A deeper understanding of why growth hacking may or may not work well for your overall growth strategy
As a startup, you need to make money as quickly as possible. Typically, the only way to do that is to acquire new customers, fast. However, how can you be sure that you’re making enough of an impact to build an audience quickly?
Simple: growth hacking.
Since this term was coined in 2010 by Sean Ellis, it has become shorthand for new brands looking to grow into monster companies in less time than most people would expect. However, while the details of growth hacking are relatively simple, the execution can be much more tricky.
Nonetheless, growth hacking is an integral part of startups and their success (or failure). By embracing these techniques and a laser focus on growth, many new brands can reach the heights they dream about, all without requiring massive infrastructure or capital to get there.
Today, we’re going to discuss why growth hacking is so important, how it has improved the success of various real-world brands, and how you can utilize it for your business. Are you ready to get to the next level?
Why is Growth Hacking so Vital?
Whenever a new idea hits the mainstream, it tends to become a “buzzword.” When that happens, most people will attempt to implement the concept, but without fully understanding what it is or how it works.
While we won’t get into the subtler points of growth hacking as a tactic (that’s a separate article), we will discuss why it should be integral to your marketing campaign. Here are some of the reason why growth hacking should be one of your priorities when trying to build your brand.
You have a killer idea and a strong business model. However, you also have infrastructure and bills to pay, which means that you need a positive cash flow as soon as possible. With traditional marketing and promotional techniques, many startups will be relatively slow to gain traction. Part of the problem is that they wait to promote their product until it’s finished, which is a mistake.
Instead, when you utilize growth hacking from the beginning (ideally), you start growing and building your audience as soon as possible, even if that means you’re still in development. At first, this may seem counterintuitive, but the fact is that you have to build momentum that will propel your brand to success. Not only that but getting feedback and interest from consumers will assist you in making a better product. Why not adjust your product when it’s still in development, instead of after release?
With growth hacking, you can turn interested into dollars almost immediately. By building buzz and acquiring new people quickly, you can start monetizing your product much faster than you would with traditional methods. When that happens, positive cash flow (and profits) will follow.
Dominance in the Market
When you think of ride-sharing apps, what’s the brand that comes to mind? It’s most likely Uber (or Lyft), which goes to show how dominant the company is in a market that it created. Sure, these days there are many more apps that work the same way, but none of them can touch Uber, and that’s because the company spread so fast and became synonymous with ridesharing as an idea.
As you can imagine, growth hacking benefits your business by helping you become the go-to name in the industry. While not all brands have this potential (depending on your market), when you create demand for something that doesn’t currently exist, it’s much easier to parlay that notoriety into market dominance. When that happens, it’ll be much harder to lose the throne to a competitor.
Is Growth Hacking Right for Your Brand?
Although there are plenty of benefits to growth hacking, the fact is that it won’t work for everyone. Thus, before you pull the trigger on a growth hacking campaign, you should consider these elements that may hold back your success.
Do People Want Your Product or Service?
One of the fundamental aspects of growth hacking is that it builds on the momentum of your brand. People are already interested in what you have to offer, to promoting it and finding new customers is not difficult.
Thus, if you have a product or service that isn’t generating buzz already, growth hacking won’t work for you. Without that momentum, you’ll likely fizzle out after a little while.
How Quickly Can You Scale?
Another thing to consider is scalability. Famous examples of growth hacking like Dropbox and Airbnb were able to scale up quickly because they didn’t have to invest in expensive things like infrastructure. With Dropbox, the company just had to buy more server space for their consumers. With Airbnb, they weren’t building new properties, only getting others to rent out spaces they already owned. In both cases, expansion didn’t have a high price tag.
If your business model requires massive amounts of capital or infrastructure, then growth hacking is probably not the best solution. While you do want to grow and expand, you don’t want to overreach to the point where you’re hurting your bottom line or creating a less desirable user experience.
Proven Benefits of Growth Hacking
Assuming that you have a favorite product offering and you can scale quickly, then growth hacking should propel you to new heights in a remarkably short amount of time. Let’s look at some examples of growth hacking in action.
This example of growth hacking was made possible by a viral video accompanying an incredible product offer. Dollar Shave Club knew that razors were expensive, so they tapped into the market with an offer of $1 blades shipped to the customer. Their video garnered millions of views, and the brand took off from there. In this case, all they had to do was get their pitch in front of a wide audience and let the product take over.
One of the primary resources for growth hacking is word-of-mouth recommendations. When people share a product or service to their social groups, it can expand rapidly. Groupon took advantage of this by requiring users to sign up others to get deep discounts. Thus, people were encouraged to share the service and get rewarded for their efforts. This method is similar to Dropbox’s refer a friend program.
It seems odd today that we used to have to go to a store to rent movies, but that kind of market transformation didn’t happen overnight. First, Netflix created a service that people wanted (DVDs by mail). Next, the company parlayed their success to get into online streaming, knowing that it would be the future of entertainment. The profits from rental subscriptions were used to build the streaming site. Finally, Netflix has started creating content that users want to watch, thereby forming a vertical business model that doesn’t require third-parties to be successful.
How Experimentation Leads to Growth
In each of these examples, the methods that the companies used weren’t laid out for them. Instead, they had to create their growth models that worked. At its core, growth hacking is all about experimentation and adaptation. If something is working, focus on that and get rid of anything that isn’t.
Let’s look at Airbnb’s use of Craigslist in the early days of the company. The developers had to figure out a way of being able to tap into the vast user network of Craigslist to promote their brand. The hack didn’t exist, and once they exploited it, they couldn’t use it again.
This example shows two things: first, the answer to your growth hacking needs may require you to build a brand-new strategy. Second, once you develop something, it probably won’t last, meaning that you’ll have to come up with a new method.
Overall, when you experiment, you can find creative ways of growing your business, as well as develop better services and experiences for your customers. The chances are that your product isn’t perfect right out of the gate, so being adaptive and responsive to your user’s needs will help you create something better and more enticing. From there, growth is inevitable.
As you can see, growth hacking is a fickle mistress. Just because it worked for one company doesn’t necessarily mean that it will work for you. If you want to take advantage of growth hacking and become the next success story, you have to:
Have a product that people want
- Be able to scale properly
- Create and focus on new techniques whenever possible
- Retain your customers for the long-term
Overall, if you can achieve these things, then nothing will stop you from reaching the success you deserve.
click here and learn more about the 10x growth narrative that will change the growth of your business.