5 questions to ask when your product stops growing | Jason Cohen (2x unicorn founder)
Jason Cohen, a four-time founder including two unicorns, shares his actionable framework for diagnosing and rekindling product growth. He covers critical steps from addressing customer churn and optimizing pricing to exploring new acquisition channels and questioning the necessity of growth itself.
Deep Dive Analysis
17 Topic Outline
Introduction to Diagnosing Stalled Growth
The Problem of Logo Churn and its Mathematical Impact
Effective Strategies for Gathering Cancellation Feedback
Understanding the True Reasons Behind Customer Cancellations
Prioritizing Onboarding to Reduce Early Churn
Revisiting Pricing Strategies: Why Your Prices Are Likely Too Low
How Positioning Impacts Perceived Value and Pricing
The Inseparability of Pricing and Overall Business Strategy
Leveraging Net Revenue Retention (NRR) for Growth
Ensuring Customer Value Drives NRR and Pricing
Addressing Saturated Marketing and Acquisition Channels
The 'Elephant Curve' of Channel Decline and Creative Solutions
Rethinking the Need for Growth: Is Stagnation Always Dying?
Personal Fulfillment vs. Company Growth
Jason's Book: Hidden Multipliers
AI Corner: Using AI for Data Extraction from Images
Contrarian Corner: The Limited Efficacy of A/B Testing
5 Key Concepts
Logo Churn Limit
This concept describes the maximum number of customers a company can ever achieve if its new customer acquisition rate and cancellation rate remain constant. It's calculated by dividing the number of new customers added per month by the monthly cancellation rate, illustrating how cancellations can create a hard ceiling on growth.
Proximate vs. Real Cause
This distinguishes between the immediate, superficial reason given for an event (like 'too expensive' for cancellation) and the deeper, underlying factors. Understanding the real causes requires asking 'what made you cancel?' and delving into multiple contributing factors rather than seeking a single 'root cause'.
Pricing Selects the Market
This idea explains that pricing isn't just about a number, but about signaling value and targeting specific customer segments. Low prices can deter larger, more sophisticated customers who perceive the product as inadequate or immature, while higher prices can attract them by signaling quality and robustness.
Pricing as Positioning
This concept highlights that how a product is priced and described can fundamentally change its perceived value and market appeal. Repositioning a product to emphasize growth (e.g., 'double your leads') rather than cost savings (e.g., 'halve your costs') can dramatically increase the price customers are willing to pay for the same underlying functionality.
Elephant Curve
This term describes the typical lifecycle of marketing channels, which initially show an S-curve of growth (discovery, rapid adoption, saturation) but then decline over time. This decline happens as the audience gets saturated, ad fatigue sets in, or the channel itself loses relevance, making sustained growth through existing channels increasingly difficult.
8 Questions Answered
The most critical problem is high logo churn (customers leaving), because it sets a hard, mathematical limit on how large your company can ever become, and it indicates a fundamental failure to fulfill customer promises.
Instead of asking 'Why did you cancel?' with multiple-choice options, ask 'What made you cancel?' as an open-ended question. This encourages customers to provide more detailed, product-centric reasons, which can then be analyzed for deeper insights.
No, 'too expensive' is almost never the real reason for cancellation, especially if the customer already went through the process of buying the product. It's usually a proximate cause masking deeper issues like unmet value, lack of integration, or the product not solving their problem effectively.
Onboarding is crucial because most customer cancellations occur in the initial period (first day, 30 days, 90 days), and even small improvements in onboarding can lead to significantly larger increases in long-term retention and profitability.
Raising prices can increase sign-ups or revenue by selecting a different market segment. Higher prices can signal quality and maturity, attracting larger companies that might have dismissed a cheaper product as inadequate, thereby increasing demand within that new segment.
NRR is critical because it measures how much revenue is retained from existing customers after accounting for churn, downgrades, and upgrades. For sustained growth, especially for public SaaS companies, NRR typically needs to be above 100% to offset churn and allow for expansion within the existing customer base.
Marketing channels tend to follow an 'elephant curve,' where initial S-curve growth eventually sags and declines. This happens due to audience saturation, ad fatigue, or the channel itself becoming less effective, meaning companies cannot rely on existing channels indefinitely for growth.
Not necessarily. While the adage 'if you're not growing, you're dying' often applies, especially for venture-backed companies, some businesses (like many bootstrapped ones) might choose to optimize for profit or maintain a stable size that aligns with their values and desired work-life balance, rather than pursuing growth at all costs.
15 Actionable Insights
1. Re-evaluate Growth Necessity
Question the assumption that continuous growth is always necessary. Consider if maximizing profit or personal fulfillment is a more appropriate goal, especially for smaller or bootstrap companies, to avoid pursuing growth at all costs.
2. Follow Stalled Growth Framework
When product growth stalls, follow a structured diagnostic process: first, check customer churn; then, evaluate pricing and positioning; next, assess existing customer growth (NRR); finally, analyze acquisition channel saturation.
3. Quantify Max Customer Cap
To understand the severity of logo churn, calculate your maximum potential customer base by dividing new customers added per month by your monthly cancellation rate. This reveals a hard cap on growth if churn isn’t addressed.
4. Ask “What Made You Cancel?”
Instead of asking “Why did you cancel?” use open-ended questions like “What made you cancel?” to encourage customers to provide specific, actionable feedback about product issues or situational factors, rather than generic excuses like “budget.”
5. Dig Beyond Surface Reasons
Don’t accept surface-level reasons like “too expensive” or “project ended” for cancellations. Dig deeper to understand the underlying product, market, or communication failures, acknowledging that complex systems often have multiple interlocking causes.
6. Prioritize Early Customer Onboarding
Focus on improving the early customer onboarding experience, as small changes in this initial period can significantly reduce churn and increase long-term profitability by ensuring customers achieve early success and value.
7. Reassess Pricing & Market Fit
Recognize that your product’s pricing is likely too low and may be attracting the wrong market segment. Raising prices can sometimes increase sign-ups by signaling higher quality and attracting more valuable customers.
8. Position for Value, Not Savings
When positioning your product, emphasize how it helps customers achieve their core objectives (e.g., “double leads”) rather than just saving money or time. This can significantly increase perceived value and allow for higher pricing.
9. Achieve High Net Revenue Retention
For sustained growth, ensure your Net Revenue Retention (NRR) is above 100%, meaning existing customers’ upgrades and expansions outweigh downgrades and cancellations. This is crucial for offsetting natural churn and scaling effectively.
10. Track True Customer Value
Beyond operational or usage metrics, actively measure the actual value customers derive from your product. This understanding allows you to create more value and strategically determine how to split that value through pricing.
11. Anticipate Channel Saturation
Assume that existing marketing and acquisition channels will eventually saturate and decline (the “elephant curve”). Proactively explore and invest in new, creative channels or market segments before current ones lose effectiveness.
12. Leverage Indirect Growth Channels
Consider indirect growth strategies, such as selling through agencies or partners, to reach new customer segments and overcome saturation in direct acquisition channels.
13. Prioritize Content Quality
When creating content, prioritize high quality and depth over strict consistency in publishing frequency. Exceptional content, even if less frequent, is more impactful and builds a stronger audience.
14. Scrutinize A/B Testing Results
Be skeptical of A/B testing results, especially for minor changes or without sophisticated statistical analysis, as many observed “wins” can be false positives that don’t lead to long-term improvements.
15. Extract Data from Image Charts
Utilize AI tools like Gemini to convert data presented in images (e.g., charts, infographics) into structured tables that can be easily pasted into spreadsheets for personal analysis and model building.
5 Key Quotes
Your prices are way too low because you just guessed and you haven't changed them.
Patrick Campbell (quoted by Jason Cohen)
If you're not growing, you're dying.
Jason Cohen
The largest point is pricing is not just the number on the page. It's positioning. It's how their budgets work. It's how it's structured.
Jason Cohen
What you want to do is say, what made you cancel? In other words, what about the product or situation or whatever caused the cancellation, just phrasing it that way, you get much better results.
Jason Cohen
Be yourself. Everyone else has taken.
Oscar Wilde (attributed by Jason Cohen)
1 Protocols
Five-Step Framework for Diagnosing Stalled Growth
Jason Cohen- **Step 1: Assess Logo Churn.** Determine if customers are leaving at too high a rate, calculating the maximum customer ceiling based on current acquisition and cancellation rates. Focus on understanding *what made them cancel* through open-ended questions and prioritize improving onboarding.
- **Step 2: Evaluate Pricing and Positioning.** Analyze if the pricing is correct, considering that prices are often too low and that pricing selects the market. Explore how repositioning the product to emphasize value (e.g., growth instead of cost savings) can significantly impact perceived worth and revenue.
- **Step 3: Examine Net Revenue Retention (NRR).** Determine if existing customers are growing (upgrading, expanding usage) at a rate that offsets churn and downgrades. The goal is to ensure NRR is above 100% by creating more value for customers, which justifies increased spend.
- **Step 4: Analyze Marketing Channel Saturation.** Identify if current acquisition channels are saturated or declining (the 'elephant curve'). If so, explore new, creative channels, indirect marketing strategies (like agencies), or consider expanding into new products or markets.
- **Step 5: Question the Need for Growth.** If all previous options have been exhausted, reflect on whether continuous growth is truly the right goal for the company or for you personally. Consider optimizing for profit, maintaining a stable business, or making a more drastic strategic or personal change.