How to grow a subscription business | Yuriy Timen (Grammarly, Canva, Airtable)
Yuri Timmin, a growth advisor to companies like Canva and Airtable, discusses tactical growth strategies for subscription products. He covers when to invest in virality, SEO, and paid growth, common failure modes, and how market shifts are impacting acquisition channels.
Deep Dive Analysis
14 Topic Outline
Yuriy Timen's Background and Advising Work
Growth Paths for Subscription-Based Products
Identifying Opportunities for Virality and Referrals
Defining and Understanding Network Effects
SEO Strategy, Timeline, and Competitive Landscape
The Shifting Landscape of Paid Media
The Comeback of Media Mix Modeling
Determining Causality Between Media Spend and Business Results
Balancing Focus and Diversification in Growth Strategies
Knowing When to Move On From a Growth Tactic
The Shift from 'Growth at All Costs' to 'Survival'
Strategic Reasons for Investing in Paid Media
Overlooked and Underutilized Growth Channels
Lightning Round: Book Recommendations and Industry Leaders
4 Key Concepts
Network Effects
The utility an individual user derives from a product increases as more users join the platform. This can apply broadly or specifically to users within a team or company, correlating with a rise in the product's value.
Media Mix Modeling (MMM)
A methodology, re-emerging from traditional advertising, that uses data to determine optimal budget allocation across various marketing channels. Historically updated quarterly, modern MMM aims to adapt this approach for less trackable digital and offline channels.
Incrementality Testing
A method involving controlled, randomized experiments to establish a causal relationship between media spend and business results, rather than just correlation. It often requires temporarily turning off a channel in a specific demographic to measure its true incremental impact.
Essentialism
A philosophy focused on cutting out noise and finding a singular focus to execute tasks exceptionally well. It emphasizes ruthless prioritization, especially for leaders, to avoid spreading resources too thin and ensure maximum impact.
10 Questions Answered
Companies should lean into virality if their product has inherent network effects (utility increases with more users) or if they have a deeply beloved brand that can support incentivized referral programs.
The earliest meaningful results from an SEO strategy typically appear around six months, starting as a small trickle that compounds over time if the strategy is successful.
While paid media budgets are contracting due to market turbulence and stricter efficiency demands, it presents an opportunity for companies with strong cash positions, healthy unit economics, and sophisticated attribution capabilities, as competition on ad platforms decreases.
Click-based attribution only provides correlative insights. To determine a causal relationship between media spend and business results, companies must conduct ongoing incrementality testing through controlled, randomized experiments.
Early-stage companies should prioritize focus, rapidly iterating on one or two promising growth engines. Diversification is a critical later-stage strategy, but attempting it too early can spread limited resources too thin.
For some tactics, objective guardrails like minimum impressions or expected click-through rates can indicate promise. For others, it involves a judgment call, weighing the potential incremental lift against the opportunity cost of other initiatives.
The two primary reasons are to drive returns at efficient unit economics or to quickly gain learnings on messaging, positioning, designs, and features through rapid A/B testing.
Investing in onboarding is almost always a high-ROI opportunity, particularly for complex prosumer products. Early-stage companies can see 2-4x activation rate improvements, while later-stage companies can still achieve 20-30% lifts.
TikTok's vast and diverse user base extends beyond young demographics, often including older, higher-income audiences. It remains relatively unsaturated with advertisers, making it a potentially efficient digital channel for many brands.
Out-of-home (OOH) advertising and podcasts are underutilized. OOH has improved attribution capabilities, and podcasts are proving very performant for many brands, especially as online attribution has become less precise.
19 Actionable Insights
1. Prioritize Onboarding for Complex Products
Invest in improving onboarding, especially for complex prosumer products, as it’s a high-leverage opportunity that can significantly increase activation rates (2-4x for early stage, 20-30% for later stage). Guide users and customize their initial experience to avoid overwhelming them with the product’s full robustness.
2. Invest in Deep Customer Research
Consistently conduct user interviews, market research, surveying, and panels to gain clarity and momentum, especially in early stages. This deep understanding of customers and prospects can galvanize your team and provide focus.
3. Focus on One Growth Channel
When resources are limited, intensely focus on one growth channel or tactic at a time. Establish clear, objective guardrails to determine when a tactic is showing promise or when to move on, ensuring it receives an “appropriate shot.”
4. Avoid Premature Growth Diversification
If a single growth tactic accounts for 80%+ of your user acquisition but your overall user base is still small, resist diversifying too early. Instead, lean further into what’s working to build it into a strategic advantage and hit critical growth rates.
5. Shift to Sustainable Growth Initiatives
In the current market, prioritize sustainability, extending runway, and minimizing burn over “growth at all costs.” This makes longer-term, defensible growth initiatives like SEO more attractive for early-stage companies.
6. Assess SEO Opportunity Early
Evaluate SEO potential by checking for a unique editorial, programmatic (e.g., templates, data-driven pages), or data angle. If you can check two or three of these boxes, SEO may be a worthwhile investment for your product.
7. Timebox SEO Experiments to 3 Months
To reduce the cost and risk of SEO experimentation, timebox initial efforts to three months. This allows you to quickly determine if the strategy is likely to work without committing excessive long-term resources.
8. Seek Specialized SEO Expertise
Given the specialized nature of SEO and constant algorithm changes, consider hiring an outside resource (boutique agency or solo consultant) for an initial audit. This can efficiently vet the opportunity and provide actionable insights.
9. Leverage Paid Growth with Strong Unit Economics
If your company has high LTVs (hundreds of dollars, prosumer buyer), healthy conversion rates (20-35% site-to-free, 5-7%+ free-to-paid), and strong financial health, lean into paid growth. This is especially effective if you can identify less saturated channels.
10. Use Paid for Returns or Learnings
Employ paid acquisition either to drive profitable returns at efficient unit economics or as a rapid feedback engine for testing messaging, positioning, designs, and features. Clearly define your objective for each paid campaign.
11. Delay Paid Acquisition if Funnel Weak
If your product’s funnel doesn’t convert well, users don’t retain, or LTVs are too low, it’s not the right time for significant paid acquisition. Focus on improving product-market fit and core metrics first, potentially using a small budget for quick positioning tests.
12. Adjust Paid Payback to 6 Months
In the current market, aim to pay back paid media investments in six months or less. Adjust your targets and cut any campaigns that significantly exceed this timeframe.
13. Invest in Better Attribution Stacks
With increased scrutiny on attribution, invest in building a robust attribution stack, including tools for media mix modeling (e.g., Recast) and incrementality testing (e.g., Measured, Incremental). This helps understand the causal relationship between spend and results.
14. Capitalize on Decreased Ad Competition
If your company possesses strong cash reserves, robust unit economics, and efficient payback periods, leverage the current market conditions. Decreased competition on ad platforms can lead to lower CPMs, offering a significant advantage.
15. Explore TikTok Advertising
Don’t dismiss TikTok as a viable advertising channel, as its audience is much broader than just Gen Z and it can be a highly efficient digital channel for many brands. Your target audience is likely present on the platform.
16. Reconsider Out-of-Home and Direct Mail
Re-evaluate out-of-home (OOH) and direct mail campaigns, as online attribution has deteriorated while offline attribution methods have improved. These channels are gaining traction and can be very performant for many brands.
17. Utilize Podcast Advertising
Consider podcast advertising as a highly performant channel for many brands. The narrowing gap in attribution capabilities between online and offline channels makes it a more attractive option.
18. Practice Essentialism
Adopt the principle of essentialism by cutting out noise and focusing on a singular, high-impact goal, doing it exceptionally well. This approach is particularly valuable for leaders managing aggressive goals and multiple responsibilities.
19. Control Your Reaction to Events
Embrace the mindset that while you cannot control external circumstances, you can always control your reaction to them. This perspective fosters perseverance and resilience in challenging situations.
4 Key Quotes
The only thing that's worse than a channel or a tactic that you tried not working, the only thing that's worse than that is when you didn't give it the appropriate shot, right? And you prematurely or erroneously concluded that it doesn't work.
Yuriy Timen
Click-based attribution... it never demonstrated a causal relationship between our media spend and business results. It was only good for correlative insights.
Yuriy Timen
The money is always in the banana stand.
Lenny Rachitsky (quoting Casey Winters)
You can't control what's happening around you, but you can control your reaction to it.
Yuriy Timen (referencing Victor Frankl)