Defining growth hacking

…and some examples

The debate rumbles on as to whether growth hacking is a valid term or not, whether it is actually just Marketing with a fancier name.

Observant readers will notice I have vacillated on this point, having changed the name of this collection from growth hacking to marketing and back again.

Where I am coming out is that there is a distinct definition of growth hacking, but it is one that has been widely abused over the last few months.

My personal definition of growth hacking is:

“Finding innovative mechanisms that acquire new users at a cost that is low enough to be irrelevant.”

Some examples of what I consider true growth hacking:

  • Dropbox’s offer of free storage for inviting friends (cost for Dropbox near-zero, high value to users, very successful).
  • Using public web data (Craigslist, Gumtree) to identify your perfect target clients and approach them automatically in an intelligent way (e.g. we have automatically created a listing for you, click here to accept).
  • Sending a tweet out when you have fresh baked goods.
  • Automatically alerting users when an item they have looked at is nearly out of stock. ( are masters of this).
  • Mailbox’s waiting list.
  • CSR Racing ‘tweet a photo of your ride’.

I don’t think growth hacking should be the preserve of either marketing or engineering. While many of the above require some engineering to implement, anyone in a company can come up with a good growth hack. There are also increasing numbers of tools that allow non-technical people to implement growth hacks (quick plug for Qubit).

What I don’t consider growth hacking:

  • Marketing approaches which are high cost and need to be thought about on a LTV>CPI basis (e.g. the free credit vouchers Uber and other taxi apps are handing out as fast as they can).
  • Social marketing in and of itself (though it is a great channel for a good growth hack e.g. No Makeup Selfie). Social marketing without a really innovative angle is increasingly becoming a paid channel.
  • Funnel optimization and multivariate testing. This is Marketing (though it should be a top priority for product management and most CEOs).
  • CRM (loyalty schemes, email marketing) — yes, that’s Marketing.
  • Pulling suggested friends from your phone book or social graph (easy to do, but low friction to join often means low friction to leave).
  • SEO: too mature a field, hard to innovate (arguably could include app store SEO as it is still an emerging technique).

Most growth hacks also have a limited lifetime — once it is over-used by companies it will become increasingly less effective

Final word. Be careful about growth hacks that are very effective, but which do not clearly lead in to your core proposition. These tend to lead to a huge spike in users which you then lose almost as fast. The social recruiting sites (Branchout, Mixtent, Identified) were a great example of this from a couple of years back. They achieved exponential growth by encouraging you to invite and rate your friends, but couldn't then transition these users onto the actual job hunt. Combination of not attracting the most relevant users, and not delivering a good enough core product.

p.s. I’d love to get some suggestions as to what would be other interesting topics wtihin growth hacking to get a ‘VC view’ on (broad and shallow…)

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