Why your product stopped growing (and the 5-step framework to restart it) | Jason Cohen

Overview

Jason Cohen, a four-time founder and investor, shares a practical five-step framework for diagnosing and reigniting stalled product growth. This episode dives into actionable strategies for improving retention, pricing, and marketing, while also exploring when growth might not be the right goal.

Notable Quotes

- Your prices are way too low because you just guessed and you haven't changed them. — Jason Cohen, on the common mistake of underpricing.

- If you're not growing, you're dying. Is that true, or is that just something investors say to push founders? — Jason Cohen, questioning the universal need for growth.

- Think about the gauntlet customers went through to get to your product. After all that, if they leave, something is fundamentally broken. — Jason Cohen, on the importance of addressing churn.

🛠️ Diagnosing Stalled Growth: The Five-Step Framework

- Logo Retention (Churn):

- High churn is a critical limiter of growth. Even small improvements in churn rates can have exponential impacts.

- Avoid relying on generic reasons like too expensive for cancellations. Instead, ask open-ended questions like, What made you cancel?

- Focus on onboarding as it’s often the most impactful area to reduce churn.

• Pricing and Positioning:

  • Many companies underprice their products, which can deter larger customers who associate low prices with low quality.
    
  • Repositioning the same product can significantly increase perceived value. For example, framing a product as a growth enabler rather than a cost-saver can justify higher pricing.
    
  • Pricing is not just about the number; it’s about how the product is positioned and structured (e.g., per seat, usage-based).
    

• 📈 Net Revenue Retention (NRR):

  • NRR measures how much revenue existing customers generate over time, accounting for upgrades, downgrades, and churn.
    
  • Aim for NRR above 100% to ensure sustainable growth. For public SaaS companies, the median NRR at IPO is 119%.
    
  • Focus on creating measurable value for customers and aligning pricing with the value they perceive.
    

🐘 The Elephant Curve of Marketing Channels

- Marketing channels often follow an elephant curve—initial growth (trunk), plateau (back), and eventual decline (sagging tail).

- Identify which channels are saturated and explore new ones before growth stagnates.

- Examples of creative channel expansion:

- Constant Contact’s in-person workshops for small businesses.

- HubSpot’s pivot to selling through agencies, which became 50% of their revenue.

🤔 Reevaluating the Need for Growth

- Growth isn’t always the right goal. For some businesses, focusing on profitability or maintaining a steady state may be more fulfilling and sustainable.

- Founders should periodically reflect on whether growth aligns with their personal and professional goals.

- Consider whether the current product or market is the right fit, or if it’s time to pivot or sunset the business.

This episode is a treasure trove of insights for founders, product managers, and growth leaders looking to diagnose and address growth challenges—or simply refine their strategies for long-term success.