3 Bites & 1 Track #4: ICP, Growth Models, Nudge & Sacred French
Hi,
I took a vacation break, so we skipped last Friday. I’m back now.
Remember
Each week, I’ll share three insightful links with comments. I’ll give you a few exciting bits to check out, ignore, or build upon. We'll focus on Growth but mix it up to keep it fun and fresh. To spice things up, we end with a music track.
This week, we get real with ICP, Model Growth, Nudge, and groove to French vibes. All with my commentary and additional notes.
If you don’t have the time, jump right into the links below.
Enjoy.
Spoilers aka TLDR
Post
Still quite niche and overlooked, Substack is becoming a great source of content—not only the newsletters but also Notes - their version of posts.
This week, I bring you a post from Kyle Poyar, a Product Led Growth reference and operating partner at OpenView VC. Check his newsletter.
Knowing and focusing on your target customer segment, or Ideal Customer Profile (ICP), is a key pillar in your strategy - both from a Product and Growth perspective. Nothing new here but it’s worth repeating: knowing the ICP is necessary condition for success.
However, Kyle points out that “there’s a difference between knowing the path and walking the path.”
Maybe you have defined and studied your ICP, but are you really focused on them? Can you identify them and know what stage they are in? How do you shape your actions based on that?
(click below to read it all)
Article
All models are wrong, some are useful
I like models. Maybe it is my systems engineering background or the scientist who once modeled a predator-prey system.
A model is a representation, usually simpler, of reality. A map is a model, for example, that we can use to plan a trip.
A Model helps us run simulations, discuss scenarios, and understand a system's dynamics.
Most maps are frozen in time, so they are a simple model. Things get interesting when you consider changes in time. For example, in growth, if you consider word-of-mouth and some virality, you know that the bigger the customer base, the more you’ll get from this viral effect because there are more people who recommend it - reinforcing loop. However, you should consider that the relative virality effect can decrease over time or with the size, as you can consider that early adopters are more eager to talk and share their discoveries than the late majority - the balancing loop. So, you should include a declining viral factor in your model. This means that your viral growth can hit diminishing returns over time.
Anyway, why do we need Growth Models?
First, if you have laid out a model and everyone understands how it works, then it means they have a good understanding of the business and how it grows.
I suspect many people working in the go-to-market teams (Sales, Marketing, CS) don’t know how the business really works. Unfortunately, as the company grows, people get siloed and then optimize for their jobs rather than for the whole system, and so they stop understanding the system.
Another reason is, as Dan explains in the article:
Growth models are primarily useful for making relative tradeoff decisions. For example, if a growth team could focus on lifting global activation rates by 10%, or improving conversion to signup from paid marketing by 25%, or increasing referrals per customer by 5%, which of those would drive more revenue growth?
In “Why growth models fail,” Dan Hockenmaier provides great insight into growth models and why they fail. You even get a template you can copy and play with to see how it works.
Show
Behavior Economics is a key pillar in Marketing and Sales, as it addresses how humans make decisions, including purchase decisions.
So it is normal that I knew the work of Daniel Kahneman, the father of Behavior Economics, a Nobel Prize winner, and the author of Thinking, Fast and Slow.
I never realized that there was another Nobel Prize winner in Behavior Economics and author of the popular book “Nudge: Improving Decisions about Health, Wealth, and Happiness.” I mean, I knew the book, but I didn’t realize it was written by such a distinguished scientist that I had never heard of.
I discovered Richard Thaler in this delightful conversation on the Freakonomics Radio podcast - People Aren’t Dumb. The World Is Hard. (Update) . From the intro:
“Remember the Greek myth of Prometheus? He stole fire from the gods and gave it to humans. The economist Richard Thaler may be the Prometheus of economics: he took Kahneman and Tversky’s research insights and made them useful for governments, firms, and everyday people”
Spotify & Apple links here.
Track
Just before the Olympics ends, it sounds reasonable that I take inspiration from Paris and share some French tunes. I bring you a real gem from one of my favorite albums - from Dimitri from Paris’s debut album Sacrebleu comes the track of the week, Sacre Francais.
Dimitri from Paris, is famous for his remixes, edits and DJing. He brings a panoply of eclectic sounds. It is hard to pin down his music:
“His musical influences are rooted in 1970s funk and disco sounds that spawned contemporary house music, as well as original soundtracks from 1950s and 1960s movies such as Breakfast at Tiffany's, La Dolce Vita and The Party, which were sampled in his album Sacrebleu. Dimitri fused these sounds with electro and block party hip hop he discovered in the 1980s.” - Wikipedia
Will Hermes of Entertainment Weekly wrote about the debut album Sacrebleu:
"Like French fromage, it often smells funny, but when it's good, it's marvelous.
Enjoy.
You should check the whole album.
That’s all for this week. See you next Friday.
Thanks for reading.
Hugo
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