Table of contents
- What Is a Growth Model?
- Why Is a Growth Model Important?
- Visual vs Mathematical Growth Models
- North Star Metric
- Macro vs Micro Growth Models
- Linear vs Non-Linear Growth Models
- Growth Loops and Non-Linear Models
- Growth Model vs Growth Loop vs Growth Engine
- Tools for Building Growth Models
- Surprising Insights From Growth Models
- About Growth Method
- Frequently asked questions
- Conclusion
What Is a Growth Model?
A growth model is a structured way to answer the fundamental question: “How does our business grow?” It maps the channels, metrics and loops that connect your marketing and product activity to sustainable, repeatable growth.
A growth model is a predictable, sustainable, and defensible strategy that helps you achieve maximum distribution in the market. – Lenny Rachitsky
At its core, a growth model boils down to a way to conceptualize and summarize your business in a simple equation, which allows you to think about growth in a holistic and structured way. – Hila Qu, GitLab
Why Is a Growth Model Important?
Having a clear growth model is essential for growth marketing teams, agencies and consultants. It ensures everyone in your organisation understands how growth happens and their role in achieving it.
A growth model helps you:
- Align your team around a clear growth strategy
- Set realistic goals and forecasts
- Identify the most effective customer acquisition channels
- Prioritise resources effectively (see our guide on prioritisation frameworks)
- Define and track key growth metrics
- Deepen your team’s understanding of the business
With a robust growth model and historical data, you can run accurate growth simulations. For example, you can test different growth levers—such as investing in acquisition versus retention (see AARRR framework)—to identify the most impactful strategies. For a deeper dive into discovering and applying growth levers, see our full guide.
Visual vs Mathematical Growth Models
Growth models typically fall into two categories: visual (qualitative) and mathematical (quantitative).
| Visual Growth Model | Mathematical Growth Model |
|---|---|
| Qualitative | Quantitative |
| Simple visual representation | Detailed numerical representation |
| Shows relationships visually | Built using spreadsheets and formulas |
| Recommended starting point | Requires accurate assumptions and historical data |
A visual growth model illustrates how different parts of your marketing, product and customer journey interact to drive growth.
A growth model is a visual representation of the acquisition model a business uses to grow and sustain its customer base. – Segment Grow Using Data Course
A mathematical growth model is quantitative, typically built in spreadsheets. It relies on accurate assumptions, such as conversion rates or paid traffic costs.
A growth model is a mathematical representation of your users. – Jon Butterfield
North Star Metric
To build effective growth models, each team should define a core metric—often called a North Star metric. This metric helps teams clearly understand all inputs driving their primary goal.
Macro vs Micro Growth Models
Companies often create a high-level growth model describing how the entire system works. Individual teams then build smaller “mini models” detailing their specific activities and strategies.
These mini models frequently form the core of a team’s strategy document, clearly outlining how their work contributes to overall growth.
Linear vs Non-Linear Growth Models
The primary difference between linear and non-linear growth models is how they predict growth over time:
- Linear models (funnels) assume a straightforward progression from acquisition to conversion.
- Non-linear models (loops) focus on cyclical processes, where outputs feed back into the system as inputs, creating compounding growth.
Growth Loops and Non-Linear Models
Historically, funnels dominated growth marketing thinking. However, modern growth marketers increasingly focus on growth loops.
The core idea behind growth loops is that the output of one cycle becomes the input for the next, creating sustainable, compounding growth.
While linear tactics do help us gather our first users, they also require us to constantly put more into the funnel for one-directional input and output. In contrast, a growth loop creates an always-on process where one cohort of users feeds into the next. – Unsolicited Feedback Podcast
Growth Model vs Growth Loop vs Growth Engine
These three terms get used interchangeably, but they describe different layers of the same system.
| Term | What it is | Scope |
|---|---|---|
| Growth model | The overall picture of how your business grows — the inputs, metrics, and how they connect | Strategic — the whole business |
| Growth loop | One self-reinforcing mechanism within the model, where outputs become the next cycle’s inputs | Tactical — a single acquisition or retention mechanism |
| Growth engineer | The person who builds and ships the systems — including loops — that make the model real | Operational — the people and code behind it |
A growth model can include several growth loops (viral, content, paid, sales) alongside linear funnel stages. A growth engineer is typically the one who takes the model and loop design and turns it into a shipped feature or campaign.
Tools for Building Growth Models
Depending on your needs, various tools can help you build and visualise your growth model:
- Paper and pen (ideal for rough sketches)
- Graphical tools: Miro, Figma, Canva, Lucidchart, Whimsical, PowerPoint, Google Slides
- Spreadsheets: Google Sheets, Excel (for rapid iteration and visualisation)
- Data tools: Airtable, Notion, Tableau (for dashboards)
- Custom apps: Python (Streamlit, Dash), R (Shiny), JavaScript (D3.js, React)
- AI tools: ChatGPT for initial model creation
Surprising Insights From Growth Models
Building and analysing growth models often reveals unexpected insights:
- Overall growth is highly sensitive to customer retention rates.
- Marketing teams frequently prioritise acquisition over cross-sell and upsell opportunities.
- Improving acquisition metrics is typically easier than improving retention metrics.
- Significant retention improvements often result from enhancing user onboarding experiences.
Statistically speaking, a 1% improvement in the lowest number will yield the biggest uplift. Practically speaking, however, increasing the lowest conversion rate might be the hardest and most time-consuming thing to do. – Ross Nazarenko
About Growth Method
A growth model is only useful if someone keeps testing against it. Most teams sketch the model once, drop it into a strategy deck, then default back to a running list of one-off campaigns that never gets checked against it again. That’s the gap Growth Method is built to close — it’s the agentic marketing platform for B2B teams, built for people and agents to plan strategy, ship campaigns, and learn what works, all in one place.
Instead of a growth model living in a slide deck, Growth Method turns it into a working system: campaigns get tied to the same goal your model is built around, agents surface the next experiment most likely to move it, and every test gets analysed against a real before/after baseline — so your model stays a living picture of how the business actually grows, not a one-time exercise.
We are on-track to deliver a 43% increase in inbound leads this year. There is no doubt the adoption of Growth Method is the primary driver behind these results.
Laura Perrott, Colt Technology Services
Book a call to see how, or apply for early access to get started.
Frequently asked questions
What is a growth model?
A growth model is a structured way to answer how your business grows — the channels, metrics, and loops that connect your marketing and product activity to sustainable growth. It aligns teams around a shared understanding of what drives the business forward.
What’s the difference between a visual and a mathematical growth model?
A visual growth model is a qualitative diagram showing how parts of your marketing, product and customer journey interact. A mathematical growth model is quantitative, usually built in a spreadsheet with real conversion rates and cost assumptions, so you can simulate different scenarios.
What’s the difference between a growth model and a growth loop?
A growth model is the overall picture of how your business grows — it can include linear funnels, non-linear loops, or both. A growth loop is one specific mechanism within that model, where the output of one cycle becomes the input for the next, creating compounding growth.
How do you build a growth model?
Start by defining your North Star metric, then map the key inputs that drive it — acquisition channels, activation steps, and retention levers. Sketch a visual model first using tools like Miro or Whimsical, then build a mathematical version in a spreadsheet once you have reliable historical data.
Conclusion
No matter how effective your growth strategy is, aligning individuals, teams and the wider company around it is crucial. Incorporating a clear growth model into your growth marketing strategy is one of the best ways to achieve this alignment.
For more insights, explore our guide on growth marketing strategy.