I had the honor of sharing, with Austin Pre-Accelerator DivInc, some thoughts about Growth Hacking. The startup program fostering diversity in tech asked for some insight to the idea of growth hacking and I’ll admit, I struggled with how to make an hour talk about such a thing relevant to startup founders.
Luckily, I find myself in Austin among a few amazing Marketers from very different perspectives; a few came to mind:
- Arturo Coto, Business Therapist driving a strategic and long term framework and plan
- Sloan Foster, Go to Market Hybrid fusing the big picture together with new ideas
- Shawn Collins, Affiliate. Really, that’s the definitive characteristic of the man who founded the Affiliate Marketing Summit
- Noah Kagan, Business Hacker who helped define growth hacking
- Josh Jones-Dilworth, Tech to Market Bridge distinguishing public and media relations
And it was no coincidence, I like to imagine, that DivInc put Jones-Dilworth and I in their pool of mentors such that just hours before my time with the startups, Josh shared a thought with the group sounded exactly like what I’m constantly advising startups.
“You’re pitching yourself every day. You need to know professional marketing.”
Founders are constantly pitching and such a thing can’t be hacked by buzzwords about growth. Investors don’t do buzzwords, begging the question…
Is Growth Hacking Real or Just a Buzzword?
How might startup founders learn from the tenets of growth hacking to best meet the expectations of their most treasured audience? Is growth hacking really just marketing and is that not what investors seek?
The term emerged at the time when digital marketing (online marketers, interactive marketers, web marketers, etc.) reached a point in their careers where it was time to become VPs. Think about the timing of the buzzword growth hacking. The “digital marketer” came into being around 2001. Yes, there were online marketers before then; it was about then that the job became common place as Yahoo! had established enough of an online advertising opportunity that most companies were doing something online.
But, not understanding well what it meant to be advertising online, companies treated it like a distinct channel instead of an evolution of existing channels. That is, rather than email marketing merely being an evolution of direct mail, early companies and executives really thought of the internet as something that had to be managed separately. This is why today we have so many different online marketing titles: both because everyone was trying different names (digital, interactive, online…) and because companies CMOs who could actually do anything online didn’t yet exist so management was treating each channel as a distinct new thing: SEM, Affiliate, Email, etc.
Fast forward about 10 years and those people had tons of experience around 2010 and it’s then when Sean Ellis coined “growth hacking.”
Executive level jobs for former digital marketers were rare as the CEOs had been taught that online was separate. The CMO was the MBA who handled the brand and strategic plan while the online marketers with a decade of experience were merely the Directors of those online channels. Moreover, product management, something long the purview of marketing shifted to the more technical skillset as our economy’s products increasingly became web sites and services; traditional marketers found themselves facing a product (web/mobile) they could no longer manage because they didn’t understand it.
Simply put: people wanted (and deserved) promotions but no one (generally) was willing to put their interactive marketing person in charge of everything. Traditional marketers and MBAs least of all, were willing to move over for these upstarts who were doing things they didn’t understand that were taking their budgets.
So the term emerged. Now, Sean Ellis may tell the story of growth hacking’s origin differently, and he’s not wrong (heck, he coined the term), but think about it, neither am I wrong. That is what happened, historically speaking.
The term refers simply to those that are in marketing and have that analytical and technical skill set that comes from spending 10+ years doing it online. They’re Dilworth’s professional marketers anew.
Growth Hacking for Investors
Martech, Adtech, Conversion Optimization, Marketing Automation – these are all fairly recent terms that are the growth hacker’s domain and I assure you they comprise the things that you are expected to be doing if you hope to secure an investment. These are just words that describe the things that today’s CMO can be expected to know how to do, not because it’s different but because marketing today includes the internet and the Product Management that has historically always been what marketing means anyway.
Thus, as I thought back to that collective of Austin marketers, a common thread struck me that while they all have different approaches to growth, we each embody what enables businesses to excel and for founding teams to meet the expectation of investors. We’re growth hackers and yet what we really are are merely examples of what you must do as the founder of a company.
The first few slides of my talk take you through that history of the internet in more detail; characterizing how this growth hacking, this marketing, is the complement to the innovation of your new business and it’s that which you must do. After the slides, I’ll get into detail about the subject matter of the talk.
Two Basic Functions: Marketing and Innovation
When we think of many of the most successful and well known innovations of our time, we can grasp at what it means to be growth hacking:
- AirBNB – Posted to available homes to Craigslist as that’s where their market previously sought rentals
- Twitter – Invested in onboarding optimization to create a compelling reason to connect with influential Twitterers
- LinkedIn – SEO: Your personal profile was on Google if you used LinkedIn
- YouTube – Share > Embed > Backlink. They perfected embedding.
- Buffer – Floating share bar that sites use to promote their content. By the way, remember my mention of Noah Kagan?
- Hotmail – P.S. Do you want free email?
- Dropbox – Refer a friend to get more storage space
- Facebook – You may not recall but Facebook friends used to appear in a widget on a person’s site
- Quora – R&D and investment in their most active users to perfect the experience for evangelists
- PayPal – Partnered with ebay to divert customers from credit cards to PayPal
The common thread in their success is a tenet of growth hacking and the very thing investors expect of you: The process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business.
But how? What must a startup founder do save becoming a marketer themselves? Focus on three things
1. Love Google Analytics
Know your sources and trends, goals completed on your site (whether you are a web based startup or not), and the value of those things to the business. You can learn about Google Analytics for Startups here.
2. Be Found
Start by stopping thinking Search Engine Optimization is something you can hire out to someone else. YOU must be found online. Your business should be found as expected. Make sure you have a LinkedIn profile, make sure you understand the basics of showing up in Google for everything that matters to your business, and set up a Facebook Page. Yes, really.
3. Study Viral Coefficient
This is a fairly complicated calculation but because of that it’s the only metric that really matters. It’s the average number of invitations sent by existing users, times the conversion rate of the invitation to new user. Basically it shows whether or not users are sharing your business and whether or not those to whom your startup is shared are actually trying it. Read: organic growth.
If you have it, investors write checks. If you don’t, start explaining why you’re fundable. Matrix Partners’ David Skok explains the viral coefficient best here.
Growth Hacking is merely Marketing
That’s what your marketing person can be expected to be able to do without blushing. Those three things are so fundamental to your success that if you are thinking about or doing ANYTHING else you are likely going to fail. As the founder of a startup, only worry about those three things! But mind you, those three things essentially encompass everything. That’s why famed economist Peter Drucker is so noted for recognizing that it’s the marketing that distinguishes every business.
Luckily, you can simplify the way in which you approach those three fundamentals by considering HOW your business wants to approach the market:
The AirBnB or PayPal approach to the market whereby your business creates more valuable for both the customer and the partner with whom you are integrating by making the investment to make the integration. Sounds like development and product management doesn’t it? Whether or not you do this an how is marketing. Knowing that you should and how is what investors expect of you.
The Twitter, Dropbox, and Quora approaches to the market wherein they figured out what was required to turn their one user into ten more. This requires knowing your market, your customer, and your user experience so intimately that you can evolve a product that sells itself.
c. Data Orientation
This is what companies like Buffer and LinkedIn accomplished through their very different approaches to the market. This is, by the way, the approach I favor given my background in search and analytics. Letting the data guide you. Being able to prove and optimize everything.
As you start growth hacking for investors… no, as you start marketing so that your startup is worth investment, appreciate that it doesn’t actually take much.
Establish the team of folks capable of working this way with a mind turned toward the engineering and marketing being one. Create a hypothesis about how your business will grow and put in place the measures so that you can test, analyze, and optimize what you’re doing. That’s marketing. That’s the very least of what investors will expect of you as a startup founder. Most importantly, look to those of us who can help, this isn’t rocket science, it’s growth hacking.