We’ve all heard the stories of companies like Facebook, Uber, Airbnb, and how they experienced huge growth (seemingly) immediately. But how exactly did they do it? What made them so successful?
The answer is growth hacking, a term coined by Sean Ellis in 2010 after he incited huge growth at DropBox, Eventbrite and other startups. Growth hacking is a fast-paced experimentation process intended to result in huge growth. This process has contributed to a number of startups’ success, but it isn’t just startups that can benefit from it.
Marketers today are concerned about their progress more than ever. Thirty-nine percent of them believe their marketing strategies are ineffective. As a result, traditional marketers have noticed growth hacking and they want in. But often they’re approaching it in the wrong way.
Reading marketing books can be a very disappointing activity. The time it takes a title to travel all the way from the author’s head to the reader’s hands is often longer than the half-life of marketing trends. Digital marketing changes by the second and books just can’t keep up.
But still, sometimes an author does their job well and describes something long-term. That’s what Sean Ellis and Morgan Brown have done in Hacking Growth: How Today’s Fastest-Growing Companies Drive Breakout Success.
The book explains how to build an experiments-driven culture and how to take decisions based on data. It is valuable to people who are still not familiar with growth hacking (and are not tired of hearing how Dropbox did everything right!
In this book, the authors take you behind the scenes of the fastest growing companies in the world: Facebook, Uber, Dropbox, Pinterest, AirBnB and many more, to uncover the secrets of how these teams move fast and compound win after win to crush their competition and create extraordinary value. Sean and Morgan provide the step-by-step growth hacking process that any company, in any vertical can use to find growth wins faster and leave their competition in the dust.
What Growth Hacking Is Not
These days, growth hacking has been applied to everything from PR to social media. Most people think of it as these tricks or silver bullets that you need some magical pixiedust to be able to deploy, but that’s not really what growth hacking is.
So many businesses see growth hacking as a quick fix or magic solution when it actually needs to be a strategic, data-driven process. It’s not something you’ll find in a listicle of hacks.
Traditional marketers have a wide focus that includes budget, conversions and more. But growth hackers are focused on growth and only growth. This is why startups have been so successful with it. They couldn’t be concerned with anything else besides growth. If they didn’t grow, they’d crumble.
Startups do not have the resources that other companies do, which forces them to be more creative in what they do. Out of this creativity comes growth hacking.
Growth hacking is now something that’s more applicable to companies of any size, and it overlaps with the need for a lot more agility. The channels through which we acquire clients change so quickly, that if you don’t have a really agile team and process in place to move in and out of those and coordinate efforts across all customer touchpoints, you’re going to have a really hard time staying the same size, let alone growing.
To implement growth hacking in your own organization, you need to think like a startup. It’s time to get into that growth hacker mindset, and get your employees in that mindset as well.
A large number of eyeballs on your site doesn’t mean anything if they aren’t converting. There’s no other book out there willing to tell you to move away from these numbers, to move away from the one-stop-shot that is Google Analytics. Instead, Brown and Ellis encourage you to find numbers meaningful to your own goals.
How Growth Hacking Can Help Elevate Your Business
Simply put, growth hacking is the process of rapid experimentation through inter-departmental communication to identify the most effective, efficient ways to grow a business. It helps a team learn faster, take advantage of emerging technology, and survive disruption.
Hacking Growth is all about how to apply a high-tempo growth hacking process to your business — a complete manual for teaching your company to experiment, learn, and grow no matter what industry. It’s the only book that shows how even companies that weren’t “sure bets” could become the fastest growing companies in their industries.
Ellis and Brown emphasize the importance of identifying new channels and taking advantage before they are saturated.
Growth hacking focuses on sustainability. C-suite executives and company founders should build a top-down growth-centric organization. The key to creating a growth team is to remove silos that are segregating inter-departmental cooperation.
Actually, the 5 Steps to driving growth for your business outlined in the book are :
1. Building your Growth team
At the core of today’s fastest growing companies is a new business unit called the Growth Team. This cross-functional team is made up of specialists from across the organization that come together to design and test new experiments that can lead to big growth wins.
Managed by the Growth Lead, the team meets weekly and moves quickly through a prioritized queue of ideas that have the potential to improve business results throughout the customer lifecycle; from acquisition and activation, to retention and revenue.
The team is comprised of builders and doers from software development, product management, data analytics, design and marketing to collaborate on innovative and incremental experiments that can move the metrics that matter most to the business. In the ideal case, you’d need:
Once you have broken down silos and found ways to work together to identify those areas of opportunity, you need to spread that growth mentality to the rest of your organization. The best way to do this is through your executive leadership.
With your executives setting the example, the idea of growth will spread throughout your company – from the top down. But what if your executives don’t have a growth mindset? All is not lost.
Brown gives the example of Bittorrent. The company implemented growth hacking on their own, without executive buy-in. When they started seeing huge results, the entire organization, including executive leadership, took notice and shifted their focus.
If you feel like this is a huge investment of human capital – you are totally right! To make it leaner, at the beginning, one person can take on several different roles. Say, a product manager can be the growth lead and also be responsible for the development work. To limit the risk, you can limit the scope of the experiments. For example, you could narrow the focus to a particular metric or channel. The important bit is to start and set up a regular process of ideation, testing and measurement.
2. Delivering Must Have Products
Putting growth hacking into practice is not a simple task. Growth hacking is not about throwing a bunch of stuff against a wall and seeing what sticks. It’s about identifying opportunities to engage, innovate and increase your audience.
Most experiments fail. The first thing is, it has to be okay to fail. You have to be allowed to experiment and test ideas…If people are afraid to fail, they’re not going to test new things, you’re not going to get any innovation, you’re not going to get any breakout growth, you’re not going to discover anything new.
Growth efforts are nothing without a product that people absolutely love. But how do you know if the product you’re working on is ‘can’t live without’ versus just ‘good enough’?
In Hacking Growth you’ll learn how the Growth Team’s first order of business is figuring out exactly where the product or service is on the ‘Must-Have’ scale. Using Sean’s ‘Must-Have’ Survey, you’ll learn just how disappointed customers would be without your product and what to do according to just how attached they are.
If your product fits the ‘Must-Have’ bill, we’ll show you below how the Growth Team can get off to the races with their growth push, but if you’re not quite at that level, we’ll show you below how the Growth Team can lead the way in figuring out what it will take to make your product indispensable to your customers.
There’s a series of other questions you might want to ask:
Sean Ellis has a trademark way of testing that. He uses one question only: How disappointed would you be if this product no longer existed tomorrow? The possible answers are „very disappointed“, „somewhat disappointed“, „not disappointed“ and „I no longer use the product“. According to Ellis, 40% of very disappointed users means you have something worth the growth efforts.
3. Finding Your Growth Levers
Each type of business has it’s own recipe for growth. A marketplace like eBay has different needs than a social network like Facebook, than does a restaurant chain or a professional services firm or an e-commerce company like Amazon.
There are plenty of resources out there about how to do growth hacking. But the truth is, what works for one business will not always work for another. Instead of copying someone else, learn from other companies’ strategies and figure out how to apply that same growth mentality to yours.
When you’re sure you have a viable product, you need to identify the primary goal and the elements that influence that goal. We call these essential elements of growth your ‘growth levers’ which are the core inputs that determine your growth.
Here’s an example. If you’re running an online store and your primary goal may be to generate high revenue. This will be influenced by the number of website visitors, the conversion rate, the average order value, and the repeat purchase rate. Then, your growth experiments need to focus on improving any one of those key elements.
For Amazon, their growth levers include things such as the number of product categories and products within each category they carry, combined with the conversion rate of their online shopping cart and the number of people who find Amazon.com in the first place.
4. Testing At High Tempo
The Growth Team, with the growth levers identified, will set off on a high-tempo experimentation process to discover what works (and what doesn’t) when it comes to moving the needle for your business.
The aim of the team is to set up an ongoing testing process. What we mean by “tests” is a series of changes that have a measurable impact on results and return data within 2 weeks. Why precisely 2 weeks? It’s because the regular iterations help us get feedback from users and quickly learn from the market. No matter how useful or interesting a test may be, if it takes 2 months to complete, it will bring little value.
Using unbridled ideation to find new and novel approaches to growth, to a formal process for vetting and ranking ideas to try, to an experimentation framework that focuses on high impact tests, the growth team will find wins both big and small while running laps around your competition in the process.
The entire process is fed by insights from data gathering and analysis the provide the rigor needed to ensure that the effort to grow is being exerted in the right place at the right time.
In Hacking Growth, there’s a cool idea on thinking about conversion rate. Basically, the conversion rate is the result of the customer’s desire to try out your product minus the friction of actually trying it out. The equation above is a neat way to think about conversion rate. We focus too often on the first part, the desire of potential users to test our product. The more effective tactic is to remove customer friction. This is the end goal of regular testing.
5. Hacking The Funnel
Growth doesn’t just come from new customer acquisition , but so often companies spend all their time and energy there that they leave growth and money on the table by ignoring other parts of their business.
AARRR stands for Acquisition, Activation, Retention, Referral and Revenue and is pretty much the bee’s knees when it comes to understanding your customers, their journey and optimizing your funnel as well as setting some valuable and actionable metric goals for your startup.
AARRR is widely accepted as the five most important metrics for a startup to focus on. That is because these metrics effectively measure your company’s growth while at the same time being simple and actionable.
In Hacking Growth you’ll learn why the fastest growing companies focus on retention and revenue optimization first and new customer acquisition second. Plus you’ll get dozens of new ideas for finding growth in all parts of the customer lifecycle, whether it’s how to pick a new customer acquisition channel to test or when and how to change pricing or how to decide if viral marketing is right for you.
Hacking Growth helps you find wins wherever they might exist in your business and shows you how to apply the growth hacking process to finding the winners faster than your competition.
It’s not uncommon for even the most successful companies to hit a plateau after several years of steady growth. That’s one of the reasons why Sean Ellis, the founder of GrowthHackers.com, has teamed up with Inman’s COO, Morgan Brown, to write Hacking Growth — a revolutionary look into how present-day companies are able to overcome this plateau and achieve sustainable growth. “We’ve tried to create a true playbook for growth that you and your team can implement no matter your business type or size,” says Morgan Brown.
I recommend Hacking Growth and I suggest you don’t postpone and read it now. Not because it’ll be less relevant in a couple of months, but because you need to start experimenting as early as possible.
So, are you ready to instill a growth hacking mindset in your organization? What are the first steps you will take? Let me know in the comments below!