Augment established problem-solving methods – using growth hacking as an example

Traditionally, management consultants have supported their clients by relying on a combination of historic internal and external data, academic theories, and decades of functional and industry experience. Definitive strengths of this approach are the ability to 1) initiate problem-solving quickly with existing information, 2) tackle issues that are too complex to limit to a certain set of testable variables and 3) generate relevant hypothesis about possible solutions – often based on deep contextual understanding.

But today’s challenges can’t be addressed with yesterday’s strategic tools alone. Due to the high pace of change and general market uncertainty, traditional methods need to be augmented with an experimentative mindset. Digitalization has made it possible to monitor many things that used to be unmeasurable. Naturally, the rise of the lean startup methodology and its cultural preference to ‘fail/learn fast’ have also helped.

In the marketing and sales domain, ‘growth hacking’ is an excellent example of how traditional approach is enhanced with experimentation.

The term growth hacking was coined in 2010 by Sean Ellis, an entrepreneur and angel investor who led the marketing for five unicorns ($1+ billion startups), including Dropbox. Ellis’s core insight was to take a scientific approach to marketing and lead conversion. Instead of adopting solutions based on gut feelings or recycled old plans, he advocated rigorous testing and tracking. Classic examples of companies that scaled rapidly with growth hacking are Dropbox, Airbnb and LinkedIn:

  • Dropbox used a referral program that gave 250Mb free storage to every person who recommended the service to a friend who then signed up
  • Airbnb redirected people from Craigslist to Airbnb, which extended Airbnb’s access to Craigslist’s user base
  • LinkedIn asked new members to give the networking platform permission to reach out to their friends and colleagues about LinkedIn and its benefits through their email contacts

The more I read about the outsized results Ellis’s methodology had achieved, the more I wanted to deepen my understanding of the topic. After devouring several books and blog posts on growth hacking and discussing the methodology with my colleagues, I signed up to Columbia Road’s growth hacking course. This class further crystallized my understanding of the growth hacking process and the benefits of its hands-on approach.

Looking back on it now, I think most of the ideas I gleaned from my independent study project can be grouped under four headings:

1. Experiment

As I said, speedy experimentation is the core of growth hacking. But this isn’t just a matter of throwing spaghetti against the wall; it’s a systematic, scientific approach that begins with hands-on experiments, testing hypotheses based on measurable data, and then testing new variations of the model against each other in order to further refine the results.

A great growth engine like Dropbox’s referral incentives is based on countless tweaks of the same basic model – you try one approach and fail, try another and succeed, then try variants of the successful approach to see if it can be further improved. This looks in some respects like a continuous improvement program, but it has this difference: even as your company’s growth hackers push forward with iterations of one idea, they will be testing others simultaneously.

2. Try, assess, repeat

To be successful, the would-be growth hacker needs to have a big toolbox of concepts and tools at hand, all quantitative enough that you can monitor their success as they are applied. For example:

  • Distribute paper flyers with specific discount IDs to track their usage.
  • Send mass marketing emails with different content to A/B test the results.
  • Adjust web page content and user experiences to test which options increase the number of visitors and conversion rates.
  • Use advanced search engine optimization analytics to gain more understanding of demand in the online sales channel and the different opportunities available in various social media channels.

However, remember that not to add more tools for the sake of adding tools. It’s almost always better to focus on a few that you think will have the most impact.

3. Hire the right team

Strong growth hacking teams are almost never homogenous. A wide range of roles are represented in ‘growth teams’, including a

  • Marketer/analyst who finds actions to be taken that might increase traffic
  • Designer focused on various methods to convert people
  • CRM/email marketer who understands how existing CRM data could be leveraged
  • Traditional salesperson who brings market intelligence and customer insights to the whole team
  • Developer who can speed up growth hacks
  • Growth Owner who is the unit manager and has overall responsibility for the growth increase

But don’t feel pressured to hire this entire marketing platoon all at once. Instead, start small, and when you see which roles are adding the most value, scale up.

4. Cast a wide net

Customer acquisition grabs the headlines, but growth hacking is about building customer relationships at every stage of the customer journey, from acquisition to sales, usage, and peer referral. It is about delivering the right kind of customer experience, and learning – what menu of features engage customers enough to make them come back, and how to get users to spend more once they are regulars. And most of all, it’s about asking, how can we help our committed customers advocate the product within their own network?

I don’t believe that the growth hacking approach invalidates the traditional strategic toolkit. The most successful approach, it seems to me, will generally be the pursuit of a mix of methodologies that combine traditional tactics with empirical, experiment-led learning. Let the context tell you which set of tools to use. But both large and small companies should make sure they keep this option in their toolkit.