The Newbie’s Guide to Growth Hacking
There is a new term being tossed around in Silicon Valley — a new concept startup founders expect you to understand if you want to have a job at their company. It’s a concept in marketing, and yet many colleges’ marketing programs aren’t teaching it to their students.
The term is “growth hacking”, and if you are a student looking to get a job at a startup, then this concept is definitely something you should understand by heart. However, growth hacking is a concept that anyone could apply to their own lives - simply by understanding the process and principles that growth hackers use. And I’ll show you how below.
What is Growth Hacking?
In order to do this, we must first define what growth hacking is, and we can do that by separating the two words. We know growth = the process of increasing in size. For a startup though, growth means improving different aspects of the business, such as increasing revenue or your number of active customers. In fact, a startup should be defined as a company designed for growth. Paul Graham, founder of startup accelerator Y Combinator, stresses this in his quote below:
“A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. . . .The only essential thing is growth. Everything else we associate with startups follows from growth.”
Isn’t Hacking a Bad Thing?
Hacking, on the other hand, usually has a negative connotation to it, as it’s defined as gaining unauthorized access to data in a system. Nowadays though, “hacking” is used as a verb to create a feature, app, or website among software developers. There is also the figurative sense of being a “hacker”, which Gagan Biyani, who was the growth hacker for the tech startups Lyft and Udemy, defines below:
“[A hacker is] someone who thinks outside the box, disregards the rules, and discovers new ways to solve problems.”
When we put these two words together, we can define the growth hacker as someone who is in charge of finding cheap but effective solutions to “hack” or increase a startup’s growth.
A Bit of History
For a bit of history, though, the term growth hacker was first coined in 2010 by Sean Ellis, the creator of the blog Startup Marketing.
In his blog post, entitled “Find a Growth Hacker for Your Startup”, he lamented his frustrations on how a lot of startups look for marketers and “hire for skills and experience that are irrelevant”. Instead, they should hire a growth hacker, “a person whose true north is growth”. Since then, the term caught on among many startups in Silicon Valley, and many resources have been made to educate people on how to be a growth hacker.
Growth Hacking vs. Traditional Marketing
At this point, it’s important to consider the differences between growth hacking and traditional marketing, since some may think they are the same.
In traditional companies, marketers were supposedly the ones in charge of increasing growth in the company, but they’d do so with concepts such as “branding” and “mind share”.
However, with many companies simply selling products and services online now, such as Facebook and Uber, traditional marketing has become difficult to apply to tech startups. As such, growth hackers have become the new VPs of Marketing, and startups need their expertise in order to drive growth during their early stages. As such, many growth hackers need to have an understanding of digital marketing, software engineering, and data analysis to help their startups achieve growth.
How do Growth Hackers Drive Growth?
So then comes the question, “How do growth hackers drive growth at a startup?” Well, in his book “Growth Hacker Marketing”, Ryan Holiday discusses a 4-step process to growth hacking — from building a product people want, to finding a growth hack, and to retaining that growth. Although you may not be working at a tech startup, it’s important for you to understand this process — because then you can apply the principles of growth hacking to your own company in the future, or even to your own life. Along the way, I’ll also include examples and analogies on growth hacking to make it easier for you to understand.
Step 1: Building a Product People Want
The first step to growth hacking is to build a product or service that people actually want. This sounds obvious, but it is something a lot of people miss. It’s like locking yourself up to write a book that no one wants to read, or making an online course that nobody wants to take. It’s a waste of time, and no amount of marketing or promotions would save your product. As such, growth hackers have this concept of finding “product-market fit”, which is basically finding a product that users love and that they would recommend to others to use.
For instance, Instagram started as a location-based social network called Burbn — but its first customers were just using one feature — the photos and filters. As such, they changed their product to focus on being a mobile app for posting photos with filters. This let it achieve product-market fit, and more users loved it because of its simplicity. Even if you’re not building a product like Instagram, you can still apply this concept of product-market fit to your own life.
Just remind yourself this: before you do or make something, make sure it’s worth doing or making first.
Step 2: Finding Your Growth Hack
After finding product-market fit, customers aren’t just going to magically find your product. As a growth hacker, it would be your job to find creative ways to get more people to sign up for your product, and there are a number of different ways to do this.
In their book “Traction”, Gabriel Weinberg and Justin Mares, two successful startup founders, outline 19 different channels in which you can find and get more customers, such as making social media ads, finding blogs to partner with, and joining trade shows.
Hotmail’s Clever Growth Hack
One example of a notable growth hack was done by Hotmail in the late 1990’s, when they used viral marketing to grow their user base. Back in 1996, while other mail services would charge users to create an email account, Hotmail’s founders created the first free web mail service at the time.
However, the founders had to figure out how to make their product go viral. At first, they were thinking of traditional, expensive ways to get customers — such as billboards and radio ads. Eventually, Tim Draper, their venture capitalist, thought of putting this at the bottom of each email:
“P.S.: I love you. Get your free e-mail at Hotmail.”.
This little feature became a game-changer. Everyone who got an email from a Hotmail user would see the P.S. line, click the link to go to Hotmail’s site, and sign up to be a new user. Within a year, they had grown to 10 million users, and Hotmail was sold to Microsoft for $400 million. This was an example of a clever growth hack, so it shows how important it is to find your own growth hacks in life. This involves finding creative ways in which you can achieve your goals faster to hack your own growth, such as finding a mentor.
Step 3: Engineering Your Product to Go Viral
Another important aspect of growth hacking is designing your product to go viral. This means making sure your product would make users want to refer their friends to use it, and that they would recommend their friends to use it too. Your startup’s product needs to be like an infectious virus — multiplying its spread at an exponential pace instead of a linear one — just like how the best startups acquire users.
The Dropbox Effect
A famous example of a viral product was Dropbox, a startup that allows you to back up and sync your files on the Internet. Dropbox created a referral program in which a user gets 500 MB of storage for every time they successfully referred a friend to make a new Dropbox account.
This incentivized users to keep inviting friends — as many as 32 — and this created a viral chain reaction that let Dropbox acquire 2.8 million users a month through the referrals. This is a perfect example of another principle growth hackers have — that virality is engineered, not chanced upon. So don’t rely on chances and miracles for your startup, or in your life.
Step 4: Retaining Your Customers and Optimizing Growth
Last but not the least, retaining your customers is the most integral to the concept of growth hacking. You can’t just acquire millions of users, only for them to realize that your product actually isn’t good and they stop using it. This is where one of the principles of growth hacking comes in — tracking, and analyzing data. With tools such as Google Analytics these days, you can know the demographics of the people coming to your websites, what they click, and where they leave your website, which you can use to optimize growth.
One example of how to track data and optimize growth is by doing A/B testing. A/B testing involves having 2 different versions of your website or app at the same time — such as 2 different designs of a front page — to test which one is more appealing and drives more users to sign up. Although A/B testing may sound technical, chances are that you’ve already applied this to your own life , whether it’s in using different lines to pick up girls, or comparing different outfits to wear. So it’s something you can apply to your own life as well.
Conclusion
So there you have it. You’ve just walked through the 4-step process that a growth hacker goes through. Although you may not have the toolkit or the technical knowledge to apply some of these concepts — such as how to do A/B testing on a website — the more important thing is that you understand the principles. Aaron Ginn, the director of growth at StumbleUpon, puts this well in his quote below:
“Growth hacking is more of a mindset than a toolkit.”
The growth hacker mindset involves being ingenious, data-driven, and goal-oriented, and it’s a mindset anyone can apply to one’s own life as well. Now it’s just up to you to figure out how to hack your own growth.
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Brian Tan is a 20-year-old writer, UI/UX designer and front-end web developer from the Philippines. He’s also the co-founder and CEO of HangTime — a web app built to help students create and share class schedules with each other. Get in touch with him at brian@hangtimeapp.com.
Side Note: This was originally a 5-page essay I wrote for my English class in first year college. It was a paper where I could explain any concept from the course I was taking (IT Entrepreneurship), so I decided to write about growth hacking, which I had read many articles about already. As such, I also have a list of the sources I used, which you can use as resources to learn more about growth hacking below:
Resources:
The Books: I highly recommend you read both of these, especially Ryan Holiday’s book. It’s the original guide.
Holiday, Ryan. Growth Hacker Marketing — A Primer on the Future of PR, Marketing, and Advertising. New York: Penguin, 2013. Epub.
Weinberg, Gabriel R., and Justin Mares. Traction: A Startup Guide to Getting Customers. N.p.: S-curves, 2014. Epub.
Articles:
Biyani, Gagan. “Explained: The Actual Difference between Growth Hacking and Marketing.” The Next Web. N.p., 5 May 2013. Web. 2 Feb. 2016.
Chen, Andrew. “Growth Hacker Is the New VP Marketing.” Andrew Chen. N.p., 27 Apr. 2012. Web. 02 Feb. 2016.
Ellis, Sean. “Find a Growth Hacker for Your Startup.” Startup Marketing. N.p., 26 July 2010. Web. 2 Feb. 2016.
Graham, Paul. “Startup = Growth.” Startup = Growth. N.p., Sept. 2012. Web. 02 Feb. 2016.
Patel, Neil, and Bronson Taylor. “The Definitive Guide to Growth Hacking — Chapter 1.” Quick Sprout. N.p., n.d. Web. 02 Feb. 2016.
“What Is A/B Testing?” Optimizely. N.p., n.d. Web. 02 Feb. 2016.
Wright, Travis. “5 Things University Marketing Programs Aren’t Teaching (But Should).” Marketing Land. N.p., 03 Nov. 2014. Web. 02 Feb. 2016.
