The Definitive Growth Hacking Primer

Growth hacking has become the buzzword for budding startups. However, there are people who've heard about it a million times but still don't have all too clear an idea about what it is. But, believe it or not, it is the reason we see new startups every year with ridiculously impossible growth rates. Facebook and Uber are prime examples. Let us take a look at what the term means and how one can go about implementing it. 

Sean Ellis coined the term growth hacking in the year 2010 when he was trying to coin a phrase for a new job description. He was responsible for helping a lot of blooming startups, like Dropbox; achieve unprecedented growth as a consultant. But whenever he left a new startup to look for other ventures, he found himself running into a wall. Most of the job requirements were for marketers who concern themselves primarily with expenses, budgets and conversions. But a growth hacker is interested in using inexpensive, analytical, innovative and creative ways to grow their company's base exponentially. 


The fundamental requirement for growth hacking is to have a scalable product. Consider Dropbox for instance. They offer cloud storage on the internet. Every time they run out of space, they can buy new servers to provide space. Or Uber – with over 200 million cabs on the road in the USA alone, the app has a high potential for scalability. Traditional products, on the other hand, are not scalable. If you run out of shampoo, you need to go get a new one. So, what are the steps you need to take to ensure that you are doing this the right way? Let's take a look: 

  1. Make sure that the product is something people want – On the surface, this one sounds obvious. Not long ago, companies could get away with mediocre products if they just marketed them right. Doing that today would be considerably harder as word about the product receives around in less than a day. If your product is not good, everyone will know about it in a week. How do you work around this? Feedback. You need to do rigorous user testing and get as much feedback from your potential users as you can.

  2. Steps you need to take enroute to ensure success – Before you get down to product development, ask the right questions. It isn't enough to have a great idea. You need to know what your customers are up to, understand their behaviour and pay closer attention to what they are clicking on. You can't tinker away in your workshop like Doc from back to the future and then come out scruffy hair and a product that you are not even sure people would want. Rapid testing and instant feedback are critical if you're going to get it right. Instagram is an excellent example. The founders of the company initially dabbled with a social networking app for whiskey connoisseurs. They realised that the photo sharing feature was the most used mechanism of the app. Then they shifted their attention to photography apps, only to realise that the market was super-saturated with them. They adopted the best parts of all the existing apps, combined it with their way of sharing and presto change-o, and pulled a game changer out of the hat. Once you get there, all you need to do is the time it right. For instance, Instagram was launched on the same day as the iPhone 4. This boosted their initial sign-ups, and they had a million users in just two months. Another way to ensure that you have a great product is to validate the idea. The best way to do it is to ask your customers to pay for it beforehand. If you’re interested in developing an app that shows the best breweries in town, and you know that it is going to take you at least a couple of thousand dollars to build, getting $10 from 200 people is a surefire way of ensuring that people want that product. AirBnB is the go-to example for this strategy. The founders struggled to make rent. So, they decide to rent out the three mattresses in their apartment to make some money. When all three mattresses got booked, they thought that this would be an interesting idea to explore. The rest is history. If you don't have any ideas, you can start by putting out free content around your target niche. This is a great way to get a pulse on people's likes and dislikes, their needs and wants. You also get a chance to collect email addresses and build an eager audience that cannot wait till you launch your product. All you have to do is give away an eBook, develop a quiz or come up with a bunch of cool videos. Give people access to your best content, get their email addresses and voila – you are well on your way to building an audience.

  3. Do not try to target everybody – Coming back to AirBnB; their target customers were people who travelled. If you want your product to reach the maximum number of people, it must successfully pass through the early adopters and the innovators. These are small communities that have to be aggressively and explicitly targeted. If your product cannot captivate the first 20% of the market, it'll die in the production line. If you try to target everyone, then there is no way you will get through to the first 20 % since you wouldn't know how to convince them to buy. Target the minority that would get the most out of what you have to offer. Create a customer persona and ask yourself “Who would benefit the most from this product?” Make sure that the profile is that of a real person. When you start out, cater to the needs of that person. Unlike traditional products, modern products get by on what happens post-launch. For instance, Dropbox launched their product at an event where tech-savvy guys gathered every year and made their cloud storage offering an exclusive “invite only” service.

  4. Go viral – Once you have successfully pulled off the above three steps, it is time for you to whip out the big guns. But before we proceed, understand that going viral does not mean targeting everyone. It just says that you try to tap into a more significant system with a broader user base and leverage the reach and user base of fellow products to achieve maximum market penetration. The target is still the ideal customer but on a much bigger platform. They introduced a feature where a user gets more free space by inviting his/her friends. This is an excellent strategy as the product gets better for you if you can get more people to sign up for it. Groupon did something similar when they offered a $10 credit for a referral. Offering incentives is the best way to make your product market itself. Apple did something similar when they introduced their earphones. Earphones were traditionally black. By making theirs completely white, they made sure that their customers were walking advertisements for their product. Integrating your product or service with another is a great way to expand your user base. For instance, PayPal struggled to get a hold of the market initially. But once they made a deal with eBay, the floodgates opened.

  5. Keep improving the product – Even if you have millions of users, it can take many years before your startup becomes profitable. This is either because the product is inexpensive, or because they wait a long time before they start charging customers. Twitter faced a peculiar problem early on. They got a lot of users quickly, but none of them used the service. The reason – the perceived product value falls and rises with the process of onboarding. Once users signed up for Twitter, they were left in the dark. A simple tweak changed this completely. What was it? Twitter started prompting its users to follow ten people. Once users began spending a few minutes finding celebrities or friends on Twitter and started to follow them, they were invested. Once you start following someone, it is only natural that you want to check up to see what is new. Once you have made it big, finding ways to improve the user experience should be your primary goal. That is the reason why companies like Facebook and Apple spend countless hours discussing the right colours, fonts and button sizes.

It took eight years for Facebook to reach an evaluation of $50 billion. That kind of growth was never seen before. And then came Uber that managed to achieve that in 5 years. If you are reading this and thinking “I hear you, but growth hacks do not apply to all industries”, then you couldn't be more wrong. Growth hacking is more of a mindset than a strategy. We hope that this guide serves as a good starting point.