Getting Past Zero-sum Growth

Getting Past Zero-sum Growth
Photo by Marek Piwnicki / Unsplash

If you’re a founder taking stock of your business, how confident are you in your growth strategy? Your playbook is likely in need of revision (esp. in B2C).

What does a robust growth strategy entail in this market downturn? Start with the fundamentals:

  1. Unit economics
  2. Scalability
  3. Sustainability

The outsized role performance marketing—particularly paid social—played in many startups’ growth playbooks during the ZIRP era is no longer tenable. Investors don’t have the appetite to underwrite user acquisition; companies must find new primary growth levers that are insulated from the zero-sum dynamics of ad platforms. The most successful teams will accomplish this by adopting the PCC growth model: they will utilize the three pillars of product, community, and content in combination to drive efficient, cost-effective growth.

Product-led and community-led growth strategies have been highly effective for SaaS companies like Figma and Notion. B2Cs have also seen success with individual elements of the PCC growth model e.g., Duolingo with community, Nerdwallet with content. By leveraging all three pillars in a coordinated manner, savvy teams can realize a halo effect. How?

Each pillar creates its own specific growth momentum; together, they augment each other, like so:

Product: demonstrates benefits and provides an intuitive UX that leads users to the Aha moment.

Community: fosters belonging and rituals that drive user acquisition & engagement.

Content: entertains, educates, and offers an authentic, unique narrative that generates awareness & interest.

Using all three pillars together, teams can create leverage across the entire funnel with the PCC model—acquisition, activation, engagement, and retention. Community is especially important, in that it can approximate some of the moats that make the SaaS model so effective e.g., network effects & switching costs. There are many ways to create community, as David Spinks, Greg Isenberg, and others have shown. My thesis is that for B2C, product-native (built-in) community is most powerful.

So what does the PCC model look like in action? Let's consider Zero Longevity, a wellness company whose fasting app I use daily. Zero has a great UX for tracking fasts & a growing library of product-native educational content about diet & metabolism. The product also utilizes a powerful user engagement tactic: challenges!

Zero is in the top 30 health & fitness apps in the App Store. The business is likely doing great. But it’s missing one thing: community! A product-native community could accelerate growth for Zero, especially for acquisition and engagement. Here’s why: fasting isn’t an easy habit to adopt and maintain on your own. The support and social accountability you get from a group is super-valuable. In fact, I’m part of a fasting group; we coordinate fasts, share data, and encourage each other…on WhatsApp (!)

This is a missed opportunity for Zero to foster belonging, support, and rituals among its users. Community would also drive greater word-of-mouth (WOM) acquisition, group activation, and other dynamics that positively impact growth rate and unit economics.

Does the current downturn mark the end of performance marketing? Of course not, but paid ads can no longer serve as a primary growth driver. Instead, they should augment other channels and strategies. The PCC model can help drive moar growth for many companies, particularly in the categories of fitness/wellness, digital health, fintech, and collectibles. I will cover other examples of products that can benefit from this model in a follow-up post…stay tuned.