What is Growth Hacking?
The Basics Startup Founders Must Know
Growth hacking is a marketing tactic where the focus is on getting your product to the market, testing it and iterating as quickly as possible. Growth Hacking is a combination of art and science that uses psychology, statistics, analytics to drive growth. It’s a mindset and methodology for building sustainable growth engines for your company.
Growth hackers are the fastest way to get your product into the market to learn from users and iterate very quickly.
Startup founders should understand how to apply growth hacking for their startups.
Myths about growth hacking
There are a lot of myths about growth hacking. Growth Hacking is not just about A/B testing or doing marketing experiments. It’s an art and science of getting your product out there into the market and then getting feedback from users to iterate quickly and get it right in the first attempt.
Growth Hacking is not about marketing only, it’s about finding new and innovative ways to market your product. It’s not just about launching your product on Product Hunt or TechCrunch, it’s also about how you can launch your product in a very unique way with minimal effort so that you can focus on the core value of your product straight away.
It’s not just about tactics, it’s also about principles and an approach that works across all kinds of products and startups. One interesting thing is that most successful startups like AirBnB, Uber, Instagram, Dropbox have used Growth Hacking techniques to get started and grow their user base in a short period of time before any VC funding.
Growth Hacking versus traditional marketing
Traditional marketing is about putting a lot of effort to make your product look great and then getting it out there. But the problem with this kind of marketing is that it is very expensive and time consuming. It also has a lot of noise which makes it difficult to get noticed.
Growth Hacking involves getting the product out there, testing it, iterating quickly and then improving on the feedback that you are getting from your early adopters and customers. Traditional marketing is about spending money to generate awareness for your product whereas Growth Hacking is about spending time to build something valuable for customers and then getting them to talk about it so that they can generate awareness for your product.
Growth Hacking framework:
There are 5 stages in the growth hacking framework:
- Ideation
- Validation
- Acquisition
- Retention
- Referral and repeat purchase
1. Ideation
Where you come up with the idea for your product or service and you validate it by talking to your customers or users.
You do market research to find out if there is a need for your product in the market.
You also look at what are your competitors doing, how they are doing strategy for their product, who are their customers and how can you reach them? What kind of marketing tactics are they using?
How can you do it better than them? What kind of messaging is driving their conversion? etc… You also think about what is the core value proposition that will make people switch from existing products to these new one.
What kind of value can this new product offer over other products in the same space?
At this stage, all your assumptions will be validated or invalidated by talking to users and potential customers about your product idea. If they like the idea, then you move on to the next stage.
2. Validation
This is the stage where you start building your product. You build a basic MVP and try to test it with your users or customers.
You get real feedback from your users about whether they like the way you are doing things or not, whether there is something that you can improve and how to improve it.
This stage involves iterating quickly and getting better feedback from users each time based on their reactions to the new features of your product which you have added based on their feedback in the previous iteration.
While releasing a new feature, if you see that it’s not getting good traction, then you quickly take it out of production and move on to the next feature until you find one that sticks with your users.
This idea of finding something that sticks with your customers will be discussed in detail in the Acquisition stage below.
3. Acquisition
At this stage, you have a product out there that has some level of validation by talking to customers before launching it into the production phase.
Now we want to get as many users as we can by using various marketing tactics like social media, SEO, SEM, content marketing etc…
At this stage we are not worried about conversion rate because we know our product is great and we are confident that we can convert them once they start using the product.
We focus on getting our product into as many hands as possible because these early users will provide us with feedback which in turn will help us improve our product.
At this stage, we don’t care if our conversion rate is low because we know that it can be improved later based on the feedback from these early users.
4. Retention
After acquiring a lot of users by using various marketing strategies, now we need to get those users to stick around and use our product for a long time so that they get value out of it and also refer it to their friends or colleagues.
This is the stage where you focus on getting users coming back again and again so that they become habitual of using your product so that they continue to use it even after your marketing campaigns stop working for them because you have acquired new customers through other channels like social media, SEM, etc…
This is where you start focusing on improving the conversion rate by optimizing your conversion funnel. You might want to make changes in your onboarding flow or change your pricing strategy or add features based on customer feedback in this stage so that you can increase your retention rate and also increase the lifetime value of your customer.
5. Referral and repeat purchase
This is the stage where you get your users to refer your product to their friends or colleagues.
This is the stage where you can start focusing on increasing the conversion rate by optimizing your sign up and conversion funnel.
It’s important to note that every startup goes through this cycle of Ideation, Validation, Acquisition, Retention and Referral in different order but they will all go through these stages one way or another based on what their product is and how it will get traction in the market.
You don’t have to worry about Growth Hacking if you are not yet ideating about your product because this process will help you come up with a great idea for your product which can be validated by talking to users and customers, then you can go ahead and build a minimum viable product which can be tested with real people so that you can get feedback from them.
This will help you iterate quickly based on their feedback and come up with a version 1.0 of your product which has been validated by talking to customers before launching it into production phase for acquisition so that you can acquire as many users as possible by using various marketing tactics like content marketing, SEO, PPC and social media marketing.
The last stage at this stage is to retain those users and get them to come back again and again based on what you have learned from them. This is when you can start focusing on improving your conversion rate based on what you have learned from your early users.
Final Thoughts
In conclusion, don’t worry about Growth Hacking if you are still at Ideation or Validation stage.
Focus on doing good market research and talking to your customers or potential customers about your product idea to validate it.
You should also make sure that you have defined your key metrics for your company like retention rate, conversion rate, customer acquisition cost (CAC), etc… before you start marketing your product.
These metrics will help you measure whether you are achieving the goals that you have defined for your business.
If your product is not getting traction in the market then don’t worry about growth hacking until and unless you have validated the idea of building a business around it by talking to people who might be interested in buying it.
I hope you liked my explanation which I think is more practical rather than theoretical approach towards what is Growth Hacking!
If you like this post, please share it with your friends and family on Facebook and Twitter!
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces, and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.
