Hiring well is one of the biggest levers you have in building a great team. A few tips:
- Create a hiring rubric, not just a job description - Define not just the skills required but the values and behaviors needed for team and cultural fit. Make them specific enough to evaluate against.
- Ask candidates to complete a practical exercise - See their actual work product vs. just trusting a resume. Give them a sample project and evaluate the results.
- Include multiple perspectives - Have a panel do the interviews, not just the hiring manager. Get diverse input on a candidate's potential fit.
- Check references - Ask references specific questions about the person's past behaviors and performance, not just generic info.
- Do informal interviews - Take the candidate to lunch or on a walk. Give them a chance to let their guard down and show their true personality.
Skills are necessary but not sufficient. Drill down on culture and values as much as technical capabilities.
Section: 1, Chapter: 7
The Law of Diffusion of Innovations shows that mass-market success starts with just 2.5% of "innovators", followed by 13.5% of "early adopters." These people are willing to try new things first based on a gut feeling, even if not everything is perfect.
What unites early adopters is that they share your beliefs and see the world the way you see it. They get the WHY behind what you do, and that belief is enough for them to take a chance on you before you've got all the details figured out.
Great leaders don't try to convince the majority first. They find those early adopters who believe what they believe. Once those early adopters are on board with your WHY, they become powerful evangelists to bring others along and spread your message. That's what creates the tipping point for mass-market success.
Section: 3, Chapter: 7
Apple not only communicates from the inside out, starting with WHY, but everything they do - their products, packaging, advertising, stores, etc - all serve as further proof of their WHY. Let's apply The Celery Test - if you're buying celery and rice milk at the grocery store, it's clear that you value health. Everything you say and do "proves" that you believe in healthy eating.
Similarly, Apple believes in challenging the status quo and thinking differently. Every product they release, from computers to iPods to iPhones, challenges the conventional thinking in that industry. Apple's marketing and messaging is aspirational and iconoclastic. Even their stores, with open layouts and approachable staff, aim to make technology less intimidating. Regardless of WHAT Apple makes, it always starts with WHY - and that clear sense of purpose inspires loyalty from customers and employees alike.
Section: 1, Chapter: 3
Symbols are a tangible representation of a company or cause's beliefs. They can be much more than just a logo - they are any image, object, slogan, cultural touchpoint, etc. that captures the meaning behind WHY an organization does what it does.
Apple's famous "Think Different" ad campaign served as a symbol of Apple's belief in championing rebel thinkers who pushed boundaries. It was making a statement about its own identity and worldview.
Symbols don't get their meaning from the organization; rather the meaning comes from what the believers put into it. Harley-Davidson tattoos are earned symbols of belief in Harley's WHY - a sense of independence and American freedom.
Section: 4, Chapter: 10
The Golden Circle is a naturally occurring pattern grounded in the biology of human decision making. The Golden Circle contains three layers:
- The outside layer is "What" - Every organization knows WHAT they do, the products they sell or services they offer.
- The middle layer is "How" - Some organizations know HOW they do what they do - their unique differentiators, proprietary process or value proposition.
- The innermost layer is "Why" - Very few organizations can clearly articulate WHY they do what they do. WHY is a purpose, cause or belief. It provides a clear answer to: Why do you get out of bed in the morning? Why should anyone care?
Most organizations communicate from the outside-in, telling people WHAT they do, HOW they are better, then expecting a behavior like a purchase. But inspired organizations start with WHY at the center, then flow outward to HOW and WHAT. When WHY is clearly communicated, WHAT you do serves as tangible proof of that belief.
Section: 1, Chapter: 3
One of the biggest traps for companies of one is getting stuck in a cycle of endless preparation and perfectionism. You tinker away in isolation, waiting for your offering to be flawless before releasing it to the world. But the truth is, you learn more from one real customer interaction than countless hours of solitary strategizing.
The antidote is what LinkedIn founder Reid Hoffman calls the "embarrassment test":
"If you're not embarrassed by the first version of your product, you've launched too late... The feedback you get from releasing your 'embarrassing' product is the most valuable feedback you'll get in your life."
You'll never achieve perfection, only progress.
Section: 3, Chapter: 11
Many companies are obsessed with acquiring new customers at all costs. But the data shows that retaining existing customers is far more profitable:
- Acquiring a new customer costs 5-25X more than retaining an existing one
- Increasing retention rates by 5% boosts profits by 25-95%
- Loyal customers spend 67% more than new customers
The lesson for companies of one is to prioritize delivering exceptional experiences for the customers you already have. Some ways to boost retention:
- Proactively gather feedback and quickly address issues
- Personalize your communications and offerings
- Thank loyal customers with exclusive perks and recognition
- Create communities for customers to connect with each other
Section: 2, Chapter: 7
The central argument of "Company of One" is that staying small is a viable alternative to the standard "go big or go home" approach to entrepreneurship. Technology has made it easier than ever to automate and outsource aspects of running a business, so a small team or even a solo founder can have huge impact and reach. Some key advantages:
- Resilience - The ability to recover from difficulties and adapt to change. Having multiple skills and not relying on a single customer.
- Autonomy - The freedom and control to make your own choices. Mastering a valuable skill set to work independently.
- Speed - The agility to change course quickly if needed. Using constraints creatively. Avoiding bureaucracy.
- Simplicity - Focusing on core essentials, avoiding unnecessary complexity. Iterating to make things simpler over time.
Section: 1, Chapter: 1
Many companies are afraid to share their "secret sauce" and hard-earned expertise. But in practice, teaching is often the most powerful way to attract loyal customers. Benefits:
- Positions you as a trusted authority and go-to resource in your niche
- Makes people feel they know, like and trust you before ever buying
- Attracts inbound leads and referrals from people who love your content
- Lets you test demand for and iterate on paid offerings risk-free
Don't think you have to give everything away for free. The goal is provide enough value to be truly helpful, while still having premium training and support to sell. Basically, your free content is the "what" and "why", your paid offerings are the "how" with hands-on guidance.
The more you share, the more people will want to learn from you. And the more they'll trust you with their money for the full experience. Teaching is a long-term play that keeps on giving in loyal fans.
Section: 2, Chapter: 9
Truly caring about your customers as human beings, not just walking wallets, is the foundation of great service. Empathy means putting yourself in your customers' shoes to understand their needs, frustrations, and desires. Then shaping your offering to best serve them.
When customers feel understood and cared for, price becomes a secondary concern. They know you have their best interests at heart. Empathy inspires loyalty that lasts.
Section: 2, Chapter: 7
As the author's freelance business gained traction, he faced a common crossroads - scale up or stay solo? He had more inquiries than he could handle and it was tempting to hire a team and go after bigger clients. But something about that path didn't feel right.
Saying no to "good" opportunities gave him the space to say yes to truly great ones - those that aligned with his values, played to his strengths, and moved him. closer to my goals. It wasn't always easy watching peers scale faster and do flashier work. But he knew he was optimizing for quality of life over quantity of revenue.
Section: 3, Chapter: 13
the digital age, trust has become the most valuable currency in business. With infinite options and information at their fingertips, customers gravitate toward companies they believe in on a personal level. Trust is built through:
- Transparency - Being open and honest about your processes, policies, and performance
- Consistency - Reliably delivering on your brand promises across all touchpoints
- Authenticity - Staying true to your values and principles, even when no one's watching
- Empathy - Demonstrating genuine care and concern for your customers' well-being
Examples of high-trust companies:
- Patagonia - Radically transparent about its environmental impact and supply chain
- Zappos - Empowered employees to "wow" customers, even if it meant taking a short-term loss
Section: 3, Chapter: 10
"Profit, not revenue, is what matters. Revenue is often thought of as the top line, the "gross sales" a company has made in a year, yet what really matters is how much of that money is left after all the bills are paid—that's profit... Focusing on profit from day one sets you up for long-term stability."
Section: 1, Chapter: 4
In a crowded market, your company's unique personality is a powerful differentiator. Customers connect with brands that feel authentic and relatable. So don't be afraid to let your quirks and style shine through your company's:
- Visual branding and design sensibility
- Voice and tone in your copy and content
- Internal culture and communication norms
Some ways to cultivate a strong company personality:
- Audit your current touchpoints and look for opportunities to humanize
- Lean into your own founder story, passions, and perspectives
- Hire people who embody your target personality traits authentically
The goal is make people feel like they're interacting with a person, not a faceless corporation. It's okay to not appeal to everyone. Attracting the right customers is better than bland mass appeal.
Section: 2, Chapter: 6
A company of one is a business that questions the assumption that growth is always good. Instead, it focuses on being better rather than just bigger. Key traits include resilience, autonomy, speed, and simplicity. Companies of one can be solo entrepreneurs, small businesses, or even self-directed teams within larger organizations.
The focus is on making considered decisions about growth based on specific goals and values, not pursuit of growth for its own sake. Prioritizing profits over scalability. Retaining freedom to adapt and change course quickly. Keeping things as simple as possible by avoiding unnecessary complexity. A company of one aims to do great work and serve customers excellently, even if it means staying small.
Section: 1, Chapter: 1
"More than ever before, trust is the most important currency in business. The ability to build trust, and do it authentically, is the greatest predictor of a brand's success... Without trust, a business fails."
Section: 2, Chapter: 5
For companies of one, relationships are everything. In a hyper-connected world, your most valuable asset is not what you know, but who you know (and who knows you). A strong network gives you:
- Referrals - Warm introductions to potential customers, partners, and top talent
- Resources - Access to insider knowledge, expert advice, and best practices
- Resilience - Support and encouragement during the inevitable ups and downs
- Reputation - Third-party credibility and social proof of your abilities
But valuable relationships don't just magically materialize. You have to put in the work to cultivate them over time. Some dos and don'ts:
- Do give before you get - Offer your time, expertise and connections generously
- Don't keep score - Focus on mutual benefit, not tit for tat transactions
- Do show genuine interest - Ask questions and listen more than you talk
- Don't be a "taker" - Constantly asking for favors without reciprocating
In short, approach networking like you would any important relationship - with authenticity, consistency, and dedication. The more you put into your network, the more you'll get out of it.
Section: 3, Chapter: 12
When starting out, don't get caught up in building complex infrastructure, hiring staff, getting offices, etc. Instead, identify the core problem you want to solve. What solution could you provide to a single customer right now, with the bare minimum of resources?
For example, designer Paul Jarvis started getting clients by simply emailing his network, offering his skills. Crew started by manually matching clients and freelancers, then automated only after proving out demand. Start tiny, prove your concept, then slowly expand only as needed to better serve customers. Premature scaling is the enemy.
Section: 1, Chapter: 4
Before launching your company of one, get clear on your purpose - the deeper reason behind what you do beyond just making money. Your purpose is a combination of:
- Your values - The principles you stand for and believe in
- Your mission - The problem you exist to solve or the change you seek to make
- Your vision - The ideal future state you're working to create
Having a bigger purpose helps you:
- Make better decisions by acting as a "north star"
- Attract and retain employees and customers who share your values
- Find deeper meaning and fulfillment in your work
- Build a brand that stands out by taking a stand
Section: 2, Chapter: 5
"Follow your passion" is common but misguided career advice. The reality is that very few people are able to turn their pre-existing passions into viable businesses. And even if you do monetize a hobby, the pressure of relying on it for income can drain the joy from it.
A better approach is to develop profitable skills, then leverage those skills in a field that interests you. Passion often follows from mastery and success, not the other way around.
Focus on getting really good at skills that are in demand in the market, and look for opportunities to apply those skills in industries/roles you're curious about. Skills first, passion second.
Section: 2, Chapter: 5
For companies of one, the key to sustainable growth is implementing scalable systems that increase output without a proportional increase in costs or headcount. Some examples:
- Email marketing allows you to communicate with thousands of leads for the same effort as emailing one
- Webinars let you present to a global audience without travel costs
- Chatbots handle basic customer service inquiries 24/7
The goal is to automate and templatize repeatable processes so you're not always trading time for money. Look for opportunities to provide one-to-many value at every stage of your funnel. Could that sales demo become an on-demand video? That onboarding call a self-guided tutorial?
Scalable doesn't mean impersonal. Use technology to enhance, not replace, human connection.
Section: 2, Chapter: 8
"Networking isn't about hunting for new contacts, it's about farming for new relationships. Plant seeds of helpfulness everywhere and you'll be amazed at what opportunities pop up. Few things are more fulfilling than connecting with like-minded people in the spirit of service."
Section: 3, Chapter: 12
Much of the obsession with growing businesses as big as possible stems from ego and envy, not smart strategy. We see other large, successful companies and assume growth is the only way to respect and clout. But comparisons are misleading - you don't see behind the scenes, only the shiny exterior.
Instead, use envy as a tool to identify what truly matters to you. If you envy a company's profits or impact, focus on improving those things sustainably, not just getting bigger overall. Don't let ego drive irrational growth. Stay true to your own definition of "enough."
Section: 1, Chapter: 2
the startup world, overnight success stories get all the glory. We idolize companies that seem to go from zero to billion-dollar valuations at warp speed. But the reality for most lasting businesses is a longer, slower, steadier climb.
Consider some examples:
- Basecamp - Took nearly 5 years to get to $1M in annual revenue, even slower to $5M
- Mailchimp - Grew gradually for the first 7 years before hitting 10K users, now at 20M
- Atlassian - Took 8 years to IPO, prioritizing sustainable growth over speed
The common thread is these companies focused on creating real value and building lasting relationships, not just grabbing quick cash. They were playing the long game. You still need a strong sense of urgency and bias for action. Just resist the pressure to inflate your numbers prematurely. Slow and steady adds up to success.
Section: 3, Chapter: 11
There are four main reasons most businesses pursue growth from the start:
- Inflation - Rising costs over time
- Investors - Pressure from VCs/funders for 10X returns
- Churn - Need to replace leaving customers with new ones
- Ego - Craving respect and status of a big company
But early stage companies can avoid these pressures. Don't take investor money if possible. Build loyalty so churn isn't an issue. Fight ego-driven urges. Have a realistic strategy focusing on sustainable profits, not just growth itself.
Section: 1, Chapter: 4
"The value of a business today is the sum of all the money it will make in the future. (To properly value a business, you also have to discount those future cash flows to their present worth, since a given amount of money today is worth more than the same amount in the future.)"
Section: 1, Chapter: 5
"In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot. Monopoly is therefore not a pathology or an exception. Monopoly is the condition of every successful business."
Section: 1, Chapter: 3
Successful monopoly businesses usually have some combination of the following characteristics:
- Proprietary technology - A monopoly business has technology that is an order of magnitude better than its nearest substitute
- Network effects - The more people that use a product, the more valuable it becomes. This creates a high barrier to entry.
- Economies of scale - Fixed costs can be spread over an ever-larger customer base as the company grows, while variable costs shrink.
- Branding - A strong brand is a powerful way to claim a monopoly in customers' minds.
Section: 1, Chapter: 5
Metaphors comparing business to war are misguided. In war, you have to compete over scarce territory or resources. In business, you want to avoid competition and seek uncontested market space. Battles between rivals cause both sides to focus on each other rather than on creating value for customers. Copycat competition on the same dimensions (price, features, etc) destroys industry profitability. Good businesses seek to escape competition and carve out their own turf rather than fighting rivals head-on.
Section: 1, Chapter: 4
Resumes and interviews are poor predictors of actual work performance. The only reliable way to assess a candidate is to see them in action. So hire them for a mini project first. Give them a small job that's identical or analogous to the real work they'd be doing.
Then evaluate their actual output. It could be a design mockup, a code module, a writing sample - anything demonstrating real skills. What you learn from a little test project is far more useful than what you glean from an interview.
Section: 1, Chapter: 9
Avoid the trap of doing client work to fund your product business. This makes you a consultant, not an entrepreneur. Your efforts go into serving clients, not building something scalable that can thrive without you. It's a tempting compromise, but it splits your focus.
You wind up with a viable portfolio but not a viable product. If you want a product business, make that your main focus from day one. Use your own resources and find a way to start generating revenue directly.
Section: 1, Chapter: 4
Having fewer resources drives resourcefulness. When you have unlimited time, money or people, inefficiency and waste emerge. But constraints breed creativity and clarity. With tight limitations you must:
- Solve problems simply, not elaborately
- Focus only on what's essential
- Find unorthodox ways to make do with what you have
Don't lament lacking resources. Treat finite means as a source of innovation. Let your constraints guide you to elegant, creative solutions instead of bloated, complex ones.
Section: 1, Chapter: 5
"Managers of one are people who come up with their own goals and execute them. They don't need heavy direction. They don't need daily check-ins. They do what a manager would do - set the tone, assign items, determine what needs to get done, etc. - but they do it by themselves and for themselves."
Section: 1, Chapter: 9
To avoid being a commodity that others can easily replicate, inject unique elements of yourself into your product. Infuse it with your values, identity, and personality.
Incorporate your way of thinking and working into how you build, deliver, and support it. By pouring yourself into your product, you make it an extension of you. No competitor can copy that. Your product won't just perform a function - it will represent a distinctive worldview customers can identify with.
Section: 1, Chapter: 6
Blind pursuit of business growth invites unnecessary complexity and problems. Growth alone doesn't guarantee profits, impact or longevity. Sometimes the right size for your ambitions is small - a size you can manage while maintaining freedom and focus. Don't assume getting as big as possible as fast as possible is the only goal. Question if expansion really fits your definition of success and is essential to fulfill your mission. Often the best growth is slow, controlled and deliberate.
Section: 1, Chapter: 3
Seek outside money only if absolutely necessary. Bootstrapping gives you more control. With investors, you have to answer to others who may not share your vision. Pursuit of an "exit" so investors can recoup their stake takes priority over long-term sustainability. And the mentality of spending other people's money breeds bad, unsustainable habits. Unless your endeavor absolutely requires major upfront capital, find a way to self-fund through savings, sales, or trading services. Your freedom is worth more than easy money.
Section: 1, Chapter: 4
You don't install a culture, you cultivate it slowly through your actions and policies. Perks and slogans don't make a culture, they reflect it. Culture is an outcome, not an input. If you encourage sharing, you get a sharing culture. If you reward trust, you develop a culture of trust. If you practice transparency, you build a transparent culture. How you behave as a company determines your culture more than anything you say. Focus on your behaviors and your cultural aspirations will follow.
Section: 1, Chapter: 11
As your customers grow, some will develop needs and ambitions beyond what your product can fulfill. If you try to satisfy them by tacking more and more onto your product, you can wind up with a complicated, overbuilt mess none of your customers can use.
Don't underestimate the continuing market for "simple." Let advanced customers graduate to more complex products when they must. Stay true to your product vision. Keep your product clean, simple and narrowly focused so new customers can always get started easily.
Section: 1, Chapter: 7
Copying others' innovations means you're always following, not leading. You just replicate the surface elements without understanding the deeper insights that led to them. So while that tactic might help you keep pace, it won't put you in first place. You remain a commodity with no real advantage.
Instead of copying what exists, look for untapped opportunities others have missed. Seek to solve unsolved problems in the market. That's where you can innovate as a leader, not follow as an imitator.
Section: 1, Chapter: 6
Successful businesses have three key roles covered:
- The Entrepreneur - Has the vision and creates the strategy. They "make it up."
- The Specialist - Executes the strategy and produces the core product/service. They "make it real."
- The Manager - Handles ongoing customer service, admin, finance, HR etc. They "make it recur."
Early on, the founder often covers all three. But to grow, you need to delegate the specialist and manager roles so you can focus on the high-level entrepreneurial work.
Most businesses are missing the manager piece. They deliver a great product but don't have systems for generating leads, onboarding clients, upselling, getting referrals, etc. As a result, growth is limited.
Section: 2, Chapter: 5
There are two ways to grow revenue: acquire new customers and increase the lifetime value (LTV) of existing customers.
Most businesses focus on customer acquisition. But the biggest profits come from increasing LTV through:
- Raising prices
- Upselling complementary products/services
- Cross-selling additional products/services
- Increasing purchase frequency
- Reactivating past customers
Acquiring a new customer can cost 5-25x more than retaining and selling more to an existing one. To maximize "back end" LTV:
- Track customer buying behavior to spot opportunities
- Offer bundles/package deals
- Create a loyalty or membership program
- Use subscriptions/auto-ship for recurring revenue
Section: 3, Chapter: 8
"Vampires consume a massively disproportionate amount of resources compared with your average customer while paying the same amount as other customers do. They usually aren't content to work with the teams you have in place. They always need to talk to the CEO and they often terrorize and manipulate the CEO into terrorizing the team in their interest. They just suck the blood right out of your business."
Section: 2, Chapter: 6
Master salesman Joe Girard noticed that most people have ~250 people in their sphere of influence. When someone bought from him, they could become either a referral source or a detractor to that entire network.
To work the "Law of 250":
- When someone buys, follow up to ensure they're delighted
- Directly ask if they know others who would also benefit
- Give them referral cards or gifts they can share with others
- Keep in touch to remain top-of-mind
Example: A real estate agent could give clients 3 gift cards for a "free home valuation" they can share with friends. This turns one sale into 3 warm leads.
Most businesses hope for passive word of mouth. But you'll get far better results by making referral generation a systematic process.
Section: 3, Chapter: 9
There are two components that make up the lifetime value of a customer:
- Front End - The initial purchase when a prospect first becomes a customer. Rarely profitable by itself. Goal is to offset acquisition cost.
- Back End - All subsequent purchases a customer makes after the first. This is where the real profit comes from in most businesses.
Many businesses focus only on making the first sale without a plan to re-sell to those customers. But the back end is where fortunes are made through upsells, cross-sells, recurring billing and re-activation of past customers.
Section: 1, Chapter: 3
Many companies become overly dependent on a single major acquisition channel, which can lead to stagnation when that channel loses effectiveness.
For instance, online publishers like Upworthy and Buzzfeed rely heavily on Facebook's News Feed algorithm to drive traffic to their websites. This dependency becomes problematic whenever Facebook adjusts the algorithm, as even minor changes can significantly reduce the publishers' readership and advertising revenue. Thus, their growth is vulnerable to the volatility of this single acquisition channel.
Section: 2, Chapter: 9
To identify your product's core value and "aha moment" that turns users into devoted fans, analyze user behavior data to find:
- The tipping point number of actions that engaged users take vs casual ones (e.g. Following 30 people on Twitter, adding 7 friends in 10 days on Facebook)
- The common actions that retained users take but lost users don't
- The key product features or parts of the user experience that most engage your fans
Then focus your user experience on driving more users to that aha moment as quickly as possible. For example, when Facebook identified adding 7 friends in 10 days as a key tipping point, they redesigned their new user experience to focus people on adding friends upfront.
Section: 1, Chapter: 2
"The first time I did a Facebook live video that got more than 1,000 viewers in a short period of time, it was an 'aha moment' like I've never experienced in my career. Immediately, I knew that Facebook live was going to change the way I reached my audience." - Mari Smith, Social Media Expert
This quote demonstrates the power of the "aha moment" - the powerful instance of initial value delivery that turns new users into raving fans. Growth teams must identify their product's core aha moment, then maniacally optimize their user experience to drive as many users to experience that magic as quickly as possible.
Section: 2, Chapter: 6
There are three key phases of retention that growth teams should focus on:
- Initial retention (first few days/weeks after acquiring a customer)
- Medium-term retention (solidifying the customer relationship and making product usage a habit)
- Long-term retention (continuing to provide value to retain the customer over many months/years)
Different tactics should be used in each phase to optimize retention. In the initial phase, focus on getting the user to the aha moment quickly. In the medium-term, build habits around using the product. For long-term, keep adding features and value to retain the customer.
Section: 2, Chapter: 7
To keep experiments organized and surface key insights, document each test with the following details:
- Name: A concise label to refer to the test
- Description: What change is being made and who will see it (e.g. a 50/50 split test of two landing page headlines for new visitors)
- Hypothesis: The expected result and why (e.g. Changing the headline to emphasize key benefit X will increase signups by 10%)
- Metrics: The key metrics to track (signups, click-through rate, retention rate, etc.). Include a primary metric that determines success.
- Launch details: When it started/ended, sample size, anything that might affect results
- Results: The actual metric changes seen in the test. Note statistical significance.
- Conclusions: Insights gleaned and ideas for follow-up experiments to further optimize
Section: 1, Chapter: 4
When growth lead Sean Ellis proposed a double-sided referral program to Dropbox - giving existing users 250MB of extra space for referring a friend and giving new signups 250MB too - the founders initially rejected it, fearing it was too generous and would be abused.
However, Ellis persuaded them to run a test to a portion of users. To their surprise, referrals shot up with no signs of abuse - so they quickly rolled it out to all users. Referrals increased 60%, with 2.8M invites sent per month!
Always test ideas before rejecting them. You may be surprised by the results!
Section: 2, Chapter: 5
While adding new features is important for retaining users long-term, be careful not to overwhelm them with too many options, which can decrease retention. This is called "feature bloat."
Product teams can be surprised by competitors introducing new technologies or using existing ones in novel ways. On the other hand, companies may face slowdowns if they shift their attention from core offerings to new products, excessive features, or new market ventures.
Section: 2, Chapter: 9
Sometimes offering a discount can actually decrease your revenue, as the Inman real estate news company discovered.
"At Inman, the team tested giving a discount to visitors who were abandoning their purchase in the middle of checking out by offering a limited-time 25 percent off their purchase to complete the checkout process. Not surprisingly, this discount drove a significant lift over offering no discount at all, increasing the rate at which people completed the purchase by 39 percent. But when they ran another test, testing the 25 percent discount against a 10 percent discount, they found that the smaller discount still converted roughly the same amount of additional customers—and by offering a smaller discount they were able to improve the revenue captured from the sign-up process by 18.9 percent."
Always test discounts to see the optimal price for maximizing total revenue.
Section: 2, Chapter: 8
Chapter 4 lays out the four key steps in the growth hacking process:
- Analyze: Review macro metrics, dive deep into user behavior data, and gather insights from customers via surveys/interviews to generate experiment ideas.
- Ideate: Encourage the team to brainstorm bold experiment ideas aimed at improving a North Star metric. Create an idea pipeline and rank using the ICE method.
- Prioritize: Each week, review top experiment ideas and prioritize based on impact, effort and company goals. Assign an owner to each.
- Test: Launch experiments quickly, ensuring each is constructed to give clear, statistically significant results. Track results obsessively.
Section: 1, Chapter: 4
Chapter 2 explains that before focusing on rapidly scaling growth, companies must first ensure they have achieved product-market fit and are delivering a "must-have" experience to users. Ways to assess:
- Conducting a user survey asking how disappointed users would be if they could no longer use your product. If over 40% say "very disappointed", that indicates the product is must-have.
- Analyzing user retention data to see if retention stabilizes over time, ideally showing increased retention the longer users stay with the product. Declining retention is a red flag.
Making your product a must-have comes before growth tactics. Otherwise you risk scaling up a product that ultimately fails to retain users.
Section: 1, Chapter: 2
To enable high velocity testing, create a growth idea pipeline that captures experiment ideas and follows these principles:
- Empower everyone on the growth team to submit ideas in a standard format: Idea name, description, hypothesis, and metrics to track.
- Use the ICE prioritization score (Impact, Confidence, Ease) to objectively rank and prioritize ideas. Rate each idea on a 1-10 scale for each.
- Each week, review top ideas and decide which to resource. Assign an owner to each chosen experiment.
- Run multiple experiments per week. More experiments = faster learning. But ensure each is well-constructed to give clear results.
- Track all experiments and share learnings broadly. Build a knowledge base of past tests anyone can access. Be sure to also track failed experiments!
Section: 1, Chapter: 3
Chapter 3 focuses on why the pace of experimentation is crucial to the pace of growth:
- The faster you run experiments, the more you learn about what works and what doesn't. More experiments = more insights.
- Most experiments will fail or show inconclusive results. Growth comes from many small wins compounded over time vs one big win.
- Early on, focus experiments on areas most core to your product vs incremental changes. Experiment boldly to maximize learning.
- Establish a weekly growth meeting rhythm to review results and determine the next most important experiments to run. Keep the growth team accountable.
Section: 1, Chapter: 3
Chapter 6 focuses on improving user activation - getting more new signups to reach their aha moment and become active, engaged users. Key activation tactics include:
- Obsessively reducing friction in the signup flow and first user experience. Minimize fields, use social logins, and cut steps ruthlessly.
- Designing a clear "happy path" in your product that guides users to key actions and value. Don't make them think!
- Using triggered messaging and prompts to nudge users to key actions. But avoid nagging and message fatigue.
- Deploying re-engagement tactics for users who visit but don't sign up or who sign up but don't complete key actions. This could include targeted emails, in-app prompts, and more.
Section: 2, Chapter: 6
To craft an engaging early user experience that maximizes activation, use the Triple A framework:
- Acknowledge: Make users feel acknowledged and appreciated for signing up. Send a personalized welcome message.
- Affirm: Affirm that the user made a good choice by signing up. Reinforce your value prop and benefits. Share impressive usage stats or social proof.
- Action: Direct the user to a key action that will deliver value and help them experience the aha moment. Focus on one clear call to action.
By making users feel good about their signup while also guiding them to unleash your product's core value, you can build early engagement and improve activation rates for your product.
Section: 2, Chapter: 6
"A good plan violently executed now is better than a perfect plan tomorrow."
This quote, cited by Facebook's Alex Schultz, underscores a key growth team principle - moving quickly to ramp up the tempo of experimentation is more important than having a flawless, thoroughly debated plan. Analysis paralysis and over-planning are the enemies of growth. Growth teams must act decisively and with urgency.
Section: 1, Chapter: 1
Look at a graph of your product's retention curve over time. Ideally, it should look like a smile - retention should increase the longer a customer uses the product, as they get more value out of it over time. This is called the "smile graph." "Evernote's retention graph looks that way essentially because the service's usefulness improves over time.
The core value is enhanced the longer you use Evernote because as a note-keeping product, the more information that is saved within it, the more likely people are to return to access those ideas and notes and add more to them." If your retention curve doesn't increase over time, dig into why. You may need to add more features and value for long-term users. Analyzing cohort retention curves is key.
Section: 2, Chapter: 7
Chapter 5 introduces the concept of Channel/Product Fit - identifying the optimal channels to reach your target customers with your product offering.
- Make an exhaustive list of possible channels - paid, organic, viral, PR, email, etc.
- Consider your business model and customer to prioritize channels to test. B2B products will focus on different channels than consumer apps.
- Prioritize 1-2 channels to start. Go deep before expanding to more channels.
- Experiment within each channel to optimize your customer acquisition. Track CAC and LTV.
The key is aligning your channels to your product, and focusing on the most effective channels while avoiding premature "channel sprawl" that dilutes your efforts.
Section: 2, Chapter: 5
To understand your company's innovation potential, analyze your value network and its key characteristics:
Identify the key players: Who are the suppliers, producers, and customers within your network?
Understand the metrics of value: How is product performance measured and valued within your network?
Analyze the cost structure: What are the costs associated with operating within your network, and how do they impact profitability?
Assess your company's position: Where does your company fit within the value network, and how does this influence your innovation strategy?
Section: 1, Chapter: 2
Digital Equipment Corporation (DEC), a dominant player in minicomputers, struggled to enter the personal computer market despite having ample resources. Its processes, designed for complex minicomputers with long development cycles and direct sales, were ill-suited for the fast-paced, modular, and retail-driven PC market. Similarly, DEC's values prioritizing high-margin products clashed with the lower margins of PCs.
Section: 2, Chapter: 8
The casino industry can be divided into three distinct market segments:
- High-end luxury resorts: Upscale properties like the Bellagio and Wynn cater to an affluent clientele with lavish amenities, Michelin-starred restaurants, and designer shopping. Gambling is just one component of a complete entertainment experience.
- Mass market corporate casinos: Companies like MGM Resorts and Caesars Entertainment operate a broad portfolio of properties that appeal to a wide spectrum of tourists and convention-goers. Casinos use tiered loyalty programs to segment customers and offer personalized promotions.
- Locals market and slot parlors: These bare-bones operations cater to a working class clientele with minimal amenities beyond the gaming floor. Slot machines and video poker are the primary focus, and casino design principles create a maze-like environment to keep players glued to their games.
Section: 1, Chapter: 3
Modern casinos are increasingly using data analytics and machine learning to model player behavior and optimize every aspect of their gaming floors. Pioneered by Gary Loveman, former CEO of Caesars Entertainment, casinos now employ teams of MIT-trained mathematicians and data scientists to determine everything from the optimal slot machine hold percentage to the personalized comps offered to loyal high rollers.
By tracking player activity through loyalty cards, mining behavioral data, and running experiments, mega-resorts can create a perfectly tuned ecosystem that maximizes both player satisfaction and casino winnings.
Section: 1, Chapter: 3
Professional sports bettors operate in an extremely efficient market, often grinding out an edge of just 2-3% on the massive amounts of money they bet. With such slim margins for error, getting money down becomes as important as handicapping games profitably.
Bettors must navigate betting limits, wager timing, market-making sportsbooks, and closing line value to extract as much expected value from their edges as possible. This unforgiving calculus has turned sports betting into a high-stakes cat-and-mouse game between top bettors looking for weaknesses in the betting market and sportsbooks looking to encourage square money while limiting their sharpest customers.
Section: 1, Chapter: 4
Early adopters are a special breed of customer. They accept an 80% solution and are eager to give feedback. Early adopters use their imagination to fill in what a product is missing because they see its potential.
When cultivating early adopters, focus your marketing efforts on places they congregate, use messaging that resonates with their beliefs, and speak to their needs. Don't try to appeal to the broader mainstream yet.
Early adopters are tolerant of a product's flaws and their feedback is invaluable for steering the product roadmap. Find them, cherish them, and shape your product to meet their needs.
Section: 2, Chapter: 6
Every business plan begins with assumptions. Startups make "leap-of-faith" assumptions - the riskiest elements upon which their success depends. Two most important assumptions are:
- Value hypothesis: The belief that the product delivers value to customers once they start using it
- Growth hypothesis: The belief that customers will love the product enough to fuel exponential growth
An example is Facebook. Their value hypothesis was that connecting online with one's real-world friends has inherent value. Their growth hypothesis was that users would be fanatical enough to rapidly recruit more users.
Section: 2, Chapter: 5
Vanity metrics are dangerous because they give a rosy picture of the business, even if no real progress is being made. Examples include total registered users, raw pageviews, and number of downloads. These metrics tend to go "up and to the right" regardless of the actual business performance.
Actionable metrics, on the other hand, clearly demonstrate cause and effect. They focus on the parts of the product customers interact with and tie them to business results. If a change is made to the product, an actionable metric will immediately reflect any positive or negative impact. Actionable metrics are the foundation for learning what's working and what's not.
Section: 2, Chapter: 7
The Toyota Production System has a key principle called "genchi gembutsu" - "go and see for yourself." It emphasizes the importance of making decisions and taking action based on firsthand experience, not the reports of others. Managers should see operations for themselves to truly grasp problems and opportunities. Entrepreneurs need to get out of the building and directly interact with customers to test their assumptions. When managers go and see for themselves, they often realize their beliefs about their customers are wrong. Speaking directly to customers reveals insights that no amount of surveys and focus groups can.
Section: 2, Chapter: 5
Andy Grove, Intel's pioneering CEO, was the main architect behind OKRs. Grove wanted to create an environment at Intel that valued and emphasized output rather than activities.
He sought to create a system where managers didn't have to tell people what to do through command-and-control. Rather, he aimed to create a culture of discipline and self-management where there was clarity on objectives and people could determine the best approach themselves.
Grove eschewed traditional, private goal-setting in favor of transparent OKRs where everyone's goals, from the CEO down, were openly shared. Objectives were significant, concrete and action-oriented. Key results were measurable and verifiable milestones for achieving the objective.
Section: 1, Chapter: 2
- Urgency: When a crisis arose, Intel's leadership responded within weeks to set and communicate a clear, focused objective to the entire company.
- Clarity: From the CEO down, everyone knew exactly what the objective was and how their work connected to it. No ambiguity.
- Alignment: Every team, from engineering to marketing to sales, set their own OKRs in service of Operation Crush. While the key results differed, the overarching objective unified everyone.
- Tracking: Regular check-ins and grading enabled leaders to monitor progress, identify obstacles, and make adjustments as needed.
- Stretching: The 2,000 design win goal was hugely ambitious. But it motivated people to rethink old approaches and deliver amazing results.
Section: 1, Chapter: 3
One of the hardest parts of building a cohesive culture is learning to tolerate the discomfort, inefficiency and messiness of open, honest conversations. Giving and receiving real-time candid feedback, admitting mistakes, confronting conflicts, and reflecting on tough challenges is awkward and painful.
But the leaders in this book emphasize that you have to push through that resistance. The pain isn't a problem but a sign of progress. You will realize that the hard, scary conversations are the real work of building a great team. Some ways to embrace the productive discomfort:
- Institute regular AARs (after-action reviews) to reflect on successes and failures
- Hold open forums where people can ask leaders anything, no matter how sensitive
- Practice sharing unfinished, imperfect work to get feedback from peers
- When conflicts arise, resist the urge to smooth things over; support the team to confront the tensions head-on
Section: 1, Chapter: 4
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