How did he achieve 1,000,000 users in 12 months?

This article is translated from Noah Kagan's "You're Still Modeling Growth Incorrectly". As one of the first 30 employees at Facebook and one of the first 4 employees at Mint, he is an authority on growth, with both methodology and practical experience.

When I first started working in marketing at Mint, founder and CEO Aaron Patzer told me we needed to get 100,000 users within 6 months of launching the product.

The number itself doesn’t scare me: before joining Mint, I was employee number 30 at Facebook. I've witnessed crazy, exponential user growth firsthand. What’s different about Mint is that we needed to invent a repeatable growth engine and product from scratch.

To be honest, I was very nervous and started to draw up a marketing plan.

The result: 12 months later, Mint had 1,000,000 users. We added a comma to our goal at the time.

In the world of entrepreneurship, growth is as important as oxygen to life. Failure to achieve growth targets means death.

Since hitting growth targets is a matter of life and death, it’s ironic that growth teams, marketers, and founders treat growth like a religion. The plan they followed was to work really hard and then get on their knees and pray to God that everything would happen like magic.

The mistake you made is simple, but fixing it is profound, and it will fundamentally change your path to growth.

1. The easiest mistake to make when building a growth model

The establishment and implementation of a growth model is not based on speculative growth. While this may sound obvious, it is what 99% of businesses do today.

My friend Andrew Chen, in his great article “The Most Common Mistakes When Forecasting Growth for New Products and How to Fix Them” says that the number one mistake he sees is something like this:

In month n, you will have U_0 X (1 + monthly growth rate)^n users.

Honestly, does this look familiar?

It's about defining beautiful growth to simulate growth, and then the whole thing becomes about manipulating growth rates to make the numbers look reasonable. You lower the growth rate so your forecast doesn't look ridiculous - just ridiculous enough to make you a newspaper millionaire.

This model is actually useless because the source of your perceived value is just a trick of the growth rate cell in the table.

This is a dilemma. In reality, we cannot choose the growth rate. We can only choose how to work, and then the growth rate is just the result of our work.

In Andrew’s words, when you are building your model, “the focus should be on how to derive the growth rate, not on guessing the growth rate”.

The process of deriving a growth rate is the process of developing an executable plan. I'll tell you how.

2. Start with the most important number

If there's one thing I've learned from Mark Zuckerberg, it's that you have to focus on one most important thing at a time. He taught me this once, and I’ll never forget it.

Back in 2005, I would go to Mark with all kinds of new ideas and different product features.

At that time, if you remember, people thought Facebook was a cool app, but no one thought it could become a real business. This is something that worries me a lot, I always worry that we won't make enough money and that others will think we can't do it.

This gave me a genius idea: prove the skeptics wrong and make Facebook a real business that was profitable.

Mark listened to my idea and wrote the word "growth" on the whiteboard. He said he would not entertain any idea that did not help Facebook grow its user base.

When I started running my own company, the app Sumo, I really began to appreciate what Mark taught me. This is our company's former dashboard:

This board makes it hard for us to concentrate. We can't say no to ideas because we have so many numbers to improve that we end up improving nothing.

What’s worse is that when you ask people around App Sumo what our company’s goals are, everyone has a different answer. Okay, let’s not discuss this embarrassing thing for now.

In January of the following year, we set a goal to acquire 3,333 customers and help them build a $1,000 per month business. Our new dashboard looks like this:

This is a goal we really want to accomplish, and the entire team knows exactly what direction we are working towards this year. We hit our goal in October and celebrated with a quick bite of nachos.

That's why we have a plan for growth. Your first step is to choose the most important metric, and then work back to figure out how to achieve it.

3. How to reach and then exceed your goals

Now that we understand our goal, the next step is to look back and find solutions on how to get there.

We don’t do “social media marketing” and some random blog posts on the internet because we know that’s not going to achieve our goals.

Here’s how we do it, using a Mint example:

If you think this thing is too simple or even stupid, it is, but it’s that simplicity that makes it so powerful.

We used a reasonable estimate to come up with a target of 100,000 users, and then used this target as a starting point to work our way back to the conversion rate, CTR (Click-Through Rate), and traffic from different sources that we needed to achieve.

Now we know what needs to be done – this is the plan we’re going to execute.

There are two columns in the above picture: total users and confirmed users. You have to determine the effectiveness of your marketing ahead of time, whether it's blogging, Twitter, paid advertising, etc. Don't leave it alone, only what is confirmed is useful.

Set your targets like this before implementing your plan, and then determine your marketing channels. As you implement your plan, coordinate your estimates with the actual situation. Use spreadsheets to track what is working and what is not working, and it will help you adjust your plan in a timely manner.

If you can do this, you can really think through what you need to do and have a roadmap that will guide you to your goals, rather than hoping and praying for good results.

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