Why Growth Hackers are Taking Over Startup Marketing
There are two primary reasons startups fail. The first is they create a product no one cares about, a solution that doesn’t meet a need for a large enough market. This is a problem the Lean Startup movement has been working to solve. The second problem is they don’t know how to get customers. While they probably pay attention to traffic, the number of users who sign up, and the amount of revenue they generate, it’s likely they don’t know what happens in between. And even if they do, it’s likely they aren’t sure what to do about it. Enter the growth hacker.
What is Growth Hacking?Coined by Sean Ellis, a growth hacker is someone focused on creating scalable growth by manipulating and measuring each aspect of the customer funnel. The role of a growth hacker has risen to prominence in Silicon Valley. But finding one is difficult there, much less in other startup hubs like Chicago. Growth hackers can be marketers, although they usually aren’t. Marketers often focus on using traditional methods to drive people to the top of the funnel. Marketers with direct marketing backgrounds are closer, as they focus on empirical strategies for conversion. And while any marketer can (and increasingly will) become a growth hacker, it’s a skillset that most marketers don’t currently possess. Growth hackers are creative, constantly on the lookout for ways to increase acquisition, adoption, retention, revenue, and referral. They are disciplined, subjecting themselves to an empirical process to determine what works and what doesn’t. They understand that the product itself is the most effective marketing tool. And they are technical enough to leverage existing platforms to reach the billions of users at their fingertips.
Empirical CreativityEmpirical creativity is probably one of the biggest differentiators between growth hacking and traditional marketing. Rather than trying to think his or her way to a "big idea" and building an entire strategy around around that idea, a growth hacker comes up with a dozen possible strategies, testing them on a small scale to see what resonates. As Jim Collins puts it, they fire bullets before firing cannonballs. Growth hackers constantly come up with new and clever ways to move customers through the funnel. But their mandate is to find strategies that work at scale, not simply strategies that are clever. Every idea must objectively point to a sustainable improvement in growth in order to survive. Through A/B tests, cohort analyses, and other methods, they make sure they know what’s working and what doesn’t. Companies who are serious about testing quickly learn that most tests fail. Which is why growth hackers also focus on the velocity of learning - they want to fail as quickly as possible. If you assume a 90% failure rate, and one organization runs one test a week while another runs ten, it’s likely that the second organization is going to move the needle much more rapidly.
A Recognition that the Product is the MarketingWhen most marketers think of viral marketing, they think of creating unique, compelling content that spreads. And while this is accurate, it's also very hard to do this on a consistent basis. A much more reliable method for helping your product spread is to bake viral components directly into the product itself:
- Hotmail's growth was almost entirely due to a "Get your free email at Hotmail" sentence at the bottom of every email.
- AirBnB reverse-engineered Craigslist to let users post listings automatically despite no public Craigslist API.
- Allowing users to embed videos was key to the success of YouTube and Vimeo.
- Slideshare included a plain-text link in their embed code, driving traffic back to their site to get an SEO boost to boot.
- Dropbox incentivized referrals by giving free extra storage space - a strategy they claim accounted for 60% of their growth.