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  • Reverse Engineering the Funnel
  • Aligning Executive Leadership and Functional Teams
  • Capturing Assumptions
  • Continuously Monitoring and Adjusting

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  1. Growth Modeling
  2. Building a Growth Model

Growth Model Assumptions

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Last updated 6 months ago

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Growth modeling is a crucial tool for businesses aiming to expand and reach their objectives. By deconstructing the funnel and harmonizing executive leadership with functional teams, a comprehensive plan that is both ambitious and feasible can be crafted.

Reverse Engineering the Funnel

The initial phase of growth modeling involves a reverse engineering of the funnel, commencing with the revenue objective and then calculating the requisite number of bookings, SQLs, MQLs, and brand awareness to reach that target.

Understanding your sales cycle and conversion rates is key. Once you know how many leads it takes to seal a deal, you can reverse engineer the process to pinpoint the number of SQLs, MQLs, and brand awareness required to meet your revenue target.

Aligning Executive Leadership and Functional Teams

With a solid grasp of our growth model, we work to unite our executive leadership and functional teams. This involves ensuring everyone is in sync with the goals, objectives, and strategies that will lead us to our desired outcomes.

One effective way to do this is to use the W method. The W method involves asking a series of questions that start with the letter W, such as:

  • What are our goals?

  • Why are these goals important?

  • Who is responsible for achieving these goals?

  • When do we expect to achieve these goals?

  • Where will we be when we achieve these goals?

By addressing these queries, we can forge a collective comprehension of the growth model and guarantee that we are all striving toward the same objectives.

Capturing Assumptions

Despite the wealth of data at our disposal, there will always be a need to make certain assumptions when constructing a growth model. These could pertain to a range of factors, from product launches to the time it takes for sales teams to scale, to market conditions.

It's crucial to identify these assumptions and keep a record of them. This way, you can monitor their effects on the plan and make any necessary adjustments to stay on course toward your objectives.

Continuously Monitoring and Adjusting

Growth modeling isn’t a one-time thing. It’s an ongoing process that requires continuous monitoring and adjustment. As you execute your plan, you’ll need to track your progress and make adjustments as needed.

This means being agile and responsive to changes in the market, your competition, or your own business. By continuously monitoring and adjusting your growth model, you can ensure that you're always on track to achieve your goals.

Growth modeling is a powerful tool for businesses looking to scale and achieve their goals. By reverse engineering the funnel, aligning executive leadership and functional teams, capturing assumptions, and continuously monitoring and adjusting, we can create a comprehensive plan that will give our business the best chance possible to succeed.