In recent years, early-stage businesses have engaged in a new approach: Growth hacking. This is a distinct mindset and set of methodologies, differing from that of traditional marketing. Growth hacking is about adopting experimental strategies and using iterative tests. It is data-centric and designed to move the needle quickly in pressurized startup (or scale-up) environments.
Growth hacking encompasses the whole funnel, aligning experts in product, engineering and business intelligence. The primary ambition of any growth hacker is to scale acquisition of new customers and improve retention of existing customers – through the most cost-efficient channels. But despite its popularity and global hype, growth hacking is not suitable for every business.
When is growth hacking not viable?
When a compelling trend has taken hold, it is tempting to apply a blanket approach and use our shiny new toys wherever possible. However, growth hacking must be treated with caution. Due to its distinct nature, growth hacking is only effective it your management and goals setup is optimized.
Here are five scenarios in which growth hacking is not the appropriate route:
When you have a small growth team: Effective growth hacking relies on having the right resources at hand. You need to build robust frameworks to define experiments, run experiments and measure outcomes. This needs expertise in data, product, engineering and marketing. For example, if you currently have a CTO and a marketer but no product manager or data scientist, it is difficult to implement bulletproof methodologies. You simply will not have the capabilities to conduct growth hacking effectively.
When you are pre-product-market fit: If you have not proven product-market fit, it will be very risky and very costly to adopt the growth hacking philosophy. Your solution should be validated before you open up new channels and test hypotheses. If there is no true need, you will find out the hard way.
When you do not have any marketing budget: Growth marketing often – although not always – involves an investment in paid media. And it may also require investment in content creation. Ultimately, you will be seeking a high return on investment (ROI), but you cannot hack growth without investing in the process.
When you do not have product insights: Product insights are a key ingredient in effective growth hacking. You need to know whether people are using your product, how they are using it, and how they feel whilst using it. This is for two reasons: Firstly, you may spot in-product opportunities to hack growth, and secondly, if the product is disliked by your audience – you need to know.
When you do not have enough data: You will burn through a lot of cash by running experiments without sufficient user numbers, data or traffic. Marketers need sufficient volume to draw meaningful conclusions, just as a scientific experiment requires a large sample size to be taken seriously. Qualitative insights may support your research but must be treated with appropriate caution.
What to look for in a growth hacker
If you have met all of the above requirements as a business, what should you seek in a growth hacker?
It is a pressurized role, involving execution and strategy in equal measure. Any good growth hacking marketer will be able to pivot when required and conduct growth experiments with commitment. It is important to have an open mind and be willing to learn on-the-fly. And a growth marketer must be a good mediator within cross-functional teams, leading the way with a shared collaborative vision.
A growth hacker should also have a deep understanding of marketing technology. Detailed technicalities can affect the outcome of a campaign, so it is essential to have hands-on experience. A growth hacker will know the importance of integrating different tools and systems. This technical awareness must be balanced with creativity and a passion for telling stories and through a variety of media.
There are certain central principles of growth hacking that are applicable to most businesses. For example, moving from the Waterfall Model to Agile, and then to Lean Startup is usually a fantastic plan. And the principle of tying marketing tightly in with product is also something to follow.
Growth hacking is a fresh and dynamic philosophy. It allows startups and scale-ups to boost performance in competitive markets, and helps big businesses incubate and grow innovation projects. This approach operates at high-velocity, making use of marketing technology to test hypotheses quickly and effectively.
In order to succeed, you need the right setup. For small businesses with a slower long-term plan and no immediate rush to scale growth (i.e. no impatient investors), the more traditional approaches may suffice. These types of businesses do not usually have the team in place to run bulletproof growth hacking experiments in any case. But for high-velocity businesses with the right resources, growth hacking is a powerful alternative to conventional marketing.