The key to understanding growth quantitatively is to build a solid intuition on how things add up over time. More than any other area, growth is all about optimizing future value. Here’s some basic math that I regularly use to think about the impact of a strategy, idea, or project.

Most growth objectives can be generalized into “get more people to do more of something.” The something, commonly called a metric, will depend on your strategy. Social media companies might optimize for the number of users who visit their site daily. SaaS companies might optimize for the number of companies with subscriptions. In our case, LinkedIn might want to get more readers to like and comment on this article. Here’s a simple formula to illustrate this concept:

growth objective = total actions = users × engagement_rate

We’re intentionally leaving out a lot of details in the math to focus on the basics. From this formula, it’s obvious that there are two levers to increase total actions. We can increase the number of users, or we can increase the engagement rate (number of actions per user). While these two concepts might seem obvious, the choice between these two have very different results when time is added to the equation.

Growing users

The first Growth challenge every social network faces is growing the number of users. Qualitatively this means we have good product-market fit, but not enough users to have the impact we want.

When we focus on growing users, we also consistently increase actions over time. The chart below illustrates a simple example where we start with 10,000 users and add 500 new users each month. Assuming an engagement rate of 0.4 which does not change, then the number of actions each month also grows linearly.

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