. Referral

Word of mouth, sometimes accelerated by referral programs, is the most cost-effective and sustainable way to scale a business.

Your goal is to make your product so good that customers do your selling for you.

This handbook teaches referrals on the User Onboarding page.

Tip — See the bottom of your screen for handbook navigation links.

Note: The growth funnel is not linear

While the growth funnel is depicted as linear, it's actually a series of loops.

Consider how a lead may repeatedly loop between seeing your ads and testing your product before finally converting into a paying user.

Here's another loop example: the Ecommerce Repurchase Loop. After someone purchases, you might email them a coupon to buy a second product. This prompts them to repeat earlier steps in the funnel: revisit your website, purchase a new product, and receive another coupon via email.

Every growth optimization should consider where the lead is in your funnel, and deliver exactly what they need to compel them to the next step—and sometimes that means starting over.

Succeeding at paid channels

Most companies never make paid acquisition channels profitable. If they did, more companies would be successful—given how easily scalable ads are. 

To be specific, most companies are not able to profitably acquire paying users through ad networks such as Facebook Ads, Instagram Ads, and Google Ads. 

If they do get one of these channels working at scale, it's a holy grail when paired with strong word-of-mouth, which acts as a force multiplier: every paid user attracts many more unpaid users.

This is why I encourage marketers to harden their funnel's conversion and referral rates before investing heavily into paid. It makes paid cheaper.

There are three thresholds that make paid channels difficult:

You won't know whether your product crosses these profit, size, and demand thresholds until you've spent a statistically significant amount of money on each ad channel for every sub-audience. This can cost $1,000-$2,000 USD per channel or more, and it varies wildly based on your business.

All this said, there are two types of companies with a good chance of making paid work:

Succeeding at unpaid channels

If you fail to make paid channels work, you'll instead rely on unpaid channels: content marketing, referrals, word-of-mouth, sales, PR, community, and more.

This is an acceptable outcome. Succeeding at paid acquisition isn't a necessity—it's just convenient because it scales quickly.

Unpaid channels benefit from not being at the mercy of ad channel volatility, ad audience risks, and CPM pressures. Unpaid growth is often more reliable and more in your control.

The tradeoff is that unpaid generally requires more skill to make work.

Here are the major unpaid channels:

Which channel mixture should you use?

I have collected years' worth of growth data from running a community of 25,000 marketers. Plus, I've helped grow several hundred companies via Demand Curve.

Based on my observations, here's what I broadly recommend each business focuses on first.

B2C companies

If you sell a product to consumers, these are the channels I suggest prioritizing:

Don't be overwhelmed by these links. Ignore them for now. This handbook will walk you through many of these concepts on later pages.

B2B companies

If you sell to businesses:

A reminder that the last page of this handbook has a downloadable cheatsheet that handily recaps most of what you're about to learn.

If you want to be mentored in growth

If you'd like to be assisted through learning this material, my team will train you or your company in growth marketing. See the programs over at Demand Curve. We also run the Bell Curve growth agency.

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