Growth Hacker Marketing by Ryan Holiday

1996 was an interesting year. The Washington Post launched their very first website, asking the nation to “.com and get it”. Friends was just in it’s third season, and a stressed Ross desperately tries to get the rest of the gang ready for a black tie event at the museum.

But something else even more interesting was happening on the west coast, in legendary Silicon Valley investor Tim Draper’s office.

Sabeer Bhatia and Jack Smith were sitting across from Draper, explaining their idea for a new product – the first free web mail service. Draper loved the idea, but wondered how they would get people to use the service. Bhatia, thinking like a traditional marketer, suggested that they would use billboards. This wasn’t Draper’s first rodeo, so he knew that buying space on billboards to advertise a free product wasn’t going to fly.

Then, at exactly 4:53 pm (I made that time up to make this story sound more legitimate), out of Draper’s mouth came the words that accidentally birthed growth-hacker marketing:

“Could you put a message at the bottom of everyone’s screen?”

And with that seemingly insignificant question, millions of people received messages over the next year that had the following at the bottom of the screen:

“P.S.: I love you. Get your free Hotmail”

So what the heck is a growth hacker anyways?

Hotmail had created the world’s first “growth hack”. That simple strategy of placing a signature in every single email sent through Hotmail.com generated 8.5 million subscribers for the company by the end of 1997. That in turn netting them a cool $400 million from Bill Gates and the gang at Microsoft.

Just imagine your company going from a dead stop to 8.5 million subscribers in one year. Go ahead, actually imagine it. Now imagine what it would take to get there.

You won’t get there by buying advertising, and you certainly won’t find the answers in a marketing text book at your local university.

As Ryan Holiday tells us in his book Growth Hacker Marketing, growth hackers are helping to build companies that reach a scale that until recently were unimaginable, without any of the skills and resources that traditional marketers have long considered essential.

As you might have gathered from the Hotmail example, a growth hacker doesn’t see marketing as something that you do, but something that gets built into the product itself.

 

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As Aaron Ginn, one of the leaders in today’s growth hacker “movement” says:

“The end goal of every growth hacker is to build a self-perpetuating marketing machine that reaches millions by itself.”

But any explanation of a growth hacker you’ll hear ends up being so far from what you believe a marketer should be doing, that it makes it almost impossible to comprehend by definition.

So, let’s look at some other examples instead.

Dropbox – from a kid on a bus to a $10 billion valuation

Dropbox currently has 300 million users, but started off as an idea that Drew Houston had when he forgot his USB drive for a bus trip between Boston and NYC.

So how do you go from an idea to 300 million users and a $10 billion valuation in less than 7 years?

At first they tried what the traditional marketers of this century reach to first – Google Adwords. Unfortunately, it cost them between $233 and $388 for every paying subscriber they acquired. Realizing that spending that much money for a user that was only generating $9.99/month wasn’t going to work for very long, they turned to a growth marketing hack.

For fourteen long months they struggled to find a way to rapidly grow the company, until they found what Holiday calls their “epiphany.”

The idea was simple. If you signed up for an account at Dropbox, you would get 500 megabytes of free space for every friend you invited and got to sign up.

So how did it work? Pretty well, thank you very much.

That little idea increased their signups by 60 percent, and is responsible for generating 2.8 million direct invites a month.

Oh yeah, and they turned down Steve Jobs’ offer to buy their business.

From a kid on a bus to turning down the CEO of the world’s most successful company.

What a ride.

Spotify rides the Facebook Rocket

Taylor Swift pulled her music from the online streaming service last year, but Daniel Ek and his team at Spotify are doing just fine.

They too were founded in 2008, and are rumoured to be valued at $5.7 billion dollars. They have 60 million active subscribers, 15 million of which pay for the service on a monthly basis. I’m one of them, and am streaming a song on the service as I type this.

The growth hack that Spotify used was to tightly integrate their service with Facebook.

Let’s say you opted in to the Facebook integration from your Spotify app. It would then start sharing what you are listening to right in the Facebook news feed. Then, one of your friends sees what you are listening to and clicks on the song. Then, magically, the Spotify app opens up right on their desktop and now they are starting the loop all over again. They set up the Facebook integration, and start sharing with their friends. And so on, until millions of people are using the service every single day.

But before you go getting all excited about integrating your app with Facebook like Spotify did, remember that they had a secret weapon: Sean Parker. Parker is an investor in Spotify, and also one of the early investors in Facebook, so there’s not a chance in hell that you’ll be getting the same treatment.

That’s great, but how do I do it for my business?

You’ll notice two things about each of the companies that are held up as examples of growth hacker marketing.

First, they had a great product. It doesn’t matter how good you are at growth hacking if you have a terrible product. People have no desire to help you spread the word about a crappy product. On the flip side, the more innovative and unique your product is, the more likely your chances are of riding a huge viral wave to success.

Second, they found some advantage that was completely unique to their situation. You won’t get to where you want to go by copying them. What you need to do is to understand how to use the growth hacker mindset in your unique situation.

But to get your creative juices flowing, here are even more examples of what other companies have done that you might get some inspiration from:

Can you create an aura of exclusivity? The email app Mailbox did by using an invite-only feature while they launched their product.

Can you seed your community or product yourself? Reddit, a popular online community created hundreds of fake profiles to make their service look more popular than it actually was for its initial users (be careful with this one).

Can you find another service to piggyback off of? Paypal, the online payments provider, did this by focussing all of their efforts on becoming the payment provider of choice for all eBay members.

Can you host a cool event to create your first users/customers manually? Yelp and Udemy did this.

Focus on your mindset

Twitter product manager Paul Rosania says that the job of a growth hacker is to “try a lot of ideas, ruthlessly optimizing successes and quickly discarding dead ends.”

Quite simply, this means you should try a bunch of things, and keep working at it until you find something that works.

The only difference between growth hacking and regular marketing, is that when you find something that works you’ll be taking off in a rocketship of growth instead of seeing incremental results.

And that, my friends, sounds like something worth trying.

Onwards and upwards.

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