Growth engine

Revenue is the product of its parts: leads, multiplied by conversion rate, multiplied by win rate, multiplied by average deal value. Treating each part as its own engine makes the weak link visible. Without that, a team adds more leads to a leaky funnel and wonders why nothing changes.

An engine also changes how a business grows. A campaign needs a new push each time. An engine keeps producing while the team works on something else, so founder time is freed for the next problem instead of being spent on the last one.

It makes ownership clear too. Each part has a person and a number, so a drop is noticed by someone whose job it is to notice. A shared goal that nobody owns is the one that slips.

Finally, engines are how a business plans. If you know how many leads one engine produces for a given spend, you can forecast what happens when you spend more, and you can see when more spend will stop helping.

• Write the equation out for your own business, with last quarter's real numbers.
• Find the number dragging the total down, not the one that feels most urgent. A flood of leads into a weak funnel only wastes money.
• Give each engine an owner and one number it can move alone: qualified replies per hundred sends, visitor-to-lead rate, win rate, or expansion and churn per account.
• Tune one engine at a time, so an improvement can be traced to its cause.
• When one engine sits where you want it, move to whichever is now weakest.

A growth engine is a repeatable mechanism that turns an input, such as time, money or content, into a predictable amount of leads or revenue. Cold outbound with a tested sequence is one. A search page that ranks and converts month after month is another. What separates an engine from a campaign is that it keeps running after the launch push is over.

Eric Ries described three engines of growth in The Lean Startup: sticky (customers stay), viral (customers bring others) and paid (acquisition funded by customer revenue). A useful working version for a small business splits the whole system into four connected engines: acquisition, the funnel, the pipeline and revenue per account.

• Calling a campaign an engine. If it stops when you stop pushing, it is a campaign. An engine runs on its own for a period.
• Scaling before it works. Adding spend to an untested engine multiplies waste.
• Tuning every part at once. If three things change in a month, nobody knows which one worked.
• Optimising the loudest number. Lead volume is easy to see and often not the constraint. Find the weakest link.
• No owner. An engine with no person and no number drifts.
• Relying on one engine. If all new revenue comes from one source, a change in that source can stop growth. Build a second once the first is stable.
• Confusing the engine with the tools. The software is not the engine. The repeatable process is.