Growth hacking is one of the biggest buzzwords of the past years, so many people are asking “What is Growth Hacking?”.
Consultants, marketers and entrepreneurs call growth hacking as the best way they grow a business, but what does it really mean?
In this article, I want to give a clear definition and explain step-by-step what growth hacking is and how it works.
In this blog…
Tip: Use the links below to skip some pieces.
- What is Growth Hacking?
- Growth Hacker Mindset
- Skills of a Growth Hacker
- Difference between Growth Hacking versus Marketing
- Growth Hacking examples
- How to get started with Growth Hacking?
- The Growth Hacking Process: G.R.O.W.S.
- Extra reading material about Growth Marketing
- Frequently Asked Questions
Let’s get started with the definition of growth hacking:
What is Growth Hacking?
Growth Hacking is a new field and a combination of marketing, data and technology. A growth hacker runs experiments based on a process-based methodology to grow the number of customers. Growth Hacking is ideal for startups, because of the limited budgets and resources, but it also lends itself to larger companies.
Origin of Growth Hacking
Growth hacking started within the startups of Silicon Valley, but nowadays it has grown into a form of work that also applies to large, established companies.
For those startups, growth hacking was their way to beat the established order; the big corporates. They had fewer resources and budget to work the same way as the big competitors and therefore they had to find alternative ways to market their product.
Hence the word ‘hacking’ is used as a metaphor to grow in a different, cheaper and / or faster way.
Why is growth hacking also relevant to large companies nowadays? Many companies see growth hacking as the perfect strategy for the 21st century, because you have to be flexible to avoid competitors, have to be quick to take chances and be data-driven because you do not want to spend thousands of euros on the basis of gut feeling.
Sean Ellis, the first Growth Hacker
Growth Hacking is a relatively new term. In 2011 Sean Ellis, then marketing manager of PayPal, coined the term when he placed a vacancy online for a ‘Growth Hacker’. He was looking for a successor for himself, but he was not really looking for ‘just’ an online marketer.
He was looking for someone with knowledge of data, product, tech and marketing, and in addition, the person had to have a very specific mindset that fully focused on sustainable growth.
From that moment on, more people stood up and started calling themselves a growth hacker, growth marketer, technical marketeer, data-driven marketer or head of growth. They recognized themself in this mindset and saw the difference with traditional marketing.
What is a Growth Hacker really?
A Growth Hacking mindset
The question “What is Growth Hacking?” is such a difficult question, because it is above all a way of thinking / working, known as the ‘Growth Hacking Mindset‘. A growth hacker sets the goal above the means; growing his ‘North Star Metric‘ is his main goal and which channel, technique or tool is used for this is secondary.
That is why it is so important that a growth hacker has a broad set of knowledge and skills.
In terms of growth hacking skills, knowledge of data is necessary, because that is the only way to find your main problem and its cause. Then comes creativity to come up with solutions for this problem and finally, a growth hacker needs technical skills to bring these solutions to reality.
“Do you mean a growth hacker needs all those skills?!” No. He is a T-shaped player, as I’ll explain below:
Skills of a Growth Hacker
As a growth hacker, you have to be able to work quickly and therefore you have to be as independent as possible. That is why it is important for a growth hacker to be able to program, handle data and design. He/she does not have to be an expert in everything, but in any case has to understand the basis to be able to execute the biggest part by themselves. Hence a T-shaped player:
This term was first used by David Guest in 1991. He described a T-shaped employee as “someone who specializes in being a generalist, but with an expertise in one or two fields”.
A growth hacker, should have 20% of all the knowledge needed to execute 80% of the work.
David Arnoux, co-founder of Growth Tribe, recently wrote an article on the skills of a T-shaped growth hacker.
Here you have a video explaining what growth hacking is (based on the book Growth Hacker Marketing by Ryan Holiday):
Every startup/scaleup is looking growth hackers
Nowadays, growth hacking is on the rise. Andrew Chen even said that the VP of Marketing will be replaced by a “VP of Growth”. For every startup or innovation project time, people and budgets are limited, so we have to be data-driven and always keep experimenting. Data is the safest route.
For every 7 companies looking for a growth hacker, there is 1 growth hacker available who has the necessary knowledge. That is why we see a big rise of growth marketing agencies and growth hacking courses. In Amsterdam, the first growth hacking academy of Europe was founded at the end of 2015, Growth Tribe.
If you want to implement growth hacking in your company, you have to know what it means. So let’s zoom in a bit further on the definition of growth hacking:
What is the difference between Growth Hacking versus Marketing?
I regularly hear people describe growth hacking as ‘marketing of the future’. I have to confess that the difference is not very big for some people and it just depends on how you look at it, so I want to apologize to the marketers who feel hurt by this post. Sorry.
In my opinion, there are five differences between marketing and growth hacking:
- A growth hacker uses the entire funnel, where most marketers only look at Awareness and Acquisition.
- A growth hacker runs experiments; he tests which direction works best, where a marketer often focuses on one method.
- A growth hacker works data driven, where that is not the case for most marketing departments.
- A growth hacker has some technical skills, such as programming, tooling and automations.
- A growth hacker is involved in the product, because, among other things, he has to pay attention to the retention of active customers.
Let me explain these five points shortly:
The Pirate funnel is a model by Dave McClure to cut a company in six phases: Awareness, Acquisition, Activation, Revenue, Retention and Referral. The first letter of the stages spell AAARRR, hence the name Pirate funnel. The shape of the model looks like a funnel, but others prefer it as a Pirate Hourglass.
Regarding this funnel, the difference between a growth hacker and a traditional marketer is:
- A marketer mainly focuses on the first two phases Awareness and Acquisition – How do I get more name recognition and more visitors on my website?
- A growth hacker focuses on all phases of the Pirate funnel – Where is the biggest opportunity to grow our revenue?
One of the most important wisdoms that a growth hacker must have is the realization that nobody knows what will work and what will fail. This applies to startup ideas, channels and conversion optimization.
That’s why you’ll have to experiment.
By trying a channel / tactic in a small experiment, you can avoid losing a lot of time or money. If during an experiment it appears that it doesn’t work, then you do not have to invest in it. If it does, you can continue exploring. In this way, a growth hacker ensures a higher ROI (“Return on Investment”) by spending time on the most effective channels. Here you can also see the big similarity between Growth Hacking and Lean Startup.
Previously companies often worked with budgets that could be spent on anything and were often divided based on gutfeeling. Partly because the correct tracking tools were not available.
Nowadays it is possible to measure everything we want to know within a website or app: scroll depth, mouse movements, time on a website, click-through-rates, etc. Why would we still make choices based on gutfeeling?
Here you can see exactly how growth hacking originated in Silicon Valley, because startups often have the smallest budgets. Nowadays you see that this actually applies just as well to corporate innovation projects. And companies with large budgets prefer to spend their money as efficiently as possible.
A growth hacker co