TOP 10 Growth Hacking mistakes that cost me 5 years of my life and then saved me $200K
This list of TOP 10 mistakes is based on questions I received from my invitation-only community of over 26,000 growth hackers — GrowthHackingIdea. I launched GrowthHackingIdea.com in July 2015. People from companies like Microsoft, Adobe, Disney, Sony/PlayStation, Apple, Uber and others are among our subscribers. I share with the community one short growth hacking idea each day. Here’s a free gift for you: the invitation link.
Very far prior to that, since 1999 right after I graduated from school I have been engaged in Web entrepreneurship. I started in Krivoi Rog, Ukraine — the city of iron ore, workers and miners. Four giant chimneys of coking plant densely covered the city with smog. The city of red puddles, red birds, red houses, all red.
Only a USRobotics modem could break through the “antediluvian” telephone line periodically busy with conversations of people unknown to me. With its help you could get to the magical world — a ray of hope in the midst of total hopelessness.
Look at this picture to feel, how long ago it was:
Skipping the beginning of my IT entrepreneurship career, by 2005 I managed to create 2 small local profitable web-services. They generated stable Google cheques — passive income for me, while I was having fun. I called it a retirement :).
In June 2010th I decided to sell one of my businesses and create a new BIG THING — my first global service!
The plan was to finish development in 4 months and start making money in 6 months at a maximum.
But in fact, after 2 years! the product was not finished yet and all the money was gone. I sold my car, sold my second business, sold everything and managed to raise investments. We finished the product, launched it, acquired users, and found that nobody gave a shit about it. Nobody wanted to pay anything.
What is the takeaway?
I invested everything I had into a new great idea, that did not achieve Product/Market Fit. But there is no life in business without Product/Market Fit. It’s suicide to invest money into anything before achieving product/market fit.
My friend had a profitable business, though his revenue declined bit by bit.
He invested 1.5 years and over $100K into a new product. And you know what? Nobody gave a shit about his awesome new product.
Another friend of mine received >$300K of investments. They were in all news headlines. He hired the best developers, designers, and other stuff. They were building and tweaking their product for 3 years. They launched for the first time, and all journalists were intrigued. And nobody stuck with the product. Then — they relaunched second time. And then they ran out of money. The last news headline was that their product was closed, because there was no demand for it.
I know TONS of the same stories. A LOT, HUGE, and ENORMOUS number of people invest thousands, hundreds of thousands, and even millions of dollars before achieving product/market fit.
Trying to build a business before product/market fit is like spending trillions of dollars on the mining of Californium 252 ($27 million per gram) on Mars without previous tests of the ground.
On the other hand, if you already have a current business that makes you money, this means, you achieved product/market fit in your current business. This is a HUGE value. This means you can apply growth hacking techniques to it instantly and increase your revenue almost instantly too. There are tons of ways how to do that.
If I knew it, I would better have developed a growth hacking plan for my existing businesses. But I did not and this is why I can tell you this story :).
This was Mistake #10 from a list of TOP 10 growth hacking mistakes.
Members of my community are always sending me emails, asking to help them with growth hacking for this and that product. So, I decided to collect all their questions and create this list of most popular mistakes.
As you can see, these mistakes can cost you years of your priceless life. Years that you can’t get back. They are just gone forever.
Mistake #9: “My growth hacking process goes VERY VERY slowly.”
In 2013 I was happy to get $50K of investments from Igor Ryabenkiy (Altair VC).
I had a web-version of a music discovery service, but it had a weak retention rate. One of growth hacking hypothesis was to create a mobile app — music discovery alarm. So that a user can set his alarm and use our app every day just like any alarm.
What a brilliant idea. After 4 months the Android MVP app was launched. I bought some Facebook ads and looked at the retention rate. It was even worse, than the web-version of the service I had.
Then I asked users, what would they want to add. And after 6 months I launched a new version. And retention did not change. It was as poor as before.
What was wrong, what do you think?
I invested 1 year into testing 2 hypotheses. But, as Sean Ellis states, growth hacking is a test driven marketing plan. The core of growth hacking is in the number of tests you run every week. If you do not run at least one test a week, this is not a growth hacking, this is a waste of time.
The majority do not tie their growth hacking process to the minimal weekly amount of tests. They have a big list of tasks in their task management system and run them one after another. And one test can take a week, another — a month, or even 6 months, like in my example.
When you create your growth hacking plan, you need to prioritize tasks this way, so that you can run the minimum amount of tests and do whatever it takes.
Mistake #8: “I put my money into this channel and this and that, but none of them worked for me.”
As you remember at the beginning of 2012 I failed with my first global startup.
About a month after that I launched a new one and at the end of 2012 I became an absolute winner with it in a startup competition among 330 Ukrainian startups. One of awards was a residency in a business accelerator.
When I was accepted to an accelerator, I tested a bunch of channels. I was good in iterations. I was testing fast. I tested commenting on Question sites and it did not work. I tested writing articles and it worked, but the effect flew away very soon. I tested press — the same issue. I tested sharing through the site and it did not work that well. I tested this and this and that and every time it did not give the desired effect.
Only years after that I figured out the reason.
The key is not in WHAT channel you choose. The key is in HOW you leverage this channel. It is MUCH better to choose one channel with your audience and focus on the QUALITY and on NUANCES inside this one channel.
When I launched GrowthHackingIdea I focused only on referral marketing. And it paid out — 20K subscribers in just 4 months. Then I focused on the nuances of utilizing Amazon as a channel and the book “TOP 101 growth hacks” became a bestseller. Now it brings new subscribers every day.
So, when you create your growth hacking plan, do not try a bunch of channels. They all can work for you if you find an approach to them. Just focus on one and dive into it completely. Successful case studies can help you here.
Mistake #7: “I’m going to outsource development of my startup.”
Did I tell you that I’m a developer myself too?
So if not — I am :). I developed my first code in 1998. At that time, I launched “Borland C” language from a floppy disc. I was coding on our school’s IBM computers, which did not have a hard drive. Yeah, it was long long time ago. Floppy discs were a brand new technology at least in my provincial city. Dinosaurs were running on the streets at that time :).
Do you know, what I was dreaming about when a new customer ordered development of a website? I was dreaming about getting money and getting rid of this guy as fast as possible. Did I tell you that I hated outsourcing, hated customers, hated everything in my job?
I knew the mindset of outsourcers because I was one of them. And I was successfully dealing with outsourcers.
But everything changed in 2010 when I tried to outsource design and development of a startup. All of a sudden this stopped work for me.
And here is why. A startup is a live essence. Ideas hit your head thousands time a day, because it’s new, and nobody did this before you. Nobody knows what it should look like. You write down your specifications for outsourcers, then you sign an agreement and the next day you understand, that what you wrote is total bullshit without this new awesome idea.
You want to test this new idea very fast, but you have to run through the clumsy process of changing the specification, confirming, and signing again and again. And this turns into a pain in the ass for both sides.
This is the first downside — outsourcing kills your speed. And speed is the most important fuel of growth hacking. This means outsourcing kills growth hacking.
The second downside is the process of creating. When I develop for myself new ideas hit my head after each line of code. I’m focused on the goal, which is to grow my service, to make my community happier, and to make more money. And this goal generates new ideas. These ideas change my product, change the idea, change value, and change growth.
When an outsourcer develops, his goal is to get rid of this job as fast as possible. And this goal generates ideas on how to make it happen.
Two vectors run in opposite directions.
When you order outsourcing you just kill a huge part of unborn ideas that could skyrocket your growth.
After trying outsourcing for a startup 5 times, and spending a huge ton of money and time; I got the point :). Hope, this story will help you to get it a bit sooner :).
Employees or even better — co-founders, who are on the same page of growth hacking with you, provide ABSOLUTELY out-of-this-world results.
P.S. All of this does not concern small outsourcing tasks, that can be done within a day or two. For small tasks and tasks that will not change, outsourcing is still good.
Mistake #6: “I can’t generate growth hacking ideas. I need somebody to do that for me.”
You are not alone, in thinking this way.
Before 2014 my knowledge about growth hacking was like a hurricane: pieces of everything in a total state of chaos. I knew SEO, knew “invite friends, get smth,” knew press, knew social and search engine ads. These were all of my ideas on the top of my memory and I could not generate anything beyond this. In fact, I knew much more, but all of that was not structured and hence was forgotten. You also know way more than you think. Here is how I discovered my potential.
At the end of 2013 in the beginning of 2014 I got to know about growth hacking as a system of knowledge. I fell in love with this system.
But the biggest shift in my understanding of growth hacking happened starting from May 2015, when I totally dove deep into learning everything about growth hacking from books, videos, blogs, etc. I was sleeping with Kindle books.
One happy day I knew about first growth hacking framework from a book entitled, “Traction.” Actually it was an Acquisition framework. I strongly recommend it, if you have not read it yet.
After this moment my hidden knowledge and experience just began to blossom. The acquisition framework helped me to avoid jumping from one idea to another and being stuck with nothing. The framework helped me to generate ideas easily. Suddenly, I saw how many awesome ideas are all around, which I knew, but was not focusing on.
And then I found another framework. And then the third one I put together by myself. And then I put together all of the frameworks throughout the whole AARRR funnel. And it was a miracle :).
It was like getting to know the laws of Physics. Everything became so smooth, understandable, simple and manageable. Marketing paradise came to my head :).
From time to time I share via GrowthHackingIdea frameworks that I find valuable for myself. If you see somewhere the word “Framework,” get it whatever it takes :). It’s the next law of Physics, that helps to understand the essence, and the core of growth hacking.
Mistake #5: “All I need to grow is to make my users invite their friends.”
At the beginning of 2013 we launched our app AlarmNewTrack — each day it wakes you up by a new track, selected according to your taste.
We implemented a very awesome “invite your friends” feature. The app allowed you to filter music by mood, energy, genre and year. Some filters were opened by default, but if you wanted to get access to all of the features, you needed to invite a couple of friends.
You could see all your friends, check them or check all of them and automatically Facebook private messages from you were sent to each of your friends.
When we launched it, we saw that new users liked to invite all of their friends instead of checking them one by one. Our invites were sent to hundreds and thousands of friends. On average every new user invited over 5 friends. It was a FANTASTIC success, or so we thought.
How many active users are there now? Around 10. One of them is my wife :).
Where are all those tens of thousands of users? They were killed by the terrible retention rate. Users just stopped using the service and never came back though the average rating was 4.2.
We spent all of our money on one shot and missed Retention.
The moral of this story:
Retention is the King
Mistake #4: “I’m overwhelmed with growth hacking ideas, but my product doesn’t grow”
When my wife was 7 months pregnant and was in the sanatorium for 3 weeks, God sent me the idea of GrowthHackingIdea :). After 8 sleepless hours the service was born.
While investigating the deepest depth of growth hacking I got to know about the Growth Hacking Framework “High Tempo Testing,” founded by Sean Ellis, who coined the term “Growth Hacking.” And instantly, I became a fan of this framework.
In short, its idea is to test hypothesis at a high tempo :). That means 1–15 hypothesis a week at a minimum whatever it takes.
Mistake #3: “The hardest part for me is acquiring new users.”
It was hard for me to acquire new users to 3 of my startups: NextMusic.TV, 1NewTrack.com, and AlarmNewTrack.com. I was investing money on advertising, hustling with articles, seeding, press, etc. I was dreaming of seeing this graph of growth.
And I saw it, but once I stopped hustling, the graph dropped down. I needed to hustle more and more to keep my growth. It was VERY hard.
Why it was so hard?
Because my retention rate sucked. Again? Yes, it’s the second part of the same story.
When I launched GrowthHackingIdea in June 2015 I was not in a hurry to promote it more and more. I gained an initial set of users and was waiting for 3 weeks, looking at the retention rate. When I saw that people did not drop off, I felt an inspiration to continue promoting it.
After basic hustling (Facebook Groups, Product Hunt) I just stopped hustling and subscribers still continued to grow.
Was it hard? No. It was like looking at a plant, that grows on its own, while I give it some water (growth hacks).
When you achieve a flat plateau retention rate, acquiring new users becomes easy and fun. Even a simple “Share” button will make your product grow. Flat retention is your treat against everlasting hustling.
Mistake #2: “I need more awesome features to help my customers see the value”
In 1999, when I started, me and my friend from the university decided to collaborate and earn some money from this magic Internet.
At that time, all in all about 900 Internet users were in the city where I lived. We simply placed ads on a free domain. Some clients had never seen the Internet, but wanted to be there with our help.
We searched for the clients the way I was taught in Multi-Level Marketing — we printed leaflets and visited every shop, office down the main street, asking to see the director. Step by step, getting 3–5 dollars per client a month, eventually we got as much as $100. That was a lot of money for a poor post-Soviet student. Educational scholarship at that time was about $5/month.
Thereafter we just visited them once a month and harvested. We were Rockefellers among students :).
I love to joke that we owned 100% of the Internet market in our city :).
Why am I telling you this?
We had zero features. We had nothing. We were selling, listening to our customers and making their dreams come true.
Was I so genius about this from the very beginning? No. We just had no money and no skills to build anything.
Years after that, when I had money, possibilities, time and skills I started vice versa — from creating a product with a bunch of features. And that story finished very poorly. You remember it.
This story repeated a bunch of times. Only years after reading very smart books from very smart guys I found out how lucky I was in the beginning, having no money. We were doing everything in the right order.
In 2000 I moved to the capital of Ukraine — to Kiev and was hired as a manager of a travel aggregator. The company had money only to cover my part-time salary. Luckily.
Again, I started to visit travel managers in their offices and talk to them. I found out that the simplest feature on the site is the most demanded. They wanted to receive individual requests for traveling from our visitors. No listings, no search, just requests to their email. This feature was also the most demanded by the visitors.
I focused on only this one feature, created it by myself in a week and in a year the service was profitable. As a bonus the service was awarded “Best business idea” by Sun Microsystems on the biggest Ukrainian IT competition “Sun Awards 2001”.
Another side of this mistake is “We build our product so long so that we can make it perfect. We have no right to make a mistake, otherwise customers will think, that we are assholes.”
This point is the riskiest one. A motto of all-in players. Nice way to burn all you have. Actually, you will not face this mistake if you start the right way as I described above. But if you are in the middle of this mistaken path, here is my another example not from the IT arena.
As I’m a drummer (yes I’m a drummer :) as well), me and my friend from our rock band decided to create an album of 12 songs. We wanted to make them perfect. Our mood should be perfect, timing should be perfect, comfort should be perfect, everything should be perfect. We created two songs within a year.
I had a lot of free time. But after the sad story with my first global service, I felt, that soon I would have to work very hard and for a long time. Hence, I will not have time. Only two months were left before I was going to have to look for a job. And we decided to focus on creating the rest of the 12 songs (10 left) within a month. Big plan!
And we did it.
Everything was not perfect this time.
Here is the funniest thing. When I started to promote our songs it turned out, that one of our “not perfect” songs was the most popular, the most demanded. This sub-genre of song was the easiest one for us to create.
There are two ways:
1. Burn all your money and time on developing a perfect spaceship, go all-in and play a 1:1,000,000 lottery.
2. Or talk to prospects, sell, and create fast one feature they want to buy and make money.
Mistake #1: “My team doesn’t have enough interest to dive into growth hacking and generate ideas. I’m not sure if it’s even possible at all.”
Before 2015 I was always telling my team that I wanted to hear ideas from them. “Your ideas are very welcome.” — I was telling them this all the time as a mantra.
But they did not generate ideas. And when they tried, those ideas were not applicable. They were ideas of a designer in a vacuum, or ideas of a developer in a vacuum. They were nice if nothing existed, but design or but backend/frontend.
They were upset when they heard that their ideas were not acceptable. As a result, after some time they stopped offering any ideas.
After a couple of years, I got an understanding of what could be the reason.
They just did not see the whole picture, as I did. They did not know successful growth hacking case studies, which I read every day. All they knew was their niched knowledge, and niched responsibility. We were not on the same page.
When I got this understanding I created a growth hacking training for them.
I gathered everything I know about growth hacking: all templates, case studies and frameworks starting from the basics, which I considered as obvious, but for my team it was like discovering the American continent the first time in the history.
After that I told my team to subscribe to GrowthHackingIdea and receive all the ideas they needed to stay on the same page with me.
The team was really excited about the training and examples I had prepared for them! At last they saw the world through my eyes.
Here is the culmination.
In a month one of our developers offered an idea, that helped us to reach out to about 1,000,000 users of our TA just for $200 and convert 6% of them into subscribers. Through Facebook ads it would cost us over $200,000!
Feel it. We saved $200,000 (and a lot of time) just because my team got on the same page with me. Just because I uncovered for them the growth hacking framework and real case studies.