Yes, but Traditional Marketing May Be a Better Long-Term Bet for Your Business
If you’re immersed in the world of social media marketing, you’ve almost certainly come across the term “growth hacking.” Probably as all one word, beginning with a hashtag.
How real is growth hacking anyway?
On its face, the phrase seems fairly self-explanatory: “Something recent college graduates put on an otherwise barren résumé.” Which is probably true (along with “social media guru” and “people skills”) but there’s much more to it than that.
Growth hacking does have a specific meaning.
The term was coined in 2010 by the CEO of GrowthHackers, Sean Ellis. He was disappointed that the traditional marketing professionals he was interviewing for his latest venture did not seem to understand how startups worked.
“A traditional marketer has a very broad focus,” he explains. “While their skill set is extremely valuable, it is not as necessary early in a startup’s life…. Early in a startup you need one thing. Growth. Every decision that a growth hacker makes is informed by growth.”
“A startup,” Paul Graham continued in 2012, “is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of ‘exit.’ The only essential thing is growth. Everything else we associate with startups follows from growth.”
For example, Chainsaw Communications was never a startup. Of course we invest in social media—email marketing, white papers, LinkedIn, blogs, Twitter, Instagram, Facebook, even Pinterest, because it benefits our company.
[Editor’s note: Please click, like, and follow one or all of our social media channels! Thanks.]
The key difference between our company and a true startup is that we have created a great stand-alone product, which benefits our clients equally, no matter how many of them there are. Your presentation (speech, slide deck, or other corporate communications) will be excellent, actionable, and memorable even if you’re the only client we’re working with.
A startup, on the other hand, needs growth to survive. Growth is the product, growth is the goal, and growth is the only metric (really, dozens of metrics) that matters.
For example, if you tried Google+, you know that it is, objectively, a superior social media platform to Facebook. The circles alone are genius. The fact that Google search gives your entire digital footprint extra attention makes Google+ even more appealing.
But there’s just one problem.
It’s not a party if nobody shows up.
Facebook may be a bit clumsy, but with more than a billion active users (compared to fewer than ten million on Google+), it’s nonstop entertainment. You may complain about the vaguebooking, baby photos, selfies, and political posts, but without them, you wouldn’t be there.
That might be why Google+ never got off the ground. Rather than focusing their strategy on growth, they launched with an invitation-only model that probably seemed like great traditional marketing. It added an air of elite exclusivity to the social medium, an appealing contrast with more plebian Facebook.
It also threw up an artificial barrier to growth, keeping posts to a minimum from the get-go. We doubt any ascendant social media platform will make that mistake again.
Today, Facebook is worth $300 billion, Twitter $20 billion, Tripadvisor $11 billion, and Yelp $500 million. They are all selling you basically the same thing: access to each other. Access to millions and millions of amazing minds.
Those priceless brain trusts are growing every day, thanks to growth hacking.
OK, but What Is “Growth Hacking?”
Growth hacking is more than just a marketing strategy. An entire company decides to gear itself for growth, and goes from there.
A startup begins by setting goals for growth. Dedicated growth hackers then measure dozens of predetermined different metrics on a regular (often daily) basis using a variety of digital tools. The entire company uses that data to tweak the marketing strategy on dozens of fronts, perhaps even changing product itself, to spur even more growth.
In growth hacking, you can only see the forest properly if you measure every tree, every day.
We don’t have the space in this blog to detail the different metrics, tools, and strategies for growth hacking, but this excellent infographic covers the basics. For a deeper understanding, Udemy has created a 10-hour growth hacking course with more detail.
To oversimplify, let’s say we want our number of Twitter followers to grow by 7% each week. We’ll measure the number of followers, of course, as well as all the metrics tracked by Twitter Analytics, our social media management dashboard, and tertiary data like follower’s interests, nationalities, impressions by time of day, and so forth.
Then, we’ll create a strategy. We’ll plan to post X amount of times per day, using Y types of content, targeting Z numbers of people. If we clock in at 7% growth (or more) week after week, no problem! The company will continue to use the same Twitter strategy, and focus on, say, Instagram or email campaigns.
But, if we track only 2% growth, we’ll change our Twitter strategy.
There are a variety of tools we can use to leverage growth. We could add more industry-targeted hashtags, or include videos on more tweets. We could target key influencers and try to engage them a predetermined number of times each week. We could reschedule our tweets to target users in different time zones.
Each of these “micro-opportunities” could bump up your weekly growth half a percentage point here, a third of a percentage point there. Soon, with enough growth hacking, your company’s Twitter following will be growing a healthy 7% per week, just like you promised the boss. Just like she promised the angel investor.
Or, it won’t. But, even if your original growth strategy fails, the magic of growth hacking can still make your startup a success.
If You Know Where You Grow, You’ll Know Where to Go
Not every startup is successful, of course. When Instagram began, it was a just another social app called Burbn. (Founder Kevin Systrom loved Mafia Wars and Kentucky whiskeys, hence the name.)
Burbn allowed users—along with friends who had downloaded the app—to check in at different locations, make plans with other users, take fun photos, earn points for hanging out, and so forth. It may have been a little too complicated, and certainly couldn’t keep up with rival Foursquare’s head start in user growth.
Not even Don Draper could come up with a brilliant tagline that would get you to use a new social location app, if your friends were already on Foursquare.
It seemed doomed, like so many startups, to failure.
But, after studying the analytics, Burbn brass noticed a bright spot. Users couldn’t get enough of the photo feature—added almost as an afterthought—or its fun filters and retro Kodak Instamatic-style sizing.
They decided to rebrand as a social photo app called Instagram. And the rest, as they say, is history.
Today, a billion dollars and 400 million active users later, Instagram is considered one of the most important social media networks in the world wide web. If their team hadn’t been paying attention to that particular growth metric, it would have never happened.
So, Why Don’t You Think Growth Hacking Is Right For Me?
You may have noticed that some key traditional metrics are missing from the growth hacking strategy. For instance, profitability and customer satisfaction.
A metaphor for the Silicon Valley startup scene.
Growth hacking involves so much data—almost infinite numbers to crunch—that at first glance it seems to have solved a problem plaguing marketing professionals since Sumerian times: calculating ROI.
Growth, however, is not money. If your marketing ROI is calculated in Twitter followers, you’ll need to learn about another metric that goes largely unmentioned in all those articles, infographics, and online courses about growth hacking. Burn.
“Burn is that tricky thing that isn’t discussed much in the Silicon Valley community because access to capital, in good times, seems so easy,” writes Maren Kate Donovan, founder of the successful startup Zirtual, which flamed out suddenly and spectacularly last year. “Burn is the amount of money that goes out the door, over and above what comes in, so if you earn $100 in a month but pay out $150, your burn is $50.”
Burn isn’t even the real problem with growth hacking. When startups start cooking the numbers—lies, damned lies, and statistics—you get bubbles. Instagram and Twitter have long been accused of inflating their “daily active user” numbers by including known bots in the totals. The fiscal transparency issue is considered by many to be “Silicon Valley’s biggest problem.”
The resulting bubbles can take down a single startup, or entire economies.
“I’m not saying there’s a ‘Tech Bubble,’ because that’s an ignorant statement to make,” writes B.J. Mendelson, who is totally saying there’s a tech bubble. “However, among businesses built around advertising and giving things away for free in the hopes they attract venture funding long enough to sustain themselves until Google or Facebook buys them, there is. This also extends to “growth hackers” who can paint you a pretty narrative about how a company grew that leaves out all the actual factors that lead to that company’s growth.”
Too much smoke and too many mirrors make growth hacking a dangerous game, often being played by young, confident, and computer-savvy types surfing on a wave of venture capital.
Of course, some growth-hacking strategies are necessary for your overall marketing plan, no matter what your industry. Restaurants, retailers, and plumbing companies are all looking for a bigger social media presence. So go ahead and hire that fresh-out-of-college social media guru to do some growth hacking for you. There’s nothing wrong with getting more Twitter followers.
But don’t abandon traditional marketing, traditional metrics, and traditional product development. That’s not just playing it safe, it’s playing it sane. Your angel investors will thank you for turning a profit long before big business gets around to buying you out.