Fake It Till You Make It
The Truth About Growth Hacking
There is a common popular misconception that traction for a startup can be solely gained by the strength of a good idea, a strong marketing strategy, great press. And combinations thereof.
For example, in 2011 I participated in a Foursquare hackathon at the General Assembly in New York City. I built an app called FourGraph that lets anyone generate an infographic based on Foursquare data. I won second place (behind TimeHop — which was originally called “Four Square and Seven Years Ago”). Driven by tweets from the Foursquare founders, press coverage by Mashable & Wired Magazine, I acquired 700K users in the span of a couple of weeks. It worked out that I had the right idea, at the right time, with the right press — but unfortunately no way to monetize it. In that short period of time, I managed to capture a genie in a bottle.
With the amount of time and money typically invested in a startup, no one has the luxury, or the resources necessary to chase genies. Investors naturally shy away from risk — it’s in their nature.
Growth hacking is a set of techniques to drive guaranteed traction. If you look at a website like this one, you would be led to believe that it’s a combination of white hat marketing & experimentation techniques. The truth is, most of the successful companies out there used black hat techniques to achieve at least initial traction. In this post, I’ll provide numerous examples.
A friend of mine ran a crowd funding campaign that was very moderately successful, yet his competitor had raised millions on the very same crowd funding platform with a lesser (yet similar) product.
How did they do it?
The competitor anonymously bought thousands of units of their own product — within the first fifteen minutes of the launch of their campaign. This gave the illusion that the competitive product was selling like hot-cakes. Since they were essentially paying themselves, the only costs incurred were the Paypal & crowd funding fee (about 7-10% of the profits), which could technically be written off as a marketing fee. With that level of “instant” success, the press came knocking, and organic sales started to grow for a period of four weeks. They had demonstrated social proof that their product was awesome and popular — even though it wasn’t really the case at the beginning. They artificially engineered traction.
Ingenious, or deceptive? Their blog posts made it seem that they were surprised by the traction — which means they were lying to customers. But they made millions — who cares, right?
Effective growth hacking is black hat — and some of the largest tech companies out there have used black hat techniques to drive initial traction. Here are some examples:
- Facebook allegedly was able to increase the number of their users in the early days by scraping email addresses from university websites, and then sending them invites to the service (Mark Zuckerberg described his black hat escapades in this blog post while developing FaceMash — the fictionalized version can be seen on “The Social Network”).
- AirBnB allegedly created a bot & fake email addresses that would automatically respond to posts on Craigslist.
- Path allegedly used millions of dollars of Facebook ads and spam techniques to drive traction
- To stimulate demand, Paypal allegedly created a bot that bought goods on eBay and then, insisted on paying for it using PayPal, driving it’s usage and popularity.
- Reddit co-founder Steve Huffman admitted that the link-sharing site was initially seeded with fake profiles posting links to simulate activity.
- Many dating & social sites have fake profiles. Here is an API that automatically generates fake users: http://randomuser.me/
There are numerous other examples. Moral of the story — should startups bother with white hat techniques? Or is black hat the answer to startup success?
