This article covers the first third of major frameworks I've encountered that might be useful when thinking about startup marketing. I'll briefly go through classical startup frameworks and then dive deeper into frameworks specific to marketing and growth.
This article is a response to my own need for frameworks for unhindered thinking and clarity in making marketing decisions.
Why are startup frameworks useful?
Startup frameworks make for a great starting point in putting forward your ideas, implementing them, or looking at them from a different perspective.
Frameworks
Porter's Five Forces
Every reader who has gone to business school has come across the 5 forces framework.
Michael Porter propounded the Five Forces Framework model leading to large-scale adoption by many organizations. The basic tenet: any company faces 5 major forces of competition when in a market, not just from its competitors.
The five forces are:
- Threat of new entrants - What is the time and cost of entry into the market? Are the barriers of entry high? What are the cost advantages? Is there technology protection? Do you have specialized knowledge about the market?
- Threat of substitutes - What are your substitutes in the market? Are you 10x better than them?
- Bargaining power of customers - How many customers do you have? What is the average basket size? Are customers price sensitive? Are the switching costs high?
- Bargaining power of suppliers - How many suppliers do you have? How big are they? Will you be able to quickly substitute suppliers? Are you overly dependent on one supplier?
- Industry rivalry - How many competitors do you have in the market? Are you 10x better either in speed/quality?
All 2x2 matrices
The power of drawing a vertical line intersecting with a horizontal line is grossly underestimated. The depth of clarity in demystifying complex concepts is so simple.
Technology Adoption Lifecycle
This model was suggested by Clayton Christensen in The Innovator's Dilemma. It's a sociological model that describes how a new product is adopted and describes the trends through a normal distribution curve.
The lifecycle progresses through: Innovators → Early Adopters → Early Majority → Late Majority → Laggards
The Startup Pyramid
Sean Ellis suggested this model. He presently works at Qualaroo and GrowthHackers.com.
There are three phases to the pyramid:
- Attaining Product/Market fit
- Transitioning to Growth
- Doubling down on Growth
Product/Market fit
Marc Andreessen came up with the term Product/Market fit as:
Product/market fit means being in a good market with a product that can satisfy that market.
As a startup, your entire energy must be focused on achieving product market fit in the shortest time possible. How does one find out if their startup has reached PM fit? A few ways:
- Product/Market Fit Survey (by Sean Ellis) - How would you feel if you could no longer use [product]?
- NPS (Net Promoter Score) - Be careful with the false positives
- Measure engagement data in addition to surveys to validate the alignment of data with actions
- Build a retention curve
Brian Balfour's excellent article on PM fit →
AARRR Framework by Dave McClure
AARRR is a framework to measure customer and model customer behavior, then perform a set of actions with the right metrics to track for every stage.
The customer journey is mapped in a funnel:
- Acquisition - Users come to the site from various channels
- Activation - Users enjoy their first visit
- Retention - Users come back
- Referral - Users like the product enough to refer others
- Revenue - Users conduct some monetization behavior
For each part of the funnel, Dave presented questions, major actions, and metrics to aid tracking.
The Hierarchy of Engagement - by Sarah Tavel
Sarah presents a framework to evaluate non-transactional consumer companies. The hierarchy has 3 levels:
- Growing engaged users
- Retaining users
- Self-perpetuating
She says:
As companies move up the hierarchy, their products become better, harder to leave, and ultimately create virtuous loops that make the product self-perpetuating. Companies that scale the hierarchy are incredibly well positioned to demonstrate growth and retention that investors are looking to see.
She goes on to present amazing slides here →
Quant-based marketing
QBM was used by Noah Kagan, Chief Sumo at AppSumo and previously at Facebook. He used it to grow Mint. The main idea of quant-based marketing is about working backwards from the goal and mapping out what you need on an excel. It's that simple.