I am sure you heard hundreds of success stories of companies that ‘made it’, are now known all around the world and have become unicorns. What do these companies have in common? They used Growth Hacking.
People see companies like Dropbox, Uber or Instagram and they never wonder how did they come to be so enormous. It was like they were non-existent and all of a sudden they took over the world by storm. That’s the end result of using Growth Hacking.
From the founders’ perspective, this looks completely different. It started from nothing and thanks to hundreds of thousands of hours dedicated to the product and growth, were they able to become the companies they are now.
Take for example Instagram, it did not start off as a picture posting service, it has pivoted into it. That was done thanks to careful data analysis that showed to the founders that their users are in big majority using only this feature. Where did it land them? Selling their startup to Facebook for a whopping $1 billion.
Another example is Dropbox’s famous referral program. If you refer a new user you get extra storage and he gets free storage too. It also came from multiple hours of testing, data analysis and failing. Was the end result worth it? Long story short, the company valuation is now standing at $ 3.3 billion.
The Unicorns are at the summit of the mountain and that is what most people can see. What you do not see is the entire journey that leads to the summit.
The journey from ground zero to the summit is where the hardest work takes place and also where this hard work is least likely to be noticed.
So how to start with Growth Hacking or in other words your journey up the hill?
With setting up the right Growth mindset within your team or organization. What does that mean?
You need to make sure that the people around you are on board with how the lean methodology works. You move fast, test a lot of things, often fail but keep learning and focus on one goal – Growth. This mindset will help you with the growth process which looks like this:
Focus on your goal, whatever metric that may be, daily active users, conversions to paid users, new account registrations, Facebook likes or any other metric that will make your business successful. It is important though that you know what are you trying to achieve and are able to measure it. This is the One Metric That Matters (OMTM). That metric may change depending on the stage of which your company is right now but don’t worry about that now.
Break the One Metric that Matters down into other metrics that influence OMTM directly or indirectly. Check if these metrics can be easily improved, how and if necessary, break those metrics down into another level of metrics that influence them directly or indirectly.
Create focus, Growth Hacking is impossible if you try to do everything at the same time. Build ideas around One Metric that Matters and the other metrics that influence it. All ideas have to have a hypothesis of how will they help you improve One Metric that Matters. You can use one of the most important elements of the growth process for this – the Idea Backlog.
How does the backlog look like?
- Funnel level. You list the ideas that you come up with and indicate which level of the funnel do they focus on (Awareness, Acquisition, Activation, Retention, Referral, Revenue). Each idea must focus on no less and no more than 1 level.
- Channel used, indicate the channel that this idea will be carried out on – Facebook, Google, Product, website – you name it. And yes, your product is a channel that has to be used for growth!
- Name of the idea,
- Who came up with the idea – to keep score within your company and reward the winner at the end of each month,
- The owner – so who will be responsible for carrying it out. This is crucial because if there is a person on your team responsible for the experiment then it is much easier to find out what is going on rather than if the entire team would poke it with a stick for a week and have no idea what happened to it.
- Description of the idea, one that will enable each team member or even an outsider to read it and understand what you want to achieve with this idea,
- Metric(s) – what metrics will this idea actually improve,
- Prediction – what is your hypothesis for this idea, will it improve the email CTR? Will it increase time spent on sight?
- Tools & Resources – what is needed in order to carry out this idea?
I always suggest that you share this backlog with your entire team or even company in order to get as many ideas in there as possible. The best way to incentivise people to come up with more ideas is competitiveness. Keep score of who came up with the most relevant ideas and have a reward at the end of each month presented to that person.
Remember, there are no bad ideas until proven so with data. Sometimes even the most trivial ideas may bring surprising results. I have seen it with my own eyes. You can even ask Sean Ellis about this.
He once described that simply by moving the newsletter sign-up on the page massively improved the number of sign-ups.
I like to use the ICE scale, which stands for Impact Confidence and Ease. Each of them are graded on a 1 to 10 scale with 10 being best and 1 being worst.
It is best to do this with the team responsible for growth so that there is no bias and a low possibility of omitting something like a sick developer who won’t be able to deliver the test this week.
After each idea has been ranked then you can count the score by multiplying I x C x E.
There is another way of prioritizing ideas, BRASS. It consists of:
- Blink – Gut Feeling,
- Relevance – Product/Channel Fit,
- Availability – Ease + Cost,
- Scalability – Does it scale?
- Score – Multiply
I like the ICE scale because it is simpler to use for the teams that are starting their adventure with Growth Hacking. You can choose whichever method of prioritizing ideas you find more suitable to your needs. You can read more about BRASS here.
The ideas with the highest score are the ones that you want to test out first.
Depending on the size of your team you should decide upon the length of your sprints and number of tests in each sprint. I would strongly suggest to start small and move up with the numbers. That will allow you to learn more in the first sprints and find out if you can take on more tests and if so add them incrementally.
I have seen too many teams get incredibly excited after the ideation and prioritization phase and take on way too many experiments upon their shoulders. This almost always results in half-assed tests, confusion, disappointment and lack of proper results.
For example, start with bi-weekly sprints and assign one experiment to each team member. As the growth master, you should keep track of any obstacles or successes of the experiments carried out in order to react as fast as possible and optimize.
Once you see that this number of tests can be increased, try giving them two tests, then three, or maybe make the sprints last one week instead of two.
Each experiment that you choose to carry out in the given sprint must have an Experiment Doc to it. What is inside the doc:
- Objective – What metric(s) is the experiment supposed to improve?
- Hypothesis – What do you think will happen because of the experiments?
- Experiment design – Explain exactly how the experiments is going to be carried out in order to document for future reference what can be optimized or in case you want to repeat it,
- Expected resources – how many working hours from specific team member are needed and/or how much money is needed,
- Expected results – write out all the metrics that will come out of the experiment and after it is complete compare the expectations to the real data,
- ICE score of the idea,
- Results – the actual data after the completion of the experiment,
- Learnings – write down everything that you have learned during, because of and after the experiment that will help you in future ideation and optimization activities,
- Action items – action points after the experiments was done
Get your own idea backlog template here.
Whatever the test demands of you, you must carry it out in every possible way in order to make sure you have exhausted the possibilities for the idea to work.
Do not just set up an automation to carry it out for the best week or two. Keep challenging it and tweaking the test for better results or more findings.
While the tests are carried out make sure you measure everything. You will need the data to see what really took place and understand why it happened. This will be crucial in the next phase.
This is the part that separates Growth Hacking from regular marketing. Digging into the data.
There are three possible results of an experiment – positive, negative and inconclusive. Go through all the data you have gathered during the sprint. Compare it against your expected results to find out if they were met. Understand why were they met or not or why was it inconclusive. Give reasons and write down the learning in the Experiment Doc.
According to Sean Ellis an ideal growth meeting should look like this:
- 15 min: Growth metrics, issues, and opportunities
- 10 min: Review last week’s testing sprint
- 15 min: Key lessons learned from analyzed tests
- 15 min: Select tests for this week’s sprint
- 5 min: Check growth of idea backlog
I always follow this schedule and can say from experience that if the entire team knows this agenda, the meetings go very smooth and everyone knows what to prepare. I suggest you start trying to put into life in your team too.
I can also leave you with suggestions as of what to read if you are starting to work on growth:
- Growth Hacker Marketing by Ryan Holiday – best book to start understanding the difference between marketing and growth hacking,
- Traction by Gabriel Weinberg – this will help you find Product Market Fit that is needed to start working on growth,
- Hacking Growth by Sean Ellis and Morgan Brown – it has become my bible when it comes to the subject
Summing up, there are several steps to follow if you want to start working on growth:
- Growth Mindset – Move fast and break things, most experiments will fail but do not let that get you down, the wins are definitely worth it!
- Ideate – Build as many ideas as possible and remember that there are no bad ideas until proven so with data,
- Prioritize – Select few ideas to bring to life in the next sprint,
- Test – Carry out the idea in every possible way that can bring you the results you assumed in your hypothesis and collect all the data in the process,
- Analysis – Did the experiment succeed, fail or was it inconclusive? Use your data to find out why was it like that.
- Repeat – never stop putting ideas into the backlog, choose another set of tests to run, run them, analyze. Never stop. Even the failed tests are useful, you learn something new about your users and this will eventually help you get the ideas that will move the needle.
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PS2. I help companies work on Growth Hacking at Growth Engine – Growth Hackers for Hire