Growth hacking seems to be the buzzword on every startup’s lips, and which new CEO isn’t dreaming of rocketing growth rates in record breaking timeframes?
The term “Growth hacking” was introduced by Sean Ellis (AKA the growth hacking Godfather) in 2010 when he was trying to hire a replacement for himself and needed to come up with a new job title.
Ellis defines growth hacking as “a process of rapid experimentation across the full customer journey to accelerate customer and revenue growth.”
Sean’s reputation for bringing companies to market and accelerating user growth may be best known in terms of the success of Dropbox, a cloud-based online storage site. Sean was the first person responsible for Dropbox’s growth and through his understanding of the digital world’s growth potential he was fundamental in Dropbox’s current $8.8 billion valuation.
How he got there was pretty simple too. Sean recognised the potential in scalability for new digital services.
In order for a business selling a traditional product to keep up with growth the business must invest more time and money into manufacturing more products in order to keep up with demand. But for a digital product, these restrictions and extra resources don’t exist. Take Facebook for example. The platform is their product, and with every new account the company has a new customer, but Facebook doesn’t need to invest more time and money to create each individual account – the work has already been done. So, when it comes to growth - the sky is the limit.
Growth hacking can be achieved by simple yet strategic incentives for the customer. To use Sean’s success with Dropbox as an example, he devised a strategy to offer extra online storage for free when a user referred a friend to sign up. Seriously, it was as simple as that!
It’s true, not every strategy or incentive will transform your startup into a billion-dollar business and what works for one might not work for another. This is where the “experimentation” comes in.
To help you navigate growth hacking into your business’ DNA we’ve devised a simple growth hacking guide:
Look at the data that you already have. Where do your customers go in terms of traffic and engagement? Once they get there, what do they do? Similarly, where are your customers not going, and where are they not engaging? Think about why that is and where you want the change to be.
Test, test and test again. We’re all friends here so let’s cut to the chase – you don’t have all the answers straight off the bat. If you did, you’d have a multi-billion-dollar company and the world would be saying “Jeff Bezos-who?”
As much as your hypothesis makes sense in your head, you need to put it to the test to find out for certain. A good set of simple, measurable tests is how to get that ball really rollin’.
But start small. Create small subsets of your audience to act as an accurate data sample and run simple A/B tests to conclude your hypothesis. And when you’ve done that – do it again. If you’re a true growth hacker you won’t have invested the contents of your bank account on one experiment and spent a month doing so, you need to be prepared to “fail fast” with minimal losses but huge potential gains.
Analytics and data make the growth hacking world go round. If your test was measurable your results should be clear. If the results weren't what you were after – no biggie, test another variable. If your results were positive, share them with your team. Growth hacker OG, Sean Ellis is a firm believer in letting fellow growth hackers be a part of product development teams. If you come up with a game-changer, document it and spread the word.
From every test, you’ll generate new data, and with every new set of data there are insights to be found. If these insights aren’t the eureka moment you were looking for, use them to drive the next test.
Test, test and test again!
To the traditional marketer, this may all sound a little overwhelming. But don’t be alarmed – you’re probably already practicing the fundamentals of growth hacking in your day to day. Ever created an A/B split test on a Facebook ad? Ever sent out variations of an email, just changing the headline? Then you’re halfway there already.
We like to define a growth hacker as a marketer at heart, with a programmer's mind set.