Holiday, Ryan. Growth Hacker Marketing

 

Holiday, Ryan. Growth Hacker Marketing
growth_hacker_marketing

  1. An Introduction to Growth Hacking
    1. Nearly a year and a half ago, on what seemed like a normal day, I got in my car to leave my house, assuming it would be no different from any other workday.
    2. As I entered the office around ten, I nodded to my assistant and sat down at my big desk and reviewed some papers that required my signature.
    3. My job: director of marketing at American Apparel. I had a half dozen employees working under me in my office.
    4. Excepting the help of a few pieces of technology, like my computer and smartphone, my day had begun and would proceed exactly as it had for every other marketing executive for the last seventy-five years. Buy advertisements, plan events, pitch reporters, design “creatives,” approve promotions, and throw around terms like “brand,” “CPM,” “awareness,” “earned media,” “top of mind,” “added value,” and “share of voice.”
    5. I’m not saying I’m Don Draper or Edward Bernays or anything, but the three of us could probably have swapped offices and routines with only a few adjustments. And I, along with everyone else in the business, found that to be pretty damn cool.
    6. But that seemingly ordinary day was disrupted by an article.
    7. What?
    8. I was a VP of marketing.
    9. But the writer, Andrew Chen, an influential technologist and entrepreneur, didn’t care about any of that.
      1. The new job title of Growth Hacker is integrating itself into Silicon Valey’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer.
      2. The entire marketing team isbeing disrupted.
    10. The new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer.
    11. What the hell is a growth hacker?
    12. But then I added up the combined valuation of the few companies Chen mentioned as case studies—companies that barely existed a few years ago
      1. Dropbox
      2. Zynga
      3. Groupon
      4. Instagram
      5. Pinterest
    13. Now worth billions and billions of dollars.
    14. As Micah Baldwin, founder of Graphicly and a start-up mentor at TechStars and 500 Startups, explains “In the absence of big budgets, start-ups learned how to hack the system to build their companies.”2
    15. We all want to do more with less.
    16. What stunned me most about those companies was that none of them were built with any of the skills that traditional marketers like myself had always considered special and most were built without the resources I’d long considered essential.
    17. Whether you’re currently a marketing executive or a college grad about to enter the field —the first growth hackers have pioneered a new way.
    18. I start and end with my own experiences in this book not because I am anyone special but because I think they illustrate a microcosm of the industry itself.
    19. So in this book, I am going to take you through a new cycle, a much more fluid and iterative process.
    20. But first , let’s make a clean break between the old and new.
    21. What is Growth Hacking?
      1. There’s no business like show business.
      2. It feels good, but it’s so very wrong.
      3. Our first idea is a grand opening, a big launch, a press release, or major media coverage.
      4. Needless to say, this is preposterous.
      5. What’s wrong with it? Well, for starters: most movies fail.
      6. Despite the glamour and the history of movie marketing, even after investing millions— often more than the budget of the movie itself—studios regularly write off major releases as complete washes.
      7. Which is fine, because their system is designed to absorb these losses.
      8. It was only a matter of time before someone smart came along and said, “It doesn’t have to be this way.
      9. That person was the first growth hacker.
    22. A New Way
      1. If that old system is an outgrowth of one hundred years of marketing precedent—designedto fit the needs of twentieth-century corporations—then the new mind-set began at the turn of the millennium.
      2. Flash back to 1996, before Hotmail had launched as the first free web mail service and became one of the first products to “go viral.”
      3. Bhatia’s first instinct was that industrial marketing approach we’ve been talking about.
      4. Then Draper happened accidentally on growth hacking.
      5. “Oh, come on, we don’t want to do that!”
      6. “But can you technically do it? . . . It can persist, right? You can put it on one message, and if he sends an e-mail to somebody else you can put it on that one, too, right?”
      7. “Yeah, yeah,” they replied.
      8. “So put ‘P.S.: I love you. Get your free e-mail at Hotmail’ at the bottom.”3
      9. This little feature changed everything.
      10. You have to understand how revolutionary this was at the time.
      11. But after adopting Draper’s suggestion—which the founders resisted for the first few months because it seemed so simple—growth was exponential.
      12. This is the power of the new approach.
      13. And in case you think Hotmail was some fluke of the tech bubble, let me remind you that a few years later, Google launched Gmail—now the dominant free e-mail service—withessentially the same growth hacking strategies.
      14. Enormous services launched from tiny, but incredibly explosive, ideas.
    23. The Rise of the Growth Hacker
      1. Since Hotmail, many others—particularly in the tech space—have begun to push and break through the limits of marketing.
      2. Almost overnight, this breed has become the new rock stars of the Silicon Valley.
      3. Their job isn’t to “do” marketing as I had always known it; it’s to grow companies really fast—to take something from nothing and make it something enormous within an incredibly tight window.
      4. The term “growth hacker” has many different meanings for different people, but I’ll define it as I have come to understand it:
        1. A growth hacker is someone who has thrown out the playbook of traditional marketing replaced it with only what is testable, trackable and scalable.
      5. A growth hacker is someone who has thrown out the playbook of traditional marketing and replaced it with only what is testable, trackable, and scalable.
      6. But don’t worry, I’m not going to belabor definitions in this book.
      7. Instead of launching products with multimillion-dollar marketing budgets, the growth hackers we will follow in this book began their work at start-ups with little to no resources.
    24. The New Mindset
      1. The New Mind-Set: Deep down, traditional marketers have always considered themselves artists.
      2. What growth hackers do is focus on the “who” and “where” more scientifically, in a more measurable way.
      3. Growth hackers trace their roots back to programmers—and that’s how they see themselves.
      4. Ultimately that’s why this new approach is better suited to the future.
      5. Thankfully, growth hacking isn’t some proprietary technical process shrouded in secrecy. In fact, it has grown and developed in the course of very public conversations.
      6. The good news: it’s as simple as changing your mind-set.
      7. The tools will vary from job to job—it’s the mind-set that will be the killer advantage, and I promise that when you finish reading this book you will fully grasp the growth hacker’s way of thinking.
      8. I want to show you the growth hacker’s way and why it is the future.
      9. And that process starts far earlier than you think.
  2. STEP 1: It Begins with Product Market Fit
    1. You know what the single worst marketing decision you can make is?
    2. Starting with a product nobody wants or nobody needs.
    3. Yet for years, this was a scenario that marketers tolerated and accepted as part of the job.
    4. What attracted me to growth hacking from the very start was that it rejects this obviously flawed approach completely.
    5. Take Airbnb, a start-up now valued at some $2.5 billion.
    6. Going back to the drawing board and hoping to capitalize on popular technology and design conferences, the founders repositioned the service as a networking alternative for attendees when hotels were booked up.
    7. Airbnb had a good idea in 2007.
    8. As a traditional marketer I can think of precisely zero times when we went back to the drawing board after seeing a less-than-stellar response.
    9. It was a wake-up call to me to learn that Airbnb was by no means unique: Instagram started as a location-based social network called Burbn (which had anoptional photo feature).
    10. The service soon retooled to become Instagram as we know it: a mobile app for posting photos with filters.
    11. Both of these companies spent a long time trying new iterations until they had achieved what growth hackers call Product Market Fit (PMF).
    12. Today, it is the marketer’s job as much as anyone else’s to make sure Product Market Fit happens.
    13. Rather than waiting for it to happen magically, marketers need to contribute to this process. Isolating who your customers are, figuring out their needs, designing a product that will blow their minds—these are marketing decisions, not just development and design choices.
    14. The imperative is clear: stop sitting on your hands and start getting them dirty.
    15. No longer content to let the development happen as it happens, we can influence it with input, with rules and guidelines, and with feedback.
    16. How Do You Get PMF?
      1. Because Product Market Fit can be overwhelming as a technical business concept, allow me to explain it by dropping the jargon and presenting an analogy.
      2. Much of the marketing I do is with authors and books.
      3. On the other hand, I have clients who blog extensively before publishing.
      4. The latter achieves PMF; the former never does. One is growth hacking; the other, simply guessing.
      5. One is easy for me to market.
      6. Perhaps you get there in one aha! moment like Instagram, or it may be incremental 1 percent improvements.
      7. In other words: everything is now on the table.How Do You Get PMF?: Because Product Market Fit can be overwhelming as a technical business concept, allow me to explain it by dropping the jargon and presenting an analogy.
      8. Much of the marketing I do is with authors and books.
      9. On the other hand, I have clients who blog extensively before publishing.
      10. The latter achieves PMF; the former never does. One is growth hacking; the other, simply guessing.
      11. One is easy for me to market.
      12. Perhaps you get there in one aha! moment like Instagram, or it may be incremental 1 percent improvements.
      13. In other words: everything is now on the table.
    17. Open up to feedback
      1. Open Up to Feedback: Part of this new approach is having the humility to accept that marketers are not necessarily the most critical members of the team. It’s true.
      2. Take Evernote, a start-up that offers productivity and organization software, which made the companywide decision to delay spending even a penny on marketing for the first several years of its growth.
      3. (That’s not to say Evernote hasn’t come up with some clever tricks to get people to see its products..)
      4. Once we stop thinking of the products we market as static—that our job as marketers is to simply work with what we’ve got instead of working on and improving what we’ve got— the whole game changes.
      5. The race has changed.
      6. The point is: marketing as we know it is a waste of time without PMF.
      7. From Google to Optimizely to KISSmetrics, there are great services that allow you to see what your users are actually doing and responding to on your site.
      8. But the most effective method is simply the Socratic method.
      9. Ask your customers questions, too: What is it that brought you to this product?
      10. Not to say that you must use all the data that comes back, but you should have it.
      11. For the first time we can ask these questions because we intend to do something about it.
      12. No more privately complaining to friends, coworkers, and spouses that we’re stuck with a product nobody wants.
      13. Product Market Fit is not some mythical status that happens accidentally.
      14. But once these companies get PMF, they don’t just wait and hope that success will come along on its own.
  3. STEP 2: Finding Your Growth Hack
    1. With growth hacking, we begin by testing until we can be confident we have a product worth marketing.
    2. For instance, many people don’t know that the late Aaron Swartz, the genius hacker responsible for Reddit, also invented two other services.
    3. As Larissa Macfarquhar wrote in her New Yorker profile of him, “[Aaron] had previously believed that if you came up with a great idea people would use it.
    4. The growth hacker’s job—like we marketers have always done—is to do that pulling.
    5. With product market fit, we don’t need to hit the front page of the New York Times to announce our launch.
    6. In other words, launching does not need to be an enormous campaign we’re expected (too often) to produce out of thin air so much as an initial boost or a shot in the arm.
    7. So, yes, like the old model, growth hacking still requires pulling your customers in.
    8. Take Dropbox.
    9. They didn’t hire some production company to produce an expensive or elaborate video that they jammed down people’s throats through widespread ads.
    10. As a result, this homemade video was enormously popular with these potential users.
    11. This was all Dropbox really needed.
    12. A few years later, the e-mail app Mailbox launched with a similar strategy.
    13. Would it work again for another company? Maybe; or maybe that growth hack is now played out.
    14. Not All People the Right People
      1. The old mind-set says go out and get everyone you conceivably can—like a movie that opens at the number-one spot.
      2. What’s the point? Most of those people never become your customers.
      3. Growth hackers resist this temptation (or, more appropriately, this delusion).
      4. This means that our outward-facing marketing and PR efforts are needed simply to reach out to and capture, at the beginning, a group of highly interested, loyal, and fanatical users. Then we grow with and because of them.
      5. If they are geeks, they are at TechCrunch or Hacker News or Reddit or attending a handful of conferences every year.
      6. If they are fashionistas, they are regularly checking a handful of fashion blogs like Lookbook.nu or Hypebeast.
      7. If they are _______________, like you and your founders are, they are reading and doing the same things you do every day.
      8. Catch their attention and pull them in. It’s as simple as that.
      9. Uber, a car service start-up founded by Travis Kalanick and Garrett Camp, has been giving out free rides during Austin’s SXSW Conference for several years.
      10. To kick off and reach your first group of users, you have many options.
        1. 1. You can reach out the sites you know your potential customers read with a pitch e-mail: “This is who we are, this is what we’re doing and this is why you should write about us.”
        2. 2. You can upload a post to Hacker News, Quora, or Reddit yourself.
        3. 3. You can start writing blog posts about popular topics that get traffic and indirectly pimp your product.
        4. 4. You can use the Kickstarter platform for exposure and bribe your first users with cool prizes (and get some online chatter at the same time).
        5. 5. You can use a service like Help a Reporter Out (www.helpreporter.com) to find reporters who are looking for people to include in stories they are already writing about your space.
        6. 6. You can literally find your potential customers one by one and invite them to your service for free or with some special incentive (that’s how small we’re talking.)
      11. Getting on one or two of these outlets is as simple as sending them a quick e-mail—after all, if your product really is specially designed for these people, they want to feature it.
      12. The point is: do whatever it takes to pull in a small contingent of initial users from your particular space.
      13. Sometimes “stunts” are a great way to do that. It’s often about exploiting systems or platforms that others have not yet fully appreciated.
      14. Patrick Vlaskovits, who w The start-up world is full of companies taking clever hacks to drive their first set of customers into their funnel.
        1. You can create the aura of exclusivity with an invite-only feature (as Mailbox did).
        2. You can create hundreds of fake profiles to make your service look more popular and active that it actually is – nothing draws a crowd like a crowd (as Reddit did in its early days)
        3. You can targete a single service or platform and cater to it exclusively-essentially piggybacking off or even stealing someone else’s growth (as PayPal did with eBay)
        4. You can host cool events and drive your first users through the systmes manually
        5. You can bring on influential advisers and investors for their valuable audience and fame rather than their money
        6. You can try to name a Planned Parenthood clinic after your client or pay D-list celebrities to say offensive things about themselves to promote your book.
      15. All of these types of outreach are done with a very specific mind-set, with a very specific goal.
      16. It doesn’t matter how many people know about you or how they find out about you.
    15. Let’s Get Technical
      1. The movie marketing paradigm says throw an expensive premiere and hope that translates into ticket sales come opening weekend.
      2. The start-up world is full of companies taking clever hacks to drive their first set of customers into their funnel.
      3. Let’s look at Airbnb again.
      4. Andrew Chen wrote in a case study of this tactic.
      5. It’s a different approach.
      6. As Sean Ellis, one of the first growth hackers—he coined the term with PatrickVlaskovits—puts it: “Focusing on customer acquisition over ‘awareness’ takes discipline. . . .
      7. The most insidious part of the traditional marketing model is that “big blowout launch” mythology.
      8. Remember what Aaron Swartz realized.
      9. Your start-up is designed to be a growth engine—and at some point early on that engine has to be kick-started.
  4. STEP 3: Turn 1 into 2 and 2 into 4—Going Viral
    1. You’ve heard it in a million meetings.
    2. Everyone wants it.
    3. It’s stunning how rarely people venture to answer this question, myself included.
    4. Even when it seems accidental, it really isn’t.
    5. Did the founders expect it to go viral and launch their company in front of many new customers?
    6. Only a specific type of product or business or piece of content will go viral—itnot only has to be worth spreading, it has to provoke a desire in people to spread it.
    7. Look, virality at its core is asking someone spend their social capital recommending or linking or posting about you for free.
      It goes without saying why viral spread is critical to the growth hacker approach.
    8. The crucial difference is that a growth hacker understands that this can’t be left to chance; we can’t wait and be pleasantly surprised like Holstee.
    9. One of the simplest and most straightforward examples of this is Groupon and LivingSocial, the daily deal pioneers.
    10. This is drastically different from throwing some “Like this on Facebook” or “Post this on Twitter” buttons on the bottom of a blog post and expecting it to suddenly spread.
    11. Public-ity
      1. Jonah Berger, a social scientist well-known for his studies of virality, explains that publicness is one of the most crucial factors in driving something’s spread.
      2. This is why many start-ups owe their now-massive user bases to thoughtful integration with big platforms.
      3. When the average Facebook user has over 150 friends, it’s incredibly powerful if theycross-post their Twitter posts on Facebook, say, or syndicate their Instagram photos.
      4. Without question the massive growth and spread of Spotify, a music streaming service launched in the United States in 2011, was largely driven by its integration into Facebook.
      5. Now, Spotify had a secret weapon in the fact that Sean Parker was an investor in both Spotify and Facebook and was able to get a sweetheart deal.
      6. Dropbox, for instance, offered its customers a 150 megabyte storage bonus if they linked their Dropbox account to their Facebook or Twitter account.
      7. Think of Hotmail, whose early attempts at growth hacking we looked at earlier. It turned every e-mail its users sent into a pitch to new customers.
      8. Now start-ups are following this lead. Mailbox, an in-box organizer, adds a “Sent from Mailbox” line to the end of its users’ e-mails.
      9. Remember, a growth hacker doesn’t think branding is worthless, just that it’s not worth the premium that traditional marketers pay for it.
    12. Growth Hacking Your Virality
      1. Dropbox’s founders, after pulling in their first set of users with their awesome demo video and social media strategy, had a choice.
      2. It was as simple as placing a little “Get free space button” on the front page of the service.
      3. And remember, the alternative was paying upwards of $400 per person via advertising.
      4. All of which is to say a simple truth that we try to deny too often: If you want to go viral, it must be baked into your product.
      5. This is not easy.
      6. But we don’t simply set up viral features and hope they work.
  5. STEP 4: Close the Loop: Retention and Optimization
    1. If the growth hacking process begins with something I would have previously considered to be outside the marketer’s domain (product development), then I suppose it is only natural that it conclude with another.
    2. The traditional marketer’s job, as I learned in my time in fashion and publishing, is to get the leads—to bring in potential customers.
    3. But does that really make sense anymore?
    4. First off, in a small company, there is no one else.
    5. What’s the point of driving a bunch of new customers through marketing channels if they immediately leak out through a hole in the bottom?
    6. Marketing doesn’t have to be this Sisyphean job of driving people through the door or to a website.
    7. In its early days, Twitter experienced this exact issue.
    8. Because the service was the subject of a lot of buzz online and in the media, new users were signing up for Twitter in droves.
    9. As Elman explained it to me: When I first joined the company, the suggested user list had 20 random people who were default selected to follow..”
    10. This doesn’t seem like marketing at all. How could a feature inside theservice—the Twitter suggested user list—be considered marketing?
    11. Always Be Tweaking
      1. At the end of the day, we are all just trying to grow our businesses.
        Aaron Ginn explained to me that even the best growth hacker cannot “grow a broken product.”16
      2. Sean Beausoleil, the engineering lead at Mailbox, put it more bluntly in an interview with ReadWrite: “Whatever your current state is, it can be better.”17
      3. Perhaps the front page of your site doesn’t convert users as well as it should.
      4. The role of the growth hacker is to ruthlessly optimize incoming traffic for success.
      5. This should come as a major relief—I know it did for me.
      6. Doing this can be incredibly low-tech, as I personally experienced when I signed up for a new service called DogVacay.
      7. My girlfriend and I excitedly signed up one day after reading about DogVacay on a blog and then promptly forgot all about it.
      8. For the same reason, I love the idea of Dropbox rewarding users with 250 megabytes of extra storage if they take a tour of the basics of Dropbox.
      9. In the course of the millions of ad impressions I generated over my traditional marketing career, I never followed up with anyone who converted and I spent only a few seconds thinking about the people who didn’t convert at all.
    12. Scaling Retention and Optimization
      1. Of course, retaining and improving the experience of your incoming customers does not need to involve individually calling each potential customer.
      2. I’ll give you another example. In 2011 or 2012, I was invited to be an early user of Uber in Los Angeles.
      3. Flash forward to a year later, when I was traveling internationally to attend a conference and the event organizers gave all the speakers a $50 Uber gift card.
      4. Back in the United States a few days later and stranded in Brooklyn, my first thought was: “Let’s pull up Uber.”
      5. That is retention and optimization. It is marketing to someone who is a lot more likely to convert than some busy stranger you might otherwise try flashing an online banner ad to.
      6. None of this is outside your grasp—and it’s definitely now part of your job.
      7. According to Bain & Company, a 5 percent increase in customer retention can mean a 30 percent increase in profitability for the company.
        “Retention trumps acquisition.”19: Growth hacking is about maximizing ROI—about expending our energies and efforts where they will be most effective.
      8. And of course, the logic here should sound familiar. It goes way back to before growth hacking.
  6. My Conversion Putting the Lessons Into Practice
    1. My fascination with growth hacking began with a wake-up call.
    2. By late 2012, it was an awakening I was very glad I’d had. Because I found myself in a situation not unlike that of many start-ups.
    3. My job was to help make it a bestseller.
    4. We had to be creative.
    5. It was a far cry from the old model: get reviewed in the New York Times, pay for shelf space at the front of Barnes & Noble or Books-A-Million, and wait for success (that may never come).
    6. But thanks to the new mind-set, I was calm.
    7. From my reading and interviews, I had seen that growth hacking could be powerful.
    8. Here are some of the things we did.
    9. Product Market Fit
      1. Instead of making a big, general book that appealed to no one, Tim took Product Market Fit to the next level—designing each chapter to stand alone on its own merits and made
      2. Even Tim’s editing was data driven.
      3. The result was a book perfectly crafted for its prospective readers, one that we knew would spread and generate reactions because this had been built into the writing itself.
    10. Growth and Attention
      1. Instead of pushing for TV and radio coverage, we worked with bloggers—because blogs are trackable and work fast.
      2. The result was big online media mentions we scheduled to go live the day of release in a well-timed barrage: Lifehacker.
      3. Blogs were just one part.
      4. Of course, a major benefit to promoting this book was that Tim had already built a platform.
    11. Virality
      1. The virality aspect is the part of the launch we’re the most proud of.
      2. With BitTorrent we produced a slick 700 megabyte bundle—more than 250 pages of material, interviews, extras, videos, and photos—and it was totally free and could be downloaded by anyone.
      3. A lot of books get good publicity and then slam these leads into the brick wall of a $20 price point. It’s tough for a book to go viral.
      4. The BitTorrent promo was undoubtedly the most effective part of the launch; by our estimates, it was responsible for selling nearly 250,000 copies of the book.
    12. Optimization and Retention
      1. Naturally it’s a little bit harder to “optimize” a book.
      2. In most launches I’ve been a part of, the mind-set is simple: get as much publicity and attention as you can, and afterward hope or assume it was all a success.
      3. In fact, based on the success of that collaboration, I worked with BitTorrent again with another client, the musician Alex Day.
      4. And we know what worked and what didn’t because we pored over the analytics.
    13. The Future of Marketing
      1. If something as old-school as publishing can be invigorated by the growth hacker approach, what else can? If you can treat a book like a start-up, anything is game.
      2. The rest of us, whether we’re marketing a car or a movie or a small restaurant, have the ability to put these tactics into practice.
      3. Instead, we can grow our businesses by iterating, by tracking success, by doing whatever we can to bring people into our funnel.
      4. You will find, as I did, that the definition of marketing is in desperate need of expansion.
      5. Before he became the most brilliant and famous man in the ad business, David Ogilvy sold ovens door-to-door.
      6. But the rest of us, decades away from a world of traveling salesmen and mail-ordercatalogs, have lost sight of this fundamental reality.
      7. That is what growth hackers have taught us.
      8. Run down the list of the start-ups we’ve talked about in this book, from Hotmail to Airbnb to Groupon to Spotify, and see the startling fact: tactics that no one would have previously described as “marketing” turned out to be the marketing steroids behind their business growth.
      9. More important than any of their specific tactics was the mind-set they all shared.
      10. Their innovative approaches to growth were possible because they came fromstart-ups, businesses typically averse to traditional marketing for two reasons: they don’t have the money and they don’t have the experience.
      11. The thing about marketers—and, well, everyone—is that we’re wrong all the time. We think we make good gut decisions, but we don’t.
      12. We’re no longer going to tolerate being part of the former category.
      13. As I interviewed and read about the dozens of growth hackers whose many insights contributed to this short e-book, I noticed that each one had used an almost entirely different set of tactics than the others.
      14. For all the tactical differences, the strategic goal was the same: to reach people in an effective, scalable, and data-driven way.
      15. Growth hacking really is a mind-set rather than a tool kit. And if you leave this book with one thing, it should be that mind-set.
      16. Once you break out of the shackles of antiquated notions of what is or isn’t marketing, the whole field becomes cheaper, easier, and much more scalable.
      17. It gets exponentially better.