Building the foundation for sustainable growth towards 100K active Nash users

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(Rdb1983) #1

TL;DR: This post covers tactics, tools and frameworks to grow the Nash userbase for the long term.

With the first beta release behind us and looking forward to the public launch we are at the forefront of Nash opening its doors. It’s very exciting for everyone involved. Lots of people have been waiting for this time to finally use the product that has been built with a relentless focus on quality, security and user experience. The basic ingredients for long-term success.

Opening the doors means it’s also time to start attracting, engaging and analyze the users of the platform. I like the quote from Marc Benioff (founder Salesforce), on what makes a successful business:

“Great businesses are formed at the Venn diagram intersection of a great product and equally great go to market.”

This post is about the latter - go to market and growth. My intention is to bring this community up to speed on how growth as a concept works. Because the average assumption in this industry on growth is more like: “We build the product (or not), hype it, and it will grow”. I don’t believe this is the right mindset for a sustainable business. A community that understands growth as a concept, is also in a way better state to think of creative ways to help Nash grow. Community intelligence is an undervalued aspect amongst other projects in this space. It’s where we can make a difference where people come for the tool but stay for the community.

First of all, as a disclaimer - this is logically my personal view of what I would do to build the growth stack for Nash. Timing and strategy wise, I have no idea if this aligns with the Nash company strategy. I’m just providing my personal view. That said, let’s start with the basics.

In order to build a foundation of growth, we need:

  1. Stack (tools)
  2. Framework (AAARR)
  3. Model
  4. Team

1) What’s a growth stack?

Growth stacks are the groups of technologies that marketers use to execute, analyze and improve their marketing across the customer lifecycle.

The first and most common mistake made is that these technologies solve your issue of growing the customer base. They don’t. They help the team and company facilitate the process.

So, how do you approach to build the optimal growth stack for Nash?

We start with strategy. We build a strategy with a known and proven framework. And we fill the gaps. A strategy needs to be the foundation of any marketing stack, one that takes into consideration who you are, what your goals are and who you’re trying to reach. Without this foundation, your marketing stack can become a set of siloed tools that will bog your team down in complexity.

Introducing the AARRR framework.

AARRR stands for Acquisition, Activation, Retention, Referral, and Revenue and is pretty much the best framework when it comes to understanding your customers, their journey and optimizing your funnel as well as setting some valuable and actionable metric goals for the company.

In this post, I’ll primarily focus on the first 3.

1. Acquisition - “Where are our users coming from?”

Where are our users coming from, and which distribution model works for driving traffic? In total there are 19 channels that are able to drive traction and generate traffic, leads and ultimately new users for Nash.

The goal is to find which distribution model is optimal, through experimentation. As you’ll see on the list - Nash is already working on a few channels for user growth. The goal of growth marketing is to nail distribution channels. As Peter Thiel (co-founder PayPal/ early investor Facebook) states:

*Most businesses actually get zero distribution channels to work. Poor distribution — not product — is the number one cause of failure. If you can get even a single distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished. So it’s worth thinking really hard about finding the single best distribution channel.

Which channel works for Nash? We don’t know, yet. In order to find this out, we could make use of the Bulls Eye approach. This is a simple 3 step approach to experiment which channel is driving users.

Tools to use (Stack) in this stage of AARRR: Adwords, Buffer, Adroll, Quantcast, Instapage, Unbounce, SEMrush, Moz, Serpstat.

2.Activation

Activation is all about the first experience the user has with your product. It is not enough to get people just to sign up for Nash if they are going to stop using the product right after. That’s why it’s crucial to get users to the “Aha Moment” , which is the first time the user realizes the real value in the product, as quickly as possible so that he/she keeps coming back. The time between when the user signs up and when she says “Holy cow, I love this”, that is activation in a nutshell. This is obviously the focus of Nash. That’s why they are testing so thoroughly and involving community feedback and input. If you nail this part of the user experience, you’ve won a lot. If you don’t nail this, and start driving huge amounts of quality traffic to your product, you waist a lot of effort and ad spend (money) because it is a leaking bucket. Meaning you ‘lose’ significant amounts of volume and liquidity…

Finding the Aha moment…

So, an activated user is someone who keeps coming back to use your product. Facebook realized early in their growth that the “Aha Moment” for a user occurred when they acquired 7 friends in 10 days, which is why they synced your email account with Facebook to suggest friends. (Feedback loop…)

Twitter realized that once you followed 30 people you were more likely to come back so they suggest popular accounts when you sign up.

Dropbox saw that users who uploaded at least one file were much more likely to use Dropbox again and so, you guessed it, they encourage you to upload a file during signup.

So, the goal of this stage is to find the “aha moment’ for new users that sign up for Nash.

Tools that can help provide these insights: User testing, Userlane, Hotjar, Kissmetrics, Mixpanel, Google Analytics

3. Retention

According to Harvard Business Review it’s 5 to 25 times more expensive to acquire a new customer than to retain an existing one. Think about this. Especially in this industry, loyalty to an exchange is extremely low. As soon as there is a better exchange, people leave their current one. Bittrex was switched for Binance instantly. Binance won’t be the longtime winner i.m.o just because of their lack of focus on true user retention. People stay because of the liquidity and short hypecycles for a quick buck. It’s short-term brand loyalty.

This stage is where Nash can win big. If the focus on keeping users coming back stays a top priority no matter what, we’re going to win this game. The platform transforms to last and a billion users are eventually within reach. Sustainable growth is built on retention.

Tools that help in this stage: Userlane, Hotjar, Kissmetrics, Mixpanel, Google Analytics

The growth stacks of other players in the industry

To get an understanding of what competition in this area is using, I use a tool called Siftery. It gives a high-level overview on what tools they use to track and grow their customer base.

See here for example the growth stack of Coinbase: https://siftery.com/company/coinbase

For the initial marketing stack, I’d use:

Acquiring new users:

  • Adwords
  • Social tracking (Hootsuite)
  • Built In-product features
  • Lead generation tools (such as instapage)
  • Optimizely for A/b testing the conversion funnel

Activating & analyzing users:

  • Optimizely for A/B and multivariate testing in-app and on site.
  • Tableau, Looker or in-house built tooling

Retention of users:

  • CRM
  • Sendgrid for mail or any other tool that has a high deliverability
  • Segment to unify all user data and personalize the customer journeys
  • Tableau, Looker or in-house built tool for Business Intelligence

In the end, it’s making sure that people, process and programmes are aligned for bringing the best and most optimal customer experience.

2. Building a prediction model for growth.

A Growth Model is a representation of the growth mechanics and growth plan for your product: a model in a spreadsheet that captures how the product acquires and retains users and the dynamics between different channels and platforms. Having a well-tuned growth model for your product is important for several reasons:

  1. A growth model can help you forecast how much growth to expect over a certain period of time.

  2. It can also help you simulate growth outcomes for different initiatives.

Important to understand, the most common mistake made with Growth Models: It’s all about the inputs, not outputs .

The average growth model I’ve seen starts with a principle user base and an average monthly growth rate. The problem with this is that it doesn’t tell us anything about where those users are actually coming from. Why will the user base grow at a neat, consistent rate of 15% month on month? Where will all those new users come from?

There are three kinds of inputs that form the essential dynamics of your model:

  1. Acquisition channels
  2. Activation & Retention
  3. Growth Loops

To explain how a model is being created, I created an example over here:

The growth model explained.

The first input is your acquisition channels (Tab 2). Let’s assume that our performance marketing budget is expected to be the main driver of installs. We start our model by plugging in monthly acquisition budget and the estimated CPA (cost per acquisition) to model user acquisitions over 12 months. We’re also expecting a boost of signups when we launch, and social media traffic, and a co-marketing partnership.

Now we’ve modeled the incoming acquisition channels. But how many of them are actually staying? To understand your MAU (Monthly Active Users), we need to apply the retention dynamic. As the product hasn’t launched yet, we don’t have 12 months of retention data to apply. So we use our best guesstimate (tab retention)

Then you can apply the retention dynamic on a monthly cohort basis to your acquisition channels to calculate our Monthly Active Users.

The last thing you want to add to your model is the growth loops that are operating on top of the acquisition channels. Let’s assume Nash has a sharing feature that leads to an average of 5 new signups for every 100 users each month (a viral factor (K-Factor) of 0.05). We can add this to your model to understand the boost in signups from the viral sharing feature.

This is essentially how you model growth. Please know, the above is quite simplified and based on many assumptions. However, as I stated, my goal is that the community understands the concept.

Start small: Optimize the micro KPI’s.

Micro KPI’s are the metrics or indicators we use to track performance. “How many visitors convert to users signing up”, “how many sign-ups become active users”, “When does a user become an active user”?Etc etc, the goal is to optimize per micro kpi.

Maybe the “Aha moment” will be when someone has 25$ in their account and makes their first three trades…who knows. We need to experiment with this, and evenly important - measure this with analytics.

The good thing which gives me confidence is that @Ethan knows a thing or two about A/B testing for quite some time and even worked on algorithms to optimize conversions, I believe. So growth experience is with the CTO, which is a big plus and gives me a lot of confidence.

Building the growth team for Nash:

The foundation of growth is only sustainable with the most essential element: the right people.

Successfully growing the business needs first and foremost the right team. From my perspective, the initial team should have:

  1. Growth Director (to manage initiatives and optimization campaigns aligning with the strategy)

  2. User acquisition lead

  3. Optimization lead (ideally w/background or experience in psychology)

  4. Web analyst (experienced, not a medior or beginner)

  5. Front-end devs/UX designer

  6. Copywriters w/ CRO experience

In the end, it’s making sure that people, process and programmes are aligned for bringing the best and most optimal customer experience.

Final note:

Sustainable growth is built to last. If we want to be there in 2030, we better focus on greatness over growth for now. I see the Nash team thinks the same. Hypergrowth brings a lot of unwanted side effects and is usually short-term, instead of long-term.

Other great reads on growth:

https://andrewchen.co/theres-only-a-few-ways-to-scale-user-growth-and-heres-the-list/

http://www.paulgraham.com/growth.html

My previous posts on growth:

The Nash effect

Product virality

30 Likes
Product virality: The untapped potential of Nash payments
(Nash101) #2

First of all I wanna express my huge appreciation of this free lesson about growth strategy.
Thanks for taking your time and sharing your knowledge and experience.

I am just curious, if your guestimated figures are coming from a sort of “industry standard value” or your personal experience.

If I am looking at “Referral campaigns”, “Social Media” and “Partnerships” you weighted social media as lowest conversion measurement.
Is this your personal assumption or some industry experience you are applying?

Does a bigger paid marketing budget necessarily mean you are definitely reach more people? I know this sounds trivial, but just throwing money a marketing instruments/tools doesn’t mean you are automatically getting such results and CPA could be also much higher, if you don’t set it up smart, right?

I have no experience in such fields and I am asking this just because it caught my interest.

5 Likes
(Niranga) #3

this is such a wonderful explanation

(Trust Yourselves ) #4

Thank you. Great post. You’re building an educated following base for Nash. Compared to other projects, the Nash following base seem to be very intelligent people.
To add, everyone here invested in this project in the height of a bear market. We’ll all be long time followers.

Thanks again!

3 Likes