Chapter 5: Determination of growth indicators - what are the directions and goals?
Rome was not built in a day. Growth, of course, does not happen overnight.
Therefore, growth must not only have the overall goal of "building Rome", but also set goals in stages.
Setting goals is an important thing when it comes to growth. This determines what to do next and how to do it. It even determines the work of the entire team.
Growth, ultimately, is all about profit growth.
This is the ultimate goal.
Then, under this ultimate goal, we need to decompose the goal, set up indicators in stages, and determine specific work under the guidance of the indicators.
Note that we don’t need to plan phased goals and tasks for a long period of time, because this is simply not realistic.
All we need to do is to formulate indicators and specific work for the current stage.
So, how do you break down that ultimate goal?
Or, to change the question:
How does your product achieve profit growth?
It is sometimes not easy to solve this problem. This is determined by the profit model and product form of your product.
For example, your product is a content-based website (not video), and the profit model is advertising. Then decompose the goal, you will find that the factor that determines the profit growth of your website is the PV volume. Break it down again, and you will find that the PV volume is determined by the UV volume, content volume, content quality, etc. For the growth of UV volume, for many For those with experience, they already know what to do. For example, if you want to do SEO, then you can set and break down goals for SEO-related work into specific executable tasks.
For another example, your product is an e-commerce APP that sells clothes, a one-sided market product.
Breaking down this goal, you may find that there may be many factors that determine profit growth. Daily activity, supply capacity, demand frequency, repurchase rate, profit margin, GMV, etc.
So, now, which indicator do you want to pull up?
At this time, we need a new concept: the first key indicator in stages.
Regarding the "Phase One Key Indicator":
After the goals are decomposed, you will find that there are many goals to achieve, many things to do, and some goals may even conflict with things (this is true).
So, the question is, what now?
Now, what to do?
Then it depends on which indicator is the most restrictive to growth at the current stage, or which indicator's growth maximizes the ultimate growth goal.
Then, this indicator is the first key indicator in the current stage.
Then, product iterations and other work at the current stage will be carried out around this indicator.
If, after a period of time, this indicator is improved to a certain extent and is no longer the indicator that most affects the final goal, then the first key indicator in the stage should be changed.
Let me say a few more words. Many years ago, I determined three stage indicators: the first key indicator, the second key indicator, and the third key indicator. Later, I found that it is most appropriate to set one indicator at each stage.
As for, should we set the first key indicator for the next stage, or even the first key indicator for the next stage?
No, it's not necessary.
Moreover, it is difficult to determine when the next phase will begin.
Because growth is the same as iteration. It is a matter of getting feedback while doing it, and then acting based on the feedback.
Therefore, it is difficult for you to determine when the first key indicator of the current stage will no longer be the most important factor affecting the growth of your product. Therefore, it is difficult for you to determine when the next stage will arrive.
Even, it is difficult to determine what is the most important factor affecting the growth of your product in the next stage.
After determining the first key indicator of the current stage, you can formulate a plan for this indicator and determine what to do at the current stage.