Jump-Start Your Business With Growth Hacking
You might have heard the term growth hacking before, but maybe you’ve never really thought about how it can be practically used in your company. Growth hacking, as the name suggests, is a type of marketing focused on growth. Startups and challenger companies that need fast growth in order to beat their larger competitors have found success with this method. Many companies that exist as household names today started off as scrappy underdogs. Through the canny use of growth hacking, they were able to rapidly scale their businesses, and you can achieve similar results by following their example.
What Is Growth Hacking?
Growth hacking emerged in the last decade as a term describing high-speed, cross-functional experimentation fueling extremely fast market growth. It proposes quick iterations and week-to-week agendas together with high-risk, high-reward experiments. What the lean approach is to software development, growth hacking is to marketing.
Sean Ellis coined the term in 2010 to describe his work for Silicon Valley startups like Dropbox. He then published Hacking Growth, in which he describes his experience and shares examples of how various startups used growth hacking in their initial phase to boost their growth considerably.
In practice, growth hacking is about taking a data-driven approach to marketing experiments. Whether you want to gain more users, boost your revenue, or lower the cost of acquiring new customers, the essential component is acquiring and using data to fuel fast iterations of experiments to find the right growth solution as quickly as possible in order to grow the business.
Growth hacking also focuses on fostering creativity and innovation in the marketing space. Because a limited budget is often one of the constraints that startups and smaller companies face, companies have to get creative about using whatever resources they have for marketing. Large enterprises with massive ad budgets usually stay on the safe side by promoting their services and products through social media campaigns. So let’s have a look at how some well-known startups built their momentum through growth hacking.
Growth Hacking in Action
Today, PayPal is a well-known way to make electronic payments. Elon Musk, Peter Thiel, and Reid Hoffman, among others, founded the company, and many of them have gone on to become ultra-successful. The company’s beginnings were hard, though, because they needed to convince people that paying online was safe, particularly when transferring money through a private company other than a bank.
Despite the challenges it faced, PayPal grew immensely in the 2000s to 100 million users thanks to its growth hack: a referral program. Referral programs are more popular now than they were in the 2000s, so PayPal was making a bold move by offering $10 to each new user and $10 to each person they referred. This meant each new user cost $20. Although the plan was a gamble that cost millions, PayPal hit the jackpot. The hack brought millions of new users onboard and allowed the company to achieve up to 10 percent daily growth.
This example shows that large budgets plus creativity can work amazingly well. But what if you’re on a tight budget? Airbnb is a great example of how you can grow by using non-standard methods. In 2010, Airbnb wasn’t a popular platform. The largest property rental site was actually Craigslist, a super-platform that encompassed all forms of offers, and which still does lots of things well.
Airbnb integrated with Craigslist, allowing users who posted their rental offers on Airbnb to cross-post them to Craigslist as well with one click. Although this integration was perfectly legal, it was not authorized by Craigslist, and it also required a bit of technical expertise to execute well. But despite these difficulties, the hack led to strong growth for Airbnb. The company grew from 100,000 users in 2010 to four million in 2014. As a creative, technology-driven approach to marketing that led to explosive growth, this is a perfect example of the power of growth hacking.
As a final example, the business-oriented social media site LinkedIn went live on May 5, 2003. In the first month, it had 4,500 users and sometimes only 20 new sign-ups daily. What pushed LinkedIn to prominence was a growth hack: new users were able to invite their entire address book to the platform. This feature was introduced in 2004 and quickly allowed LinkedIn to reach over 1.2 million users within a year, thanks to its network effect for creating communities. Once you were in, you wanted your friend in, and the platform allowed you to invite them quickly.
These examples all suggest that marketing isn’t necessarily about ads. Often it’s about your own product. You can attract a lot of users or customers just by adding a new feature or reworking the product to better fit your target audience. So how can you start with growth hacking right now?
Getting Started With Growth Hacking
Growth hacking is about extracting marketing insights from data through a cycle of innovative experiments. You can’t hire a growth hacker per se. Rather, growth hacking is the product of teamwork between marketers, data analysts, and software engineers.
So how to start if you’re on a budget? Here are three general growth hacking methods worth trying:
- Build a community around your product. On a basic level, that might involve creating Facebook groups, using Reddit forums, answering questions on Quora, or launching a newsletter. All these platforms are great for getting people to engage with your content. This is also a great way to verify your product-market fit. Just test which sub-Reddits and Facebook groups give you the most positive feedback. You can also directly ask the people on your mailing list. If you don’t have one of those yet, you definitely need to maintain one.
- Tweak features of your product to adapt to your users. Remember that the customer comes first. You should always listen to the feedback that your early adopters provide and have a way to measure it in order to gain actionable insights. Sometimes a small feature might be missing, or your site has bad UX that leads to churn, or an invisible “Paid Plan” button that causes the loss of revenue as users don’t know how they can pay for your product. Opportunities are endless. Listen to your users.
- Tap into an existing audience. Maybe Airbnb’s early hack was quite bold, but it worked. Recognize who your early audience is and where to find them, and then make a more personalized approach to win them over. You should attempt this even — or maybe especially — if that means taking them away from your competition.
All in all, growth hacking is an iterative process. You’ll likely fail in the beginning, but gather the data-fueled feedback and move on to the next marketing experiment, until you hit a jackpot.