Today I want to share with you the 10 points that seem to be most relevant in describing how a growth hacker thinks, acts and behaves on a daily basis.
I remember my first exposure to the definition of growth hacking. And especially that of Wikipedia. At that time I was struggling to get my first startup to take off. I discovered the difficult challenge of reducing the friction and how retention, commitment, referral and success were intertwined.
Acquiring the minimum traction needed to efficiently iterate around the product, was one of the things that pushed me to take this sport very seriously. Without a sufficient number of early adopters, I understood very well that it would be extremely difficult to collect enough data to understand where the value would be in the product. So I had to study in detail all these disruptive means to target, interact and redirect a rather interesting number of leads to my platform. Quality users with a more affordable acquisition cost (most of us do not have the money to compete in paid advertising).
Of all the articles I’ve read, the interviews I have attended and the studies I have conducted in parallel, I have noticed quite quickly that there was nothing more important than growing your startup. All these little hacks that have gradually taken place behind the curtain at Airbnb to Dropbox, have been important factors in the development of these giants. All these inspiring stories formed the foundation of the many experiences I have been able to achieve in recent years. Today I want to share with you the 10 points that seem to be most relevant in describing how a growth hacker thinks, acts and behaves on a daily basis.
#1. Growth hacking is a mindset.
One of the most fascinating methods to assess someone’s imagination is to give him a paper clip. Once the paper clip is in hand, ask him to find as quickly as possible 10 uses which the paper clip could solve a problem (other than to fasten sheets of paper together: take a look at this article for an overview). What is interesting in this game is that hackers are formidable opponents. They have an ingenious ability to imagine and invent new applications by exploiting the opportunities / vulnerabilities of a system. Remember that this mindset is shared by all growth hackers. What is important to understand is that growth hackers perceive the world through a growth lens. They train daily to test how to use a function in a disruptive manner and hacking through experiments to generate traction.
Finally, growth hacking is like legos. Growth hackers have extensive knowledge of the tools, networks and psychological techniques to attract attention and then click. All these are cubes. Then, through their imagination, they build experiences that they successively test in order to get growth. The best growth hackers have a very broad view of each of the channels in which they can acquire traffic. However, their goal is to understand very quickly, those which will be most fruitful to concentrate on it in depth, until the saturation of the latter.
#2. All growth hackers understand the difference between traction and growth.
There is a fundamental difference between traction and growth. In the first weeks / months of your startup, you are not looking to achieve growth but traction. Your performance is concentrated on optimizing features by providing a continuous flow and consistent users. It is this traction that allows you to quickly iterate and understand where the value is. It is this traction that allows you to collect the raw data essential to understand if your value proposition is sufficient/understood and whether your product is essential to a well-defined target. The goal then is to determine the variables that make up your growth equation: the different levers that must be optimized include factors such as activation, retention, referral or the lifetime value.
One thing to understand is that once you have reached what is called a product/market fit, your strategy changes. The goal is to find a way to play in a scalable acquisition channel (ie, you aren’t looking for traction hacks but you must grow as fast as possible to create a monopoly). What you want is to find a way to achieve a lower cost per acquisition for your LTV (lifetime value) to improve and scale your profits (how to turn one euro into two). This may involve a thorough mastery of your target and through effective management of Adwords, Facebook Ads or from a sales force. This may involve a gradual organic growth via search engines… There are many other examples. Understand that your goal is to scale, and for that you will need to play in a scalable channel.
“Traction seems to be a learning phase that consists of understanding the market and optimizing its product. So that growth does not kill you but enables you.”
#3. A growth hacker thinks outside the box but understands that most growth hacks have a temporary/short lifecycle.
The vast majority of growth hacks, especially those who take advantage of weaknesses/opportunities in external networks cannot scale on the long run. Being destined to die one day or another, it is important that you keep in mind that you cannot base a sustainable growth strategy through them. Do not base the entire future of your startup on it. They are intended to quickly provide you with your first users but once your product’s value has been determined, you need to quickly capitalize on sustainable processes (through referral for instance).
It is also interesting to note that at the first stage of your startup, you have nothing to lose. Exploiting a flaw in a system for traction is something you can afford in most cases. This is only my opinion but I would recommend it. Dare to exploit these little traction hacks because when well targeted, they can provide a strategic advantage to your execution.
#4. A growth hacker does not underestimate the paid acquisition channels and perceives them as a business model competition.
I think there still persists a great misunderstanding on the acquisition through paying channels. Some think that growth hacking is a discipline of acquiring users without putting any money on the table. Unfortunately, they are wrong. Obviously, you do not have HBO’s budget for creating multi-million dollar campaigns but that does not mean you should ignore Facebook Ads or Adwords. At the end of the day, remember that there are only two things that matter: making a return on your investment (that is to say, find a way to turn $ 1 into $ 2) or learn something important about your product/market (finding where the value is or reducing the friction).
Non-spending strategies for your startup may be irrelevant if you adopt them without well-defined reasons.
“Advertising is by nature a business model competition. It is you and your competitors who are trying to figure out who can afford to pay the more to acquire a certain group of users.”
This point is very important to understand. Remember that the paid acquisition channels represent a business model competition. Understand that at this particular time, you and your competitors are trying to determine who can afford the more to earn the attention of the user (and through realtime bidding). And that cost per acquisition depends entirely on your CLV and in other words, the efficiency of your business model (otherwise you will lose money, but this can sometimes be a short-term strategy especially when it comes to understanding where the value is). Therefore, a better competitor with a CLV above yours will have a decisive advantage when it comes to focusing on and paying for a similar audience.
#5. Growth hackers understand that the key to success lies in both retention and engagement.
Never forget, startups are built for the long term. If your wish is to get an exponential curve, then you’d better have attractive retention graphics. The big mistake that many entrepreneurs make is that they still are focusing the majority of their time on acquisition. But you need to know is that your bucket (your product) is often drilled and that’s normal: users arrive, test the product and then leave permanently. In this situation, it is clearly useless to continue to develop diverse and varied strategies if you do not take the time to understand what’s wrong. Improve your retention, measure the commitment then attack the acquisition more intensively. It needs to be executed in this order.
“I like to think that the acquisition represents the level of excitement for a product whereas retention rather describes the love that your users feel for what you do.”
#6. A growth hacker knows there are two basic ways to get growth.
If there’s one thing that makes the difference, it’s growth. And if we take the time to analyze in detail how some startups have become giants within a few years, we notice very quickly that they capitalized on two distinct patterns.
The first scheme is to achieve growth on the back of someone. This is to successfully grow through a current user base on an external network. This is notably what Zynga and many others did to take advantage of Facebook’s growth. From a more imaginative perspective, Airbnb has also benefited from this strategy from cross-posting ads on Craigslist. Or Google with its white label partnership with Yahoo (I think I was five years old at the time). These experiments that seek to exploit the current users on these OPNS (other people networks) can be extremely beneficial in terms of acquisition. There are several examples: Paypal with eBay, YouTube and its player with Myspace… Note that this can sometimes be a scalable and repeatable strategy (Paypal with eBay) but this is not always the case (like Airbnb and Craigslist). Nevertheless, a growth hacker has this question ingrained in his mind: how can I redirect the current users of a third party site to my application in order to gain traction?
The second scheme is to grow through your existing user base, especially with a good retention management and by making maximum use of referrals. In this situation, what you want to do is to encourage your users to communicate about your product. Your hacks are designed to encourage sharing (whether on social networks or elsewhere), word-of-mouth etc. Some can develop affiliate programs (Amazon or long gone Megaupload are illustrious examples). Others, referral systems (Dropbox and its gigas offers, Uber, Airbnb…). It can also be very creative playing on incentive by allowing access to certain features in exchange for sharing (Mixpanel and its badge).
Based on this model, I encourage you to read about the strategy of Zynga: Grind, Spam or Pay.
#7. A growth hacker uses emotion and psychology to achieve his objectives.
When Groupon released a short video on their unsubscribe page threatening to punish Derrick if you confirm your action, it was a clever way to turn a painful situation into an amusing experience (while reducing the rate of unsubscription). The emotion that you can reach to win-over your users is something that should be at the heart of your strategies. It is a powerful lever to encourage them to make a decision: play on humor (LOL), create the surprise (WTF), induce guilt, longing or urgency. Take time to watch almost any viral thing, you will find that emotion and virality are closely related. Marketing is basically the study of human beings and they act under the influence of emotion.
Create a closeness with your users and work on your storytelling to better convince them. We live in an attention economy and it is extremely difficult to get noticed. If they can identify with the codes and culture of your product, it will be much easier to convert them into customers and keep them long term.
#8. A growth hacker seeks to inform and to be fully understood by its users.
One of the most common mistakes is to assume that your users understand what you are doing and that they are therefore ready to buy what you sell. And for this reason, one of the most important qualities in a growth hacker is empathy. You must cultivate this skill by always getting closer to your visitors. It is this ability to defend/sell the value that your product delivers that allows you to grow effectively. And for this there is only one clear path: talking with your users on a daily basis.
Education is a critical issue in a startup and that might be one of the few things that can determine your destiny. There is a deep gulf that will widen between the two similar projects in the medium and long term of a contractor that manages to be extremely clear and concise on his value proposition and one that is not clear enough.
It is also important to ask your users for information here and there (especially after some type of action has been performed). A very good technique applied on Airbnb, Facebook or Linkedin. When you have just had your first experience renting the apartment from a third person, Airbnb take this particular time to get you to list your home online as well (and start making money). It is sometimes better to ask just little things to convert the user and wait for the right time to re-engage or up-sell.
#9. It is always easier to build on a strength than on a weakness.
During Linkedin’s first few years, one of the main problems was commitment. Besides the huge database that users gradually filled few of them regularly returned to the platform. Concerned with that, Reid Hoffman (one of the founders) brought together a small group of employees to address the subject. And among them was Elliot Shmukler. Returning home for the weekend, Elliot devoted the next 48 hours to studying various numbers and graphs to understand the current situation of the company (from a growth point of view). The goal was of course to have sufficient background to develop strategies for improvements concerning the activation (so that people register and fill their profiles) and retention (what makes people come back on the product).
After many experiments, one of the major discoveries that Elliot made was that it is always easier to build on a strength than it is to improve a weakness. Indeed, it is very difficult to change someone’s behavior and even more difficult to convince him to do something for the first time (and even worse when he does not necessarily have the desire). However, persuading a user to do something for the second or third time is much simpler. Remember that it is always easier to ask to make an active user do a little more than it is to convince an inactive user to do anything.
#10. A growth hacker spends valuable time capturing events and analyzing the data.
If you cannot track down the events that occur in your product, it will be particularly difficult to grow. You need to understand why people sign up, use your solution, and then come back … Understand that a growth hacker devotes a large part of his agenda to capturing and analyzing the metrics that matter (take a look at Mixpanel, Kissmetrics, Google Analytics, Hotjar, Flurry, Heap… ).
It is this data that will allow you to build and guide your strategic decisions. It is this data that will enable you to assess the impact of your optimizations. Because what you need to remember is that it will never tell you what you need to do (its up to you to be imaginative about it) but you will understand if there is a problem somewhere or if you are on the right path.
“Growth hackers are highly quantitative individuals, analyzing and juggling figures/ratios on a daily basis in order to optimize key performance indicators.”