Find the growth loop

To: Rachel Dunn and the exec team From: Staff PM Re: How we grow, and the plan to triple paid

Bottom line

Our main growth engine is search and reviews, and it is leaking at the entry point. New tutors aren't getting booked, so they don't get reviews, so they don't rank. Tripling paid would add roughly $1.1M of spend over six months, bring in perhaps 2,000 to 3,000 extra parents, and still leave us well short of 50,000. I recommend holding paid at $90k a month and putting the next two quarters into fixing the primary loop.

1. How we actually grow

``` PRIMARY: SEARCH + REVIEWS New tutor profile → first booking → completed paid lesson → review ▲ (61% of new profiles: no booking in 60 days) │ Organic parent ← search ranking ← 3+ reviews (81% of organic profile sessions) ←┘ │ └→ books → completed lesson → (loop repeats)

REFERRAL (PARENTS) Booking parent → 0.31 invites/mo → 14% book → new parent → invites

SUPPLY (TUTOR REFERRAL) Tutor → refers tutor → onboarding ($50) → new tutor → needs bookings

PAID (NO LOOP) Spend → paid click → new parent → 22% still booking at six months ```

Why search and reviews is primary: it is the largest source, it carries no per-parent cost, and it is the only loop that gets stronger as reviews accumulate. Profiles with three or more reviews get 81% of organic profile sessions; profiles with none get 4%.

Where it's leaking: - 61% of profiles created in the last six months had no booking within 60 days, so they never accumulate reviews. - Click-through on our top 200 keywords fell from 6.1% to 5.0% (−18%) after the March results-page changes. Organic sessions are up 40%, but that growth is concentrated in established profiles. - Supply grew 62% (14,200 to 23,000 active tutors), while bookings per active tutor fell from 9.1 to 6.8 a month (−25%). Total monthly bookings rose only about 21% (129k to 156k, my calculation). At 18% of $40, net revenue went from about $0.93M to $1.13M a month. We are growing supply faster than we are converting it.

Two numbers to correct before the offsite: - The 2.2 LTV:CAC mixes two different things. It divides blended LTV ($210) by average CAC ($95). Paid parents are worth $120 in LTV. At today's marginal paid CAC of $109, paid returns about 1.1x, not 2.2x. - Referral data doesn't reconcile. Each active parent sends 0.31 invites a month and 14% of invites book, which is about 0.043 new parents per active parent. Across 37,000 active parents, that implies roughly 1,600 referred parents a month. The reported 9% share implies roughly 200 a month, given paid's ~800 new parents a month at 39% of the mix. One of these figures is wrong by roughly 8x. We should not scale referral spend until attribution is fixed.

2. The plan to triple paid

• The gap is large. Reaching 50,000 means +13,000 parents (+35%) in six months. Over the last twelve months we added a net 6,000.
• Costs rise faster than spend. Raising spend 50% ($60k to $90k) pushed CAC up 33% ($82 to $109). If that curve holds, tripling spend implies a CAC of roughly $200 to $235. This is a rough extrapolation, and marginal CAC is probably higher.
• The output is small. Tripling adds roughly 320 to 520 parents a month, or 2,000 to 3,000 over six months, for about $180k more spend each month. At 22% six-month retention, no more than about 700 of those would still be booking at the end.
• The realistic outcome is 40,000 to 42,000 by month six, on current trend plus the squad plan. That is my estimate, and it assumes no step-change in organic growth.

Recommendation: Do not triple. Hold paid at $90k a month. Pause any campaign or keyword whose CAC is above $120, since that is roughly the break-even point on its own LTV. Report paid on marginal CAC and payback, not blended LTV:CAC. Redirect the freed budget to referral credits and search fixes.

3. Where the three squads should go

Squad 1: Reviews and first bookings (primary loop entry) - Test: Give zero-review profiles a first-booking boost in search and discovery, using non-review signals such as verified credentials, availability, and response time. Automatically prompt parents to review after each completed paid lesson, with no incentive attached. Move the $50 tutor referral payout from onboarding to first completed booking. - Threshold: Share of new profiles booked within 60 days rises from 39% to 50% or more by the end of Q1. Review rate on completed lessons rises 20% relative to a baseline we measure in week one. - Stop: No lift in first-booking rate after eight weeks, or cancellations or complaints on boosted profiles worse than control.

Squad 2: Search click-through recovery - Test: A holdout on the top 200 keywords that reverts the March results-page changes for half the keywords, while testing profile snippet and structured-info variants on the rest. - Threshold: Click-through back to 5.6% or higher within eight weeks (recovering about half the drop), and 6.1% by the end of Q2. - Stop: No recovery after two test cycles, or organic bookings per session falling.

Squad 3: Parent referral (cheapest acquisition) - Test: First, reconcile referral attribution in weeks one and two. Then test a review-free prompt after a parent's first completed lesson, and a $30 versus $20 referrer credit. Credits reward bookings, not reviews, so this stays within our rules. - Threshold: Referral share of new parents rises from 9% to 12% by the end of Q2, with an all-in cost per referred booker under $40 (against $109 for paid). - Stop: Invite-to-booker conversion stays below 14% after eight weeks, or cost per referred booker exceeds $40.

Paid stays with the existing team and is not one of the three squads.

4. Decisions for the offsite

1. Reject tripling. Hold paid at $90k a month with a $120 CAC ceiling.
2. Reset the 50,000 target. Commit to about 42,000 at the raise and show investors marginal paid CAC, bookings per active tutor, and organic share of new parents. A smaller number with clean unit economics is a stronger story than a target that paid spend cannot reach.
3. Fix referral attribution this week before any referral spend is scaled.

Memo

To: Rachel Dunn and Executive Team From: Staff PM Subject: How Tutorly grows—and where to invest before Series B

The growth loops

```text More completed lessons → more genuine reviews on tutor profiles → stronger search visibility and parent trust → more profile visits and bookings → more completed lessons [SEO/review loop]

Active parents → invites → referred parents book and become active → more invitations [parent-referral loop]

Tutors → refer tutors who complete onboarding → more tutor supply → more choice and capacity for bookings → tutors refer more tutors [tutor-supply loop] ```

Primary: the SEO/review loop. It brings 52% of new booking parents, organic profile sessions grew 40%, and organic-acquired parents have $260 net LTV and 48% six-month retention. Reviews are a durable marketplace asset: profiles with 3+ reviews receive 81% of organic profile sessions, versus 4% for profiles with none. This loop is compounding, but its conversion leg is weakening: search CTR on the top 200 keywords fell from 6.1% to 5.0%, and 61% of recent tutor profiles had no booking within 60 days—so they cannot earn reviews.

Parent referrals: contributing, not proven compounding. Referrals bring 9% of new parents; their $275 net LTV and 51% six-month retention are strong. But each active parent generates only 0.31 × 14% = 0.043 referred booking parents per active-parent month. For that alone to produce more than one direct referral per parent, average active life would need to exceed about 23 months. We do not have that evidence. Grow this channel, but do not call it self-sustaining yet.

Tutor referrals: contributing supply, while the supply loop is decaying in productivity. Tutor referrals account for 44% of new tutors, but active tutors grew 62% while booking parents grew only 20%; bookings per active tutor fell from 9.1 to 6.8, a 25% decline. The current risk is adding supply faster than demand and weakening tutor utilization—not a shortage of tutor sign-ups.

On tripling paid acquisition

I would not approve an unconditional increase from $90,000 to $270,000 per month. The stated 2.2 LTV:CAC ratio divides blended LTV ($210) by average CAC ($95). That mixes customers from channels with very different economics. Paid parents have $120 net LTV: that is 1.26× the $95 average paid CAC, and only 1.10× the $109 CAC observed after the latest spend increase. Spend rose 50% last quarter while CAC rose from $82 to $109. Those are poor grounds for assuming a threefold budget will deliver threefold growth.

At $270,000 and $109 CAC, we would acquire roughly 2,477 paid booking parents per month before churn. The 50,000 target requires 13,000 more monthly booking parents—about 2,167 net per month over six months, before accounting for losses. Paid-parent six-month retention is only 22%. We cannot responsibly claim the target is achievable from this spend without a cohort-based forecast; the simple gross-add math is not enough.

Keep paid at or below the current run rate while we test incrementality and economics. Scale only where a holdout shows genuinely incremental parents and the marginal CAC supports the channel’s LTV. More spend into a worsening auction is not automatically growth.

Squad priorities for the next two quarters

No squad should reward or pay for reviews: reviews must follow completed paid lessons and remain voluntary. The near-term growth job is to turn existing tutor supply into booked lessons and genuine reviews, recover search conversion, and prove which acquisition dollars are incremental before committing to a larger bill.