growth-model-construction
Installation
SKILL.md
A growth model is a formulaic representation of your business, typically built in a spreadsheet, that maps how acquisition, retention, and monetization interact. Its primary value is not forecasting, but providing a "common currency" to compare the ROI of different product initiatives.
The Construction Process
1. Build the SaaS Foundation
Start with the three linear building blocks. Even for non-SaaS businesses, these are the starting points:
- Acquisition: Map your channels (Paid, Organic, Viral). Define inputs: Traffic/Spend → Conversion Rate → New Users.
- Retention: Create a survival curve. Define: Activation Rate → Monthly/Annual Retention Rate.
- Monetization: Define the base revenue per user (e.g., Subscription Fee).
2. Layer Transactional Complexity
If the business is transactional (e.g., E-commerce, Marketplace), add the following variables:
- Frequency: Transactions per month/year per retained user.
- Average Order Value (AOV): Revenue per transaction.
- Unit Economics: Model the Contribution Margin (Revenue minus COGS and marginal costs like shipping or support).