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Introduction to Growth Hacking for startups

This article was republished with permission from VC Cafe.

growth hacking

Paul Graham’s Startup Curve – avoid the “through of sorrow”!

Pinterest, Facebook, Zynga, Dropbox, AirBnb… What do they all have in common? They’ve all used growth hacking techniques to grow their user base from zero to millions (and sometimes hundreds of millions). Growth Hacking isn’t viral marketing (although viral marketing is part of it).

Growth Hacking comes to solve a very common problem in consumer startups: getting to the first x thousand/million users quickly once the product has launched and the hype has passed.

The term “Growth Hacking”, invented by Sean Ellis, and made popular by Andrew Chen, a Silicon valley marketer and entrepreneur, is a combination of two disciplines – marketing and coding:

Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph. On top of this, they layer the discipline of direct marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries. If a startup is pre-product/market fit, growth hackers can make sure virality is embedded at the core of a product. After product/market fit, they can help run up the score on what’s already working.

In a recent post, TechCrunch defined the three characteristics of a Growth Hacker as follows:

Growth hackers have a common attitude, internal investigation process, and mentality unique among technologists and marketers. This mindset of data, creativity, and curiosity allows a growth hacker to accomplish the feet of growing a user base into the millions.

First Steps in Growth Hacking for Startups

1) It all starts from the Growth Hacking Funnel.

In the early stages, startups should not just focus on top/bottom line metric like unique users and revenue. They should understand the different states of the user (Acquisition, Activation, Retention, Revenue) and focus on moving users from one state to the next. In a nutshell:

Acquisition: Get people to hear about your product from press, blogs and social channels. Creating searchable content that is original and interesting, increases the chances of users sharing your content and blogs picking it up as interesting stories.

Activation: Users arrive to your homepage (or landing pages) and take an action – do they sign up?, like/+1/follow? Minimal homepages like DropBox and Groupon help drive user Activation.

Retention: Users come back to the site through emails, social media and stay active with product features (“you’ve got a message”). Active users also refer new users through product features and incentives.

A week after users sign up to Quora, they receive an email with interesting updates on the topics they care about and are encouraged to come back. Similarly, social sharing features on Quora enable users (registered or not) to re-share the content and drive new referrals.

Revenue: Active users generate revenue through ads, subscription, lead gen or partnerships. A Growth Hacker isn’t always concerned with revenue in the first stages. The constant strive for user growth means that revenues would be put in the back burner in the first phase, although not all startups can afford this.

A good way to experiment with revenue using growth hacking elements is incentivized sharing – for example, offering users to get discounts, freebies, or premium access in return for a tweet, like, +1 or plain old email sharing.

2) Running experiments – A/B testing

To test new features and their impact on growth, it’s recommended for startups to run experiments. Divide your userbase (big or small) into a test group (which will be exposed to the new feature) and a control group (stays the same). You can do this very easily by running a Google Adwords campaign. For example, spend $100 to drive users to two separate landing pages: your current homepage and a landing page with a user picture and testimonial. Measure where you see the higher number of sign ups. Rinse and repeat.

3) Create good content

For content to be found and shared, it needs to be available (i.e. accessible to search engines, sitemap.xml), fresh (i.e. new and original) and interesting (i.e. “superstar” content such as infographics/video is worth investing in). Growth Hackers create long tail landing pages that combine both editorial content, professionally written and automated content which is slotted to a template (using your own listings/APIs).

When it comes to blog content (or text in general) there are a few recommended formats that are more likely to be shared and contribute to the startup’s growth:

  • Top 10 lists
  • Interviews – I recommend using “Hangouts on Air” on Google+ – a video call that automatically gets posted as a video on YouTube
  • Image slideshows – Some would say it’s annoying and a pageview inflation, but Business Insider seems to have taken this to the next level – learn from them!

4) Get social proof

We use the actions of others to guide us through decisions in our daily lives. That’s why reviews, likes, +1s, give us the reassurance that the action/decision we’re about to make is the right one. Startups should take this principle and translate it into user activation and retention:

  • Include logos – startup was featured in TechCrunch, the Next Web, New York Times etc or main clients/partners include Google, Adobe, Nike etc. While it usually requires permission from the brand, logos instill a sense of security to users.
  • User testimonials – one of the most effective type of social proof, testimonials are a great way to instill confidence in new users. Customer Development Labs recently shared a great experiment on using mTurk to interview 100 customers in 4 hours for less than $200. That has the potential to generate a lot of testimonials, which you can later use for landing pages to increase activation!
  • Customer statistics – publicly sharing the number of followers, live tweets, recently added users etc is a way of maintaining the retention and keeping users engaged. For example, Instagram has a feature that shows the user’s friends who have recently joined Instagram from other networks (i.e. your Facebook friend John Doe just joined Instagram – follow them).

5) Integration with other platforms

Depending on the target demographic for the startup, tapping into existing platforms can have a big impact on the number of registered users. It can be done in the form of apps, API usage or business development partnerships.

Facebook, Twitter, Google+, Android, iOS – these platforms can help you tap into millions of users. Andrew Chen offers three questions to evaluate if the platform is right for your startup:

  • Which offers access to the most relevant users?
  • Which one is the most stable?
  • Which platform is most unlikely to build a competing app and try to replace yours?

Don’t discount smaller platforms that have deep reach. For example, developing on top of SalesForce will give your startup access to small businesses (and large), LinkedIn inApps are currently limited, but you could apply to host your own app on the social network, similar to Tripit and Slideshare.

  • APIs – Integrating with Twitter, Facebook and Google+ is essential for more than just the Oauth login. Your startup could be big in Japan! Tap into language APIs, data from AngelList, Craigslist, Maps, Quantcast, LinkedIn and many others, can enrich content and make it more appealing for users. For example, AirBnb created a popular “post to Craigslist” feature despite there not being an official API!
  • Business Development – find partners who can help you grow by sharing mutual incentives – lead generation, affiliate partnerships or incentivize downloads/sharing partners can be a great way to get new users at a low cost.

Growth Hacking Resources:

Inspired by Tyler Willis from BigThink, below is a starter list of resources on Growth Hacking:

Essentials:

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In summary, while some critics say that “Growth Hacking” is bulls**t”, and we should just call it online marketing, getting from zero to 100,000 users in a short period of time ain’t easy. Startups should learn these principles and practice them, rather than build a product that has all the bells and whistles, and have no one care.

About the author

Ezequiel (Eze) Vidra

Eze Vidra is the Head of Campus, Google’s “open source” building for startups in East London. Campus offers startups work and event space, a strong community and access to mentorship. Before Campus, Eze spearheaded Google’s commerce strategic partnerships in EMEA. In the years before joining Google, Eze had every title before & after “Product Manager” working at: Shopping.com, Gerson Lehrman Group, Ask.com and most recently at AOL Europe, where was the Principal Product Manager for Search. In 2003, Eze co-founded a mobile startup in Israel, developing text-input technology for mobiles.

Eze dedicates his spare time to VC Cafe and Techbikers – a startup charity bike ride. He also mentors startups at various accelerator programs pro-bono in addition to serving on the advisory board of BBC Labs, 88Mph and various early stage startups. Eze holds an MBA from London Business School and a BA in Business and IT Management with distinction from IDC in Israel.


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