Growth hacking: how to grow your company with smart and affordable ideas

Small, new companies often find themselves in a precarious situation when first starting out: in order to get started, they have to get their name out there, but their small budgets make traditional marketing campaigns in print media, radio, and TV virtually impossible. But with a little resourcefulness and some elbow grease, these start-ups can hit the ground running even when dealing with the constraints of more modest budgets.

One term that often gets mentioned within such a context is growth hacking. Growth hacks refer to marketing measures that focus exclusively on business growth in terms of both user and customer data as well as matters regarding conversion. At the same time, these tactics are so attractive because of their low costs. But what is it exactly that growth hackers do and what examples of successful use of this performance marketing tactic are there?

What is growth hacking?

The term growth hacking was first coined by Sean Ellis, founder of the web service Qualaroo, in 2010 in an entry in his start-up marketing blog. Here Ellis describes growth hackers as being marketers that concentrate on the growth of their company and place this parameter above other factors, such as image or notoriety. By relying on innovation and creativity, growth hacking carves out new paths to achieve its goals, and done ideally without adding any new substantial costs. With this model, the product, its offered service, and the users involved are all considered to be marketing instruments. This goal is realised with the help of certain interfaces that facilitate spreading information, which in turn helps generate new customers. But growth hackers are more than just marketing specialists: they also need to be informed on the technical aspects of the marketing channels on which they operate.

Hotmail, Facebook, and Twitter: the most successful growth hacks

The different ways in which growth hacks manifest themselves becomes apparent when taking a closer look at different instances of applying this tactic. Hotmail gathered a lot of positive attention in 1998 with this simple, yet innovative strategy: the free-of-charge e-mail service tagged a text on every e-mail sent that solicited users to sign up for Hotmail and included a link for registration. This simple measure turned the e-mail provider’s users into Hotmail billboards and helped gained more users, a move that helped gain over 12 million additional users within a year. This growth hacking method is commonly employed by providers of homepage toolkits, which often provide free-to-use basic versions. In addition to offering a gratis (albeit limited) range of functions, these also add small advertising banners, which include links that signal to the user which toolkit was used to construct the site they’re currently visiting.

And as the following example from Twitter shows, growth hackers need to be savvy on technical knowhow as well. When the messaging service first appeared in 2006, the company was able to quickly determine that users following a minimum of at least 30 other Twitter users were able to more quickly understand new topics, like hashtags and retweets, resulting in more frequent use. Twitter capitalised on this knowledge by installing a feature in the accounts of new users that recommended different accounts that users may want to follow. As a result, users were able to more quickly reach the magic number of 30. Pinterest, which appeared four years later, takes this concept one step further: whoever registers within this network automatically follows users of selected top accounts.

Facebook and WhatsApp experienced almost-uncanny level of success with their various growth hacks. Their path to quick growth was paved with existing contact lists. In 2010, Facebook purchased the Malaysian company Octazen solutions, which specialised in importing e-mail contacts. Soon thereafter, Facebook introduced its contact import function, which enabled account holders to use their e-mail contact lists to invite new users to join the social network. The networking strategy for WhatsApp worked even better. Thanks to the automatic import of contacts from users’ mobile phone contact lists, it’s easy for users to find one another, and phone numbers make inviting friends and acquaintances to the app a simple task. Within the course of a few years, this strategy resulted in the application gaining over a billion users, all without having to invest a penny in marketing.

The deciding success factors

Depending on the product or service in question, there are a few factors that you should adhere to so that your growth hacks produce strategic and sustainable growth. The most important thing to always take into account is the product or the service itself. Growth hacking works best whenever the product or service in question speaks for itself and only needs a small spark to ignite a chain reaction of rapid growth. In other words, you’ll be able to increase your chances of having users act as engines of growth by convincing them to inform others about your product.

Of course, blogs and social networks both play substantial roles when it comes to growth hacking. These platforms offer virtually free-of-charge advertising that visitors are able to both directly consume and share amongst their friends and peers. Images and infographics present especially lucrative options for generating buzz about your company. You should also make sure to always follow the latest social media trends. Staying up to date on the latest and most popular platforms, themes, and content types will most likely prove useful when searching for innovative ideas on suitable growth hacks.

But there’s more to making the most of this tactic than just being observant: flexibility and responsiveness to changing situations are equally important parts to this skill. Growth hackers aren’t just rewarded for their hard work: they also have to be able to overcome challenges whenever it becomes clear that ordinary mechanisms aren’t working. The online storage service, Dropbox, provides a good example on how to do this: Dropbox incentivised registered users to sign up for the service by promising them additional, free-of-charge storage space whenever they solicited others to join the network or connected their Dropbox accounts to their Facebook or Twitter accounts. So-called Dropquest competitions, which had users solving tricky tasks in order to win additional storage space, also contributed to the success of the file hosting service.

Chances and risks of growth hacking

It’s often assumed that growth hacks constitute as not only cost, but also as time saving measures. This myth is debunked by the fact that working out the correct growth hacking strategy can be just as demanding as setting up an entire ad campaign. What’s more, growth hacks should never be seen as a replacement for a sound marketing strategy, rather they are meant to serve as a supplement to these efforts. And just as is the case with any tool, when used improperly, there’s always potential that more harm may come about than good.

This is especially the case when you offer a product or service that is designed to add value to the customer experience. In this case, you’re sure to experience more robust growth through creative measures than with comparable offers of higher quality; however, such measures probably won’t be able to hold up on the market in the long run, as they’re only able to turn a few newly gained customers into repeat visitors. The majority of users will unfortunately be lost, and normally won’t return. And what could potentially make matters worse is the fact that some users may end up advising people against using your product instead of recommending it to others.

Having said that, the excellent chances that growth hacking offers cannot be denied. While search engine optimisation, social media marketing etc. are indispensable features of any solid marketing mix, innovative growth hacks offer the perfect possibility to potentially out do these aforementioned marketing mechanisms and gain additional users. The budget required to implement these measures is furthermore quite modest, enabling less financially-well-endowed enterprises to compete with larger players.


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