Consider a system that is external and foreign to you. You don’t control it, you are outside of it, its alien to you, and at times you are at its mercy. You start to observe and learn about it. Then by using your tentacles and the right amount of venom, you start to take over the system. With failed attempts and more learning and observations, you find few points of entry. That’s where you start working and slowly and steady to crack open the shell. Then you start taking over that system which was once external and alien to you.
Hacking can be visualized this way. In the case of Growth Hacking, it’s the Massive Growth Opportunity that is the system and you are the little creature (growth hacker) trying to hack it.
Sean Ellis, in 2010, coined a term Growth Hacking to explain the data-driven mind-boggling growth in users, revenues and traffic. As per him, the true north of the growth hacker is growth and everything that he/she does is measured by its potential impact on scalability.
One of the finest and earliest examples of growth hacking can be traced back to the launch of Hotmail. Rather than relying on traditional media, they utilized a lean marketing methodology and launched a simple campaign where each email to the user contained this line, “Get Your Free Account at Hotmail”. This simple growth hack led to a massive explosion in the new user acquisition.
Essentially all growth hacking tactics can be termed as lean marketing tactics, all are data-driven, involving low costs tool and tactics. Such initiatives might start from instinct or gut reaction, but are thoroughly investigated, explored, and planned via data.
All the above sounds dreamy and every other venture would like to implement such low-cost tactics to scale their venture. But it isn’t that easy. You will find out that there is no single solution, tools, or roadmap to crack growth. All companies with their own set of problems, opportunities, and data employed tools that they were good at and scaled.
So, where do you start, what are the main functions that can be used for growth hacking? A better approach could be to look at the case studies of some of the famous growth hacks. This investigation might give you some pointers for the start of the process.
Amazon and eBay — Riding the Explosion of Upcoming Platforms
Both Amazon and eBay scaled when Google launched their Ad platform. Since in the beginning, not many advertisers were participating in the bidding process, so they bought Keywords at dirt cheap prices.
This resulted in getting orders at such low costs that no other channel would come close to it. Later on, once more advertiser came and with that the CPC and CPA increased, both platforms had already scaled and became brands.
Later on, branded term searches and direct traffic of Amazon and eBay made all competitors irrelevant.
This case is an excellent example of riding a wave and capturing the opportunity to its fullest. A new platform was about to explode and by exploiting the opportunity it presented Amazon and eBay became giants.
In addition, Amazon was the first one to triple down on product hacks where they would utilize the similar book’s recommendations.
They were also the first one to crack the email automation, recommending users with products they might be interested in offers, based upon their search history or buying patterns.
Instagram’s — Early Artists
Instagram started off with the objective to make the initial influencers to start using their product. Since their product quality is also dependent upon the quality of the user-generated data, this growth hack had the potential of getting to early adaptors and have the best content quality.
So, they contacted (paid? maybe …) 100 artists to post their pics using Instagram on their social profiles like twitter. Such posts carried the stamp of Instagram usage and their followers learned about the product and saw the potential quality of content. This hack resulted in a massive explosion of growth in user acquisition and within the first few weeks, Millions started using the app.
Airbnb and Zynga — Non-scalable Efforts
At times you need to take on projects that can’t be scaled well and doesn’t justify the immediate return on investment.
Consider the example of Airbnb. In 2010, they figured out the quality of listing pic makes a massive difference and makes the end user 2.5 times more likely to buy. So, to accompany this task, they started employing freelance photographers to take pics for the listings for free. A massively expensive and difficult task to pursue as they had to scale the team of photographers from 20 to 13,000. Yet, the results were phenomenal and down the road paid off well.
Another example of non-scalable efforts to grow business in the long term is of Zynga where the CEO himself declared “F&^K Growth” and focused on improving the quality of game down to each pixel. This resulted in a company-wide perusal of making each and every part of the game work and making use of the entire real estate of the mobile screen to the max. Not only that resulted in the production of great games, but also in increasing customer retention.
Gmail’s — Scarcity Tactics
Gmail did an amazing hack for user growth. For the launch, they would offer the limited invites and that too came exclusively from friends of yours. It became so popular that the in days people were selling invites on eBay for hundreds of dollars. Those who didn’t get it were on the waitlist and once they got in, they became a part of the exclusive club.
PayPal and DropBox — Incentivisation
Incentivizing is one of the best approaches utilized by all scalable ventures. The idea is to trade value for access to the users’ networks. There could be many ways of doing it. You can unlock premium features of your product for referrals. Games utilize this mechanism well.
The other way is offering an actual monetary benefit for a referral. PayPal gave away USD 10 for each referral.
Incentives could be non-monetary in nature too. DropBox gives away more Storage Space for referring a customer. Since they know that the initial usage of their product would result in a later purchase, so they use this hack to get the potential customer to try it first.
Uber partnered with OpenTable, Uber, and Starbucks by opening their APIs. This resulted in accessing the users of those networks. So, even the act of opening your product to other services via APIs has a major upside to your business.
Many companies like Evernote has found that 50% of the users of partnered apps are most likely to use their service.
Remember all partnerships and dependent upon the value you add to your partners’ network. If you are getting access to their customers, you must have a great service to offer in return. At times, that access can come only in return of cash.
Grey Areas and 7 Sins
LinkedIn — Questionable Email Automation
LinkedIn founder Reid Hoffman mentioned one of his hacks where LinkedIn would import a user contact list and keep on sending emails on his/her behalf. This resulted in user growth but can be easily considered unethical. Since there was no formalized penalty for such an act, they utilized it well.
He also believes that for your venture to scale, you need to be playing on the 7 basic sins. So, you might want to go through the list and explore which vice you can scale on.
Earlier, to hack SEO, people would employ questionable hacks to get to the top of search results. This hack did result in access to customers easily and cost-effectively. Again a short-term tactic with a massive downside in the longer term.
Remember Google keeps on updating its algorithm and many ventures have to bear the brunt of being penalized by Google with the new updates.
Airbnb — Questionable Integrations
In addition to some of the earlier growth hack examples, Airbnb while in the early stage of craigslist dominance where having issues where suppliers weren’t comfortable listing with them. Their go-to destination was craigslist. Craigslist didn’t have any API for integration, so the founder made a service that would automatically post the listing on CG once they uploaded it on Airbnb.
This hack resulted in massive listings growth. They did operate in the grey region but were successful in pulling it off and making their venture successful.
Tinder — Hacking Sororities and Fraternities
During the initial days of Tinder, one of their marketing head employed an ingenious way to scale and engage. She started visiting the campuses and would to sororities and convince them to upload their profiles to be found. Then she would go to fraternities and convince them to do the same.
This way she was able to tap into the highly motivated users of the platform — the early adaptors. The consumers of the app started seeing the value it offered right away. Truly, one of the best hacks to engage early adapters.
Also, all such scaling apps have the ability to connect with social networks and invite all of your friends.
Uber — Back to Campuses
Uber did a similar hack to Tinder and used early adaptors from campuses. They offered students flat rates from college to downtown areas.
One of the best campaigns that Uber used was the Social Invite to friends. Once you share the coupon with your friends and end up downloading the app and taking the ride, you get a ride for free.
One of the best hacks for user acquisitions and growth. Similar tactics were utilized by a player like Careem in other markets to exponentially grow their user base. Such tactics do come with a price.
Zynga — Ideation Hack
For idea generation and testing, Zynga employed a technique where they would show the users the banner of new game ideas. In case a certain percentage clicked on the banner and shred their info to be notified later, they determined which idea has merit or not. This resulted in gathering data from the already acquired user and also determining which next project to work on. One of the most cost-effective ways of ideation.
Instagram — Simplest of Hacks
One of the biggest hassle Instagram faced during its early years was its server downtimes. Once they fixed that part they were able to provide a better service. That’s why the CEO and founder commented that Better Performance in itself is one of best hacks you can employ.
LinkedIn — A Better Network
LinkedIn did imply great growth hacks to make their network more useful for its users. Their widget with the suggestions of friends of friends resulted in explosive growth. It also made the network more useful for everyone.
Etsy — Killing its own Growth Hack
Consider the case of Etsy, the company listened to their customers and they wanted an infinitely scrolling page so that their products can be viewed without the delay or hassle of clicking next page buttons.
Etsy implemented the infinite scrolling with 5 months of tech development. Later they found out that the conversion rate has decreased significantly. So they had to let go of the project and went back to the original pagination mechanism.
A good example of relentless perusal of growth and having the discipline to kill your own (in this case customers’) ideas.
Groupon — Growth Hacking Gone Wrong
For acquisition, you can also look for virality.
Remember Groupon, one of the best examples of venture going viral. Yet this single-minded obsession took away their focus on user retention and that resulted in huge loses to the company later on.
Remember, growth Hacking can be tricky and beware of a single-minded obsession of pursuing one objective and missing the whole picture.
I hope you get an idea of growth hacking potential and also its complexities.
Remember, all examples of hacks were very specific to the company, their own capabilities, and the situation they were in. It might or might not work for you.
In the next article, I will discuss the steps you can take to make it work for you. The focus will be on Customer, Product, Data, and Tools.