Find the growth loop

Memo: How Tutorly actually grows, and why I would not triple paid

To: Rachel Dunn, exec team From: Staff PM, Growth

Bottom line

1. Our engine is the organic search → profile → review loop. It is stalling at the review step, not at the top of the funnel.
2. Don't triple paid. The last $30k/month we added bought parents at about $319 each, against a $120 paid-parent LTV.
3. 50,000 by the raise isn't reachable with either plan. A credible number is about 41–43k, with a better quality story for diligence.

1. Growth loops

``` PRIMARY: Search/review loop (52% of new parents) Tutor profile -> bookings -> paid lessons -> 3+ reviews ^ | | v more tutors <- tutor earnings <- new parents <- organic profile sessions LEAK: 61% of new profiles get no booking in 60 days -> no reviews -> 4% of sessions

SECONDARY: Parent referral (9%) active parent -> 0.31 invites/mo -> 14% book -> new parent

SUPPLY FEED: Tutor referral (44% of new tutors, $50 at onboarding) -> more profiles

NOT A LOOP: Paid (39%) spend -> parent -> 22% still booking at 6 months. Stops when spend stops. ```

Why organic is primary. It is the largest source and has the best retention, and its output (reviews) feeds its own input (ranking and trust). It compounds for tutors who already have reviews. Profiles with 3+ reviews get 81% of organic sessions, and those with none get 4%.

Why it is weakening: - Tutors grew 62% against parents' 20%, so bookings per tutor fell from 9.1 to 6.8. - Most new supply never gets a first booking, so it never gets reviews or traffic. - Organic sessions grew 40% but parents only 20%. - Top-200-keyword click-through fell from 6.1% to 5.0% (−18%) after the results-page changes.

Parent referral is real but small. Each active parent yields about 0.043 new booking parents a month (0.31 × 14%). Even over 12 months that is about 0.5 per parent, so k is below 1 and it contributes rather than compounds. It is also cheap ($20 credit) and retains well, so it is worth improving.

Data flag: 37,000 parents × 0.043 implies about 1,600 referred parents a month. The 9% attribution implies roughly 150–190. One of these is wrong, and we must reconcile it before it appears in a Series B deck.

Tutor referral pays $50 for onboarding, not for a booking. At least 3,900 of last year's net 8,800 new tutors came this way, so we spent at least ~$190k buying supply that mostly isn't booked.

2. Response to tripling paid

The 2.2 isn't the paid ratio. It divides blended LTV ($210) by paid CAC ($95). Paid parents are worth $120, so paid LTV:CAC is 1.3 on average and 1.1 at the current $109.

The marginal number is worse. Spend went from $60k to $90k, and CPA went from $82 to $109: - New paid parents moved from about 732 to 826 a month. - So $30k bought about 94 extra parents, or roughly $319 each. That is 0.38× their LTV.

If the same curve holds (CPA scaling with spend^0.7, my extrapolation), $270k gives a CPA near $235 and about 1,150 parents a month. The extra $180k a month then buys about 320 parents, roughly $560 each.

The 50k math doesn't work: - We need +13,000 active parents in six months. Last year we added 6,000 in twelve. - Trend alone gets us to about 40k. - The extra ~$1.1M buys about 1,900 gross parents. With 22% still booking at six months, that is roughly +1,000 active parents at the raise, so about 41k. - Even with CPA frozen at $109, which won't happen, it is about 4–5k active and ~45k.

It also dilutes quality. Paid would rise from 39% to roughly 47% of new parents, and blended LTV would fall from $210 to about $195. Series B diligence will cut by source and cohort, and this is the cut that looks worst.

Caveats: this is one quarter of data. Seasonality, competitors and the CTR drop may explain part of the CPA rise. A holdout will tell us how much.

Recommendation: - Return paid to about $60k/month now. - Re-fund only campaigns where measured marginal CAC is ≤$60 (2:1 on $120). - Redeploy about $30k/month into the tests below. - Reframe the raise target as about 42k active parents, rising organic share, and recovering bookings per tutor. I would rather show that than 45k bought at 1.1×.

3. Squads for the next two quarters

Squad 1: New-tutor activation (fix the review leak)

• Test:
• Reserve a results/matching slot for quality-gated tutors with fewer than 3 reviews on new parents' first-lesson bookings.
• Fund a small first-lesson credit for the parent, from the redeployed paid budget.
• The credit is paid at booking, never conditioned on a review. Ask only neutral post-lesson review prompts. Legal should sign off before launch.
• Second arm: move the $50 tutor-referral payout from onboarding to the referred tutor's first completed lesson.
• Threshold:
• The 60-day first-booking rate for new profiles rises from 39% to ≥50% versus control.
• Routed first lessons' rebooking and ratings stay within 3 points of control.
• Cost per referred tutor who gets a booking falls ≥30%.
• Stop: the lift is under 5 points at week 6, or the rebooking/rating guardrail is breached. Then drop the routing and keep only the payout change if that arm hit its threshold.

Squad 2: Search recovery

• Test:
• First, serve the pre-March results layout to 20% of traffic to find out whether the March change caused the CTR drop.
• In parallel, improve snippets on the top 200 keywords (rating and review count, titles, structured data), with keyword-level holdouts.
• Threshold:
• Treated-keyword CTR is ≥5.6% by week 6 while holdouts stay near 5.0%.
• Session-to-booking conversion is flat or better.
• Restoring 6.1% is worth up to +22% clicks on those terms, which is our cheapest growth.
• Stop: under +0.3 points after two iterations (about 8 weeks), or conversion falls. Then move the squad to Squad 1's ranking work.

Squad 3: Parent referral and paid measurement

• Weeks 1–2: reconcile the referral attribution gap, and set up the paid holdout (geo or campaign-level) with analytics.
• Test:
• Trigger the invite prompt after a 5-star or third completed lesson.
• Run a two-sided $20 credit arm against the current one-sided credit.
• Threshold:
• Referred share of new parents rises from 9% to ≥13%.
• Cost per referred booking parent is ≤$45.
• 90-day retention is on track for ≥45% at six months.
• Stop: cost per referred parent exceeds $60, or invites per parent are under 0.36 after six weeks. Then cut referral work to maintenance and move the squad to first-90-day retention of paid cohorts (22% at six months is our biggest leak).

What I'd ask the offsite to decide

1. Cut paid back to $60k and fund the holdout.
2. Approve the squad plan and the tutor-referral payout change.
3. Accept about 42k as the committed target, and have finance model the raise story on retained parents, organic share and bookings per tutor.

I'd revisit paid at the end of Q1 with holdout data. If marginal CAC is ≤$60 in any segment, I'd scale it there.

Memo: How Tutorly Actually Grows

To: Rachel Dunn and the exec team From: [Staff PM] Re: Growth loops, the paid plan, and squad focus for the next two quarters

The short version

Our growth comes mainly from organic search, and that engine runs on reviews. Reviews only come from completed lessons. Two things are slowing the engine. Most new tutors never get a first booking, and our click-through from search has dropped.

Tripling paid acquisition would buy our lowest-value parents at a marginal cost about 2.7 times what they are worth. It would also get us nowhere near 50,000. I recommend we hold paid flat or trim it, measure what it actually adds, and put all three squads on the review and search engine.

1. Our growth loops

``` LOOP A: Search–review (PRIMARY) Parent books → lesson completed → review → profile reaches 3+ reviews ↑ ↓ new parent ← clicks profile ← ranks/shows in search results

LOOP B: Parent referral Active parent → invites (0.31/mo) → 14% book → new active parent ↺

LOOP C: Tutor referral (supply) Tutor → refers tutor ($50) → new profile → [61% get no booking in 60 days → no reviews]

LINE D: Paid (not a loop) $ → new parent → (some lessons feed Loop A) → spend stops, flow stops ```

Loop A is primary. It is compounding, but it is being throttled. - It brings in 52% of new booking parents, the largest share. - These parents are among our best: 48% are still booking at six months, and their net LTV is $260. - Reviewed profiles capture the traffic. Profiles with three or more reviews get 81% of organic sessions, while profiles with none get 4%. - Organic sessions grew 40%, but booking parents grew only 20%. The loop is producing traffic faster than it converts. - There are two leaks: - Click-through has fallen. On our top 200 keywords it dropped from 6.1% to 5.0% since the March results-page changes, an 18% relative fall. - New tutors are stuck. 61% of new profiles have no booking within 60 days, so they can never earn the reviews that make them visible.

Loop B is contributing. - Referred parents are our best customers: 51% retained at six months, with a net LTV of $275. - It is not viral. Each active parent produces about 0.043 new booking parents a month. Over a typical parent lifetime that is a k-factor of roughly 0.3–0.4, well below 1. - There is a data problem. Applied to 37,000 parents, those invite rates imply about 1,600 referred parents a month. Our attribution says referrals are 9% of new parents, which is closer to 190 a month. One of these figures is wrong, and we need to know which before investing here.

Loop C is compounding the wrong thing. - Tutor referrals brought in 44% of new tutors. - Active tutors grew 62% while booking parents grew 20%. - As a result, bookings per tutor fell 25%, from 9.1 to 6.8 a month. - The loop mass-produces unreviewed profiles that search ignores, and probably creates frustrated tutors who leave. In supply terms it compounds; in value terms it is decaying.

Line D (paid) is decaying. - Paid parents are our weakest: 22% retained at six months, with a net LTV of $120. - Their cost is rising (see below). - Paid does feed Loop A a little, because these parents' lessons generate reviews. But it stops the moment spend stops.

2. The plan to triple paid acquisition

The 2.2 ratio is real but misleading. It divides our blended LTV of $210 by our average CAC of $95. Paid parents are worth $120, not $210, so the true paid ratio at average cost is about 1.3.

The marginal picture is much worse. Last quarter: - At $60k a month and $82 per parent, we bought about 732 parents a month. - At $90k a month and $109 per parent, we bought about 826 parents a month. - So the extra $30k bought about 94 extra parents, at roughly $320 each. - Against an LTV of $120, each marginal dollar returned about $0.38.

Tripling to $270k would push further up that cost curve. Even if the marginal cost stayed at $320, which it will not: - The extra $180k a month would buy about 560 parents a month, or about 3,400 over six months. - Those parents would be worth about $400k in lifetime value, for about $1.08M of spend. That is roughly $680k of value destroyed. - With 22% six-month retention, perhaps 1,500–2,000 of them would still be booking at the raise.

The 50,000 target is the real issue. Reaching it means adding 13,000 net parents in six months, a 35% gain. Last year we added 6,000 in twelve months, a 20% gain. No channel closes that gap by the raise: - Our current pace of about 500 net parents a month gets us to roughly 40,000. - Tripling paid might add 1,500–2,000. - The squad work below might add a similar amount. - My honest range is 41,000–43,000.

I would rather we take a credible story to Series B investors. That story is: a strengthening organic engine, rising retention, and channel-level unit economics we can defend. A burned-through paid spike will show up in their diligence.

My recommendations on paid: - Bring spend back to about $60k a month, where the cost per parent was $82. - Run a geo holdout to measure how many paid parents would have found us organically anyway. - Redirect the $30k saved, and the $180k not spent, into the work below. Some of it could fund first-lesson guarantees for new tutors.

3. Where the three squads should go

Every squad works within one guardrail. No incentive may be tied to leaving a review, directly or indirectly. Legal should review every test that touches the post-lesson flow. Review requests and referral or reward prompts should never appear together.

Squad 1: Search click-through recovery (Loop A, top of funnel)

Test: - Split-test the results-page and profile templates across matched keyword groups within the top 200. - Revert the March changes on half. - On the other half, test titles, meta descriptions, and review structured data.

Threshold: Click-through on the test groups recovers to 5.8% or better within eight weeks, with no loss of rankings. If it does, roll out to all keywords.

Stop condition: No lift of at least 0.3 points after eight weeks, or ranking losses on the test groups.

Why first: This is the cheapest win we have. Recovering the 18% fall is worth roughly a fifth more clicks on our best keywords, from traffic we already rank for.

Squad 2: New-tutor first booking (Loop A, the review bottleneck, plus fixing Loop C)

Test: - Give unreviewed but qualified tutors a "new tutor" slot in matching and in broad-search results. - Back their first lesson with a satisfaction guarantee: a refund or a free rebook if the parent is unhappy. - Gate the $50 tutor referral bonus to subjects and regions where bookings per tutor are above median, and pause it where we are oversupplied.

Threshold: - The share of new profiles booked within 60 days rises from 39% to 55%. - The share reaching three reviews within 90 days rises by 50% relative.

Guardrails: - Parent 30-day rebooking rate on lessons with new tutors stays within 2 points of baseline. - Total bookings do not fall.

Stop condition: No movement after two monthly tutor cohorts, or a breach of the parent rebooking guardrail.

Squad 3: Parent referral (Loop B)

Test: - Weeks 1–2: reconcile the invite and attribution data. This tells us whether the loop is under-attributed (good news) or the invite counts are inflated. - Then test referral prompts at natural moments, such as a lesson milestone or a rebooking. These prompts must be separate from any review request. - Test a two-sided offer: $20 for the referrer and $20 off the referred parent's first lesson.

Threshold: - Invites per active parent rise from 0.31 to 0.45 a month. - Invite conversion holds at 14% or better. - Cost per referred booking parent stays under $60, against an LTV of $275.

Stop condition: - Cost per referred booking parent goes above $90. - Fraud or self-referral exceeds 5% of rewards. - No lift in invite rate after six weeks.

What I am asking the exec team to decide

1. Keep paid at about $60k a month and run an incrementality holdout, rather than tripling it.
2. Replace the 50,000 headline with a Series B narrative built on growth in organic and referral share, six-month retention, and bookings per tutor. Our honest forecast is 41,000–43,000 parents.
3. Assign the three squads as above, with a checkpoint at the offsite plus eight weeks.

I am happy to walk through the arithmetic in detail before the offsite.