PodcastsThe Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch20Growth: The Golden Rule to $100M in ARR, Why CAC to LTV is BS Early On, Why Your First Growth Hire Should Be a Former Founder & How Ramp Does 200 Growth Experiments Per Quarter with Guillaume Cabane
20Growth: The Golden Rule to $100M in ARR, Why CAC to LTV is BS Early On, Why Your First Growth Hire Should Be a Former Founder & How Ramp Does 200 Growth Experiments Per Quarter with Guillaume Cabane
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The PitchTue Nov 28 2023
Growth Roles and Experiments:
- Guillaume Cabane shares his journey into the world of growth, emphasizing the importance of running experiments in a centralized company like Apple where authorization for marketing campaigns was challenging to obtain. He highlights the value of running experiments without needing explicit approval.
- He also discusses leveraging engineers to build quasi products as a means to drive demand and engagement, particularly effective for technical audiences. This approach merged with his experience at Mention and Segment, leading him to understand the concept of growth.
PLG vs. Enterprise Sales:
- Guillaume provides insights into PLG (Product-Led Growth) and enterprise sales motions, highlighting that most startups end up landing between both strategies due to optimizing for efficient acquisition and selling.
- He emphasizes that very few companies have a strong virality or real PLG, often attributing self-serve plans to PLG when true virality is absent.
CAC (Customer Acquisition Cost) Considerations:
- The discussion revolves around customer acquisition cost (CAC), its significance in an environment with scarce capital, and how it impacts decision-making within startup boards.
- Guillaume delves into defining low CAC based on industry benchmarks and payback time considerations, stressing the importance of understanding fully loaded CAC along with suitable payback periods.
Experimentation and Learning from Failures:
- Guillaume stresses the need for ruthless assessment before undertaking experiments, focusing on audience size and statistical significance to ensure valuable learnings are generated.
- He expresses concern about failing to gain meaningful learnings from experiments due to insufficient sample sizes or impractical post-product stat-sig requirements in B2B SaaS products.
Lead Scoring and Pipeline Management:
- Lead scoring predicts the likelihood of closing a deal, enabling businesses to assign a dollar value to each lead in their pipeline.
- By attributing values based on lead scores, businesses can accurately assess the potential revenue generated from each lead and allocate resources accordingly.
- Effective lead scoring requires understanding ideal customer profiles (ICP) and continuously refining lead qualification criteria.
Marketing KPIs Aligned with Revenue:
- Reject vanity metrics such as traffic volume and focus solely on weight-adjusted pipeline dollars when evaluating marketing performance.
- Marketing teams should convert engagement KPIs into monetary figures based on lead scores, company size, stage, and close rates to align efforts with revenue generation.
- Establishing clear goals for every stage of the marketing pipeline ensures that marketing activities directly contribute to driving sales.
Role of Growth Teams:
- Growth-minded individuals typically function within product or marketing departments rather than operating as standalone entities within an organization.
- Hiring a growth team becomes relevant after achieving a certain level of revenue and user base maturity, ensuring sufficient data for effective experimentation and optimization.
- Prematurely hiring a growth team may result in optimizing for short-term metrics like signups and engagement without considering long-term business viability.
Hiring for Growth Team:
- Emphasizes the importance of hiring a former founder or someone with a consulting background for the growth team.
- Discusses the ideal structure of the growth team, comprising a head of growth/former founder, an engineer, and a marketer/copywriter.
- Explains the need to assess candidates' approach to data analysis, risk-taking, and ability to think outside the box during the hiring process.
Structuring Hiring Process:
- Advises on structuring the hiring process by evaluating candidates' ability to analyze data and take risks through practical assessments.
- Recommends testing candidates' approach to problem-solving by asking about their experience in gaming and strategy development.
Senior Hires in Marketing:
- Highlights challenges with hiring senior personnel in marketing roles compared to engineering positions.
- Compares the career progression between engineers and marketers, emphasizing that deep knowledge in one channel is not respected in marketing as it is in engineering.
Hiring Advisors vs. Full-Time Employees:
- Advocates for hiring full-time employees when possible, especially those with expertise and skills relevant to the role.
- Acknowledges being an intermediary solution for companies unable to make specific hires due to various reasons such as risk aversion from experienced individuals.