Summary:
The premise of the book is looking at using alternative techqniues for marketing. INstead of marketing “plugging” or “pushing” a terrible produce by using a huge marketing budget, iterate the product to make it a winner. Then use creative techniques to make it a winner.
An Introduction to Growth Hacking
Marketing has always been about: WHO the customers are and WHERE they are.
Growth Hackers focus on the WHO and WHERE more scientifically, in a more measurable way. Traditional marketing is difficult to measure the return on investment (ROI). Growth Hacking makes marketing metric and data-driven. It removes the vagueness.
Products are NOT static – iterate, iterate, iterate.
Step 1: It begins with Product Market Fit
“Make a product people want” – Paul Graham.
Traditional marketing plugs and pushes a product, no matter if it’s bad or good.
We are told “Go to market with a product you have, not the product you want”, which is dreadful advice and will lead to expensive failed marketing campaigns.
Growth Hackers believe in improving their Product Market Fit (PMF) until they’re primed to generate explosive reactions from first users.
Books tend to flop where the author becomes a hermit the year they’re writing it. The author needs to be plugging it the entire time, creating a newsletter or audience to sell to.
Marc Andreeseen, entrepreneur behind Netscape, Ning, Opsware, VC, etc., says “do whatever is required to get to product market fit”. This includes changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising more VC when required. – Do what is required. Put everything on the table and iterate.
“People thinking about things other than making the best product, never make the best product” – Phil Libin, Evernote founder
Marketing should never be prioritised over product development
Step 2: Finding your Growth Hack
“To be successful and grow your business and revenues, you must match the way you market your products with the way your prospects learn about and shop for your products” – Brian Halligan, Hubspot founder.
Unfortunately, buying t-shirts with your brand on them is not going to help at all. It might be fun and feel good to get t-shirts, but use that money someplace else – like improving your product.
For every marketing strategy, often they work once for a company (see Case Studies below). Will they work again? Maybe or maybe not, often a different approach is needed
Not all the people – the RIGHT people
Everywhere is nowhere
Aim for the right places at the right people
Who are they and where are they?
if they are geeks, they’re at TechCrunch or Hacker News
If they’re fashionistas, they’re at LookBook or Hypebeast.
If they are ________, like you and your founders are, they are reading and doing the same things you do every day
if you don’t know where o find the right people, you don’t know your industry well enough to launch a product. Period.
Try this:
- Email a blog in the industry with a pitch:
- This is who we are, this is what we’re doing, this is why you should write about us”
- Upload a post yourself on Hacker News, Quora, reddit, etc.
- Start writing blog posts about popular topics to generate traffic and indirectly pimp your product
- Use Kickstarter
- Try Help a Reporter Out to find reporters looking for news
- Find customers one by one and invite them to your service for free or with some special incentive
Stunts also work:
- Create exclusivity (Mailbox, Dropbox)
- Create hundreds of fake accounts to make the service look popular (reddit)
- Piggy back on one service or platform and cater to it exclusivity (like PayPal did with eBay)
- Launch for a small group and own that market, then move from host to host
- Host cool events and drive users manually to the system (e.g. Myspace, Yelp)
- Dominate the App store (e.g. Instagram)
- Bring on influencers
- Use a charity plug (e..g Amazon and Smile.amazon.com)
Focus on customer acquisition over “awareness”. This takes discipline to do. At scale, brand building and awareness is important, but for year 1 and 2, it’s a waste of money – Patrick Vlaskovits
Step 3: Turn 1 into 2 and 2 into 4 – Going Viral
Understand that you can’t create a YouTube video and expect it to go viral. The video must have a compelling reason for the community to take hold of it and share it. You can’t expect people to become fanatics of your product, you must provide them the incentive and platform for them to do so.
Step 4: Close the loop: Retention and Optimisation
Conversion rate = getting people to your service and getting signups
Churn = get people to your site but they click off relatively quickly
When Twitter started, there was a 20 generic default list of people to follow. The stats showed that there were thousands of new Twitter accounts opening, but not many stuck with the platform. Josh Elman (Growth Hacker) discovered that when users manually selected 5 – 10 accounts to follow or friend, they were much more likely to keep using the platform.
Twitter changed the generic default list from 20 to a list of 10, but gave a lot of choices. Twitter also built a feature that would “recommend” accounts to follow. FaceBook also uses this “suggested friend” technique to keep users engaged.
Forget the advice that when a company lacks growth, they need more investment in sales and marketing. Screw that! Use that budget to re-invent and improve the product instead.
Retention trumps acquisition.
According to Bain & Company, a 5% increase to customer retention results in a 30% increase in profitability.
Stats shows that an existing customer is 60% – 70% likely to buy another product compared with a new customer, where stats show that they’re only 5% – 20% likely to buy.
My Conversion: Putting the lessons into practice
How can you create an audience? Can you create a blog or vlog and internally build a base of potential customers to sell to?
For the 4-hour Chef, Tim Ferriss used his network and newsletter exclusivity to sell because brick-and-mortar companies refused to sell his Amazon published book. Refer to tim.blog
The thing about marketer is that we’re wrong all the time. The old model involving a large marketing budget means mistakes are costly. Growth Hacking makes it cheap to make mistakes. Failures are encouraged and the cost of being wrong is fundamentally lower.
Some ideas to try out:
- Cheaply test your product, iterate and improve, then launch!
- Give away content for free, prove how good you are and then charge for it with a larger product or larger piece of content (e.g. blogs then an ebook then a physical book)
Case Studies
Hotmail
Put “Get your free e-mail at Hotmail” at the bottom of each email their users sent. Similar to “Sent from my iPhone” or “Sent from my blackberry”
Google vs. Hotmail:
Hotmail came first but Google:
- Built a better product
- Made it exclusive (invite only)
- Steadily increased the no. of invites allowed for each existing user (it spread person to person)
Airbnb, 2007
The original Airbnb, Air bedandbreakfast.com, focused on founders putting air mattresses on their floors and offering homemade breakfasts to their guests. The founders wanted more. Their original value proposition was mediocre – they could jave spent all their time and energy trying to force the “let people crash on your floor and feed them breakfast” angle and creating a small business around them.
Instead, they treated their product as something malleable, and changed it and improved it until they found their best iteration, which has exploded worldwide.
Amazon
Ian McAllister, general manager at Amazon, uses a “working backwards from the customer” approach. For new initiatives employees start by making an internal press release, which announces this new potential project as though it was just finished. It’s addressed to the customers – whoever that is – and explains how this new offering solves their problems in an exciting or compelling way. If the press release cannot do this, the initiative is tweaked and tweaked until it can.
This exercise forces the team to focus exactly on what its potential new product is and what’s unique about it, and how it will solve a problem.
Another method Amazon uses (ref. Wener Vogels, CTO) is to:
- Create an FAQ for this new product. You can address, in advance, potential questions and issues that users may face
- Create a user manual with Concepts, How-Tos and References
- Create mock-up use cases or hypothetical case studies
Evernote
Evernote took “marketing” off the table and poured this budget into product development. Now, it is the superior productivity and note-taking app out there – it practically markets itself.
Dropbox
Initial product wasn’t open to public – users had to sign up to a waiting list and wait to be invited to join.
The founders created unique video demos walking future users through the service. They created these videos in-house and adapted them depending on who they were showing (e.g. Digg, reddit, etc.). This way they could use slang, jokes, references, specific terms, etc. that each user group would eat up. Their waiting list exploded and the high volume of interest was all Dropbox needed
eBay
eBay partnered with Gogo, an inflight wifi provider, on Delta and Virgin America flights. eBay made it possible for fliers to access eBay for free, without having to pay for the wifi sewrvice via Gogo. eBay created access to thousands of bored potential customers, trapped on a flight for multiple hours. eBay did all this through someone else’s platform! They hijacked the service for their own benefit.
Because it’s all digital and all through Gogo, eBay could easily track revenues and traffic, making this campaign easy to monitor and assess. eBay could continue, adapt or cancel this strategy based on the revenue made via Gogo.
Uber
Uber has been giving out free rides during Austin’s SXSW conference for years. For a single week, thousands of potential customers get to test out the service. All the attendants are tech obsessed, high-income, young adults. INstead of spending millions on adverts or resources to reach these customers, Uber waits for the 1 week in the year that they’re all collected in the one area.