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In today's technology-led world, new companies are taking off faster than ever. In 2010, the number of new business applications was 2.5 million. Fast forward 11 years to 2021, and the number jumped 116 percent to 5.4 million. But they are also failing faster. According to the latest data, 10% of new businesses don't survive the first year, and 90% of startups fail over the long run.
One of the culprits, other than the bad product or lack of proper product-market fit, is that some companies expand so quickly that they outrun the process of putting in place a holistic growth strategy that's based on adaptability, ongoing learning, and customer understanding.
For Subscription League Podcast Episode 13, we invited Hannah Parvaz, an award-winning app marketer and the Co-founder of a London-based growth agency, Aperture, to talk about some of the most valuable growth lessons she learned throughout years of research and experience in growing numerous brands to ten-figure yearly revenues.
In this episode, you will learn about:
The conversation with Hannah dived straight into the discussion around “growth mindset”, an essential theoretical foundation that everyone in a company aspiring to grow should be aligned with.
A growth mindset is a way of viewing challenges and obstacles. People with a growth mindset use feedback and mistakes as opportunities to improve while actively engaging in the process of learning and trying again until reaching their goals. By contrast, people with the opposite mindset perceive challenges and obstacles as signs of limitations they should avoid.
Hannah believes that a growth mindset enables a company's continuous and profitable growth and that it's not up to one person but to everybody to drive it. When embracing the mindset, everyone in a company can purposefully seek failures (instead of blindfolding or indulging in self-praise) to zero in on the clues of improvement and growth maximization.
Hannah said, "any person who works in growth, their whole career is built on a series of failures."
In the same sense, failures in business do not mean the end of the world. It's quite the opposite. At the beginning of every sought-after improvement and customer satisfaction, there is a failure - bringing it to the surface, examining its cause and solution, then turning the tables.
Most of the trailblazing inventions and innovations throughout history, from the birth of the Braille system to the advancement of commercial aviation, have something in common: curiosity - the need to know, the need to explore possibilities, and the need to seek information and solution to reach closer to those possibilities.
When curiosity is cultivated at a collective level, colleagues and peers can stimulate the thirst for ideas to improve, learn from each other, or/and put heads together to tackle common challenges.
The further along a company is, the harder it can be to get everyone aligned with the concept of "being curious together" as people come from different organizational structures where sometimes interdepartmental collaboration is not a habit. Another way companies can shift to a growth mindset is by breaking down those departmental barriers. It takes understanding that there's not one team that's more important than others but that everyone is working on the exact same goal and the exact same metric.
Growth professionals can also help. If cultivating a growth mindset is like conducting an orchestra, growth professionals such as the head of growth can play their role as a conductor by sitting at the intersection of different teams and getting everyone and their ideas on the same level, identifying priorities, and validating them through learning and experimenting.
Shifting to a growth mindset is not only about getting ideas out of people but also about what comes after - finding the right process to solve them, which is the harder part. A team can put together a hundred ideas but often get lost in setting priorities.
Hannah's suggestion is to target the low-hanging fruits, which involve fewer ambiguities, resources, and most importantly, less time before moving on to more challenging work. The point is not to exclude the higher apples and oranges on top. In fact, low-hanging fruits can act as stepping stones toward them when they have a directed purpose within a long-term business plan. What is important is once the easier goal is attained, the next stage, then the other should quickly follow after. On the other hand, when the result is not satisfying, celebrate the failure and invest more in learning and exploring better solutions, so the same failure does not repeat itself.
Everyone is talking about the North Star metric - the one metric that matters. Gain 10 paying users per day; Gain 10 reviews per month; Raise $2 million. Typically, these are not North Stars but vanity metrics. If you focused on the number of reviews, you'd be ignoring a more powerful one: what are your customers saying in those reviews? If you are fixated on the number of paying users per day, you'll also be missing out on the insight into how long and often your users are using your app.
In this sense, some metrics can be important in isolation when monitored alongside other metrics, but fail to signify the real return on investment or long-term revenue performance.
Hannah defines the North Star metric as a metric representing both the customer and the company, such as time spent or active users. Then because a single north star metric gives insight into only one part of the business, she recommends setting up early on multiple key metrics and considering them as levers to impact the North Star.
Hannah believes that understanding customers is the No. 1 job of any business. Understanding customers is indeed the key to ensuring good service, which in turn results in customer loyalty, and new, recurring and increased sales.
However, understanding customer psychology is not easy and most often starts with a wrong aim. Many product and marketing teams focus on finding out how the customers are using their product or service. But Hannah points out the focus has to be put on why, who the customers are, and what their jobs are to be done.
Then how can we drive such insights? By having conversations, not interviews, which is usually the format many companies use to talk to their customers. Hannah suggests that by stripping all the formalities from the process of understanding customers, we can finally bounce ideas and reach places that we wouldn't usually reach with a rigorous list of interview questions: what are their fears, anxieties, hopes and dreams.
Listen to the full episode to learn more about Hannah's advice for startup subscription businesses, growth mindset, her experience and lessons learned, the "jobs to be done framework," and some book suggestions!
“It's not just one person's job to gain all of the learnings in the company. It's up to everybody to learn and to drive this mindset.”
“It's true that a lot of teams also have elements of growth and elements of learning within them, but it's not until the whole company unifies around it and everyone starts to collaborate more”
“The growth mindset is about learning as quickly as possible so that you can improve your metrics as quickly as possible.”
“I would say that any person who works in growth, their whole career is built on a series of failures-”
“A North Star metric is something that represents both the customer and the company.”
“An awesome metric is not something that you can manipulate very easily.”
“The reason that subscribers, as on its own, isn't necessarily a great North Star metric is because that means that you're only focusing on getting people to pay you and you're not focusing on what happens after that.”
“We work out which areas can have the biggest impact on your North Star metric. We can think about these as levers.”
“When we're having an interview with a user, it always, to me, feels very clinical and it feels very scripted.”
“We're usually bouncing ideas around, we're getting much deeper than we would in a normal user interview. We're talking about our fears, we're talking about our anxieties, our hopes and our dreams. We reach places that we wouldn't normally reach in just something that we think of as an interview.”
“It's really important to know that it's a conversation that you should be having, not a rigorous list of questions”
“There's a theoretical framework called Jobs to be Done. This theory says that everybody has something to achieve.”
Hannah Parvaz is the Co-Founder of Aperture. A multi-award-winning marketer, coach and mentor, Hannah was named App Marketer of the Year in 2019 and has spoken internationally on the future of app growth, privacy, and leveraging data analytics.
Having worked with more than 200 companies, Hannah is passionate about supporting & lifting others within the industry; mentoring on Google Launchpad, coaching for Startup Core Strengths, and gaining a 5-star rating on GrowthMentor.
What is a growth mindset and why it's important
How companies can shift to a growth mindset
How to balance ideas and prioritize them
Advice on setting the right North Star metrics
User interview vs conversation
Recommendation for jobs to be done framework
Lessons that Hannah learned
Go to SubscriptionLeague.com or subscribe to our podcast on Apple Podcasts, Google Podcasts, Spotify, Podcast Addict, Amazon Music, or wherever you listen to your podcasts.
HAPPY LISTENING!
Previous episodes:
#1: Phiture - All about Retention with Andy Carvell
#2: Babbel Live - How to create a success in a crowded market with Belen Caeiro
#3: Mojo - Strategies you should focus on for a successful subscription business with Jean Patry
#4: The Guardian - Growing the user base The Guardian way - with Jesse Wilkins
#5: Blinkist - Using transparency to increase your conversion rate with Eveline Moczko
#6: Rootd - How to bootstrap #1 health and fitness app with Ania Wysocka
#7: Luni - Subscription Marketing 101: tips to drive acquisition and retention with Adrien Miniatti
#8: Uptime - How to build a successful user-first app strategy with Léa Samrani
#9: GP Bullhound - What venture investors look for in subscription apps with Eric Crowley
#10: Phiture - How to optimize mobile app subscription with Andy Carvell
#11: Jodel - Shifting from ads to In-App Subscription-led revenue generation with Tim Schmitz
#12: BlueThrone - Product market fit, Subscription, and Other Secrets of Success by Idan Waller
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