Originally published at thinktank.personagraph.com.

Growth hacker is term that was coined by Sean Ellis in 2010. The need to coin this term arose from the discrepancy he experienced between his official title – VP of Marketing – and his actual activities. In contrast to traditional marketing, his sole focus was to make companies grow by creatively conceiving and implementing “hacks”. The essence of such hacks being that they are integrated features that form a growth engine for a product.

Since 2010, growth hacking has become an industry of its own with many high profile examples. Dropbox, AirBnB and Hotmail are famous examples of companies that growth hacked their way to success. So what lessons can app developers learn from these huge success stories? All used very different methods which makes it hard to create a single framework to follow. However, there are key elements that are commonly seen in growth hacking strategies. We will discuss these using success story examples.

Incentives
Incentives can be used for a variety of purposes. The most popular purpose is obviously to let people recommend a product to friends and family. By rewarding people for this behavior with something your product has to offer you can get considerable visibility without spending a dime on advertising. Zynga mastered this with their highly addictive “Ville” game series which include FarmVille, CityVille and FrontierVille. Users were prompted to invite their Facebook friends to play the game in return for in-game bonuses like energy and time credit. The addictive nature of the game and the frictionless integration with Facebook made this strategy a huge success. Many regard this “spamming” as a nuisance but it did not stop millions of people from trying it out. Dropbox rewards their users for inviting people as well by giving them extra storage space. However, note that incentives can be designed to achieve different goals. Dropbox also incentivizes people to get to know the full extent of their service. Extra storage space is given for completing the “starting guide”, connecting to Facebook and Twitter, and for giving feedback. This helps to achieve other goals than merely growing in the number of users. Shopping app Fancy also achieved significant growth because of an incentive hack. Inviting friends to the app earns users in-store credits. Additional rewards are given per 5 activated friends and when invited friends are purchasing products.

Viral loop
One of the most famous examples of growth hacking, although the term wasn’t even coined at that time, is what Hotmail did with their new email service. They added “PS: I love you. Get your free e-mail at Hotmail” to the bottom of every email that was sent with a Hotmail account. The result was a viral loop. More people started using Hotmail which meant more “PS: I love you” messages were sent out which led to more people using Hotmail. Video app Blab uses a similar technique. The app syncs with the user’s address book and then sends video messages to anyone, even to people that do not have the app. A person that doesn’t have the app gets a message that they received a video message which they are able to view in a browser. The hack here is that the app spreads itself through its core functionality which isn’t limited to its existing user base. Creating a viral loop like this allows for exponential growth in the number of users without spending any money on traditional user acquisition methods like advertising.

Technical hack
A technical hack usually involves using an existing platform to slingshot your business to success. This can be done with and without permission of the owners of the existing platform. AirBnB’s early employees reverse engineered Craigslist’s website in order to build an API that let users post their listings on the popular classifieds website automatically when posting on AirBnB. This resulted in millions of views from visitors of Craigslist instead of just the modest amount of website traffic AirBnB was generating themselves. Eventually Craigslist noticed the hack and shut it down but by that time AirBnB already had huge momentum. Facebook used a similar technique but is on the opposite end. Their SDK enables websites to integrate the renowned ‘Like’ button which was widely adopted after its introduction in 2010. All of a sudden the Like button popped up on thousands of websites which increased the social giant’s visibility even more. Currently, Facebook is one of the best platforms to tap into as an app developer. By strongly integrating your app into the biggest social network you can leverage their huge reach. Foursquare was one of the first apps to take advantage from this. They allowed for check-ins to be automatically posted to a user’s timeline. Similarly, Draw Something allowed users to challenge Facebook friends. Like AirBnB, this gave them significantly more exposure than they would have had as a standalone app. A technical hack like this allows you to enjoy visibility to partners’ audiences. However, having to rely on 3rd parties can backfire when software gets updated and your API becomes incompatible.

Word of mouth
Something that is worth noting is that successful growth hacks often rely on encouraging word-of-mouth. A study showed that the by far biggest factor in how people find apps that they download is getting an app recommended by family and friends. When it comes to user acquisition, generating word of mouth should be your key focus!

Pirate metrics
Successful growth hacking comes with a strong focus on analytics. When you implement a hack you want to make sure it has the desired effect. This starts with setting a clearly defined actionable goal. As mentioned above, this doesn’t have to be limited to growing users. A very influential way of measuring growth is by using Pirate Metrics, proposed by Dave McClure. It consists of Acquisition, Activation, Retention, Referral, Revenue (AARRR). These form a funnel and each one is suited to derive an actionable goal from which can be tackled by growth hacking. Keeping track of the right analytics is key in measuring progress. By constantly performing A/B tests you can uncover what measures have the best effect on your selected metrics. Check out this article we extensively discuss Pirate Metrics.

Keeping these hacks in mind when building and improving your app can greatly improve your app’s reach and drive down acquisition costs. Creativity is what drives these hacks and there is a lot of hacks waiting to be discovered by savvy developers.