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– Timothy C. Draper
We can define Growth Hacking as a continuous process in which different sets methods and quick tests are applied, on different marketing channels and during product development, that allow for the growth of a company in a faster, more effective way.
GH tactics combine creativity, analytics and technology.
Under this new strategic approach to digital marketing, the tactics of growth that are devised through Growth Hacking arise from a combination of three fundamental pillars: analytics, technology and creativity. By analyzing the data, it becomes possible to discern in advance how that data will impact the different strategies to be executed and measure the results of those strategies to see if they meet the goals set. Creativity, thinking “outside the box,” will help organizations produce innovative solutions to common problems, regardless of previous rules or restrictions. Through the use of technology – an organization focused on growth, committed to using all available digital tools to achieve that growth, and actively combining personal technique with external services connected through APIs – the expected results can be obtained quickly and scalably.
Growth Hacking Methodology
Growth Hacking is a process composed of five well defined steps, that allow an organization to test the obtained results and to verify the possible problems found in its diverse stages, thus allowing that organization to make any changes in an agile way. The basic steps in a Growth Hacking process are:
- Define achievable and measurable objectives: focusing solely on those objectives that are well defined will make it easier to measure their impact on the final results by avoiding working with data of little relevance.
- These objectives should be smart SMART:
- Specific: specific and relevant to that type of business
- Measurable: measurable from a quantitative point of view
- Achievable: accessible and achievable in the short term
- Realistic: realistic, this is important and essential for any project to succeed
- Time-Based: based on a defined period of time.
- Implement analysis tools: without a method of measurement, goals cease to make sense because no one is certain that they have been achieved. In addition, by using appropriate analytical systems, the data that can be collected also provides the organization with information on other aspects of the strategy adopted, or on any other objective that may be pursued in the future.
- Take advantage of strengths: to be able to obtain significant results, with minimum effort, in an industry that is mature or developing
- Execute and optimize an experiment: the first step is to pose a hypothesis about the expected outcome of the experiment, which can be confirmed or disproven, and then analyze the data obtained to determine what best options or strategies to take forward. The testing process requires time and internal coordination, there will be multiple challenges, the first collection of data can be a daunting task, but the final results will help the organization to correctly advance its Growth Hacking strategy.
- Repeat: once you have settled on a successful process, conduct a new experiment, repeat, and optimize. The sustainability of a Growth Hacking strategy is dependent on how easily an organization adapts to change.
Companies that have made Growth Hacking their fundamental growth strategy
Airbnb is a company with a real Growth Hacking mentality. Their development team detected a flaw in the approach of one of the most popular advertising services in the United States, Craigslist, just as Airbnb was set to launch.
Airbnb used a seemingly simple system; wherein once a new user registers to advertise their home, they are given the option to automatically share the same advert on Craigslist. This helps the user reach more people and increase the visibility of their ad on Google and on other search engines (SERP). The implementation of this system was not simple, since Craigslist had deliberately abandoned its open API to avoid saturation of its portal with adverts of similar services. Until the Airbnb team, without their consent, and through a process of reverse engineering, found a way to ensure their system of publication was compatible with that of Craigslist, whose data is automatically, publically registered.
During a period of strong growth, due in part to Sean Ellis (CEO and Founder of Growthhackers.com), Dropbox had to deal with already well established competitors like Google Drive, iCloud and SkyDrive. The founders of Dropbox, after “conquering” those initial adopters, thanks to their incredible mastery of viral videos, found themselves stagnant by early 2009. They were forced to consider whether it was best to continue investing their budget into the same channels (their viral video communication strategy and social networks) or promote their product through online advertising. The acquisition cost for a single client was between $233 and $388 USD, the cost of a premium subscription was $99, so it was obvious that this advertising model was not sustainable. After more than fourteen months of stagnation, a proposal was introduced by Sean Ellis; a referral program, where each time a user registered on the site, they were automatically encouraged to invite their contacts to join Dropbox. For each referred contact that joined, the user received 500 free megabytes of storage. Dropbox went from 100,000 to 4,000,000 subscribers.
The growth hacking strategy used by Zuckerberg to grow the number of active Facebook users, also came at the point in which a new user first signed up. They were able to find friends on the platform by entering their email address. They were encouraged to invite all contacts to join them, even those that were not already using Facebook. This was achieved through the integration of the APIs of different popular email service providers (Gmail, Hotmail, Yahoo…etc.)., New users doubled as an additional promotional channel, and Facebook achieved great success in terms of scalability.