The Truth about Growth Hacking

Following the response to my last article on growth hacking, I thought it a good idea to take a little more in-depth look at this incredibly popular topic and its relationship to marketing. Growth hacking is not, as many assume, all about marketing, nor is it particularly new, although the actual term itself is. Early adopters of growth hacking techniques would include companies such as LinkedIn, which from the very beginning focused on a “strong emphasis on user growth and engagement”, according to Aaron Ginn.

It’s about viral growth and whilst the first growth hackers generally had coding skills, this is something that’s not necessary to become one. The term ‘hacker’ itself evokes associations with coding, but it relates more to how a problem can be solved using a different approach and “creative disruption”.

It’s Not Just a Marketing Strategy

Growth hacking is product-centred, rather than marketing, although it does rely upon a certain amount of virility. It doesn’t rely on the same strategies that marketing takes, such as inbound and outbound. Rather, it looks for ways to boost the growth of a product through converting site visitors (for example) into customers, rather than leads.

Whilst it’s commonly thought that it involves just one, expert, person growth hacking can (and most likely should) be a team effort that involves more than one person across an enterprise, whatever its size.

According to Ryan Holiday, author of Growth Hacker Marketing, it can also be thought of as a new form of marketing that replaces the glitz and glamour associated with the launch of a new product, much like a movie launch.

“It was only a matter of time before someone smart came along and said, ‘it doesn’t have to be this way. The tools of the Internet and social have made it possible to track, test, iterate, and improve marketing to the point where these enormous gambles are not only unnecessary, but counterproductive,” Ryan says.

By this, he’s referring to the amount of time, money and effort often sunk into a startup to create the product launch. This is unnecessary and outdated, he says, and the answer to failure following a glitzy launch, is growth hacking.

The Death of Marketing as We Know It

According to Aaron Ginn, this means that marketing as we’ve known it for the past 100 years is fading away and as “[p]eople are awash with mounds of data […] marketing fatigue is at an all-time high”.

“Distribution is now the number one problem that faces every product and every startup,” he goes on to say. This means that growth hacking must be all about the product and it must use a scalable method for growth which is “inspired by data”.

It’s this data-inspired approach, alongside a strong focus on users and growth and where they are, and when, that the growth hacker focuses on. It’s more efficient marketing that throws out the rule book and applies completely different techniques. It doesn’t look at throwing lots of cash at fancy marketing campaigns that involve lots of glossy literature, press releases and the usual approach, it concentrates on users and data.

The Involvement of the Tech Industry

Because early growth hackers tended to possess programming skills, the technology industry is the one in which we’ve seen the most movement. However, growth hacking can be applied to any industry and ideally, it should begin in the early stages of business planning, when applied to a startup.

It’s fair to say though that growth hacking first began to emerge through the tech industry, as early techniques used by many companies can be said to part of what’s known as growth hacking now. For example, in his book Ryan Holiday cites Hotmail as being the early adopter, due to the way that they used links in email footers to drive adoption – and it worked.

Other companies that have been described as using growth hacking techniques include:

• Dropbox
• Pinterest
• Zynga

And many more … It’s also safe to say that all of the biggest tech companies out there, from Facebook to Quora, are now using growth hacking techniques in order to gain further users. As an example, take Facebook’s recent $19bn acquisition of WhatsApp, which it appears was purchased just for that reason; to gain users and entry into further markets.

Product Market Fit

The most important part of growth hacking is the above; it’s no use launching a product that doesn’t fit the market and there should be no guesswork involved either. So you should know who your potential customers are and why exactly they would love the product. Of course, you can adjust the product as necessary if it proves that people love some aspect of it more than others.

This fine-tunes the product to ensure further growth. According to Ryan Holiday, this is something that Instagram did when the company realised that its users were most interested in the photo and filters aspect of the early product. So it can be applied to existing products, it’s just a case of knowing your market and ensuring that you give the user what they want.

Choosing Wisely

Whilst it’s tempting to create a huge splash before launch, getting a magnificent social following and having 100s sign up to your site, the best approach is actually to choose the right people to attract, rather than just a large audience.

So, instead of spending all that money on marketing to attract as large a target audience as possible, the people you really want to take notice are the influencers. The point isn’t to create a large audience that won’t actually buy or use the product, but the people that are likely to endorse it too.

Of course, this depends to a certain extent on the product. You can create a buzz that allows people that really want your product to first sign up on the website for beta products, for example. Or you can offer a select amount of people that sign up first to receive a special offer, but these people must be targeted as ones that want it, or it’s a useless exercise.

Other ideas for attracting the right people include:

• Posting about it on sites such as Reddit
• Using a crowdfunding platform
• Blogging on your product, or even better, finding high-profile bloggers that will do it for you

The Trick to Virility

Nobody ever said it was easy to go viral, but according to our friend Ryan, going viral is very often no happy accident that’s incidental to a marketing campaign. In fact, he says, it’s really more about the above – finding the right people and making them want to share the news about your product.

It has to provoke that desire to share, so it needs to speak to the right people on the right level. This means that in some way, it has to appeal to the emotions in such a way that everyone wants to tell their friends about it.

A great example of this is the ad used by TV show Mad Men, which created a buzz by creating an avatar that fans of the show could use to “Man Men Yourself” before the launch of Season 3 of the show. As well as the half a million visitors that the site itself received, ratings for the AMC show soared and now on Season 7, it remains hugely popular.

Each Season, the avatar has updates, so users don’t get bored and further users are attracted by the shares that are generated. Brilliant and perhaps the reason that the show has continued to rise in popularity each season and even, maybe, the reason it’s still on air.

So whilst virility can be an accident, when the growth hacker is involved, it’s most likely to be a very intentional move that’s targeted the right people.

Virility through Referral

Dropbox offers its users free additional storage space by referral and this has driven its user base to become huge. That’s all it can take, a simple link with a simple offer – but of course the product has to be worth referring.

Ideal for college students, imagine just how well Dropbox can spread throughout a university:

• Lecturer mentions in seminar
• Student 1 adopts as a means to back up/access anywhere
• Student 2 loses work due to disk failure
• Student 1 sends him link to Dropbox
• Everyone is happy

This is self-perpetuating, it’s the snowball effect, getting bigger and bigger and it rolls throughout the student and teacher population and then finds its way into further markets when it’s shared for other means. For example, it’s also a simple way for families to share images and the more members they invite, the more space they get and the more they use it. The incentive to refer to friends is great as it returns real results for the user of a highly useful free service.

Dropbox is also an excellent example of how to close the loop and retain the customer, at least until something bigger and better comes along. However, even if a rival product does pop up (and there are a good few on the market to rival Dropbox), it’s likely that unless they have something very special to offer, then they won’t beat down Dropbox.

This is due to the trust and loyalty of the users. Unless something goes horribly wrong with a product or service that they like and use very often, it’s unlikely they’ll jump ship on a whim.

Keeping it Going

Once you’ve achieved what you wanted, a high-growth product that users love, it’s not time to quit and sit back to watch the cash roll in. The art of growth hacking is ongoing, you may have a brilliant product and it may be being received with great acclaim, but that may stop and you don’t want it to.

Take a look at the biggest brands in the world, you won’t find many that aren’t constantly bringing out new variations on a product or tweaking a web service. Even if you look at Coca Cola, the company is constantly doing something to improve and draw in buyers.

(Source: Coca Cola)

Take the recent campaign that had Coke bottles with names on them as an example. This had people rushing out to find their own name on a bottle and even created a buzz on social media as people asked others to find their name for them.

Scalability

It’s also an important part of the growth hacker’s job to ensure scalability as well as growth and retention. This is easily achievable with databases and email lists, for a start, but it’s not all about acquiring new customers, as much as encouraging existing ones to carry on using and recommending the product.

This means that you have to introduce new features, new flavours, new ideas and continue to do so in order to maintain the users that you have. This maintenance creates new users as WOM (word of mouth) marketing takes hold. As Ryan Holiday points out, “a bird in the hand is worth two in the bush”.

Mattan Griffel maintains that the highest ROI to increase signups is to make a minimal homepage, but not to assume that including easy sharing features will necessarily make people share. This, he says, is because more people are not proactive sharers, so you are essentially alienating a large portion of your target audience by taking this approach alone.

He further points out a few things that help to increase ROI and scalability, such as:

• Giving access to a site without the user having to register
• Using large images for bigger impact
• Embedding sign-up forms

Minimalistic websites are incredibly popular at the moment as any foray into the web design community shows. So make sure that you keep it simple and scale it from there.

There’s so much more to growth hacking that this could be a much longer article, and as you will have noticed, it’s already twice as long as my usual posts. It’s a fascinating subject for anyone in business, not just tech, marketing and startups, so if you fall into that category, I would strongly suggest that you look into it even further and properly learn the techniques that the best growth hackers use.