Did you manage to get it? million users. Amazing.
But if 999,999 of them don’t make it through the funnel, or don’t flip, it’s not that surprising now.
This is an extreme example, but it shows why optimizing your growth funnel is important in the early days of your company.
What does a growth funnel look like? While every startup’s prospect funnel will look different, it generally consists of three main pillars: acquisition, activation, and retention. I won’t go into detail about these columns, but let’s talk about some basic optimization concepts.
Acquiring the right users
As your startup matures and solid user-level data begins to flow, you should prioritize understanding which acquisition sources attract the most users. As a bonus, try to measure which sources add the most users incrementally as well.
Changing posts by a group of users is your biggest lever for moving users through the funnel.
Cross-functional teams (i.e. product, growth, and data) must also constantly question the best sources of traffic at a defined rate.
Leading fleet growth at Postmates, I quickly learned to become desensitized to top-of-the-funnel benchmarks. Here’s an example of how we prioritized budget allocation using down-funnel metrics:
Although Indeed has the worst CPL of the channel grouping, it provides the highest-grossing fleet drivers who are most active on Y1.