The "Messy Middle" of Startup Growth

Hi Team, 

It's hard to believe it’s already June. Midway through the year, are we doing ok?

How are things?

Before we jump in, It’s week 3 of 4 in TLV, and I’m here with the coffee rating of the week:

Nahat Coffee Roastery: 8.2. This spot is right off the super walkable “mesila,” where they roast their coffee under the same roof. The Guatemala brew over ice had a unique depth and sweetness to it. The vibe was solid, not a ton of indoor seating, so I removed some points for that.

Ok, who am I with these coffee ratings smh?? 

Let’s move on to the weekly photos that matter:

Most of my newsletters focus on either the early days of starting a startup or navigating the 9-figure growth of one.

But what about the messy middle of startup growth? When you are scaling rapidly from a small shop to a giant, busy unicorn?

Should you hire CX in-house or outsource?
How should you think about scaling your Retention side of the business? 

This is a fun topic I’ve discussed with a few founders lately, and I’d love to share some of what I've learned.

Let’s dive in. 

The Best Advice for Scaling Your Online Shop

This week’s newsie is brought to you by Help Scout. 

There’s a reason they’re called “growing pains!”

Seeing your ecommerce business grow is exciting. You’ve got a great product, your marketing hits the mark, and your processes are in place — for now. 

But with growth come challenges: Will your tools handle increased demand? Can you balance acquiring new customers and keeping the old ones happy? 

The team at Help Scout rounded up the best advice from ecommerce brands to deliver a treasure trove of tips on scaling faster and delighting more customers. 

Inside this guide:

• Stock your toolkit. Are you using the most powerful tools to scale your business? Discover which AI-powered tools, Shopify integrations, and social media resources you should be using today, compiled by ecomm growth experts.

• Get serious about scaling. Find blueprints for growing and retaining a loyal customer base — with tips for automating your internal systems, increasing brand awareness on social media, and taking better care of your customers.

• Hear straight from the source. Learn which growth strategies worked and read firsthand founder stories from ecomm brands like Fishwife, The Sill, Franc, Uncommon Goods, and more.

• Build a customer-oriented brand. Focus on interactions rather than transactions to create online shopping experiences that keep customers at the center.

Hiring CX for the Messy Middle:

There's no universal formula for whether to “build or buy” when it comes to CX and retention teams. 

Anyone claiming there's a one-size-fits-all approach is likely trying to sell you something. Take those strong opinions with a grain of salt.

That said, if you want to build a brand truly renowned for customer obsession, IMHO, having at least a lean in-house CX team is table stakes. 

Outside vendors can provide helpful scale, but fostering a customer-centric culture has to start from within your core team. Otherwise, you risk having soulless, cookie-cutter "customer service."

Skills and experience should account for maybe 15% of the criteria when hiring CX leadership. The other 85% needs to be based on their passion for delighting customers and their ability to inspire that same fire in others. 

I've seen companies make the rookie mistake of hiring an average but very experienced CX person, only to still get generic, uninspiring service.

Tenured "business as usual" folks tend to create...you guessed it... business-as-usual outcomes.

Hiring Retention for the Messy Middle: 

For retention roles, hard skills carry a bit more weight - maybe 50%. However, work ethic (25%) and a willingness to constantly learn and get uncomfortable (25%) are equally critical. 

This messy middle stage requires relentless experimentation and iteration on your retention playbook. You can't just revert to boring "spray and pray" batch-and-blast tactics because they're familiar and seem to "work" based on simplistic metrics.

Long-term, It’ll create an unengaged Wayfair-esque strategy that annoys the bulk of your customers into submission (unenagement).

Hire people who will challenge that mindset and strive for true comms “PMF stickiness.” 

Don't get blinded by pedigree; raw skills and a hunger to prove themselves can often trump years of experience. After all, you're still a scrappy startup, just a bit bigger and messier than before.

Practical and Tactical Retention Tips in the Messy Middle

Retention from zero to one is generally lots of testing and iterating, but once you get to full-on growth mode and are moving quickly, it’s time to start getting strategic and thoughtful:

1. Map Out Your Full Customer Lifecycle:

   • Identify all the key stages customers go through, from initial awareness and through the funnel to purchase, retention/nurture, expansion, etc.

   • Map these out on Figma, Miro, or whatever other tool you’d prefer.

   • Define the primary goals, friction points, and engagement opportunities for each stage and how your retention strategy can help thoughtfully drive them through the funnel once you have their contact info.

   • Develop targeted plays and campaigns tailored to each lifecycle stage rather than batch-and-blast tactics.

   • Bonus: Leverage AI and machine learning for smarter segmentation and content recommendations (side note: Yotpo offers some of this).
     

2. Obsess Over Customer Data:

   • Track critical customer health signals and leading indicators of churn or less engaged segments.

     1. Are certain cohorts much stickier than others?

     2. Are customers of a specific product much stickier than others?

     3. Are customers of one product journey much higher LTV than another one?
        

3. Build a Dedicated Retention Strike Team:

   • Consider forming a cross-functional growth squad laser-focused on retention initiatives.

     1. Include members from product, growth marketing, data, CX, Ops, etc.

     2. Empower them to run rapid experiment cycles and make data-driven optimizations to the core product experience, including ads, post-purchase experience, unboxing and product packaging, CX guidance, etc.
        

4. Leverage Personalization & Segmentation:

   • Move beyond one-size-fits-all batch campaigns to more contextual, personalized engagements.

   • Use RFM segmentation, cohort analysis, and other signals to identify high-value user groups.

   • Customize messaging, offers, and experiences for each critical segment rather than spraying everything to all users. There are some great tools that help you do this as well.
     

5. Focus on Building Real Product Stickiness:

   • Don't just rely on discounts, gimmicks, and re-engagement spam to temporarily boost activation metrics.

   • Invest in developing a remarkable core product experience that keeps users hooked through utility and delight.

   • Make existing customers feel valued insiders through exclusive betas, insider content, superfan communities, etc.

That’s it for this week!

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers, 

Eli 💛

P.S. Looking for inspo on your next email/SMS campaign?

I know you will love this.