Is Growth Hacking just a new buzzword or new thing in social media and web? While some people say it is just another name for online marketing methods, others consider it as a synonym for viral marketing. In this article, I will explain to you the basics behind the growth hacking. If you are a startup founder at the early stage, you might be struggling to acquire new users. Then, you should definitely take a look at growth hacking – a modern technique to grow your startup on a small budget.
Growth hacking is a technique used by startups to get new users as soon and as cheap as possible. It requires a combination of creativity, analytical thinking, programming, and social metrics, to grow the user base. Even though growth hacking is considered to be a cheap alternative to traditional marketing, it also costs money and lots of time. But before I tell you more, let’s take a short journey into history.
I Love You
The first registered growth hack is recorded in 1996 as the Hotmail service invested 300,000$ in radio and advertising poster. The campaign was not successful until they came onto the idea to integrate a single line at the end of each email sent with the service:
PS: I Love You. Get your free E-Mail at Hotmail.
The sentence was the link to Hotmail homepage and brought 1 Million new users in the next 6 months. The effect was easy to explain: people were curious who could send such a nice phrase and clicked on the link that followed them to the landing page. Everything was right: the time point, the channel and the target group. Moreover, it had a scaling effect: the more emails people send, the more people were invited to use the service and send emails.
What is it?
Now that you have some background, you might ask: but what is a growth hacker? Andrew Chen, a growth hacker from Uber, defined the growth hacker as „a hybrid of marketer and coder.” There are 7 common disciplines which traditionally closely connected to growth hacking:
- User Experience
- A/B Testing
- Data analysis
- User-centered business
- Stakeholder Management
In this list, the A/B testing and user-centered business are two key areas, every growth hacker should focus on.
Inside The Business
What’s the typical day of a growth hacker? Ideally, it consists of finding growth hacks, prioritizing, implementing, analyzing and learning from them. In reality, there are many dependencies within the company, and a growth hacker should have strong people skills to be able to promote the ideas.
How they do it
In general, every growth hacker follows the same common approach. It starts with brainstorming to list all possible traction channels, including both online and offline. Among all channels, the growth hacker selects the most relevant ones based on her past experience. At this point, it’s also possible to run quick tests to validate new ideas. Finally, three questions help to select the main 3 channels:
- How much does it cost to acquire a customer for the selected channel?
- How many users can be reached, at most?
- Are they the right users who can be converted to paid customers?
Let’s take a look at a simple example of Google AdWords, online advertising platform from Google. If you buy a search ad, it will appear next to search results when someone googles a specific phrase. But, until you find the keywords which lead the right traffic to your landing page, it’s not a growth hack. Because it’s too expensive and brings too few right users. Only after you identified the right keywords with enough search volume, you set the full ad budget on this keyword set.
In conclusion, the biggest challenge of a growth hacker is to find and prioritize the traction channels. Nevertheless, it is not enough to come up with plenty of growth hacks. Many companies work intensively on creating the environment to support continuous planning, executing and measuring effects of growth hacks.