Updated: March 30, 2023 - 5 min read
Pratik Shah guides us through growth teams in B2C companies, key frameworks and principles in growth, acquisition, and retention. He also explains how one becomes a good growth Product Manager and how one can break into the industry.
Meet Pratik Shah
Pratik Shah has over ten years of experience in Product Management, specializing in growth (acquisition and retention) and two-sided marketplaces. He has a Masters in Computer Systems Networking and Telecommunications from the University of Pennsylvania and an MBA from the University of Cambridge. Based in San Francisco, he spent 2 years working at Airbnb before recently moving to Lyft.
What is Growth and Why Does It Matter?
In product, there’s really only one metric that matters. Whether or not people actually use your product. Thinking about software and consumer software product management, Pratik recommends that we think about the following quote:
What is Growth?
When we think about Growth, which started as a term around 2010 as Growth Hacking, it was kept within the confines of marketing. In a product company, you have product teams that used to focus on building core products, and then the marketing teams focused solely on bringing in a new audience.
Growth nowadays is a marriage of these two things. It’s a function which thinks about product and marketing together, and trying to get users to experience the core value of the product as often as possible.
Let’s Define Success
In Silicon Valley 10 years ago, if you had great tech that was it. You were good. You’d won.
That’s not the case now. It’s really easy to build an app nowadays, the challenge has become distribution. How do you get a large enough amount of people to really adopt and understand your product?
It’s actually poor distribution and not poor product which leads to the failure of most products. Which is why good PMs need to think about how to build distribution (in the form of growth) into their products.
…a multi-disciplinary and data-driven approach to scaling products.
It All Begins with a Growth Model
Going back to the core of product, (are enough people using your product, as frequently as you want them to?), we can break it down to a mathematical formula.
If you think about it from a function perspective, gaining new users is its own function – acquisition.
Just because you acquire 1000 users doesn’t mean they’ll stay on and use your app or product in the future. This is critical, because if you can’t retain your users then your acquisition efforts are useless. You’ll have a leaky bucket, and no matter how much you spend on gaining new users, your money is wasted if you can’t keep them.
If you do both acquisition and retention right, you’ll have the recipe for sustainable growth.
Growth Model Breakdown
Ultimately, a growth model is used for a variety of reasons, from setting strategy, to making company predictions, and finally communicating. All of these are really important things, and Product Managers all think about these things anyway. The Growth Model is just a way of thinking about them systematically.
What Are Key Areas in Growth?
There are large teams around acquisition, and many ways to go about it. There are huge industries around customer acquisition. Pratik takes us through an overview of some of the most important ones.
Retention & Engagement
Retention and engagement are arguably the most important parts of growth. There’s simply no point in acquiring millions of users if you can’t keep them.
Companies that haven’t understood retention, and stepped on the gas too fast with their acquisition, have then lost all of their users very quickly. Without users, your product is nothing.
The key to retention is moving your users to an ‘aha’ moment as quickly as possible. You’ll need to analyse what states your users are in when they come to your website (active, no longer active, not active yet etc) and differentiate them into segments. With these segments, you can use different tools and techniques to figure out how to move each of these groups to a specific ‘aha’ moment.
You might also be interested in: Evidence Driven Development Strategy to Make Better Data-Driven Product Decisions
Community and Network Effects
Growth Teams and Key Skills
Growth is Cross-Functional. It requires Design, Data Science, Engineering, and
Marketing as its core functions. A PM has to facilitate and help each of these functions to work together. At Airbnb, they use pods of people from each of these teams on a specific goal.
Balance of Art and Science
The Growth PM Career Path
With Growth becoming such a hot topic in business, and also in Product Management, it’s natural that people would want to start specializing as a Growth PM.
Pratik gives us some insight on how to achieve this by going through his own experience. He started out in engineering, which was his college major. He started career in Ad Tech before moving on to become a Growth PM.
However there is also the Analyst path which was very common at Airbnb. Many coworkers go from Analyst, into Marketing, and then finally into Growth Product Management. There is also the Consultant path, where one can move from consultancy to Product Specialist, and then finally to Growth PM.
Because the nature of Growth is so cross-functional, good Growth PMs really can come from anywhere. If you have a foothold in any of the core disciplines involved, you have the potential to be a great Growth Product Manager.
Updated: March 30, 2023