What do the most successful disruptors of this century have in common? They’re all platform-driven businesses that have achieved unprecedented value through massive reach. And they do that by executing one thing far better than anything that’s come before. That could be an experience that vastly surpasses anything else available. It could be delivering at dramatically lower cost, or at lighting speed.
But what every one of these hypergrowth disruptors shares is the ability to completely reimagine what companies do and how they do it. Step changes of this magnitude don’t just happen. Achieving them demands the vision, courage and ambition to redesign the known world through innovation, bold thinking and a singular focus.
Growth platforms all start small
It’s hard to imagine today’s super platforms as start-ups. But they all were. Every one of them started as a bright idea and a handful of users. Their journey to massive scale is the very definition of hypergrowth. And this usually reflects a very deliberate – almost obsessive focus – on a specific growth lever.
One example? Facebook. When it launched in the early 2000s, it was not the only social network nor the most widely adopted. Back then, Facebook had 45M users, Myspace had 115M. So, what helped Facebook become as huge as it is today, and why did its peers from 20 years ago fade from view1?
The hypergrowth story begins
The story starts with Chamath Palihapitiya. He pioneered the concept of a team focused entirely on growth. Recognizing that dedicated teams for product development and marketing on their own would not achieve the network effect Facebook needed to expand, he pitched the idea of a new team that sat somewhere in the middle1.
This ‘Growth Team’ would solely focus on how to drive user acquisition strategy and growth. By experimenting, testing and analyzing, his team discovered the key to sustainable hypergrowth for Facebook was to “get any individual to seven friends in 10 days.1”
This one metric became a key focus for the entire company. The rest is history. It’s an approach that has been followed with enormous success by many others. Companies like Uber, Airbnb, Pinterest, and Google2 have all experimented over the years with various Growth Team models – formal and informal – to drive customer acquisition, engagement, monetization, and retention.
The results speak for themselves. In FY 2020, the top 300 global platforms generated approximately $1.5 trillion in revenues with 41% of that from B2C, 59% from B2B.
Growth Teams take a scientific approach: hypothesizing, experimenting, testing, iterating, and launching new solutions fast. Crucially, they have a singular focus: the “One Metric That Matters” (OMTM)3. However, the best Growth Teams go beyond that. They embed growth into the DNA of their entire organization by synching engineering, product, and marketing teams around the achievement of long-term growth.
How do they do it?
It all starts with a discovery phase. This is where Growth Teams identify their key growth metric and hypothesize the friction points that could slow things down. Then, armed with those insights, they test concepts quickly to pinpoint which tactics will precisely lead to their desired outcome.
Growth Teams get results by harnessing the power of network effects in several ways:
Accelerating adoption of new products and services
Growth Teams typically focus on rapid platform adoption by scaling user bases.
But they also take metrics such as customer retention into account. These are critical for achieving growth in the longer term. Dropbox is a great example. It created an entirely new referral program that massively expanded its user base from 100,000 to 4 million in just one year.
Attracting new kinds of customers
In the SaaS space, platforms in the early stages of growth focus on SMBs.
Why? Because they understand that greater product agility and reduced sales cycle times can give SMBs advantages over their larger competitors.
Growth Teams in consumer markets often simplify the value proposition to activate untapped customer segments. This is what Airbnb’s Growth Team did. They analyzed all the features offered on Airbnb’s platform, and from 30+ prioritized just six. Why? Because those were the ones that inactive or non-users might look at. Focusing on these provided a fast track to access untapped areas of value and achieve scale faster4.
Another example? Uber. When it launched in the US, Uber’s core value proposition was all about enabling cashless transactions. But its user base in India was extremely small. At that time, most people in India didn’t have credit cards, so for Uber to grow, it had to find a way to expand beyond its existing customer base. The team experimented with a cash payment option’s impact on growth and retention. These experiments succeeded. So even though this deviated from the product team’s cashless vision, it made sense to support cash in India.
Harnessing the power of platform ecosystems
Platforms are amplified by their ecosystems to an extraordinary degree.
Across e-commerce, ride-hailing and hospitality, ecosystem partners take an incremental $2.3 trillion in revenues over and above the platforms’ $1.5 trillion. Many platform ecosystems are made up of millions of smaller partners, whether merchants on Amazon or Alibaba, or restaurants and drivers using Uber. A platform ecosystem strategy to swell these numbers is a vital source of growth. It’s what Salesforce did when it opened its platform to hundreds of developers so they could build business solutions harnessing the power of its CRM and data management capabilities. And it’s what Uber’s Growth Team did with their focus on the rider-to-driver conversion metric. They boosted this by providing economic incentives for drivers to pick Uber over competitors and focusing efforts on building a loyal driver ecosystem4.
Opening new global markets
Growth Teams don’t just focus on customers or the platform ecosystem. They can also help to achieve growth in new global markets.
For platform companies, whose digital products move effortlessly across borders, expanding geographically can be one of the fastest routes to achieving scale. For example, Netflix used a Growth Team to drive its initial expansion and attract subscribers, utilizing patterns that they identified to achieve sustained global growth5. Amazon6, for example, adopted this approach when it entered the Indian market and set a metric that would support its goal to become one of the country’s largest e-commerce players.
Growth and benefits
As well as growing their platform’s external business, Growth Teams can also drive positive change internally. By working cross-functionally, Growth Teams break down silos, improving coordination between marketing and engineering. By uniting functions behind improving a single growth metric, Growth Teams can help foster a clear and shared sense of purpose. The critical first step? Selecting a metric that is testable and has a meaningful impact on the company’s network building.