The Swyx Mixtape

Listen to the Creator Lab: https://www.listennotes.com/podcasts/creator-lab/lenny-rachitsky-lennys-bUBLKO_NIG4/

Growth Loops are the New Funnels: https://www.reforge.com/blog/growth-loops
The Racecar Growth Gramework: https://www.reforge.com/blog/racecar-growth-framework


Transcript

today for the sake of focus we're going to start with this growth framework called the race car growth framework which i thought was really incredible um so let's just kick it off man from what i could see from the outside from reading your work there's four components to this product growth which is 

- the first one was the growth engine
- the second one is called turbo boosts
- third is lubricants 
- the fourth is fuel 


we're going to explain what all of those are in a second um but before we even go into the details could you just share like a bit of context around what who who is this for and who is it not for 

yeah because absolutely this isn't for every single company in the world and um you know you've probably applied this in many different contexts but yeah curious what what stands out to you there so maybe zooming out even further i spent a lot of my time with this newsletter looking into growth stories and how growth strategies and essentially understanding how all the most successful companies grew and i've spent a lot of time on the early days of how they got their first say a thousand users and then i've also spent a lot of time on the longer term down the road strategy of how do they grow long-term what can what needs to work for a company to continue growing and so now there's kind of these two ends of the spectrum that are coming into focus for me of how do i get your early users and then how to long term grow your business so this race car framework is focused on the long term how do you grow eventually and long term and then we can even talk about how to get your first users and then i'm slowly filling in these puzzle pieces through more and more of my research of how companies go from zero to say a million and it turns out it's it's not as mysterious as people think there's not actually that many options it's more of a question of which of the options do you choose and then how do you become the best at that or do something remarkable within that option so so we could start at the end and then we can come back to the beginning days 

so the end is this race car framework and i this is uh based on work that i did with a buddy of mine dan haukenmeyer so this post is something we both put together and what we found is there's a really cool mental model of thinking about how businesses grow long-term and it turns out you can think of your company like a race car which includes these four components that you're talking about there's the engine there's uh turbo boosts lubricants and then fuel and the engine is the most important part because that's what drives your business and 

it turns out there's essentially four engines you can choose from as a company and uh and these engines are self-sustaining loops that keep your business growing and there's kind of like a fuel that goes into it and then the output is growth so should we dive into those yeah yeah so 

i love that so i'll repeat kind of what i heard and understood and then you can clarify if i heard it wrong so the growth the growth engine is the most important part is self-sustaining the turbo boosts from what i understand are more like these one-off events or big hero moments maybe events a super bowl ad and they can maybe make a big splash but they're not self-sustainable the way a growth engine is and we'll go into the details of what that means and then the lubricants are more about running efficiently exactly things that make everything run better exactly and then the fuel is what's actually needed to make the car run so the input that's needed that's that's awesome so maybe yeah we can start off by going into the growth engine itself so i've heard you talk about loops and engines and i have a visual of this thing going around and people talk about flywheels i found like a lot of the jargon sometimes is like overly used but in this case i think it actually is really helpful to see it visually um because i think if you think of like a growth engine in a traditional business you think of a marketing funnel which is not exactly the same thing but a lot of the time when you're getting new users and getting them to convert and become paying users and then spread and share something like in business school you might learn it like a funnel and i think what i like about this is it's not necessarily like a linear thing that just goes from top to bottom it's more something that keeps feeding itself is that accurate before we move on from there yeah that's exactly accurate and there's this uh group called reforge who was one of the first uh i guess um groups that kind of figured out that this is the thing that matters more than funnels so they kind of have this famous blog post that loops for the new funnels and in reality they're both important like funnels are a part of these loops and so they both uh are worth thinking about but when you're starting out it's a lot more important to think about the flywheel slash engine slash loop they're all kind of the same idea and it's just your point there are these things that kind of feed themselves and keep going yeah and so what we're going to do is we're going to be talking about a lot of theory but what we're going to try to do is layer on examples wherever possible so if we're talking about a funnel or a sorry not a funnel a a uh flywheel is there one that we could just explain to people yeah like airbnb's flywheel or a company that people know about




## ENGINES


let me share the four engines first and then we can talk about yeah that sounds great leverage each one 

so essentially the way to think about this is if you think about like all the things you can do to grow your business there's like pr there's events there's paid ads there's seo there's this like whole collection of options and what this concept tries to help you with is which ones should you focus on deeply and which are just kind of these one-off things or just micro-optimizations 

so the engines are the there's only four ways your business is really going to grow long term and the four ways are 

- performance marketing and the way that loop works is you spend money to run an ad the ad drives customers the customers generate revenue and you can feed that into more ads so that's a pretty straightforward one 

- the next is virality which is what we all know and love when we think about viral growth essentially users draw new users and those users join and invite their friends and their friends join and it goes on and on and they'll give examples but maybe an example that one is like yeah snapchat or telegram whatsapp facebook things where you're kind of encouraged in by your friends and we can talk about like how to know which of these your business is most naturally suited for because it's not like choose any it's usually based on the type of product that you have one is going to fit best and there's actually this kind of growing meme of first time founders focus on product and second time founders focus on distribution and a lot of that is that's actually very true i find and knowing these engines is how you think about that is almost working backwards from i have a unique way of being really good at one of these things what product can i build to take advantage of that that's that's in it that's a mental model that i find useful so anyway let me go through the four and then we can talk in more depth 

- content is the third one and that includes seo as one and usually the the most popular one but also includes like viral videos and content people share with each other so an example of a company that grew primarily through content is like glassdoor or uh trulia or quora and reddit where you just think of like looking for a thing and then shows up in your google results and then you go find it yeah 

- and then the fourth is just sales where you hire a salesperson they generate they find customers customers generator revenue hire more sales people that's usually the most common engine for enterprise businesses b2b businesses like a force i think it's probably a good example of yeah salesforce is a classic example the king that's right 


yes all right that's awesome and i i know that you've mentioned those are the four the four main ones in the blog post you also mentioned that there's some others people think about but like partnerships physical space um so like physical space could be retail stores uh like a showrooming thing that casper done for example came to mind for me um shelf placement casper is a good example where they they're almost exclusively performance marketing driven and then they started expanding into other engines like retail where like the loop of a physical location in physical placement is you pay money for a location either on a shelf or a on a block people walk by you know for those people buy stuff generate revenue and keep the business going sometimes it's just like a brand building thing where it's not meant to make money but that's i think directly yeah yeah and then the other one was partnerships which we'll just touch on briefly because even though it's not part of those those four components i think increasingly we're seeing really interesting examples of this 

even in the creator world um that both of us semi-playing well you're definitely playing and i'm partially playing in now you're definitely playing it yeah yeah i'm definitely kind of in there nowadays um but yeah so i think it's an interesting one as well because a lot of people don't always think of this and maybe it's not the primary way to start but for some people it can be a huge growth driver i mean even at google when i was there and that's a really obviously huge established business channel sales was uh channel partners were a huge uh driver for us um even on a smaller scale affiliates for other companies i've worked with as well and even on a smaller scale if you're an independent creator i would think about partnerships too because um you know the way i'd see it like i did something with the hustle newsletter that wasn't like i didn't pay for anything but we both like i brought something to the table and they wanted to feature it so there was a way for me to be featured in their their newsletter where there's distribution so um i think it's probably worth mentioning those two as well but for the sake of this conversation we'll we'll start with those four 

## WRINKLES

an important wrinkle to think about when we talk about this stuff uh the kind of the core idea of an engine is that it continues to grow your business and sometimes partnerships do that where they continue to draw traffic sometimes it's kind of like a one-off event and it doesn't mean you shouldn't do that like other those other parts of the car are great it's just they're not going to continue driving growth and that's the core is you need to find a way that continues that growth otherwise you're just going to flatten out it again um 

another really important point of this concept is it's not that you just pick one and you'll win it's to actually do well you have to become one of the best in the world at that engine in order to have a chance and the way i think about it is you kind of find the cross-section of your market and one of these engines where you could be in a huge company if you're the best at say content for travel and another business can be amazing at performance marketing for travel so as an example airbnb is incredibly successful as a virality driven travel company but booking.com very large successful business is also really big but they become really good at performance marketing and and then there's like tripadvisor which became really big through content so the way to think about this is you just need to find a way to become the best at your market in one of these engines to have a really good chance and the main thing the main issue companies have is they don't realize how they have to become incredibly good at one of these things they think they can just do all these things in some small way and have a chance and it turns out that's really really hard