The most frequent question
One of the most frequent questions that founders ask is – I’ve read all about the importance of user growth, so now, how do I hire a Head of Growth? It’s asked often for good reason. Growing your startup’s users and revenue is so critical that it makes sense to hire someone to run it, and to potentially add a team underneath them to support this goal. It’s been a decade since “Growth Teams” became popular in the industry, sprouting up at places from Facebook and LinkedIn to Uber, Slack, Dropbox and others — and it’s natural that startups want to replicate the strategy.
However, it’s rarely easy to hire a Head of Growth. Aside from the historically tight labor market for these skills, it’s also tricky to have a simple answer to the question. “It depends” is the right place to start.
First, you have to define the correct job requirements, and what you’re looking for ultimately depends on the context of your startup — Are you trying to get your startup off the ground? Or are you trying to scale its success? Or are you focused on fending off competitors? Or growing yourself out of a saturation point. Depending on your goals, you should be looking for different things. The initial step is to define your needs.
In this essay, I’ll aim to answer this critical question — how do you hire a Head of Growth — using parts of framework from my upcoming first book, The Cold Start Problem. In the book, I describe stage-by-stage how to successfully start and scale the central forces that power tech’s most successful companies — network effects. Network effects emerge when products, like marketplaces, social apps, B2B collaboration tools, and so on, get more useful the more users that are on them.In the book, I present 5 distinct stages of a product’s lifecycle that require different goals and skillset, and understanding these stages will help you answer the more important question:
How do I hire a Head of Growth for my stage in the framework?
Let me start by spending time on each stage.
Which stage of the startup journey are you on?
I want to excerpt a passage from The Cold Start Problem that describes each of the stages, but please have some important things in mind: Not every product has network effects. After all, some are simply utilities for individual users. However, for the ones that do — and many consumer apps and consumerized workplace apps do — it’s an incredibly powerful idea that fundamentally changes the dynamic of the journey. Many startups fall in this category, and there are unique growth challenges when getting these types of products off the ground.
At this point, I’ll take a few sentences to describe “The Cold Start Problem” — one of the central ideas in the book. The idea is that for every network effects-driven product, there’s an existential problem at the beginning where users won’t find a product valuable if there’s no other users on it. Imagine a dating app with no profiles on it, or a new video app with no users and no content. Or a workplace chat app where none of your coworkers are active. These products are useless, and it’s kind of a circular problem, since to get users you need users. That’s the Cold Start Problem.
And as you might imagine, if you want to hire a Head of Growth while you’re in this first phase, that is very different than someone who is taking you from tens of millions of users to hundreds of millions of users, which is primarily the phase that I experienced at Uber.
Here’s an excerpt from The Cold Start Problem on each of the stages in the book’s central framework:
The central framework described in this book is a new way to think about network effects — split into stages, each with its own distinct challenges, goals, and best practices. My goal is to not simply to describe what happens as a network grows and evolves, but actually how to take action and propel a product from one stage to the other.
There are 5 primary stages:
The Cold Start Problem
Hitting the Ceiling
1. The Cold Start Problem
The framework for the book starts with an empirical insight: Most networks fail at the beginning. If a new video-sharing app launches and doesn’t have a wide selection of content early on, users won’t stick around if they can’t find what they want. The same is true for marketplaces, social networks, and all the other variations – if users don’t find who or what they want, they’ll churn, but this leads to a self-reinforcing destructive loop. In other words, it is the average case that the network effects that startups love so much actually hurt them. I call these “anti-network effects” because these dynamics are downright destructive – especially in the early stage as it’s getting off the round. Solving the Cold Start Problem requires getting all the right users and content to be on the same network at the same time — making for a difficult launch plan.
This is the Cold Start Problem, and to solve it, I look at a series of examples — examining Wikipedia’s most prolific content creators, the invention of the credit card, and how Zoom launched a killer product. From these case studies, I describe an approach that focuses on building an “Atomic Network” — that is, the smallest possible stable network that is stable and can grow on its own. For example, Zoom’s videoconferencing network can work with just two people, whereas Airbnb’s requires hundreds of active rental listings in a market to become stable. I also look at the product idea at the heart of every network effect, and the similarities many startups have used to pick the product and its features. I also ask, what are the first, most important users to get onto a nascent network, and why? And how do you seed the initial network so that it grows in the way you want?
2. Tipping Point
It takes an enormous amount of effort to build the first atomic network, but it’s obviously not enough to just have one. To win a market, it’s important to build many, many more networks to expand into the market — but how does this happen, at scale? Luckily, an important dynamic kicks in: As a network grows, each new network starts to tip faster and faster, so that the entire market is most easily captured. This is the second phase of the framework, the Tipping Point. I use Tinder as an example here, showing their initial launch at USC, but then how their success then unlocked other colleges in, then larger cities like Los Angeles, and then the broader market — including India, Europe, and other markets.
Imagine network launch as tipping over a row of dominos. Each launch makes the next set of adjacent networks easier, and easier, and easier, until the momentum becomes unstoppable — but all radiating from a small win at the very start. This is why we so often see the most successful network effects grow city-by-city, company-by-company, or campus-by-campus as rideshare, workplace apps, and social networks have done. SaaS products often grow inside of companies — landing and expanding — which also jumping between companies as employees share products with partner firms and consultants. This is when a market hits its Tipping Point.
3. Escape Velocity
When a company like Dropbox, Slack, or Uber hit scale, it might seem like network effects kick in, and the next phase is easy. But it’s not — to the contrary, this is when technology companies start to hire thousands of people, launch a series of ambitious new projects, and try to continue the product’s rapid trajectory. The Escape Velocity stage is all about working furiously to strengthen network effects and to sustain growth.
This is where the classical definition of a “network effect” is wrong. Instead, I redefine so that it’s not one singular effect, but rather, 3 distinct, underlying forces: The Acquisition Effect, which lets products tap into the network to drive low-cost, highly efficient user acquisition via viral growth. The Engagement Effect, which increases interaction between users as networks fill in. And finally, the Economic Effect, which improves monetization levels and conversion rates as the network grows.
By understanding how these forces work, we can accelerate the systems that power them. For example, the Acquisition Effect is powered by viral growth and the user experience that compels one set of users to invite their others into the network. I describe examples like PayPal and their viral referral programs, or LinkedIn’s recommendations for connecting as tactics that increase the power behind the acquisition force. The Engagement Effect manifests itself by increased engagement as the network grows — this can be developed further by conceptually moving users up the “engagement ladder.” This is done by introducing people to new use cases via incentives, marketing/communications, as well as new product features — as Uber did as it leveled users up from airport trips to dining out to daily commutes. And finally, the Economic Effect — which directly affects a product’s business model — can be improved over time as well, by increasing conversions in key monetization flows and ramping up revenue per user, as the network grows.
Stitched together, all of these combine into a flywheel that can power networks into the billions of users.
4. Hitting the Ceiling
In many narratives about network effects, by the time a product has hit the Tipping Point, that’s the fairy tale ending of the company — it’s won. Ask the operators inside a company though, and you’ll hear a different story: A rapidly growing network wants to both grow as well as tear itself apart, and there are enormous forces in both directions.
This is when a network “hits the ceiling,” and growth stalls. This is driven by a variety of forces, starting with customer acquisition costs that often spike due to market saturation, and as viral growth to slows down. Similarly, there’s the Law of Shitty Clickthroughs, which drives down the performance of acquisition and engagement loops over time, as users tune out of stale marketing channels. There’s fraudsters, overcrowding, and context collapse — all natural outcomes of a network that grows and matures. And many other negative forces that grow as the network grows.
In the real world, products tend to grow rapidly, then hit a ceiling, then as the team addresses the problems, another growth spurt emerges. Then followed by another ceiling. Then another cycle after that, each one often successively getting more complex to address over time as the problems become more fundamental.
I look at a series of case studies as major products hit periods of slowing growth: The implosion of Usenet discussion groups from the early days of the internet, eBay’s slowing US business, to the origins of Nigerian prince scams. In each of these examples, sometimes they are easily dealt with and sometimes they destroy the network over time. The solutions are difficult — a successful product inherently comes with various degrees of spam and trolls. These are problems to be managed, not fully solved.
5. The Moat
The final stage of the framework focuses on using network effects to fend off competitors, which is often the focus as the network and product matures. While it is not the only moat — brand, technology, partnerships, and others can help — it is one of the most important ones in the technology sector.
However, there’s a problem — using network effects to compete with competitors is tricky when everyone in the same product category are able to take advantage of the same dynamics. Every workplace collaboration is able to leverage network-driven viral growth, higher stickiness, and strong monetization as more users arrive. Same for marketplaces, messaging apps, and so on.
This dynamic drives a unique forms of rivalry — “network-based competition” — that isn’t just about better features or execution, but about how one product’s ecosystem might challenge another’s. Airbnb faced this problem in Europe when a strong, local competitor called Wimdu emerged with a boatload in funding, hundreds of employees, and on paper, had more traction in its home market. Airbnb had to fight off its European competitor by competing on the quality of the network, and scaling its network effects — not via traditional competitive vectors like pricing or features.
Because all products in a category likely have the same type of network effects, competition ends up being asymmetrical while leveraging the same forces. A larger network and the smaller network in any given market have distinctly different strategies — think of it as a David strategy versus a Goliath strategy. The upstart has to use its smaller size to pick off niche segments within a larger network, and build atomic networks that are highly defensible with key product features and when applicable, better economics and engagement. The incumbent strategy, on the other hand, using its larger size to drive higher monetization and value for its top users, and fast-following any niches that seem to be growing quickly. I will also examine Uber and Lyft, eBay China and Alibaba, and Microsoft’s strategy of bundling new products, to go deeper on how networks compete.
By now, hopefully each of these stages are getting your wheels turning! Obviously this excerpt hints at a lot of different ideas that I cover in the book, and you can read more expanded versions of the ideas when it’s released!
Different skills for different stages
Back to the original question on hiring a Head of Growth. Since this essay is targeting at startups, I’m going to mostly focus on the first few stages of the framework and the skills that it implies for your new hire. If you look at each stage, they roughly imply a different set of problems you are trying to face – first, finding product/market fit and building the initial “atomic network” — a stable set of users who retain. Then finding the playbook for repeatable growth, and third, scaling growth into millions of users. The first few stages are very different:
The Cold Start Problem = Getting a critical mass of users to prove product/market fit
Tipping Point = Finding a playbook to find repeatable growth
Escape Velocity = Scaling up growth across many efforts and channels
And if you start to think about how this maps to the types of growth projects, some stark differences emerge. I’ll look at each stage and discuss, starting from the first stage.
Context, goals, and assessment for The Cold Start Problem
In many ways, the skills needed to succeed for the first stage are the hardest to define, because it’s the most generalist and entrepreneurial:
The Cold Start Problem
Goal: Getting a critical mass of users to prove product/market fit
Roadmap: A series of “Hustle”-driven efforts — often idiosyncratic, entrepreneurial, and surprising
Outcomes: A stable “atomic network” of users who retain, are engaged, and provide a launching pad for the next phase
The honest truth it, this stage is generally usually pretty random. If you read the stories of companies like Slack, Reddit, Dropbox, YouTube, Uber, and so on, you’ll realize that what worked for one company probably won’t work for you. Passing out discount codes at the train station works for a rideshare app, and a funny viral video works for YouTube, but that may not be relevant at all. So instead, the early stage usually requires a lot of elbow grease. It requires the founders to be very involved onboarding users, sometimes one-by-one, into the product. It’s usually a 100% focus on acquisition — and not much on retention at all, so it’s more hustle and less notifications/email-led.
As a result, the “Head of Growth” that makes sense here may not be one at all. Either there’s nothing to “head” — it’s such a small startup team that it’s probably an individual contributor role — or secondarily, the people heading the growth efforts here should actually be one of the founders.
That might be disheartening for a group of early founders to hear. They may want to focus on a superpower on product rather than learning a new skill on growth. Yet it’s critical to develop an intuition around go-to-market and validate hypotheses on a new product’s growth strategy. Often, the founder has to come up with a novel launch strategy, since hiring someone leads to more of the same. In today’s zeitgeist, creator partnerships for “creator economy” companies might be the cutting edge, or using NFTs as a way to attract new users. I’m just not sure that you can hire employees to do this kind of work. Sometimes the really entrepreneurial projects — in product, but also in growth too — just have to be done by the founders.
Sometimes this opinion makes founders grumble. So what if you really, really want someone to lead growth at this stage? If you really want one, I might try to find an entrepreneurial generalist and have them mostly execute a playbook that’s already worked in the past. If a team is building a new social app, I might suggest growing from high school to high school, or college to college. Or if it’s a workplace app, to use social media to drive beta users into a wait list. Things we’ve all seen work, rather than asking them to innovate totally new growth tactics. With luck, you might be able to hire someone who’s entrepreneurial and can execute those strategies. If they’re paired with advisors and operators who are experts on the playbook, that can work well. But I still like to push one of the founders to ideally drive or be the primary sponsor of the work.
What’s needed to succeed at the Tipping Point
The next stage starts once there’s a small group of users, often only a few hundred or thousand who seem to be coming back and where the network is stable. I often use benchmarks like D30 >20% or projecting out M12 to be >30% to try to assess this. But more importantly, it should be qualitative. It should feel like it’s working.
After that, it’s time to stamp out these networks in a more repeatable fashion — this is when the market begins to “tip” in your direction, and in the book, I refer to this stage as The Tipping Point.
Goal: Finding a playbook to find repeatable growth
Roadmap: Testing a series of more scalable growth channels, showing that if one network can be built, then multiple networks might be launched as well
Outcomes: At least one scalable growth strategy. Typically organic “pull” from the market combined with a scalable channel with reasonable metrics (CAC/LTV, or viral factor, or otherwise) going into in-app acquisition funnels
In the second phase, the Tipping Point, usually the growth efforts to focus on a set expert skills to scale rather than explore. If you are working on a product in real estate that competes with Redfin, the expert skill is probably figuring out how to capture high-intent traffic — like SEO/SEM. If you are working on social apps, it’s probably viral growth. If it’s a marketplace product, then maybe referral codes and paid marketing. Being able to successfully guess a startup’s most probably growth channels allows you to then recruit for a “Head of Growth” who can supercharge the strategy. At this point, it’s important to note that the focus is still on customer acquisition, although efforts to improve engagement might also start.
The “Head of Growth” at this stage is probably someone who is a doer. They should be able to create a detailed plan for how their first 6 months might look like, and the handful of people they might hire. This is someone who knows what they want, which is made easier since the company they’re growing has product/market fit. They are hands-on, and has maybe led a small team before, but I’d prioritize tactical know how over management skills. A hard requirement is that they’ve stood up a new growth channel from scratch before. It’s important to find a hire who hasn’t just maintained the strategy of bigger companies for years and years — they must know how to instantiate it out of nothing. I like to see people who are still very entrepreneurial, is potentially less specialized on a primary channel but maybe has done a few related growth areas — like a smattering of projects that cross through product-led growth, email marketing, and paid. (And yes, I get scared if they talk too much about hiring lots of agencies, big budgets for TV and radio, or if they’re pushing back hard against metrics — there’s a time for all this, but not right now)
During the interview, I tend to look for clear spikes in the specific channel that the team thinks is the most likely to succeed. While I’ll ensure they have a strong foundation for understanding growth, I also want them to be an expert in at least one growth strategy. In fact, I usually call this out — “usually people in growth are great at one channel, and know the other channels fine but less. What’s yours?” And I’ll follow that up with detailed questions about on their superpower channel, making sure — if they claim to understand email marketing — that they really understand how to improve deliverability, all the various tools in the market, technical details like setting up DKIM/SPF, etc. Or if they are focused on paid marketing, that they understand retargeting down to the level of understanding why tracking “pixels” aren’t really pixels, how cookies actually work, how to calculate CAC/LTV when conversions happen months later, and so on.
Does this sound hard to hire for? It is! Because the labor market is so tight for people with the right skills, sometimes the only choice is to cross-train someone from an adjacent category. I often like people who are former founders, or from product management or marketing who started their careers in banking/consulting. It helps if they show a deep quantitative interest in business. Similarly, product folks from highly quantitative categories like travel, games, and marketplaces tend to do well. I want them to be spikey in their skillset, and be strong at execution, even if they need to go to advisors and peers to figure out the actual growth strategy. If they can pick it up quickly, can attract and retain talented employees for the various specializations, it can sometimes be the Plan B. I tend to lean away from people from the brand world, or from agency work, or who have only worked at larger companies. Speed of execution is just so important here.
The biggest mistake I see here happens here is when the founders try to hedge their bets. They have a slide on “growth strategy” in their investor deck with 20 different ideas, when the key is to just iterate their way into 2-3 core things that work. In the end, the largest properties on the Internet are driven off of just a few growth loops — SEO and inviting for Linkedin. Direct sales and product-led viral growth for most B2B collaboration apps. A lack of focus means that the startup is perpetually finding the next quick growth hack, rather than starting to build a system for repeatable growth.
Next is Escape Velocity
At this point, the product is ready for Escape Velocity if it’s consistently growing >3-5x year-over-year growth rate with at least one (if not two) channels that are obvious levers. One oft-used metaphor is that the product becomes a “coin operated machine” where $1 of spend into the growth loops will spit out $5. Or if you just put X engineers on Y product optimizations, then the growth rate increases by Z. This is when growth becomes predictable, repeatable, and forecastable.
And with Escape Velocity, we see the emergence of the classic “Growth Team” that the big companies have.
Goal: Scaling up growth across many efforts and channels
Roadmap: Multiple growth strategies — primarily 2 or 3 — that work in concert to grow the product to millions or tens of millions of users
Outcomes: Multiple scalable channels, combined with optimizing the in-app acquisition and engagement loops
The “Head of Growth” in this configuration is really more of an executive than a tactician, though domain-specific knowledge is needed. This role starts to emerge with small growth team of >10 people, in a wider company of >50-100 employees. The Head of Growth becomes more of a people manager, can set strategy and recruit people onto the team with the needed skills, but also work horizontally across teams at the company.
The complexity happens across multiple dimensions. Both acquisition and retention both become priorities. On the acquisition side, it’s not just one channel but pushing into multiple new ones while maintaining the core. By this point, there’s a few growth channels that are working, but there’s a big push towards testing and adding new channels. Or at least variations of the channels. If TikTok ads are working, then maybe try Instagram and YouTube and other visual formats. If viral invites are working, then maybe add in referral programs and more sharing prompts. So often there is a big effort to just grow the core. At the same time, there should be an effort to try a few big new channels. And then finally, there is the matter of integration — making the acquisition channels work alongside the activation/re-engagement products that happen over email and push notifications. And optimizing the product funnels and sharing flows to amplify all the marketing efforts.
To give an example, at Uber, all of these growth efforts eventually got complex — very complex. There were teams working referral programs, landing pages, adtech integrations, funnel optimizations, activation sequences over email, retention and loyalty programs, as well as all the underlying infrastructure. There were projects to help with A/B testing (Morpheus!), communication platforms to streamline notifications to users, and much more. Then on top of all of that, add in several hundred people working on international growth, customizing the product to work better in China, developing countries, and otherwise.
For most startups, getting to this scale of a growth effort is a fancy problem to have — the team might be 100+ within a larger startup numbering thousands of people. The “Head of Growth” in this case should probably just be recruited from a larger incumbent who already knows how to do this. But if this is a smaller team than that, then you can similarly downgrade and find a growth leader from inside an incumbent that’s a first line manager.
The most common pitfall
What’s the biggest mistake that founders make in hiring their Head of Growth? In my opinion, it’s when the founders are trying to abdicate responsibility for their growth efforts, and hoping that a magical hire solves everything. The problem is, a startup’s growth is so fundamental that the founders have to take it on themselves. The buck stops at the top. If the founders pick the wrong growth channel to double down, even if they hire an expert on the channel, most likely the journey will end in failure. If the founders hire some amazing growth folks but don’t give them the engineering and product support to get their loops to work, then it won’t work either. The founders need to be there to supervise the growth, because ultimately they are directly responsible.
The second biggest mistake is probably to hire the “executive” Head of Growth too soon. If you are under 100 employees, you’ll only have a half dozen or dozen people working on growth, and in reality, you need a hands-on leader. Someone who’s primarily a people manager — particularly one that starts their tenure by hiring a bunch of agencies to build and execute their plans — will lead you down a path that simply won’t be concrete enough, at a moment when that’s what the startup needs. Early startups need to move the needle each week, growing 5 or 10% week-over-week, and no amount of PowerPoint can do that. The executive is helpful when you start needing to manage 3 or more teams focused on building a repeatable system — this is probably a 20+ team in a broader team of hundreds.
In the end, the “Head of Growth” title is probably too vague. Each of these stages requires such different skills and are judged so differently that a single title feels like it doesn’t capture the nuance. Instead, founders to incorporate the context of their startup — what stage are they in? How much conviction do they have on their growth channels? How many people are going to constitute the growth team, and thus, how much expertise versus management ability is needed? What are the most similar companies — from a growth perspective — that they can recruit from? These are the questions to ask, and by answering them, the Head of Growth role will be more clearly defined.