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Ravi is a senior product manager at Zalando. He likes to solve business-growth problems as a product manager. He has helped big and small companies from various geographies to scale further. He also loves to read, write, make &amp; watch films.

Ravi Sinha

Fewer than <a href="https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/#6b980d166792" target="”_blank”" rel="”noopener” noopener noreferrer">10% of startups survive and grow into large companies</a> and, for every time growth is done right, there are 100 ways it could have been done wrong. Here, I&#8217;d like to share the lessons I’ve learned from my years working as a product manager, focused on growth.
If they could, organisations would choose always to grow &#8211; not only bigger but faster. So why do most organisations fail to realise this aim and why can this aim sometimes lead to the death of an organisation?
In modern tech companies, growth teams and growth product managers are becoming common, although all product managers aim to deliver business growth within their sphere of influence. For example, a mobile product manager will want to grow Android daily active users whereas a platform product manager will want to grow the platform reliability KPIs and have a positive impact on growth.
I’ve learned that the essence of a successful growth strategy is that it does not leave any part of the organisation behind. The resulting growth lasts and isn’t just a flash in the pan. This learning did not come cheap. I worked with a hyper-funded startup that grew too fast too soon, fixating on “fundable” metrics, and eventually had to be sold off. But I also worked with an online publisher that pivoted its decades-old product strategy to become category leader within eight months, and a hotel metasearch company that transformed its product offering to get on a new channel which helped it grow 100% year-on-year.
<h2>Validate the Organisation-Level Growth Hypothesis</h2>
A growth hypothesis is an assumption statement outlining how you could achieve growth within your sphere of influence. It could be about how new users find your product or how existing users engage more with your product. Different teams have their own growth hypotheses, which should add up to fulfil the organisation’s growth ambition. The assumption part is usually the customer’s (or market’s) response to the product change that you are planning to execute.
In 2014, I joined <a href="https://techcrunch.com/2018/08/30/to-boost-amazon-pay-in-india-amazon-reportedly-acquired-tapzo-an-all-in-one-aggregator-app-for-40m/?guccounter=1" target="”_blank”" rel="”noopener” noopener noreferrer">Tapzo</a> to build and grow a mobile app that enabled consumers to chat with a brand and get their issues resolved. Think of it as like WhatsApp but where a user can chat with Apple support to get their iPhone fixed.
<figure id="attachment_17924" aria-describedby="caption-attachment-17924" style="width: 765px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-17924" src="https://www.mindtheproduct.com/wp-content/uploads/2019/11/on-the-phone-300x200.jpg" alt="" width="765" height="510" srcset="https://www.mindtheproduct.com/wp-content/uploads/2019/11/on-the-phone-300x200.jpg 300w, https://www.mindtheproduct.com/wp-content/uploads/2019/11/on-the-phone-768x512.jpg 768w, https://www.mindtheproduct.com/wp-content/uploads/2019/11/on-the-phone-1024x683.jpg 1024w" sizes="auto, (max-width: 765px) 100vw, 765px" /><figcaption id="caption-attachment-17924" class="wp-caption-text">At Tapzo, we didn&#8217;t scale operations as fast as we acquired consumers</figcaption></figure>
We started large-scale user acquisition as soon as we released the app. We targeted consumers who were searching for customer support from top Indian brands. We got to 500,000 downloads within two months. As a young startup, we celebrated this milestone.
But the users began to drop off. Our chat support experience wasn&#8217;t keeping up. We did not scale our operations as fast as we had acquired consumers. Onboarding brands took way longer than we anticipated. Our initial growth hypothesis assumed that consumers would stay with our product until the brands came on board. We might have saved ourselves a lot of pain if we had looked at the consumer experience end-to-end and had validated whether the respective growth velocities of our consumers and our brands would mesh together well.
In hindsight, I believe the right way to grow would have been to build niche communities or platforms for brands individually and to empower them through our solutions to deliver quick resolution. The growth then would have been slower, but it would have been sustainable. With sufficient volume and traction, this network of communities could have been interconnected.
As product managers, we focus on growth within our sphere of influence, but it’s worth understanding how that ties to the growth of an organisation &#8211; which other organisational factors also need to grow to support your product’s growth, and if the growth velocities are aligned.
<h2>Behind Sustainable Growth is a Scalable Process</h2>
Today,<a href="https://economictimes.indiatimes.com/small-biz/marketing-branding/marketing/how-the-revived-indiatimes-became-top-social-publisher/articleshow/56746494.cms" target="”_blank”" rel="”noopener” noopener noreferrer"> Indiatimes</a> is one of the most successful Indian publishers, but when I was working there in 2013, its readership was dwindling. The key source of traffic was direct traffic but increasingly fewer people were typing the URL in their browser to read its content. We saw that several small publishers were growing when their stories spread on social media.
<figure style="width: 1204px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2019/11/91950f38-21b7-4293-8ad9-c096cb764efd_pasted20image200.png" alt="" width="1204" height="523" /><figcaption class="wp-caption-text">From mid-2013 to mid-2016, social media (especially Facebook) became the biggest channel for visitors for most online publishers. Source: NativeAI</figcaption></figure>
We believed that share-worthy stories would spread and bring in new readership. We revamped the business from being a CPM-based news site to a content marketing based social publisher (think Buzzfeed). Virality is a self-sustaining cycle in which the early URL wins &#8211; you can’t be late to the party. Our growth hypothesis was to create or find viral-worthy stories early and plant them in the right networks. Working with the editorial and marketing team, I soon realised it was an extremely difficult process to dig through a pile of content to find the diamonds. We needed a better process and we needed smarter shovels.
We built a tool to predict the viral potential of stories, from across the internet, that were only starting to trend. On integrating this to our CMS and to Facebook ads, we could curate and publish stories, and also instantly promote them to the right target audience. We ran this new content creation cum distribution process. Within one month of running this process, we had our first real viral story that scored as many viewers as all other stories combined from the previous two months. We could say that we had found our product/channel fit.
The tool enabled-process was efficient. Combined with marketing smarts, it turned out to be quite effective. It was not about how many pieces our editors could publish, but about how many people they could reach. With the same size of editorial team, we reached over 10 million monthly users (20 times larger than before). The end-to-end process involving publishing, marketing, and the product took time and effort to synchronise, but when it did, it worked like a well-oiled growth machine. In the next eight months, we grew 10 times to become India’s biggest social publisher.
<h2>Stay Nimble to Respond to Growth Opportunities</h2>
I led product growth for a hotel metasearch company, <a href="https://www.findhotel.net/" target="”_blank”" rel="”noopener” noopener noreferrer">Findhotel</a>. This is a site where users can compare prices for hotels across several hotel booking websites and go on to book on a partner website. In a market full of big, well-funded, cash-rich players like <a href="https://www.booking.com/" target="_blank" rel="noopener noreferrer">Booking.com</a> and <a href="https://www.expedia.co.uk/" target="_blank" rel="noopener noreferrer">Expedia</a>, it is very expensive to acquire quality (high booking intent), customers. It was clear that, given competitors’ brand value and deep pockets, we couldn’t compete on user acquisition on conventional channels. We learned this after several campaigns. We tried new markets, advertising platforms, and different bidding models &#8211; our user acquisition growth hypotheses still did not deliver.
What worked for us yesterday did not work today. The first banner ad ever, on HotWired in 1994, debuted with a clickthrough rate (CTR) of 78%. Today banners have a CTR of 0.05% (<a href="https://twitter.com/andrewchen" target="”_blank”" rel="”noopener” noopener noreferrer">Andrew Chen</a> calls it <a href="https://andrewchen.co/the-law-of-shitty-clickthroughs/" target="”_blank”" rel="”noopener” noopener noreferrer">The Law of Shitty Clickthroughs</a>). We had to find the next untapped channel.
Meanwhile, through user testing on our product, we realised that an available discount was the key lever which moved the user decision to convert instantly. Understandably so: if the hotel room and dates are the same, why would you book with Booking.com when you could get it for E20 cheaper on Amoma? We tried another growth hypothesis &#8211; if we could find the right deals, we could assume the customer lifetime value would be higher and we could spend more to acquire them &#8211; as compared to the other big online travel agencies (OTAs). Once we validated this hypothesis, the challenge was to scale it.
About the same time, a new platform emerged &#8211; Google Hotel Ads. It was only open for OTAs. We wanted to get on this channel so we built a checkout experience by integrating a third-party check-out solution. We changed our product model for a presence on a high-value channel.
We formed a cross-functional team comprising a product manager, marketers, analysts, and engineers to focus on Google Hotel Ads.  It was possible to do because we were a nimble team that wanted to deliver growth, and we weren’t afraid to kill our darlings. Scalable acquisition on this new channel combined with our growth hypothesis enabled us to grow 100% year-on-year.
<figure style="width: 575px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2019/11/dd358b8d-decb-4712-9c08-09a9c4aef724_mxq_redBv0jy4HXFnbXROGueignE7LJGL-RqPIDBAh5uz60inNA1MaGgaxuL-VKICHvnyUVANygOul08ufc8nCpLDQYiOQCvzPPMRxuEFN_Y-hNYux3h0o8-J_lZGP6xSe6Cq_-e.png" alt="" width="575" height="448" /><figcaption class="wp-caption-text">Average customer value v/s channel of acquisition. Source: Hospitality Tech News</figcaption></figure>
<h2>Current Growth Efforts at Zalando</h2>
<a href="https://www.zalando.co.uk/" target="_blank" rel="noopener noreferrer">Zalando</a> is Europe’s biggest fashion platform. Zalando Lounge is a portal within the Zalando group where consumers find fashion items at deep discounts within the shell of ephemeral campaigns. Creating these campaigns is a manually-intensive and time-consuming process.
As supply and demand grows, we’ve seen that more visitors are leaving the platform disappointed at not finding what they were looking for. This happens when we can’t surface a relevant deal for them within their attention span. This experience, at scale, would result in dwindling sales and eventual degradation of our NPS.
<figure style="width: 638px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2019/11/5d309207-6a95-4d31-ada1-a3203523016c_pasted20image200.png" alt="" width="638" height="359" /><figcaption class="wp-caption-text">User’s attention span online is decreasing over time. At Z-Lounge, we aim to present a good offer for a relevant product to the customer instead of flooding them with all our inventory</figcaption></figure>
To power the next leg of sustainable growth, adding new markets, spending on customer acquisition, and getting more supply, is not going to cut it. The sum total of growth in demand and growth in supply is not equivalent to sustainable business growth of a marketplace.
We need to craft a good shopping experience for our visitors  &#8211; who have <a href="https://neilpatel.com/blog/8-principles-of-user-optimization-thatll-increase-your-search-rankings/" target="”_blank”" rel="”noopener” noopener noreferrer">increasingly shorter attention spans</a>. We have a growth hypothesis: relevant supply for the relevant demand. After validating the hypothesis, the first step is to make the offer/campaign creation process more efficient to enable the right offers to reach the right customers, without delay. Then we focus on the “how” of surfacing the right offers to the right customers. Scaling that will hopefully lead us to the sustainable growth we aspire to.
As product managers, it is our job to realise a future we’ve visualised in our mind’s eye &#8211; whether it’s a small feature or a company-level growth strategy. We must make sure to consider everyone in that future visual, to not leave anyone behind. To fuel that growth, we need a scalable process: smart people with small tools. Growth strategies do not always shape out according to our plans. All we can do is to stay nimble as we navigate with our team and stakeholders towards the outcome.

What are the Secrets to Enabling Sustainable Growth?

Ravi Sinha

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