Technology has expanded the range of possible business and revenue models. The 21st century has seen more innovation around these models than in the actual products and services. With so much creativity unleashed and rapidly changing the face of business, it is no wonder that formal marketing training cannot keep up. Traditionally trained marketers have in several cases found themselves unable to measure up to the challenges presented by these new companies and their products.
Growth hacking has become the buzzword used to encompass all the new and unconventional marketing tactics that tech startups adopt to generate and accelerate growth. Because most of the attempts to define this term fail to do it justice let us take a quick look at just four examples of products whose rise to prominence was facilitated by strategies which we have now come to refer to as growth hacking.
This company was one of the pioneers of cloud storage – the services that enable one to store one’s files online. This was an extremely useful service as it not only allowed you to reliably back up your files but also to access them on any device connected to the internet. However, an excellent idea without users or customers is exactly just that, so the company had to do even more innovating to grow.
One of the (several) strategies that DropBox used was to incentivise referrals by offering more storage for current users who linked their DB accounts to their social media ones and sharing information about the service. This allowed it to leverage the power of already popular platforms like Facebook and Twitter. At a time when the service had virtually no competitors, the mere spread of the knowledge of the service’s existence brought it, users, in droves.
This example from Google proves that growth hacking is not only the forte of tiny startups. When the internet giant wanted to grow the user base of its then-new web emailing service they decided to exploit people’s so-called FOMO (fear of missing out) to build up interest, curiosity and anticipation. They did this by using an invite-only system to sign up people for the service. FOMO is a very powerful marketing tool which drove some people into such a frenzy that Gmail invites were being auctioned on E-Bay.
It is important to note this was a time when instant messaging via smartphones was yet to reach its current levels of popularity – email was still king. Remember that in addition to using this tactic Gmail was still also a very excellent and innovative service which revolutionized the way that email systems worked. Most of the email client features that we take for granted nowadays were pioneered by the likes of Gmail.
Hotmail (Precursor to Outlook)
While a lot of people nowadays take it for granted that an email address is free and is primarily accessed via your browser, that was not always the case. In the earlier days of the internet, your email address was either provided to you by your ISP or your employer. They also invariably required dedicated client software for you to access them. Because mobile computing devices were still beyond the reach of many, this meant that you could only access your email from a few computers. This allowed employers and ISPs to control and monitor the email traffic on their networks.
Two gentlemen then came up with the idea, that today sounds like commonsense – free email boxes for everyone which can be accessed via a browser. For people who believe in Cinderella tales centred around ideas, this would be an adequate explanation of how these innovators became rich. However, in the real world, a great idea is just one of the milestones on the rocky and uncertain road to riches. They had to acquire users before anyone would take them seriously.
In one of the simplest and earliest examples of growth hacking, they just added a signature line at the end of emails sent from their service that invited the recipients to try out Hotmail. With each email sent marketing them at virtually no cost, their user numbers grew. Eventually, an impressed Microsoft came knocking and bought the company.
The developed world had a robust and entrenched money transfer infrastructure far before the advent of the world wide web. Far from being a good thing this complicated e-commerce transactions on the internet as these systems were run mostly by banks which, like most traditional institutions, prefer to pursue technology only after they have had a real good view of its usefulness to them.
Paypal stepped in to bridge this gap and provide the security that online payments so desperately needed. One of the key strategies they used was to give away substantial amounts of money from their coffers. They gave people $10 for each new user referred with another $10 for the new user.
While growth hacking can yield impressive results depending on the quality of the strategy, it is by no means foolproof or a silver bullet for flawed product ideas. As an example, the strategy that Google succeeded with on Gmail failed on their other products like Google+ which you would be forgiven for not knowing.