Introduction to Growth Hacking
If you are a startup, you might have heard your fellow entrepreneurs or enthusiasts talking about "growth hacking." However, if you are new to this term, stick till the end of this article as we will take a deep dive into "all things growth hacking." With digital media taking over traditional marketing by storm, the term growth hacking has garnered a lot of attention in the recent decade. Entrepreneurs and startups give special attention to this unique marketing technique to gather the attention of more users and increase the number of daily registrations/subscriptions.
In this article today, we will talk in detail about what is growth hacking, the strategies behind it, and how you can practically go about using it in your startup or working as a growth professional. To understand the concept of growth hacking – the strategies and applications, it is important to understand what hacking is. Growth hacking consists of a trial and error approach to a company's growth, building hypotheses about growth, and then testing them. To cut it short, growth hacking can be defined as quickly finding out the most effective way to grow a business. This marketing strategy of growth hacking is affordable and allows businesses to be creative in their outreach plans.
Let us first define the term growth hacking. Growth hacking is the innovative approach to attract new users/customers or the technically formulated strategy. It is a structured, informative, and highly technical strategy. It is a technique in which traditional marketing knowledge and non-scalable tactics are coupled together to offer new business opportunities and occurrences. It covers almost every area of monitoring, development, and business advancement in a successful and wise way. Without proper deep industry knowledge, a user cannot be attracted towards growth hacking, as it would be called a general marketing strategy. Even though basic marketing principles are used in growth hacking, still it can be distinguished and recognized as a step beyond traditional marketing.
Growth hacking marketing offers the type of work, which is based on a flexible and scalable strategy/model. This outlook on growth hacking, however, fails to provide a comprehensive understanding. It narrows the scope of this new technology to include only web-based applications. A new perspective is needed. Vitasek posits a more comprehensive definition of growth hacking, defining it in broad terms as a non-traditional and innovative approach to sustainable growth or development across a wide range of industries, targeting companies of any size, shape, and dynamic.
The Principles of Growth Hacking
Growth hacking represents a complex technique of attaining the desired growth levels in the business firm if customers' base, sales, and conversion rates are in question. Their understanding is crucial for successful hacking to be made and implemented. While growth hacking has many forms and techniques, one is based on data, the other one is based on customer behavior research, and the third is based on effective and efficient communication (content growth hacking). However, two fundamental principles are the same for all of them: the A/B testing which helps business professionals understand visitors' behavior on their business page, and how to improve and optimize the page, as well as sales techniques based on the golden circle principle by which marketers imply that they must have clear and easy answers ('what', 'how', 'why') on the products and company they are selling.
These two fundamental and common principles for growth hacking lay down the theoretical and scientific border for this kind of hacking. The A/B testing help business professionals how to compare several pages at once, i.e. to emphasize on their strong and weak points. Basically, there are: quantitative (it gives results that are numbers and statistical, not as other types of research with other type of data, i.e. subjective and open, not as objective and closed, not that fundamentalism and casuistic science's border laden) analysis using webpage analytics tools or online testing tools to gather data to guide the decisions about optimization, i.e. Google Website Optimizer (GWO), which requires a scripting or programming language like Hypertext Markup Language for JavaScript (HTML/JS) as well as server-side infrastructure that can handle high volumes of tracks (Oracle, EXASOL, etc...).
The concept of growth hacking incorporates several overlapping techniques knit together to achieve the core objective of "growth" for businesses, which translates to increase in the customer base or sales. Consequently, when we talk about a customer-oriented company, our emphasis will fall on looking into the various techniques which can be branded under the head of "content growth hacking". Such techniques are marked by their forms of communication and use of different channels of communication such as the free-form writing, using images and videos, to emotions, context involved with the products and customers, or not organizing the information by the branch. Growth hacking embodies a very concrete process as well as an appropriate philosophy of understanding the contours of a firm in the given market condition and its consumers at the given point in time. These are essential because it is the voice of these consumers that will chart the pathway for decisions to be made in the business venture, to guide the level of consumption in the business to be in line with the strategic needs. While we value all these three types and techniques of growth hacking, the paper primarily concentrates on the distinctive view of content growth hacking.
Data-Driven Decision Making
At the core of growth hacking lies the ability of an entrepreneur to make decisions based on cold, hard data. Growth hackers generally have a high level of expertise in analytics and data mining that enables them to draw conclusions and drive direction based on quantitative evidence. Making data-driven decisions means that an entrepreneur is not reliant on personal preferences, cognitive biases, or emotional inclinations. This means that the decisions that growth hackers take have a higher probability of success than if they were relying on gut instincts. Of course, data-driven decision making is not infallible, and sometimes people may misinterpret the data. However, making mistakes is a part of growth hacking, and the ability to pivot quickly in reliance on new evidence ensures the viability of the methodology.
In the book Lean Analytics, the authors have developed a framework which they call the "One Metric That Matters" (OMTM). This OMTM should, to quote the authors, "serve as your North Star, guiding every key decision you make." This OMTM is always based on appraising the data that flows through an organization, but the decision about which metric to choose varies depending on the stage of growth the enterprise has reached. For a start-up that has yet to find a sustainable business model, the OMTM might be growth rate or retention statistics. For enterprises that have accelerated from one stage of growth to the next, the OMTM may transition from growth to revenue, profits, or market share.
Key Strategies and Techniques
An anti-disciplinary approach to driving growth, growth professionals employ a variety of unusual and innovative techniques and methods. Oftentimes, practitioners find that the results of their experiments are unpredictable, pushing them to adapt and pivot on their approach to keep it accessible and allow for leverage and scalability. While growth hacking efforts encompass a wide array of diverse platforms and applications, many of them are still fundamentally dedicated to the level of interest in, and engagement with, the audience. It often involves the development and deployment of marketing and sales strategies and operations which leverage data analytics capabilities and tools that allow for a more organic and customer-driven relationship to improve product value and increase overall ROI.
In today's increasingly crowded markets, business success depends on long-term, ongoing growth. Growth hacking as a digital marketing strategy can accelerate and supercharge that growth, attracting attention, engagement, and leads in much greater volume than traditional methods and at a lower cost. To do this, growth hackers utilize top-selling and highest potential growth strategies for new lead generation, conversion, and customer follow-on sale, along with viral marketing. Achieving the remarkable growth rates associated with growth hacking requires a fully-integrated approach across multiple touch-points, from web app user interface through to search and social media and international convergence multi-language, multi-cultural customer user experience journey strategies.
Viral Marketing
The human complex loves news, entertainment, and gossip. We yearn to know, and we are driven to share the stories, videos, and articles that we love and hate. In the digital world, this is known as viral. As a growth hacker, we aim to create content that fans will share. We also maximize the power of sharing by strategically placing our content at the key nexus of a community of connected fans. When fans are well connected, our content can be seen by hundreds, thousands, and even millions. This is critical to exponential growth. Each fan who shares our content—whether it be a funny video, link to an article, inspiring story, or anything else—has the potential to attract more customers to the business at an exponential rate.
In the last few years, word of mouth and viral have gained increasing attention among the media and the business and marketing communities. The growth of the internet and social media – which allow word-of-mouth endorsements to be generated and transmitted far more quickly and powerfully than through traditional "offline" networks – has been the key driver of this increased interest. The unprecedented exponential growth of websites such as Facebook and LinkedIn, which rely on users' personal and business networks to fuel their growth and are frequently cited as examples of the potential for word of mouth and viral growth techniques. Whether these businesses are making a profit is beyond the scope of this dissertation. The key point is to understand the immense power of word of mouth, especially viral, when they are harnessed and strategically employed.
Case Studies in Growth Hacking
One of the tenets of growth hacking is that all startups are rather different, and therefore successful growth hacks need to be developed on a case by case basis. Instead of offering step-by-step guides to quick and cheap user acquisition, growth hackers tend to focus on the underlying strategy and innovative thinking that led to success and user growth. Some of the really innovative ideas outlined below conjure up talking in organic sign-ups in the region of hundreds of thousands, and to turn a tool viral in weeks. While it is tempting to think all you need to do is replicate an idea for guaranteed success, the nature of a start-up means instead these case studies may offer up future possibilities, and core insights or lessons for entrepreneurship.
One of the most famous case studies is Hotmail. One of the key breakaway innovations was gaining widespread growth in a few short weeks by adding "P.S. I love you" to the bottom of millions of users' emails. It was a simple concept; with the signature war being a game for intellectual acumen. As Hotmail was a free email account, they grew their user base quickly by encouraging their subscribers to refer their friends. By simply appending, "Get your private, free email at Hotmail" at the bottom of each email sent by subscribers, the company added 3,000 new subscribers per day. Groupon works on a similar principle; when you sign up and buy a group coupon, Groupon attempts to get you to share, and then offers you credits as an incentive to get your other broke-ass friends to do likewise. This grew their user base into the millions. Offering a referral fee to a friend is a classic method of growth hacking and was a key switch in Tim's Toolbox.
Success Stories
Pinterest - Pinterest is an exemplar of growth hacking - a service that was introduced in private beta in March 2010 was reportedly growing so quickly in 2011 that they were only one person short of entering the top 10 websites for total page views (2 billion per month) and top 10 for total visits (11 million a month). They were averaging 100 visitors a week to 100,000 visitors a week during that time. As of May 2013, the service acquired over 25 million monthly active users.
Snapchat - Snapchat is another case where the sheer user growth seems to be absurd. The company was founded in July 2011; in November 2012, there were over 1 billion photos shared on the service, and the company was valued between $70 million and $100 million by November 2012. The service was averaging nearly 20 photos a second being sent. Placing a value of $60 to $100 per user, Business Insider valued Snapchat at $826 million to $1.5 billion. The team is comprised of 29 people who are almost entirely engineers.
Instagram - A year and a half after its launch, Instagram had 27 million registered users. It hit the 1 million user base in January 2011. The app launched simultaneously with the iPhone, Droid, and HTML5 platforms; these last two platforms slowed down user base growth as the company did not normalize the number of users across all three at the speed they planned on. Based on its user numbers, in January 2011 Sequoia formally invested $7 million. As of January 2012, 40 million photos were being uploaded to Instagram per day. The first 11 months of release showed simple growth while the following 4.5 months sported an inflection point of user base growth. The infusion of funds from Sequoia came in the middle of this inflection point.
Auxo - a music sharing platform with over 80 million global users. They achieved this using a referral system drummed out in 2007.
BluRay, OnStardom, GrooveShark, and Skype also use growth hacking to grow quickly. Each of these cases has its own unique component, and in various ways, they highlight different aspects of growth hacking. By analyzing the services that do well and those that don't do so well, it allows us to learn exactly what it might be that makes certain things go viral, giving us requirements of real success to guide us to build a successful service.
Future Trends
Five key non-technical insights can be drawn from this study:
Growth hacking and "old" marketing appear driven by different logics. Classical, traditional marketing and growth hacking are conceptually distinct, based on different driving rationales and bearing unique characteristics. Growth hacking operates by combining creativity and low-cost, digital technologies, registering and supporting growth with a tracking system and measurable results and "hinging" on technological platforms. Such operations are in stark contrast with mass-marketing or branding activities, which are designed to afford large audiences maximum exposure by clearly outlining the mission, vision, products and services of the company to large groups via different means. These findings open the door to researchers wishing to dig deeper into companies' digital activities, which hitherto have been categorized monolithically as "online marketing" or "social media marketing," for example. Scholars are encouraged to analyze which of these different kinds of "onlineness" is adopted by organizations in the course of their different marketing sales strategies. Therefore, and with explicitly exploratory purposes in mind, we know that organizations rely on technology to collect, retain and use data. What we still do not know is the strategic profile that distinguishes organizations' conceptual differences in the use of their data.