A Simple Framework for Startup Growth
One of the most common—and deceptively simple—questions founders ask is: “How can I grow my business faster?” It feels like the kind of question that should have a straightforward answer. Yet, as many CEOs discover, growth is rarely straightforward. It’s a balancing act between multiple forces, each pulling in different directions.
The key to unlocking growth lies not in doing everything at once but in identifying and addressing your most significant constraint. Inspired by the principles in The Growth Equation, this framework helps founders zero in on the specific areas holding their business back.
The Growth Equation
Growth doesn’t happen by accident. It’s the result of several forces working in harmony. Think of your business as a system: if one part falters, the whole system slows down. These are the seven key factors in the equation:
Audience: How many people know about your product and have the problem it solves?
Motivation: How motivated are these people to overcome switching costs and give your product a try?
Value: How effectively and consistently does your product deliver on its promise?
Stickiness: How well does your product integrate into users’ lives, ensuring they stay engaged and don’t churn?
Virality: How naturally do your users bring in others, creating a flywheel of growth?
Friction: What obstacles—big or small—are frustrating users and causing them to leave?
Competitive Pressure: How effectively are your competitors addressing these same factors to win over your audience?
Every growth challenge can be traced back to one or more of these factors. However, trying to fix all of them simultaneously is a recipe for overwhelm. The secret to faster growth is finding your weakest link.
Diagnosing the Bottleneck
The most important question you can ask is: If every other factor were working perfectly, would this one still hold us back? This process of elimination simplifies a complex system, allowing you to focus on what matters most.
Let’s break it down:
Audience: If we had flawless motivation, value delivery, and retention, would our reach still be too small?
Motivation: Are potential customers eager enough to try our product, or are switching costs holding them back?
Value: Once customers try the product, do they quickly see the promised benefits, or do we struggle to deliver?
Stickiness: Are users integrating the product into their daily lives, or do they stop using it after initial excitement?
This process helps you identify the biggest constraint in your system. For example, if motivation is high but stickiness is low, you may have a product that attracts users but doesn’t retain them. Solving this issue unlocks a compounding effect on growth, as retained users drive referrals and increase lifetime value.
A Hypothetical Example
Imagine a SaaS company struggling to grow. After reviewing the Growth Equation, they identify the following issues:
Their Audience is small but growing steadily through word-of-mouth.
Motivation is moderate; customers are interested but hesitant due to perceived complexity.
Value delivery is inconsistent, with new users struggling to achieve quick wins.
Stickiness is low, with many users churning within the first month.
The product lacks Virality, and competitors are aggressively targeting the same audience.
At first glance, it seems like everything needs fixing. But digging deeper reveals that Value is the root cause. When users don’t experience value quickly, they lose motivation, churn, and fail to recommend the product to others. By improving onboarding and helping users achieve early success, the company can address multiple downstream issues at once.
Turning Insights Into Action
While all seven factors are interconnected, the key is prioritisation. Start with the area that’s causing the most damage to your growth, then work systematically to strengthen it. Here’s how you might approach this:
If Audience is the issue, double down on marketing and awareness campaigns. Experiment with new channels to expand your reach.
If Friction is the problem, simplify your product’s onboarding, pricing, or user interface to make it easier for customers to engage.
If Competitive Pressure is intense, find a niche where your product shines and build a defensible position there.
This approach ensures you’re always working on the most impactful area rather than spreading yourself thin.
Why This Framework Works
The beauty of the Growth Equation lies in its simplicity. It cuts through the noise, helping you and your team align around a single point of focus. Instead of chasing vague ideas like “we need to grow faster,” you can pinpoint the specific issue holding you back and take targeted action.
It also creates a feedback loop: as you improve one area, it often strengthens others. For example, increasing retention boosts word-of-mouth referrals, while reducing friction can improve conversion rates.
The Path to Sustainable Growth
The next time you’re wondering why your business isn’t growing faster, ask yourself: Where should we start? Use The Growth Equation to identify the bottleneck, prioritise your efforts, and unlock the next phase of growth.
Remember, growth isn’t about doing everything at once. It’s about doing the right thing at the right time. With this framework, you’ll know exactly where to focus—and how to move forward.