It’s a spectacular feat. Right in front of our eyes, a group of marketers helped build billions of dollars of brand equity on products like Facebook, Twitter, AirBnb, StumbleUpon, Zynga, Dropbox, Reddit and LinkedIn.
Stunningly, these brands were built without traditional advertising, brand partnerships or celebrity endorsements — in less than a decade. And the people who did it blew off traditional marketing for a new set of strategies that felt more like engineering and product development than a Don Draper strategy. But it worked.
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Now consider that those brands were only the freshman class. Their success has inspired and informed another batch of startups with equally stunning prospects: Evernote, Everlane, KISSMetrics, Qualaroo, Soma and countless other companies incubated off the radar, ready to explode based on the same strategies.
The marketers behind these brands don’t see themselves as such, though.
They are “growth hackers.”
So how did they do it? What’s their secret? How does growth hacking really work? We went straight to the source to ask the gurus who actually helped build these billion dollar brands. What follows is the the growth hacker method, easily applicable to any kind of business or product someone may launch.
Marketing has long been applied after the product is completed. The result is marketers are often forced to promote products that don’t resonate, that don’t really work. And the reason marketers didn’t contribute to product development was that they didn’t have any interest or the skills to do so.
Growth hacking changes this, says Josh Elman, a growth hacker in Twitter’s early days. “Growth hacking recognizes that when you focus on understanding your users and how they discover and adopt your products, you can build features that help you acquire and retain more users, rather than just spending marketing dollars."
Aaron Ginn, today a growth hacker for StumbleUpon, explains that growth hacking has marketing goals “driven by product instincts.” In other words, don’t just try to market; try to build a product that is easy to market. This, more than any other single factor, is responsible for AirBnb's and Zappos' growth. They are great, necessary and unique solutions to problems; therefore, the product largely markets itself.
Growth hackers try to achieve “Product Market Fit.” That is, a product perfectly designed to fit a specific and critical need for a well-defined audience. Prolific founder and investor Marc Andreesen says, “You can always feel when product market fit isn’t happening.”
What’s one of the biggest signs? Word of mouth isn’t strong. In other words, it’s the product’s fault, not the marketer’s. Growth hacking, most growth hackers will tell you, is pointless without product market fit. So instead of jumping the gun, tweak and re-tweak your idea until you get there. Run surveys, test, iterate and improve. Then the magic starts.
Image: nbergmedia.com/">Heisenberg Media
So your product's been tested and developed for a specific audience. What’s next?
Andrew Chen defines the growth hacker mindset best: A tech startup doesn’t want awareness. It wants users, customers, clients. A growth hackers job is to hack that growth together, through any means possible: “A/B tests, landing pages, viral factor, email and open graph.”
Hacking is taking advantage of loopholes and underappreciated opportunities. With American Spotify, it was Facebook integration. With AirBnb, it was hijacking Craigslist to get new users and traffic. With Zynga, it was cheap online advertising and Facebook alerts (its CEO later explained they were willing to do anything to get users early on). Author and entrepreneur Tim Ferriss gave parts of his last book away on BitTorrent and sold around 250,000 copies as a result.
The specifics will differ for your product or company (as Ginn has said, growth hacking is a mindset, not a toolkit). There is very little commonality between strategies. The essential mindset? “Forget press releases or advertisements. Let’s figure out something that’s never been done before and is specifically designed to leverage the strengths of our product."
As Twitter product manager Paul Rosania describes it, the job of a growth hacker is to try “a lot of ideas, ruthlessly optimizing successes and quickly discarding dead ends.” There is no one thing they do to achieve growth.
The key is to always be prepared for the next step.
Once you pull your first users in, you must ask: "How do we get more?" The most scalable approach is to get those initial users to do it for you.
Take Hotmail, perhaps the best (and earliest) example of viral marketing. Tim Draper, its first investor, pushed the founders to add “PS I Love You. Get Free Email” to the bottom of every email. The result? One million users within six months. Within a year, 10 million.
Paul Graham once explained why he prefers companies with multiple cofounders. It means, he said, they found a least one other person to buy into the idea, and they can convince others. Not every product is going to go “viral” like a YouTube video, but success will always depend on word of mouth. A growth hacker’s job is to develop a product people want to get on board with, and to encourage that process to happen rapidly and self-sustainedly.
Take Dropbox again. I get extra storage space by referring friends.
On LinkedIn, my resume will look better if I ask former bosses and employees to provide testimonials — I am going to be more likely to upload my email contacts and invite them. As one of the company's growth hackers, Ivan Kirigin says, “If your product involves sharing at its core, virality will matter and you should focus on optimizing it.” Not just optimizing, but encouraging it.
“A product goes viral through baking in growth mechanics, through testing and data-based creativity — it is hardly ever random,” says Ginn.
In other words, you can refine and refine your product until the rate of sharing goes up. You can’t just build something and hope it goes viral. You can’t just bolt on viral features after the fact. Something that spreads from person to person is not the result of a couple well placed “like” and “tweet” buttons.
It’s the growth hackers job to engineer virality.
Image: Heisenberg Media
Fandrop growth hacker Ken Zi Wang says growth hackers have two sides to their approach. The first is about getting “very creative in finding new ways to get users.” The second gets “very scientific in looking into metrics very carefully.”
You can drive a million new users, but if none stick around, what’s the point?
If users are leaving, chances are imperfections in your product are the result. Sean Ellis, inventor of the word “growth hacker” reminds us we must constantly “obsess over every element of the customer experience.”
Gagan Biyani, founder of Udemy and of the Growth Hackers Conference, explains that the way to fix a user retention problem is to actually “interview your existing users (both active and dormant) to understand why they aren't coming back, and then figure out what to build to get them to re-engage.”
Yes, it’s actually the marketer’s job to take market feedback and improve the project — not just to pitch harder.
Andy Johns, product manager at Quora, says it’s not just new user signups that matter. A growth hacker focuses on reactivations of current users and pays close attention to deactivations of other users. Reducing churn means the team has to go out and chase new customers less often — because they’re keeping the ones they already had.
Of course, it’s not just retaining users that matters, but also optimizing and upselling the ones who have stuck around. Archie Abrams, director of growth at Udemy, aims a philosophy at sustainable growth, increasing the long term value of customers: “It's better to have 500,000 users, each spending $20 than it is to have 10 million users each spending $0.05. Companies that win find a channel like email, Facebook notifications or push notifications that can sustainably drive users back to their product."
Instead of going out chasing new customers (which is expensive), we can, as Josh Elman reminds us, “focus on understanding your users and how they discover and adopt your products. You can build features that help you acquire and retain more users, rather than just spending marketing dollars.”
That’s why this is the final step in the growth hacker. Instead of spending more, it’s designed to get more out of what you already spent your time, money and resources on.
You can see why the growth hacker approach not only lends itself to the bootstrapped, iterative world of startups, but also how it could be responsible for their massive successes as well.
Instead of putting the cart before the horse and promoting a half-baked idea, growth hackers are intimately involved in product development. Instead of chasing vague notions like branding or awareness, a growth hacker drives users and clients. Instead of spending money, growth hackers look for scalable growth from viral factors and social sharing. Finally, instead of hoping these things magically happen and customers organically stick around, they ruthlessly optimize and improve efforts based on data.
All of this happens not once, but countless times, a continuous loop that makes the startup and its promotional efforts more effective each time.
No one is saying traditional marketing can’t be successful. Only that it is incredibly expensive, and worse, failure is often catastrophic (think of massive flops from New Coke to Google Wave). Who wants to spend millions only to find out it was all for nothing?
Growth hacking is a new way. It’s cheap. It’s effective. It’s iterative. It’s practical.
And best of all, it’s right there, available for you to try.
Image: Renato Ganoza
Ryan Holiday is a bestselling author and advisor to many brands and writers. His newest book Growth Hacker Marketing: A Primer on the Future of PR, Marketing and Advertising focuses on ...More