Value Creation For Growth Products
From driving successful IPOs to funding new ventures, Mike Maples is a product visionary who understands how to find "the next big thing." Growth products do not happen overnight. Most importantly, there's no substitute from putting in a lot of work early to define your value proposition. As Mike explains, product managers must take time in moving through the complete value creation process in order to build long-term success.
Floodgate Founder on Building For Growth Products (Part 2)
More so than any factor, value creation is the number one driver for building successful growth products. In my experience, value creation involves multiple phases over time. In addition, products will create value in different ways along the way. For product managers, it’s vital to understand every value creation phase to ensure that you’re focusing on the right priorities at every stage.
Furthermore, you can’t skip steps along the way in hopes of achieving long-term success. For example, you’ll see companies focus on growth hacking before they define their product’s value proposition. The reality is that going from the value phase to the growth phase is way harder than you think. Moreover, it’s even harder to achieve profitability or build a sustainable company. Simply put, you can’t jump from square zero to making money. With this in mind, I’ll cover every value creation phase and how each stage contributes to building growth products.
Value Hacking (Going From 0 to 1).
If you think about value creation in chemistry terms, this is where growth products are at their “gas” phase. In other words, this is where invention takes place and you start to build your value proposition. This is critical work and should not be skipped over or rushed. Ultimately, once you start to scale, you can’t back up and revisit your foundational work. As a result, you have to spend time getting it right from the very start.
For example, Twitch took five years to achieve product/market fit. If this work had been rushed, there’s no way that Twitch would be where it is now. Simply put, you don’t know how long this phase is going to take. Ultimately, the best way to get from “0 to 1” is to give yourself enough time without having revenue or volume expectations.
Growth Hacking (Going From 1 to X).
Getting back to chemistry, this phase involves going from a gas to a liquid. Said differently, you go from inventing a product that brings delight to getting distribution and growing at a predictable rate. Furthermore, your product’s value proposition starts to syndicate itself. In other words, your product’s foundational “truth” starts to become common knowledge within your product landscape.
That said, this is often a tricky time for founders – as they need to start thinking differently about how to operate. For example, when you’re in the value hacking phase, you tend to work like a “McGyver” and just make things happen. When you’re building growth products at the next stage, you have to focus on predictable execution and standardize practices. Ultimately, you can’t do everything on your own. Instead, founders need to hire the right people to take your business to the next level.
Profit Hacking (Optimize P*X).
Every startup founder dreams of getting to this point. Simply put, this is where the money starts to pour in. At this phase, growth products are starting to become “solid” in terms of our value creation chemistry. This is where companies are accelerating profitability and attracting new customers at the same time. For example, your growth products are generating higher margins while driving new sales by expanding your customer base. The best way to achieve this is to own your core customer segment. From there, you can to expand your core audience to bring in new users and channels to drive your business forward.