Understand Growth Hacking in 5 Minutes

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Growth Hacking intrigues, Growth Hacking is passionate and disturbing at the same time. Old school marketers are pulling their hair out: the disruptive ideas of Growth Hackers drive them crazy, as does the insolent growth of some start-ups. Sean Ellis coined the term Growth Hacking in the early 2010s. The reality is at least a decade or two older.

Growth Hacking is a set of techniques, or rather a state of mind, a methodology, whose objective is the rapid growth, by all means, of a service or a product. The growth of what? What techniques? Which means? Which business? To see more clearly, we worked on a complete guide dedicated to this phenomenon, to this marketing revolution. This guide is entirely theoretical, and if you are looking for techniques and tools, it's here.

What is Growth Hacking?

This concept resonates louder and louder to the ears without one always knowing what it is. The answer to bring is not straightforward. We can try to define in one sentence Growth Hacking (as we will work to do at the beginning) without touching the concrete reality of Growth Hacking. To determine Growth Hacking quickly, one very often uses a subterfuge, both relevant and insufficient. All Growth Hackers or GH experts will tell you that Growth Hacking is a state of mind, before being a set of techniques, tools, and know-how. This is a handy way to describe Growth Hacking, as we will see, but at the same time, inevitably, it leaves us hungry. "State of mind" is, to say the least, a very vague notion.

We will try to propose a simple definition of Growth Hacking, for starters. Growth Hacking is a set of practices and techniques, often unconventional, used to ensure the rapid growth of a service or product. In this definition, two elements are emphasized:

  • Growth Hacking aims at the fast, exponential growth, if possible, of a product or service. In Growth Hacking, there is Growth.
  • Growth Hacking uses all means to achieve these ends - growth. Unconventional methods sometimes at the limit of legality or "decency." Hence the term "Hacking" contained in "Growth Hacking."

This definition is quite disappointing because it does not explain what growth it is. Nor does it tell what these alternative practices are, these "hacks." We must continue the analysis. We chose four ways, four ways to explain Growth Hacking more precisely. We will begin by recalling the history of Growth Hacking, and then we will try to describe the typical profile of Growth Hacker, before talking about the AARRR matrix and to give some concrete examples of GH.

Growth Hacking Definition: where does it come from?

Growth Hacking, as a concept, was born in the early 2010s in the United States. Specifically: in Silicon Valley. The inventor of the term "Growth Hacking" is Sean Ellis. At the time, Sean Ellis worked at Dropbox, but already had other professional projects behind him. In short, he wanted to leave Dropbox. So Sean Ellis had to look for someone to take over. Problem: He did not know how to name and define his post. His job was to develop the Dropbox user database. The term "marketing" was not appropriate because it was utterly insufficient to describe what he was doing. Finally, he opted for Growth Hacker.

This anecdote can help us better understand what Growth Hacking is. The GH is primarily a start-up business. The GH has been designed by and for start-ups, hence its birthplace, right in the heart of Silicon Valley. Let's specify: technological start-ups. To my knowledge, all Growth Hackers work in this kind of companies and their job is always the same: to increase the number of users quickly.

Example: you are a start-up that offers an entirely innovative e-mail solution. You are sure that people will love, but the question arises: how to make the service known? Growth Hacker is the person who will search (by what means - we still do not do it) to make your service known. Alternatively, concretely: to increase the number of users significantly.

Why technological start-ups? There are many answers to this question. I see at least two: first, start-ups often do not have many resources at the very beginning of their business. They rarely have the means to afford conventional advertising and marketing campaigns. Growth Hacker has to be paid, of course, but the actions it takes usually have a very manageable cost. A Growth Hacker allows a start-up to grow up without getting fat. Then, the second answer that could be made: the operation of a start-up is, as we will see when we talk about the AARRR matrix, almost always based on the model acquisition - monetization. We do not monetize until we have done much work. This is not still true, of course, but overall that's how it works. The goal of a start-up is, first of all, to build a loyal user base large enough to, afterward, start to monetize. Traditional companies, on the contrary, can very well "walk" without having a huge user base.

We now know what growth it is. Now let's take a look at what tools the Growth Hacker uses to get to an end.

Moreover, Growth Hacker in all this: identity card of an atypical profile

It is very relevant to explain Growth Hacking Growth Hacker, that is to say, to reduce activity on a personality. In general, a profession is defined by a set of know-how, practices, and skills. For example, a baker is a person who knows how to make bread and who, to make bread, uses well-identified processes. However, Growth Hacking is tough to adapt to the logic of the business card. Hence the embarrassment of Sean Ellis, who did not know how to define his profession and who was forced to invent a new term: Growth Hacker.

Growth Hacking is not defined by means and tools, but by a goal: to grow quickly, grow the number of users, regardless of the methods used to achieve this end. As Sean Ellis says (definitely, we talk a lot about him), Growth Hacker is "a person whose only goal is growth. Everything this person undertakes will be judged by the impact of their actions on the measurable and evolving growth of the activity, product or service. " Implied barely implicit: you can do anything you want, including entirely illegal things, what matters is that it works.

The first consequence of this: there are no schools specifically designed to train Growth Hackers. Growth Hackers are all self-taught. They learned on the job, still having basic training in marketing or computer science. Because yes, Growth Hacker is far from stupid. It can be compared to a kind of web poacher or genius, according to the appreciation that is made. The list of skills that a Growth Hacker must have is potentially unlimited. Here are a few (list by definition not exhaustive): SEO, web culture, social marketing, social psychology and anthropology (to be able to calculate the expectations of the public and the habits of people), analysis of data, statistics, A / B Testing, emailing, development, etc.

The skills of a Growth Hacker, as we can see, ultimately revolve mainly around (web) marketing and IT. From one Growth Hacker to another, skills can be very different. On the other hand, the common trait of all GHs, in addition to their imperturbable growth goal, is "human" or behavioral. The GH is non-conformist, creative, full of ideas, ready for anything and at the same time able to continually question itself. AGH knows how to learn from mistakes and not stubborn when something does not work.

We will see, through examples, how Growth Hacker uses these skills. If we wanted to pick up a bit of work, we could say that a Growth Hacker is an experimenter. It is a person who will test actions (set up features), and analyze, through a method A / B Testing, the result of these actions. The indicators used to analyze the tests can be very different: bounce rate, time spent by users on the service, user actions on the service. Methods to better examine the results have emerged, including the cohort method. Experienced and an excellent analyst, the GH is the cornerstone of a long process of refinement of the service leading to the acquisition of traffic to the generation of income. Which leads us naturally to the AARRR matrix.

Growth Hacker in the tunnel: the AARRR matrix

Every Growth Hacker works, consciously or unconsciously, but more often consciously, from a schema that can be summarized from the AARRR matrix. Dave McClure, entrepreneur and business angel, first proposed this matrix. The latter describes, more broadly, the functioning of any technological start-up. A better understanding is also better understanding Growth Hacking. AARRR is an acronym for Acquisition - Activation - Retention - Referral - Income. This matrix defines the successive stages on which a growth hacker must pay attention. This is the conversion funnel, no more and no less.

1. Acquisition

The first step in the work of a GH and a start-up is to attract users to a service (via different channels: social networks, SEO, SEA, etc.). in other words: the acquisition of traffic. This is the BA-BA. To succeed in making the acquisition, it is necessary that the value proposition of the proposed service is sufficiently relevant and that the user visualizes it very quickly (hence the importance of landing pages). Example of a value proposition: "rent at the inhabitant for less than a hotel and with more conviviality" (that of Airbnb).

2. Activation

Once users have arrived on the landing page, have seen the value proposition, we must succeed in getting them to join. In other words: turn the user into a user. A typical way to measure the degree of activation: registrations (newsletter, RSS feed or other). To succeed in this step, it is necessary to ensure that the user has a satisfactory first experience of the product or service. He must say to himself "oh yes, not bad, well go I register." For Uber, for example, one way to optimize activation is to show cars that are moving live. Sometimes we talk about "onboarding marketing."

3. Retention

Growth Hacker must ensure that users of the service become active and use it regularly, for example through regular updates, news, the proposal of new features, the organization of events, coupons, loyalty programs, marketing drip, etc. This step is sometimes neglected, but it is an error that leads straight to the syndrome of the pierced basket. It is important to work well before even trying to referral. Retention work is the sine qua nonproduct/market fit. Roughly speaking, we can say that if we reached this stage of the P / M fit, the start-up has every chance to break through. It means that the start-up has been able to create its market or seize a pre-existing demand. People like. It only remains to continue the vein. Retention is perhaps the most crucial step for start-ups, and it is here that good GHs do the hard work.

4. Referral

At this stage, it is necessary to make every effort to ensure that active users of the service become ambassadors of the service to their network. We are here at the heart of Growth Hacking: virality. It is virality that will allow the user base to grow exponentially or by geometric growth. The Growth Hacker can use a variety of actions to increase the referral: sponsorship offers, coupon codes, quizzes, etc. The inventiveness of GH is limitless.

5. Income

This last step consists of turning active users into sales. It is the stage towards which all the work of the GH tends, but which, nevertheless, arrives only at the end. It is the stage of monetization (advertising, subscription ...) during which prospects become real customers.

This matrix explains very well the Growth Hacker philosophy. At first (the ... first four steps!), Growth Hacker does not try to make money at all. Its goal is to increase the number of users of the service. To ensure sustainable growth, the GH pays full attention to the quality of the users, hence the importance of the activation and retention phases. Only when the user base becomes large enough, and the users become sufficiently active can the monetization work (last step) begin. The Growth Hacker is not an ox that goes headlong into the growth goddess, as our first definition of the GH could suggest. He wants qualified and sustainable growth,

Growth Hacking in action: some more or less famous, more or less borderline examples

Here are some more or less well-known examples of Growth Hacking practices. For those new to Growth Hacking, this is probably the best way to get a concrete idea of the thing. These examples show the lineaments of the AARRR matrix.

Growth Hacking Example # 1 - Hotmail

Everyone knows this great e-mail. It is the first electronic mailbox. It was created by two employees who did not want their boss to read their emails. The history of start-ups is sometimes crisp ... The two employees, admiring their work, quickly sought to commercialize their revolutionary solution, but they did not have enough money to invest in marketing. The idea of Timothy Draper, one of the two (ex-) employees, was to add an original signature at the bottom of all the emails: "PS: I love you. Get your free e-mail at Hotmail ». It does not pay for bread, but after six months, Hotmail has exceeded one million users (more than 12 million after a year and a half ...). Note that Apple has recycled this idea by offering the signature "Sent from my iPhone" at the end of each message sent from an iPhone. This action by GH is particularly relevant to the "Referral" stage.

Growth Hacking Example # 2 - Youtube

YouTube, for its part, had the idea to offer its users to post their videos on their sites or blogs ( via the "embed" function). It allowed boosting the stats of the site in no time! Here again, we are at the Referral level.

Growth Hacking Example # 3 - AirBnB

Airbnb, probably one of the most frequently cited examples with Hotmail, had another idea for expanding its user base: diverting traffic from a big site. Airbnb, created in 2008, had a hard time getting off the ground. Its creators then had a genius idea: to post the announcements of Airbnb on a site with a broad audience: Craiglist (an American Leboncoin, is to tell you his audience). Whenever a user posted an ad on Airbnb, the announcement was at the same time, automatically, published on Craiglist. It worked perfectly and propelled Airbnb where they are today. We see with this example the sometimes "borderline" side of Growth Hacking practices (Airbnb has neither more nor less "hacked" Craiglist, it must be said).

Growth Hacking Example # 4 - Spotify

Spotify used the same process as Airbnb while using Facebook to develop its user base. From 2011, the music streaming service has produced an integration device allowing automatic sharing of the music listen to on Facebook. All Facebook contacts of people who used Spotify were able to discover the service.

Growth Hacking Example # 5 - Dropbox

The Dropbox service has also used a Growth Hacking technique. His tip: offer to get free 16 GB of space by inviting people to join Dropbox. Here again is a typical example of Growth Hacking action to play on the referral. We also note that the biggest successes of Growth Hacking are the Referral step. It does not invalidate the idea developed above: before the Referral, we must think about Retention.

Growth Hacking Example # 6 - Twitter

Finally, here is an example of Growth Hacking action related to the "Retention" phase. Twitter noticed that many users registered on the social network but did not use their account after a few days or weeks. Twitter became aware (we see the importance of analytics here) that the majority of inactive accounts belonged to users who had some followers below 20. To improve the retention of its users, Twitter teams have had an excellent idea: propose at the time of registration a list of people to follow. Success has been there, and the proportion of inactive users has fallen sharply.

 


Also published on Medium.

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