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Why growth hacking is extremely popular in Silicon Valley

February 20, 2015 – by Jennis Jongerius &samhoud media

In the uncrowned capital of innovation, Silicon Valley, almost no business is traditional. So aren’t the marketing strategies. That is why ‘growth hacking’ has become the new religion and it is changing the game for startups. Since the role of the growth hacker has risen to prominence in the technology hub, other parts of the world follow the American pioneers soon. The guy that coined the term growth hacker for the first time is the American Sean Ellis. Despite what you may think upon seeing the term, growth hacking is not the same as the traditional hacking. It is the art to build, improve and grow your company using creativity, metrics and analytical thinking.

Growth hackers focus mainly on low-cost and innovative alternatives to traditional marketing. Utilizing social media and viral content instead of buying advertising through more traditional forms of media to gain growth. A simple digital application can create such a growth hack. And the most successful growth hacks take advantage of unique opportunities in a digital world where traffic can spread rapidly. But I will explain this later in a case study of Airbnb.

Unfortunately growth hacking is not just a series of tricks that every company can integrate. It is the specific date-drive mindset to do what it takes to grow a company. But why is this new way of art so incredibly popular in the startup scene?
growth hacking

Startup buzzword
The easiest way to answer this question is that scrappy and new-formed companies have limited resources for a traditional marketer so they need to be creative to grow, acquire users, retain and monetize them. Moreover, many traditional marketing channels are almost saturated.

A second answer is that many startups have failed in the past because they focused too much on their product. The real challenge nowadays is distribution. There are so many good projects and cool products that it is much more important to have a clue about how to reach your customers.

Growth is king
The best example for me to underline this is a content creation channel. A heard a lot sentence is ‘content is king’ and you are probably already tired of hearing that. So get rid of that crappy advice. Of course content is important and it is also how you keep your loyal visitors satisfied. But everyone with a desktop or a webcam can create content when he or she wants. I hear you thinking: “who is the new king?”

Well, the real magic happens after you hit the publish button and you need to focus on how to put your content in front of the right people. So clicking “publish” is just the beginning. In the tsunami of online content you only have five seconds to grab someone’s attention. In this first user experience people make judgments about you, your startup and your website. So it better be good.

Growth hackers are not marketers.
Traditional marketers care also about growth, but I started this article with mentioning that startups from Silicon Valley are not traditional. The teams are relatively small so it is up to the growth hacker to develop the whole strategy chain, from soup to nuts. That may involve some amounts of coding, framework development, A/B testing and other technical methods. That makes the growth hacker technical enough to control existing platforms to reach billions of users.

But a growth hacker is not a replacement for a marketer. Growth hacking dovetails quite a bit with online marketing, but it is still different. Their power is in their obsessive focus on a that only single goal: growth. I hear you think again: “that is also the goal of a marketer?”

But there is a difference. The true north of a growth hacker is growth. These data-driven adventures don’t care about something like brand awareness, they only care about return on investment and finding out what works and that’s why the growth hacker is many times in conflict with designers and CEO’s. Every tactic, every initiative, every decision he makes is attempted in the hopes of growing.

I think we need a case study to illustrate the theory. Airbnb, the community marketplace for people to discover and book accommodations around the world, is a great example of a firm that successfully embodies growth hacking. They do it with just a simple and notable Craigslist integration.What is exactly so remarkable? For every startup, just like Airbnb a few years ago, it is difficult to build an audience. So they used the audience of Craigslist: a platform with ten millions of users. It was the place where people who wanted something other than the standard hotel experience. In other words: the target group of Airbnb.
The growth hackers added a simple “Post to Craigslist” feature for homeowners to automatically cross-post listings, driving all the Craigslist audience to Airbnb. As you can see in the image the result was astonishingly. They spent nothing on advertising, but their group of monthly new users is drastically increasing.
airbnb grafiek
Airbnb is just one classic example of a very successful growth hack. What about the file sharing service Dropbox. It offers free storage space whenever its users invite their friends to join. Also the results of YouTube have been astonishing. Only by integrate an easy option of embedding videos on your own website. Linkedin, Twitter, Facebook, and Hotmail; all this companies’ embraced growth hacking, which imminently led to their enormous success.

Testing, testing and keep testing
There are some parts of growth hacking that are ideal for companies of every size and that is the focus on constant growth. In practice this means that every firm can expend by not agree with the status quo. So always test your methods and be aware of what you are doing is truly effective or not. That is the best opportunity to reach your full potential. This never-ending growth should be a main goal of every successful business: size doesn’t matter always keep testing.

Unfortunately it is not likely that you are going to hire a growth hacker to join your company soon. Simply because that there are not enough growth hacker out there yet. But fortunately growth hacker is largely a way of thinking and the necessary skills can be acquired. Good luck!

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