Sean Ellis coined it in 2010 when trying to come up with a new job description. Sean is the OG (original growth hacker).
He helped lots of startups achieve accelerated growth (for example Dropbox) as a consultant.
However, whenever he left a startup to pursue new ventures, he would have a tough time finding a replacement.
Someone who was in charge of growing the startup. He went through hundreds of applications each time, all outlining a job for marketers.
But marketers couldn’t do this job.
Modern software products are entirely different from traditional products, and so is their distribution.
Marketers felt they had to consider budgets, expenses, conversions, etc.
A growth marketer does not care about any of these things. Sean, in his own words,was looking for“a person whose true north is growth”.
As growth is the make-or-break metric for startups (either they grow fast enough or they die), that’s the only metric a growth marketer cares about.
An engineer can be a growth hacker, just as much as a marketer can. What matters is their focus.
Due to the startup culture, they often have to use analytical, inexpensive, creative and innovative ways, to exponentially grow their company’s customer base.
That’s the only thing a growth hacker does.
To really understand what growth hacking can achieve, and what your mindset needs to be, if you want to apply the same principles to your business, I’ll show you a few examples of growth hacking done right.
A traditional product, like soap, is not very scalable. Every time you run out of soap, you have to buy new soap.
But every time another user signs up to Facebook, your experience gets better.
Plus, the way the product works allows it to market itself. If you use an Uber to go to your friend’s house on Friday night, and they ask you how you got there, you say: “I took an Uber.”
Naturally the word spreads. If you like the idea, and have friends who could benefit from using the service (in addition to you benefitting of them being on the platform), you’re very likely to suggest it.
That’s how growth hacking uses word of mouth on a big scale, in order to achieve the exponential growth rates we’ve seen.
Alright, time to look at some examples who have done growth hacking the right way.
But today I won’t just show you great examples, I’ll also give you a simple, 4-step process you can follow to try and apply growth hacking in your own business.
Step 1: Make sure you create a product people actually want
You’d think this is obvious for any company, right?
Well, in old times you could sometimes get away with a mediocre product, if you just marketed it enough.
For example, Coca Cola introduced lots of other soft drinks over the years, like Sprite or Fanta, most of which don’t nearly taste as good.
But through extensive advertising they made them popular and now they litter the aisles at grocery stores just as much as Coke itself.
Doing this again now would be much harder, as word about a new product spreads extremely quickly.
If your product is bad, the world will know it faster than you can imagine.
This phenomenon is also known as a sh*tstorm. Example: When United Airlines workers were seen passing on luggage to one another by throwing it around in 2009, they ended up breaking a guitar by a customer.
They committed to doing it, but refused to compensate the guy for his loss.
The result? Not one, but 3 songs, including videos, about the crappy United Airlines service.
The first one has gathered 15 million (!) views so far:
Pretty bad PR for United. If your product sucks, it can disappear in less time than it took you to build it.
What’s the solution to this? Feedback.
You have to get your product out there as fast as possible, to start collecting feedback, and keep improving it on a regular basis.
It took us a year to build it and when we released it – we learned that our customers were happy with the metrics their social networks were already offering.
2 Steps you must take to make sure your product hits the target
Here’s how to do it the right way:
1. Start by asking and answering questions, not by developing a product.
We did this with Crazy Egg. People were coming to us with questions about customer behavior. They said: “We’re spending all this money on advertising, but we don’t actually know what the customers are doing, where they are clicking, what their behavior is like.”
Only then did we start digging deeper into the topic and thinking about creating a product that solves that problem. We didn’t just develop a product that “felt like a great idea”.
2. As soon as you have an idea, start getting feedback.
Don’t hide in your basement, develop something for 6 months, and then come out, wave it and ask: “What do y’all think?”
Ask for feedback right away.
Imagine a friend tells you about a problem with her company over dinner. Together you sketch out a solution to it on a napkin.
The moment you have that sketch you can show it to other people.
We pushed out the first version of Crazy Egg after only a month to start collecting feedback. Then, each month, we released an improved version.
Thanks to our quick release and constant collection of feedback, we had a decent product after only 6 months, which customers were happy to pay for.
Not only that, but the press and buzz created from releasing the updates publiclyhelped us create a 10,000 people long waiting list by the time we launched Crazy Egg.
Another example of a company who definitely nailed the feedback part, is Instagram.
In order to reach the majority of people, your product must first successfully pass through innovators and early adopters.
These are small groups and communities, who need to be explicitly targeted. Geoffrey Moore has written an entire book about this phenomenon, called “Crossing the Chasm”.
Products either captivate the first 15% of the market, or they go to die there.
If your target customer is “everyone” there’s no way to growth hack through those first 15%, because you don’t even know who to convince to buy.
Alright, well how do you get this right then?
Target the small minority of people, who gets the most out of your product
You should create a customer profile. Consider all aspects of your product. Then ask yourself:
Who would get the maximum effect out of our product?
Be specific. Describe a real person as best as possible.
If Dropbox were to tell you about their ideal initial customer, they’d probably say something like:
A 22-year old white male, who is tech-savvy, lives in San Francisco or the Bay Area, is skinny, has only a few really good friends, wears XYZ brand clothes and spends most of his time online.
That’s how detailed you should be.
And in the beginning, you actually want to cater exclusively to those people’s needs.
Traditional products like books published with a traditional publisher have to create a lot of buzz before they even launch, in order to make sure the launch is successful.
With a modern software product, what happens before the launch isn’t nearly as important as what happens after the launch.
Dropbox didn’t throw a huge invite-only launch event. They just released to the public at TechCrunch50 in 2008.
Their much smarter move was to make the service invite-only after the launch.
They launched it at an event where their ideal customers gathered every year and then created an aura of exclusivity around the product.
People looking to join the service needed an invite from current users to get on. Since everyone wanted to know what Dropbox is about and how it works, the waiting list quickly blew up.
But mystery always brings skepticism right with it. So in order to give potential users an idea what Dropbox is about, they made a short demo video.
They custom-tailored that video to the users of Digg, a very popular social news network at the time. Again, the users were all their ideal targets: internet geeks, techies and nerds.
Drew Houston, one of the founders, placed about 12 inside jokes throughout the presentation. Within 24 hours, the video had 10,000 diggs (=likes), the word spread like wildfire and their waiting list jumped from 5,000 to 75,000 users.
Original Dropbox Demo:
Compared to spending $300 per acquisition for a $99 product on Google Adwords, this seemed to be the better strategy for them – they now have 400 million users.
These types of growth jumps are crucial in the early days of a startup in order to push through the 15% market share boundary that is needed for the product to take off.
Here’s another great example of spreading the word in your community: Hotmail.
If you’re a Gmail user, Hotmail seems ages away and you’ve probably long forgotten it, but since being acquired by Microsoft, they have grown to over 400 million users.Gmail only beat them 3 years ago.
What did they do to get bought out by Microsoft in the first place? Grow. Fast.
When debating marketing options like billboards, their investor had an idea. Why not just put a sign at the end of each email sent through them, saying “PS: I love you. Get your free e-mail at Hotmail”?
It was definitely worth a try, since it increased signups to 3,000 per day, doubling their user base within 6 months – from 500,000 to 1 million.
After that, growth became even faster – just five weeks later they counted 2 million users.
By making their headphones white, Apple made sure everyone would recognize them. All headphones are usually black, so by tweaking this feature they turned all their customers into walking advertisements.
They gave users the option to show that they’re on Facebook in other places, like their blogs, websites and in forums, by creating different badges for them to embed.
The badges are still around today…
This created billions of impressions, hundreds of millions of clicks and thus millions of sign ups each month.
And this isn’t the only giant using this strategy. Ever tried to share a Youtube video on your blog?
They make embedding videos super easy, so lots of people do it.
This works not only because they create the entire code and highlight it for you, so you just have to press Cmd+C (or Ctrl+C, if you’re on Windows) and then paste it into your editor, but also because Youtube videos are very shareable.
We also wanted people to embed their data from Crazy Egg – not a good idea.
What company wants to show their traffic, clicks, revenue numbers and conversions?
But guess who wants to share the latest funny cat video they found? Everyone!
Pro tip: Give people a reason to dig deeper into your embeds. The Youtube player automatically plays the next video, or gives you a selection of related videos, at the end of each video, which makes it highly likely you’ll actually switch to Youtube after watching an embedded video.
When you decide on whether you want to make your product embeddable or not, be sure customers have a reason to embed, it’s easy to do and you entice them to dig deeper into your embed.
There is something that’s even more powerful than embeds though, especially, if you get it right: integrations.
Did you know that if people can sign up to your service using one of their already existing accounts on Facebook, Twitter or Google, that can increase sign ups up to 50%?
Integrating your service to work seamlessly with another can give you very easy access to millions of potential customers.
PayPal was struggling to get a foot in the door with the majority of the market. Few retailers actually offered them as an option.
But once they landed a deal with Ebay and were offered as an option right next to Visa and Mastercard, the floodgates opened.
Integrating with Facebook was a very targeted move. Facebook was a platform for sharing interests, especially music (in the form of videos, for example), before already.
Spotify just made the experience better. By showing what your friends listened to in the app and in the Facebook stream, people started to discover the app.
“Tom’s listening to Jay-Z on Spotify.”
“Hm, I wonder what that is, let me check it out. Oh, free streaming, awesome!”
And boom, Spotify had another user (that’s exactly how they got me by the way).
As with embeds, make sure your integration makes sense for the users, so that both parties benefit.
AirBnB didn’t, which is why their growth hack eventually stopped working. Lucky for them they didn’t need it any more at that point.
When they started creating their listings, they really wanted to tap into Craigslist’shuge network. But Craigslist didn’t make their API public, so the AirBnB guys had to create a quite difficult technical solution.
Eventually, they made it work and people could cross-post their AirBnB listings with one simple click: