The Three Engines of Growth

The engine of growth is the mechanism that startups use to achieve sustainable growth. There are three primary engines of growth: the sticky engine, the viral engine, and the paid engine.

Each engine has a specific set of metrics that can be used to measure and optimize its performance. A startup should focus on one engine of growth at a time.

The Sticky Engine of Growth

The sticky engine of growth is focused on retaining existing customers. The goal is to make the product so engaging that customers will stick around for a long time. The key metric for the sticky engine is the churn rate, which is the fraction of customers who fail to remain engaged with the product. If the rate of new customer acquisition is greater than the churn rate, the product will grow.

The Viral Engine of Growth

The viral engine of growth is focused on getting customers to spread the word about the product. The goal is to create a product that is so compelling that customers will want to share it with their friends. The key metric for the viral engine is the viral coefficient, which is the number of new customers that each existing customer brings in. If the viral coefficient is greater than 1, the product will grow exponentially.

The Paid Engine of Growth

The paid engine of growth is focused on acquiring new customers through paid advertising. The goal is to find a way to acquire customers for less than they are worth. The key metrics for the paid engine are the Customer Acquisition Cost and the Lifetime Value of a Client. If the LTV is greater than the CAC, the product will grow.