Warm Up
Discuss these questions with your partner before you start the lesson.
Question 1
Think of a product or app you use every day that seems to grow without much advertising. How do you think it grows? What keeps you using it?
Question 2
Has your team ever run an experiment or A/B test to improve a marketing result? What did you learn — and did you act on it?
Question 3
If you had to double your sign-ups or leads in six months without doubling the budget, what would you try first?
Vocabulary
8 key words for this lesson
Listen to the audio for the full abbreviation
Growth hacking
A mindset and method focused on finding fast, creative ways to grow — often with limited budget. Growth hackers test ideas quickly, cut what fails, and scale what works.
Riley said: Growth hacking is not about tricks — it is about speed and discipline. You test ten ideas, nine fail, one doubles your sign-ups. Then you put everything behind that one. That is the whole game.
Pirate metrics
A framework for measuring growth across five stages — Acquisition, Activation, Retention, Referral, and Revenue. The acronym AARRR sounds like a pirate, which is where the name comes from.
Marcus said: I keep hearing about pirate metrics. Riley said: AARRR — Acquisition, Activation, Retention, Referral, Revenue. It is a simple way to find where your funnel is leaking. Most companies focus on acquisition and ignore retention. That is the most expensive mistake you can make.
AARRR
Acquisition, Activation, Retention, Referral, Revenue — the five stages of the growth funnel. Each stage is a place where users can drop off, and each one needs a different strategy to improve.
Riley said: Walk me through your AARRR numbers. Where are you losing people? Marcus said: Activation. People sign up but fewer than 20% complete the onboarding. Riley said: That is where you start — not more acquisition. Fix the hole in your bucket first.
Viral loop
A growth mechanism where existing users bring in new users — who then bring in more. A strong viral loop means every new user helps you acquire the next one, reducing your overall cost of growth.
Riley explained: Dropbox built their viral loop into the product. You get more storage when you invite a friend. The friend signs up, and they also want more storage, so they invite their friends. One user becomes ten. That is a viral loop at its best.
Product-led growth
A growth strategy where the product itself is the main driver of acquisition, retention, and expansion — instead of sales or marketing. Users experience the value of the product and then buy or invite others.
Marcus asked: Why does Slack grow so fast without a big sales team? Riley said: Product-led growth. When you use Slack and love it, you invite your whole team. The product does the selling. Marketing and sales support the motion — they do not drive it.
Activation
The point at which a new user first experiences the real value of a product — the 'aha moment'. If users do not reach activation quickly, they leave before they become loyal customers.
Riley said: Activation is the most underinvested stage in most funnels. You spend all your budget getting people in the door, and then you let them wander around and leave. Find the one action that predicts long-term retention — and get every new user there in the first session.
Experimentation
A structured process of testing ideas to find what works. In growth marketing, experimentation means running fast, controlled tests — changing one variable at a time — and using the results to make better decisions.
Riley said to the team: Growth is built on experimentation. You do not have to know the answer — you have to be disciplined about finding it. We run ten experiments a month. We expect eight to fail. That is not a bad result — that is a healthy growth culture.
Retention
Keeping customers coming back after their first purchase or sign-up. Strong retention means users keep using, paying, and engaging over time — and it is almost always cheaper than acquiring new ones.
Marcus asked: Should we focus on acquisition or retention? Riley said: If your retention is below 40% at 30 days, focus on retention. You are filling a leaking bucket. Fix the leak first — then turn on the tap.
Phrases
6 phrases and their meanings
Where is the funnel leaking?
The key diagnostic question in growth marketing — asking which stage of the AARRR funnel is losing users. Identifying the leak is the first step to fixing it.
Riley opened the growth review: Before we talk about new channels, let's answer one question — where is the funnel leaking? Show me the drop-off at each stage. The answer to that question tells us exactly where to focus.
We need to find the aha moment
The moment when a new user first understands the value of a product. Finding and shortening the path to the aha moment is one of the most powerful things a growth team can do.
Riley said: Our activation rate is 18%. That tells me users are not reaching the aha moment before they leave. We need to find it — what is the one thing our best customers do in the first session that casual users never do? That is the aha moment. Get everyone there faster.
Let's run an experiment on that
A growth team phrase that turns an idea or assumption into a structured test. It signals that decisions should be based on data, not opinions.
The team was debating whether to change the onboarding flow. Riley said: We do not have to guess — let's run an experiment on that. We test two versions with 50% of new users each. In two weeks we have a real answer.
Double down on what is working
To invest more in a strategy, channel, or tactic that is already showing strong results. In growth marketing, this means scaling experiments that win — and stopping the ones that do not.
Riley said after the monthly review: Referral is generating 40% of our new sign-ups at one third of the acquisition cost. That is the signal. We need to double down on what is working — more budget, more resource, a dedicated team on referral. Everything else waits.
The viral coefficient is...
A specific metric used to measure how many new users each existing user brings in. A viral coefficient above 1 means the product is growing on its own — every user brings in more than one new user.
Riley said: Our viral coefficient is 0.4. Marcus asked: Is that good? Riley said: It means every ten users bring in four more. That is not viral — it is a nice bonus. To get truly viral growth, we need to get above 1. That is the threshold where growth becomes self-sustaining.
Fix the retention before you scale acquisition
A core growth principle — you cannot grow sustainably if users are leaving as fast as they arrive. Fixing retention first means every new user you acquire stays longer and is worth more.
The team wanted to triple the paid acquisition budget. Riley said: I hear you — but fix the retention before you scale acquisition. Right now we are spending £50 to get a user who stays for three weeks. If we fix retention first, that same £50 gets us a user who stays for six months. The economics change completely.
Videos
Watch these terms used in context
Dialogue
Read the dialogue and hover the blue words for definitions
Marcus
RileyRiley, the CEO has asked us to double our sign-ups in six months without doubling the budget. Where do we even start?
Start with pirate metrics. Walk me through the AARRR numbers. Where is the funnel leaking?
Acquisition is fine — we get about 5,000 sign-ups a month. But only 18% complete the onboarding and become active users.
That is your leak. Activation is broken. We need to find the aha moment — the one thing that turns a sign-up into a loyal user. What do your best customers do in the first session that others do not?
Our data shows users who invite a team member in the first 48 hours have a 70% retention rate at 90 days. Everyone else is around 25%.
That is the aha moment. And that insight is also the seed of a viral loop. If every user invites one person, your experimentation budget goes further than any paid channel.
How do we get more users to invite someone in the first 48 hours?
Let's run an experiment on that. We redesign onboarding to make the invite step the second action after sign-up — not a later optional step. We test it on 50% of new users. In three weeks we have a real answer.
And what about retention? Should we be working on that at the same time?
Fix the retention before you scale acquisition. At 25%, you are spending money to fill a leaking bucket. Fix that first — then turn on the tap.
Is this what product-led growth looks like in practice?
Exactly. You are not adding more ads or sales calls — you are building the growth into the product itself. The invite mechanic, the aha moment, the retention hook — those are product decisions, not campaign decisions.
And if the experiment works — what then?
Double down on what is working. Move more budget, more engineering time, more focus there. That is growth hacking in its simplest form — test, learn, scale.
Exercises
Complete all three exercises to see your final score
Complete the Sentence
Choose the correct answer to complete each sentence.
Choose the correct word or phrase to complete each sentence. Only one answer is correct.
1.AARRR stands for Acquisition, Activation, Retention, Referral, and .
2.The moment a user first understands the real value of your product is called the moment.
3.If every existing user brings in more than one new user, you have a coefficient above 1.
4.Slack's growth model is product-led — the product the selling, and marketing supports the motion.
5.When a test shows strong results, you should down on what is working.
6.In product-led growth, the product is the primary driver of , not marketing or sales.
Matching
Click a word, then click its correct definition.
Click a word on the left, then its definition on the right.
Words
Definitions
Fill in the Blank
Drag the correct words from the word bank to complete each sentence.
Sentence 1
Our activation rate is 18% — users are not reaching the aha — — — before they leave.
Sentence 2
Fix the — — — before you scale acquisition — you cannot grow sustainably if users leave as fast as they arrive.
Sentence 3
We do not need to guess — let's run an — — — on that and get a real answer in two weeks.
Sentence 4
Referral is generating 40% of sign-ups at half the cost — we need to double — — — on it.
Sentence 5
The AARRR framework shows us exactly where the funnel is — — — — and which stage to fix first.
Sentence 6
Slack grows through product-led — — — — the product does the selling, and marketing supports the motion.
Tip: Think about the meaning of each word and what makes sense in the sentence.
Multiple Choice
Choose the best answer for each question about the dialogue.
1.What does Riley say is the first thing to do before talking about new acquisition channels?
2.What does Marcus's data reveal about the aha moment in their product?
3.What does Riley say about fixing retention before scaling acquisition?
4.How does Riley describe the core principle of growth hacking?
Group Activities
Role-play scenarios and discussion questions for group classes
🎯 Choose the Best Response
Read what the team member or stakeholder says. Choose the best response from the three options.
Customer says
“We are spending more on ads but sign-ups are not growing. What are we doing wrong?”
Salesperson responds…
Customer says
“Our retention at 30 days is 22%. Should we be worried?”
Salesperson responds…
Customer says
“The team has an idea to change the sign-up flow. Should we just do it?”
Salesperson responds…
🔍 Spot the Mistake
Read the conversation. Three lines have a mistake. Can you find them?
Riley
Let's review our AARRR metrics — Acquisition, Activation, Retention, Referral, and Results.
Marcus
Actually, the final R stands for Revenue, not Results — it measures whether users are generating money for the business.
Riley
Our activation is low — users are not finding the eureka moment before they leave.
Marcus
The standard term is 'aha moment', not 'eureka moment'. Same idea, but aha is the one the industry uses.
Riley
Fair point. And once we find it, we should lean lightly into referral — it looks promising.
Marcus
If referral is working, we should double down on it — not just lean lightly. That is where the growth is.
✏️ Finish the Salesperson's Line
The growth marketer starts a sentence. Work with your partner to finish it naturally.
Customer
“We want to grow sign-ups fast but we have a limited budget.”
Salesperson
“Then the first thing we do is map the funnel and find where it is leaking. More spend cannot fix a broken funnel — but fixing activation can double your results without spending a penny more on acquisition. Let's start by looking at... …”
Customer
“How do we build a viral loop into our product?”
Salesperson
“Look for a natural reason for users to invite others — not a gimmick, but something that makes the product better when more people use it. For example, we could make collaboration the core of the experience, so that... …”
Customer
“Our retention is 22% at 30 days. What do we do?”
Salesperson
“Fix the retention before you scale acquisition — otherwise you are filling a leaking bucket. The first step is to find your aha moment: what is the one thing that users who stay always do in the first session? Then... …”