A Primer on Growth Hacking

Peter Sharkey in Marketing automation on 10th of Nov 2016
what is growth marketing

What is growth marketing?

Felix Baumgartner hurtled towards Earth at 833.9 mph. His descent began a few seconds ago, when he jumped out of a plane that was 24 miles above the Earth’s surface on October 14th, 2012. Eight million people around the world watched Felix’s death defying dive as it unfolded. Because Felix was literally in the stratosphere, he had to have a specially constructed suit to protect him from the harsh temperatures and blazing speed. And on that suit, pasted everywhere, was the Red Bull logo.

Chasing virality

The Red Bull Stratos Mission was a smashing success, with 52 million+ people having since relived that moment on YouTube, forever associating the brand with extreme sports and coolness. True virality like this is rare. Beyond having just a good product or message, it requires insane network effects, a little bit of luck, and a ton of money (like Red Bull, who reportedly spent $65 million on the Stratos Mission campaign). But, going viral can happen with a little hacking. Growth hacking that is.

A Primer on Growth Marketing

Growth hacking is a special breed of data-driven marketing that requires an engineer’s mindset and skills. Make no mistake, growth hacking is still marketing at its core. But it’s a revved-up, souped-up version whose goal, unmistakably, is growing a user base through a careful blend of tactics designed to:

  • Acquire: Generate customers through a mix of distribution and promotion tactics, including referrals or word of mouth, organic search and paid efforts.
  • Activate: A “happy first experience” as Dave McClure calls it gets users to emotionally buy into what you offer, greasing the wheels for a signup and eventual trial.
  • Convert: The number of high quality people joining or opting-in to an offer or purchase, tested ad nauseam.
  • Retain: Keep customers around as long as possible, to drive up the lifetime value of each. Retention strategies are among the most profitable, yet least practiced. Here are a few ways to grow faster with retention.

Case in point: the Dropbox growth hack heard around the world. Dropbox growth hack Which was really just a 3.0 version of the Hotmail one done decades ago. Then there’s the Airbnb Craigslist hack, which piggybacked on an existing platform of users to seed their initial inventory and audience.

Airbnb Craig's List email(Image source)

Which was actually a repeat of when YouTube took advantage of MySpace in much the same way. Both of these successful hacks were a result of their product, audience, and timing. The point is not to immediately set up a referral program and post your product on Craig’s List. Instead, the goal is constantly test different ideas designed to reach, convert, and retain more users. To do this, put your engineering hat on (or just hire one for your growth team). Engineers don’t look at problems like you and me, where the easiest, most half-assed solution will do (gotta make happy hour after all). They look for root causes. And they’re obsessed with scale. Incorporate this way of thinking into your growth hacking mindset by asking questions like “How do I use tech resources to make a hack work as well for 10,000 people as it does for 10?”

Where’d growth hacking come from?

Sean Ellis coined the term way back in 2010 in his seminal essay, Find a Growth Hacker for Your Startup.  He was working with companies like Dropbox and Eventbrite when many startups were leery of “marketing”, largely because of how they saw companies in other industries conflate the term marketing to mean advertising. So most startups and product people saw “marketers” as people who just buy Super Bowl ads. Sean, though, was using more direct response-style tactics, taking a different approach that ultimately led to growth hacking becoming a thing. Eric Ries also threw the term “growth engines” into the mix with The Lean Startup. He makes the case that the most reliable (and predictable) methods of success for new companies stem three primary growth engines:

  • Viral: Member use drives powerful network effects to reach a critical mass
  • Sticky: A sticky product drives high customer retention and word of mouth growth
  • Paid: When you spend to acquire a customer for less than their lifetime value to your bottom line

This was in 2011. Then the language of growth engines, growth hacking, and growth marketing caught on. The word growth started being changed to “Growth”—always capitalized because…well, no one knows. It’s become a catch-all term that can be used as a noun, adjective, verb, and possibly even a conjunction. For example, you can be a Growth Hacker, who’s responsibility is Growth, on the Growth Team. And you can have massive Growth in your hipster neck beard, too.

When should I start growth hacking my product?

You need to have a few things in place before you start growth hacking. Namely, product-market fit and great distribution. Before that, you’re just toying around with hacktics. Which aren’t enough to really move the needle. Andrew Chen, in an excellent Mixpanel interview, emphasized that “You can’t just growth hack a mediocre product to success. It’s not something you tack on when you’re looking to go viral.” He’s right. You need to create something people want (product-market fit), systematically get your product in front of people (great distribution), make your customer acquisition math work, then growth hack to your heart’s content. Now it’s your turn. How do you define growth hacking? Do you love it, hate it, ignore it? Let us know in the comments.

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