In January of 2024, I stepped in to help run marketing and sales at Carrot.com. This would be my second time being involved in marketing (previous time was 2015-2018).

A lot has changed in the digital marketing landscape – but in some ways – nothing has changed. In this post, I am going to write down my thoughts on marketing & sales – which I often called growth or growth marketing. I distinguish growth marketing vs traditional marketing because the whole point of growth is scalability. I’ve seen other businesses view marketing as something they do – but not a primary focus for how they grow their business.

What Is Growth?

Growth is a widely used word, but it’s often misunderstood. I would define growth as the output from running specific marketing plays (activities or strategies).

Growth is an output. It’s the output that we measure using two important metrics: revenue and customers.

I’ve made the mistake of focus on a variety of metrics (conversion, arpu, NRR, etc). But at the end of the day – if you want focus and clarity it’s revenue and customers.

That is NOT to say you can ignore other metrics. As an example – you must growth profitably. So it’s important to understand the math to what it is costing your company to acheive growth (revenue and customers). I come from the world of bootstrapped SaaS – so we are spending OUR money from OUR bank account. If you have VC backing – your mindset is likely growth at any cost – we will figure out profitability later. If this is your mindset – I probably can’t help and you might want to stop reading right here.

So if revenue and customers are growth outputs, what are the inputs?

The inputs are the marketing tactics and strategies. Think of these tactics as levers that control a big machine. If you pull them in the wrong order, the machine isn’t going to do what you need it to do. But when you get them right, you’ll build a growth engine that consistently gets you more customers and increases your revenue.

For example, let’s say you think your company should be running Facebook ads. Before committing to that marketing channel, you’ll need to understand the inputs of that activity (money, time, resources) and the desired outputs (revenue and customers).

Once you understand the underlying mechanics of growth, you’ll realize that there are far fewer ways to grow a company than most people think. It comes down to company size, growth required, market and a few other key factors.

Growth is not about:

• Jumping from one tactic to another in search of a spike in traffic or revenue
• Spreading your limited resources thin across multiple strategies and channels
• Frantically rushing to a new strategy or a new channel because others are getting results and you excited want to see if you can grow even faster by doing MORE.

Growth is not about being reactive. 

Growth is about being proactive and putting your effort toward activities that are proven to align with your business model, market, brand, and product.

5 Growth Principles

1: Focus is key 🔑
2: Try fewer channels for more consistent and predictable growth 📈
3: Growth = learning 🤔
4: Leverage and compound (stack your wins) 📊
5: The staircase of growth 🪜

Focus is key 🔑

It is SO easy to spread your marketing team thin. You read a blog post about a growth hack that took XYZ startup from $10k to 50k MRR in 6 months – so you figure, that’s has to work for us right? Or you listen to a podcast about how a VC backed company went from 0 to 1,000,000 active users with this one simple viral hack. So you start tweeting, creating a newsletter, publishing 45 blog posts per month – but you don’t see the output you desperately need (revenue and customers).

To create focus, you need to identify and perform repeatable activities that drive meaningful results for your revenue and customer base.

You won’t be able to find those meaningful growth activities without testing them, which leads to the next principle.

Try fewer channels for more consistent and predictable growth 📈

Again – like the focus problem, it’s easy to fall into the flawed thinking of – we should try more channels because that will equal more growth.

Another easy trap to fall into is finding a channel that is consistently creating revenue and customers and think – great we can now start testing new channels or take this strategy to all other paid media platforms and expect similar results.

In theory, it seems to make sense…the more tests we have running on multiple channels – the higher our success rate will be. Or stated in another way – we want to diversify our customer acquisition channels so we can scale.

Why “more” isn’t always better in an acquisition strategy

In terms of personal finance, we’re taught that diversification is critical.

Why? Because you’re trying to reduce risk by spreading your money across stocks, instead of putting it all in a few stocks that you hope will 10x. You’re probably not in a rush—retirement might be years down the road. So diversification serves a great purpose: It reduces risk and increases security.

Contrast that with your typical startup or small business. You don’t have 30 years. You may have enough capital only to last six months. This is an entirely different mindset. You likely can’t survive on 10% annual growth rates. You need more significant growth, faster.

To do that, you must concentrate on only the channels that are most likely to work for you. They’re the ones that will kick-start your growth. 

It’s riskier to try too many channels at once than to pick the ones best suited for your product, launch them, and evaluate their performance for continued optimization.

Let’s look at the two extremes:

Situation #1 – You run a massive company like Canva or Asana

You have many millions of dollars in the bank, and can raise more money from your stock increasing each year. You’re trying to stay at the top of the market by continuously investing in new tech and opportunities.

If you miss out on the next big wave, you will be irrelevant.

You take 0.01% of your resources to create multiple teams to solve the same problem. If one of them hits, it more than pays off. If it fails, oh well.

Situation #2 – You run an early-stage startup or small business

It’s you and maybe a handful of others. You have a few months of cash in the bank. 

You’re trying to stay alive and grow revenue so you can grow the team and cash reserves. You only have so many bets you can make before you get completely wiped out. You need to aggressively prioritize the surest bets. If you find something that works, you keep doing that.

Just like in poker, the house plays differently than someone with only a few chips left. The latter needs to only play hands they know they can win.

Fewer channels means better investment, too

Getting a single channel to work takes a lot of work (and money). 

You’re competing with many other companies for the attention of your market. Many companies have entire teams dedicated to one channel alone. To give yourself a chance to succeed, you need to give a channel the time and attention it needs.

Here’s what goes into launching a single channel, such as Facebook ads:

• Prepare for launch: You’ll conduct research, design ad creatives, write copy, set up your ad account, build your campaigns, set up pixels and conversion tracking, create landing pages, and more.
• Launch: You’ll likely be spending at least $2,000/month (and more if you want to accelerate your learning). Plus, you’ll be closely monitoring and optimizing results. This takes time. And since you’re new to this, there will be a learning curve. Things often take longer than expected.
• Iterate: If your initial test looks promising, you’ll invest more resources into putting together new creatives and campaigns on an ongoing basis, as well as continually analyzing results and optimizing. You may also want to increase your spend to, say, $5,000 or $10,000/month.

Imagine if you tried to test four other channels at the same time. Each channel requires its own research, ads, tracking, and so on. Plus, now your initial cost has increased 5x. And once you launch, you’ll have 5x as many channels to analyze, optimize, and continue creating new assets for. This often leads to subpar results since your time and budget are spread so thin. You can’t give each channel the attention it requires.

Imagine testing all five at once and finding only one that works. 

Great, right? 

Possibly, but not if it took six months of slow, watered-down results to get there. Now, you’ve burned through a good chunk of capital. You may not have enough in the bank to begin investing heavily in and scaling up your winning channel.

Acquisition channels

This is a major shortcut. You won’t need to test dozens of channels. You’ll be able to jump straight to the ones best suited for your company and goals.

Experiments & A/B tests

Early on, when you have limited resources, site traffic, users, and time, you have to be exceptionally thoughtful and intentional with what you decide to test.

Why? Again, because we need big wins. Squeaking out 5% improvements isn’t going to cut it.

Credit: Andy Johns – Indispensable Growth Frameworks from My Years at Facebook, Twitter and Wealthfront

Large companies have tons of traffic and can collect massive sample sizes. This allows them to run lots of A/B tests that may only move the needle by a couple of percentage points. But a 1% improvement is significant for a company like Google (which explains their famous experiment in which they split-tested 40 different shades of blue on a single toolbar).

It also allows them to be less thoughtful with what they test. If you can launch and conclude a test in a single day, it makes sense to lower your bar.

Startups don’t have this luxury. Whatever we prioritize, we need to have high conviction that it will produce major results.

Growth = learning 🤔

A good growth strategy emphasizes feedback loops. These allow you and your team to quickly learn what’s working and what needs to be improved.

Growth is data-driven. You will learn how to apply the scientific method to your activities: hypothesis, test parameters, observation, and analysis.

Most founders and startups struggle to learn from a failed experiment.

Let’s look at some examples:

• You launch an ad campaign, but it yields few new signups.
• You launch a new feature, but it doesn’t improve your customer retention rate.
• You create content for a new channel, but hardly any sales come through.

You’ve learned nothing if you can’t understand WHY each failed and HOW to ensure that it doesn’t fail again.

The opposite can also be said: If something is working, but you have no idea why or how to continue growing it, you don’t really have a strategy. 

You got lucky.

You’ll learn how to create a growth strategy that includes systematic experiments. Being systematic will help you know whether or not your experiments are worth continuing.

You’ll also learn how to prioritize which activities to focus on. You’ll find out how to collect the right information to know when it’s time to double down or move on to the next experiment.

Leverage and compound (stack your wins) 📊

How do startups with only a few people experience explosive growth and win out against established industry players that are hundreds of times bigger?

They apply an extreme amount of force to a single point of leverage. Leverage is what allows tiny companies to create massive change.

Leverage compounds, meaning that the high-leverage activities you do today will allow you to do more with fewer resources in the future. As you learned in the last principle (growth = learning), those learning fast generate compounding effects earlier.

Therefore, to create maximum leverage, you’ll want to learn as fast as possible in the beginning to turn that knowledge into growth and growth into leverage.

We know your time is valuable, so our program focuses on HOW to execute high-leverage activities.

Soon, you’ll have a growth strategy that will keep you laser-focused on the opportunities with the highest likelihood of producing meaningful results.

The staircase of growth 🪜

Growth often occurs in a step function, like stairs going upward. Here’s how it works:

• You’ll get a growth activity to work well. You’ll acquire new customers consistently, and your revenue will steadily increase.
• Then, for seemingly no reason in particular, growth will begin to slow. You’ll see all your growth outputs plateau.

This tends to occur when you reach the upper ceiling of a channel, market, or tactic—you’ve reached all the customers a single channel can reach. This is a sign that you’re ready to take a step up the staircase to the next level of growth.

For example, let’s say you’re selling a pool toy, and you start by selling door-to-door in your hometown. You know there are 10,000 pools within your town. The ceiling of selling using door-to-door as your growth channel is about 10,000 sales. Once you reach that point, you’ll have to find another way to reach pool owners.