Growth hacking is the application of the mindsets and tools of a computer hacker to the challenge of growing a company. Basically, growth hacking is what happens when software developers try to do marketing. The essence of the growth hacking mindset is the scientific method and an iterative rapid prototyping approach to marketing. This type of marketing can be faster, cheaper and more effective than traditional marketing so growth hacking is becoming popular in many industries.
New Zealand has normally been pretty slow to adopt global trends in sales, marketing and design. As far as I can tell, there are still only a small number of New Zealand companies such as Vend, TradeMe and 90 Seconds TV that are applying growth hacking techniques to rapidly expand their businesses. I’m hoping to find more people doing growth hacking in Auckland and the rest of New Zealand to swap stories and share lessons learned.
1. Applying the Scientific Method to Marketing
Many software developers have a background in engineering and science. When software developers inside tech startups with no marketing team looked at the challenge of growing a company’s user base, they began to apply an experimental approach based on the scientific method. The scientific method is designed to allow technical and analytical people to approach situations of high uncertainty and to iterate towards certainty.
The core of the scientific method is the cycle of hypothesis, experiment, measurement and validation. The “lean startup” approach is to build a new business by creating as many ideas as possible and then testing those ideas with the smallest and simplest experiments possible.
The experiments to test demand for a new product are called a Minimum Viable Product. A minimum viable product is the simplest and fasted version of a product that can be created to test and measure valid market demand for a future product or service. In the marketing world these experiments are called “growth experiments“. I think of them as the “minimum viable promotion” needed to test a creative idea.
The process is driven by a series of guiding questions. In the growth and marketing arena the experimental steps are:
- Hypothesis: A statement about what might increase the demand for the company’s products. This statement can be proven as either true or not true. For example: “If we create a free version of our product, people will want it, use it and will then upgrade to the paid version.”
- Experiment: A simple way to test the hypothesis and gather information. For example: “We will create a free version of the product and test how many people upgrade to the paid version.”
- Measurement: Analysing the data from the experiment to determine the result. For example: “How many people use the free version and what percentage upgrade to the paid version?”
- Validation: Learning from the results to iterate and improve. For example: “Did more people sign up to the paid version as a result of the free version or are we better having a paid model only?”
2. Applying Rapid Prototyping to Marketing
One of the most important things that the scientific method unlocks for companies is the freedom to run a lot of experiments very quickly. This in turn unlocks the freedom to experiment and be creative across a lot of parts of the business. New Zealand companies can sometimes be slow to adopt new marketing ideas so this has slowed down the adoption of growth hacking in New Zealand.
Growth hacking is agnostic across marketing channels and includes a mix of product and marketing.
In the world of marketing agencies there are well defined professional boundaries between advertising, public relations and design. But this new world of cross-channel promotion demands that agencies are able to conceive and execute ideas in every channel.
My personal hypothesis is that brand design agencies have a head start in this new world because they are used to being there at the starting point of big ideas and stories that play out across many channels.
To provide growth hacking services all that a branding agency really needs to do is become more involved in implementation. Branding firms will also need to up-skill on data and analytics, and some firms will need to learn to move faster than usual. But the raw material for a high intensity growth hacking engine is already hidden inside many branding agencies.
In the world of in-house marketing teams there are several challenges with being more scientific and more iterative with marketing:
- The product team are usually resource constrained and already have a product roadmap with priorities for improvements and changes to the core product. Therefore any creative ideas for product features that could increase growth have to be balanced against existing product priorities.
- On a personal level, the product team and marketing team probably have different world-views, ways of operating and ways of communicating. This is a natural and healthy tension but it can slow down the speed of collaboration.
- Using data and analytics to track and measure growth experiments is a difficult challenge and requires the team to balance the tension between measuring too much and being overwhelmed with useless data or not measuring enough to be able to make decisions.
- Internal growth projects can get distracted and derailed by other internal priorities. Growth experiments usually fall into the category of important but not urgent so they are easy to delay and procrastinate on. Most marketing teams have a to-do list somewhere with dozens of ideas that could make a major difference to growth if only they could get around to them.
When I was in-house I hired and fired several marketing, advertising and PR agencies. I have formed a view over time that a lot of the best growth hacking needs to be done by in-house teams. But I always wished that I had a SWAT Team on call to deploy when a really interesting growth idea came up. My ideal external growth team would meet the challenges listed above with:
- Full-stack: On-tap capacity to go all the way from concept and design to engineering and deployment. This “design & build” capability should be channel agnostic so that the team can deliver everything from advertising campaigns to mobile apps quickly, cheaply and with high quality.
- Collaborative: Multi-lingual across disciplines to serve and collaborate with different people inside the in-house team. The agency strategists, designers and developers should all play nice with others.
- Data-driven: Deep expertise in tracking, analytics and data. An in-house team can only really know the current analytics systems that they are using. An external team should be able to use and deploy tracking solutions from different providers and help the in-house team prioritise which metrics to track.
- Focused: An external team should have the focus and speed to deliver growth projects without being derailed by the company’s internal crises.
It’s early days, but I’m aiming to build exactly this type of growth team here in Auckland. If you’d like to learn more about this type of rapid and practical marketing then you can hit me up on [email protected] I’d also love to hear from other practitioners that are at the coal face running growth hacking teams in Auckland or the rest of New Zealand. The New York and London startup scenes thrive on collaboration and sharing. We need to find and celebrate more great New Zealand growth hacking success stories.