What is Needed for Your Product to Reach the Growth Inflection?

Read time: 4 minutes.

Welcome to the 40th edition of The Growth Elements Newsletter. Every Monday, I write an essay on growth metrics & experiments and business case studies.

Today’s piece is for 5,100+ founders, operators, and leaders from businesses like Shopify, Google, Sage, Hubspot, Servcorp, Zoho, Apollo and more.

Happy Monday!

Slow growth and churn can burn your ARR unless you hit the Growth Inflection point on time.

So the question is, what is needed for your product to reach the Growth Inflection?

Even before that, what is the Growth Inflection point?

► Growth inflection points are critical milestones in a product’s journey.

► They mark the transition from gradual or slow progress to exponential growth.

► These points can derive from various factors, both internal and external.

𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐥 𝐅𝐚𝐜𝐭𝐨𝐫𝐬

[1] 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐈𝐦𝐩𝐫𝐨𝐯𝐞𝐦𝐞𝐧𝐭𝐬

► Iterative enhancements, macro and microfeature launches, and usability improvements can trigger growth inflection.

[2] 𝐔𝐬𝐞𝐫 𝐄𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐞 𝐑𝐞𝐟𝐢𝐧𝐞𝐦𝐞𝐧𝐭𝐬

► Streamlining user flows, reducing friction, and enhancing delight contribute to reaching the inflection.

[3] 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲

► Pricing adjustment, pricing structure changes, upsells and cross-selling add-ons can drive revenue growth.

𝐄𝐱𝐭𝐞𝐫𝐧𝐚𝐥 𝐅𝐚𝐜𝐭𝐨𝐫𝐬

[1] 𝐌𝐚𝐫𝐤𝐞𝐭 𝐓𝐫𝐞𝐧𝐝𝐬

► Shifts in consumer behaviour and tech advancements - for example, AI or GPT wave can create growth opportunities.

[2] 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐄𝐯𝐞𝐧𝐭𝐬

► Regulatory changes, industry partnerships, or global events (like the pandemic) can impact growth.

[3] 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐨𝐫 𝐌𝐨𝐯𝐞𝐦𝐞𝐧𝐭𝐬

► Observing competitors’ successes or failures can guide your strategy.

𝐒𝐨𝐦𝐞 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐟𝐫𝐨𝐦 𝐬𝐮𝐜𝐜𝐞𝐬𝐬𝐟𝐮𝐥 𝐬𝐭𝐚𝐫𝐭𝐮𝐩𝐬

► The majority of growth inflections come from a product improvement

► A decent number of growth inflections came from an unexpected external event without the product changing at all

► Many of the most durable inflections came from the company's leaning into its primary growth model, predictable customer acquisition strategies, and scaling it.

𝐅𝐢𝐧𝐚𝐥 𝐰𝐨𝐫𝐝𝐬

► It’s important to note that long-term sustainable growth is never as simple as just one thing.

► To build a sustainable business, you’ll eventually need to get these three pieces right:

[1] Ongoing product improvements to build something people want and need.

[2] Ongoing events that get the word out. It is important to capitalise on it faster.

[3] A predictable growth model that generates scenarios around CAC, churn, and growth capital to derive a net growth rate.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintan Maisuria