50 Principles for Startup Marketers

Principles to help modern marketers grow software products faster and accelerate their careers

I wrote these Principles after 10 years of reading and applying many lessons on growing and marketing software from incredible practitioners. These Principles were revised and edited down 50+ times after years of growth experiments, failures, and successes.

Many of these ideas aren’t my own, but I can vouch for their effectiveness. Applying these Principles is how I:

• Became the CMO of a $50M+ annual revenue software company (joined at $8M)
• Previously acquired 1.6M paying customers (*not users) for early stage software companies

These Principles are for software entrepreneurs and marketers:

• Looking to focus on less things, but the right things for growth
• Wanting a First Principles-based approach to growing and marketing software
• Wanting a repeatable process for growth that isn’t reliant on single tactics
• Aiming to move faster in their careers

Macro Marketing

1. Successful marketing means mastering scale and unit economics

2. Scale means a channel or tactic’s potential for customers

3. Unit economics means a channel or tactic’s cost vs. revenue and profit per customer

4. A common mistake with unit economics is only measuring cost to acquire and not cost to reactivate or retain; all matter for healthy growth

5. When it comes to finding successful marketing channels, start with Traction: How Any Startup Can Achieve Explosive Customer Growth

Marketing Mix

6. A strong marketing mix includes Awareness, Consideration, and Conversion

7. Maximizing your bets across all three with good unit economics and quick ratios is how to never get fired

• Awareness: prospective customers know who you are
• Consideration: prospective and active customers know your value and how you’re different
• Conversion: you have a playbook to convert prospective customers and retain active ones

8. Direct ROI on awareness marketing is usually unrealistic if you’re trying to build for real scale (thanks for this one, Nate)

• If you don’t spend on awareness, you risk an insufficient # of prospects (i.e. people aware and/or considering) to convert and continue considerable growth
• This isn’t an excuse not to measure rigorously
• Commit to tracking awareness spend separately with the key metric(s) being impressions/reach/CPI/CPC/CTR to your target audiences
• Ruthlessly optimizing lower funnel marketing and product is the only way to keep scaling awareness marketing assuming you care about favorable cost to lifetime value ratios

Customer Types and Real Growth

9. The most important formula for growth is Active = New + Reactivated + Retained

10. Active customers is an output metric and often given too much focus

11. Only focusing on Actives can also lead to Fake Growth

12. Fake Growth is a favorable CMGR where lots of customer acquisition masks unhealthy churn

13. New, reactivated, and retained customers are input metrics and often not given enough focus

14. New, reactivated, and retained are mutually exclusive, and thus, a wonderful way to understand strengths and weaknesses to growth

• New customers use your product for the first time in [insert period]
• Reactivated customers use your product in [insert period], not in the preceding period, but in some period before that
• Retained customers use your product in [insert period] and in the preceding period

15. Your marketing mix must balance each customer type if maximizing healthy growth is the goal

16. Social Capital’s Quick Ratio is the best most honest way to assess product-market fit (P/M fit) and real growth

17. Marketing’s purpose pre and post P/M fit are very different

18. Pre P/M fit, marketing is a tool to drive customers to learn how to achieve P/M fit; if you try to grow pre P/M fit, you’ll light money on fire

19. Post P/M fit, marketing is a tool to drive customer growth

20. The best engine for growth is a great Product, not Marketing (i.e. strong Quick Ratios)

21. If a company perceives Marketing as the only team responsible for growth, run

22. A common marketing spend mistake is spending too much on New, not enough on Reactivated, and not knowing what you spend on Retained (i.e. Are you wasting money on already returning customers?)

Growth Stages, Frameworks, and Process

23. There’s four stages to growth

• Making something enough people want and will pay for
• Hypothesize models for growth (all below: use AARRR and/or Growth Loops, fold in ICE)
• Test rapidly to validate your growth hypothesis
• Confirm tests, double down, and repeat

24. The best old school framework to measure what matters is Dave McClure’s Startup Metrics for Pirates (AARRR)

• Acquisition: prospective customers come to your product
• Activation: prospective customers become customers
• Retention: active customers continue being active customers
• Revenue: users get to revenue (i.e. customers), or active customers get to higher LTVs
• Referral: users or customers market the product for you

25. Good marketers do acquisition; unicorn marketers do all five (AARRR)

26. The best new school framework to measure what matters is Brian Balfour, Casey Winters, Kevin Kwok, and Andrew Chen’s Growth Loops

• Loops answer, “How does this product grow?” on more macro level than funnel frameworks
• Loops provide compounding growth and may be more defensible than funnels

27. The best framework to prioritize an individual or team’s time is ICE (Impact, Confidence, and Effort)

• Impact: if this works, how big can it be for profit, revenue, customers, etc.?
• Confidence: what’s the likelihood that it works?
• Effort: what’s the human, time, and financial cost to find out if it works?

Growth Teams

28. Smaller startups shouldn’t have growth teams

29. The most important attributes (*not skills) of Growth Teams are curiosity, humility, discipline for process, grit, and a belief in idea meritocracies

• Curiosity: the best test ideas usually come from customers. The next best ones usually come from reading, reflection, and inspiration outside the office
• Humility: experiment results often surprise; even the best Growth Teams are wrong a lot
• Discipline for process: great Growth Teams can look boring. Same meeting cadence, agenda, and process to prioritize/test/measure/learn/repeat
• Grit: Growth Teams are paid to be wrong a lot. Being wrong leads to learning. The best keep going.
• A belief in idea meritocracies: the best idea should be tested. Doesn’t matter who or where it came from.

30. Generally, a solid growth team makeup is a team lead, technical marketer, full stack developer, full stack designer, and a data analyst (that’s experienced and technical enough to moonlight as a QA engineer)

• Team lead: keeps morale high (hard since most experiments fail) and maintains discipline for process
• Technical marketer: doubles as team product manager and measurer and communicates learnings
• Full stack developer: can set up majority of tests without much help
• Full stack designer: can polish experiments or take the lead if more front-end focused
• Data analyst-QA engineer: many of the best wins are just fixing bugs in core flows and experiences

31. Growth teams need buy-in from the top. If it’s not there, don’t bother.

32. Starting and finishing tests regularly is almost everything to start; forget about results

33. The formula for growth = # tests run * average test impact” * test success rate

34. # tests run is the only one fully in your control; hence why it’s almost everything to start

35. Growth is optional

Easy Wins

36. Brian Balfour’s Building a Growth Machine is how you build a constant engine for new, good ideas

37. Great tactics come from great process, but there’s a handful that usually work (below)

38. Apply Pareto to all parts of the customer lifecycle (i.e. lead gen, sales, product roadmaps, support, etc.)

39. Conversions congruence (i.e. Copy, Design, etc. that matches on ads and landing pages) will drive more efficient spend (linked are my favorite one-stop sources)

40. Fixing bugs in core flows is usually the highest ICE-scoring opportunity for post-P/M fit products

41. Activate first, educate later

42. Personalize whenever possible

43. In other words, subscribe to Andrew Chen’s The Minimalist Funnel when it comes to product and activation

• Strip things down and ask for as little as possible
• Just get the user into the product so they can experience the magic (ask for most info later)
• The only exceptions are email/push/text permissions and key “personalization” steps

44. Use logistical regressions to find your product’s AHA Moment

• Logistical regressions are how Facebook discovered “7 friends in 10 days” was their growth engine
• The AHA Moment is when someone realizes your product’s value and often tells others about; to find your AHA moment: (1) Organize your historical data so each row is a user (2) Have a column with your binary dependent variable such as retained users (3) Users that complete this goal get a 1, everyone else gets a 0 (4) Have additional columns with possible independent/explanatory variables (E.g. 7 friends in 10 days), noting a 1 or 0 depending on if the person did this (5) Use R or Excel to get coefficient and significance level for each independent variable

45. Spend 80% of time doubling down on channels and tactics with good scale and unit economics and 20% of your time testing new ones (the others will become saturated and less effective in time)

Attribution

46. Google Analytics is usually sufficient for attribution for early stage companies

47. The best alternatives to last-touch attribution that tell a more accurate story of a channel’s value are Shapley Value and Markov Chain

48. Brand and offline marketing channels are measurable: you can do a lot with unique codes, landing pages, and post-order surveys and indices

People, Culture, and Management

49. Radical candor is the best way to manage

50. Good managers do three things: listen, care, and follow through