Thursday, April 24, 2014

Lesson #174: Growth Hacking--Marketing for Startups

Posted By: George Deeb - 4/24/2014

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As you may already know, I have detailed plenty of low-cost marketing lessons within our 101 Startup Lessons--An Entrepreneur's Handbook.  So, be sure to re-read those 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 is "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, that is a pretty basic premise which be incorporated into most any marketing programs, defined as growth hacking or not.  Frankly, if you are not a growth hacker today, you are not being a good marketer period, in today's tech space. 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. What can you 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. that 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).  Here was a more comprehensive list of growth hacking tactics from Jon Yongfook, for more inspiration here.

But, it is more than just the tactics, it is knowing how to apply and track them within the customer lifecycle: (i) acquisition; (ii) engagement; (iii) purchase; (iv) retention; and (v) referral.  At each step within this process, you have to figure out the key datapoints to be managing and optimizing.  As examples, maybe it is 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 examples of companies that have built very large businesses via growth hacking tactics, here is a list of the top ten growth hacking examples I found on Quora.  The top three examples included: (i) Paypal offering a $10 bounty for all customer referrals sourced by their users; (ii) Hotmail including a "Get Your Free Email Account on Hotmail" link within all users' email messages; and (iii) AirBNB reverse engineering an automated integration with CraigsList for their rentals to be easily promoted to all of those users.  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 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, to leverage the collective wisdom of the industry and to see how those learnings may apply to your business.

At the end of the day, growth hacking is all about driving as much growth as you can, with 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, that doesn't need a lot of budget to do their job.

If you are aware of any great growth hacking examples from your business, be sure to share them in the comments section below.

For future posts, please follow me on Twitter at:  @georgedeeb.

1 comments:

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