In this series titled “Defining a growth hacker”, I am exploring the meaning and practical application of growth hacking through a number of interviews with prominent growth hackers. This is the second post the series, which outlines the ways growth hacking changed marketing. You can find the first post, “Defining A Growth Hacker: Three Common Characteristics,” here.
The Internet has been the most disruptive vehicle in modern memory, from buying shoes to connecting with friends. The profession of marketing was no less transformed over the last two decades. Marketing has evolved from rules of thumb to data-driven decisions with the adoption of lean. Danielle Morrill, co-founder of Referly, says “Growth hackers are questioning and challenging marketing as we know it today.”
Obtaining growth with little to no marketing budget, once deemed impossible, is now considered a badge of honor. A growth hacker’s creative ability to grow outside traditional channels has changed the face of marketing in startups. Metrics, scalability, lean, and iteration used to be words only for the product team. Now, the best marketers talk like product gurus and engineers who eat data for breakfast.
Growth hackers changed marketing in five ways: reimaging marketing spend, engineering virality as a core strategy, looking for new channels, pushing the limit, and product-driven marketing.
No Budgets.
Growth hackers typically learned the art of growth out of necessity: no marketing budget. While traditional marketing usually involves a budget that maps spending to specific channels, growth hackers have no preconceived notions of which channels will work. Experimentation, discovery, and innovation are the heart of a marketing strategy. Michael Birch, co-founder of Bebo and early growth hacker, explains why: “Budgets make people lazy. They begin to think in traditional terms and don’t innovate.” When a marketer has a budget, they’re tempted to spend it or lose it.
Instead of looking at a budget, a growth hacker looks for arbitrage, whether on a paid or unpaid channel. Blake Commgereage, founder of DeezGames, says that growth hackers look for the channel with the greatest potential; “Don’t make a false choice between free channels or paid channels. As a startup, you are playing a game of arbitrage on the value of a user, CAG versus LTV.” Utilizing paid channels is a reflection of product and market dependencies.
Ivan Kirigin, former growth hacker at Dropbox, says, “Some products lend themselves to certain channels of growth. If you make a lot of money per user, you can easily use paid acquisition channels. If your product involves sharing at its core, virality will matter and you should focus on optimizing it.”
Even though growth hackers will utilize paid channels, the core of growth hacking is the power of loops and virality, aka “free marketing”.
Virality
“Going viral” to a traditional marketer is unpredictable, but growth hackers live viral day-in and day-out. Michael Birch says, “Viral marketing is at the heart of growth hacking.” Growth hackers take a very measured and iterative approach to virality that is engineered into the product. “Growth hacking is tied closely to viral customer acquisition, because the best growth hackers can ‘engineer’ viral growth,” says Jesse Farmer, co-founder of Everlane.
An attitude of testing towards an optimize frontier creates a repeatable channel to growth. Just as a software engineer builds a technology with binary, a growth hacker is building growth into a product with data. The entire process is diligent, thoughtful, and purposeful. Every click and tap from a user is an opportunity for growth.
Beyond The Normal
Growth hacking differs from traditional marketing in actively seeking new channels. Danielle Morrill says, “Growth hacking is going an extra step to discover new channels. Normal channels are not enough anymore. Traditional marketers are applying a set of skills to predetermined channels. Growth hackers are making new ones.”
Growth hackers are explorers and constantly researching and testing channels to discover new ways to propel a business. Hockey stick growth comes from exploration of what is not common. Relying on predetermined channels will miss unique and clever growth opportunities that remain untapped.
Pushing The Limit
From the desire to scratch the exploration itch, growth hackers will get quite close to SPAM-land. “Growth hacking can get into a ‘grey area’ of marketing. Typically, a growth hacker is trying to push to do things differently and sometimes you get your hand slapped.” says Matt Humphrey, co-founder of HomeRun.
The rise of the social network has provided a harvest of gawking users ready for the reaping by a creative growth tactics. To be an effective harvester, a growth hacker will optimize to the greatest degree of growth, but this can leave a bad taste if done incorrectly. “Terms of service are secondary to growth hackers,” says Dan Martell, founder of Clarity.
A growth hacker has a day-to-day balance between accomplishing growth objectives and less optimization for user experience considerations. Over-optimization can lead to a misleading user experience and user back lash. The line between SPAM and cleverness is very, very fine.
Top To Bottom
Traditionally, marketing was viewed as a promotional arm, separate from product and development. Growth hackers see product as the main channel for growth and tinkering is required. Greg Tseng, co-founder of Tagged and growth hacker, says, “Traditionally, marketing has focused on external methods to attract users and gain momentum around a product. Growth hacking takes a more internal approach by merging creative and technical abilities to create user-growth mechanisms within the product itself.” Growth hackers are deep into product and constantly iterating. Successful implementations have an entire business perspective.
Jim Young, co-founder of Hot or Not and founder of Perceptual Networks, says growth hackers need a broad view of the business to test “Growth hackers view the whole business, from the top to the bottom, as an experiment. They need to be able to tinker with everything.”
A growth hacker is a superhero spawn of a product manager and marketer with a lens of pushing metrics. From messaging to user experience, it is a top to bottom level understanding of the business. Traditional marketing often looks at product “as-is” and needs to be sold. A growth hacker reverses the equation. Product is intrinsic to successful and scalable distribution, not just an Adwords problem.
With inception of growth hacking, marketing is redefining itself. As mass media begins to die and mass customization becomes the base customer expectation, marketers are faced with a challenge of pushing adoption versus rising acquisition costs. The classic Mad Men marketing joke, “Half of my marketing budget is a waste; I just don’t know which half” is no longer a vexatious rule of thumb. It is simply
unacceptable today.
Mike Greenfield, 500 startups growth hacker-in-resident and co-founder of Circle of Moms, says, “Marketing is becoming more metrics driven something that old school marketers often don’t fully understand. Growth hacking is a part of rethinking marketing in the age of digital.” Just as the lean startup movement has taken hold as common practice, marketing is getting lean makeover: measured, iterative, action-based, and repeatable.
The next post in this series will explore how a growth hacker should operate in a company, from small to large.
A special thanks to Jared Kopf, Matt Humphrey, Jesse Farmer, and Zak Holdsworth for helping me structure, interview, and form this series.