Is Growth Hacking Right for Your Company?
Join us in a city near you at Entrepreneur’s Accelerate Your Business event series kicking off Feb 23. View cities and dates »
It’s true -- growth hacking won’t work for every company. But if you’ve already got a good product-market fit and a team that’s on board with the idea of prioritizing growth through the adoption of new strategies and tactics, you’re probably wondering how to get started with the strategy that’s on everybody’s lips these days.
Below, you’ll find a simplified introduction to the process of growth hacking as many companies implement it. Pick and choose the pieces that work for your organization -- not every recommendation or step is appropriate for every company or industry.
Know your company inside and out. Good growth hacking begins with an analysis of your company’s strengths and weaknesses. Ideally, you’ve already determined that growth hacking is a good fit for you, but now you’ve got to dig deeper to figure out what specific challenges your organization is facing.
As an example, if you’re the first to bring a product to market that offers your particular solution, one thing your growth hackers (or growth-hacking teams) will need to account for is the time required for consumer education. On the other hand, if you already have a rabid fan base of happy users, this strength gives you the unique leverage needed to consider deploying a referral bonus hack.
Create good experiments. At their core, growth hackers rely on data to do their jobs.
Early in its formation, Dropbox -- a great example of growth hacking -- gave users a free gigabyte of online storage for bringing on new customers. Ultimately, the strategy was successful, as the company is now valued at $10 billion, but that doesn’t mean the approach will work for every growing company.
Imagine what would have happened if the additional costs associated with giving out free storage space would have made Dropbox unprofitable, due to the need to build out its infrastructure? Or what if all those new users would have wound up unhappy with the service -- abandoning Dropbox and telling others about their negative experiences along the way? Worse, imagine that Dropbox wouldn’t have put any tracking or timeline features into place that would have allowed it to identify this failed experiment and change course?
Obviously, Dropbox’s success makes such speculation seem irrelevant. But hopefully, you see the need to base any growth hacking initiatives around good experiments that include all of the following features:
- Measurements of the costs associated to launch a particular growth hack, as well as of the additional revenue generated by the program.
- Analytics tracking to measure the full impact of the hack (keep in mind that growth may occur in unexpected areas).
- Deadlines that allow growth hacking teams to assess the impact of a particular strategy and change course if necessary to avoid wasting resources on a program that’s destined for failure.
Lather, rinse and repeat. As long as you’ve set up your company’s growth-hacking experiments effectively, the key to success in this area lies in your organization’s agility. Running a single test for a year, for example, might give you a wealth of interesting data, but will ultimately limit your ability to make meaningful changes that result in positive growth.
Most companies doing growth hacking will approach these types of experiments in “sprints” -- that is, quick periods of growth punctuated by evaluation periods. Depending on your company’s product or service, these sprints could consist of a few days of experimentation, followed by a day or two of wrap-up. If your sales cycle is longer, you may need a few weeks of experimentation to gather enough data to move forward.
Of course, it’s also worth mentioning how important it is to make sure any growth you’re driving through these sprints is sustainable for your organization. One particular experiment might drive your sign-up rates through the roof, but if you can’t handle the influx of new business (whether due to lagging infrastructure or insufficient support resources), you’re better off forgoing growth hacking entirely for a more measured, scalable approach.
Growth hacking isn’t for everybody, so don’t buy into the notion that hiring a rock star “growth hacker” will solve your company’s lagging expansion once and for all. But if you’re willing to adopt a mindset of growth as an organization and fully commit to each of the steps listed above, you may find that bringing growth hacking to your business gives you the tools and data needed to experience the same explosive growth as companies such as AppSumo, BuzzStream and EchoSign.
For reprints and licensing questions, click here.