What is Growth?
Growth Hacking, or Growth Marketing, is a lean, systematic approach to grow products at scale. It spans across product and marketing and covers the whole user journey from acquisition to referral. It’s most commonly applied at startups, which have the goal to grow exponentially with scarce resources.
The most important requirement for growth at scale is product-market fit, a term coined by Marc Andreessen: “Product market/fit means being in a good market with a product that can satisfy that market.”
Growth Marketing was first defined in 2010 by Sean Ellis, former marketer at Dropbox . The term was then promoted by
- Andrew Chen in “Growth Hacker is the new VP Marketing“
- Aaron Gin in “Defining A Growth Hacker: Three Common Characteristics“
- Ryan Holiday in “The Secret That Defines Marketing Now“
Facebook was the first company with an actual growth team, led by Chamath Palihapitiya.
Other popular Growth Hacks include:
- Airbnb using cross-posting to Craigslist to grow its initial user base
- Twitter suggesting 5-10 accounts to follow to increase retention
- Hotmail adding a link to every email that read “PS – I love you” to get new users
- Dropbox kick-starting growth with a smart referral program
- 11 growth marketing predictions for 2018
- Early adopter marketing
- Explaining the Land & Expand business model for SaaS
- The SEO mistakes young startups make every time
- The underrated power of online communities for growth
- How SEO feeds product-market fit
- How startups should do SEO
- Why you can’t miss out on SEO as a growth hacker
- Growth Marketing principles: critical mass
How Growth works
After the product has achieved product-market fit, growth marketers seek to optimize the four essential stages of the user journey:
Acquisition = how you get users
Activation = how to make users use your product
Retention = how to keep users
Referral = how to get users to invite their friends
The most important one is retention. If you can’t keep your users you suffer from the “leaky bucket syndrome”, meaning you lose too many customers. It doesn’t make sense to get more users before fixing the leaks.
Retention is also one of the strongest signals for product-market fit. To improve retention or activation, you need to make changes to the product. There is almost nothing in Marketing that you can do to improve that. That’s why traditional marketers don’t do that.
Activation is about the user to product value as quickly as possible. One part is guiding users through the application the first time they use it. The second part is making sure the user finds *repeated* value.
Referral is not the same as virality but has to do with network effects. The goal is to find out how the product gets better the more people use it. Some products, like social networks, have it engrained. Others, like SaaS products, need to find it (with the help of Growth Marketers).
Acquisition revolves around push and pull marketing channels: SEO, Paid marketing, Social Media Marketing, E-Mail Marketing, Viral Marketing, Content Marketing, Affiliate Marketing, etc.
The way to optimize the AARR funnel is through experimentation. Eric Ries, author of the book “The Lean Startup”, calls it “build-measure-learn loop”. It’s important because too often we marketers just follow our own biases. In Growth Marketing, we need to prove them with data.
Built-measure-learn works better the faster you get through the whole cycle. That goes from setting up a hypothesis to building a test, measuring results and learning from that. The final step (often overlooked) is the storage of that knowledge.
Growth Techniques and Tactics
There is no set of common techniques that can be applied to every type of product and company. Instead, Growth Marketing focuses identifying small levers that add to overall growth like compound interest.
I modified the graph below from a monetary to a user growth scenario.
The small levers Growth Marketing seems to find and optimize are not focused on an initial splurge in users. Instead, they impact the growth *rate* so that the return compounds over time.
Examples of such tactics could be:
- Optimizing the login page for 5% more sign-ups
- Increasing referrals through a sharing function in the product
- Lifting engagement rate with “hooks” in an app that trigger usage
However, these tactics must be identified from scratch for every company by using the build-measure-learn framework. User feedback, whether from a/b tests or focus groups, is a critical component in this loop.
That leads to a principle that’s commonly ignored in content about Growth Marketing: the best tactics haven’t been used before. Since you have to “reinvent the wheel” for every company, the levers that work best have not yet been used by another company. No startup leveraged Craigslist to grow the way Airbnb did it. Neither has any other company used the Hotmail “PS I love you” to the same extent or Dropbox’s referral system. Startups might use the same channels or platforms but never the same tactics.
Growth vs. Traditional Marketing
Traditional marketing is focusing on communication channels: newspapers, TV, radio. The commonality between these channels is that they are one-directional. The “Web 2.0” made communication by-directional and gave consumers a voice. Therefore, modern marketing and especially Growth Marketing is focused much more on user interaction and marketing with consumers instead of to them.
What most articles nowadays sell as growth hacking is actually marketing. They talk about tactics that increase user acquisition or maybe referral but that’s not the whole story because Growth Hacking is a system, not a tactic.
Growth Marketing applies to a different kind of company than classic marketing, even though many people want to make other people believe that growth marketing can be applied to everything. Startups have to grow with higher rates than establishes corporations but with fewer resources. At the same time, the path for startups is often uncertain and blurry. Hence, growth marketers are easier to find in startups, while traditional marketers live in established companies.
How to get into Growth?
Becoming anything requires learning new skills and collecting practical experience. As a Growth Hacker, you need a distinct base of skills and then add specializations on top. We call it “The T-shaped marketer”.
The basic skills relate to the core of Growth Marketing: testing, learning, measuring.
The specializations apply to (online) Marketing channels and must fit the acquisition strategy of the company. A Growth Hacker who is really good a social organic marketing is not a good fit for a B2B company that doesn’t acquire users on social networks.
The basic skills also hardly ever change. They might expand over time, like Design & UX to mobile devices, but their core principles stay the same. Channels, however, come and go and change over time. The way you do SEO nowadays is completely different to 5 or 10 years ago and AR/VR will be a new channel in the future.
So, you should learn all basic skills and then find one to two specializations. “Learning basic skills” doesn’t mean “Watch a Youtube video” or “read a blog post”. It means reading books, doing online courses and going to Growth Hacking conferences (all listed on this page).
Then, you find one or two channels that you naturally lean towards and learn everything there is to them. It’s hard to impossible to specialize in more than two channels because you don’t have the time to learn and keep up with more than two.
There’s a second vital part of learning: **practical experience**. It’s not enough to read, watch, and listen. You must also do.
You have two options for that: start a project yourself or join a company. It’s very advisable to join a company with a growth team and learn the skill(s) from people who already have them.
If you start your own project you need to find a product. It can be a blog, an app, or even an e-book. The issue is that you have to create the product first but in the process, you learn valuable lessons. When your product is done, create a marketing plan for it and try different things out to increase traffic, sales, and referral. This will slowly get you into the habit of testing and help you find viable channels to market your product.
It’s vital to learn about the Growth Funnel (AARRR) and how to optimize it. Try to map it to your product and then find suitable metrics for it.
A Growth Hacker isn’t made by tools but they’re helpful. Almost every paid tool also has a try-out or limited free version. Try them all out and learn how to use them. If you are part of a Growth Team you’ll have enough budget to get the full functionality. If you’re marketing our own product the free functionality should be sufficient to learn.
- Aaron Ginn – Defining a Growth Hacker: 3 common Characteristics
- Andrew Chen – How to be a Growth Hacker
- Sean Ellis – Find a Growth Hacker for your startup
- Ryan Holiday – The Secret that defines Marketing now
- Ryan Holiday – The 5 phases of Growth Hacking
- Ryan Holiday – Growth Hacking a book
- Aaron Ginn – Build it and they won’t come: How and why growth hacking came to be
- Gagan Biyani – The actual difference between Growth Hacking and Marketing
- Sean Ellis – Milestone to startup success
- Brian Balfour – How to become a customer acquisition expert
- Brian Balfour – 7 principles to master Growth Marketing
- Dave McClure – Startup Metrics for Pirates
- Mattan Griffel – Growth Hacking
- David Skok – The Art and Science of Growth Hacking
- Sean Ellis – Using Your Growth Model to Drive Smarter High Tempo Testing
- Andrew Chen AMA by GrowthHackers
- Andreas Klinger – Startup metrics, a love story
- Hiten Shah – Lean Analytics Cycle
- Nir Eyal – Hooked
- Brian Balfour – Building a growth machine