You’re familiar with the term “growth hacking”, right? You’ve likely read about how Facebook, Uber, Airbnb, Hotmail, Dropbox, etc. growth hacked their way to mega success.
Those case studies resulted in a widespread shift in thinking. Many marketers became more concerned with 10x growth hacks they read about online than strategy and growth process.
Is growth hacking useless? Absolutely not. Is the way it’s commonly talked about useless? Undeniably.
Table of contents
- The Evolution of Growth Hacking
- What Is the Overlap Between Growth Hacking and CRO?
- 3 Growth Hacking Mistakes & Myths
- Growth Hacking Tactics vs. Process
- How to Create a Growth Hacking Process
The Evolution of Growth Hacking
2010 – Sean Ellis, who currently runs Qualaroo, coins the term “growth hacking” in his article, “Find a Growth Hacker for Your Startup.” Back then, he defined a “growth hacker” as, “[…] a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth. Is positioning important? Only if a case can be made that it is important for driving sustainable growth (FWIW, a case can generally be made).”
April, 2012 – Andrew Chen, who currently does growth at Uber, writes Growth Hacker is the new VP Marketing, which goes viral (2.4K shares) and finally takes the term “growth hacking” from obscure to mainstream. In the article, Andrew describes growth hackers as a cross between marketers and coders.
September, 2012 – Andrew Chen writes You don’t need a growth hacker, which encourages companies to really consider whether they have product-market fit before hiring a growth hacker. He puts the focus on product, not “growth hacks”. Unfortunately, this post only receives 182 shares.
Andrew Chen, Uber:
“Startups don’t need growth hackers – at first. They need products that are really working in the market. This means users love it, that there’s lots of retention and engagement, even at small numbers.
The reason for this is that ultimately working on scalable growth is an optimization problem. And it’s a combined product management and technical function, to boost an already positive growth curve into something even bigger.” (via AndrewChen.co)
September 2012 – Aaron Ginn, who currently does growth at Everlane, writes Defining A Growth Hacker: Three Common Characteristics to help define the term. He states that all growth hackers have three common traits:
- A love for data. “Growth hackers have a passion for tracking and moving a metric. Without metrics or data, a growth hacker can feel out of place and uncomfortably exposed. This strong bias towards data drives a growth hacker away from vanity metrics towards metrics that will make or break the business.”
- Creativity. “While driven by data and moving metrics, growth hackers are also creative problem solvers. A growth hacker has a vibrant mental dexterity to think of new ways to acquire and loop in users. Growth hackers do not stop at data but build into new and unknown frontiers to find growth.”
- Curiosity. “A growth hacker has a fascination at why visitors choose to be users and engage and why some products fall flat on their face. With today’s distracted users, growth hackers are habitually exploring to find new ways to push metrics up and to the right.”
It’s worth noting that these traits are not dissimilar to what we found to be the most common / desired traits of optimizers…
As Aaron points out below, at this point, the definition of and understanding of the term “growth hacking” is loose and vague…
Aaron Ginn, Everlane:
“Despite the buzz and increasing commercialization, most companies are unaware of the true meaning of growth hacking other than the simplistic acknowledgement that ‘they grow stuff’ or ‘get users’. Unlike most professions in technology, a growth hacker isn’t a set of skills or a stock of knowledge.” (via TechCrunch)
October 2012 – Erin Turner and Gagan Biyani host the first Growth Hackers Conference in Menlo Park, California.
At this point, the difference between marketing and growth hacking is still incredibly unclear.
December 2012 – Ryan Holiday, author and former Director of Marketing at American Apparel, writes Everything Is Marketing: How Growth Hackers Redefined the Game. He blurs the line more by claiming that growth hacking is not a new strategy or tactic, it’s simply a shift in thinking.
Ryan Holiday, Author of The Obstacle Is The Way:
“At the core, marketing is lead generation. Ads drive awareness…to drive sales. PR and publicity drive attention…to drive sales. Social media drives communication…to drive sales. Marketing, too many people forget, is not an end unto itself. It is simply getting customers. And by the transitive property, anything that gets customers is marketing. […] Welcome to growth hacking. Or better, welcome to actual marketing, where whatever works is marketing.” (via FastCompany)
December 2012 – Aaron Gin writes Defining A Growth Hacker: Debunking The 6 Most Common Myths About Growth Hacking, which distinctly separates growth hackers (product-focused) from marketers (inbound and outbound marketing).
Aaron Ginn, Everlane:
“Both marketers and growth hackers have common goals; they work closely together on a daily basis to push metrics in different ways. However, growth hackers are looking for growth through product utilization and product iterations instead of a marketers’ outbound- and inbound-based strategies.” (via TechCrunch)
May 2013 – Gagan Biyani, CEO of Sprig, writes Explained: The actual difference between growth hacking and marketing, which essentially equates growth hackers and marketers with limited time / resources.
Gagan Biyani, Sprig:
“A growth hacker really is just a marketer, but one with a different set of challenges to tackle and tools to work with.” (via TheNextWeb)
Gagan first separates the two by suggesting that startups do growth hacking and bigger companies do marketing. Therein lies the three differences between growth hacking and marketing…
- Startups are organizations with extreme uncertainty.
- Startups are designed for astronomical growth.
- Startups don’t have access to the same resources or brand equity.
Now, people begin defining growth hacking as a process, a systematic approach, a “viral loop”, etc.
September 2013 – Ryan Holiday publishes Growth Hacker Marketing and urges people to build growth into the product itself so that it’s a self-sustaining, scalable growth machine.
June 2014 – Sean Ellis and Morgan Brown write Startup Growth Engines: Case Studies of How Today’s Most Successful Startups Unlock Extraordinary Growth, which defines growth strategies as growth engines.
How Is Growth Hacking Defined Today?
Today, all things startup marketing are typically lumped under the term “growth hacking”. Take a look at these “growth hacking” articles…
The 6 Best Growth Hacks to Get Customers Without Having to Pay for Them by KISSmetrics
An Epic List of 100 Growth Hacks for Startups by Search Engine Journal
6 Growth Hack Techniques You Can Try Today by Entrepreneur
4 Unbeatable Growth Hacking Strategies for Startups by Inc
5 Social Media Growth Hacks for Small Businesses by Forbes
These aren’t growth hacks. They’re inbound and outbound marketing tactics. Somewhere along the line, those two things became synonymous.
On Sean’s GrowthHackers.com, categories include…
So, essentially everything from customer development and onboarding to persuasion and social marketing fall under the umbrella of growth hacking.
What Is the Overlap Between Growth Hacking and CRO?
At GrowthHackers.com, there’s an optimization tag. So, it’s not surprising that a commonly asked question for optimizers is: What is the overlap between growth hacking and conversion rate optimization?
Peep Laja, CXL:
“I see growth hacking as traffic acquisition + conversion optimization.”
But what do other growth marketers think? Would they agree that growth hacking is essentially traffic acquisition plus CRO?
Morgan Brown from Inman argues that while optimization and growth go hand-in-hand, it’s more about optimizing the product and customer experience than landing pages…
Morgan Brown, Inman:
“I would say instead that growth hacking is experiment driven marketing focused primarily on how the product is used to create growth both from the distribution and retention side. The key differentiator being the product-level focus vs. the channel-level focus of traditional marketing effort.
Optimization is a huge part of growth, specifically optimization applied across the entire product experience, not just on websites and landing pages, where CRO has traditionally been highlighted. For example, optimizing retention is a major component of growth hacking that most people ignore. This is where engineering and product teams can drive a ton of growth that traditional marketing cannot.”
Sujan Patel, co-creator of Narrow.io, argues that much more than traffic acquisition and conversion rate optimization goes into growth hacking…
Sujan Patel, Narrow.io:
“Growth is much more than traffic and increasing conversions. Although they have a lot of similarities, growth hacking covers more, including: branding, offline marketing, customer success, support and more.”
David Arnoux of Growth Tribe adds that speed is a key factor…
David Arnoux, Growth Tribe:
“Growth hacking includes CRO, customer acquisition, a technical skill-set and a company culture which rewards rapid experimentation.
In this sense growth hacking borrows many principles from the Lean Startup. Especially the need for rapid testing and creative experiment design: ‘Test the concept before you test the design’.
Let’s look at an example with referral marketing. A typical marketing team might set up an entire referral campaign based on gut and ask their dev team to help them implement it on the website. They would then track results and optimize later. A growth hacker would first list out 6 different referral incentives then test them individually by rapidly sending emails to a part of the user-base or by using an off-the-shelf product (like Friendbuy) which requires no dev time.
It’s all about speed and finding the quickest way to test your ideas because 80% of your ideas will probably fail. The faster you can run through experiments the faster you can find out what works and what doesn’t. This is how companies can find their ‘growth hacks’. I believe this is one of the biggest pitfalls of growth hacking. The lack of a process for rapid experimentation.”
Morgan is right in saying that CRO is typically associated with optimizing landing pages and sites. However, smart optimizers know that the buck doesn’t stop there. Optimizing for retention, as he points out, is a high-value activity.
So, if CRO covers the visitor-to-customer conversion and retention, all that’s left (online, anyway) is indeed traffic acquisition, which is where inbound and outbound marketing tactics come into play. So, to summarize…
- Traffic Acquisition – Using inbound and outbound marketing tactics, send visitors to the site.
- Visitor-to-Customer Conversion – Using a CRO process, increase on-site conversions.
- Retention – Using a CRO process, reduce churn and encourage repeat buyers.
Throughout this entire process, growth strategies are present. They can be applied at every stage.
3 Growth Hacking Mistakes & Myths
While we’re discussing what growth hacking is not, consider these basic growth hacking mistakes and myths: growing before you’re ready, expecting the results you read about online, and focusing too much on awareness.
1. Growing Before You’re Ready
To Nichole Elizabeth DeMere, who currently does growth at Inturact, the most costly growth hacking myth is that you should be growth hacking…
Nichole Elizabeth DeMere, Inturact:
“A ‘Growth Hacking’ myth is that it’s time for ‘Growth Hacking.’
From the point of view of a SaaS consultant: before employing growth marketing strategies, you need to have:
- Identified your ideal customer.
- Conducted Customer Development.
- Established a strong value proposition based on Customer Development.
- Established product-market fit.
- Established a Customer Success philosophy.
- Established a value-based pricing strategy (that is based on desired outcomes and not features and numbers of seats).
- Ensured that onboarding and off-boarding reflect your Customer Success philosophy.
- Ensured that sales reflects your value-based pricing strategy.
- Ensured that beta testing is for the purpose of Customer Development and Customer Success and not determining pricing strategy.
- And you need to understand the potential impact of product-economic fit so that you can be better prepared for it.”
Growth hacking is done best when it begins at the start of product development. Why? Because growth should be built into the product itself for maximum ROI. However, at the very least, you must have product-market fit and a clear understanding of what your customers want, need, fear, etc.
Just as Andrew Chen said way back in 2012, not everyone is ready for growth. Growth hackers aren’t magicians, they’re marketers. They can’t make a bad product’s revenue move up and to the right. Even if they can generate that type of awareness for a bad product, they can’t make those customers stay, which is a crucial part of the process.
Everyone wants growth, but not everyone needs it (right now).
2. An Inspiration, Not a Promise
Sujan cautioned against believing you’ll achieve the same results as someone else…
Sujan Patel, Narrow.io:
“The most costly myth is believing that you can expect the same results as growth hacking examples you read about online. Nothing you read will work the same or provide the same results for your business. It needs to be prioritized, weighed against other initiatives and tested for yourself. Everything you read about is meant to help with ideation and inspire you to take action.”
When you read an article about Uber’s growth or Airbnb’s growth, you’re reading an inspirational article. You’re not reading a how-to article. Similar to CRO case studies, growth case studies can’t be duplicated. There are just too many variables…
- Different audiences.
- Different contexts.
- Different products.
- Different user experiences.
- Different motivations.
- Different times.
All you can use what you read online for is ideation, which is the first step in the growth hacking process…
- Creative Ideation – Come up with your “big ideas”.
- Prioritize – Evaluate all of your ideas and prioritize them. How confident are you that they’ll work? How easy are they to implement? How big would the effect be?
- Test – Execute your ideas, testing them against a control to see if your hypothesis was correct.
Note how similar this process is to a conversion rate optimization process.
3. Nurturing, Not Just Awareness
Dan Martell, who is currently working on growing his personal newsletter, believes that the biggest growth hacking mistake people make is…
Dan Martell, The Dan Martell Newsletter:
“Not building a lead nurturing path for your product. The truth is 90% of people visiting or signing up for your product don’t have the burning desire right now, or the knowledge, to engage your solution, so you need to build a strategy to help them along this path. You can do this via a strategic sequence of emails, social media engagement or even remarketing online. A simple email sequence would include an email on each of the following; the problem, the benefit, the transition, the tools, the case study and the resources.”
Here’s the reality: Growth hacking isn’t about getting visitors to a site. It’s about money. [Tweet It!]
Optimizers tend to have the same misconception. They believe the goal is increasing the conversion rate of their popup vs. generating more money.
It isn’t enough to get people to your site. As Dan says, most of them aren’t ready to make a purchase the second they land, anyway. The motivation just isn’t there. Instead of losing visitors as quickly as you acquire them, plug the leak by designing a lead nurturing path.
Here’s what that path should look like…
- Highlight the pain point or problem your product solves.
- Explain how your product solves the pain point or problem.
- Show how your product is making someone else’s life easier / solving the pain point for someone else.
- Explain your product thoroughly. What are the features? How does it work? Are there any relevant resources / can you provide reading material?
- Describe the next steps in detail. What action should they take? What will happen next? What will the onboarding process be like?
Growth Hacking Tactics vs. Process
Above, I referred to the three growth hacking steps as a “process”. That’s important to note because only amateurs rely on tactics. Professionals have a systematic process.
Ed Fry of Inbound.org had this to say about growth processes…
Ed Fry, Inbound.org:
“By far the most costly growth hacking myth is the brand around ‘growth hacking’ itself. The word ‘hacker’ means something. Paul Graham has a great essay on this. ‘It’s called a hack when you do something in an ugly way. But when you do something so clever that you somehow beat the system, that’s also called a hack.’ The age-old adage that ‘marketers ruin everything’ comes into it’s own here when you marry growth marketing and hacking together.
What I believe Sean Ellis is getting at is a methodology and set of processes, not a string of silver bullets and moonshots (maybe akin to what the Lean Startup methodology is to entrepreneurship?). I think the worst thing about it is people’s false belief and the hyperbolic headlines people push around – we ‘growth hacked’ contributors on inbound.org by 69% this month, but so what? For you, not working on our specific project, what really matters (and is repeatable and actionable by you and your team) is the process, not the means we got there. Marketers have been functioning like this for years. Grab hold of some of the golden oldies – Tested Advertising Methods and Scientific Advertising. Peep puts it best: “Tactics are for rookies. Processes are for professionals”.
That all said, it’s been great for taking something that was previously felt to be unsavoury and seedy, and turning it into something respectable in the startup world. There’s also a bias towards more engineering, product-side execution which does great things for unlocking even more value. The biggest, best and most fun results have tended to come from projects of that sort, and I think the ‘Growth Hacking’ rhetoric will only support more of that.
We can get drunk and rant about this for forever at CXL Live next month. :)”
The term “growth hacking” much like the term “conversion rate optimization” is both a blessing and a curse. On one hand, it draws attention to the marketing potential hidden within products. On the other, people believe that a single tactic they read about on Forbes will skyrocket their site’s success overnight.
Growth teams should be focused on creating and refining a systematic, scalable, repeatable growth process. A string of tactics is a string of shots in the dark. Even if you do hit your mark by chance, you won’t be able to repeat the success.
Morgan agrees that there is no magic growth hacking secret…
Morgan Brown, Inman:
“I think there are a couple of important myths to avoid. The first is the myth that there is a silver bullet short cut that produces a ton of results by gaming a system. This has never been the case and is not the case now. Unsustainable growth always fizzles out, no matter what you call it and what the gimmick is. Any blog post promising you the world if you do these one or two things is nonsense and should be treated accordingly.
The second is the prevalent myth that growth hacking is a synonym for these types of short cuts and silver bullets. People love to categorize ‘growth hacks’ as tricks and ploys. That’s unfortunate. Growth hacking is about product and system level growth opportunities that have historically been off limits to marketers, but are now big growth levers thanks to the rise of faster feedback loops, large online audiences and platforms, and new cross-functional teams that include marketing, engineering and product working together to unlock new ways for products to grow.
If people ignore this new reality, that companies grow based on data- and experiment-driven improvement in how the product drives distribution and retention simply because the term growth hacking turns them off–they will miss out.”
Here’s a sample growth process from Ryan Gum…
Though, I would note that he’s missing product validation.
He also clearly demonstrates the difference between process and tactics…
When you follow the growth process, you’ll come up with growth hacks and tactics. But instead of throwing 12 of them against the wall and hoping one sticks, you’re executing in a strategic, systematic way that allows you to gather insights and learn from your efforts.
How to Create a Growth Hacking Process
So, what exactly goes into each step of the growth hacking process? The process can really be condenses into three steps: product development, exploration, and optimization.
Step 1: Product Development
- Refine your product with growth in mind. Build growth loops into the product itself.
- Validate your product-market fit. The best validation is always money in your bank.
- Conduct heuristic analysis and remove any friction you find.
- Using your heuristic insights, optimize your product so that customers get to the core value as quickly as possible.
Step 2: Exploration
- Start by identifying your key metrics. Stay as close to the money as possible.
- Participate in creative ideation. Get the whole team involved.
- Prioritize your ideas based on how confident you are in them, how easy they are to implement and how big of an effect you believe they’ll have.
- Test your ideas against the control to see if your hypotheses were correct.
Remember, the exploration step applies to every stage of the funnel…
- Traffic acquisition.
- Visitor-to-customer conversion.
Step 3: Optimization
- Analyze the results of your tests and ideas. Did they perform the way you expected? How did they impact your key metrics?
- Ask yourself why. Was the execution flawless? Was there a problem with the loop? Where did you fall short? Where did you excel? How can you do better next time?
- Optimize your ideas. How can what you learned through analysis improve your existing ideas? How can they improve future ideas? Can you automate your ideas at all? Does your idea have a strong growth loop?
Growth hacking has become both a blessing and a curse. On one hand, it refocuses marketers on the importance of product development and product-market fit. On the other, it’s being used as what I can only compare to a “get rich quick scheme”.
There’s no 10x growth hack in an article somewhere just waiting for you to discover it. Growth hacking isn’t magic. [Tweet It!]
In fact, we haven’t even unanimously settled on a definition of growth hacking. It means different things to different people.
So, how can you avoid the growth hacking trap and still reap the benefits? It’s quite a simple process…
- Throw out the list of 10x growth hacks you’ve read about online.
- Create a systematic, repeatable growth process for you and your team.
Join the conversation
Add your comment
Shanelle that’s so well written. Thanks for highlighting the number 1 point which is PROCESS.
Anything else is chasing rainbows.
And you also need a ton of diligence and persistence. That’s where the 10% outperform the rest. Stick to the basics , execute well and test/measure obsessively.
Chasing rainbows. I like that, hah.
Do you have a specific process that you follow? I’d love to hear from you on that.
Thanks for reading.
I’ve gone to hate the term ‘growth hacker’, mostly because it has been misused in numerous clickbait articles. So I love that you took the time to write all this down.
Can I suggest you add ‘busts myths’ to your article signature as well ;-) ?
I have to agree with you. The term has been misused (and overused) to the point of irrelevancy.
Thanks for reading, Simon! :)
Great article Shanelle!
It hits close to home as well :)
I’m 2-months in at my new job, and people really thought of Growth Hacking as one guy behind his computer pulling off miracles (read traffic / users).
So in everything I do, I try to put an emphasis on process, testing, learning and having a north star guiding your efforts. Oh, and that growth happens at a company level, not from isolated actions inside the marketing dept.
But it’s not easy, being just the new guy in the marketing team.
I’m curious, do you guys have experience (or advice) in implementing a growth framework while not being in a position of influence and with a lot of co-workers (programmers, R&D, …) regarding marketing as “fluff”?
I get where you’re coming from. It’s an uphill battle if it’s not something baked into the culture.
I’d suggest slowly trying to expand your growth efforts to different departments. Ask as little as you have to of them at first. Be sure to measure results carefully. Then, go back to the department you collaborated with and show them the results.
Joanna Lord has spoken out about this a few times. You can find her talks about creating a testing culture.
People who regard marketing as “fluff” are people who are used to working with marketers who aren’t data-driven.
I hope this helps!
I don’t like when somebody calls me to urgently help their biz because they need growth. Most people really think that growth hacking is about magic wand or silver bullets and you can jump from 0 to 100 in no time.
The growth is actually about small compounding wins. You startupers, you won’t become billionaires. You have to work your ass out and if you did it well you will start getting some results :)
In an interview, Demian Farnworth talked about being called in at the last minute. He was talking about copywriting, of course, but it’s just as relevant here…
“When I did a lot of freelancing, people would come to me and they would say, ‘Hey, I’ve got this product. We’re getting ready to launch and I need help on the copy.’ And I’m like, ‘No way am I going to do that.’ because really what they’re saying is, ‘We’ve figured out that something’s wrong.’ but they won’t admit that the product sucks, they won’t admit that. So, you want to come in and try to save that, but it’s not going to happen.”
Growth just doesn’t work that way.
Great article Shanelle. In my opinion you should include a reference to Dave McClure’s Startup Metric for Pirates. He is the one who first talked about the AARRR model (Acquisition, Activation, Retention, Referral, Revenue). Nowadays everyone that is doing growth use this model.
Thanks Alexi. I’m glad you liked it!
I did love his pirate presentation, hah. Thanks for the tip.
This is a future classic Shanelle. Funny (but not really) how billions of dollarss are wasted on CRO consultants, SEO gurus, SaaS growth experts, then the time spent in lost productivity wasting zillions of hours a week (and like to mentioned collecting “10x articles”) in the grand pursuit of how to grow a SaaS startup.
I’ve been guilty of all of the above unfortunately which bring me to a burning question. Do you feel that most SaaS startups could take the article above and “run with it”? I mean it’s one thing to convert this article to a printable “cheat sheet” or best practices “template” but in my experience most startups still need to learn how to fail fast.
Is a virtual Shark Tank for SaaS the answer? A trusted resource where a new startup can “interface” with and within an hour have a good idea of whether they should pivot or continue. Anyway just throwing out some thoughts–would love your thoughts.
They can run with the process outlined at the bottom of the article, yes.
In my opinion, the best way to validate product-market fit is money in the bank. So a virtual Shark Tank wouldn’t be much help. They need to be able to pitch their products / services and leave with actual money. “Would you pay X for Y?” isn’t product-market fit. “Give me X for Y.” is product-market fit.
Then, they can move through the rest of the growth process.
Thanks for reading, Marc! I really appreciate the kind words.
Marc, good question. A short answer is YES but they do need your ‘fail fast’ skillset. A better answer is NO BUT…. they can get an idea of what to do using Shanelle’s excellent article, but EXPERIENCE is the missing ingredient.
One of the key things I know I bring to any marketing is knowledge of a lot of situations where I’ve seen similar things tried and I know what to look for which will tell me if I’m at the ‘fail’ moment, or if I can just tweak something and make it a success. Many startups who lack this experience will waste $$ and waste time and will fail / pivot at the wrong moment.
So get in some gray hairs or find some who can consult / mentor / guide your team and help them to spot these situations.
Amazing article, thanks for sharing your knowledge, it is always good to learn something new!
Thanks for reading, guys. Do you have a growth process at FanGrow?
This article should be the core idea for a book!! As a book This point of view or growth hacking understaning if you will can be enriched it with more info a background history, resources, charts
Really, and I would suggest you donate part of the revenue for a charity.
Thanks for the kind words, Hani. If it is ever turned into a book, you’ll be the first to get a copy, hah.
Growth hacking is an explosive way of increasing traffic and accelerating startup growth. It is almost impossible without using the tools & technology available. As per Dmitry Dragilev @dragilev Founder of JustReachOut.io – New startups have to grow at least 33% year over year to be able to acquire the customers they need. Here is an amazing list of growth hacking tools/websites I found- http://www.saleshandy.com/blog/21-tools-websites-i-use-as-a-growth-hacker/
I have to disagree that it’s “almost impossible”. Most of the companies famous for their growth hacks focused on building growth into the product itself. However, tools can be very helpful.
This list seems to focus exclusively on the traffic acquisition stage. I’d love to see a more complete list that addresses the conversion and retention.
Thanks for reading, Kalpesh. I really appreciate you sharing!
Comments are closed.