Startup 101: What is growth hacking?

Growth hacking. The two words on every marketers’ lips.

Do you need to know how to code to do it? Does the code grow? Why are startups doing this kind of thing? In this article, we’ll be delving into growth hacking, the pros and cons, and why most startups do it.

Growth hacking is the activities done by a company that requires creativity, perhaps not so much money, and a new way of looking at all stages of the customer journey. The reason it’s called growth “hacking” is because marketers are “hacking” the traditional system of getting customers for their company and coming up with alternatives that are generally much cheaper and more unique.

Growth hacking is seen as cheap and fast and has become the new trend in recent years because it can cause explosive growth if done correctly. To do growth hacking correctly, though, you need to be creative and think outside the box. We’ll be providing you with some examples inside this article to give you an idea of successful growth hacking.

The difference between growth hacking and traditional marketing

So, if growth hacking is like “hacking” traditional marketing, what’s traditional marketing then?

Traditional marketing is a set of techniques that have been implemented by different companies over the years that have proven to work. Examples of traditional marketing techniques include:

• Paying for a highway billboard with a big advertisement on it
• Getting a 30-second television commercial
• Newspaper adverts
• Catalogs delivered door-to-door
• Telemarketing and cold calls

Traditional marketing techniques are usually tried-and-tested offline ways of reaching people, usually need a lot of money, resources, and a big team to bring those techniques to life. There are some digital marketing techniques that are also included in these traditional methods, but the emphasis of traditional is a time before the internet. Scary, I know.

To give you some perspective as to how growth hacking is different, here are some examples to get us started:

• Airbnb hacking into the back of Craigslist
• As you probably know, Airbnb is known for being the place where you can find accommodation practically anywhere you go. But, in the beginning, they really needed to build their user base, customer base, and reputation. The founders noticed that people looking for accommodation frequently used Craigslist. As a result, they offered an option for Airbnb accommodation providers to copy their Craigslist listing with one click. The outcome? Immediate access to a large market of target users.
• Dropbox’s referral loop
• Dropbox created the most successful referral program ever. They did this by offering 250MB of extra storage space to any user who invited a friend to sign up. With this program, signups increased by 60% overnight. Each new user only cost Dropbox 500MB of disk space.

You might now start realizing that growth hacking is not the same as growth marketing, and they are so very easily confused because they’re nearly the same thing, but not quite.

So, what is growth marketing? How is growth marketing different from growth hacking?

Growth hacking focuses on all parts of the customer funnel rather than just acquisition, which is seen as the main focus. Growth hacking essentially focuses on all sections of the funnel, maybe even more on customer retention over getting more customers suddenly.

Growth marketing focuses on the top sections of the customer funnel, the acquisition of customers. This is what people commonly confuse growth hacking for. Growth marketing is that concentrated focus at the top of the funnel where creative ideas are brainstormed, implemented, and help acquire customers fast.

Considering the pros and cons

While growth marketing and hacking sound like the perfect technique to get your company noticed and flourishing, it actually isn’t that simple for many. After all, you have to ask yourself why all other companies aren’t doing the exact same thing. Why do some companies stick to billboards and TV adverts if they’re so expensive and resource-consuming?

For starters, growth hacking can be a bit blinder than going traditional, and because of this, you may end up wasting quite a bit of time. Growth hacking is a make-or-break way of doing business: it’s a lot of shots into the dark without having any backup to know if what you’re doing is going in the right direction. Traditional methods have proven to work in the past, so usually when you start using those you’ll actually know how it ends up going and how it will impact your company.

Another issue with growth hacking is that it’s about explosive growth, not necessarily sustainable growth. Many companies end up falling flat on their face when they grow too large too fast. You might not have the resources or manpower to match the growth you’re seeing, and that can look really bad if you can’t match your customers’ needs. If they’re buying things that you don’t have the stock for in your warehouse, you’re gonna face big problems.

Because of this, some companies prefer those traditional methods for marketing. They build the brand in people’s minds and rely more on that than sudden boosts of popularity and trendiness on Linkedin, for instance.

Author: Maxine Buchert

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