Within Red Rocket’s “101 Startup Lessons—An Entrepreneur’s Handbook” I have detailed plenty of low-cost marketing lessons, so be sure to read (or re-read) those posts for more details about how best to market your startup. But the goal of this lesson is to try and pull it all together and demystify the concept of growth hacking.
The term “growth hacker” was first introduced in a blog post by Sean Ellis in 2010. He summarized a growth hacker as “a person whose true north is growth” and is disciplined in prioritizing and testing marketing ideas and religiously analyzing such results to see which tactics worked the best and should be scaled out further.
To me, this idea is a pretty basic premise that can be incorporated into most any marketing programs, defined as growth hacking or not. Frankly, in today’s tech space, if you are not a growth hacker, you are not being a good marketer, period. Perhaps the term growth hacker should be renamed “Marketer 2.0” to better emphasize its importance for all organizations.
To me, growth hacking is the intersection between marketing and technology. Essentially, it is whatever you can do and track as it relates to your web page design, email templates, purchase process, social sharing links, website analytics, content creation, search engine optimization, advertising creatives/landing pages, etc., in relation to what you can iterate with A/B testing to continually improve until you find that “aha moment” that will lead to rapid, viral and affordable customer growth (as opposed to expensive traditional media buys, which most startups can’t afford).
For more inspiration, here is a more comprehensive list of growth hacking tactics from Jon Yongfook.
But it is more than just the tactics. It is knowing how to apply and track them within the customer lifecycle: 1) acquisition, 2) engagement, 3) purchase, 4) retention and 5) referral. At each step within this process, you have to figure out the key datapoints to be managing and optimizing.
For example, maybe it is the click-through rate from Google campaigns for acquisition and contacts/unique-visitors ratio for engagement and transactions/contacts for purchase and percentage of repeat clients for retention and number of times a social-sharing button is pressed for referral. Figure out what the key drivers are for each and religiously A/B test and improve along the way. Growth hacking is a never-ending process that continues to iterate in a virtuous cycle over time.
As for companies that have built very large businesses via growth hacking tactics, here is a list of the top 10 growth hacking examples I found on Quora. The top three examples included: 1) Paypal, offering a $10 bounty for all customer referrals sourced by their users, 2) Hotmail, including a “Get Your Free Email Account on Hotmail” link within all users’ email messages and 3) AirBNB, reverse-engineering an automated integration with Craigslist for their rentals to be easily promoted.
And, the list goes on and on, with great lessons from Dropbox, Twitter, Instagram, Pinterest, YouTube and others. One of my favorites, not on the list, was Groupon’s 24-hour ticking clock and 500-person-tipping-point to help spark the viral feeding-frenzy for their deals.
So, piggyback on all of these proven growth-hacking tactics for your business. And, frankly, experiment with some new ones of your own so I can be writing about your creativity and success in the years to come.
Growth hacking has become such a highly-demanded discipline for startups that stand-alone, information-sharing sites, like GrowthHackers.com and GrowthHacker.tv, and dedicated events, like the annual Growth Hackers Conference, have been created to help better serve the startup marketing ecosystem. So be sure to tap into these key resources in order to leverage the collective wisdom of the industry and to see how the principles may apply to your business.
At the end of the day, growth hacking is all about driving as much growth as you can while spending as little money as possible. And good growth hackers are driven by the challenge and the “game” of it, so make sure you find a proven growth hacker with the right DNA to help you here.
If you are aware of any great growth hacking examples from your business or industry, be sure to share them in the comments section below.
This article was originally published on Red Rocket VC, a consulting and financial advisory firm with expertise in serving the startup, digital and venture community.
Image credit: CC by TREEAID