Growth.

The framework

1. 01

   Do the arithmetic before you celebrate the number.

   Take your customer list at the start of the period and at the end. If you're counting customers, every account sorts into one of three buckets — new, resurrected, churned — and start plus new plus resurrected minus churned has to land exactly on your closing figure. If you're counting revenue, the same accounts sort into five, because expansion and contraction only exist once there's a price attached. Run one identity at a time. Most businesses can produce new sign-ups on demand and have never once counted a resurrection, and an afternoon of unglamorous sorting will tell you more than the next three dashboards you commission.

2. 02

   Which two flows are you actually running?

   Acquisition is visible, budgeted and owned by someone with a title. Expansion is enjoyable, because it looks like selling. The other three tend to be orphans — resurrection belongs to nobody, contraction hides because a downgrade still arrives as revenue, and churn is everybody's problem, which is to say it's no one's. Write the five flows down and put a human name beside each. Where you find yourself writing a team, a tool or a hopeful blank, you've found the flow that's been quietly cancelling the work of the other two.

3. 03

   The ratio underneath the identity.

   In the same series Hsu pairs the accounting with a single diagnostic: new plus resurrected, divided by churned. Above one you're growing; below one the base is shrinking however loud the top of the funnel gets. Social Capital's co-founder Mamoon Hamid is credited with the revenue version — new plus expansion over churn plus contraction — which is the number a great many investors now open a meeting with. Calculate yours across the last six months rather than the last one. A single month tells you almost nothing; the direction of travel tells you nearly everything.

4. 04

   The flows don't substitute for one another.

   Each of the five has its own cure, and the cures aren't interchangeable. Churn is answered by the product and by what happens in the first fortnight of using it. Contraction is answered by pricing and packaging. Resurrection is a campaign to people who already know your name, and it is usually the cheapest customer in the building. Acquisition is the only flow you can simply buy, which is exactly why it gets asked to do the work of the other four — and why the bill keeps climbing while the net number sits still.