20Growth: The Golden Rule to $100M in ARR, Why CAC to LTV is BS Early On, Why Your First Growth Hire Should Be a Former Founder & How Ramp Does 200 Growth Experiments Per Quarter with Guillaume Cabane
Nov 29, 2023
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Guillaume Cabane, growth advisor to high-growth SaaS startups, discusses his entry into growth and shares lessons from his time at Segment. He explains why it's harder to scale into enterprise and why CAC/LTV analysis is impossible for early companies. The conversation also covers activation, engagement, and setting KPIs, as well as the characteristics of great growth hires and common hiring mistakes. Guillaume emphasizes the importance of running experiments, leveraging engineers, and diversifying channels for revenue growth.
Focus on weight-adjusted pipeline dollars as the key KPI, rejecting vanity metrics and irrelevant engagement metrics.
Test marketing channels by increasing budgets over several weeks to assess scalability and effectiveness before scaling back.
Build a successful growth team with a former founder or experienced growth manager, an engineer, and a marketer/copywriter.
Deep dives
Focus on Weight-Adjusted Pipeline Dollars
In the podcast episode, the guest emphasizes the importance of rejecting vanity metrics and focusing solely on weight-adjusted pipeline dollars as the key performance indicator (KPI). Traffic and other engagement metrics are deemed irrelevant. The main goal is to convert engagement KPIs into tangible revenue figures, creating a pipeline that aligns with sales goals. The guest stresses the need for marketing teams to have a funnel-based approach, tracking pipeline figures at each stage and setting goals accordingly. The importance of lead scoring and its correlation with pipeline value is also highlighted.
The Significance of Depth and Channel Testing in Growth
The guest discusses the importance of understanding the depth of each marketing channel and the need for rigorous testing. By increasing the budget for a specific channel over several weeks, startups can assess the scalability and effectiveness of that channel. This allows them to determine the maximum capacity and potential returns before scaling back. The guest also emphasizes the value of lead scoring and its impact on pipeline figures, noting that engaging the wrong leads can hinder growth.
Creating a Growth Team and Hiring the Right Candidates
The guest provides insights into building a successful growth team. Initially, the team should consist of a former founder or someone experienced in growth and product management who can drive the process effectively. Additionally, an engineer and a marketer/copywriter should be included. The guest suggests a hiring process that includes analyzing the candidate's ability to utilize data, identify outliers, and take risks. A unique approach involves assessing their gaming experiences and understanding their strategies to determine if they are reasonable risk-takers.
Personalizing Communication
One of the biggest mistakes companies make in activation is not personalizing their communication. Often, companies use generic emails that try to appear personal, but the HTML coding gives it away as impersonal. Companies need to consider the psychology and emotions of the recipient and whether they are trying to create a corporate or personal connection. Personalized communication that addresses the recipient's specific context, challenges, and interests can greatly increase response rates.
Value and Reciprocity
To drive engagement and responses, it is important to provide true value in your communication. One effective strategy is to identify mistakes or problems that the recipient is facing and offer meaningful solutions. By highlighting areas of improvement or offering helpful insights, companies can capture the recipient's attention and create a sense of reciprocity. Whether through detecting negative comments about their brand or providing personalized sports betting insights, demonstrating value and personalization can significantly increase response rates.
Guillaume Cabane is a growth advisor to high-growth SaaS Startups, including Ramp, Spot, Airbyte, G2, Gorgias, Metadata, Madkudu, and others. Guillaume held VP of Growth roles at Drift, Segment, and other successful startups, where he helped them grow from ~50 to 300. Prior, Guillaume spent 6 years at Apple.
In Today's Episode with Guillaume Cabane We Discuss:
1. Entry into Growth:
How did Guillaume make his way into the world of growth?
What are 1-2 of his biggest lessons from him time at Segment where he 4x revenue?
What does Guillaume know now that he wishes he had known when he entered growth?
2. Enterprise vs SMB & CAC/LTV:
Why does Guillaume think it is harder to go enterprise down than SMB up?
What are the biggest mistakes companies make when scaling into enterprise?
What are the biggest mistakes startups make with product-led-growth motions?
Why does Guillaume believe it is impossible to analyse CAC/LTV in early companies?
3. Activation, Engagement and KPI Setting:
What are the biggest mistakes companies and teams make in activation?
What can growth and marketing teams do to guarantee engagement in prospects?
Why are all KPIs not tied to revenue BS?
4. Hiring the Growth Team:
What are the core characteristics of great growth hires?
How quickly does it become apparent when you have made a bad growth hire?
Why do founders make the best profiles when hiring your first growth hire?
What are the biggest mistakes Guillaume has made when hiring for growth?
5. Why Growth is Like Venture:
What is the secret to building a great growth portfolio?
Why is it impossible to scale to $50M ARR with only one good channel?
What is the right way to spread resources across channels?
When is the right time to add new channels and diversify?
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