Author: Lace Nguyen
At any given moment, Skyscanner is running hundreds of experiment permutations on its websites, serving over 60 markets all over the world. The company hit 100 million monthly users in late 2019, having been acquired by Ctrip for £1.4 billion (US$1.74 billion) in 2016. Skyscanner’s growth culture is well celebrated and documented: the Medium blog of its engineering team has over 2,500 followers; with articles such as “Fostering a culture of experimentation” and the on-going series titled Chasing Statistical Ghosts in Experimentation.
Instrumental to its culture is Yara Paoli, Skyscanner’s former Vice President of Growth. Paoli helped scale the company from a small 32-employee startup to a global leader with over 1000 talented people. After Skyscanner, she served as the Interim Chief Growth Officer for the edtech giant Preply, co-founded Growth OS, and has been an active mentor to fast-growing startups including SOSV portfolio founders.
Last month, Paoli dialed in from Singapore to talk with our founders about the elements of growth. Here’s a condensed version of her talk at the recent SOSV Virtual Growth Summit.
The most important growth metrics: morale
“We often think about growth in terms of revenue, or the number of product releases. But the most important growth is in terms of team members and their morale,” Paoli says.
Startup founders usually hope that increasing the number of employees will increase business outcomes. That’s often not the case. For some companies, no matter how many more people they hire, the outcomes will not follow that.
Companies throughout their life cycles will incur what is called a “strategic inflection point.” The term is coined by Andrew Grove, the longtime CEO of Intel Corporation and one of the most acclaimed personalities of the computer era. “A strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end,” writes Grove in his book Only the Paranoid Survive.
Images courtesy of Yara Paoli. Thanks Mark Logan for the inspiration!
1. Hygiene factors
Hygiene factors often get confused with “great culture,” even by HR teams. These factors may include great office environments, free food and drinks, two screens, ping pong tables, pizza and beer Friday, etc.
Most HR professionals focus on these perks because they can be easily paid for, as long as the company has a bit of budget. Yet they directly lead to growth. To cultivate growth, companies should focus on it as a holistic discipline.
2. Growth as a discipline
There’s no organizational growth without personal growth. “Building a growth culture is about building a system that allows people to succeed,” Paoli points out.
The team at Skyscanner before we transitioned to growth very much looked like a traditional marketing team, with people specializing in SEO, PR, engineering, and marketing working in silos, she shares. “In the best-case scenario, these teams have different objectives. In the worst, they have conflicting ones, leading to a lot of waste in the system,” she adds.
To become a growth-oriented organization, Skyscanner looked at growth as a cross-section of skills: marketing and commercial sensibility, product and engineering, data analysis, and experimentation taken from the Lean Startup methodology. To this end, they created an internal Growth Hacking Ninja Program to train traditional growth marketeers into growth hackers or growth managers.
Secondly, Skyscanner modified its recruitment process, changing the interview questions to look for a growth mindset and not just a deep specialization. The company identified several traits of growth talent—a T-shaped avid learner with an agile and lean mentality; plus a focus on impact, data, experimentation, and customer.
Finally, the company developed a defined professional trajectory for growth talent to advance within the company, i.e. from Growth Manager to Head of Growth and eventually Chief Growth Officer. This trajectory is based on a clearly defined “competency framework” that includes the specific skills, accomplished tasks, behaviors, reach of influence, etc. needed for each level.
“Be clear in the promise the company makes to its employees. How I can go to the next step, how can I become a more senior version of myself, how do I increase my salary, because my impact is better and better every day,” she adds.
3. Team structure to support a growth culture
Too often startup teams work in silos, creating dependencies even when making just a landing page let alone an entire infrastructure.
To restructure the team so that growth is the focus, Skyscanner went ahead with several experiments. The first one is to create independent growth tribes with their own engineers, designers and data scientists; all of whom are trained in the growth methodology. While operating under the same overarching frameworks; these regional tribes—Americas, APAC, and EMEA supported by the Central team—strive to become the regional leader in the market, enlisting the support of regional specialists for market insights and localization.
The second experiment is to embed growth people into each product team. This is another step “to further collaboration and to remove the last silos separating product and growth,” shares Paoli.
“Too often, Product teams only focus on building the core product, and when it’s done and ready, they come to the marketing and say, ‘now you go and sell it,’” she mentions the all-too-familiar problem even at lean startups. To counter this, the teams embrace the principle Product = Features and Channel. Channels, acquisition and distribution problems should be integrated into product development from the get-go, as opposed to being an afterthought.
4. Growth goals and execution
Here’s how it looks in action, starting with the tools to disseminate growth culture and increase the impact of the growth experiments.
Tool No. 1: Product-market fit score
The lack of product-market fit (PMF) is the #1 reason for startup failure. Skyscanner’s own measure of PMF is a complex score based on the AARRR framework by the original growth hacker Dave McClure; taking into account different metrics including acquisition in terms of unique monthly visitors, activation rate through different channels, retention rate and so on.
Tool No. 2: North star metrics
A north star metric is the single metric that best captures the core value that your product delivers to customers, a single focal point for your efforts and resources. Below are some of the growth indicators that Paoli has worked with in the past.
Here the value of being process-driven is clear: a culture of experimentation has allowed the team to shift from big batch gambling (e.g. spending US$100,000 on a brand marketing campaign) to an iterative, replicable path to success. Irregular spikes in traffic have given way to steady and controllable increases. The implementation of the growth model has become their significant competitive advantage, helping Skyscanner beat three other global competitors by a long shot.
5. Psychological security
“Truly seasoned leaders set specific goals and they implement a culture system to ensure their achievement,” Paoli says. For example, “Preply A/B tests things a lot and is not afraid to tell. They openly share both wins and failures with the team during demo days — information sessions in which the teams present what they have been working on. “The approach is blame-free,” she emphasizes.
In organizations with hypergrowth, a willingness to embrace failures is key. In fact, like scientists, growth managers are always looking to be proven wrong. As Paoli puts it, “When you A/B test, you are trying to prove yourself wrong, not to prove yourself right. Anyone who has taken statistics understands that. A manager that doesn’t understand that you’re trying to fail probably doesn’t understand how experimentation works.”
To foster a culture of experimentation, teams need to celebrate process-driven failures. The only way to do it is to ensure psychological safety. In a research carried out by Google, psychological security came out as the #1 factor that distinguishes great teams from good teams; topping structure & clarity, meaning, impact, and dependability. Psychological safety encourages team members to take risks and be vulnerable in front of each other, without being afraid that they’re being judged. When employees feel comfortable admitting mistakes, they can learn from failure, which leads to more open sharing of ideas and learnings, which leads to faster growth.
To ensure psychological safety, organizations need high-quality HR professionals, but most importantly, a leadership team that understands how to nurture professional and personal growth.
They need to install trust and transparency as supporting pillars to cascade the company’s values to every single team member.
In day-to-day operations, they need to observe how team members ask questions, and whether they show any hesitation in expressing their opinions. They should encourage displeasing but differing opinions. They also need to define what the company stands for in terms of value, and illustrate those values with behavior.
At Skyscanner, this is epitomized by the hashtag “failforward”: a company-wide invitation to share the lessons learned openly in Slack channels, meetings, and weekly check-ins. Elsewhere, accounting software giant Intuit gives a special award for the Best Failure and holds “failure parties”. The celebration of failures might come in the decision to actively kill ideas, Inc suggests.
A process-drive failure may prove more valuable than a lucky success, and an honest inquiry into it will lay the groundwork for future results.
Personal growth and organizational growth
So there you have it, the four elements of a sustainable and scalable growth culture. To inspire your team to get the conversation going, Paoli echos the Stanford psychologist and author Dr. Carol Dweck on her research into mindset and its profound impact on every single aspect of our life. Unlike fixed mindset, growth mindset is defined as an attitude towards learning and effort as a means for personal growth. A growth mindset thrives on challenge and sees failure not as evidence of unintelligence but as a chance for developing and realizing our potential. This generative, inspired mentality is not limited to either work or personal life, since they are branches of the same tree, one deeply rooted in your mindset. With parting words that remind us that organizational growth and personal growth are complementing forces, Paoli reminds the SOSV founders: “Mistakes can lead towards growth no matter how, and you can always change yourself for the better.”