What is Growth Engineering?

March 16th, 2017

You see growth engineering in consumer tech (Facebook, Pinterest, Uber), but I’ve seen less of it for B2B SaaS, so one year in, I wanted to share my understanding of growth engineering as it fits into our business.

Growth engineers iterate on product and internal systems to improve on activation, conversion, retention/expansion of a self-serve business. The role stems from technical founders being able to beat larger incumbents to market. Incumbents are better resourced, but startups can iterate more quickly because the marketer, salesperson, engineer, PM, and analyst are the same person. A startup’s feedback loop is limited not by meetings and specs, but by single individual’s ability to reason.

Skill Set

1. Ownership (set metrics and goals)
2. Analytical (run SQL + analytics)
3. Technical (build product)

Approach

Every business has a metric it’s looking to grow (often revenue). A growth engineer will break down the overall goal and metric into smaller pieces, usually stages of a funnel. By looking at the product experience and numbers at each stage, a growth engineer can target points of friction and experiment with product changes to improve it.

Critically, growth engineers should never limit themselves to writing code. The goal is always growth. “Unscalable work”—running numbers once a day, customer outreach, doing batch work—should always be considered. If the unscalable work drives disproportionate (and thus scalable) returns, the work can either be automated with code or handed off to another team.

It’s useful to understand growth engineering in contrast to product engineering, traditional sales, and operations engineers.

Versus Product Engineering

In the long-run, the best kind of growth comes from an insanely great product. A product engineer builds that insanely great product. While this can often be driven by analytics or customer outreach, the day-to-day is much more focused on designing features and writing code.

However, incremental growth today is better than massive growth later; 5% every month is better than 60% growth at the end of the year. Growth engineering thus focuses on achieving continuous growth. It does this by considering the customer lifecycle as automate-able process. The day-to-day of growth split between measuring where the customer lifecycle is leaking and writing code to “fix the leaks.”

Versus Sales

Sales is always superior to growth engineering in extracting the most revenue per account. The weakness of sales is it has linear costs for linear return. It therefore requires both continuous investment (firing your sales team means no new sales revenue) and customers with high ASP.

Growth engineering relies on improving the product to generate additional revenue. Improvements are marginal (growth rarely lands “big deals”) but low cost (firing your growth team has no effect on the code they’ve written). Therefore, growth engineering is particularly well suited for a strong self-serve model and lower ASPs.

Business Operations Engineering

Most organizations have engineering resources exclusively focused on serving marketing and sales teams. Their customers are internal and their focus is productivity. Salesforce admins, internal application developers, etc fit into this role.

In contrast, growth engineering’s customers are the business’ customers and their focus are the business metrics (this can be revenue or active users, depending on the business). At a small stage, growth engineering will often fill this role, but it is not the core focus of the organization.