Introducing the Growth Model Canvas and an Updated Growth Model Spreadsheet template

With markets becoming more competitive, modular, and diverse, companies must go multi-product earlier and more often. Bringing a product or service to the market is a capability that every team should have.

Understanding how to distribute products to new customers, convert them into paying ones, and sustain growth through customer acquisition is crucial for teams’ development.

The critical role of growth in digitally enabled ecosystems has made Growth and GTM an emergent key support function in organizations: we used to think about sales and marketing as sole, separated, and centralized functions responsible for ensuring a company’s market success.

With organizations embracing a more distributed and product-centric nature, GTM and growth are becoming shared responsibilities across different players in the organization, with centralized services coupled with independent capabilities within product units.

In this context, clearly and visually framing growth models is essential not only for startups. Assessing the growth strategy’s status and evolving it collaboratively is also important in the corporate sector and requires a shared basis for contributions.

A growth model defines how a company or product can scale, covering customer acquisition, channels, conversion rates, and growth projections.

The Growth Model Spreadsheet Template

Over a year ago, at Boundaryless, we released a growth model spreadsheet template. Today, we release an updated version, which corrects bugs and extends it, along with an experimental canvas called the Growth Model Canvas. The new template has a broader range of customer acquisition channels and is more comprehensive and applicable in various cases.

The accompanying canvas helps you collect the parameters for the growth model.

The spreadsheet has been widely presented: reading the introduction article is suggested for more clarity.

This growth model template is premised on the idea that:

• You have users who, thanks to product features (PLG, marketplace liquidity), become paying users by subscribing to a paid plan or transacting on a marketplace – or both.
• You acquire users through four ways: paid customer acquisition channels (Sales, Marketing, Paid Ads, Influencers), organic reach fueled by content marketing and SEO, virality/WOM, and User Generated Content.

All channels are pre-set, but new ones can be added.

Network and bandwagon effects

The template and canvas consider the potential supply side in the product system. The relationship between producers and consumers is central in digital products like marketplaces (where suppliers are service/product providers) or in B2B SaaS, where suppliers are third-party apps and plug-in providers. Including this in the growth model canvas and template allows teams to frame the attraction that platform users create for same-side and cross-side users. This effect could be related to:

• network effects, when the presence of more users/providers directly impacts the quality of services;
• bandwagon effects, when the presence of more users/providers creates “peer pressure” for others to join.

To work well, these effects rely on a “liquid” marketplace (especially network effects), meaning that the attraction will only play out if the marketplace or third-party app ecosystem has enough availability and diversity to respond to customer needs. It represents the likelihood/speed that, as a user, I can find the provider or third-party software integration I’m looking for and close a transaction.

The updates to the Growth Model Spreadsheet template

The new growth model template is heavily based on the first version. Therefore, we urge you to read the introductory post again. The new template has two main updates.

The spreadsheet now has separate lanes for paid acquisition channels (sales, marketing, paid ads, influencers) and relative investments.

Now, there’s also a space for tracking SEO and content marketing investments to increase organic acquisition.

>

The Growth Model Canvas

The new Growth Model Canvas accompanies the Spreadsheet to help teams frame, list, and identify parameters needed to prepare a growth model.

The “A” zone contains five lines to track acquisition channels, the relative current CAC, and the % of customer acquisition budget invested in those channels.

The “B” zone frames the parameters for Word-of-Mouth/Virality and user-generated content-based attraction (it’s self-explanatory if you read the introduction post).

The “D” Zone allows you to track the conversion rate to paying users and the rate of user inactivity. The spreadsheet template assumes a three-month timeframe for users who drop the platform without becoming paying users, but it’s adaptable.

The “F” zone gives the team space to consider the other side of unit economics, LTV, and note the % of LTV you choose to invest in customer acquisition. The canvas includes a space for the payback period, which is becoming an important metric and factor to ponder how much of your LTV % you want to reinvest: a particularly long payback period may encourage more prudent investments.

Zone “C” and “E” can help you frame the network-effect/bandwagon elements of the platform by providing a space for:

• estimates for same-side and cross-side attraction;
• the key metrics you choose to assess marketplace/platform liquidity.

The canvas includes a space for teams to annotate liquidity metrics like Search To Fill or Time To Fill. Liquidity is crucial for generating cross-side or same-side attraction, and impacting conversion rates: a liquid platform/marketplace is more likely to be used and paid for, and users are more likely to transact.

Using the canvas and template

These tools are designed to be versatile and provide a “scaffold” for you to develop your own growth model. Even though you shouldn’t rush into building your growth model – for example, anticipating achieving a true problem-solution fit – developing a growth model can be useful as soon as the first of your canonical units, meaning the contexts where progressive liquidity should be created (e.g., an initial marketplace category). Once you have that, a credible, repeatable, measurable, and interpretable mechanism to achieve growth should be solidified in a growth model.

As a complement to this piece, we suggest reading our previous articles:

• Key Concepts and Practical steps to your first Growth Model (for a Platform or Product) – where we first introduced the Growth Model Template.
• Defining the Go-To-Market and Liquidity Approach: Part 3 of  a series on  The Macro-Problems and Techniques of Platform Design – covering early-stage go-to-market and growth.

If your product is struggling to grow, check out our article on The 4 Key Problems that hinder growth in Platforms and Marketplaces and download our Product and Growth guide and watch the walkthrough video.

Join our upcoming training on Strategies and Structures for Product Portfolio Innovation: learn how to optimize your product portfolio and evolve the organization to support it

Download Links

The new and updated Growth Model Spreadsheet v1.1

The newly released Growth Model Canvas v 0.1 Draft