Growth Newsletter #163

A common mistake service-based founders make:

“I currently charge people $$$$ for my expertise, and it’s a ton of work. I'll make a $49 course and sell it to a LOT of people. It’s scalable, and they’re getting a big discount.”

Sadly, in most cases, that does not work.

Here’s why: the Sales to Fulfillment Continuum (from $100 Offers by Alex Hormozi):

Let’s use an example to illustrate this.

You’re a busy founder. You know the importance of growing a personal audience. You see two people online that can help you with it:

1. For $10k/mo, Person A will 100% do it all for you: come up with ideas, write the content, engage, DM people, and set up meetings. All you have to do is answer questions upfront, meet new people, and sell them. They’ll start posting next week, guaranteeing you at least 10k followers and 10 leads/month in 6 months.
2. For $100, Person B has a 50-hour video course that teaches you everything you need to do it yourself. However, it will take you 10+ hours per week at minimum, and there are no guarantees it will work.

Unfortunately, option 1 would sell much more revenue than option 2 (and be a nightmare to fulfill as it scales). Sure, fewer founders could afford it, but it’s a way easier because:

• They’re experts, and they guarantee results (high perceived likelihood of success)
• More followers + leads (tangible dream outcome)
• You don’t have to do anything (no effort or sacrifice)
• Starts next week, and results guaranteed before summer ends (short time delay)

Whereas option 2 will take you hours to get through the content, there’s a low chance you’ll succeed (in fact, you haven’t finished most courses), and it’ll require a ton of effort and time away from your business and family.

According to the Value Equation, that makes Option 1 a lot higher value in your eyes:

It might be tempting to create a DIY product or course so you can stop doing service work, but it’ll be a hard sell.

Only those with large audiences or a ton of existing demand can pull it off. Here’s a way to do it instead:

1. Start with a “Done For You” option. Try to systematize and simplify things as much as possible and document how to do it.
2. Switch to “Done With You” 1:1 coaching. Give them your systems and help THEM do it. Iron the bugs out.
3. Then, offer DWY small group coaching.
4. Then, create a cohort course that many people can take at once, with less individual help from you.
5. Then, create a self-serve version (with accompanying tools/templates).

At each step, only move forward if you have proven demand and customers are seeing results. If not, keep tweaking it.

What job do you hire a milkshake to do?

Your customers “hire” products to do certain “jobs” for them.

Often, they’re not consciously aware of this.

The milkshake example is from a restaurant client of Clayton Christensen’s. To sell more milkshakes, the restaurant polled customers to see what attributes of the milkshake they liked best and what could be improved (chocolateiness, thickness, etc.).

They improved all of the most common answers. Nothing happened to overall sales.

Unsurprisingly, customers didn’t have insight into their purchase preferences.

Instead, the answer was much deeper.

So, Clayton’s team dove into WHO the customers are, WHEN they’re buying milkshakes, and WHY they’re buying them at that moment. Here’s what they found:

1. 50% of milkshakes sold before 8AM to solo customers who drove off in their cars.
2. After confronting customers in the parking lot to ask them WHY they were doing it, they eventually determined they used it for breakfast during a long commute.
3. The milkshake optimally achieved that because it fit in the car’s cupholder, required only one hand, was clean, and lasted throughout the commute.

So compared to most other breakfast items like bagels, muffins, fruit, cereal, a plate of eggs, and doughnuts, milkshakes (and likely smoothies) performed that job best.

Knowing what customers cared about made improving the product and marketing it easier.

Here’s Clayton’s famous talk about his so-called Jobs-to-be-Done Framework:

Examples of famous products’ non-obvious jobs:

• Rolex/Ferrari: Make me feel like I’ve succeeded and signal that to others.
• Doordash: I’m too exhausted to cook tonight or go out to eat; bring me food.
• Slack: Email crushes my soul. I want to feel like I’m texting with my team.
• Duolingo: I want to feel smart, but I want it to be fun and easy.
• Airbnb: I don’t want to feel like an annoying tourist. I want to feel like I live there.
• TikTok: I don’t want to do this thing I’m procrastinating on.

Newsletters are ephemeral.

Once they're sent out, reads trickle in only for a few days. People do not re-read old emails.

If you put your newsletter on your website, you get additional longevity from people promoting it, bookmarking it, stumbling upon it, or finding it via Google.

Or, if you're lucky, you'll earn some backlinks with steady referral traffic.

But for that, it needs to be a thorough guide (like our Growth Guide and my 10 Ways to Hook People) or reference material, like Lenny Rachitsky's benchmark articles:

Our newsletter isn't conducive to any of those. It's 3 separate tactics in one edition. As a result, they receive little organic traffic after they're sent out. 

How we're solving that problem: The Growth Vault

Instead of hiding our tactics across 163 newsletter pages, we've created a searchable and filterable database of 435 startup growth tactics (and counting).

Not only does this provide additional value to subscribers, but it's also something:

1. People can bookmark.
2. We can share on social media.
3. We can launch on Product Hunt.
4. That can earn organic backlinks.
5. That can generate even more subscribers.

If you generate content on an ongoing basis, find better and better ways to package it and let people consume it.

Check out the Growth Vault.