When I first heard the term growth hacking, about 5 years ago, I thought Great! Some unscrupulous marketer is at it again. In my head hacking meant doing something either illegal or unethical. Either way, it wasn’t going to be good for business in the long run and whoever was doing it would figure it out sooner or later. Hence I dismissed it.
During the following couple of years, I stumbled upon an increasing number of posts and web articles on growth hacking. The authors described tactics they had used and stated the impressive results they had achieved in attracting users to an application or a website while spending very little money. Many of these tactics were creative and the vast majority of them were neither illegal nor unethical. I had to know more, so I researched growth hacking thoroughly.
I started by going to Sean Ellis’s first post on the topic where he coined the term. That honestly didn’t give me much to go on. Since I’m a firm believer in the need to understand the context in order to truly understand the problem, my second step was to study who Sean Ellis was. What was the road that led him to create the growth hacking concept?
Sean’s professional journey led him first to a commission only sales job in Budapest, in a pretty cut-throat environment, selling advertising for publications. The guy did brilliantly. In order to do so however, he had to get very creative. Then he headed to Silicon Valley for short stints (less than a year) at Dropbox and Eventbrite where he was hired specifically to grow their user base. At that time he was also active in multiple technological start-ups in the valley, helping them not only with their marketing but also often acting as an angel investor. He went on to become a serial entrepreneur. Hence his business culture is soaked with the Silicon Valley culture where fast growth and big numbers (where the money comes from is secondary) are what counts most.
Understanding the creator’s journey and the environment in which it was created can help you understand where growth hacking shines and where it doesn’t.
Like any other business concept, growth hacking is not a panacea. It isn’t applicable in all situations, in all companies, at all times.
Growth hacking can be described as creative digital marketing tactics, aimed specifically at web user base growth, that are best suited for web based products/services during the start-up phase, immediately after product/market fit stage. This is when scaling the business goes from back burner to front of mind.owth hacking can be described as creative digital marketing tactics, aimed specifically at web user base growth, that are best suited for IT products/services during the start-up phase immediately after product/market fit stage.GG
Are you confused yet? I didn’t think so. When applied the way it was intended to, a good business concept usually isn’t confusing.
It gets confusing when the concept starts being applied when it shouldn’t or in situations it isn’t intended for. This isn’t to say that a concept shouldn’t evolve and be adapted to new situations and contexts. The message here is, when it is, it must be done carefully in order to preserve the concept’s value.
A good example of an evolved application of growth hacking is when it is used by large corporations to grow their user base of a new (or even an existing) product. Only a few years back an active social media presence, cross promotions, webinars, Facebook contests and selling their apps through the iStore or Google app store could all be have been considered growth hacks in large corporations. Today, these same marketers would need to be more creative in their tactics to be counted as growth hackers. The tactics, whatever form they take, are a part of an overall marketing plan and, when well executed, give fast and excellent results in growing the user/customer base.
Here are a couple of situations that I was exposed to in recent months which confused the heck out of me. They also show that comprehension and application of a good business concept can get distorted to the point of being harmful.
The first one was an 18 month old start-up that was a B2B reseller (of non IT products). It used the web as one of its distribution channel. When I asked the owner who was doing his marketing strategy he proudly said to me; We don’t waste time with marketing, we only do growth hacking and sales. I asked him what growth hacking entailed for his company. He went on to describe various digital marketing tactics, some aimed at finding new customers and others aimed at brand recognition (hence not growth hacking). The web developer who he had employed as his growth hacker did use analytics but wasn’t familiar with cohort analysis or the sales funnel. Aside from transferring email addresses, his growth hacking tactics would generate, to the person responsible for sales in non web channels, there was no other coordination between the two. When I asked the head of sales how useful these email addresses were he rolled his eyes and let out an exasperated sigh. In the end, growth hacking was costly and had little to no impact on revenues in this situation.
Growth hacking is NOT a replacement for marketing. It is one of the categories of digital marketing tactics that can be used in specific situations to generate users, members, contributors and/or email lists (amongst others). Growth hacking has little or no value if it isn’t part of an overall marketing strategy.
The second situation, and I have seen it more than once, is when a founder or co-founder tags him or herself as Chief Growth Hacker. From day one, their focus is on growing their potential user (fan) base. The product is nowhere near being ready, the target customers still change every other week and product/market fit is nowhere in sight. Growing your user/customer base is a valid concern, even on day one, but growth hack tactics should not be how you find your first customers. Even if you have a web only based business, your first customers should be people you first approach and meet face to face. People you can observe in various situations. People who have no restrictions (or constraints) in telling you what they like and don’t like about your product idea. People you get to know inside out. Most of the users generated by growth hacking tactics before you achieve product/market fit will not convert into paying customers.
When you have not yet achieved product/market fit, you are better off having only a few customers (willing to pay you), that you know inside out, than having a large base of potential non-paying customers that you know only superficially. Once you know your various customer segments intimately and have found the product that they can’t live without, then will be the time to put massive efforts into growth hacking.
Yes, showing a large number of potential customers early can make potential investors notice your start-up. However, unless you can convert a large proportion of these potential customers into paying customers soon, which won’t happen if you haven’t reached product/market fit, the investors will disappear faster than you can snap your fingers.
If you are a founder, and thinking about using growth hacking, the takeaways are:
- Make sure the timing and contexts are right for it
- Growth hacking is not a substitute for marketing. It is but one of its components
- Growth hacking requires skills in analytics. Ensure you have those skills in your company before attempting it
- Growth hacking is not a magic bullet. It will not ensure your start-up’s success by itself.
If this post has raised any questions in your mind about growth hacking, feel free to contact Baker Marketing. We’ll be happy to help you answer them if we can.