The future of Growth Hacking

Sean Ellis is the person who coined the term “growth hacking” back in 2010. Not only that, but he was responsible for growth at some of the biggest brands and tech companies in the world, such as Dropbox, Eventbrite, Lookout, and LogMeIn.

Growth hacking is really about using the same scientific process that’s been around for hundreds of years. So having some analysis where you figure out ways to drive improvement and then coming up with ideas, running tests, you know, having the right way of prioritizing those tests, running tests, and ultimately figuring out how to move a metric.

It is the scientific process that would be used for innovation.

The difference between marketing and growth hacking

Sean: So the most significant difference between marketing and growth hacking is not just doing this with channels and kind of top of funnel stuff, but you’re doing this across all touchpoints in the product.

So it requires usually a cross-functional effort between a marketing team, a product team, engineering, design, really everything that’s about driving improvement in how you grow the business.

It was, it was tough to get started with LogMeIn initially. So 95%, the people who signed up never once used the product. That’s where I discovered that to effectively grow that business, I had to work with the product team to experiment on that new customer onboarding.

Even if I had the skills on the marketing side, I could do the engineering around, you know, different types of installers, and different ways to get started inside the product. I don’t think the product team would have trusted a market or a group of marketers to go in and do that.

Sometimes you can have people who have all of the skills, but they also have to have permission to run the experiments in kind of the deeper parts of the product.

But that’s very interesting because I believe that today there are more and more startups and SaaS products that are using this strategy. They are hiring growth hackers but that they are something like the bridge between the marketing department and also the product department.

There are lots of different ways to slice it, and that’s why I don’t necessarily recommend companies to have a growth hacker on the team or to have a growth team.

But what I do recommend is that they run lots of testing and that they have a shared metric across the company and that ideally that testing.

They have permission to run that testing anywhere that could affect the key metric in the business, what we call a North star metric.

When you come up with the term growth hacking?

Sean: I spent ten years in two companies where I was the vice president of marketing, and both of those companies listed on NASDAQ, and I ran marketing through the pre-NASDAQ days up until filing for the NASDAQ listing.

And I realized that those companies that kinda first six months of going to the market were the most important was the area where I added the most value. And so after I left LogMeIn, I worked with several companies just for the upfront six months period. And so, the second of those companies was Dropbox.

And what I realized is that a lot of that was to get equity in the business. So I got I guess paid some cash, but a lot of it was just ownership in the market. And so it was crucial for me that when I left after those six months that it didn’t work only a yeah, that all my work, I didn’t just get undone.

So it was essential for me to think about how do they continue to manage this growth hacking process after I leave? So initially, I started to try to help them hire a marketer to replace me. But what I found is that most people who were applying for those positions, they were creating a resume by reading the book marketing 1:1.

The kind of a college textbook around branding and awareness building and nature of all these pieces that, in my opinion, a relatively early stage startup doesn’t have the funds.

And if you do that enough times, you build a good brand, and you make good awareness, but you do it in a more sustainable way.

So that’s where I’ve found that if I just promoted for a head of marketing, I had a very different profile of person applying. So that’s when I started to think, okay, if we call it something else, maybe I can redefine what that role should be.

And that was the impetus for it for saying we’re looking for a growth hacker.

We all know that today, acquiring the first ten customers can be an easy target to achieve when you start a new company. But let’s talk a little bit about churn. What are some of your favorite tactics to get customers to not only stay but also become ambassadors of your brand?

I think that’s the starting point is figuring out does anyone look at your product and say, I, you know, after they’ve tried it, say, Oh my gosh, I can’t live without this product.

And so that’s the starting point.

And then, and then once they considered it a must-have, there are several things that you can do to help drive that ambassador. So I had a great interview on a podcast I recently launched. Um, ah, I released this podcast yesterday with the head of growth at TransferWise. And it’s mostly built that business from 40 employees to 1700 employees, primarily off of your customer ambassadors.

And what he said is, is not just the product that drives it, but it’s people — all of these users who believe in the cause.

Yeah. So it’s kind of this cause-based marketing approach where they believe most people are getting screwed over by their banks when, uh, when they’re doing international money transfers.

They just want to get the word out that there’s a much more affordable, elegant way to transfer money internationally. And so if firstly, it has to deliver on that it needs to be more accessible and very easy to use and just excellent customer service and all of that.

And then people want to get on board what the overall mission of the company is. That is to make it much more, much easier, and affordable to move money around internationally. And so I think that’s an example of what drives that.

But that’s a powerful word of mouth, but it all starts with finding not just your first ten customers, but your first ten customers who say that they can’t live without the product and then figuring out how you engage with them beyond that point.I think the challenge there is that’s the hardest part right there is creating a product that people can’t live without.

And there’s almost no right way to do that.

I think like marketers and growth people, what our goal is is to take the product that we’re given and help find the market. I can’t live without that. And so the way I do that is, I might throw a thousand people at our product and then it’s about sorting through those people to find the ten who can’t live without it and understanding those people on a deep level.

• What were they using before?
• Why do they love this product?
• Why would they be very disappointed without this product?
• What would they use instead of this product weren’t available?

Just learning everything about how they use the product and why it’s important to them and then, using that information to go out and acquire the next thousand or 10,000 people.

Can you also define what’s the “North Star Metric” and how you see this concept integrated into a growth strategy? So you want me to take one step back even before explaining what the North Star metric is and, and tell why it’s essential.

As I mentioned, the challenge that growth hacking is all about using the scientific process to grow the business. The problem is that usually one person, a growth hacker might get excited about this process and reading a book and learn about it.

Then they bring it back to their company, and the company’s not used to working that way. And then, that person gets frustrated and is just not able to execute that.

And maybe they’re able to execute it with marketing channels. And then that’s just good, good marketing. That’s the way any digital marketers should be working today.

But to be effective, you need to apply that scientific process around not just acquisition but how you activate new company customers, how you, how do you retain and engage new customers, how you drive referral.

All of those should be done through it a test and learn the process. And so that’s where the North star metric comes in, is that when you can come up with a metric that reflects real progress against your mission and reflects the amount of value you’re delivering to your customers, that that must have value.

And when you’re growing that footprint of value, that is how you created a big, sustainable business. And so it’s a little bit confusing.