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Every product team and founder dreads the moment: you build something, it starts to show success, traction picks up, and then—seemingly out of nowhere—growth stops. It is perhaps the most painful phase in a startup's lifecycle. The immediate reaction is often panic, followed by a frantic attempt to throw money at marketing or ship new features to see what sticks.
However, diagnosing stalled growth requires a methodical approach, not a shotgun strategy. Jason Cohen, the four-time founder behind two unicorns (including WP Engine) and the author of the popular blog A Smart Bear, has developed a sequential framework for identifying exactly why a product stops growing. By asking five specific questions in a specific order, you can isolate the bottleneck and restart the engine.
This framework forces you to look at the unglamorous mechanics of your business—churn, pricing structures, and channel saturation—rather than hoping a new feature will save the day.
Key Takeaways
- Fix logo churn first: If customers are leaving, no amount of marketing can save you. Cancellation rates grow exponentially with your customer base, while marketing growth is typically linear.
- Pricing dictates your market: Raising prices often does not lower demand in B2B; instead, it signals quality and moves you up-market to customers with better retention.
- Positioning creates value: You can charge significantly more for the same product simply by aligning your messaging with what the buyer values (e.g., selling "growth" rather than "cost savings").
- Beware the Elephant Curve: Marketing channels don't just plateau (S-curve); they often degrade over time. You cannot rely on "flogging AdWords" forever.
- Growth is personal: The maxim "if you aren't growing, you're dying" applies just as much to your personal fulfillment and career trajectory as it does to corporate revenue.
1. Are Customers Leaving? (Logo Churn)
The first question you must ask is the most painful one: Are customers canceling? Cohen argues that you must solve this problem before touching anything else. If you have a leaky bucket, pouring more water (marketing) into it is a waste of resources.
Churn is the "silent killer" because of a mathematical reality that few founders fully appreciate: Cancellations grow exponentially, while acquisition grows linearly.
If you triple your customer base, your marketing team cannot magically triple their lead flow overnight. Marketing improvements are hard-fought and incremental. However, if you have a 5% churn rate, tripling your customer base automatically triples the absolute number of customers leaving. Eventually, the math catches up to you. The raw number of people leaving equals the raw number of people joining, and growth hits a mathematical ceiling.
The "Gauntlet" of Acquisition
Beyond the math, churn signals a fundamental product-market fit issue. Consider the incredible journey a customer takes to buy your product:
"Think about the gauntlet they went through to get to the product. How do they even find out about me? That was hard already and improbable. They didn't just bounce off the homepage... they got to the pricing page that didn't scare them off. They actually had the budget and bought the stupid thing. And after all of that, which clearly means they wanted it to work, they're like, 'No, bye.'"
If a customer survives that gauntlet and still leaves, you are breaking your promise to them. To fix this, you need honest data.
How to Diagnose Churn Correctly
Most companies use multiple-choice exit surveys with options like "Too expensive" or "Project ended." Cohen advises against this. "Too expensive" is almost never the real reason—they already saw the price and bought it. It usually means "I didn't get enough value for the price."
Instead, ask an open-ended question: "What made you cancel?"
If you are looking for a tactical place to start fixing retention, focus on onboarding. Most churn happens in the first 30 to 90 days. Improvements in the first five minutes of a user's experience pay higher dividends than improvements made for power users.
2. Is Your Pricing and Positioning Correct?
Once you have stabilized retention, the next diagnostic step is pricing. In the vast majority of startup cases, prices are too low. Founders often base pricing on guesswork or competitors, and then are too afraid to touch it.
The Demand Curve Fallacy
In Microeconomics 101, we learn that as price goes up, demand goes down. Cohen argues that in B2B software, this is often false. Low prices can signal low quality, lack of security compliance, or poor support—signals that scare away mid-market and enterprise buyers.
When you raise prices, you don't just get more money; you often enter a different market segment. A company with 1,000 employees isn't looking for a $10/month tool; they are looking for a solution they can trust. By raising prices, you might find that signups actually remain flat or even increase, because you are finally signaling that your product is "good enough" for serious businesses.
Positioning: The "Double Down" Framework
Pricing is not just a number; it is a function of positioning. You can charge significantly more by changing what you are selling, even if the software stays the same. Cohen illustrates this with the "Double Down" example:
Imagine a tool that optimizes Google Ads, cutting costs in half.
- Positioning A (Cost Savings): "We save you 50% on ad spend." If a company spends $40k, you save them $20k. You can maybe charge $5k for that value. The CEO hears "we saved money," which is good, but limited.
- Positioning B (Growth): "We double your leads for the same budget." If the company was willing to spend $40k for X leads, they should be willing to spend another $40k for 2X leads. You can charge significantly more because you are selling growth, not savings.
"Sell more of what the company values like growth... If you deliver more of the value that they already value, the cap is maybe an order of magnitude higher than saving."
3. Are Existing Customers Growing? (NRR)
If churn is low and pricing is optimized, look at Net Revenue Retention (NRR). This metric measures how much revenue you retain from existing customers, including upgrades and expansion.
To build a high-growth company, it is nearly impossible to rely solely on new logos. You need your existing customers to pay you more over time. This offsets the inevitable churn and fuels exponential growth.
- The Public Market Standard: Almost no public SaaS companies have an NRR below 100%. The median for a SaaS company at IPO is roughly 119%.
- The Math of Recovery: If you lose 20% of your revenue to churn, you need to grow the remaining base by 25% just to break even. NRR obscures this struggle, which is why looking at gross churn (Step 1) is vital before looking at expansion.
To improve NRR, you need a business model that scales with value—seats, usage, or tiered features. The customer must feel that paying more is justified because they are receiving more value.
4. Are Your Marketing Channels Saturated?
Sometimes the product is sticky, the pricing is right, and customers are expanding, but top-of-line growth still stalls. This often happens because you have hit the ceiling of your primary marketing channels.
Many founders believe they can just "work harder" at AdWords or SEO. But channels have physical limits—there are only so many searches for a specific keyword.
The "Elephant Curve"
Marketers often talk about "S-curves," where growth ramps up and then flattens. Cohen suggests a more pessimistic reality: the "Elephant Curve." After a channel ramps up (the trunk), it doesn't just flatten; it often sags (the dip). Ad blindness sets in, competition increases, and costs rise (CAC).
If your growth is stalling, ask yourself: Are our current channels saturated?
If the answer is yes, incremental optimization won't work. You need to do something non-linear. This might mean:
- New Channels: Expanding from direct sales to agency partnerships (like HubSpot or WP Engine).
- Creative Education: Like Constant Contact conducting physical seminars in cities to teach small business owners about email marketing.
- New Products: Launching a second product to cross-sell to your existing base.
5. The Existential Check: Do You Need to Grow?
The final question in the framework is philosophical but essential. If you have optimized retention, pricing, expansion, and acquisition, and you are still stalled, you must ask: Do we actually need to grow?
For a venture-backed company, the answer is usually "yes" due to investor expectations. But for bootstrapped founders, maximizing profit rather than revenue might be a valid and healthy choice.
"If You're Not Growing, You're Dying"
Cohen challenges the cliché that lack of corporate growth equals death, but he applies it to the human element. While a business can be healthy and profitable at a plateau, the human spirit often struggles with stasis.
"If you're not growing, you're dying. Is that true? ... Maybe the 'you' in 'if you are not growing you're dying' is *you* the person as opposed to *you* the company."
Founders and product leaders rarely enjoy doing the exact same thing for 20 years. Stalled growth often leads to cultural stagnation, where top talent leaves because there are no new challenges or promotion opportunities. If the business cannot grow, it might be time for a personal change—selling the company, stepping down, or pivoting drastically—not because the business is failing, but because you are no longer growing within it.
Conclusion
Diagnosing stalled growth is not about guessing. It requires a rigorous walk through the hierarchy of your business mechanics. Start with retention; if you can't keep customers, nothing else matters. Move to pricing and NRR to ensure the economics work. Finally, look at acquisition channels and your own existential goals.
By systematically addressing these five questions, you move from panic to action, turning a stalled product into a machine built for long-term scale.
For more actionable insights on the multipliers that drive scale, check out Jason Cohen’s book, Hidden Multipliers.
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