How does growth hacking work?

How does growth hacking work?

Want to know how growth hacking works. This is a quick and simple overview of how growth hacking works exactly.

An in-depth and definitive look into how growth hacking works and how it can transform your growth strategy

As a startup, growing your business is one of the most crucial aspects of your success. You need to ensure that you’re moving forward quickly to start earning money and building your brand.


Growth hacking is one of the defining features of modern marketing techniques, but it can be hard to understand how it works since it’s still relatively new. To make things easier for you, we want to break down how to get started and make growth hacking work.


The Fundamental Process of How does Growth Hacking work

One of the most vital things to remember is that your primary focus is growth above all else when it comes to growth hacking. While traditional marketing has its place in your business, a growth hacker’s true north is growth while ignoring anything that doesn’t contribute to that.

So, with that in mind, here are the necessary steps you should follow to build your brand and achieve massive growth in a relatively short period.


Idea Validation

First and foremost, you need to ensure that your product is worthwhile to the user. Do you think that Facebook would have taken over the world if it were just “okay?” Would Airbnb have disrupted the hotel and hospitality industry so much if it weren’t offering a better alternative to the status quo?


If you don’t have a product that people want, then no hacking amount will lead to growth. You could try all kinds of techniques and tactics, but you won’t gain any traction with them.


However, how can you validate your idea or product? Here are a few ways to get started.


Get Feedback

One excellent way to see the type of reaction you’ll get from consumers is to ask them for their opinion on your product. Find out whether your idea offers a solution to a pain point or problem that your typical user encounters. If so, then there’s a much better chance that they will embrace it.


Even if you have an idea right now, putting it out there and seeing the type of reaction it gets is still beneficial. It’s better to build traction and buzz right now before you launch so that you don’t invest a ton of time, money, and effort into something that will fizzle out before you get a chance to succeed.


Remove Any Unnecessary Elements

During the feedback process, you want to focus your attention on what users respond to the most. Thus, if you have certain features that aren’t getting used or that people don’t seem to care about, get rid of them.


Overall, this constant refinement is one of the defining characteristics of growth hacking. Put all of your attention and effort into what’s working the most – don’t waste time on elements that aren’t getting a buzz.


Charge Money for It

If you already have a product in development, you may already be charging customers to use it. However, when you only have an idea, many startups believe that they can’t charge for something that doesn’t exist yet.


However, if people aren’t excited about your product from just hearing about it, what’s going to change when you have something tangible that they can use? The reality is that if you’re going to grow quickly, people should already be willing to pay for your idea. That doesn’t mean you can’t benefit from things like free trials and referral programs (more on that later), but there should be enough interest in your idea for people to see the price tag and still say, “I want it.”


Pirate Metrics

Once you’ve started validating your product or idea, the next step is to create a growth hacking funnel that will build on itself and generate the kind of response you want. If you’re hoping to become the next big thing and achieve massive growth in a short period, then you need to be sure that you’re creating a cycle of user acquisition and referrals that can only go one direction – up.


Pirate metrics were developed by Dave McClure, one of the founding members of PayPal. He outlined a strategy that looks like this-


  • Acquisition – bringing new customers in
  • Activation – getting new users excited about your product
  • Retention – keeping your customers around
  • Revenue – making money off of your user base.
  • Referral – having your user base recommend your product to others.


Once you get someone into the referral phase of this plan, they will act as a brand ambassador, helping to grow your business as much as an ad campaign or marketing strategy. The most successful growth hacking examples have built referrals into their system, making it easier to expand their user base and achieve success.


Let’s break down each point so that you can see how you can hack your way to growth.


Acquiring New Users

This step is all about putting your idea or product in front of as many people as possible. There are many ways to do this, from advertising on various platforms to creating content that goes viral and gets shared by many people.


When it comes to growth hacking, you want to be tracking your acquisitions by looking at a variety of metrics. They could be site visits, subscriber lists, or referrals, but no matter, what makes sure that your numbers show actionable results. Thus, getting more likes and followers on Twitter doesn’t count. Yes, it looks good, but unless each new follower is buying your product, those numbers don’t matter to your bottom line.


One crucial thing to think about when utilizing these metrics is that you should be coming up with a comprehensive growth hacking strategy that combines each step. Thus, when trying to acquire new users, you want to activate them as quickly as possible and move them through the funnel.


Thus, it’s not enough to get people to visit your site or your blog. You want them to get engaged with your product and take action as soon as they know who you are and what you offer. By building a strategy with activation and retention in mind, you can be much more successful.


Instead of putting ads out there that promote your brand, get users activated by having them sign up for your mailing list, or receive updates about your launch. If you have an app, you want new users to download it, not just read about it. Once they’ve taken the first step, you can move into the next phase – activation.


Providing an Excellent Experience

When a new customer uses your product or service for the first time, they should be more than satisfied with the results. Assuming that you validated your idea and created something that fulfilled a need, activating your new users shouldn’t be that difficult.


For example, let’s look at Uber. The company promoted itself heavily at first and encouraged users to sign up and download the app. To entice them to try the service, Uber offered discounts on their first rides.


Once someone used the app and saw how it worked, that person was much more likely to use it again and recommend it to friends. The primary solutions that Uber offered were:


  • Cheaper than taking a taxi
  • No cash transactions
  • A rating system so you can see the quality of your driver.
  • Tracking your Uber’s position in real-time


Compared to the alternative, Uber was far superior, which meant that anyone who used the app was more than satisfied with their experience. As more and more people downloaded and used it, growth was inevitable.


Your activation phase should use the same strategy. Once you get people interested in your product, make sure that they have a happy first experience. This is where feedback can help you out immensely. See what people like the most about using your product and focus your attention on those elements.


Retaining Your User Base

Retention is all about getting people to come back to use your product over and over again. One of the best ways to figure out your retention metrics is to focus your attention on the people that will use your product the most.


When talking about something like Uber, commuters will use the service much more than people on vacation who don’t want to rent a car. Thus, by focusing on passengers and getting feedback from them, you can build a better retention strategy.


Overall, getting feedback from everyone who uses your product is good, but you want to get more insight from those who are using it regularly so that you can refine it faster and make it better.


Getting Referrals

Finally, once you’ve built a substantial user base, you want to be able to entice customers to refer your product to others. Ideally, you can bake that into your service with a referral program. Uber lets users give discount codes to friends and family. Dropbox offers more storage space when you refer a friend.


Building this kind of feedback loop into your product will ensure that satisfied customers become your most abundant advertising source. Best of all, it costs a lot less and can reach a much broader audience in less time.


Do’s and Don’ts of Growth Hacking

To further help you figure out how to hack your growth the right way, let’s focus on what you should be doing, as well as what you shouldn’t. These elements will help you develop a leaner strategy that will yield better results faster.


DO: Innovate and Experiment

Growth hacking is all about finding new ways to promote your brand and your product. In many cases, you have to develop different strategies to continue your momentum and keep moving forward.


For example, you may already know what it takes to appease your product’s early adopters, but what as? When trying to break into new markets and acquire different customers, you have to get creative, lest your growth stalls out.


DON’T: Stick to the Same Old Tactics

The phrase “if it ain’t broke, don’t fix it” doesn’t apply here. Yes, you may have a successful acquisition or activation strategy, but that doesn’t mean it will work forever. While we’re not saying you should abandon a tactic that’s still working, you don’t want to put all of your attention on a single method – diversify instead.


DO: Remove Anything That Isn’t Working.

If a feature of your product is not getting used by customers, then get rid of it. Why waste time, money, and effort on something that isn’t contributing to your doesn’t contribute

DON’T: Add Features Without Validating First

It may be tempting to add more features to your product to appeal to different markets, but if you’re going to do that, be sure that each new addition has been validated and vetted first. Don’t just try something and see if it works – that can be a costly mistake.


DO: Reward and Incentivize Your Customers

One way to keep people coming back to your product is to incentivize them. Whether it’s with discounts, free add-ons, or something else, you’re much more likely to retain users and keep them happy when you validate their loyalty.


DON’T: Try to Appeal to Everyone (Yet)

In many cases, companies fail at growth because they’re trying to market themselves to such a wide audience that it’s impossible to please them all. Even apps or services that can cast a wide net (think Facebook) started by focusing only on a specific demographic (i.e., Harvard students). Until your brand gets so widely recognized that you can build on your user base without alienating them, focus your attention on a core group of customers and refine your product to meet their needs.


Growth Hacking Overview

Let’s review the various elements to get started with growth hacking.


  • Validation – first, make sure that people want what you have to offer.
  • Acquisition – promote your product to the people who want/need it the most.
  • Activation – make sure that each user has a positive first experience.
  • Retention – develop a strategy that will keep users coming back for more.
  • Referral – ideally, build a model that will enable your customers to refer new people using the product.


Once you follow these steps, then you should be well on your way to growing your brand and achieving the success you crave.


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