Like most people who do marketing for startups, I have a love-hate relationship with the term “growth hacker.” On the one hand, it has allowed startup marketers to differentiate themselves from their counterparts in corporate America. On the other, it just sounds like one of those Silicon Valley buzz words that makes you want to puke every time you hear it (can anyone say “pivot”?).
That said, “growth hacker” is here to stay. So we may as well own it and make it clear what it means — that way, we can actually use it, hire for it and train for it.
The difference between “growth hacking” and “marketing”
A new era of tech events has begun
We’re back in New York this November for the 4th edition of our growth-focused technology event.
A growth hacker really is just a marketer, but one with a different set of challenges to tackle and tools to work with. There are a few key differences between startups and big companies (for simplicity’s sake, I’ll call them “corporations”) that best explain the difference:
- Startups are organizations with extreme uncertainty. At a startup, you may not know who your core customer base is, why they buy your product (or whether they will at all), what marketing channels will work the best. Most of the time, corporations have all this figured out. So while startups are trying to both build a car and get the engine started, corporations are trying to make their cars run faster.
- Startups are designed for astronomical growth. Startups intend to grow at 20 percent month over month (or more), while corporations are satisfied with 5 percent year over year. As such, corporate marketers deal with the challenge of: I’ve got a mature business that already has significant market penetration. How do I eke out another few percent and keep the business growing? Startup marketers, by contrast, need to figure out how to 1000x their numbers but from a much smaller base.
- Startups don’t have access to the same resources or brand equity. Self-explanatory: you have less money and are less well-known at a startup than at an established company. This means you must both educate your prospective customer as well as acquire them without significant budgets.
Thus the term growth hacking. Growth hackers utilize analytical thinking, product engineering and creativity to significantly increase their company’s core metric(s).
Many of the growth hacking descriptions on the Web are unnecessarily restrictive. I don’t believe growth hackers must be formal engineers when many of the most well-regarded growth hackers don’t code regularly. Growth hackers also don’t have to use viral loops: would you say that the Groupon guys didn’t use growth hacking to grow to 180 million users?
Furthermore, growth hacking is not a new practice, just a new term. Anyone who figured out how to game Google’s algorithm (aka SEO) was leveraging both creativity and analytics to rapidly grow their company. Amazon’s legendary use of A/B testing surely fits into the category of growth hacking. So does LinkedIn’s ingenious email importing scheme (where users were prompted to let LinkedIn import their email contacts and send them a note inviting them to the service).
Breaking down the term “growth hacker”
“Growth” is the easier half to understand: as Sean Ellis says, a “growth hacker’s true compass is north.”
Basically, all they are trying to do is to make their primary metrics go up and to the right. What makes this type of growth unique (say, from its corporate counterpart) is the scale at which it must occur: successful startups grow from 0 to millions (or hundreds of millions) of users in a few years.
“Hacker” is more of a double entendre. By one definition, it means programmer – someone who builds features that encourage a company’s product to experience viral growth. However, I believe it also means “hacker” in the more figurative sense (similar to the term “life hacker”). A “hacker” is someone who thinks outside the box, disregards the rules, and discovers new ways to solve problems. In this way, a growth hacker needs to be as creative as she is analytical.
What tools does a growth hacker use?
Here is a laundry list of the primary tactics most growth hackers use:
- Viral Acquisition: Leveraging built-in product features to encourage existing users to share your product with new users.
- Paid Acquisition: There are many types. To name a few, search engine marketing, aka Google AdWords; Facebook ads; display ads; mobile ads; radio, TV, OOH (out-of-home), and many others all can be part of one’s arsenal – but they don’t provide accurate enough source attribution for most growth hackers; and finally, affiliate marketing, or providing incentives to third-party marketers who then promote your product for you and take a cut of the revenue.
- Call Centers / Sales Teams: Surely building a sales teams does not count as “growth hacking,” but recently a new trend is emerging: leveraging outsourced low-cost labor to help support a startup’s efforts (usually in the Philippines, sometimes college interns). These workers can do anything from massively e-mail your prospective customers to create hundreds of SEO-friendly pages. In these cases, I would consider it a form of “growth hacking.” (To learn more, read: How did Udemy get 5,000 courses online so quickly?)
- Content Marketing: Leveraging blog posts, infographics, and viral videos to increase brand awareness and site traffic. Turn those visitors into users.
- E-mail Marketing: If you believe a growth hacker’s job is not just to increase new users/customers but also to engage them or encourage them to spend more money, then e-mail marketing is a significant part of their arsenal.
- Search Engine Optimization (SEO): Don’t be fooled: what most mainstream SEO books and articles talk about is very different from what startups do for SEO. Startups that use SEO effectively build scalable infrastructure that applies to tens of thousands or millions of pages. Most of the SEO theory on the web is focused on ranking for just 5-10 keywords.
- A/B testing and Analytics: Though this is not an acquisition method, there is no doubt that heavy data analytics and A/B testing helps a growth hacker improve their acquisition and conversion funnels.
Of course, there are dozens of specific posts on each of the subjects above. I recommend reading in-depth articles via Quora and startup marketing blogs to gain deeper expertise in the areas of interest for you.
Editor’s note: This is a guest post by Gagan Biyani. Gagan is an entrepreneur and growth hacker. He co-hosts with Erin Turner the Growth Hackers Conference. Also, he has led marketing at marketplace startups Lyft and Udemy. You can follow him on Twitter: @gaganbiyani.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
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