Andrew Chen’s (Andreessen Horowitz) Business Lesson about Growth

We found an interesting collection of Tweets about the business that are written by Andrew Chen, Andreessen Horowitz’s general partner.

According to him, it is not important to look at the final business success; the growth is the key to every business success. There are special growth teams in every company who collect data about growth flow, estimate funnel success, and about customers that bring growth and those who are not. The term funnel is a process which estimates and measures the effectiveness of a business’s attracting, engaging, converting, and retaining for customers. That also includes that you must have a special product that is worth for your customers if you want to have a success and growth.

It is not good to be addicted to paying to advertise. As Fred Wilson claim, there is a simple Rule of 40 to prove that. It is very hard to estimate selling success and marketing effectiveness, but many economists claim that paid advertising, even simple and the fastest, is not always good and effective in long-term business.

Customers are way more heterogeneous than we usually think. Looking at average data is not good enough today when data systems and technology offers much more opportunities and helps to understand our buyers and their interests and behavior. It is always important to keep your high-intent customers close and tight to you with using easy access, special password, or the opportunity to try your product for free. It is much harder attracting a buyer who is not really interested in your product than those who are interested and close to you.

Pixabay/ Public Domain

The most attractive and shared product is that includes a naturally viral motion. That means that you need to make a viral description or showing of the product which will be shared on the social network, otherwise nobody will notice it expect usual buyers.

He describes something about what he called a “creative destruction”. That is a point where every growth hit its top and becomes boring and not attractive anymore. That usually happens with aggressive and not much creative advertising, but it can also be a natural border from which nothing can go up anymore without changing the main strategy.

A competition is an important part of advertising and selling and every marketer should be preparing for another better seller at some point. That does not mean failure necessarily, but it could lead to a crash if not paid enough attention. But not too long, everyone starts up should last shorter than a year or it lost its investments and buyers’ attention.

Finally, learn from others and adjust their (even bad!) experiences on your business. If you are waiting to make mistake on your own you could make a failure of your business and lost invested money. There are so many businesses on the market nowadays and still too many failings per year, so everybody should be prepared for potential mistakes.


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