What Every Entrepreneur Should Know About Growth Hacking

Over the past few years, startups and scale-ups have been employing growth hacking to skyrocket growth. Here’s what entrepreneurs should know.


Photo: Oren Greenberg, founder of Kurve | Source: Courtesy Photo
Photo: Oren Greenberg, founder of Kurve | Source: Courtesy Photo

Instant communication, open access to knowledge, low operating costs, and an appetite for on-demand digital services. This is the modern business environment, and it is the perfect breeding ground for entrepreneurs.

Over the last decade, starting a business has become easier than ever, but this agility has also created saturated markets. Entrepreneurship is more accessible, which means it’s harder than ever to get heard.

Nowadays, the market changes quickly and weeds out the laggards. New solutions must be delivered extra swiftly with a proven product-market-fit. If we look back to the 19th century, Graham Alexander Bell and Elisha Gray submitted the patent for the telephone on the same day. You needed to be quick off the mark back in those days, and this has become even more important 150 years later.

Over the past few years, startups and scale-ups have been employing growth hacking (an approach designed to skyrocket growth). But what is growth hacking, and how does it differ from conventional marketing approaches? Here’s what entrepreneurs should know.

 

An overview of growth hacking

Growth hacking is the practice of rapidly growing a business–as efficiently as possible–by adopting experimental marketing strategies.

A growth hacker possesses multiple skills, with a broad knowledge of data, CRO, PR, paid media, UX, content, psychology, and social. Growth hackers target fast and scalable acquisition and solid retention. They meet goals by spotting niche problems and crafting innovative solutions–often (but not always) using technology, tools, and automation. They build hypotheses using qualitative research and quantitative data, and iteratively test their tactics.

“Growth hacking is the practice of rapidly growing a business–as efficiently as possible–by adopting experimental marketing strategies.”

Growth hacking and digital marketing are two sides of the same coin. Digital marketing, traditionally, is focused mainly on acquisition and brand awareness. Growth hacking (i.e., growth marketing) is about the complete funnel. It is more data-driven, with a tighter tie-in among team members across engineering, product, and business intelligence (BI). Growth hacking is primarily a methodology and mindset.

Furthermore, they tend to have a different intensity. Whilst growth hacking is focused on quick gains, digital marketing tends to encompass other “softer” and slower practices, which often lean on longer-term branding and customer relationships. Growth hacking is usually most suited to later stage startups with enough marketing resources. It isn’t always the answer, and shouldn’t be blindly employed.

 

Opportunities associated with growth hacking

With growth hacking, you can use a clear methodology and structure rather than fishing in the dark. In short, the main opportunity is to outpace the competition by growing faster and snatching market share at a speed they can’t contend with. When applied correctly within the right organization, growth hacking can scale that business with incredible velocity.

Growth hacking for entrepreneurs
© mavoimages, YFS Magazine

A sole focus on growing through the most effective channels spurs early-stage businesses to improve their use of data, in order to assess the performance of marketing activities and improve ROI. Deep analysis, accurate tracking, and full attribution should always be put in place. Robust technology is at the heart of the growth hacking approach.

Growth hacking demands innovation and an agile mindset. Growth hackers are obsessed with iterative improvements that move the needle. Continuous optimization is needed, and these experts often adapt to limited budgets–especially when working with bootstrapped startups.

 

Challenges and cautionary tales

The experimental nature of growth hacking can provide improved ROI, but the business’s culture and mindset must be geared towards an iterative testing methodology.

It’s also worth noting that the term growth hacker can evoke negative connotations. For this reason, many specialists have redefined themselves as growth marketers in order to reinforce the legitimacy of their approach. Here are some common challenges in the growth hacking world:

Technical challenges

A detailed understanding of martech (i.e., marketing technology) is important for growth hackers as well as knowing how technical features can impact outcomes it’s critical to consider integrations. You may need CRM, email automation, data enrichment, and more. These systems should talk to each other. This is where the technical expertise of a growth hacker comes into play.

Resource challenges

Growth hacking requires a combination of hands-on execution and strategic oversight. This can put pressure on the team to deliver–especially in a fast-paced startup environment. There are endless tests to run, but somehow you must prioritize which will make the most impact. Part of the approach is to double-down on the most effective channels and pivot when these are maximized. A growth hacker must be comfortable with switching up the focus when needed.

Growth hacking must be carried out with creativity and tenacity. Learning, goal-setting, and motivations are all crucial components for a successful campaign. It is also a challenge to get different departments to work collaboratively (e.g., data, product, and engineering), especially when priorities and goals are disparate across the organization.

Inadequate implementation

It’s easy to get caught up in more, more, more. When the pressure to grow is high, you need to be active. But an obsession with output can cause the quality of outcomes to suffer – resulting in negative long-term consequences. Whilst growth hackers must think “outside the box,” they should not cut dangerous corners. I’ve seen brands get it wrong first-hand, and other disasters have been well-documented.

As Sarah Perez highlights in TechCrunch, the mobile application Circle reached the top charts in the Google Play Store, following a significant number of five-star reviews from countries such as Niger, Kenya, and Mongolia. This sparked widespread accusations of the company buying reviews to boost their image. The application’s quality failed to live up to expectations, and other referral-led growth hacking experiments irritated users even more.

Another example listed in the same article is Glide’s misuse of direct messaging. Referral incentives are a solid technique for organic growth, but this time it went wrong. The app sent out unwarranted invites to all available contact points. These messages lacked tact and attempted to trick users into referring friends with click-bait subject lines. This is a prime example of automation gone bad. A lack of empathy and understanding of their user experience resulted in spam accusations, bad press, and distrust.

 

A final word on growth hacking

Growth hacking is an approach for startups and scale-ups to assert themselves in a competitive and cut-through market. Established businesses might consider growth hacking to take their success to the next level, or they might employ these techniques to a specific subsection of their product/service range.

Whatever the motivation, growth hackers must respect the power of the tools at their disposal. Growth hacking operates at a fast pace, using technology and automation to test data-led hypotheses. This experimental approach isn’t for everyone. Indeed, many businesses don’t need such an intense set of tactics to achieve growth. As an entrepreneur, you decide whether growth hacking is right for you.

 

Oren Greenberg is the founder of the Kurve consultancy in London. He helps startups and corporate innovation projects scale using digital channels. He has written for leading marketing blogs and has been featured in the international press.

 

© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.

   

In this article