What does growth hacking mean?

The growth hacking is so misunderstood that I found it essential for the entrepreneurial community to create this guide with the best available information on the Internet blogs. Few concepts have been as polarizing and revolutionary at the same time. What is growth hacking? Is growth hacking a new geek term to ask for salary increases or higher fees? Is it the future of internet products? Let’s start from the beginning of growth hacking…

The History of Growth Hacking: Let’s start from the beginning.

The term “growth hacker” was coined by Sean Ellis in 2010. When Neil Patel asked Sean why he felt the need to compose a new phrase, he said it was born out of the frustration he felt when he got hired. Let me explain.

Sean Ellis helped a number of web companies achieve incredible growth, some of which even experienced an IPO. Obviously, everyone turned to Sean when they needed to grow their database of users. He took equity and/or the added value he brought to the company as payment for his services. Over time, he became a hub for companies wanting to grow, setting up systems, processes, and mindsets that could be maintained after he left. At the end of each of his mandates, he would hand over the keys to his growth machine to someone else and leave when his job was done. It was at this precise moment that the problems began (and by the way, I have experienced this same issue on a few occasions).

While looking for his future replacement, he found himself more often than not receiving quality resumes… but not relevant ones. The people submitting their applications had marketing degrees and experience, but they were still missing something. Sean knew well that the strategies he employed were not considered typical marketing methods, those used by more traditional marketers. If he handed over the reins to them, it would probably not be a good choice.

Traditional marketing has a very wide scope, and although its use is extremely valuable, it is not as necessary for startups and micro and small businesses (more S than M). In the early stage of a startup, you don’t need someone to “build and manage a marketing team,” to “manage external vendors” or even to “establish a strategic marketing plan to achieve the company’s objectives” or a host of other things that are expected from traditional marketers. In a startup, you need only one thing: growth.
Sean had asked for marketing specialists and he got marketers. So, Sean changed his request. The title of his article on the Watershed blog was “I’m looking for a growth hacker for a startup.” The idea was born.

A growth hacker does not replace a marketer. Growth hacking is not better than marketing. A growth hacker is just different. To use the most concise definition from Sean’s article, “a growth hacker is a person whose true north is growth.”

Every decision made by a growth hacker is dictated by growth. Every strategy, every tactic, and every initiative is attempted in hopes of growing. Growth is the sun around which a growth hacker revolves. Of course, traditional marketers care about growth too, but not to the same extent. Remember, the power of a growth hacker is in their obsession with a singular goal: growth.

This absolute obsession with growth has given rise to a number of methods, tools, and practices that simply did not exist in the traditional marketing repertoire. Over time, the chasm between the two disciplines has drastically widened.

Redefining the Product

Traditional marketers are qualified to understand traditional products, but the internet has drastically changed the definition of the word product. For thousands of years, a product has been a physical good, but now it is invisible bits and bytes in the form of software products, or in plain English, SaaS. Products were only used for cars, shampoos, furniture, and firearms.

Now Twitter is a product. Your online accounting software is a product, also known as a digital tool. Things you cannot physically hold are products. This transition is the main reason behind the new era of growth hackers. The internet has given the world a new type of product, and this requires a new type of thinking and mindset.
For the first time, because of this new definition, a product can play a role in its own adoption. A product like Facebook allows you to share its product with other friends to enhance your experience on their platform. Shampoo cannot do that. A product like Dropbox can offer you free cloud storage if you ask a friend to sign up with you. Diapers don't do that. If you do not master this new classification of products that the Internet is currently creating, you will never completely understand growth hacking.

Sean Ellis, the guru who invented the term “growth hacker”, was also the first growth leader at Dropbox. He understands what is new about products on the web.

Redefining Distribution

Despite the importance of the product, it would be foolish to limit your activities to that one product alone. The same internet that has redefined the product has also redefined distribution. Those who have a good understanding of how people navigate online will be able to use this knowledge for the growth of their startup.

Consider the highway system built in America starting in the 1950s. McDonald’s understood that the interstate roads were a new channel for acquiring customers, and they took advantage of it. The exits are still littered with golden arches to this day. It’s a great example of “offline growth hacking.”

The internet is the modern counterpart of this analogy. Now, the roads and highways are the Facebook, Google, and YouTube of our world.

Rather than having a “brick and mortar” business model like before, we have search engines providing a way for both digital and more traditional companies. Those who master SEO will be seen by all web users or, in other words, anyone who ranks high in the Google results can expect to be found by internet users.

Instead of taking the road to our friends’ homes, we now choose to socialize using Facebook. Those aware of this will be able to inject their own strategy into the new era of digital socialization both implicitly and explicitly.

There are many other examples of “online infrastructures” that create huge opportunities for distributing products and services, but the fact is that those who have a clear idea of how people move online will have growth advantages that are difficult to imagine.

What does “hacker” mean in growth hacker?

The word “hacker” has several different definitions and connotations. Here are some of them:

Hacker as “ingenious”

Hacker is sometimes used to refer to someone who is clever, original, or inventive. The hacker will use anything at their disposal to create a solution that may have been overlooked by others. A “life hacker” would be an example of this usage. This same attitude is found in the growth hacker because they are forced to be ingenious if they want to achieve extreme growth goals.

Hacker as “programmer”

Hacker is sometimes used to refer to a programmer, and while a growth hacker may or may not be a programmer, they use technology-based solutions to accomplish many of their objectives. Growth hackers will use software, databases, APIs, and digital tools to grow a startup. If a growth hacker is also a programmer, they can sometimes progress more efficiently, but this is not essential.

On our side, we chose to partner with programmers to offer more efficient growth hacking services. A growth hacker must understand technology very deeply to succeed. If a growth hacker is not a programmer, they still need to understand programming to coordinate with others who write code (as in my case). Remember, products and services are now technology-based, and mastery of technology will be essential for growth.

Hacker as “pirate”

Hacker is also used to describe someone who gains unauthorized access to a system. They might enter a database without permission, for instance. A growth hacker does not hack in the illegal sense of the word, but they will push the boundaries of what is expected or generally advised. Growth hackers are on the lookout for system weaknesses that will allow growth. For example, my girlfriend, a painter, used LinkedIn, Facebook, and Instagram for her business. She added a crowd of people likely to buy her paintings on those three platforms. In a month, she increased her fanbase by 25,000 people and significantly boosted her revenue.

Growth Hacking in Practice

So far, we have discussed growth hacking very philosophically. We have gone through its history, its definition, and the reasons that make this concept new in the market of mindsets for companies. Now, let’s look at some concrete examples!

Here is a popular case study we can use to clearly define growth hacking: AirBnB. As many of you know, AirBnB allows anyone to convert accommodations and guest rooms into spaces that can be rented by perfect strangers. It’s an incredible idea, the execution is amazing, and their success is largely due to growth hacking. How?

AirBnB was able to leverage Craigslist, a platform with millions of users looking for accommodations, to significantly boost their user base. When you fill out the form to list your room on AirBnB, you simultaneously get the chance to post the listing on Craigslist, so it will appear on that network too, creating inbound links for you and for AirBnB. (SEO wise!)

It seems so obvious in retrospect, one might wonder why other companies had not already saturated Craigslist with these types of cross-postings. The answer lies in the fact that Craigslist did not have a public API. Simply put, Craigslist did not offer an easy way for other companies (like AirBnB) to post ads automatically on their platform. There was no technological solution for AirBnB to implement easily, and there was definitely no reference documentation that AirBnB could use to automatically post their ad on Craigslist. Instead, they had to reverse-engineer how Craigslist’s forms worked, to then make their service compatible... without ever accessing Craigslist’s code. APIs are easy. Reverse engineering is not.

AirBnB did something a traditional marketer would have found hard to imagine, and even more difficult to execute. A bachelor's degree in marketing, as it is currently taught, will not give you the full set of tools, nor even the conceptual framework, to achieve this kind of deep integration with Craigslist, especially without an API.
Also, AirBnB quickly realized that the distribution mechanism they needed to growth hack their growth was Craigslist. No product works without users… and the users they needed were already gathering in a different place. They then gained their attention.

Another important point: the AirBnB team was very ingenious. They didn’t learn or read how to use Craigslist to promote their business. They thought of it themselves. Then, they had the courage to execute a brilliant solution when there was no guarantee that it would actually work.

Finally, they capitalized on the “gaps” in an existing market to acquire users. Craigslist had not created a public API for a reason: Craig Newmark refused to offer that on his service, which would allow the hacking of his user base. AirBnB pushed the boundaries of what was acceptable by not asking for an API and going forward without asking anyone.

Now, Craigslist has “fixed” the vulnerabilities that allowed this integration. Now, on the FAQ page of the AirBnB site, it is mentioned that they no longer post on Craigslist. This serves as a lesson for growth hackers. “Growth hacks” rarely last long.

The Future of Internet Businesses

Growth hacking is an interesting trend that gives us insight into the future of internet-based businesses but also those that are less so. There has often been a barrier between the “product/services team” and the individuals responsible for user acquisition for that same product/service. Coders build. Entrepreneurs grow. It has seemed to work this way for some time. Now, growth leads need to learn what an API is, and programming leads need to think about the customer experience within the product/service. The worlds are colliding and everything is moving very quickly.

This “cross-pollination” makes sense. If growth is truly the cornerstone of an organization, why wouldn’t it be integrated into all aspects of the organization? Even customer support should be done by people who think about growth because unhappy customers turn against businesses that have not adapted quickly enough. The future of businesses and the teams that build them will look nothing like what we are used to seeing.

For now, growth hacking is limited to startups, but soon it will be part of Fortune 500 companies. There is nothing about growth hacking that cannot be applied to large companies. If growth hackers can operate without resources, imagine what they can achieve with resources.

Summary

Traditional marketers are important, but at the beginning of a startup, you need someone with a mindset much more focused on growth.

The nature of Internet/SaaS products has produced a new way of thinking regarding growth. Product features can now be directly responsible for growth.
Distribution channels are being redrawn, and those who understand the movement of people online (internet users) will have control over their final destination.

Growth hackers, using their knowledge of product and distribution (offline or online), find ingenious, technology-based growth pathways that sometimes push the boundaries of what is expected or advised.

AirBnB is an excellent example of a company that embodies growth hacking.

Growth hacking shows us a trend that will permeate more than just the traditional marketing department.

Growth hacking is primarily found in startups, but it will eventually be found in large organizations.