Always, always, always start with activation
You can spend all day driving traffic and launching pricing experiments, but without activation, it’s just churn with extra steps. - Elena Verna
Then, address monetization
Next up, acquisition
End with retention
Here are the key takeaways from Elena Verna’s “How to Sequence Your Growth Squads”:
Why Sequencing Matters
Growth success depends heavily on building squads in the right order. Many companies start with acquisition or retention without fixing core issues, leading to wasted effort and poor ROI. The correct sequence aligns with the product’s maturity and user journey.
Growth Team Sequence
- Activation First
- The most essential step; all growth depends on proper user activation.
- Companies often mistake acquisition or conversion issues for what are really activation problems.
- Core responsibilities:
- Define and measure activation (identify the true aha moment).
- Optimize onboarding and reduce time-to-value.
- Drive early engagement and habit formation.
- Activate whole teams for B2B contexts (e.g., Miro’s metric of Weekly Active Teams).
- Goal metric: 40–50% of ICP sign-ups activated.
- Then Monetization
- Comes after activation because activation automatically boosts monetization.
- Focus areas:
- Free-to-paid conversion.
- Plan upgrades, renewals, and churn reduction.
- Paywall messaging and pricing strategy experiments.
- Key insight: Align packaging with actual user journeys, not internal assumptions.
- Next, Acquisition
- Only invest once activation and monetization are optimized; otherwise, “you’re pouring water into a leaky bucket.”
- Squad activities:
- Top-of-funnel (TOFU) growth through paid, organic, and viral loops.
- Conversion path optimization.
- Channel testing and message personalization.
- North star: sign-ups within the ICP.
- Finally, Retention
- Should initially be owned by Core Product, not Growth.
- Growth’s role is to amplify retention via lifecycle nudges, habit loops, and re-engagement systems.
- Metrics: Daily/Weekly/Monthly Active Users or Teams.
Mature Growth Org Add-ons (Rogue Squads)
- Growth Infrastructure Squad: builds tools for testing, messaging, billing, and analytics—enabling faster experiments.
- Experimentation Squad: a SWAT-style team testing bold, cross-journey ideas.
- Loop-specific Squad: focuses on key viral loops (e.g., referrals, content creation, collaboration).
Budget and Timing Guidance
- Start serious Growth investment around $30M ARR—once product-market fit is proven.
- Growth should represent 25–30% of your R&D budget.
- The other three R&D specializations: Core Product, Infrastructure, and Innovation.
Core Principle
Always start with activation, then monetization, acquisition, and retention—in that order. Done correctly, each layer strengthens the next, creating compounding growth effects rather than isolated wins.Gmail-How-to-sequence-your-growth-squads.pdf