Growth Hacking 101

This post is part of our 'Entrepreneurial toolkit' series. In this series, we put together a curated list of resources on a topic that is top of mind for entrepreneurs.

We'll share some key insights from the selected clips, but we highly encourage you to listen to the clips on broadn so that you can hear the experts themselves sharing ideas, opinions, and advice.

Growth Hacking Defined

Growth hacking is more than marketing; it is not a pop-up ad or an influencer endorsement. Instead, it focuses on growing as quickly as possible by deploying tactics and lateral thinking outside conventional marketing norms. It is also doable on a shoestring budget, which is why it is popular among early-stage startups.

Abolishing funnels and building loops

A loop dynamic is at the heart of the fastest-growing companies today. In a traditional setting, you put in the effort around a funnel and expect a particular output or conversion at the end. A loop dynamic entails plowing back the work generated and placing it back on top of the funnel. This growth path begins with creating a circular path around your product. An example would be Spotify. If someone listens to a song on Spotify and likes it, they share it with their network. So, Spotify allows users to share it directly on their social media. This creates a loop: when people share and others click to listen to the song, they are redirected to the app.

Common Pitfalls in growth hacking

There are some common pitfalls that early-stage entrepreneurs should be aware of during the process.

First is not having a hypothesis or a plan and taking a "we'll see" approach because it needs to work in tandem with the product and business model. The second is to have too many growth loops. It is okay if your team is comfortable executing two loops simultaneously and does not have to worry about getting four or five loops to sync together. 

Growth loops also have a ceiling beyond which it becomes difficult to extract value. So it makes sense to keep adding growth loops for consistent progress.

Growth Hacking on a Budget

There is also a time constraint for executing strategies. You can devise a hundred strategies, but you would not have the time to manage them. This is due to a lack of resources and an opportunity cost. That is why having a sustainable process is essential.

The Golden State Warriors' digital operations team is a great example. They are famous for regularly converting $1 into $29. Their strategy involves distributing authoritative content across multiple verticals. Suppose you are an early-stage startup with no connections to large distribution houses. In that case, gaining exposure through small or medium distribution sources is recommended as you progress from small to medium to large.

Growth Hacking for Marketplaces

It is challenging to manage a marketplace - you must consider both the supply and demand sides of the equation. The answer to this chicken and egg problem is a mix of strategies. Tripping is an excellent example of a search engine for vacation rentals and a review aggregator. They initially had trouble finding hosts (suppliers) for their platform. As Jen O'Neal, the founder, and CEO, suggests, they solved it by narrowing their focus to one market and concentrating their efforts in one area. They steadily weaved in demand after bringing in suppliers because now they had what people wanted. Another critical consideration is to use business development and partnerships to get the marketplace off the ground. 

For example, Tripping did an excellent job by making sense of its customer base, young millennials looking for a localized travel experience. They planned for growth by focusing on the product via 'Private Social Networks.' This approach was a game changer and became their core business model. It created a networking site to help travelers find locals who wanted to meet for drinks, offer extra living space, participate in local activities, and so on. To provide this experience, Tripping collaborated with universities, travel associations, and volunteer organizations. This technique increased the platform's active user base and boosted its network effect, allowing them to leverage the purest form of marketing—word of mouth.

Network Effects and Tinder

The term ‘network effect’ is frequently heard in the context of consumer apps. Network effects occur when the value of a platform increases with each new user. More users mean more content, and more content means more value for the platform.

Tinder is a fascinating case study. Tinder's founders threw parties on the campuses of the University of Southern California. Joining the party required everyone to download Tinder. They began by approaching sororities to get young women to sign up. They would then go to fraternities and motivate students to join if they were interested in online dating.

Seth Godin's formula for finding trends

Seth Godin has an uncanny ability to anticipate trends before they become mainstream. His claim to fame implies that you don't need to invent these trends. Instead, you have to be ahead of the competition. It's not as easy as it sounds. You must have a broad mind and be constantly aware of 'what they don't know.' This mindset means asking questions when encountering a novel idea beyond one's standard line of thought and digging until you feel you have something valuable to share.

Conclusion

Many case studies of decacorns used unorthodox marketing strategies to generate initial growth and acquire users. The most common pattern is a loop with an emphasis on sharing. Airbnb, PayPal, Dropbox, and Spotify are some other great examples of growth hacking done right. Growth hacking can help your startup go from good to great when all forces are aligned.