Sean Ellis on Growth
Why You Need a Growth Hacker at Your Startup
Growing startups is a passion of mine. There are few things more engaging to me than taking a compelling product and exposing it to as many people as possible. I decided to join Tradecraft to learn hands-on how to drive growth from some of the leading experts in the field. There is no better way to learn than to reach out to some of the gurus of growth, which is how I found Sean Ellis, founder of Qualaroo and GrowthHackers.com. Sean has done perhaps more than any other to popularize the concept of growth for startups. He has inspired me in my own pursuits through his clear posts that make a case for applying rapid, iterative growth hacking to drive customers through new and exciting channels.
I have tried to distill down Sean’s system for growing startups and have selected his most important insights for your consideration.
A growth hacker is more than just a marketer
The term “growth hacking” is now being widely used to describe startup marketing, but its meaning has changed since Sean Ellis originally coined the term in his 2010 blog post. So what differentiates a growth hacker from a traditional marketer? While a growth hacker certainly has the skills of traditional marketing in his toolkit, he also recognizes that those skills are not always relevant to early and mid-stage startups, which care more about rapid growth and customer acquisition than brand recognition.
The only metric that matters is growth
The core theme of Sean’s methodology is that all activities should be analytics driven to achieve growth — everything the business does, from product development to customer service and marketing should be focused on activating new users. As Sean originally put it:
“A growth hacker is a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth.”
A growth hacker carries this methodology throughout the stages of a startup’s development, innovating into new channels and using analytics to measure outcomes. He is constantly iterating, gauging users’ interest in different features and finding which resonate with a particular marketing channel. He uses a blend of intuition and analytics to find the fastest, most cost effective, and scalable channels for growth. Acutely aware of what a startup’s needs are at any particular stage of growth, he directs his efforts towards precisely those areas that will drive a startup’s continuous growth and development.
A growth practitioner’s job depends on the stage
Sean Ellis explains the shifting role a growth practitioner will play throughout the stages of a startup’s development:
Early Stage
• Validate Product-Market Fit
• Identify and lead users to a product’s core gratifying experience
Mid-Stage — the growth stage
• Identify and adapt to promising new channels
• Remove all friction to the must-have experience
Late Stage
• Scale up identified growth channels
• Continue innovating and finding new markets
With each new startup, I immediately started working to uncover the “must have” experience before I formed preconceptions about how and why a product would be useful. This involved a rigorous process for identifying the most passionate users and then getting their unstructured feedback about how they were getting value.
-Sean Ellis
The Early Stage: MVP to Product-Market Fit
Sean’s Startup Pyramid shows the typical path a startup takes. Once it has a Minimum Viable Product that it knows users are interested in, it must find out if there is a market for that product. At this stage, the startup is not so much concerned with growing the business, but with finding which features and marketing messages resonate with users. As Sean’s quote from Vinod Khosla aptly puts it:
Startups should think of their early users as a flock of sheep… “the flock always finds the best grass.”
Let your early users show you which features make your product outstanding and put all of your effort into showing those off.
Refine until it sticks
This is the perfect stage for a startup to test its product in as many channels as possible, refining the product and messaging until something sticks. The point is to figure out the “core gratifying experience,” that something special about your product that makes it a must-have for users. There are many tools to do this, from hands on usability tests, to usage metrics and heat maps. Use surveys to ask users what they hoped to accomplish in coming to your site, and if anything got in their way. Figure out just what exactly this core experience is that makes your product a must-have.
Validate your users’ interest
Sean is a big advocate of avoiding the “free only” business model. Charging something for your product validates your users’ interest, as only those who are actually convinced that your product will solve their problems are going to be willing to pay for it. In Sean’s case, adding a premium version helped drive signups for his trial version by overcoming users’ skepticism about a free-only product.
Whether or not your product has a for-purchase business model, you should include some deeper level of user interaction to gauge just how interested users are, beyond just a signup or the download of your app. Encourage users to share it with their friends or through social media, write a review, or even contact the developers. Increasing the user’s level of interaction with your app gives you a measurable indication of just how engaged they are.
As a bonus, giving users the ability to have that deep level of interaction so early on will help convert them into lifetime users. A user who has a positive interaction with the developers or sees a feature they recommended integrated into a new app may become a dedicated user for life, and is that much more likely to recommend the product to their friends. For example, a feedback button on your app can increase user engagement and make them feel like they are a part of the product’s growth. Interacting with users on sites like ProductHunt is an excellent way to build a connection with your most committed early adopters, turning them into dedicated fans and promoters of your product.
The Growth Stage: Remove all friction to the must-have experience
Once you have identified that one must-have feature of your product that keeps users coming back, and have validated that there is a market for your product, it’s time to grow the business. All efforts, from product development to customer service must now emphasize that must-have feature and make it as easy as possible for the user to get to and use. The first order of business is to hone the product’s messaging to highlight the must-have experience. Next, apply that message to the most cost-effective and scalable channels available. This means test and retest different permutations of the must-have message across a range channels to find which resonates with customers and incites/excites them to engage. The growth practitioner must innovate within existing channels and discover new engagement channels as well.
Make the most of your channel
Sean makes the point that growth hackers should particularly emphasize conversion rate optimization. Traditional advertising channels are becoming saturated, and even newer channels such as mobile ads and social media are becoming crowded. A startup with a high conversion rate within any channel will have a competitive advantage, allowing it to outgrow others in the space. Remember to stay focused on the goal: lead every user to the core gratifying experience. Everything from the initial landing page to the final conversion must be optimized to get the user to that core experience with the least friction possible.
A good growth hacker will use A/B testing to find the most compelling way to present information, heat maps and usage statistics to follow users through the experience, hands-on user interaction testing, and surveys to understand how users are engaging with the site. All of this is focused on finding and eliminating any friction points that get in the way of the user experiencing the core value proposition — how the product solves their need in the most simplified and intuitive way possible.
