Growth Hacker Marketing

Growth Hacker Marketing

Author

Ryan Holiday

Year
2014
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Review

Before Ryan Holiday started writing about stoicism he squeezed out this book on Growth Hacker Marketing. It captures a really exciting moment in product development history, when new approaches to attracting users upended traditional marketing. Most of the stories mentioned in this book have become tech folk law, which isn’t surprising because it was the talk of the town when it came out. Well worth the couple of hours it’ll take you to read.

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Key Takeaways

The 20% that gave me 80% of the value.

  • Traditional marketing focuses on big launches, risking everything on one shot. This works for Hollywood but not for most businesses.
  • Startups, lacking resources, reinvented marketing. Growth hackers pioneered new approaches, making traditional methods obsolete.
  • Growth hacking strategies are product-specific and often temporary, but the mindset is enduring.
  • Growth hackers integrate marketing into the product, aiming for rapid, self-perpetuating growth.
  • They leverage data, social media, and unconventional tactics to track, test, and improve marketing.
  • Example: Hotmail's signature line "PS I love you. Get your free email at Hotmail" led to exponential growth.
  • Growth hackers use digital tools instead of traditional advertising, focusing on measurable "who" and "where."
  • They combine programming, data science, design, and marketing skills.
  • Growth hacking is a mindset that integrates marketing throughout a product's lifecycle, not just at the end.
  • Step 1: Product Market Fit
    • The single worst marketing decision you can make is starting with a product nobody wants or nobody needs.
      • Make something people want. Paul Graham
    • Growth hackers believe products and businesses should be changed until they are primed to generate explosive reactions. Growth hackers will spend a long time trying new iterations until they find Product Market Fit (PMF). Which can come quickly or take many incremental 1 percent improvements.
      • Famous pivots include Odeo (Podcasting) to Twitter and Burbn (Location sharing) to Instagram.
    • Product Market Fit is a feeling backed with data and information.
    • You get to Product Market Fit by starting with a "minimum viable product" and improving it based on feedback. Growth hackers help with iterations, advise, and analyse every facet of the business.
    • The most effective method is simply the Socratic method. We must simply and repeatedly question every assumption.
    • Questions to ask your customers include: What is it that brought you to this product? What is holding you back from referring other people to it? What's missing? What's golden?v
    • Part of this new approach is having the humility to accept that marketers are not necessarily the most critical members of the team. Evernote put their entire marketing budget into product development.
    • Companies have to work for product market fit, they crawl toward it.
  • Step 2: Finding Your Growth Hack
    • Only once confident you have a product worth marketing do you chase growth.
    • Growth hacking is about finding a cheap, effective and unique way to pull your customers in.
      • Dropbox utilised a waiting list and a self-made video that demoed the yet to be built product (full of jokes aimed at their target audience. )
    • Focus on finding the right people, those that are likely to become your customers. Aim to find early adopters as cheaply as possible. You get to mass market by ignoring the urge to appeal to the mass market initially. Aim any outward-facing marketing and PR efforts toward a group you hope will become highly interested, loyal, and fanatical users.
      • Uber gave out free rides during Austin's SXSW conference for several years. All the ‘right’ people were in the same place once per year.
    • The more innovative the product is, the more novel your method will need to be.
    • Outreach with a very specific mindset and goal. Focus on driving an initial set of new user sign-ups and customers.
      • Focusing on customer acquisition over 'awareness' takes discipline. Sean Ellis
  • Step 3: Going Viral
    • Virality at it’s core is asking someone to spend their social capital recommending or linking or posting about you for free.
    • You need to create powerful incentives to encourage sharing and make it seem like it isn't a favour. Make users feel like they are getting something out of it.
    • Many start-ups owe their now-massive user bases to thoughtful integration with big platforms.
      • Spotify: Driven by its integration into Facebook.
      • Dropbox: Offered storage bonuses for linking accounts to Facebook or Twitter.
      • Coinbase: Prompted users to tweet about buying Bitcoin.
    • Growth hackers don't think branding is worthless, just not worth the premium. Seek to get social currency for free. Apple made iPod headphones white instead of black.
    • If you want to go viral, it must be baked into your product. Provide the incentives and the platform for users to share.
  • Step 4: Close the Loop: Retention and Optimisation
    • There’s little point in driving new customers if they leak out through a hole in the bottom.
    • Paradoxically the key to retention is often found somewhere in the onboarding process:
      • Twitter: Rebuilt onboarding to encourage following others.
      • Facebook: Users who added seven friends in ten days were the most engaged.
      • Zynga: Focused on getting users to come back after the first day.
      • Dropbox: Focused on dragging new users past potential hurdles.
    • Avoid vanity metrics. Focus on the most important metric for growth.
      • Airbnb: Began offering free professional photography for listings. Increased conversion rate, listing price, and user engagement.
    • Always be optimising. Growth hackers know the product is probably broken in at least one way. Use all available information to figure out and fix problems.
    • Maximise ROI, a 5% increase in customer retention can mean a 30% increase in profitability.
  • Growth hacking taught us the mindset of merging marketing into product development.
  • Kick off growth with early adopters. Add viral elements. Relentlessly repeat these cycles, guided by data and optimisation.
  • Growth hacking reduces the costs of being wrong, thus providing room for experimentation. The strategic goal is to reach people in an effective, scalable, and data-driven way.
  • Growth hacking is a mindset. Once you break free from antiquated notions of marketing, the field becomes cheaper, easier, and more scalable.
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Deep Summary

Longer form notes, typically condensed, reworded and de-duplicated.

  • Traditional marketing favours the big launch. Driving as many eyes as possible in a short window of time. If it doesn't work right away, we consider the whole thing a failure.
    • That’s OK in the movie business. Hollywood hits pay for the mistakes many times over.
    • The problem is, this might be your one shot. You can’t take those odds.
  • Unencumbered by old assumptions and in the absence of big budgets - startups reinvented marketing out of necessity. Their shortcuts, innovations, and back-door solutions fly in the face of traditional marketing approaches. Growth hackers pioneered a new way and made marketing irrelevant, or at the very least, have rewritten best practice.
  • Growth Hacking strategies are hard to copy, their often tailored to the product, complex and transient. They might only work once. The techniques maybe ephemeral, but the mindset is timeless.
  • 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 optimised on its way to massive and rapid growth. The end goal of every growth hacker is to build a self-perpetuating marketing machine.
  • With a mind for data and a scrappy disregard for the "rules," they have pioneered a new model of marketing. Internet and social media made it possible to track, test, iterate, and improve marketing in new ways.
▫️
Hotmail added this message to the bottom of every email. Growth went exponential and they gained 10 million users quickly. ‘PS I love you. Get your free email at Hotmail.’ Google launched Gmail in a similar way, but with a superior product, more storage and built initial excitement by making it invite-only.
  • A growth hacker is someone who has thrown out the playbook of traditional marketing.
    • Their tools are e-mails, pay-per-click ads, blogs, and platform APIs instead of commercials, publicity, and money.
    • Growth hackers originated from start-ups with little to no resources.
    • They focus on the "who" and "where" more scientifically, in a more measurable way.
  • Traditional marketers are seeing for the first time that their strategies are "often flawed and their spending is inefficient..
  • Growth hackers trace their roots back to programmers.
    • They are data scientists meets design fiends meets marketers.
    • They welcome this information, process it and utilise it differently.
    • This new approach is better suited to the future.
    • The thinking is the same: how do you get, maintain, and multiply attention in a scalable and efficient way?
  • Growth hacking is more of a mindset than a tool kit.
    • Growth hacking 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.

Step 1: It Begins With Product Market Fit

Make something people want. Paul Graham
The single worst marketing decision you can make is starting with a product nobody wants or nobody needs.
  • Growth hackers believe products and businesses should be changed until they are primed to generate explosive reactions.There are many examples of famous pivots:
    • Odeo (Podcasting) → Twitter
    • Burbn (Location sharing) → Instagram
    • Glitch (Online Game) → Slack
    • YouTube (dating) → YouTube
  • Growth hackers will spend a long time trying new iterations until they find Product Market Fit (PMF). You might achieve PMF with one aha moment like Instagram, or it may be incremental 1 percent improvements.
  • Product Market Fit is a feeling backed with data and information.
  • You get to Product Market Fit by starting with a "minimum viable product" and improving it based on feedback. Growth hackers help with iterations, advise, and analyse every facet of the business.
  • You need to optimise the product to spread and be well received by customers. Amazon work backwards from the customer: creating a press release that announces the product as though it was just finished, together with an FAQ and user manual.
Do whatever is required to get to product/market fit. Marc Andreessen
  • Part of this new approach is having the humility to accept that marketers are not necessarily the most critical members of the team. Evernote put their entire marketing budget into product development.
▫️
Evernote produced stickers for laptops that said… "I'm not being rude. I'm taking notes in Evernote."
  • The most effective method is simply the Socratic method. We must simply and repeatedly question every assumption.
  • Questions to ask your customers include: What is it that brought you to this product? What is holding you back from referring other people to it? What's missing? What's golden?
  • Companies have to work for product market fit, they crawl toward it.
  • Once you get PMF you have to focus on bringing in customers.

Step 2: Finding Your Growth Hack

To be successful and grow your business and revenues, you must match the way you market your products with the way your prospects learn about and shop for your products. Brian Halligan
  • Only once confident you have a product worth marketing, do you chase growth.
  • You can’t expect people to come to you, you have to pull them in. Although you don’t need an enormous campaign.
  • Growth hacking is about finding a cheap, effective and unique way to pull your customers in.
▫️
Dropbox utilised a waiting list and a self-made video that demoed the yet to be built product (full of jokes aimed at their target audience. )
  • Focus on finding the right people, those that are likely to become your customers. Aim to find early adopters as cheaply as possible. You get to mass market by ignoring the urge to appeal to the mass market initially. Aim any outward-facing marketing and PR efforts toward a group you hope will become highly interested, loyal, and fanatical users.
▫️
Uber gave out free rides during Austin's SXSW conference for several years. All the ‘right’ people were in the same place once per year.
  • The more innovative the product is, the more novel your method will need to be.
  • Outreach with a very specific mindset and goal. Focus on driving an initial set of new user sign-ups and customers.
▫️
Airbnb engineers coded tools for seamless cross-posting on craigslist, hooking into a site with a bigger audience.
Focusing on customer acquisition over 'awareness' takes discipline. Sean Ellis
  • Users have to be pulled in. A good idea is not enough. Customers have to be "acquired.

Step 3: Going Viral

Virality isn't luck. It's not magic. And it's not random. Jonah Berger
  • Virality at it’s core is asking someone to spend their social capital recommending or linking or posting about you for free.
  • You need to create powerful incentives to encourage sharing and make it seem like it isn't a favour. Make users feel like they are getting something out of it.
Making things more observable makes them easier to imitate, which makes them more likely to become popular. Jonah Berger
  • Many start-ups owe their now-massive user bases to thoughtful integration with big platforms.
    • Spotify: Driven by its integration into Facebook.
    • Dropbox: Offered storage bonuses for linking accounts to Facebook or Twitter.
    • Coinbase: Prompted users to tweet about buying Bitcoin.
  • Growth hackers don't think branding is worthless, just not worth the premium. Seek to get social currency for free. Apple made iPod headphones white instead of black.
▫️
Dropbox: Placed a "Get free space" button on the front page. Users received five hundred megabytes of free space for every friend they invited. Sign-ups increased by 60 percent and stayed at that level for months.
  • If you want to go viral, it must be baked into your product. Provide the incentives and the platform for users to share.

Step 4: Close the Loop: Retention and Optimisation

  • The growth hacking process concludes with retention and optimisation. There’s little point in driving new customers if they leak out through a hole in the bottom?
  • Use analytics to know and improve your conversion rate.
  • Paradoxically the key to retention is often found somewhere in the onboarding process:
    • Twitter: Rebuilt onboarding to encourage following others.
    • Facebook: Users who added seven friends in ten days were the most engaged.
    • Zynga: Focused on getting users to come back after the first day.
    • Dropbox: Focused on dragging new users past potential hurdles.
  • Avoid vanity metrics. Focus on the most important metric for growth.
  • Airbnb: Began offering free professional photography for listings. Increased conversion rate, listing price, and user engagement.
  • Always be optimising. Growth hackers know the product is probably broken in at least one way. Use all available information to figure out and fix problems.
Even the best growth hacker cannot grow a product that people don't want. Aaron Ginn
  • Maximise ROI, a 5% increase in customer retention can mean a 30% increase in profitability.
  • Tim Ferriss viral marketing approach for ‘The 4-Hour Chef’:
    • Built his own audience through regular blogging
    • Got features in key blogs.
    • Created a BitTorrent bundle for The 4-Hour Chef without the book but lots of extras
  • Marketing is simply getting customers. Anything that gets customers is marketing.
  • Growth hacking taught us the mindset of merging marketing into product development.
  • Kick off growth with early adopters. Add viral elements. Relentlessly repeat these cycles, guided by data and optimisation.
  • Growth hacking reduces the costs of being wrong, giving us freedom to experiment and try new things. The strategic goal is to reach people in an effective, scalable, and data-driven way.
  • Growth hacking is a mindset. Once you break free from antiquated notions of marketing, the field becomes cheaper, easier, and more scalable.