Wayne Lockwood: How to Growth-Hack Your Way to Revenue Gains

Thursday, 29 June 2017

How to Growth-Hack Your Way to Revenue Gains—Even if You’re Not A Startup

Have your marketing efforts hit a plateau? Are you looking for an innovative way to reach new markets and solve new problems?

If so, you may have considered growth hacking but run into snags if your company is beyond startup mode.

As may already know, Sean Ellis, an experienced marketing leader, entrepreneur and angel investor, coined the term “growth hacker” to describe “a person whose true north is growth.” The initial concept was that budget-strapped startups needed to use unconventional tactics to achieve an ideal product/market fit and progress to driving mass user adoption.

Since then, several upstart companies, including Instagram, Airbnb, and Slack, have ridden the growth-hacking wave to stardom—attracting interest from established companies.

However, a cultural conflict has stopped many SMBs and enterprises from realizing the promise of growth hacking. Why? Inherent risk aversion and a focus on process are in opposition to the concept behind growth hacking—that failure is OK, as long as you can rapidly execute agile, measurable, out-of-the-box tactics.

This is unfortunate—and remediable. Growth hacking has an important place in larger, more evolved companies, too. If you’re willing to step out of your comfort zone, growth-hacking success stories can inspire new ideas that elevate your marketing and bolster ROI.

In this blog I’ll share three growth-hacking lessons and use cases that you can use to help generate ideas on how to use growth hacking for your organization and improve your results:

1. Use Your Best Customers as Your Research Lab

To achieve product/market fit, revamp your approach to innovation by using your best customers as your research laboratory.

Use case:

Instagram: In 2009, location-based mobile applications were skyrocketing. Mirroring the buzzworthy app at the time, Foursquare, Instagram co-founder Kevin Systrom developed a similar app, named Burbn. The app allowed users check in to locations, post planned activities, and post pictures using filters.

Systrom secured a $500,000 round of funding and hired his first employee, Mike Krieger. Together, they examined how Burbn’s user base behaved within the app. It became abundantly clear that the photo-sharing capability was by far the most popular feature. The two studied the cluttered yet embryonic photo-sharing app marketplace and realized there was an opportunity to develop a filter-based app that also boasted a social network.

Based on this learning, they pivoted away from the original premise of Burbn, instead developing an easy-to-use app that eventually became Instagram.

Instagram grew by leaps and bounds—to 100,000 users in a week, 1 million in 2½ months, and 30 million just 30 months after its launch. Facebook eventually purchased Instagram for $1 billion.

The Instagram approach also can work if your company has been around for years. Deeply evaluating user behavior, may lead you to decide to focus solely on a particular product feature, or to enhance and emphasize it to improve your company’s competitive edge.

2. Use “What If” Analysis to Create New Opportunities

To expand market share, use “what if” analysis to create new opportunities.

Use case:

Airbnb: If your company already has a viable product or service, growth hacking can help you drive awareness. Take a cue from Airbnb penetrating Craigslist’s marketplace.

Airbnb, which enables almost anyone to convert a spare bedroom into a hotel room available for rent, wanted to increase its market penetration. To do so, it reverse-engineered an application program interface (API), allowing its users to post listings on Craigslist.

Although Craigslist’s model prevented the hack and there were no guarantees that the API would work, Airbnb’s team went for it based on the potential payoff. The plan succeeded, and because Airbnb’s listings generally were better than traditional Craigslist ads, Airbnb drove more traffic to its application—at virtually no advertising cost.

You could accomplish a similar breakthrough to expand the market for an existing product.

3. Address Problems That Prospects Don’t Know They Have

To define a new market, strategically address problems that prospects don’t know they have.

Use case:

Slack: Two weeks before launch, Slack co-founder Stewart Butterfield sent a memo to his development team. Titled “We don’t sell saddles here,” the memo conveyed Slack’s mission, stating: “Despite the fact that there are a handful of direct competitors and a muddled history of superficially similar tools, we are setting out to define a new market. And that means we can’t limit ourselves to tweaking the product; we need to tweak the market too.”

Butterfield further explained that Slack was more than a chat system; it was the key to “organizational transformation.”

“We’re selling a reduction in information overload, relief from stress, and a new ability to extract the enormous value of hitherto useless corporate archives,” Butterfield wrote. “We’re selling better organizations, better teams. That’s a good thing for people to buy and it is a much better thing for us to sell in the long run.”

And the market proved him right. By articulating a value proposition to serve a broader, previously unknown need, Slack became a $1 billion company in a mere two years.

While there’s no right or wrong way to growth-hack, these three lessons offer a foundation for finding new pathways to accelerated revenue gains and higher ROI—whether your company is on the launch pad or well-established.

Do you have a great example of growth hacking—either in your organization or outside of it? I’d love to hear about it in the comments below.

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