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Demand Generation

What is Growth Hacking?

July 15, 2016, by Tony Joseph

What is Growth Hacking?

If you’ve been following the world of startups closely over the past couple of years then you’ll no doubt have noticed a term that keeps cropping up all over the place - growth hacking.

Growth hacking may seem like yet another business buzzword that has been banded about without much substance. But for those working in early stage businesses striving to acquire customers in a scalable fashion, growth hacking is much more than just a buzzword.

It’s a way of working that requires a unique mindset and ultimate focus on one thing and one thing only - growth.

So what does growth hacking really mean, what does it involve and what kind of person is a typical growth hacker?

Let's explore the concept in a bit more detail.

What is a Growth Hacker?

"A person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth." - Sean Ellis - first to coin the team 'growth hacking'

To understand what a growth hacker does, firstly it’s important to understand the concept of hacking.

Hackers are individuals who aren't worried about doing things in conventional ways. Their primary goal is to complete a task or objective by whatever means necessary. That means they'll think creatively and innovatively in order to solve the problem at hand.

A growth hacker's primary objective is to do whatever it takes to achieve customer growth for a business.

In more established businesses, customer growth is a task that is often given to sales and marketing teams. However the growth hacker is more often than not, a different type of individual who doesn't typically come from a traditional marketing background.

Successful growth hackers have the ability to think laterally about a problem and tend to have a combination of many different skillsets, crossing areas such as product, marketing, engineering and operations.

Most importantly, their work is built around a dedicated focus on achieving astronomical customer growth for a business.

"Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of 'How do I get customers for my product?' and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph." - Andrew Chen, Growth Advisor / Startup Investor

What Does Growth Hacking Actually Involve?

Unlike traditional marketers in more established businesses, growth hackers aren't reliant on a hefty marketing budget to grow a business's customer base.

Instead they seek to collaborate with teams across the business to find cost-effective solutions that leverage customer growth wherever possible.

That's not to suggest that marketing budgets don't come into play, of course they do, but only when it truly makes sense to start opening up new channels for growth.

The point is that growth hackers work off the premise that a good digital product shouldn't need to rely on a marketing budget to kickstart growth.

Instead, they look to build the product's potential growth machine directly inside the product itself - customer acquisition, onboarding, virality and referral, monetisation, and retention are all areas that growth hackers focus their efforts on.

"Virality isn't luck. It's not magic. And it's not random. There's a science behind why people talk and share. A recipe. A formula, even." - Jonah Berger, author of Contagious

Effective growth hacking also requires a thorough knowledge of the growth metrics that matter to a specific business. Without these key data points it's impossible to know where to focus time and effort.

It's for this reason that successful growth hackers are analytical people by nature. They are inquisitive folks who like to dig into granular data points to help them understand which customer behaviours need to be unlocked to drive rapid viral growth.

Armed with this deep understanding of the customer and product performance, growth hackers seek to find scalable, repeatable and sustainable ways to grow a businesses.

They do this by constantly running new experiments and rapidly testing ideas, measuring the right things, developing repeatable processes and systematising activities that drive long-term scalable customer growth.

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Why is Growth Hacking Good for Startups and Early Stage Businesses?

  1. The principles of growth hacking are centred around driving as much growth as possible for as little money as possible. When you're in the early stages of a digital business and budget control is critical, you could go far worse than following this mantra from day 1.
  2. Growth hacking involves rapid testing and learning about customer behaviour, product performance and identifying levers for customer acquisition. Every startup needs to be concentrating on these aspects as they look to prove product / market fit.
  3. Effective growth hacking requires collaboration across all different departments of a business - engineering, marketing, product design etc. If everyone is working together, operating with the same mindset towards the common goal of growth, your startup is going to have a much greater chance of succeeding.
  4. Investors want to see traction and a consistent upward curve of new customers as it's a strong sign that you've got a business that is going places fast. If they have confidence that you know how to grow your business in a cost-effective fashion, you'll be a much more attractive investment opportunity.

What Are Some of the Best Examples of Growth Hacking?

Dropbox - by analysing early customer behaviour, Dropbox realised that although customers may not pay for their product straight away, but they would do many things to extend the amount of storage they have, the most valuable of these things for Dropbox being invite their friends to use it.

Leveraging customer pain points in their product such as the customer maxing out their storage limits meant Dropbox were able to grow their audience by over 60% through referral without the need of a big advertising budget.


Dropbox Referral Mechanic
Dropbox referral mechanic

Airbnb - as the Airbnb team were looking at cost effective ways to grow, they realised that Craigslist could be an avenue to a huge customer base that they could potentially take advantage of.

Through a smart piece of product development integration, they introduced a one click post to craigslist feature which extended the reach of their listings creating a massive uplift in visitors to their website.

Facebook - the best social networks are powered by friends-get-friends programs to drive customer growth, a prime example of a growth hacking tactic. Facebook analysed their customer data and discovered that their most engaged users averaged 7 new friends in the first 10 days of joining.

So they went off and developed the 'friends you may know' feature - a way of connecting users who most likely knew one another but weren't connecting with one another on the Facebook platform.

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