Nearly a year and a half ago, on what seemed like a normal day, I got in my car to leave my house, assuming it would be no different from any other workday. I had read the morning news, dealt with a few important employee issues over the phone, and confirmed lunch and drinks meetings for later in the day. I headed to the athletic club—a swanky, century-old private gym favored by downtown executives —and swam and ran and then sat in the steam room to think.
As I entered the office around ten, I nodded to my assistant and sat down at my big desk and reviewed some papers that required my signature. There were ad designs to approve, invoices to process, proposals to review. A new product was launching and I had a press release to write. A stack of magazines had arrived—I handed them to an employee to catalog and organize for the press library.
My job: director of marketing at American Apparel. I had a half dozen employees working under me in my office. Right across the hall from us thousands of sewing machines were humming away, manned by the world’s most efficient garment workers. A few doors down was a photo studio where the very ads I would be placing were made.
Excepting the help of a few pieces of technology, like my computer and smartphone, my day had begun and would proceed exactly as it had for every other marketing executive for the last seventy-five years. Buy advertisements, plan events, pitch reporters, design “creatives,” approve promotions, and throw around terms like “brand,” “CPM,” “awareness,” “earned media,” “top of mind,” “added value,” and “share of voice.” That was the job; that’s always been the job.
I’m not saying I’m Don Draper or Edward Bernays or anything, but the three of us could probably have swapped offices and routines with only a few adjustments. And I, along with everyone else in the business, found that to be pretty damn cool.
But that seemingly ordinary day was disrupted by an article. The headline stood out clearly amid the online noise, as though it had been lobbed directly at me: “Growth Hacker Is the New VP [of] Marketing.”
What?
I was a VP of marketing. I quite liked my job. I was good at it, too. Self-taught, self-made, I was, at twenty-five, helping to lead the efforts of a publicly traded company with 250 stores in twenty countries and over $600 million in revenue.
But the writer, Andrew Chen, an influential technologist and entrepreneur, didn’t care about any of that. According to him, my colleagues and I would soon be out of a job—someone was waiting in the wings to replace us.
The new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer. Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph. . . .
. . . The entire marketing team is being disrupted. Rather than a VP of Marketing with a bunch of non-technical marketers reporting to them, instead growth hackers are engineers leading teams of engineers.1
What the hell is a growth hacker? I thought. How could an engineer ever do my job?
But then I added up the combined valuation of the few companies Chen mentioned as case studies—companies that barely existed a few years ago.
• Dropbox
• Zynga
• Groupon
Now worth billions and billions of dollars.
As Micah Baldwin, founder of Graphicly and a start-up mentor at TechStars and 500 Startups, explains “In the absence of big budgets, start-ups learned how to hack the system to build their companies.”2 Their hacking—which occurred right on my watch—had rethought marketing from the ground up, with none of the baggage or old assumptions. And now, their shortcuts, innovations, and backdoor solutions fly in the face of everything we’ve been taught.
We all want to do more with less. For marketers and entrepreneurs, that paradox is practically our job description. Well, in this book, we’re going to look at how growth hackers have helped companies like Dropbox, Mailbox, Twitter, Facebook, Evernote, Instagram, Mint, AppSumo, and StumbleUpon do and did so much with essentially nothing.
What stunned me most about those companies was that none of them were built with any of the skills that traditional marketers like myself had always considered special and most were built without the resources I’d long considered essential. I couldn’t name the “marketer”—and definitely not the agency—responsible for their success because there wasn’t one. Growth hacking had made “marketing” irrelevant or at least completely rewritten its best practices.
Whether you’re currently a marketing executive or a college grad about to enter the field—the first growth hackers have pioneered a new way. Some of their strategies are incredibly technical and complex—which is why I won’t weigh you down in this short book with concepts like “cohort analysis” and “viral coefficients.” Instead, we will focus on the mind-set.
I start and end with my own experiences in this book not because I am anyone special but because I think they illustrate a microcosm of the industry itself. The old way—where product development and marketing were two distinct and separate processes—has been replaced. We all find ourselves in the same position: needing to do more with less and finding, increasingly, that the old strategies no longer generate results.
So in this book, I am going to take you through a new cycle, a much more fluid and iterative process. A growth hacker doesn’t see marketing as something one does, but rather as something one builds into the product itself. The product is then kick-started, shared, and optimized (with these steps repeated multiple times) on its way to massive and rapid growth. The chapters of this book follow that structure.
But first, let’s make a clean break between the old and the new.
What Is Growth Hacking?
The end goal of every growth hacker is to build a self-perpetuating marketing machine that reaches millions by itself.
—Aaron Ginn
There’s no business like show business. Yet, when it comes right down to it, that’s the industry every marketing team—no matter what business they’re actually in—pretends to be in when they’re launching something new. Deep down, I think anyone marketing or launching anything fantasizes that they are premiering a blockbuster movie. And this illusion shapes and warps every marketing decision we make.
It feels good, but it’s so very wrong.
Our first idea is a grand opening, a big launch, a press release, or major media coverage. We default to thinking we need an advertising budget. We want red carpet and celebrities. Most dangerously we assume we need to get as many customers as possible in a very short window of time—and if it doesn’t work right away, we consider the whole thing a failure (which, of course, we cannot afford). Our delusion is that we should be Transformers and not The Blair Witch Project.
Needless to say, this is preposterous. Yet you and I have been taught, unquestionably, to follow it for years.
What’s wrong with it? Well, for starters: most movies fail.
Despite the glamour and the history of movie marketing, even after investing millions—often more than the budget of the movie itself—studios regularly write off major releases as complete washes. And when they do succeed, no one has any idea why or which of the ingredients were responsible for it. As screenwriter William Goldman famously put it, nobody knows anything—even the people in charge. It’s all a big gamble.
Which is fine, because their system is designed to absorb these losses. The hits pay for the mistakes many times over. But there is a big difference between them and everyone else in the world. You can’t really afford for your start-up to fail; your friend has sunk everything into her new business; and I can’t allow my book to flop. We don’t have ten other projects coming down the pike. This is it.
It was only a matter of time before someone smart came along and said, “It doesn’t have to be this way. The tools of the Internet and social media have made it possible to track, test, iterate, and improve marketing to the point where these enormous gambles are not only unnecessary, but insanely counterproductive.”
That person was the first growth hacker.
A New Way
If that old system is an outgrowth of one hundred years of marketing precedent—designed to fit the needs of twentieth-century corporations—then the new mind-set began at the turn of the millennium. It began and evolved to meet the new needs of a new type of marketer.
Flash back to 1996, before Hotmail had launched as the first free web mail service and became one of the first products to “go viral.” As Adam Penenberg describes the meeting in Viral Loop, Hotmail’s founders, Sabeer Bhatia and Jack Smith, sat across the table from Tim Draper, the famous venture capitalist. He told them that he thought the product—web-based e-mail—was great but wondered how they’d get the word out.
Bhatia’s first instinct was that industrial marketing approach we’ve been talking about: “We’ll put it up on billboards,” he said. Draper nixed such an expensive approach for what would be a free product. So they kicked around more ideas. Radio ads? Same problem. What about sending an e-mail to everyone on the Internet? Draper suggested. That was an equally old mind-set—spam doesn’t work.
Then Draper happened accidentally on growth hacking. “Could you,” he asked, “put a message at the bottom of everybody’s screen?”
“Oh, come on, we don’t want to do that!”
“But can you technically do it? . . . It can persist, right? You can put it on one message, and if he sends an e-mail to somebody else you can put it on that one, too, right?”
“Yeah, yeah,” they replied.
“So put ‘P.S.: I love you. Get your free e-mail at Hotmail’ at the bottom.”3
*
This little feature changed everything. It meant every e-mail that Hotmail’s users sent would be an advertisement for the product. And that advertisement was effective not because it was cute or creative but because it showcased an amazing product that many people wanted and needed. Each user meant new users; each e-mail meant more e-mails and more happy customers. And most crucially, all this could be tracked and tweaked and improved to drive as many users as possible into the service.
You have to understand how revolutionary this was at the time. Consider that just a few years later, Pets.com would try to launch with a multicity television and outdoor advertising campaign that culminated in a $1.2 million Super Bowl commercial and an appearance at the Macy’s Thanksgiving Day Parade. Or that Kozmo.com would blow through literally hundreds of millions with advertising campaigns featuring the Six Million Dollar Man before collapsing like Pets.com in the burst dot-com bubble.
But after adopting Draper’s suggestion—which the founders resisted for the first few months because it seemed so simple—growth was exponential: 1 million members within six months. Five weeks after that, membership had doubled again. By December 1997, with nearly 10 million users, Hotmail was sold to Microsoft for $400 million. It took just thirty months from launch for Hotmail to accumulate its thirty millionth user. And though it has now been renamed, Hotmail still exists, unlike the majority of its peers from that era.
This is the power of the new approach. A $400 million brand was launched and built with just a $300,000 investment—what a Hollywood studio or a Fortune 500 company might spend on a decent premiere party or single television commercial. Implemented and executed by people without the slightest bit of marketing experience.
And in case you think Hotmail was some fluke of the tech bubble, let me remind you that a few years later, Google launched Gmail—now the dominant free e-mail service—with essentially the same growth hacking strategies. First Google built a superior product. Then it built excitement by making it invite only. And by steadily increasing the number of invites allowed to its existing user base, Gmail spread from person to person until it became the most popular, and in many ways the best, free e-mail service.
Enormous services launched from tiny, but incredibly explosive, ideas. That’s what we’re going to study in this book.
The Rise of the Growth Hacker
Since Hotmail, many others—particularly in the tech space—have begun to push and break through the limits of marketing. With a mind for data and a scrappy disregard for the “rules,” they have pioneered a new model of marketing designed to utilize the many new tools that the Internet has made available: E-mail. Data. Social media. Lean methodology.
Almost overnight, this breed has become the new rock stars of the Silicon Valley. You see them on the pages of TechCrunch, Fast Company, Mashable, Entrepreneur, and countless other publications. LinkedIn and Hacker News abound with job postings: Growth Hacker Needed.
Their job isn’t to “do” marketing as I had always known it; it’s to grow companies really fast—to take something from nothing and make it something enormous within an incredibly tight window. And it says something about what marketing has become that these are no longer considered synonymous tasks.
The term “growth hacker” has many different meanings for different people, but I’ll define it as I have come to understand it:
A growth hacker is someone who has thrown out the playbook of traditional marketing and replaced it with only what is testable, trackable, and scalable. Their tools are e-mails, pay-per-click ads, blogs, and platform APIs instead of commercials, publicity, and money. While their marketing brethren chase vague notions like “branding” and “mind share,” growth hackers relentlessly pursue users and growth—and when they do it right, those users beget more users, who beget more users. They are the inventors, operators, and mechanics of their own self-sustaining and self-propagating growth machine that can take a start-up from nothing to something.
But don’t worry, I’m not going to belabor definitions in this book. What’s important is we’re all trying to grow our business, launch our website, sell tickets for our event, or fund our Kickstarter project. And the way we do it, today, is fundamentally different from how it used to be done.
Instead of launching products with multimillion-dollar marketing budgets, the growth hackers we will follow in this book began their work at start-ups with little to no resources. Forced to innovate and motivated to try new things, growth hackers like these have built some of these companies into billion-dollar brands. They did it not only outside the enormous edifice of the Hollywood-industrial-launch-complex but also because they ignored it and rejected its tactics. Instead of bludgeoning the public with ads or dominating the front page of newspapers to drive awareness—they used a scalpel, precise and targeted to a specific audience.
The New Mind-Set
Deep down, traditional marketers have always considered themselves artists. That’s fine—it’s an image I aspired to myself. It’s a sentiment responsible for spectacular and moving work. But this sentiment is also responsible for some appalling ignorance and waste. One Harvard Business Review study found that 80 percent of marketers are unhappy with their ability to measure marketing return on investment (ROI). Not because the tools aren’t good enough, but because they’re too good, and marketers are seeing for the first time that their marketing strategies are “often flawed and their spending is inefficient.”4
Noah Kagan, a growth hacker at Facebook and personal finance service Mint (which sold to Intuit for nearly $200 million) and the daily deal site AppSumo (which has more than 800,000 users), explains it simply: “Marketing has always been about the same thing—who your customers are and where they are.”5
What growth hackers do is focus on the “who” and “where” more scientifically, in a more measurable way. Whereas marketing was once brand based, with growth hacking it becomes metric and ROI driven. Suddenly, finding customers and getting attention for your product become no longer a guessing game. But this is more than just marketing with better metrics.
Growth hackers trace their roots back to programmers—and that’s how they see themselves. They are data scientists meets design fiends meets marketers. They welcome this information, process it and utilize it differently, and see it as desperately needed clarity in a world that has been dominated by gut instincts and artistic preference for too long.
Ultimately that’s why this new approach is better suited to the future. With the collapse or crumbling of some of the behemoth companies and the rapid rise of start-ups, apps, and websites, marketing will need to get smaller—it will need to change its priorities. When you get right down to it, the real skill for marketers today isn’t going to be helping some big boring company grow 1 percent a year but to create a totally new brand from nothing using next to no resources. Whether that’s a Kickstarter project you’re trying to fund or a new app, the thinking is the same: how do you get, maintain, and multiply attention in a scalable and efficient way?
Thankfully, growth hacking isn’t some proprietary technical process shrouded in secrecy. In fact, it has grown and developed in the course of very public conversations. There are no trade secrets to guard. Aaron Ginn, the growth hacker tasked with rapidly updating the technology behind Mitt Romney’s presidential campaign and now director of growth at StumbleUpon, put it best: growth hacking is more of a mind-set than a tool kit.
The good news: it’s as simple as changing your mind-set. (Or if you’re just starting out in marketing, it means you’ve been spared the baggage of the old guard.) Growth hacking is not a 1-2-3 sequence, but instead a fluid process. Growth hacking at its core means putting aside the notion that marketing is a self-contained act that begins toward the end of a company’s or a product’s development life cycle. It is, instead, a way of thinking and looking at your business.
The tools will vary from job to job—it’s the mind-set that will be the killer advantage, and I promise that when you finish reading this book you will fully grasp the growth hacker’s way of thinking. The chapters in this book are organized to guide you through the process of taking something from one user to a million and possibly to a hundred times that. I am compressing everything I’ve learned in the last two years studying, researching, and interviewing the world’s best growth hackers.
I want to show you the growth hacker’s way and why it is the future. How it’s infiltrating the next generation of companies; how it’s reshaping marketing, PR, and advertising from top to bottom; how even authors are using the principles in their book launches.
And that process starts far earlier than you think. The new marketing mind-set begins not a few weeks before launch but, in fact, during the development and design phase. So we will begin there, with the most important marketing decision you will likely ever make.