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Anna Holopainen

SaaS reads this week: Growth experiment learnings, User intent, Why startups lose momentum

published10 months ago
6 min read

Hi friend šŸ‘‹ Here are my best reads from this week again. Let's go!

  1. What is user intent & how to optimize for it like a pro
  2. Five learnings from top product-led companies' growth experiments
  3. Why some startups lose momentum and others don't

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#1 What is user intent & how to optimize for it like a pro

  • User intent is essentially a relevance signal for Google. Meeting Search Intent means serving content in the format users expect and meeting their needs in the context of the keyword they used.
  • If you get Search Intent right, you can rank a single piece of content for thousands of keywords. Users express the same goal in different ways. "What to do in SF" is the same as "things to do in SF", for example, and Google understands that users want to accomplish the same thing.
  • If you don't satisfy User Intent, your chances of ranking are low ā€“ it's more powerful than backlinks and content in SEO

The most common challenges with User Intent

  • User Intent can change over time: When the Covid Pandemic broke out, people's intentions when searching for "Wuhan" changed. Instead of learning more about the city, searchers wanted to know more about the virus outbreak. So, Google showed Top Stories and results that cover the virus instead of destination sites. Similarly, every year around July 4th, Google shuffles the search results for "independence day" to show more results related to the holiday than the movie.
  • There are many different types of User Intent that can be hard to identify: A common misconception is that every intent fits into three categories: informational, navigational, transactional. That understanding is outdated. In reality, searchers have very specific types of goals. For example: "I want to learn what a word means" (definition), "I want to compare prices," "I want to find an image for my presentation," "I want to book a trip."
  • Location and devices play a role: For example, when searching for "Tumeric," users might get results for restaurants with that name if they search on their smartphone and a restaurant with that name is nearby, and results for the plant if that's not the case.
  • Keywords can have different interpretations: The shorter a keyword is, the higher is the degree of ambiguity. Shorter keywords ("cat food") carry more intentions than longer ("dry cat food for sensitive stomach"). As a result of query ambiguity, Google shows a mix of several results that might satisfy the dominant, common, and minor interpretation of the keyword.

How to optimize for User Intent

  • Identifying User Intent can be very simple when we talk about a single keyword: google the keyword and look at the sites and types of content that Google ranks in the top positions. You can derive User Intent from the top positions like a self-fulfilling prophecy. If you see a lot of articles at the top, you probably need to write an article to rank well. If you see tools, you need to build a tool. The best performing content leads the way. Pay attention to the title of the results because they might tell you what type of content you need: reviews, a definition, long-form, a product page, etc.
  • Ambiguous queries can never fully meet user expectations (= how helpful search results are for users according to Google). For a content piece to fully meet needs, it should satisfy the common interpretation of a query and have a high degree of authority, accuracy, and credibility.
  • Best results are often achieved when you monitor what queries Google tries to rank a content piece for and expand the content over time.

ā€‹Read the articleā€‹

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#2 Five learnings from top product-led companies' growth experiments

  1. A hypothesis is not a prediction: A common mistake when forming your hypothesis is to state it as a prediction based on a metric you think will improve (e.g., "Adding an option allowing users to save their checkout progress will increase conversions by 100%"), something that fails to articulate what you believe to be true of your users (e.g. "Adding an option allowing users to save their checkout progress will increase conversions, because in many cases, they only proceed to the final stage to see the final price.")
  2. An experiment helps you understand the potential upside of an initiative: Nearly all experiment docs contain a section for the predicted upside from an experiment. If this is successful, how will it impact one of your core business metrics? The reality is this: If you could accurately predict the upside of a potential change, you wouldn't need to run the experiment in the first place.
  3. Manage risks with diversification: Have a mix of big risky initiatives and smaller initiatives that are more likely to succeed. Aim to minimize the amount of work you put into each test (to get buy-in easier & to be able to run more tests) but understand the level of investment required to determine whether your hypothesis is right or wrong
  4. Autonomy is the best way to scale experiment ideas: At Pinterest, they empower individuals to come up with different ideas for experiments and be responsible for taking that idea from concept to execution. They've found this approach has helped them get a better diversity of experiments and better quality of work, as the person who has the original idea is also responsible for executing that idea.
  5. Gamify to encourage participation to introduce the growth mindset: Invision created a system where all employees were given imaginary money they could use to vote on the experiments, which allowed them to introduce the whole company besides just marketing & growth teams to growth.

ā€‹Read the articleā€‹

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#3 Why some startups lose momentum and others don't

  • Momentum is everything in startups. It creates the Universal Growth Loop: Product grows --> Growth attracts and retains talent and capital --> Talent and capital enables you to solve more problems in the business --> Product grows
  • But just like with any growth loop, the loop can work for you or against you. When you lose momentum, sourcing potential hires is harder, conversion rate to closing hires decreases, talents start seeking growth opportunities elsewhere, capital becomes harder to raise, etc. The problem is that losing momentum doesn't make things incrementally harder ā€” it makes them exponentially harder.
  • In startups, roughly between Seed and Series B, a canyon exists that kills momentum. Many startups find product-market fit yet still fail to grow. They start to face rising acquisition costs, declining retention, increased competition, and lower ROI on their efforts.

Why does the startup momentum canyon exist?

  • There's no growth engine built on growth loops, or. Most startups get initial traction by executing one-off or linear tactics (e.g., press, Product Hunt) that eventually become ineffective and inefficient and aren't repeatable over the long term.
  • Linear traction is confused with product-market fit. Many startups that launched on Facebook Open Graph received a huge amount of top-of-funnel distribution and conflated that with PMF. To understand where you're at, you should start thinking beyond product-market fit, and about the four fits: Product-Market Fit, Product-Channel Fit, Channel-Model Fit, and Model-Market Fit.
  • You are not addressing adjacent users. Most product teams know their existing users pretty well, but your future audience is always evolving. The challenges that these potential users face in adopting the product increase over time. Without a team dedicated to understanding, advocating, and building for your next set of users, you end up never expanding your audience. This stalls growth, and the product never reaches the level you aspire it to.
  • The talent you need is hard to find and retain. It's incredibly hard to find people who can both set strategy and are close enough to the tactics, who are also willing to take on the risk of an earlier stage company, and who specialize in the very type of growth relevant to your company.

How is the canyon getting wider?

  • There are more competing companies getting funded than ever, and those companies are receiving more capital earlier in their life at the time of the canyon. This accelerates the lifecycle of any growth tactic and strategy, which makes it harder to cross the canyon. The problem is, that the number of scalable growth channels to invest this money have not increased at the same rate as capital has increased.
  • FB used to be an MVP growth engine for startups with efficient and effective user targeting. As that has gone away, startups need to diversify investment across more channels to receive the same results.

Why do founders need to own the growth strategy?

  • Growth strategy IS company strategy at this point in a company's life, so you can't outsource it
  • Your growth strategy informs the metrics you use to guide your business, the goals you set for the team, how you organize and align your teams, how you should think about competitors, how much money you should raise and when, and how you should deploy that capital.

ā€‹Read the articleā€‹

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ā€‹That's it for this week. I'd love to know what was your favorite read this week!

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Cheers, Anna

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P.p.s. Did you know you can now find all previous summaries here?

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P.p.p.s. Connect with me on LinkedIn and Twitter! (Warning: I mainly post memes and rants about marketing, but if that's your jam, let's be friends. I'm also Head of Growth at an EdTech startup and a freelance consultant for B2B SaaS startups, but honestly, I'm more into shitposting than personal branding.)

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